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Driving through the one signal light in Honeoye Falls, turning right onto a quiet rural street, then left onto an even quieter rural street, one would expect soon to see scattered houses, or a cow pasture. Instead, two gleaming new buildings pop into view, as if dropped intact by a tornado from some industrial metropolis. This is the General Motors Fuel Cell Activities Center.
The research going on here and places like it, experts say, could change the course of life as we know it in the 21st century.
Or, it could lead to the next Betamax: a promising technology ultimately dustbinned by a more successful competitor.
What goes on in the Honeoye Falls facility, where some 300 staffers work, is research into a power-generation technology called fuel cells. These are electrochemical devices that convert the chemical energy in fuels, such as hydrogen, into electrical energy. Because they do not use a combustion process, fuel cells are not limited by the thermodynamic limitations of heat engines-they are extremely efficient. And they do not pollute. The U.S. Department of Energy hails fuel cells as "an exciting option ... one of the cleanest and most efficient technologies for generating electricity."
The potential applications are far-ranging: power for mobile devices such as laptop computers and cell phones; on-site electric power for buildings; power for mass, commercial and personal transportation. So are the geopolitical implications: no more dependence on foreign oil.
But first, somebody has to make the gizmos work-reliably and cost-effectively. This is the first of three articles that will examine the potential and the pitfalls of fuel-cell development, and Rochester's stake in the race toward a "hydrogen economy."
Matthew Fronk, chief engineer at GM's Honeoye Falls center, likes to show visitors a display case that houses successive generations of fuel-cell stacks developed by GM. Each is roughly the size of an airline carry-on bag-small enough to fit under the hood of a car. But the amount of power generated by them has more than tripled.
"This isn't a research project for the sake of research," Fronk says. "It's a focused application of research and product development to get us to a vehicle."
Imagine. GM develops a fuel-cell car ready for mass production. It builds a factory near its research center. Supplier factories spring up next to the center. Other companies too locate here. Rochester becomes a fuel-cell hub, with billions of dollars pouring into the local economy.
The vision thing
Michael Finney, president and CEO of Greater Rochester Enterprise Inc., envisions precisely this future.
"We have a couple of major players here now that are leading the way in terms of fuel-cell development and commercialization. Ultimately, those players will decide where they're going to manufacture," Finney says. "Over the long term, Rochester could stand to gain multibillion-dollar companies and all the support infrastructure that goes along with that."
GRE's role in all this is marketing and business development. In 2003, the organization commissioned a study from Deloitte & Touche, "Fuel Cells Industry Growth & Attraction Strategy," for the Rochester area. That study cited estimates that the global fuel-cells market could exceed $18 billion by 2013, possibly double that amount if automotive technologies develop more rapidly. And, it stated, Rochester stands a good chance of winning a substantial piece of that pie. This region's strengths include:
-- a leading-company presence-GM and Delphi Automotive, whose Delphi Technical Center is a major fuel-cell research facility in Rochester;
-- strong universities-Rochester Institute of Technology, University of Rochester and Alfred University all conduct fuel-cell research and have spearheaded efforts to form new industry/academia alliances; and
-- a skilled work force-particularly in engineering and in thin film, ceramics and micro-electronic systems, all central to fuel-cell development.
The fourth critical success component, the Deloitte study stated, is less developed in Rochester: a support infrastructure for proactive economic development and coalition-building. That is a polite way of saying politicians and business leaders need to get their act together.
"We're not operating at peak efficiency," says Mark Zupan, dean of UR's William E. Simon Graduate School of Business Administration. "Economists have this term called the 'free-rider problem.' When you've got a team-based problem but you're relying on individual effort, everybody has an incentive to let other people shoulder the burden."
A host of challenges
Not only is it a team-based problem, but the payoff is somewhat speculative and the time frame is long. Fuel-cell development faces a host of engineering and infrastructural challenges. Hydrogen, to put it bluntly, leaks through just about anything and tends to blow up; storage and distribution are huge unsolved problems, as are limited durability and high cost. For example, a 100 kilowatt fuel cell would cost at least $50,000, compared with $2,000 to $3,000 for an energy-equivalent 150 horsepower internal combustion engine, says Mark Bunger, principal analyst for the automotive industry for Forrester Research in California.
Given all these fuel-cell drawbacks, some other energy alternative might ramp up faster. Or, somebody might figure out how to cost-effectively use tar sands oil, or oil sands, reserves in Canada, thus eliminating political urgency to develop alternative energy. Even fuel-cell optimists say the real payoffs are at least a decade away.
"I think right now the hype around fuel cells is premature," says Kent Gardner, director of economic analysis for the Center for Governmental Research Inc. "I would be surprised to see large-scale manufacturing of fuel cells in anything less than a decade, and a lot of people say it's 10 to 15 years out."
So what should Rochester do? The consensus seems to be: Make sure the community responds to the needs of existing fuel-cell players. Strengthen alliances among local companies and universities. Grab as much federal and state funding as possible.
In his State of the Union address in January 2003, President George Bush pledged $1.2 billion over five years to develop the technology to produce, store and distribute hydrogen for fuel-cell vehicles. In his State of the State address this January, Gov. George Pataki announced a plan to install over the next 10 years a system of hydrogen refueling stations from New York City to Buffalo. The New York State Energy Research and Development Authority in February held a series of public meetings to gather input for a hydrogen economy roadmap. The goal is to articulate a comprehensive statewide plan for moving from a fuel-cell vision to strategies and tactics attached to a timeline.
It is not a moment too soon, experts say. California, Illinois, Florida, New Mexico and a host of other states already are in the race, wooing development dollars and company presence. Even Hawaii has a fuel-cell roadmap, developed far in advance of New York's.
"There are about two dozen states that all want to be known as leaders in the hydrogen economy," says Joseph Badin, assistant vice president of Energetics, the Columbia, Md., company hired by NYSERDA to lead the roadmap effort. "New York is competing with their neighbors across the country."
"We're a few years late," says Nabil Nasr, director of the Center for Integrated Manufacturing at RIT. "Other states have done this planning and moved ahead."
Is it too late? Nasr and GRE's Finney say no but add there is no time to waste. Indeed, as all roads lead to Rome, most conversations with fuel-cell researchers in Rochester lead to GRE and the critical role it plays in spearheading action. GRE, in a sense, might be Rochester's antidote to Zupan's "free-rider problem."
Billions of dollars are at stake, Finney says. Rochester has three areas of technological strength that could spell long-term vitality for this community: biotechnology, optics/imaging/photonics and fuel cells. The key is to work effectively on all three fronts to enhance and publicize the area's attractiveness to growing businesses.
"Those three probably have the greatest potential future impact for Rochester," he says. "Any one of them could be highly, highly successful here because all the basic ingredients are here-the right kind of people, the research capability, and I'm assuming we can get the governmental support and business leadership to be successful at it."
That support has started to gather, Finney says. But it cannot be allowed to lapse.
"We have, as a community, a long way to go," he says. "I don't think we can afford to lose focus."
Next week: The scientists at work: Fuel-cell development faces a host of engineering and infrastructure development challenges. Some of the most advanced work in the world is going on right here in Rochester.
Cathy Salibian is a Rochester-area free-lance writer, and former reporter and editor at the Rochester Business Journal.
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03/25/05 (C) Rochester Business Journal