Remarks by
Robert S. Kripowicz
Acting Assistant Secretary for Fossil Energy
U.S. Department of Energy
at the
Ohio Fuel Cell Technology Symposium
Cleveland, Ohio
November 7, 2001

Good afternoon. I appreciate the opportunity to visit Ohio again and to participate in this symposium. This is the second time in the last month that I have addressed an audience in the state.

Visiting Cleveland is almost like going back home. I grew up in, and still have family in Western Pennsylvania, so I'm a longtime neighbor. I have fond memories of the rivalry between the Browns and the Steelers, back in "the old days." The "old days" were the times when not all the tickets were sold to season ticket holders.

There were caravans of buses on the road to games in Memorial Stadium in Cleveland or Forbes Field or Pitt Stadium in Pittsburgh culminating in snowball fights in the winter between the well-lubricated fans.

Those were fun times. This is a difficult time.

The events of September 11th have changed many things, perhaps permanently. That terrorist activity, and the recent bio-terrorism incidents, make it difficult to discuss such matters as energy supply and demand, or energy prices, or energy reliability in the context of "business as usual." But they do focus our attention on energy - and energy security. They must never be far from our national attention, even if that attention is currently focused on more immediate concerns. I believe that energy and energy security are more important than ever, and although it was crafted in different circumstances, the President's National Energy Plan is completely relevant to the current situation.

The President's plan includes five essential elements.

The first is conservation. Contrary to what some have said, half of the National Energy Plan consists of recommendations on how to use energy smarter, how to consume less, and how to use energy efficiently.

The second element is making sure the United States has diversity of energy supplies. Diversity not only means increasing the contribution of alternative energy resources and rejuvenating the nuclear option, but also developing better ways to produce and use our conventional energy sources like coal, oil and natural gas. We need to take a balanced approach.

Third, we are putting a new emphasis on renewable energy sources that need a push from the government to get them into the marketplace.

Fourth, we intend to do all these things with minimal environmental impact by using a wide array of new technologies and techniques which emphasize reducing pollutants and minimizing the effects of production of our resources on the surrounding environment.

Finally, we intend to work with other nations to develop alternative sources of supply, particularly with our hemispheric neighbors, Mexico and Canada. In less developed parts of the world, we want to help countries adapt and deploy the technologies that have been successful in this country in finding and producing more energy - and supplying that energy with less environmental impact. That will diversify global sources of energy, and in turn, improve the energy security of this country and other consuming nations.

Of the recommendations in the plan, most can be implemented by the federal government without explicit Congressional approval. And our federal Departments and agencies are moving ahead to implement them. The remainder will require the actions now being taken by Congress.

After spending almost two decades working in Congress, I hesitate to predict where Congressional action will lead, or when we will get a final piece of legislation. But, even in current circumstances, energy is back in the national spotlight.

So what does all this mean for fuel cells, the technology we're here to discuss today? Fuel cells address all of the five elements in the President's plan. First, they are efficient. Second, they diversify supply choices in the electricity arena as well as being able to operate on a variety of resources. Third, they can operate on renewable fuels. Fourth, they are environmentally clean. And, fifth, they will be applicable to international markets as we heard from the presentations this morning.

Fuel cells stand out. They have the opportunity not only to contribute to, but to revolutionize the way electric power is generated.

According to a recent statement by Robert Savinell, of Case Western Reserve University's School of Engineering, "Fuel cells are likely to penetrate everywhere where energy is used, including homes and businesses."

Fuel cells open the door to a new era of fuel flexibility. They can operate on natural gas, methanol, biomass gas, and in the future, synthesis gas made from coal. They can serve as the bridge to a hydrogen economy. This diversity of fuel choices can lead to greater reliability, competitive prices, and ultimately a more stable power market.

Fuel cells are clearly the environmental technology of choice - certainly in terms of fossil fuel-based power systems. They release virtually no emissions of sulfur dioxide, nitrogen oxides, or particulates. Efficiencies are high and can be higher still when operated in a cogeneration mode or in a hybrid configuration with turbines. Thus, greenhouse gas emissions are also low.

