Canadas Hydrogen and Fuel Cell Industry Global Partnering

Canada’s Hydrogen and Fuel Cell Industry: Global Partnering for Success Alison Grigg, on behalf of Chris Curtis Fuel Cells Canada August 27, 2005 Santa Fe, New Mexico 1

Fuel Cells Canada æ National not-for-profit industry association æ Founded in October 2001 æ Our Mission is to promote the development and commercialization of Canadian hydrogen and fuel cell technologies, products and services æ Prime source of services and support to companies, educational institutions and business alliances promoting, developing and demonstrating fuel cell and related products and services in Canada æ 67 member companies and organizations across Canada Setting the Scene | The Canadian Industry | The Future 2

Drivers for Hydrogen and Fuel Cell Commercialization An energy platform that enables other technologies to achieve goals of reliability, security, efficiency and sustainability. Greenhouse Gas Reduction Improved efficiency in converting energy. Zero GHG emissions when based on renewable sources. Urban Pollution Reduction Zero emissions from tail pipe of fuel cell vehicles. Energy Reliability/Security Key enabler to meet growing need for clean, distributed power Economic Development Significant export opportunities and global economic value. Setting the Scene | The Canadian Industry | The Future 3

Global Market Projections Mobile Fuel Cells - $7. 5 billion Stationary Fuel Cells - $7. 5 billion Automotive Fuel Cells - $3. 6 billion Data from “Fuel Cell Industry Competitive Analysis - Assessment of Major Players, Global Markets, and Technologies” 2003 Allied Business Intelligence Inc. , Courtesy Industry Canada Setting the Scene | The Canadian Industry | The Future 4

Markets for Fuel Cell Products 10, 000 Remote sites (off-grid) Capital cost $/k. W Micro-applications (laptop computers, digital cameras, cell phones) 1, 000 700 100 Lift trucks, industrial equipment, residential applications, off-grid and back-up power, military applications Distributed power Buses Autos 60 10 2004 Early niche markets Major market increases 2015 Increasing: manpower + capital + production + capacity Source: adapted from Methanex, September 2002 Setting the Scene | The Canadian Industry | The Future 5

Supply Chain Opportunities Setting the Scene | The Canadian Industry | The Future 6

The Canadian Hydrogen and Fuel Cell Sector: Overview æ Activities began in 1982 with first contract for Ballard Power Systems æ Total Canadian industry revenue has grown 40% from $134 million in 2002 to $188 million in 2003 æ Industry R&D expenditures over $290 million – since 2000 an average of $100, 000 per employee per year æ Over 80 companies across Canada are focused on fuel cell and hydrogen technology and associated services, employing over 2, 600 people æ Patent holdings were up 34% to 581 in 2003. Setting the Scene | The Canadian Industry | The Future 7

Geographic Profile Fuel Cell Producers & Integrators Suppliers Fuelling Infrastructure Service Providers Setting the Scene | The Canadian Industry | The Future 8

International Involvement – Industry æ About 33% of Canadian industry activity is outside of North America æ Active in 262 demonstration projects (2003); 70% outside of Canada æ Industry Associations: California Fuel Cell Partnership, US Fuel Cell Council æ Networking with industry groups and participation in trade missions æ Corporate partnerships and joint development examples: – Ballard with Ford/Daimler Chrysler – General Hydrogen with General Motors – Hydrogenics with GM, John Deere, American Power Conversion, US Army Setting the Scene | The Canadian Industry | The Future 9

International Involvement – Canadian Government æ æ International Partnership for the Hydrogen Economy (IPHE) International Energy Agency (IEA) Implementing Agreements: – Production and Utilization of Hydrogen – Advanced Fuel Cells – Advanced Motor Fuels æ æ æ International Safety Organization TC 197 Asia Pacific Economic Cooperation (APEC) Natural Resources Canada/US Department of Energy (treaty negotiation) Natural Resources Canada/California Air Resources Board MOU Government led trade missions Setting the Scene | The Canadian Industry | The Future 10

Commercialization Challenges for Hydrogen and Fuel Cells Micro-level: æ Improved fuel cell reliability and durability æ Reduced cost Macro-level: æ Stimulating early market demand æ Improving product quality while reducing costs æ Financing for R&D, commercialization æ Creating supporting infrastructure æ Codes and standards Setting the Scene | The Canadian Industry | The Future 11

Technology Development: On Track for Commercialization Companies are meeting technology development timelines: æ Ballard Power Systems has reduced costs of fuel cells by 80% since 1999, while achieving a ten-fold increase in lifetime æ Fuel Cell Technologies has accumulated over 1500 hours of operation on its second generation 5 k. W system æ Hydrogenics Hy. PM 10 k. W power module has achieved over 5000 hours of operation & over 6500 “stop-start” cycles on a single unit æ Dynetek Industries has 10, 000 psi (750 bar) hydrogen tanks on the market æ BC Hydro/Powertech is a 10, 000 psi operational fueling station æ US companies attaining commercial sales contracts Setting the Scene | The Canadian Industry | The Future 12

