Remarks by Mark Maddox
Acting Assistant Secretary for Fossil Energy
to the Ohio Fuel Cell Seminar
Columbus, Ohio
May 25, 2004

Thank you, and good morning everyone. It's great to be home again in Ohio, and it's a real pleasure for me to be here to talk about a subject — fuel cells — that is of enormous importance to the energy and environmental future of our country and the world – and to Ohio.

Governor Taft was quick to recognize the potential of fuel cells, both to our common energy future and to Ohio's economic, industrial and employment future. He has pushed important initiatives to secure a prominent place for Ohio in the development of fuel cell technology.

The Department of Energy has been pleased to partner with Ohio fuel cell companies such as McDermott, Battelle and Next Tech in developing fuel cells' vast potential.

Ohio's history of fuel cell development work; its large number of fuel cell-related companies; its strong university research tradition; and strong government support, led by your governor, combine to make Ohio a true fuel cell center. There can be no doubt that you have placed your bet on the right horse.

Fuel cells are an essential element in President Bush's comprehensive national energy plan. The plan covers the entire energy spectrum, offering short-term and long-term solutions to the challenge of providing for our nation's energy security.

The plan addresses every aspect of energy security, from energy supply, to transmission and distribution, to production, to efficient energy consumption. It covers fossil fuels, nuclear and renewable energy sources. It is both practical and visionary in its approach to meeting the challenge of providing "dependable, affordable and environmentally sound energy for the future."

The key visionary element in President Bush's national energy plan is the commitment to set the stage over the next two decades for a rapid transition to the hydrogen economy of the future. A hydrogen-based economy would, by itself, essentially eliminate the energy security concerns that preoccupy us today.

Imagine a world, some decades from now, in which worries over energy supply and demand, and their environmental effects, are subjects for the history books. It's hard to imagine, but the day is coming - and fuel cells are integral to our vision of the energy future.

They also have an important shorter-term role to play in the President's Clear Skies and Climate Change initiatives to reduce emissions of nitrogen oxides, sulfur dioxides and mercury by 70 percent by the year 2018, and greenhouse gas intensity by 18 percent by 2012.

Popular perception of the hydrogen future centers around a hydrogen-fueled passenger car and the infrastructure that will make a fill-up as easy and convenient as it is for today's gasoline-powered car. There are good reasons for this emphasis on a fuel cell-powered automobile.

First, the transportation sector accounts for most of our oil consumption. The introduction of a mass-market hydrogen fuel cell-powered automobile would signal the beginning of the end of our reliance on imported oil.

Second, the transportation sector produces a significant amount of our polluting emissions and greenhouse gases. Again, introduce a hydrogen fuel cell-powered car and our environmental concerns begin to shrink in the rear-view mirror.

And third, the technological hurdles to producing the automobile of the future and the infrastructure to support it are complex and formidable, as the NRC report makes clear. The magnitude of the task ahead gets your attention. The President's FreedomCAR and Hydrogen initiatives are designed to overcome those obstacles, and they will.

But while attention centers on transportation-related technology, vital work is also going on in the development of stationary fuel cell and hybrid fuel cell technology that will produce affordable, emissions-free electric power and hydrogen for an energy-hungry nation.

Distributed Generation fuel cells and fuel cell hybrids for the power plant of the future are the Office of Fossil Energy's business. I want to concentrate today on the huge potential of fuel cells and fuel cell hybrids, and on my office's research program to turn that potential into reality.

Before getting into our approach, let's take a look at some additional reasons why we're doing it.

America's antiquated power transmission infrastructure must be modernized and expanded to meet a forecast 50 percent increase in electric power demand over the next 20 years. Distributed Generation based on fuel cells will help increase our power transmission and distribution network's reliability, efficiency and security by both reducing the demands made on the system and supplying power to it.

Compact, modular systems notable for their quiet operation can be installed almost anywhere to meet specific power demands. To take just a few examples, Distributed Generation systems can meet demands for:

• standby power at a hospital,
• peak shaving at an office building to alleviate grid congestion,
• on-site production of combined heat and power at large commercial buildings or process industries,
• grid support where the network has trouble sustaining power delivery, and
• power supply for remote facilities without access to the grid, and manufacturing plants dependent on delicate electronics.

Distributed Generation fuel cells are fuel flexible, capable of operating on natural gas, transportation fuels, and synthesis gas derived from coal, biomass or waste - and they are extremely efficient. In many applications, they can potentially double power generation efficiency, cutting CO2 emissions in half. And, of course, when using hydrogen, fuel cells produce no CO2 at all.

Fuel cell hybrids will help guarantee the future of coal, our most abundant energy resource. Coal-fired power plants produce more than 50 percent of our electric power today. To reach our energy security goal, we must take advantage of our 250-year coal supply to meet increasing electricity demand.

Fuel cell hybrids, that is, fuel cells married to gas turbines, are integral to our plans for the FutureGen power plant of the future that will allow us to keep our vital coal asset in our energy portfolio. That is no small matter to Ohio's coal industry.

