Hydrogen-technology developers are hoping $12.2 million in federal funding for a North Vancouver waste-hydrogen recycling demonstration project will help kick-start B.C.'s hydrogen economy.

Ottawa has confirmed it will provide the long-awaited money to build a waste-hydrogen recycling facility operated by North Vancouver-based Sacré-Davey Innovations Inc. next to a sodium chlorate plant in the Maplewood Flats area of North Van.

Sacré-Davey and its partners in a consortium of 12 private and public companies are kicking in another $6.1 million, bringing the total value of the project to $18.3 million. The demonstration project is slated to run until 2008.

"The announcement of $12.2 million (in federal funding) means that we're moving forward - and we're ready to go," says Chris Sacré, president of Sacré-Davey Innovations Inc.

Bayne Stanley, Business Edge
Fuel Cells Canada CEO John Tak, federal Industry Minister David Emerson and North Vancouver MP Don Bell, left to right, check out a hydrogen fuel cell-powered car.

Ottawa bills the project as the first to demonstrate the entire chain of generating, distributing and using byproduct hydrogen in operations that consumers understand, such as buses and pickup trucks as opposed to traditional industrial applications.

Ottawa's Hydrogen Early Adapters Program committed $6 million while Sustainable Development Technology Canada, a federal foundation that acts as a venture capital company, agreed to contribute $5.9 million.

Natural Resources Canada pledged $273,000 through its Canadian Transportation Fuel Cell Alliance. Although Ottawa has agreed to provide the money, payments will be staggered and conditional on the partners meeting deadlines and other responsibilities as promised.

Sacré said the project will showcase his firm's hydrogen-scrubbing technology while other technologies will prove that a vehicle's reliability and performance don't have to be sacrificed for the benefit of the environment.

The recycled hydrogen will power eight hydrogen-powered pickup trucks, four public transit buses converted to run on a combination of compressed natural gas and hydrogen, and a fuel-cell system used to power a carwash and heat its water.

In addition to liaising with its partners on some components, Sacré-Davey will also build fuelling stations at Riverside Drive and Dollarton Highway in North Vancouver and a bus garage in Port Coquitlam, along with the carwash at Main Street and Mountain Highway in North Van.

The carwash's excess power supply, enough to heat 150 homes, will go to the provincial electricity grid.

"The carwash is actually under construction today," says Sacré. "The fuel cell is undergoing final engineering, and it's scheduled for delivery around March of 2006."

The next steps, he says, include detailed design, product verification, proving the technologies work, and getting ready for the launch and deployment in 2006.

He and other hydrogen-technology proponents are hoping the project will spur the development of other technologies that are affordable for consumers and profitable for developers. In other words, a hydrogen economy.

"The Canadian economy is going to have to be an innovation economy, and nowhere is that more clear than here today," federal Industry Minister David Emerson said at the news conference.

"Many people have said that we're ultimately on the road to a hydrogen economy," added Emerson. "This (project) is going to be a fundamental step along that road."

Sacré-Davey Innovations is part of the Sacré-Davey Group, which is more widely known as Sacré-Davey Engineering.

The federal money goes to Sacré-Davey Engineering, while newly-created subsidiary Hydrogen Technology and Energy Corp. and Burnaby-based QuestAir Technologies Inc. will purify and supply the hydrogen.

Sacré-Davey and Calgary-based Dynetek Industries Ltd., which manufactures high-pressure tanks used to store the hydrogen, will develop storage trailers that take the gas to fuelling stations.

"So what (these tanks) will allow you to do is have low-cost transportation of the fuel from the purification site over to places like TransLink, so they can use it in buses," says Allan Grant, BC Hydro's manager of hydrogen programs. "It's really taking advantage of world-leading Canadian technology and put it into the B.C. cluster."

Powertech Labs of Surrey, a wholly owned subsidiary of BC Hydro, will convert eight gasoline-powered engines into hydrogen-powered vehicles for use by public and private firms. BC Hydro will use two of the converted vehicles while Sacré-Davey will select users for the other six.

"It will be almost zero emissions from a greenhouse-gas perspective," says Grant. "There will be a little bit of lubricant in the engine burn producing carbons, but very little... . It supports the hydrogen infrastructure and really paves the way (for the day) when fuel-cell vehicles are much more prevalent."

Vancouver-based Westport Innovations Inc. and Translink, the provincially owned firm that serves as Greater Vancouver's transportation authority, are developing the transit buses.

Sacré-Davey and its subsidiary Easywash Inc. are building the carwash that will carry the Easywash name, while Nuvera Fuel Cells of Cambridge, Mass., is supplying the 150-watt system that powers the facility and heats the water.

Vicky Sharpe, president and CEO of Sustainable Development Technology Canada, says the private sector is not yet receptive of the idea of funding new technologies as they progress from the research to commercialization stage.

She adds she hopes the project will encourage more private-sector involvement in testing and trials of new technologies.

"We've bridged the gap between research and commercialization ... This gap has proven to be a significant barrier to entrepreneurs in all sectors," says Sharpe.

Typically, she says, money is available from universities and industry for research studies, but not for advanced testing because there's "a pathological risk."

"You'll find that the private venture capital companies will not take that level of the risk," says Sharpe. "What they want to see is the technology broken out in a real-life environment and they then will pick it up. So there's a gap between university research and the commercialization activities that the private sector will fund."

Sharpe hopes the pilot project will encourage companies to find partners to share the risk of new-technology development.

Working with industry partners, SDTC expects to help finance more than $2 billion in projects designed to protect the environment over the next five or six years.

Michael Gallagher, president and chief operating officer of Westport Innovations Inc., says his firm only expects to break even after investing several hundred thousand dollars, but he hopes the project will pay off in future deals elsewhere.

"This is a wonderful demonstration that we can use hydrogen - today - in commercial transit systems around the world," says Gallagher.

Westport, which started up from technology developed at UBC, is supplying the hydrogen- and natural gas-powered engines for use in the Translink buses.

In addition to participating in this project, Westport and Translink are discussing the possibility of developing a fleet of green buses.

Westport has also supplied natural-gas engines for five large trucks (used to haul semi-trailers) that are part of a pilot project in the Toronto area.

Meanwhile, Sacré says his firm has signed on to develop a similar waste-hydrogen recycling facility with International Energy Group in Dubai.

"We are looking at harnessing waste hydrogen landfill gas, purifying it and deploying technologies similar to those (in the North Vancouver recycling facility)," says Sacré. "The processing-plant equipment would be designed and built here and then sold into (Dubai) in a project similar to what we're doing here. It's early days. It's probably another year away."

(Monte Stewart can be reached at monte@businessedge.ca)