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Good morning, Mr. Chairman. My name is Frank Preli. I am Vice President of
Engineering for UTC Fuel Cells (UTCFC), a business of UTC Power, which is a unit
of United Technologies Corporation (UTC). UTC is based in Hartford, Connecticut,
and provides a broad range of high technology products and support services to
the building systems and aerospace industries. UTC Power is focused on the
growing market for distributed energy generation to provide clean, efficient and
reliable power. One of UTC Power's businesses is UTC Fuel Cells, a world leader
in the production of fuel cells for commercial, space and transportation
applications. I appreciate the opportunity to participate in today's hearing on
"The Hydrogen Energy Economy".
UTC Fuel Cells is one of the largest and most experienced fuel cell companies
in the US and the world. We're the only company addressing the space, stationary
and transportation markets. UTC Fuel Cells employs a total of 850 individuals
and I lead a team of 350 engineers and scientists focused solely on fuel cell
research and technology development. Over the years our employees have amassed
an impressive list of more than 550 US patents related to fuel cell technology.
UTC Fuel Cells produced its first fuel cell in 1961 for the space application
and since then we've supplied all the fuel cells for every US manned space
mission. UTC Fuel Cells has also led the way with terrestrial fuel cell
applications. We've sold 255 stationary 200-kilowatt size units known as the
PC25ä to customers in 25 states and 19 countries on five continents. Our
installed base of PC25s has generated six million hours of clean energy.
We're also a leader in the development of fuel cell systems for the
transportation market. We count Nissan, Hyundai and BMW among our transportation
fuel cell partners. In addition, California's only hydrogen fuel cell transit
bus in revenue service today is operated by SunLine Transit and is powered by
one of our power plants.
In 1839 Sir William Grove discovered that combining hydrogen and oxygen in
the presence of a catalyst could generate electricity. For many years the
potential of fuel cells was untapped. Its use in the space program to generate
electricity and provide drinking water for the astronauts represented its first
practical application.
More recent technical advances plus the growing appreciation of the benefits
of fuel cells including their clean, efficient, quiet operation and ability to
reduce our dependence on foreign oil have captured the interest of not just the
President of the United States, but also auto manufacturers, Fortune 500
companies, small business entrepreneurs, Wall Street, Congress, foreign
governments and the general public.
The automotive application is the most daunting challenge and therefore it
will take longer for fuel cells to successfully compete in this market. It's the
most demanding in terms of cost, durability and performance. On the other hand,
the auto market offers the largest payoff in terms of reducing toxic air
emissions and greenhouse gas emissions related to global warming, achieving oil
import independence and providing incentives for supplier investment due to the
huge volume of cars produced each year.
The vision of an economy fueled by hydrogen generated from renewable energy
sources is a revolutionary concept that will require evolutionary, incremental
progress. We believe fuel cells will be deployed first in stationary devices and
fleet vehicles such as transit buses and only later in the personal auto market.
Transit buses are a strategic enabler on the pathway to autos powered by fuel
cells. Hydrogen-fueling stations can be made available more readily given the
relatively small number of inner city bus stations and the power plant size and
weight requirements are less demanding than those associated with autos.
We need to walk before we run and gain experience in real world operating
conditions. Fleet vehicles represent a perfect candidate for this type of
practical experience since they offer an opportunity to enhance the range of
operation for the vehicle, gain experience with heavy-duty cycles and train a
core group of technicians.
As the industry gains experience in deploying fuel cells for stationary,
inner city buses and fleet applications, these successes can pave the way for
zero emission fuel cell cars and serve as benchmarks to measure progress towards
the goals of the Administration's FreedomCAR and Fuel initiative. Similarly, we
believe it is wise to continue the investments being made in electric drive
train technology for hybrid cars and buses since fuel cell vehicles will
incorporate this same technology and benefit from the technical advances and
experience gained from these earlier vehicles.
Fuel cells must meet certain technical and performance criteria if they are
going to be commercially viable and accepted in the marketplace. These metrics
vary depending on the application, but automobiles represent the most daunting
challenge. We believe consumers will demand that fuel cell power plants deliver
cost, durability and performance equivalent to the internal combustion engine.
From a technical perspective, we've made tremendous strides in reducing the
cost, size, and weight of fuel cells while increasing efficiency, and
substantially improving durability. But we still have a long way to go.
For example, in the past five years we've seen extraordinary improvements in
the life of the fuel cell stack, which is where the electricity is produced and
represents the heart of the power plant. In 1998, proton exchange membrane (PEM)
fuel cell stacks had a life of 100 hours. By 2001, our fuel cell stacks
experienced a tenfold improvement to 1,000 hours and just recently UTC Fuel
Cells demonstrated close to 10,000 hours of durability in laboratory tests.
