Accelerating the advent of the hydrogen economy

Dr. Roger B. Saillant, Plug Power Inc.

The promise of a hydrogen economy raises hopes about many of the country’s immediate energy concerns, particularly the delivery of an abundant supply of reliable, cost-effective energy with zero emissions.


Dr. Roger B. Saillant
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Citing the benefits is one thing; making the transition to hydrogen is quite another. In that task, we as an industry cannot go it alone.

Hydrogen today

While there are myriad issues to be worked out, there has been significant progress and the future looks bright.

Fuel cells hold vast potential for providing homes, commercial buildings and industrial plants with combined heat and power (CHP). Automotive researchers continue to make major progress. Already in the field-testing phase, Chicago powers some of its public buses with hydrogen, and Las Vegas is doing similar fieldwork. Industry leaders are at work on a transition strategy, and industry research and development strives to address a range of technical issues and advances, including a combined, home heat-and-power unit with a hydrogen auto-refueling system.

Such developments might create the impression that the transition to hydrogen will be smooth. However, several obstacles could slow the mass-market use of hydrogen.

Obstacles to overcome

Production from renewable sources is still some years away from commercial reality. Pipeline infrastructure–the most efficient means of transporting hydrogen–is nearly nonexistent.

There is also a vicious cycle of cost and market viability. Take fuel cells as an example; to make them commercial, manufacturers must lower unit costs. However, at high costs the market uptake will be low, which inhibits the introduction of cost reductions dependent on volume.

What prevents stronger demand? High unit costs.

Hydrogen firms also face competitive and regulatory barriers. Current regulations support a dominant market position for traditional utilities. Many of these utilities, naturally wishing to protect market share, reinforce their position through preferential pricing structures and other practices.

For their part, private hydrogen firms cannot resolve these issues among themselves, as competitors are understandably reluctant to undertake joint efforts. These facts highlight the need for another party to take the initiative.

Government’s essential role

Progress to date owes much to government leadership. A continued focus at the federal level will stimulate capital markets to invest in hydrogen companies and also help propel hydrogen technology forward. Among the recommended steps:

“- Lead mission status. As with the “man on the moon” initiative of the 1960s, a lead mission status would empower a single government entity to “coordinate” the efforts of researchers, industry leaders and federal agencies–not only streamlining the advancement of the hydrogen economy, but also drawing public support.

“- Additional R&D collaboration. The transition to hydrogen will require advances in new technologies (pumping, sealing, membranes, etc.). These advances will not happen without continued funding–and an ongoing partnership among government, industry and academia.

“- Further tax credits. Production offsets and environmental credits play a direct role in breaking the vicious cycle of cost and consumer acceptance. By essentially reimbursing consumers for adopting hydrogen technology, credits can bring its use within their reach.

“- Unified codes and standards. The current patchwork of codes presents a major barrier to companies that serve a national, even international, market. Uniform standards on many operational fronts–from interconnection to home safety–would remove this barrier.

“- Right of way. The federal government could accelerate construction of the delivery infrastructure by facilitating right of way on federal lands already used for that purpose. For example, natural gas lines are given free right-of-ways wherever land for hydrogen can be as costly as a million dollars a mile.

“- Demonstration projects. By providing a real-world glimpse of hydrogen in action, these projects build consumer confidence while facilitating field testing under actual conditions.

“- Leveling the playing field. Artificial barriers to the use of hydrogen-fueled stationary fuel cell power systems must be eliminated, specifically those barriers that impede a fair payment for electricity supplied to the grid.

“- Public education. A focused, consistent education campaign can win acceptance among the audience most critical to hydrogen’s success.

Now, and in the years to come, our job as an industry is to address the world’s urgent challenges with the best fuel alternative on the horizon–an alternative whose mass commercialization is still decades away under “business as usual” circumstances. Acceleration will occur only if we commit ourselves to a business as unusual approach. The time is now.

Roger B. Saillant, Ph.D., Plug Power Inc. president and CEO, is also a member of the company’s board of directors.

Plug Power (NASDAQ: PLUG) designs, develops and manufactures on-site electric power generation systems utilizing proton exchange membrane (PEM) fuel cells for stationary applications (www.plugpower.com).

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