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No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without the permission of Plug Power Inc. COMPANY CONFIDENTIAL Copyright 2003 by Plug Power Inc. y Independence uel Cells Will Change the Energy Landscape & Military Operations Wilshire, Director of Marketing Engagement--
31

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Page 1: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

recording or otherwise – without the permission of Plug Power Inc. COMPANY CONFIDENTIAL Copyright 2003 by Plug Power Inc.

Energy Independence

How Fuel Cells Will Change the Energy Landscape & Military Operations

--Scott Wilshire, Director of Marketing Engagement--

Page 2: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

How Fuel Cells Will Change the Energy Landscape & Military Operations

Energy Landscape Introduction to Fuel Cells State of Technology Progress & Customers Challenges & Support Market Adoption Military Opportunities

Page 3: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

ENERGY LANDSCAPE TODAY

Dependence on Fossil Fuels• Finite Resource• National Security

Greenhouse Gas Emissions• Burning Fossil Fuels ( 53.4% C02)• Deforestation (15% C02)

Underserved Developing Nations• 2 Billion people without any power

Population Growth• 10 Billion by 2100

Page 4: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

ENERGY LANDSCAPE – NEAR TERM Power generation (and/or storage and conditioning) equipment

located at or near the point of use - “on site” power.

Coal, nuclear

100 - 1000 MW

Micro-grid

DG

DG

Utility Grid

Sub Station

DISTRIBUTED GENERATION POWER SYSTEM

10 - 500 kW

500 - 5000 kW

Natural Gas

Natural Gas

CENTRAL GENERATION POWER SYSTEM

Page 5: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

ENERGY LANDSCAPE - MIDTERM

Wind PV (Solar)

Electrolysis (water)

e- H2e-

e-e-

Hydrogen Storage

Commercial Consumer

ResidentialConsume

r

PEM Fuel Cell

H2

CH4

e-e-

e-e-

e-e-

Biomass (methane)

Automotive

Page 6: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Annual World Capacity AdditionsTraditional Generation vs. Distributed Energy Resources

0

20

40

60

80

100

120

140

160

180

2000 2005 2010 2015 2020

Gig

awat

ts

Source: Plug Power Estimate based on IEA data

Distributed Energy Resources59.3 GW in 2020

Traditional Generation

Distributed Energy

OPPORTUNITY FOR DISTRIBUTED GENERATION

PEM fuel cells are well positioned to capture this growth opportunity

High-Speed Diesel Recip55%

Solar9%

Emerging Technologies

<1%

Natural Gas Recip8%

Wind11%

Gas Turbine7%

Medium-Speed Diesel Recip

9%

Source: PSR, AD Little, Strategies Unlimited, BTM Consulting

Page 7: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Alkaline Potassium Hydroxide OH- 80 0.6 - 0.8100

PAFC Phosphoric Acid H+ 200 0.6 - 0.8 670

MCFC Molten Carbonate CO3= 550 - 650 0.7 - 0.85 250

SOFC Solid Doped Zn-Oxide O= 850 - 1000 0.6 - 0.75 100

PEMFC Solid Polymer H+ 100 0.6 - 0.8 250

.

Fuel Cell Electrolyte Ions Temperature Cell Voltage Size (largest) Type (oC) (V) (kW)

FUEL CELL OPERATING COMPARISONS

Page 8: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Alkaline 60 - 120 35 - 50 Medium Medium High

PAFC 100 - 400 35 - 45 Medium MediumMedium

MCFC 100 - 200 45 - 55 Low Low Low

SOFC 100 - 300 45 - 50 Low Medium Low

PEMFC 400 - 900 32 - 40 High High High

Fuel Cell Current Density System Fuel Proc. Stack Power Transient Type (mA/cm2) Efficiency Complexity Density Capability

FUEL CELL OPERATING COMPARISONS

Page 9: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

HISTORY OF PEM FUEL CELLS

1950’s • GE development - solid film electrolyte with proton movement

1960’s • GE work continues -Membranes unstable -High catalyst loading

1970’s • Development of Nafion, testing of today’s fuel cell version of

membrane. Other Players appear: IFC, Engelhard, Occidental, Engelhard, US Army………

1980’s• Develops monomer and polymerization chemistry, cost, size,

weight reduction, performance improvements 1990’s to Now

• First attempts to commercialize stationary, early vehicle utilizing public funding

• Market segmentation: component suppliers, systems integrators • $/kW major obstacle - shift focus from technical to cost reduction