Perhaps the most remarkable aspect of this significant progress is that it's
been accomplished not in decades, but in a matter of years. Building on fuel
cell experience from the 1960s, 70s and 80s, the use of sophisticated computer
simulations, custom designed testing equipment and the extraordinary talent of
dedicated and experienced engineers has made this possible. We're very
optimistic that with continued investment in public private partnerships and
focused demonstration programs to verify and validate our laboratory findings,
we'll meet our durability target by 2010.
Fuel cell costs have also seen a dramatic decline. Fuel cells used in the
space application cost $600,000 per kW; our 200 kW PC25 stationary unit
introduced in 1992 costs $4,500 per kW; and our next generation stationary
product that will be introduced next year is targeted at an initial cost of
around $2,000 per kW. We've achieved similar dramatic reductions in size and
weight that also have contributed to the reduction in costs. For example, fuel
cell stack size has been reduced by 50 percent since 1997 and weight has
decreased by approximately the same.
So while we've made substantial progress, we still have some challenges ahead
if we are going to be competitive with the one hundred year old internal
combustion engine technology that is produced in high volume. The cost
improvements made to date have been achieved through a variety of strategies
including improved use and performance of exotic materials, reduced number of
parts, and enhanced manufacturing processes, but further development is
required. Ultimately, we need to couple these technical successes with higher
volumes to reduce unit costs.
At UTC Fuel Cells we're confident about meeting the technical challenges that
lie ahead. Our forty years of experience in this business has taught us that
there will be surprises (both good and bad) along the way and that the best way
to learn is by doing. We're encouraged by progress to date, but we also know
that the last percentage points of improvement are sometimes the most difficult
to achieve and the most costly.
But there are other factors beyond our control that can influence the future
of the hydrogen fuel cell. For example, we must ensure that similar progress is
made in the development of the necessary hydrogen infrastructure including
hydrogen production, storage and distribution. Codes and standards and safety
procedures must be developed and uniformly adopted. Consumer confidence and
acceptance must be won. The supplier base must be developed and must meet
demanding specifications.
A team effort that involves original equipment manufacturers, component and
raw material suppliers, energy companies and governments will be required with
substantial, sustained global investment by public and private partners. Our
recipe for successful fuel cell commercialization includes the following key
ingredients:
1. Articulation of a comprehensive, long term national strategy that
addresses stationary, portable and transportation applications; 2. Sustained
national commitment and leadership; 3. Robust investment by the private and
public sector; 4. Public private partnerships for research, development and
demonstration programs for both fuel cells and hydrogen infrastructure with a
focus on renewable sources of hydrogen; 5. Development and deployment of
hydrogen production, storage and distribution infrastructure; 6. Financial
incentives and government purchases; 7. Elimination of regulatory barriers; 8.
Harmonized codes and standards in the US and globally; 9. Global involvement
with open access to markets; and 10.Education and outreach to ensure consumer
acceptance.
We've covered a lot of distance in the past few years, but we are engaged in
a marathon not a 100-yard dash. Fuel cell technology has experienced a long
gestation period and will not reach its full maturity for some time. We
anticipate the early adopter vehicle fleets will result in at least 10,000 fuel
cell cars, trucks and buses on the road by 2010 and a substantial amount of
stationary fuel cell generation capacity deployed.
This assumes that the technical challenges are met, the private and public
sector make robust investments, suppliers perform as predicted, consumer
acceptance is won and the necessary infrastructure develops as required. If all
these efforts come together successfully, we can see mass production of fuel
cell vehicles starting in the 2012-2015 timeframe. We envision a bright future
for fuel cells, but recognize the challenges and uncertainties that we must
address collectively.
My testimony today has focused on the progress made to date and the
challenges facing the automotive market since this is both the most challenging
and rewarding application. But UTC Fuel Cells believes that in order to meet the
automotive challenge, a national strategy for fuel cell commercialization must
focus on stationary and fleet vehicles to ensure our success in the automotive
market and get us there sooner.
At UTC Fuel Cells we're proud of our past accomplishments and excited about
meeting the challenges and opportunities that lie ahead so the many benefits of
fuel cells can be enjoyed not just by a lucky few, but on a global scale. We
look forward to working with you, Mr. Chairman and other Members of Congress, to
ensure the fuel cell agenda noted above becomes a reality and the full promise
of fuel cell technology is realized.
Thank you Mr. Chairman for the opportunity to testify.
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