Intelligent Energy – Written Evidence (BAT0038)
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Intelligent Energy – Written evidence (BAT0038) Introduction Intelligent Energy is a world leading fuel cell engineering company based in Loughborough, Leicestershire, focused on the development, manufacture and commercialisation of its hydrogen fuel cell products, for customers in the automotive, aerospace, warehousing, telecoms and drone sectors. Our technology is ready for the here and now. What our submission to this Committee’s inquiry wants to convey is the UK’s unique position with respect to zero emission Fuel Cell (FC) technology and the wider industry. We are of the belief that the UK is currently adequately funding Research & Development spending through BEIS initiatives, such as the Advanced Propulsion Centre (APC) and the Aerospace Technology Institute (ATI). In addition, we believe the UK Government has been successful at encouraging low-cost hydrogen production as well as investment in Carbon Capture and Storage technology (CCS). However, there are a number of areas where the UK is currently behind on. Firstly, more should be done to accept and encourage fuel cell technology employed in electrified powertrain vehicles for passenger use. In addition, the UK Government should more readily demonstrate how much it values UK companies that have developed this technology and should support them accordingly. Finally, we hope to convey with our response four key points: 1. Hydrogen fuel cell technology is well established, both in the UK and across the world. It is not a development technology, it is technology ready for the here and now. 2. The top-level total cost of ownership of fuel cells favours this technology over batteries, especially given the logistical challenges that battery technology faces if it were to be rolled out extensively (lithium mining and recycling, and the lack of a second National Grid to power them to name just two). 3. The impact that FC technology could have on the wider decarbonisation agenda and the goal of reaching net zero is underappreciated. If developed correctly, this could help decarbonise off-road and construction, for example. 4. The UK can be a leader in this field, and given the competition we face from North America, Germany and Asian countries in this sector, there is both a strategic as well as economic consideration to be made over the benefits of rolling out this technology here in the UK. We are delighted to be able to submit a response to your Lordships’ inquiry and would be willing to take part in an oral evidence session to discuss these issues further if that would be of interest to the Committee. Questions 1. To what extent are battery and fuel cell technologies currently contributing to decarbonisation efforts in the UK? What are the primary applications of battery and fuel cell technologies for decarbonisation, and at what scale have they been deployed? The primary applications so far for Fuel Cells (FCs) have been in the transport sector (in the UK and across the world) with the main example being that of Fuel Cell Electric Vehicles (FCEVs). Fuel cells utilise hydrogen to produce electricity through a chemical process, without combustion, meaning FCVs combine the emissions-free driving of an electric vehicle with the no-compromise range, performance and convenience of a traditional internal combustion engine. Bus programmes have been key in providing early proof of hydrogen and fuel cell technology operational capability in urban conditions. Fuel cell electric buses have conclusively proved the technology’s overall zero emission performance, as well as its safety and longevity. However, it should be noted that the UK has been less ambitious on FC applications in the transport sector compared to Germany, Japan, South Korea and China – our other biggest direct competitors in this space. We at Intelligent Energy work with a number of clients across the world, given their interest in developing this technology. Examples include Changan Automobile, the fourth largest carmaker in China, and Teijin Engineering, a major conglomerate, in Japan. In addition to the transport sector, there has been a large deployment in the US for warehouse indoor material handling equipment, and the onset of early displacement of diesel generators on construction sites and back-up power systems for telecom towers is occurring in the UK, US, Europe and Asia. 2. What advances have been made in battery and fuel cell technologies in recent years and what changes can we expect in the next ten years (for example, in terms of energy density, capacity, charging times, lifetimes and cost reduction)? There have been substantive developments across all aspects of FCs covering components, materials, interfaces, design for manufacture and manufacturing processes. Consequently, costs have dropped by 50% in last five years as the transition from one generation to the next has increased performance and opened up a wider and lower cost supply chain. In the automotive sector, FC car engine costs are expected to be in line with existing internal combustion engine vehicles before or by 2035. We believe the trend will now be that given how reliable FCs have proved themselves to be in cars and buses, we will soon be set for adoption across heavy duty applications in trucking, rail and marine. Aviation will be the final stage of adoption. FCs will end up being the predominant zero emission propulsion technology for flight, and through ATI Intelligent Energy already developing solutions for this long-term market. What advances are expected beyond this timeframe, but in time to have an impact upon the 2050 net-zero target? Are there any fundamental limits to these technologies that would affect their contribution to the target? We are of the opinion that, currently, there are no known fundamental limits to FC technologies. However, we acknowledge that the downward curve on efficiency, cost and related production parameters – and the related upward curve on performance parameters – will level off in the next decade to be more incremental for automotive and rail/heavy duty applications. That said, there is more to be learnt about FC applications in the aerospace sphere. For example, we believe that the lessons of steps taken to improve power density in cars will be applicable, together with light-weighting, for aerospace. Collectively this will support the bringing about the decarbonisation of the transport sector, which will be a necessary step of the UK is to reach its ambitious net zero target by 2050. However, while hydrogen (H2) is due to become increasingly available, and cost of H2 is also expected to reduce – we expect the cost of hydrogen to soon become around £6 (+tax) to fill a car tank for example – from a purely decarbonisation perspective, it will require an equivalent uplift in the availability of low carbon and renewable (also known as ‘green’) hydrogen. Are there any implications of next generation battery technologies that could make the charging infrastructure we will be installing between now and 2030 obsolete? What are the implications on battery life of multiple charge/discharge cycles, for example when used to support storage and frequency management on the grid? 3. What are the opportunities and challenges associated with scaling up the manufacture of batteries and fuel cells, and for manufacturing batteries and fuel cells for a greater number and variety of applications? Is the UK well placed to become a leader in battery and fuel cell manufacture? With most of the fundamental development stages of FCs now maturing or fully proven, we believe the scaling up of manufacturing to be an imperative in cost reduction terms to enable commercial uptake across the widest possible application base. Crucially, we are of the strong belief that this can be successfully achieved in the UK, and we at IE are making the case to Government and across the industry. We believe this would not require or imply widespread deployment of manufacturing activities across the country, once the initial decision to go ahead with FC technology has been approved. Government should be looking to make strategic decisions based on volume production of FCs in sites and areas across the country that provide the greatest economies of scale once diverse applications of FC technology is agreed. One fuel cell Gigafactory would be enough to provide manufacturing capabilities for FC technology across a number of sectors. UK supply will also drive local development of sales, installation, aftermarket services and end of life services. The UK is already well placed for FC technology capabilities and IP platforms, has an expanding supply chain base and with some world leading tech companies in the sector (such as IE, Johnson Matthey, ITM Power, and Ceres). Unless the UK develops its own volume manufacturing base, imported FCs will be the only market choice in the years and decades to come. What supply chain considerations need to be taken into account when scaling up battery and fuel cell manufacture in the UK? The first thing to consider is the extra cost that would be incurred if the supply chain were to be located in the UK. The cost of scaling up is 30-40% lower if undertaken in either Eastern Europe (Poland, for example), or more specifically in China. China already has a comprehensive New Energy Vehicle support framework (covering FC and H2 related technologies for transport sectors) for development and deployment of FC vehicles. This has created early FC car, bus, truck and light rail markets and is attractive for the relative convenience of local production set-up and manufacturing operations. We would also note that the UK Government’s plans on enabling low cost H2 production are well developed. However, the same cannot be said for H2 refuelling provision. The UK Government already values research and development and H2 fuel supply, but we believe that it also needs to ensure that the value of intellectual property of FC technology to GDP and ‘UK plc’ is properly retained as manufacturing is scaled up.