Fuel cells offer flexible siting options. With fewer rotating parts than many power generation technologies, they are quiet, allowing them to be placed almost anywhere. Their environmental characteristics also increase siting flexibility.

Fuel cells produce high quality, highly reliable power. They can be operated independently of the grid or connected to furnish power to the grid. Increasingly, I believe, the world of electric power generation will evolve into a world of cleaner, more efficient and, in many cases, smaller units of power generators.

I foresee a world in which a diversity of energy resources and energy technologies are tailored to the specific circumstances, or the specific location - where power is generated reliably both from central power plants and increasingly, from distributed energy systems.

This is a world made for fuel cells.

We have had a long and productive involvement in the technology of fuel cells. The roots of our program reach back to the space program of the 1950s and 60s. Most of the interest in the early days was to develop an onboard power source for America's manned spacecraft - the Gemini and Apollo vehicles. But I want to note that even in the early days, some people could see a more down-to-earth application for fuel cells.

I have lunch every month or so with one of the first directors of the Office of Coal Research. He is into his early 80s. Forty years ago, he helped create the Office of Coal Research in our Interior Department - well before the Department of Energy was formed. It was the predecessor to the office I currently oversee.

In its first year, the Office of Coal Research put into place eight projects, all jointly carried out with private industry. Seven of those projects dealt with new coal combustion or conversion technologies - many of them laid the groundwork for today's fluidized bed combustion, coal gasification and coal liquefaction technology. But the eighth dealt with fuel cells - some of the earliest work done in solid oxide technology . . . 40 years ago.

That effort was small, however, in comparison to the work on space-based fuel cell systems. But in 1976, the National Aeronautics and Space Administration transferred its fuel cell program to the Energy Research and Development Administration. When the Department of Energy was created in 1977, the fuel cell program became our responsibility.

Since that time, we've invested over $1 billion for R&D, not only in fuel cells for stationary power applications, but more recently, in fuel cell technology for transportation applications. And stationary fuel cells have reached the point where they can compete in specialized, or niche markets.

Let me just expand on this theme of specialized applications, or "niche markets" to explain some of the factors driving the development of fuel cells. We have heard and read a lot in recent months about rolling blackouts in California, and the threat of blackouts in other cities around the United States. Recently, however, the New York Times ran a full-page article that began with this sentence: "If New York City had a power blackout, the Central Park police station would continue to glow like a beacon inside a dark forest. That's because the station gets all its electricity from a 200-kilowatt fuel cell right outside the building, not from utility lines."

The Central Park fuel cell is a phosphoric acid fuel cell - technology we have labeled as "first generation." It is the product of nearly 30 years of research and development. It is offered as a commercial product by International Fuel Cells, a subsidiary of United Technologies. IFC was our industrial partner in the development of this technology. And although expensive compared to alternatives such as diesels, fuel cells are ideal for applications where premium, reliable power is a necessity - banks, computer centers, airport terminals, hospitals.

When a credit card company loses power, it loses on average $2.5 million every hour that the power is off. A bank in Omaha, Nebraska, purchased an onsite fuel cell because when its power goes off, it loses $6 million per hour. For every hour an airline can't access its central computer, it loses $90,000.

When the New York Power Authority calculated the cost of new power lines to provide the necessary power to that police station in Central Park, the cost was well above the cost of the fuel cell. Moreover, installing a fuel cell avoided power lines running down the middle of one of our most beautiful urban parks. Today, more than 200 of these units - each generating about 200-kilowatts of electricity, plus useable heat - are installed in the U.S. and around the world. Most provide power for these specialized, niche applications.

The development of this technology is accelerating so that we can expect commercial products for both stationary and transportation sectors in the near future.

In a sense, although the roots of fuel cell technology can be traced back several decades through the niche market products I have described, we are seeing something of a new beginning.

We are seeing an increasing interest in hybrid technologies - in which fuel cells are linked to turbines to raise power generating efficiencies and lower costs. I personally believe that the hybrid concept could be one of the most significant technological innovations and will spur the increased commercial acceptance of fuel cells if successful.

