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2012 ballard power systems expert panel slides

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A panel of experts in their respective areas was assembled at Ballard’s Annual General Meeting to provide their insights into “Achieving Large-Scale Fuel Cell Market Adoption: How and When?”

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2012 ballard power systems expert panel slides

  1. 1. NASDAQ:BLDP   TSX:BLD ® NASDAQ:BLDP    TSX:BLDSmarter Solutions for a Clean Energy Future EXPERT PANEL DISCUSSION June 5,  2012   1
  2. 2. Expert Panel Discussion NASDAQ:BLDP   TSX:BLD Achieving Large‐Scale Fuel Cell  Market Adoption:  How and When? JEREMY RIFKIN TYLER HAMILTON STUART FUNK BRIAN PICCIONI June 5,  2012   2
  3. 3. Economic Perspective NASDAQ:BLDP   TSX:BLD JEREMY  RIFKIN Author – “The Third Industrial  Revolution: How Lateral Power  is Transforming Energy, The  Economy, and The World”  June 5,  2012   3
  4. 4. Economic Perspective NASDAQ:BLDP   TSX:BLD June 5,  2012   4
  5. 5. Media Perspective NASDAQ:BLDP   TSX:BLD TYLER  HAMILTON Editor‐in‐Chief – Corporate Knights and Author – “Mad Like Tesla”  June 5,  2012   5
  6. 6. Why mainstream media coveragedoesn’t do justice to thehydrogen fuel cellTyler HamiltonEditor-In-Chief, Corporate KnightsClean energy columnist, Toronto Star June 5, 2012  . 46
  7. 7. History of miscalculation re: fuel cell car Daimler: promised a car cheap enough to compete with petrol vehicles by 2003, and production of 100,000 fuel cell engines by 2005. Ballard tells Time magazine in 1999 that fuel-cell vehicles will be economical by 2010. PricewaterhouseCoopers LLP predicts in 2001 that fuel cell-powered vehicle sales will reach one million units a year by 2010. NOT EVEN CLOSE…. June 5, 2012  . 47
  8. 8. Public, media lost interest Media attention began to shift in mid-2000s just as interest began to build around plug-in hybrid or all- electric vehicles. Emphasis was put on advancements around batteries, particularly lithium-ion flavours. Government funding for R&D and demonstration and policy began to shift as well. Media grew tired of reporting on demonstrations and one-off deals for fuel-cell buses. Forklift market not very sexy. Investors felt burned… June 5, 2012  . 48
  9. 9. The story the media are missingHuge opportunity today for stationary fuel cells, combined with wind power and other renewables, in Canada’s north and/or other remote locations that currently rely on increasingly expensive diesel fuel. June 5, 2012  . 49
  10. 10. Utility-scale storage Using surplus baseload from nuclear or off-peak wind power to generate and store hydrogen, which can then be run through fuel cells during peak times. …. or produce hydrogen via steam reformation of landfill gas. June 5, 2012  . 50
  11. 11. Efficient use of cheap natural gasEXAMPLE:Apples new Maiden, N.C., data centre will use 4.8megawatts of fuel cells powered initially by natural gasthat has been put through a steam reformation process.It is expected to be the largest corporate fuel cellinstallation of its kind. June 5, 2012  . 51
  12. 12. Getting close to profitability There are no profitable fuel cell companies yet, but a couple – including Ballard – now appear within striking distance as revenues grow steadily. Strong opportunity and growth in BRIC countries for stationary and mobility products are key to this happening, and may attract media attention if properly positioned. June 5, 2012  . 52
  13. 13. Vehicle dream still alive Fuel cell sector continued to lead patent index in 2011 – Honda, GM, Toyota, Nissan, Ford and Ballard head the pack. But hydrogen infrastructure costs and complexity will continue to pose challenges for hydrogen fuel cell vehicles for years to come. When that challenge is addressed, media – currently in “show me” mode – will take notice. June 5, 2012  . 53
  14. 14. Public Sector Perspective NASDAQ:BLDP   TSX:BLD STUART  FUNK Program Manager  Energy and Climate Change Practice LMI June 5,  2012   14
  15. 15. Public Sector Perspective: Hydrogen and Fuel Cell Technology for U.S. DoD Ballard Annual General Meeting Stu Funk, Program Manager, LMI June 5, 2012 June 5, 2012  . 55
  16. 16. Defense Logistics Agency (DLA) Hydrogen and Fuel Cell R&D Program Objectives • Early adopter & principal demonstrator • Create market demand & exercise supply chain • Support improved Technology & Manufacturing Readiness Levels (TRLs & MRLs) Approach • Up to 2-year pilot projects, 4 locations • Alternative H2 production techniques • Additional spiral developments DoD Benefits• Support DoD energy strategy – Promote energy independence – Reduce environmental impact – Improve operational efficiencies Ribbon cutting at Defense Distribution Susquehanna, PA (DDSP) – February 2009 June 5, 2012  . 56
  17. 17. Beyond Demonstration:The Role of Fuel Cells in DoD’s Energy Strategy• DLA sponsored report analyzing how fuel cells can help meet DoD’s power needs over next 5 years• Report is to assist DoD establish priorities & take actions that reflect - – Potential energy, environmental & economic benefits of fuel cells – Fuel cell readiness to support missions – Role as an early adopter of technology June 5, 2012  . 57
