Canada's leadership role in the hydrogen economy could be at risk if financing for fuel-cell and other technologies runs out of juice, says the head of Fuel Cells Canada.
The country faces a constant threat that leading Canadian companies working on hydrogen-related technologies - fuel cells in particular - could be enticed by other countries that place a higher value on developing alternative energies, says Christopher Curtis, interim president of the non-profit national association dedicated to developing the nation's fuel-cell and hydrogen industry.
"There's always a danger of losing that status; it's an issue related to government policy as well as a technology and development issue," Curtis said, following a presentation in Calgary last week.
"Other countries are very active in trying to lure Canadian companies away, particularly (the U.S.), Singapore and Korea. It's the same as with other technologies."
Keeping up with the U.S., for example, is not an easy feat given the "significant but unknown" amount of spending that country's military directs toward hydrogen-fuel technologies.
Not having access to big defence contracts makes it harder for Canadian companies to compete, "but we've done extremely well for what we get from our government," Curtis noted. "Still, it's been the private sector that has provided 80 per cent of the funding, or more, for this industry in Canada."
The Canadian government - traditionally a big contributor towards hydrogen research and development - last year announced that it would inject $215 million over the next five years to bolster the hydrogen sector.
It's not just prestige that's in jeopardy. Canada's hydrogen and fuel cell sector showed strong growth in many key indicators in 2003. Revenue grew 40 per cent in 2003 to $188 million from 2002, while research and development expenditures increased five per cent to $290 million in 2003. Patent holdings were up by 34 per cent to 581 in 2003.
Employment in the sector, meanwhile, stood at 2,685 in 2003 - a modest decline from 2002 levels.
"You see how much money the private sector is putting into research and development in this technology, so it's a huge amount of value added for the Canadian economy," Curtis said. "There are a lot of jobs at stake, and it's also about future exports to the world.
"And our goal, of course, is to retain the leadership that we have, especially in British Columbia, which has the largest cluster of fuel-cell and hydrogen activities anywhere in the world."
B.C. - home to Ballard Power Systems Inc., the country's largest and best-known company in the sector - leads the country's hydrogen industry. There are about 45 companies involved in the industry in the Lower Mainland, representing 65 per cent of both employment and total expenditures in Canada, Curtis said.
Ontario is also a powerful engine driving Canada's hydrogen sector. Hydrogenics Corp. and Stuart Energy, now a wholly owned subsidiary of Hydrogenics, have taken a lead in fuel-cell development, while Kingston, led by Fuel Cell Technologies Ltd., which manufactures SOFC power systems, has gained a reputation for being a hydrogen-technology centre.
In addition, the Ontario government recently announced $9 million to support demonstration and commercialization activities in the province.
Meanwhile, Alberta is also at the forefront of the hydrogen industry, led by Calgary's Dynetek.
"The leadership shown by Dynetek Industries Ltd. has been the prime source of storage containers and storage systems (for hydrogen) around the world," said Curtis.
Other major Calgary players include Advanced Measurements, a worldwide supplier of solid oxide fuel cells (SOFC) test systems, and Versa Power Systems - formerly FuelCell Energy, Ltd. - which produces small-scale, five-kilowatt solid oxide cells.
Curtis added that the University of Calgary has become an important player for research and development on SOFC systems.
Nevertheless, Curtis recognized that to be viable in the long term, the industry must prove its mettle in the commercial arena.
By 2006, industrial applications for power generation will be commercially viable; by 2007, fuel cells will be powering consumer products such as laptop computers and cellphones, offering more power to keep up with new features being added to these items; and within 10 years, the first commercial hydrogen-powered cars will be rolling off the assembly lines.
These types of initiatives should hold the interest of fickle financial markets, Curtis said.
"Finance is a big problem for all emerging technologies in Canada," he added. "But with people being more and more concerned about environmental issues - (greenhouse gases), pollution and the need for reliable electricity and the jobs and innovation involved - this is a story that plays well and the financial community will come to the table."