Page 10: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

ADVANTAGES OF FUEL CELLS

Power generation is accomplished without moving parts

Higher efficiency than an internal combustion engine

Clean - products are water, heat, and electricity

Does not generate conventional NOx or SOx pollution

Generates approximately half the amount of CO2 emissions

Co-generation: Combined Heat and Power (CHP) capable

Page 11: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Oxygen Oxygen

HydrogenHydrogen

ProtonsProtons

ElectronsElectrons

MembraneMembrane

DC ElectricityDC Electricity

ee

ee e

WaterWater

HeatHeat

e

H2 2H+ + 2e-

0 Volts

1/2O2 + 2e- 1/2O2 - -

~1.23 Volts H2 + 1/2O2 --> H2O

Approx. 1 volt or less/cell, therefore add cells togetherApprox. 1 volt or less/cell, therefore add cells together

PEM FUEL CELL PROCESS

Page 12: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

PEM FUEL CELL SYSTEM COMPONENTS

NaturalGas or hydrocarbon

Fuel Processor

Heat and

Water

DC Power

Fuel Cell

Stack

Hydrogen

PowerConditioner

AC Power

Air

Page 13: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

10

100

1,000

10,000

100,000

2000 2005 2010 2015 2020

CURRENT STATE OF THE TECHNOLOGY

Innovators / Early Adopters

Backup & Standby

Remote / Premium

Initial Mass Markets

AutomotiveSys

tem

Co

st (

$/kW

)

Page 14: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Ballard

GM

Plug Power

Hydrogenics

UTC

Japan Inc.

Significant “potential” competition

Strongest Challenge• Technology• Resources• Scaleable products• Distribution Channels

PEM COMPETITIVE ENVIRONMENT

Page 15: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

PROGRESS - EARLY ADOPTERS

Actions Target demonstrations and specific niche markets in line with

current technology, early customer requirements/expectations Understand Early Adopter needs, experience, feedback Use it for a base to advance platform products Choose to pursue relationships that meet the available resources Learn, Learn, Learn

Examples Government, Utilities, Research Facilities

10

100

1,000

10,000

100,000

2000 2005 2010 2015 2020

Page 16: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Frequency of Repair

41

2215

12 10 107 7 6 6 6 5

7166

0

20

40

60

80

100

120

140

Resta

rt Sys

tem

Met

hane

Senso

r

Stack

Coola

nt-Top O

ff

Charge

Batte

ries

Syste

m C

oolant -

Top O

ff

Cell S

canner

Boar

d

DI Tan

k Lev

el S

enso

r

Stack

Man

ifold

SARC Boar

d

Fuel C

ell S

tack

Elect

rical

- w

iring c

onnectio

n

Cathode

Air Flo

w S

enso

r

Natura

l Gas

Flo

w S

enso

r

All O

ther

Fre

q o

f R

epai

rs

0

10

20

30

40

50

60

70

80

90

100

% o

f R

epai

rs

PROGRESS - LEARNING

Page 17: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

40 Systems delivered under US Army and US Navy programs through 2003.

Successfully completed 10 unit program in 2003 at Watervliet Arsenal, NY.

Broad scale operational validation using third-party service providers.

CUSTOMERS – US Department of Defense

Sub Base, Twentynine Palms

San Diego, CA

Naval Housing Unit

Saratoga, NY

US Military Academy

West Point, NY

Selfridge ANG Base

Detroit, MIWatervliet Arsenal

Watervliet, NY

FT. Bragg

Fort Bragg, NC

FT. Jackson

Columbia, SC

FT. McPherson

Atlanta, GA

Coast Guard Station

New Orleans

Metairie, LA

Barksdale AFB

Bossier City, LA

Brooks AFB

San Antonio, TX

Page 18: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

CUSTOMERS – US Department of Defense Completed Program at the Watervliet Arsenal, New York

10 grid-parallel 5kW fuel cell systems operated for more than 80,000 hours and generated approximately 210,000 kilowatt-hours of electricity.

Systems operated at or above 94 percent average availability, exceeding the contract requirement of 90 percent.

Systems provided supplemental power to a telecommunications facility, a R&D Lab and provided power for four apartments on the base.

