Florida Trend | Florida's Business Authority

An Element of Hope

ALL NATURAL: The major challenge in developing hydrogen as an energy source is producing it cost effectively. Florida Solar Energy Center Director James Fenton holds a device that uses solar power to separate water into oxygen and hydrogen.

Holding a toy car, James Fenton steps into the hall outside his office at the Florida Solar Energy Center and pours a few tablespoons of water into a clear tube on the car's rear.

Inside the car, the water flows into a solar-powered device that splits the water into hydrogen and oxygen. The hydrogen then circulates through a fuel cell, which breaks it down into protons and electrons. The design of the fuel cell forces the electrons to flow in such a way that they create a current, which powers the car's tiny motor. Fenton, the center's director, places the car on the floor, and almost immediately it begins to move around the room.

While scientists at the "solar" center still research ways of getting power from the sun, much of the research there these days focuses on the fuel that powers the toy car -- hydrogen -- and its potential as the fuel of the future. Fenton, a fuel cell expert with a doctorate in chemical engineering from the University of Illinois, oversees dozens of engineers, chemists and physicists looking into the use of hydrogen and fuel cells to power everything from backup power systems to automobiles and cell phones. The hydrogen group's immediate director is Ali T-Raissi, a mechanical engineer known worldwide for his research on hydrogen generation, using solar energy and other means.

"Hydrogen is a perfect fit for solar," says Fenton. "The challenge is to make it cost-effective."

Florida is betting on hydrogen -- starting with a focus on hydrogen by the center, a striking, brightly colored facility in Cocoa run by the University of Central Florida. Fenton's team is funded primarily by some $8 million to $12 million in mostly federal research grants. Another part of the state's effort is a public-private task force, the Florida Hydrogen Business Partnership, that was set up in 2004. Last March, the group issued a hydrogen energy commercialization strategy with detailed steps for attracting and developing hydrogen-related businesses in the Sunshine State (see "Florida's Hydrogen Highway" on this page).

Meanwhile, the state has helped to fund more than 15 demonstration projects around Florida to exhibit hydrogen's potential as an energy source. Most notable are two projects in the Orlando area in partnership with Ford Motor Co.; one involves hydrogen-powered shuttle buses; the other involves hydrogen-powered Ford Focus cars.

"I think we are doing the right thing at the right time," says John Hutchinson, general manager for public affairs at Gulf Power Co. in Pensacola, whose firm is a member of the Hydrogen Business Partnership.

Whether Florida's hydrogen strategy pans out, however, will depend largely on two things:

One, whether the state can sustain its research effort to compete successfully against others that are placing big bets on hydrogen.

Two, whether hydrogen's payoff will ever match its promise. With the toy car, Fenton makes it look easy. But problems in producing hydrogen, whether from water or other sources, and making fuel cells for commercialization are far from being solved. Right now, for example, the only way to mass-manufacture hydrogen in anything like a cost-effective way is to use nuclear power to generate the electricity it takes to split water. That option gives environmentalists and many in the research field the vapors, and it remains to be seen whether the other non-nuclear hydrogen production technologies can move beyond boutique-kind of applications into mass production anytime soon.

"It's very expensive to produce large quantities of hydrogen," says Yogi Goswami, a professor with the Clean Energy Research Center at the University of South Florida. "I'm not sure when we will be ready."

Plenty of gas

Fuel Cells 101In a fuel cell, hydrogen fuel isn't burned. Instead, it reacts chemically with components inside the cell to produce electricity. The most common type of fuel cell is the PEM, short for proton exchange membrane. The membrane is a material that resembles kitchen plastic wrap.

As air flows into one side of the fuel cell, hydrogen is fed into the other. The hydrogen interacts with a platinum-coated cloth or paper and splits into electrons, which have a negative electrical charge, and protons, which are positively charged.
The protons pass through the membrane. The electrons cannot pass through the
membrane. Instead, they form an electrical current that travels through an external circuit, powering a motor or other device.
The oxygen in the air combines with the electrons and protons from the hydrogen fuel, creating exhaust in the form of water and heat.