We are seeing interest develop in micro fuel cells for a variety of applications. Toshiba Corporation of Japan, for example, has developed a 1-kilowatt fuel cell to power a vending machine that dispenses hot and cold beverages. Other companies are developing small fuel cells that could be used to supply power and heat in a residence. And perhaps most significantly, we are beginning a major new initiative to apply the remarkable progress made in solid state manufacturing in recent years to dramatically lower the cost of fuel cells.

Cost is the last remaining hurdle for fuel cells. Cost is the barrier that separates today's specialized, niche market applications from tomorrow's widespread commercial adoption of fuel cells. Our goal is to reduce costs to nearly one-tenth the cost of the "first generation" phosphoric acid systems now being sold. Our goal is $400 per kilowatt for the assembled power unit - a cost that will make fuel cells competitive in virtually any power application.

The initiative in our Fuel Cells Program to which I refer is the formation of the Solid State Energy Conversion Alliance, or SECA. This alliance includes government agencies, commercial developers, universities, and national laboratories committed to the development of low cost, high-power density solid state fuel cells for a broad range of applications.

SECA is still a new program. Its goal is to develop an all solid-state fuel cell module - in sizes of 5- to 10-kilowatts - that can be mass-manufactured for a variety of applications, from residential to business to automotive to large scale power generation. This broad-based alliance will help us to achieve our goals for fuel cells. With a successful SECA program, low-cost, high-efficiency, solid state fuel cell systems will be available at less than $400/kW for stationary applications and at even lower costs for transportation applications. This breakthrough will allow widespread penetration into high volume stationary and transportation markets. The inherently high (60 to 70 percent) conversion efficiencies of these solid state fuel cells will also provide significantly reduced CO2 emissions and negligible emissions of other pollutants.

As I said, the basic building block will be a 5-10 kW solid state fuel cell module that can be mass-produced and used for residential or auxiliary power unit applications. The mass-produced core modules will be combined like batteries for applications with larger power needs, thus eliminating the need for custom designed fuel cell stacks to meet each specific power rating. Additional innovative designs will ultimately lead SECA technology toward megawatt size configurations for commercial/light industrial packages and Vision 21 central power station applications.

In August, Secretary of Energy Spencer Abraham announced the selection of four private industry teams to initiate the SECA program -- a 10-year, $500 million program.

I find it fitting that members of two of the four SECA industry teams have their roots here in Ohio. The team of Battelle (Columbus, OH) and Delphi Automotive Systems (Flint, MI); and the team of McDermott Technology Inc. (Alliance, OH) and Cummins Power Generation (Minneapolis, MN) are among the winning competitors that will begin developing ultra-low-cost fuel cells. The two other teams are Siemens Westinghouse, and the Honeywell division recently purchased by General Electric.

To illustrate, Battelle and Delphi are developing and testing a solid oxide design that can be mass produced at a low cost for automotive and truck auxiliary power units, distributed power generation and military markets. They will demonstrate a 5-kW system that operates on common fuels.

Meanwhile, McDermott and Cummins are pursuing stationary and mobile markets by producing and testing a modular, 10-kW system. It will be designed to compete with and replace current reciprocating engines of the same size. The project accelerates McDermott's existing solid oxide fuel cell program, and makes use of Cummins skill in integrating systems and penetrating a variety of small-size consumer and commercial markets.

In both cases, the Department of Energy and the teams will provide nearly equal cost-sharing over the life of the projects.

Also, directly addressing our cost goals, we are participating in an "energy challenge" program for university teams. The Office of Fossil Energy first participated in The Institute of Electrical and Electronics Engineers (IEEE) 2001 Future Energy Challenge which was won by a student team from Texas A&M . On October 1st, the university received a prize from us of $50,000 for their creation and successful testing of a prototype DC-AC inverter for a 10kW fuel cell system that can be manufactured at less than one half the cost of today's commercial inverters.

This achievement goes far to eliminating inverter cost as a barrier to fuel cells for residential applications. And, it illustrates that students in our nations' engineering schools can make valuable contributions to this technology. Some of the people who participated in the competition also have expressed interest in participating in SECA.

