Freedom Car Program To Accelerate Stationary Fuel Cell Development

North American Stationary Fuel Cell Shipment Forecast sees government spending will accelerate the stationary fuel cell market to achieve significant growth through 2005.

Published: 15-Jan-2002

NATICK, Mass.--(BUSINESS WIRE)--Jan. 15, 2002-- On January 8 the Secretary of Energy, Spencer Abraham, announced that $1.5 billion in U.S. government subsidies will be re-allocated to further develop fuel cell technologies for automotive applications. The program, called Freedom CAR (Cooperative Automotive Research), was developed by DaimlerChrysler Corporation (NYSE:DCX), Ford Motor Company (NYSE:F), General Motors Corporation (NYSE:GM), the U.S. Department of Energy and the U.S. Council for Automotive Research. Freedom CAR will replace a $1.5 billion, eight-year project aimed at developing high mileage per gallon engine powered vehicles.

What does this $1.5 billion in government funding mean to the stationary fuel cell marketplace? For the fuel cell companies pursuing automotive applications such as Ballard (NasdaqNM:BLDP) and United Technologies Fuel Cells (NYSE:UTX), this will probably result in considerable government subsidized R&D funding. For the rest of the fuel cell world, the answer is not as simple.

For the automotive fuel cell market to directly impact the stationary fuel cell market, fuel cell vehicles must achieve commercial success. A number of requirements are necessary for these vehicles to effectively commercialize:

To meet these requirements, automotive fuel cells must overcome a number of technical barriers. Most important is the need to further develop hydrogen-reforming technologies, which are used to convert hydrogen rich fuels (gasoline, natural gas, methanol, etc.) to pure hydrogen. Without this technology, a hydrogen infrastructure will need to be constructed at a very high cost. There are also significant size, weight, and noise requirements placed on automotive fuel cells.

According to VDC analyst Nathan Andrews, "Once these requirements are met and fuel cell vehicles commercialize, the increases in fuel cell production will help to significantly drop prices. The research to meet these requirements will also assist in the development of stationary fuel cell systems." VDC anticipates that this government spending will accelerate the stationary fuel cell market to achieve significant growth through 2005. Beyond 2005 the possibilities for both stationary and automotive fuel cells are tremendous. The Freedom CAR program will go a long way in assisting fuel cell development, but for these markets to reach their true potentials, industry participants will need to take matters into their own hands.

Exhibit showing North American Stationary Fuel Cell Shipment Forecast - go to:

"The North American Market For Grid Power Solutions: Distributed Generation & Ride-Through Technologies" is an analysis of the current size and future growth of the North American market for five products: fuel cells, microturbines, flywheels, battery UPS, and STS.

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