Hydrogen is the most abundant element in the universe, although it doesn't exist alone naturally in any significant quantity. It is found in water (H20), plant materials, natural gas and other fossil fuels. The hydrogen must be extracted and converted to a gas before it can be either burned to power combustion engines, similar to those in today's automobiles, or used in fuel cells to generate electricity ("Fuel Cells 101"). As a fuel source, hydrogen is an environmentalist's dream since it produces no carbon monoxide or carbon dioxide. The ability to produce it efficiently would make the nation less vulnerable to fuel supply interruptions -- like those seen after Hurricanes Katrina and Rita -- and create a massive set of business opportunities.

In 2003, President George W. Bush proposed a $1.2-billion hydrogen fuel initiative in his State of the Union address. That July, Gov. Jeb Bush followed suit, announcing an "H2 Florida" program designed to put Florida in the forefront of commercializing hydrogen technologies.

H2 Florida, an energy initiative managed through the Florida Energy Office, is meant to accomplish a host of goals, from launching demonstration projects to developing financial incentives for commercializing hydrogen technologies and creating markets for hydrogen products in state and local governments across Florida.

Meanwhile, other states have jumped into hydrogen. When Orlando-based Siemens Westinghouse, now Siemens Power Generation, selected a site for its fuel cell manufacturing operation in 2001, it chose the Pittsburgh area, where Siemens already had its fuel cell research and development operation, over Orlando and Dallas-Fort Worth. "With over 20 years of development done in the Pittsburgh area ... it made sense at that time to stay in the area," says Siemens executive Allan Casanova.

The highest profile hydrogen initiatives are in California. Toyota has an advanced technology center in Torrance, Calif., and a Los Angeles Times report last spring cited California as a possible location for a General Motors-Toyota fuel cell research and manufacturing facility. California already has 39 hydrogen fueling stations built or scheduled for completion within the next two years. The California Hydrogen Blueprint Plan, released in May, calls for up to 61 more stations by 2010, with 50% of the funding from the state of California. This summer, the California Legislature approved an initial $6.5 million in funding for Gov. Arnold Schwarzenegger's "Hydrogen Highways" initiative, which is budgeted at $54 million over five years.

New York, Michigan, Connecticut, Hawaii, Massachusetts and other states also have hydrogen initiatives. The Rochester, N.Y., region is the site of fuel cell research centers for both General Motors and Delphi Automotive as well as one of New York's five renewable energy business incubators. The GM operation employs approximately 300 well-paid researchers, says Michael Finney, president and CEO of Greater Rochester Enterprise. The city, home of struggling Eastman Kodak, is aggressively pitching the high-tech future of its fuel cell cluster. "We just see it as a no-brainer," Finney says.

Vision vs. reality
No-brainer or not, Florida's top hydrogen researchers admit that there are plenty of scientific issues that cloud hydrogen's future. Since hydrogen is very flammable, researchers will have to find ways to transport and store it safely. With current fuel cell technology, it's difficult to carry enough of the gas in a vehicle to travel more than 150 miles -- to say nothing of finding a fueling station.

Most critical, however, is the fundamental issue of producing hydrogen efficiently -- right now it takes more energy to produce the hydrogen than the energy value of the hydrogen itself. Case in point: Some 95% of the nation's hydrogen is produced using natural gas. But the U.S. imports about 15% of its natural gas, according to the U.S. Energy Information Administration. And it costs more to produce hydrogen with natural gas than to use the natural gas in a traditional power generation system. "There are no easy or efficient or cheap ways to get hydrogen," says Vernon Roan, professor emeritus at the University of Florida and head of the university's fuel cell lab for a decade.

Florida scientists are looking at other ways of extracting hydrogen, including getting it from biomass, such as agricultural waste. For instance, Fort Lauderdale-based Ener1, a maker of batteries and fuel cell components, is working on a $550,000 contract from the state to develop a fuel cell system that uses methanol created from theme park food waste and citrus peels, all "readily available, cheap and renewable resources -- especially in Florida," says Ener1 Chairman and CEO Kevin Fitzgerald. The methanol will be reformulated into hydrogen and will power a fuel cell at a rest area on a Florida interstate, probably I-95 in Brevard County.

