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B A L L A R D P O W E R S Y S T E M S

PUTTING FUEL CELLS TO WORK

NOVEMBER 2010

Utilizing Renewable Energy Resources for Distributed Generation

Michael GoldsteinVP & Chief Commercial Officer

NOVEMBER 2010 P A G E 2

Fuel cells have unique ability to provide base load power, power regulation, or load cycle as required to meet the demands of distributed generation

Application of Fuel Cells in Smart Grid

Source: EPRI

chemical plant utility

wind

PV

fuel cell

micro CHP

commercial building

industrial complex

hybrid

fuel cell

fuel cell

turbine

NOVEMBER 2010 P A G E 3

Fuel Cell Attributes Ideal for Distributed Generation

Fuel Cell Applications in BC’s Energy Mix:

Base load power from by-product hydrogen

Remote community electrification

Peaking power applications

Combined heat & power from natural gas

Key Drivers of Fuel Cell Adoption:

By-product hydrogen

High efficiency

Dispatchability

Lower transmission cost

NOVEMBER 2010 P A G E 4

Key Driver #1: By-Product Hydrogen Availability

~1,000 MW of by-product hydrogen available globally

Sufficient to power ~800k-1M homes for a year

Often vented or combusted for heat

Low-cost fuel for electricity production through fuel cell system

Sources:

Chlorine production

Sodium chloride production

Petrochemical refineries

Production of acetylene, ethylene & styrene

NOVEMBER 2010 P A G E 5

Key Driver #2: High Efficiency Operation

Combined efficiency of 40% to 80%

fuel

heat

fully dispatchable

electricity

utility

point of use

NOVEMBER 2010 P A G E 6

Key Driver #3: Dispatchability

solar

wind

Problem: Renewable energy & demand for electricity (load) do not coincide

electrolyser

hydrogen storage

CLEARgen™

Solution: Energy storage with fuel cell system

tidal

fully dispatchable electricity

NOVEMBER 2010 P A G E 7

Key Driver #4: Reliability & Cost of Transmission Infrastructure

Lower Transmission Cost:

Locate generator close to load

Reduce transmission losses

Reduced infrastructure costs

Increased security, grid reliability

NOVEMBER 2010 P A G E 8

Example #1: By-Product Hydrogen Generator

Fuel cell system to offset power requirements at K2 Pure Solutions’ Californian bleach plant

Benefits:

Offset power demand on site

Sell excess electricity to utility

Zero GHG emissions

48% efficiency

15-20% IRR possible

Enablers:

Capital grant (SGIP)

Low cost fuel

Net metering

NOVEMBER 2010 P A G E 9

Example #2: Remote Community Electrification

Renewable power for remote, off-grid communities to displace diesel generators

>300 communities across Canada isolated from grid, ~3,000 worldwide

Benefits:

Reduces/eliminates reliance on diesel

Low noise

No transmission losses

Dispatchable

Zero GHG emissions

BC Hydro's Hydrogen-Assisted Renewable Power (HARP) initiative

Bella Coola demonstration project

Enablers:

Capital purchase incentives

Clean energy mandates

NOVEMBER 2010 P A G E 10

Fuel Cell Success Will Be Policy Driven

Volume will come through:

Clean energy mandates (RPS, Clean Energy Act)

Feed-in tariffs

Capital purchase incentives

Net metering programs

Canadian value proposition

Local, high-value jobs

Retain fuel cell leadership

Global export markets

Clean, green energy

‘Levelized Cost of Energy’ ~$0.06-$0.13/kWhr

(reflecting US Federal and California state incentives)

2007 2008 2009 2010 2020

USD

/stack

Product Cost Reduction

volume driven

~45% to date