A large fuel cell industry gathering this week in Vancouver, British Columbia impressed attendees with the overall state of the hydrogen economy... but disappointed them when it came to consumer vehicles and challenges ahead for the industry overall.

The Hydrogen & Fuel Cells 2007 conference showcased commercial fuel cell applications at work today, including how hydrogen and fuel cell technology is powering buses, forklifts and flashlights, as well as heating buildings and homes throughout the world.

The automotive industry was an area of lively debate at the event. Nearly all industry participants that are focused on the segment acknowledged that the fuel cell industry would not have a viable solution for the market until 2015 at the earliest.

Speakers highlighted the need to move away from carbon-based solutions for the automotive industry. Hybrids with internal combustion engines, plug-in hybrids, ethanol, and biodiesel alternatives were positioned as stopgap solutions that just buy time in terms of moving to lower emissions.

Bill Reinert, Head of Toyota’s Advanced Technologies Group, predicted hydrogen-powered fuel cells will eventually be viable in the automotive sector, but said Toyota itself is hitting problems in mass production.

He also got in a shot at ethanol, citing excessive water use in its production, as well as all-electric vehicles, saying battery technology needed to improve to a greater degree because current next-generation lithium ion batteries wouldn't be reliable beyond 100,000 miles and 10 years.

The competitive jousting seemed on par with that by electric car vendors doing their best to de-position fuel cell vehicle makers at a recent investor conference (see Hydrogen cars non-starters [1].)

Fuel cells appear to be gaining more traction, and perhaps more respect, in countries other than the United States.

"Hydrogen and fuel cells technologies offer significant potential for helping us to increase energy efficiency and reduce dependency on fossil fuels," said keynote speaker Flemming Hansen, Denmark's Minister of Transport and Energy. "However, the efficient development of these technologies will require high levels of both political commitment and international cooperation."

Denmark and the German state of North-Rhine Westphalia, for example, are developing policies to foster the growth and commercialization of hydrogen and fuel cells.

At the conference, general challenges facing the fuel cell industry appeared to include:

• A lack of hydrogen infrastructure or incentives to quickly install hydrogen distribution.
• A need to lower production costs by over 50% in most cases.
• Uncertainty of regulations in regards to codes and standards for hydrogen storage and distribution.
• The challenge of access to capital to finance R&D.
• A lack of consumer awareness of fuel cells, and
• Clean hydrogen production techniques; most hydrogen today is produced using “dirty” techniques involving coal, oil, and gasoline facilities and other fossil fuels. Currently there are few renewable initiatives to create hydrogen that do not use reformers and electrolyzers (though some are working on interesting approaches to the problem - see NanoLogix using bacteria to produce hydrogen [2].)

Analyst Jeff Osborne of CIBC World Markets attended the event.

"We came away impressed with the direction the fuel cell industry is headed, but continue to see the sector as problematic from an investment standpoint," he said.

"At this point in the life cycle of the industry, we view the sector as appropriate only for those investors willing to take a 3-5 year bet at a minimum ... all parties we spoke with are still looking for vast amounts of government funding as well as private and other public sector monies to offset R&D budgets."

Keynote speaker Robert Rose, executive director of the U.S. Fuel Cell Council, called fuel cells “the only energy pathway—fuel cells in partnership with clean electricity—that provides a comprehensive answer to the challenges of energy security, air pollution and climate change.”

The three-day Vancouver event was held at the Vancouver Convention and Exhibition Centre. It was jointly organized by Hydrogen & Fuel Cells Canada, the Government of Canada and the Government of British Columbia.