Meanwhile, other scientists are looking for ways to split water more efficiently to produce hydrogen. At the Florida Solar Energy Center, Raissi uses a process he developed that employs ammonium sulfate-ammonium sulfite as well as very high temperatures and light to separate the hydrogen in water.

Another application designed to produce hydrogen uses photovoltaic, or PV, panels. At a demonstration project at Homosassa Springs State Park, installed in June, PV solar panels use sunlight to generate electricity. The electricity is then used to split water into hydrogen and oxygen. A fuel cell then converts the hydrogen into electricity.

If the process sounds circular -- using solar technology to make electricity to power a fuel cell that then makes electricity -- it is. And that is why hydrogen power is so expensive. "A lot of these boutique ways to make it, while they can be shown to work, you have concerns of them working on a large scale," says UF's Roan.

Hydropower or energy from the sun or the wind can be cost-efficient in some small parts of the U.S. but lacks the general availability to mass-manufacture hydrogen. It appears that for the large-scale production of hydrogen the least expensive alternative is probably nuclear power. "The fuel is extremely cheap," Roan points out. At the federal level, nuclear energy is on the front burner of the nation's energy policy. As part of the Bush administration's hydrogen plan in 2003, the U.S. Department of Energy launched a nuclear hydrogen initiative. President Bush, in his remarks at the signing of the 2005 Energy Policy Act in August, said, "We will start building nuclear power plants again by the end of this decade."

Indeed, in late August, Progress Energy announced plans that "could lead to" submitting a new construction and operating license for a new nuclear power plant. The company, which does business in North Carolina, South Carolina and Florida, did not disclose a potential site for the plant.

Many scientists involved in hydrogen research, however, seem more interested in finding other ways to produce hydrogen efficiently. Raissi is blunt: "We don't think nuclear is the way to go."

Small steps
Despite all the problems of producing and distributing hydrogen, some businesses already are making money with the technology. Nuvera, a Cambridge, Mass., company, makes fuel cells as well as devices to make hydrogen on site. It currently is marketing its PowerFlow fuel cell as a replacement for batteries in forklifts. A number of other products are in the pipeline for the next several years. "The products are ready to start coming to market," says Bill Mitchell, Nuvera's vice president for marketing.

Closer to home, DynEco, a Rockledge-based maker of a device that supplies the oxygen to fuel cells, has licensed its compressor technology to Fortune 500 manufacturing company Parker Hannifin's fuel cell business unit. Tom Edwards, DynEco's CEO and a member of the Florida Hydrogen Business Partnership, gives kudos to Florida's effort -- with one reservation. "There's definitely deep dedication by a number of very influential people to have Florida become a leader," he says, adding, "the problem is we just don't have the dough. If Florida really wants to kick ass in this industry, we don't have to go broke. We're not talking billions. We're talking millions."

Whether the Legislature will make that kind of investment is unclear: The $15-million Hydrogen Energy Technologies Act sponsored by Sen. Lee Constantine and Rep. Adam Hasner in the 2005 legislative session would have provided $12.9 million in matching grants for demonstration projects and $2.1 million in tax incentives for hydrogen energy technologies. The legislation passed unanimously in the Florida House but died in the Senate.

"I'm coming back again. I believe in it," says Constantine. He says it was purely a matter of money and the state's competing priorities and adds, "It's so new, it's so fresh that we would be crazy not to take advantage of this. If we can pass this bill (in 2006), we have a great opportunity."

Certainly there are no guarantees that Florida's focus on hydrogen will pay off. But University of Miami College of Engineering Dean M. Lewis Temares says of hydrogen fuel cell technology: "I think it's the future." Adds Florida Solar Energy Center Director Fenton: "The biggest risk is to do nothing."