  18. 18. Beyond Demonstration: Scope of Report • Value propositions for 4 applications analyzed (of 11 potential) - – Distributed stationary power – Non-tactical material handling equipment (MHE) and ground support equipment (GSE) – Backup power – Unmanned vehicles (UXVs) June 5, 2012  . 58
  19. 19. Beyond Demonstration: Conclusions • DoD should more proactively evaluate & acquire fuel cell systems for 3 applications: – Distributed power generation • 500,000+ buildings at 5,000 sites • CHP opportunities • Mission-critical needs for uninterruptible power – Backup power • 1,000’s of facilities with continuous power needs • Highly dependent on vulnerable electricity grid • Risk assessments being undertaken – Unmanned vehicles • Operationally driven requirements As the largest single U.S. energy user, DoD has a key stake in advanced energy technologies ... including fuel cells June 5, 2012  . 59
  20. 20. Financial Perspective NASDAQ:BLDP   TSX:BLD BRIAN  PICCIONI Former Managing Director  High Technology Equity Research  BMO Capital Markets  June 5,  2012   20
  21. 21. Getting to Commercialization … Think SmallBrian Piccionibjpiccioni@gmail.com B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 61
  22. 22. Big Projects Take Money and Time• Large projects require commitment, potentially  spanning multiple administrations• Politicians make political decisions for political reasons• Ensuring treaty compliance is hard enough – how can  we be confident a particular large project will survive  political shifts? B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 62
  23. 23. Deleveraging:  Austerity & Frugality• Decades of declining interest rates have encouraged  governments and consumers to outspend income• With rates near zero, they cannot go lower o Regardless of the fate of EU, Euro, U.S. deficit or Chinese economy,  economic stimulus can’t continue• Governments and consumers must live within their means  for a decade or more B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 63
  24. 24. Big Projects Are Vulnerable• In an era of austerity, large government‐sponsored  projects are vulnerable to political changes• In an era of frugality, cost‐effective solutions will be sought  to deliver immediate financial benefits• Projects requiring long‐term, constant commitment are  particularly vulnerable B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 64
  25. 25. Hit Them Where They Ain’t• In the short‐term, HFCs will be less successful in  applications served by highly optimized, mature  technology (eg. automobiles)• HFCs will be successful in applications where …  Numerous inherent  fc benefits OFFSET   disadvantages to provide a superior alternative B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 65
  26. 26. Fuel Cell Strengths & WeaknessesStrengths Weaknesses• Highly reliable • ‘Exotic’ technology, limited • Quiet applications ‘know how’• Lightweight • Many applications require access • No / limited maintenance to hydrogen, meaning a fueling infrastructure• No noxious emissions • Legacy of hype, unmet promises• No self discharge, constant  power curve  B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 66
  27. 27. Suitable Early‐Adopter Applications• Replace large heavy duty‐cycle batteries o Lift truck battery replacement in large  distribution centres  purpose‐built fuel cell trucks, eventually• Replace diesel generators in low power  applications o Diesel Gensets great for high power, not for low  power• Mission critical indoor backup power o Home medical respirators, data centers (UPS), … B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 67
  28. 28. When Will This Happen?• ‘When?‘ is always the hardest question• FC industry is close to commercial breakthrough o Some cost effective solutions exist today o Key challenge for the industry is financial o Vast sums of money and years wasted on the hydrogen  economy … makes it challenging for many in the sector to  raise capital o Most FC companies are small / micro cap, yet many investors  looking for large cap investments B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 68
  29. 29. How Can This Be Sped Up?• Industry must supply solutions, not elements  o Complete chemical  electricity systems, not just FCs o Instead, structure to leverage the value chain … most people  take the safe route, believing that a FC solution requiring  engineering is fraught with risk• Cost effective reformer technology would help o Hydrogen fuel limits markets, based on distribution• Consider alternative business models o ‘Power by the hour’ o Partnering with gas vendors (who already partner on lift truck  fuelling) B J Piccioni PBI Consulting bjpiccioni@gmail.com June 5, 2012  . 69
  30. 30. NASDAQ:BLDP   TSX:BLD ® NASDAQ:BLDP    TSX:BLDSmarter Solutions for a Clean Energy Future June 5,  2012   30

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