Making the case for hydrogen in the U.S.: American Fuel Cell and Plug Power

Hydrogen power is back. First discovered in 1839 by Welsh physicist Sir William Robert Grove, hydrogen—the forgotten child of renewable energy tech—is enjoying a renaissance across the globe. Countries like China, Germany, and India are increasingly relying on it as part of their growing sustainable energy programs. That’s not the case in the United States, where most clean-energy R&D focuses on lithium-ion battery systems powered by other renewables, like wind and solar. But there are signs that this story is changing as new US-based companies are finding success adapting hydrogen applications to niche markets.

The case for hydrogen power

States across the US have made bold commitments to transition from fossil fuels to renewable energy sources: New York State aims to source 50% of its electricity from renewables by 2030, while California is working to reduce greenhouse gas emissions to 40% below what it emitted in 1990 by the same year. Achieving these goals will demand a concerted strategy that makes use of multiple clean-energy technologies, not just one.

Enter hydrogen. First, a fuel cell can pack a much bigger punch than a lithium-ion battery. It generates electricity from fuel whereas a battery directly stores it. That means the fuel cell’s energy capacity power is not limited by its size, as it is for a battery. It also means that refueling a fuel-cell powered system is quicker than recharging batteries, still a challenge for today’s battery-powered vehicles. On-road applications of hydrogen have also realized comparable or better ranges than gas-powered consumer vehicles.

A hydrogen fuel cell only needs pure hydrogen and oxygen to power an electric motor with clean energy. Water is the only by-product. As long as it is fed hydrogen, the fuel cell will continue to generate electricity. A large manufacturer using hydrogen fuel cells to power forklifts and other equipment could reduce its annual electricity consumption from the grid by 1.8 million KWH. Hydrogen fuel cells are perfect for powering indoor warehouse forklift applications, eliminating the need for the number of backup batteries that a single vehicle demands because of the limits to how much charge a single battery can carry.

“The future of clean-energy tech isn’t an either/or scenario—it’s got to be ‘all of the above.’ Every technology has its strengths and our job is to find their best applications,” says Daniel O’Connell. He works for Plug Power Inc., the American hydrogen-fuel-cell manufacturer that everyone is watching.

Building hydrogen’s future in New York State

On a cold, snowy morning last February, Plug Power held a press conference in Eastman Business Park in Rochester, New York. The 35,000-square-foot facility once made film stock as part of the former Kodak industrial complex, but today has been reconfigured to manufacture the stacks of membranes, catalysts, and electrodes found inside a fuel cell. The ribbon-cutting announced the expansion of Plug Power’s young Rochester operation, a milestone in the company’s growth as a leading producer of hydrogen power systems in the United States.

Valued at $103.3 million and headquartered in Latham, New York, Plug Power’s fuel cells have been fitted into forklifts working in the massive, fast-paced warehouses behind Walmart and Amazon’s expansive distribution networks. More recently, the company is partnering with Workhorse Group, a developmental-stage vehicle electrification company, to create FedEx’s first fuel-cell-powered electric delivery van. Make no mistake—Plug Power is busy. It currently holds the title of being the world’s largest consumer of liquid hydrogen, using 15 tons every day.

The expansion of the MEA production facility was not just a win in Plug Power’s plan to show the immense potential of hydrogen power as part of the clean-tech economy, but a capstone moment for many members of its Rochester site team.

Rochester’s American Fuel Cell

Plug Power would not be in Rochester at all were it not for O’Connell and the startup he founded with his partner David Wetter, American Fuel Cell. A 2014 graduate of NEXUS-NY, the NYSERDA-funded clean-energy accelerator program, O’Connell launched American Fuel Cell because he saw an opportunity to exceed existing performance standards for the core component of a fuel cell, the membrane electrode assembly (MEA). His goals weren’t limited to technical ones—he sought to produce what would be the only US-made MEA available on the market.

The team that O’Connell built included long-time veterans like himself of what was a small-but-active fuel-cell research and development hub in the Rochester region. Both General Motors and Delphi Technologies operated hydrogen research programs in the area before relocating (the former) or shifting focus (the latter) by 2012. O’Connell made his commitment to rebuilding Rochester as a hydrogen R&D center clear from the outset, saying in 2014, “Our goal is to bring high-tech, high-paying, fuel-cell jobs to the Rochester region.”

Soon after entering the market, American Fuel Cell hit the ceiling of their productive capacity. Their product, a domestically produced, improved MEA, met a genuine market need. Now they had to grow, but that required more resources and capital.

Fast forward three years: American Fuel Cell is acquired by Plug Power, a hard-earned accomplishment for O’Connell and his team that spoke to the quality of the technology they developed. It was also a win for Rochester’s economy because the American Fuel Cell staff continued to work in the Eastman Business Park facility following the deal. Plug Power’s investment, as the recent expansion shows, is already realizing a scale up of R&D efforts at the location. Plus, they expect to hire 80 additional staff.

Plug Power also stood to gain through the deal. The acquisition gave them a footing in on-road applications of hydrogen, since much of their focus had been on stationary systems.

How real technical innovation happens

Over $25 billion dollars were invested into clean energy technology start-ups by venture capital firms between 2006 and 2011—half of that money was lost as businesses failed. So what made American Fuel Cell such a success story?

While there are no doubt many reasons, it is clear that O’Connell’s diligence paid off when it came to validating and improving his MEA technology. That meant seeking out the expertise and resources that would give him the information and recommendations he needed. Often startups lack the resources to take the time to fully evaluate and adjust their technology design. Missing problems early on in the development cycle can lead to an expensive redesign, wasted inventory, and lost customers, all setbacks that can spell out failure for a new company.

O’Connell is the first to point out that [tweet]American Fuel Cell’s ascent would not have been possible without the matrix of technical and business development assistance that was available to him in New York State.[/tweet]

Powering tomorrow’s clean-tech economy

The Golisano Institute of Sustainability (GIS) at the Rochester Institute of Technology (RIT) is proud to be among the resources American Fuel Cell utilized to arrive where they are today. GIS’s dynamic structure, which includes a variety of programs with unique focus areas, allowed RIT to walk with American Fuel Cell each step of the way on its path to joining Plug Power. From graduating from NEXUS-NY to Plug Power’s recent expansion, O’Connell is convinced of the benefits of having a university like RIT available to entrepreneurs like him as a long-term partner.

“I think RIT-GIS is at the forefront of a paradigm shift in how businesses are working with research universities,” he said. “Working with GIS definitely helped us get to where we are today. We were able to move very fast, advance the technology, and to do it at a very low cost.”


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About the author

Golisano Institute for Sustainability (GIS) is a global leader in sustainability education and research. Drawing upon the skills of more than 100 full-time engineers, technicians, research faculty, and sponsored students, it operates six dynamic research centers and over 84,000 square feet of industrial infrastructure for sustainability modeling, testing, and prototyping. Graduate-level degree programs are also offered that convey the institute's knowledge to the next generation of industry professionals.

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