Page 19: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

BUSINESS CHALLENGES

Alternative technologies may be competitive

Changes in government regulations and electric utility industry

restructuring may affect the demand for fuel cells

Utility companies could place barriers on entry into the marketplace

Production and availability of hydrogen sources

Consumers are reluctant to try a new product and are concerned

about product safety

Lack of experience with fuel cells and hydrogen

Page 20: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

TECHNOLOGY CHALLENGES

High cost, low durability membranes

Reliability – lifetime and durability

Lack of standardized methods and components

Fuel clean up and desulfurization technology needs development

Need to reduce cost of sensors and controls for humidification and

gas composition

Require low cost hydrogen generation, compression and storage

technology

Insufficient knowledge of fundamentals, i.e., degradation mechanisms

Page 21: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

FEDERAL GOVERNMENT SUPPORT

Seeking to shape federal energy legislation in the 108th Congress

Tax credits

Uniform interconnection standards and net metering requirements

Federal fuel cell purchase requirement

Promote development and deployment of fuel cells

Demonstration and Buydown funding (DoD)

President Bush’s increased attention & funding for a hydrogen infrastructure

Research & development funding from (NIST/ATP, Commerce, Energy, DoD)

Page 22: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

DOE 2003 FUEL CELLS AND HYDROGEN

Stationary Fuel Cells

• $70M over 5 years. Development and demonstration of stationary fuel cells.

Hydrogen and Fuel Cells Demonstration and Validation

• $250M over 5 years. 3-5 awards projected. Auto company/energy company lead. Stationary, Transportation fuel cells and H2 infrastructure.

Hydrogen Storage

• $30M/year for 5 years. More fundamentals /materials, some small amount of applied basic sciences and DOE EERE

Hydrogen Production

• $100M over 5 years. On-site H2 generation.

Page 23: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

PROGRESSIVE MARKET ENGAGEMENT

Attractive market opportunities - Niche and Mass Government support increasing Pursuing opportunities to enter commercial markets

• BACK-UP–Telecom–Broadband–Uninteruptible Power Systems

• RESIDENTIAL AND SMALL COMMERCIAL

–Grid parallel residential and light commercial–Niche markets that enable commercialization – Military

applications mirror the private sector and are generally more open to advanced technologies.

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Hydrogen Backup

Value PropositionValue Proposition Low Cost of Ownership Reliable

• Predictable runtime / performance

Low Maintenance Clean & Quiet

Military ApplicationsMilitary Applications Communications Telecommunications Security Battery Replacement

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Battery Replacement

Fuel Cell Module

Motive Power

Value PropositionValue Proposition Increased Productivity

• >24 hour operation per “charge”

Low cost of ownership

Clean & Quiet

Military ApplicationsMilitary Applications Material Handling Aviation Ground Support

Equipment Auxiliary Power Units

Page 26: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means – electronic, mechanical, photocopying,

Base Load Power and Heat

Value PropositionValue Proposition Deployable

• Propane

• Natural Gas

• Combined Heat and Power Low noise and heat signature

Military ApplicationsMilitary Applications Tent Cities Base Applications Generator Replacement

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On-Site Hydrogen Generation

Value PropositionValue Proposition Economics

• Low Cost of Ownership

– Low Maintenance

– Low Operating overhead Reliable Ease of Use Security

Military ApplicationsMilitary Applications Logistics fuel Bottle replacement

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MILITARY OPPORTUNITY TO IMPACT TECHNOLOGY

Research & Development • Complementing, not duplicating private efforts.

Demonstration & Pilot Fleets • Commercialization is a process, technology validation is essential.• Military applications mirror the private sector.

Purchases • Lends invaluable credibility and stability, develops strong US industry as

prime exporter of technology. Market Entry Support

• DoD Buydown program, other incentives. Remove Barriers to Commercialization

• Through purchases and demonstration, provide opportunity to develop areas that will further adoption.

Education & Outreach • Support development of service base, increase public acceptance and

awareness.

TIMING: NOW

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Scott Wilshire, Director of Marketing Engagement Plug Power Inc. 968 Albany-Shaker Road Latham, New York 12110 Phone: (518) 782-7700 Extension 1338 Fax: (518) 690-4445Email: [email protected]: www.plugpower.com

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HEADQUARTERS 968 Albany-Shaker Road Latham, New York 12110 Phone: (518) 782-7700 Fax: (518) 782-9060

WASHINGTON, D.C. 499 South Capitol Street, SW Suite 606 Washington, D.C. 20003 Phone: (202) 484-5300 Fax: (202) 554-2896

EUROPE 7301 BC Apeldoorn P.O. Box 880 The Netherlands Phone: 31 55 53 81 000 Fax: 31 55 53 81 099

www.plugpower.com