The theme of the new IEEE 2003 Challenge is "energy challenge in the home" - with an objective of introducing low cost, broad potential engineering innovations that can demonstrate dramatic reductions in residential electricity consumption from utility sources. Within that program, Fossil Energy is sponsoring a special contest to further reduce the costs of DC-AC inverters used in small fuel cell systems.

Ohio has an excellent history of producing outstanding engineering graduates. I encourage Ohio schools to participate in our competition.

Other progress is also being made in our ongoing program.

Worldwide, Siemens Westinghouse Power Corporation is undertaking several commercial demonstrations of its tubular solid oxide technology building on its success with its 100kW solid oxide fuel cell co-generation system in the Netherlands, where it ran over 16,600 hours without any performance loss. It is now successfully operating this system at a new site in Essen, Germany. RWE, Germany's largest electric power supplier, plans to run the system until 2002, when it takes delivery from Siemens Westinghouse of a larger system - a 300kW SOFC/gas turbine hybrid prototype.

Additionally, we have worked closely with FuelCell Energy, Inc., to develop molten carbonate fuel cell technology. In addition to demonstrating several full-scale fuel cell stacks commercially, the company has designed a direct fuel cell/ turbine hybrid system based on a non combusting turbine, with efficiency approaching 75%, and under the Vision 21 Program, they are planning to test a sub-scale unit with a Capstone micro turbine.

As I mentioned earlier, Ohio is a leader in fuel cell research and development work. A Cleveland-based fuel cell developer, Technology Management, Inc., and NexTech Materials, another Ohio-based company are working on SECA tasks focused on improved manufacturing methods for solid oxide fuel cells.

I believe industry and government are on the right track. I believe we need to develop and demonstrate the technologies that will make fuel cells less expensive to build and even more efficient to operate. This will allow us to provide a major source of distributed generation, provide cost-effective power for homes, small businesses and industries, and relieve our dependence on foreign oil in the transportation sector.

In the longer term, fuel cells could provide us clean, efficient utilization of coal, biomass, and other fuels in large-scale Vision 21 power plants.

We have a big challenge ahead of us; this challenge to bring fuel cells to fruition. To make this highly-touted, always promising technology a success - to make it a promise kept.

What makes me think this is possible?

First of all, we have a solid base in our research and development program, including innovations such as the SECA initiative. The overall program is a government/industry partnership, long-standing in nature.

We have had many initial successes as I have mentioned, including demonstrations and initial commercial production.

We have a commitment, over $57 million in government funds in Fossil Energy appropriations alone, with about equal amounts in other DOE and Department of Defense programs.

Fuel cells, in many ways, capture the confidence and commitment we have in technology. Technology is driving a revolution in our economy. And technology is driving a revolution in how we produce and consume energy - and how we think about tomorrow's energy industry.

At a recent fuel cell exposition, Secretary Abraham said, "Fuel cells represent a cutting-edge technology that has been nurtured and pushed forward by public private partnerships. This is part of our investment in the President's energy and environmental plan."

Those of you in attendance at this symposium recognize and accept the challenge I have described.

The President has said, "Our Administration will be creative. We're committed to protecting our environment and improving our economy, to acting at home and working in concert with the world. This is an Administration that will make commitments we can keep, and keep the commitments that we make."

I want each of you to work with the President and the Administration to meet the challenges ahead of us in fulfilling our energy strategy and the promise of fuel cells.

We believe our program is well designed to meet that challenge. If highly efficient, ultra-clean fuel cell technology can move from niche markets to widespread use in stationary power applications, the result will be significantly more reliable power along with reduced emissions. In combination with other Vision 21 technologies, fuel cells will enable us to continue to use our low-cost fossil fuel energy resources consistent with the need to protect the environment. In mobile applications, low-cost fuel cells will reduce our dependence on foreign oil and also significantly reduce emissions.

Our Nation is strong, but it will need to summon all of its strength to confront the challenges that await us. Energy is part-and-parcel of our national strength and, likewise, we must summon all of our determination and wisdom to ensure that we remain an energy-strong and energy-secure Nation.

I want to thank all of you for your interest in helping to strengthen the energy future of our country. You are making a positive and lasting contribution. I ask that you continue to do your part to make America stronger and more secure. It is more important than ever.

Thank you.