Fuel cells: We don’t have liftoff
Development of a local fuel-cell industry requires more funding, government support and lifting of regulatory barriers if it is ever going to grow enough to make a difference to platinum demand
Despite being a pillar of SA’s industrial strategy, the growth of a local fuel-cell sector has been painfully slow. Eight years after establishing a dedicated agency, Hydrogen SA (HySA), the country still imports the fuel cells being showcased by platinum companies and government departments (though it is now building its first local prototype).
Hydrogen fuel cells use platinum as a catalyst to turn hydrogen and oxygen into energy. It is hoped they will develop a substantial new market for platinum, possibly as much as 1moz/year, as demand from other sectors like auto catalysts, jewellery and investment has stalled in the past decade.
Current global offtake of platinum for fuel cells is a mere 40,000oz a year. Though many countries, including the US, Korea and Australia, see it as promising technology, there are only about 30 commercial fuel-cell companies in the world. In SA, government and platinum companies’ ability to fund research is limited.
HySA, part of the department of science & technology, works with universities and research institutions to develop and commercialise prototypes. Several fuel-cell pilot projects have been showcased. Impala Platinum (Implats) has been using fuel cells to power a forklift and is making a major investment in a 22MW fuel cell to power its Springs refinery. Anglo Platinum has used fuel cells at Naledi Trust village to power 34 households and a mine locomotive.
Last week, at a panel discussion on the sidelines of the CSIR’s Science Forum, speakers from platinum companies, fuel-cell specialists and government raised some of the factors that needed to be addressed to assist commercialisation. Tshepiso Kadiaka of the department of trade & industry (DTI) admitted there was policy uncertainty and said the DTI would address it. She said government, provincial and local municipalities were developing a fuel-cell industrial hub next to Implats’ Springs refinery, which would have guaranteed access to platinum and special economic zone incentives.
Cosmas Chiteme from the department of science & technology said HySA was in the second of three five-year phases in its 15-year programme. It was addressing market development by showcasing prototypes with platinum companies as well as the SA Post Office (where fuel cells are being tested as range-extenders for scooters). In the next phase, from 2019 to 2023, HySA would focus on commercialising fuel-cell products.
A member of the audience questioned whether government should use taxpayers’ money to subsidise technology benefiting mining companies. He said fuel cells might be more viable if government stopped subsidising the fossil-fuel industry. Speakers insisted fuel cells can make money without subsidies but they need the same kind of initial government backing that was given to solar-power providers 10 years ago.
Eric Strayer, vice-president of sales at Doosan Fuel Cell America, said both the US and Korean governments provided initial support through research grants and tax breaks so that the market for fuel cells could grow. If the SA market for fuel cells were big enough, Doosan could establish a manufacturing hub to supply local and other African markets. Doosan is supplying the fuel cells at Implats’s Springs refinery.
Monique Mathys-Graaff, Public Investment Corp head of investment projects development, said the PIC was willing to continue investing in fuel cells though it had some questions. Fuel-cell developers needed funding but to get it they had to have business plans to attract venture capitalists.
Globally, listed fuel-cell companies have been disappointing investments, Mathys-Graaff said. The sector has shrunk to one-twelfth of its previous size.
Kerry-Ann Adamson, founder of 4th Energy Wave, consultants to the fuel-cell industry, said it was possible to make money out of this industry but many issues still need to be addressed, ranging from technology to supply chains and insurance, before there was widespread adoption. Fuel cells had application in many industries, from transport to telecommunications, but each region has specific requirements.
She said having platinum did not give SA any competitive edge and added that it was far behind many others in its policies. Barriers, preventing commercialisation of products that had been developed in academic institutions, had to be removed. What it means.