Hydrogen Highway æ Province of British Columbia – Lower Mainland Vancouver Island æ Coordinated market demonstration program designed to accelerate commercialization æ Framed around the 2010 Winter Olympic and Paralympic Games æ Showcase and demonstrate the environmental, economic and social benefits of this technology to the world æ First phase by 2007 is focused on seven highly visible locations æ Mobile, stationary and micro fuel cell applications and infrastructure æ Multi-agency effort Setting the Scene | The Canadian Industry | The Future 13

Hydrogen Highway Examples of Activities: æ Hydrogen Fueling Stations: § Surrey (10, 000 psi) § Vancouver (5, 000 psi) § Victoria (5, 000 psi) æ Hydrogen Technology Environmental Chamber æ Photovoltaic panels, electrolyser and hydrogen storage at the NRC Institute for Fuel Cell Innovation æ Integration with Vancouver Fuel Cell Vehicle Program Setting the Scene | The Canadian Industry | The Future 14

Vancouver Fuel Cell Vehicle Program æ æ æ Partnership between Government and Industry Demonstration of sustainable, zero-emission based transportation technologies 5 Ford Focus vehicles to be evaluated for three years in Vancouver’s Lower Mainland Technology: Ballard Fuel Cell Systems, Dynetek Hydrogen storage Opportunity to test, demonstrate, deploy and evaluate proprietary systems for H 2 production Setting the Scene | The Canadian Industry | The Future 15

Hydrogen Village The Hydrogen Village is located in the Greater Toronto Area in the Province of Ontario. The intent of the H 2 V is to: æ Create a plan and platform for the deployment of hydrogen and fuel cell technologies to the benefit of the local community. æ Develop the necessary supply, service, and knowledge infrastructure needed to create a sustainable market. æ Ensure technology deployments (stationary, mobile and transportation) fit within the context of existing community infrastructure and activity. æ Aid in the complementary growth of other centers across Southern Ontario – thereby developing a hydrogen Corridor. Setting the Scene | The Canadian Industry | The Future 16

Hydrogen Village Examples of Activities: æ Hydrogen powered delivery trucks for Purolator courier fleet æ Fueling infrastructure and hydrogen powered forklifts for General Motors plant in Oshawa æ Residential heating and power generation using four solid oxide fuel cells at a townhouse-style student residence at the University of Toronto at Mississauga æ Back-up power for computer network servers æ Fuel cell-based back-up power system at a telecommunications switching station æ Hydrogen fuel cell powered utility vehicles in conjunction with hydrogen production and refueling at the Canadian National Exhibition Setting the Scene | The Canadian Industry | The Future 17

The Path Forward – Partnership Opportunities æ Demonstration Projects – Hydrogen Highway – conceptually, a Hydrogen Highway from Baja, California to British Columbia, Canada (“BC to BC”) – Funding programs that encourage North America wide participation – Sharing lessons from past Olympic Games and preparing to showcase NA capabilities/expertise in the 2010 Olympic Games æ Joint Development – Providing enhanced access to R&D programs in all jurisdictions – at the institutional/corporate level – Joint education and outreach programs – Identify and set objectives to support core competencies in each country to ensure complimentarity rather than duplication æ Government Support – State/Provincial governments encouraging transborder activities – Involvement of US, Canada and potentially Mexico in IPHE activity Setting the Scene | The Canadian Industry | The Future 18

Fuel Cells Canada Sponsoring Members 19

Fuel Cells Canada Members Advanced Measurements Inc. FTI International Inc. NORAM Engineering and Constructors Ltd. Alberta Research Council Fuel Cell Technologies Ltd. Palcan Power Systems Inc. Alternate Energy Corporation Fuel. Con Systems Inc. Pathway Design & Manufacturing Inc. Angstrom Power Inc. General Hydrogen Corporation PEM Engineers Inc. Astris Energi Inc. Gowling Lafleur Henderson LLP Pricewaterhouse. Coopers LLP Azure Dynamics Corp. Greater Vancouver Regional District Propane Gas Association of Canada Inc. Ballard Power Systems Inc. Growth. Works Ltd Province of Ontario BC Hydro Heliocentris Energy Systems Inc. Quebec’s Fuel Cells and Hydrogen Network BC Transit HERA, Hydrogen Storage Systems Inc. Queen’s RMC Fuel Cell Research Centre BOC Gases HSBC Bank of Canada Quest. Air Technologies Inc. Business Development Bank of Canada H 3 Energy Sacré-Davey Engineering Canadian Hydrogen Association Hydrogenics Corporation Sarnia-Lambton Economic Partnership Canadian Hydrogen Energy Corporation IESVic TD Securities Inc. Cellex Power Products Inco Special Products Tekion Solutions Inc. Chevron. Texaco Technology Ventures Keen Engineering Teleflex Canada Inc. Chrysalix Energy Limited Partnership Kinectrics Inc. University College of the Fraser Valley Clean Energy Canada KPMG LLP Westport Innovations Inc. Conduit Ventures Ltd. Marcon-DDM Zongshen PEM Power Systems Deloitte & Touch LLP Marsh Canada Ltd. Dynetek Industries Ltd. Mc. Carthy Tetrault LLP Enbridge Gas Distribution Membrane Reactor Technologies Ltd. Energix Research Methanex Corporation Energy QBD Inc. National Bank Financial Ford Motor Company National Research Council 20

Thank you Alison Grigg, on behalf of Chris Curtis Fuel Cells Canada August 27, 2005 Santa Fe, New Mexico 21