And finally, we aim to follow President Bush's directive that we lead the world in the creation of a hydrogen economy. By spearheading the development of highly cost-competitive fuel cell and fuel cell hybrid technology that will be in great demand in a rapidly expanding international energy market, we will be helping to improve the lives of the world's people. At the same time, we will be creating a new industry, contributing to economic growth and job creation here at home.

Building and selling fuel cell systems will be good business, but using them here at home will also be an aid to economic growth and jobs. Studies have concluded that 72 Gigawatts of SECA fuel cell-generated power installed by 2025 will save $50 billion in energy costs. On the environmental side, those fuel cells would reduce nitrogen oxide emissions by 6 million tons per year, and CO2 emissions by 900 million tons per year compared to current technology.

That's a lot of money and a lot of effort that can be redirected to other economically productive projects.

Now let's talk about how we're going to accomplish all this.

The major fuel cell focus of the Office of Fossil Energy is the Solid State Energy Conversion Alliance, or SECA.

Our goal is to develop low-cost, modular, high-temperature fuel cells that can be mass produced for a wide range of applications, initially using conventional fuels.

SECA's Solid Oxide Fuel Cell, with an internal or external reformer, can produce hydrogen locally from conventional fuels and use it to produce electricity. As the hydrogen economy develops and hydrogen becomes widely available, fuel cells will operate even more efficiently without the need to reform other fuels.

We plan to develop the fuel cell systems that can meet market criteria over the next few years. The extremely high efficiency and zero emissions characteristic of fuel cells eliminate any environmental objections to their development. The real obstacles we face in developing marketable fuel cells are technical, beginning with cost.

Current fuel cell capital costs are in the area of $4,000 per kilowatt. To make a marketable fuel cell system a reality, we have to cut that $4,000 to $400 per kilowatt, and develop a fuel cell system that operates at 40 to 60 percent efficiency. Fortunately, solid oxide fuel cells have tremendous cost reduction potential based on the mass production of common modules for multiple applications.

We have to develop low-cost materials that work cohesively at very high temperatures. We have to determine each subsystem's operating parameters in order to optimize the entire system's cost and performance, and then we have to develop those subsystems. And we must ensure the system's reliability, particularly with regard to thermal cycling and startup.

These are ambitious but achievable goals, and we intend to achieve them by the year 2010.

That $400 per kilowatt SECA fuel cell will serve as the basis for the hybrid fuel cell/gas turbine design that will be the heart of our coal-based power plant of the future — FutureGen.

Future Gen is a $1 billion, 10-year project to build and operate a 275-Megawatt coal-based power plant that will generate electricity and produce hydrogen while emitting virtually no polluting emissions, and permanently sequestering produced CO2.

FutureGen will allow us to:

• Continue to take advantage of our vast domestic coal resource to generate electricity;
• Eliminate polluting emissions and greenhouse gas emissions from coal-based power plants, and
• Produce hydrogen to supply the hydrogen economy of the future.

FutureGen is perhaps the most visionary energy project in our entire fossil fuel research portfolio — and fuel cell hybrids are integral to its design.

Researchers have found attractive synergies between linked high-temperature fuel cells and gas turbines. Operating together, the fuel cell and the turbine produce power with 60-70 percent efficiency, about 10 percentage points higher than either component can produce by itself.

That increase in efficiency is critical to the economics of FutureGen.

However, FutureGen faces significant technical hurdles. Challenges before us include:

• Scaling up, pressurizing and aggregating fuel cell stacks;
• Developing a control/operating strategy for coupling the operation of the fuel cell and the gas turbine, and
• Reducing the number of system components and simplify its operation.

That's a lot of work, but we know the challenges can be met.

FutureGen is a comprehensive power generation and fuel production system that offers huge energy and environmental benefits beginning in just 10 years. And the key to building a coal-based power plant that can deliver low-cost, $850 per kilowatt power is the $400 per kilowatt SECA fuel cell that is the basis of all our fuel cell research today.

Distributed Generation systems and fuel cell hybrids employed in central systems promise to change the way we think of power generation over the next 10 to 20 years. And hydrogen fuel cell-powered automobiles promise to change the way we think of fuel consumption over the same period.

The President's energy plan and energy initiatives are not aimed at the sort of advances we are used to: incremental changes at the margins of our venerable energy system. Instead they promise profound changes with long-term beneficial consequences.

But the goal of an energy secure United States is not merely a visionary dream — it is a practical program.

It is based on fuels we know, on technology we know, and on processes we understand. Our challenge is to refine them, improve them, combine them, and make them cost-competitive — and in a relatively short time.

It is also based on the talent of the individuals in this room, and on that of your peers not here today.

It is your creativity, ingenuity, practical experience, sheer hard work and persistence that will guarantee the successful development of fuel cells, and the hydrogen economy of the 21st century.

Please be assured that the Department of Energy and President Bush support you and applaud your efforts.