Canada’s Hydrogen and Fuel Cell Industry: Global Partnering for Success

1. Canada’s Hydrogen and Fuel Cell Industry:Global Partnering for Success Alison Grigg, on behalf of Chris CurtisFuel Cells CanadaAugust 27, 2005 Santa Fe, New Mexico

2. Setting the Scene | The Canadian Industry | The Future Fuel Cells Canada • National not-for-profit industry association • Founded in October 2001 • Our Mission is to promote the development and commercialization of Canadian hydrogen and fuel cell technologies, products and services • Prime source of services and support to companies, educational institutions and business alliances promoting, developing and demonstrating fuel cell and related products and services in Canada • 67 member companies and organizations across Canada

3. Drivers for Hydrogen and Fuel Cell Commercialization Setting the Scene | The Canadian Industry | The Future An energy platform that enables other technologies to achieve goals of reliability, security, efficiency and sustainability.

4. Setting the Scene | The Canadian Industry | The Future Global Market Projections Mobile Fuel Cells - $7.5 billionStationary Fuel Cells - $7.5 billionAutomotive Fuel Cells - $3.6 billion Data from “Fuel Cell Industry Competitive Analysis - Assessment of Major Players, Global Markets, and Technologies” 2003 Allied Business Intelligence Inc., Courtesy Industry Canada

5. Setting the Scene | The Canadian Industry | The Future Markets for Fuel Cell Products Remote sites (off-grid) 10,000 Micro-applications (laptop computers, digital cameras, cell phones) Early niche markets Lift trucks, industrial equipment, residential applications,off-grid and back-up power, military applications 1,000 700 Distributed power Capital cost $/kW Buses 100 Major market increases Autos 60 10 2004 2015 Increasing: manpower + capital + production + capacity Source: adapted from Methanex, September 2002

6. Setting the Scene | The Canadian Industry | The Future Supply Chain Opportunities

7. Setting the Scene | The Canadian Industry | The Future The Canadian Hydrogen and Fuel Cell Sector: Overview • Activities began in 1982 with first contract for Ballard Power Systems • Total Canadian industry revenue has grown 40% from $134 million in 2002 to $188 million in 2003 • Industry R&D expenditures over $290 million – since 2000 an average of $100,000 per employee per year • Over 80 companies across Canada are focused on fuel cell and hydrogen technology and associated services, employing over 2,600 people • Patent holdings were up 34% to 581 in 2003.

8. Fuel Cell Producers & Integrators Suppliers Fuelling Infrastructure Service Providers Setting the Scene | The Canadian Industry | The Future Geographic Profile

9. Setting the Scene | The Canadian Industry | The Future International Involvement – Industry • About 33% of Canadian industry activity is outside of North America • Active in 262 demonstration projects (2003); 70% outside of Canada • Industry Associations: California Fuel Cell Partnership, US Fuel Cell Council • Networking with industry groups and participation in trade missions • Corporate partnerships and joint development examples: • Ballard with Ford/Daimler Chrysler • General Hydrogen with General Motors • Hydrogenics with GM, John Deere, American Power Conversion, US Army

10. Setting the Scene | The Canadian Industry | The Future International Involvement – Canadian Government • International Partnership for the Hydrogen Economy (IPHE) • International Energy Agency (IEA) Implementing Agreements: • Production and Utilization of Hydrogen • Advanced Fuel Cells • Advanced Motor Fuels • International Safety Organization TC197 • Asia Pacific Economic Cooperation (APEC) • Natural Resources Canada/US Department of Energy (treaty negotiation) • Natural Resources Canada/California Air Resources Board MOU • Government led trade missions

11. Setting the Scene | The Canadian Industry | The Future Commercialization Challenges for Hydrogen and Fuel Cells Micro-level: • Improved fuel cell reliability and durability • Reduced cost Macro-level: • Stimulating early market demand • Improving product quality while reducing costs • Financing for R&D, commercialization • Creating supporting infrastructure • Codes and standards

12. Setting the Scene | The Canadian Industry | The Future Technology Development: On Track for Commercialization Companies are meeting technology development timelines: • Ballard Power Systems has reduced costs of fuel cells by 80% since 1999, while achieving a ten-fold increase in lifetime • Fuel Cell Technologies has accumulated over 1500 hours of operation on its second generation 5 kW system • Hydrogenics HyPM 10 kW power module has achieved over 5000 hours of operation & over 6500 “stop-start” cycles on a single unit • Dynetek Industries has 10,000 psi (750 bar) hydrogen tanks on the market • BC Hydro/Powertech is a 10,000 psi operational fueling station • US companies attaining commercial sales contracts

13. Setting the Scene | The Canadian Industry | The Future Hydrogen Highway • Province of British Columbia – Lower Mainland and Vancouver Island • Coordinated market demonstration program designed to accelerate commercialization • Framed around the 2010 Winter Olympic and Paralympic Games • Showcase and demonstrate the environmental, economic and social benefits of this technology to the world • First phase by 2007 is focused on seven highly visible locations • Mobile, stationary and micro fuel cell applications and infrastructure • Multi-agency effort

14. Setting the Scene | The Canadian Industry | The Future Hydrogen Highway Examples of Activities: • Hydrogen Fueling Stations: • Surrey (10,000 psi) • Vancouver (5,000 psi) • Victoria (5,000 psi) • Hydrogen Technology Environmental Chamber • Photovoltaic panels, electrolyser and hydrogen storage at the NRC Institute for Fuel Cell Innovation • Integration with Vancouver Fuel Cell Vehicle Program

15. Setting the Scene | The Canadian Industry | The Future Vancouver Fuel Cell Vehicle Program • Partnership between Government and Industry • Demonstration of sustainable, zero-emission based transportation technologies • 5 Ford Focus vehicles to be evaluated for three years in Vancouver’s Lower Mainland • Technology: Ballard Fuel Cell Systems, Dynetek Hydrogen storage • Opportunity to test, demonstrate, deploy and evaluate proprietary systems for H2 production

16. Setting the Scene | The Canadian Industry | The Future Hydrogen Village The Hydrogen Village is located in the Greater Toronto Area in the Province of Ontario. The intent of the H2V is to: • Create a plan and platform for the deployment of hydrogen and fuel cell technologies to the benefit of the local community. • Develop the necessary supply, service, and knowledge infrastructure needed to create a sustainable market. • Ensure technology deployments (stationary, mobile and transportation) fit within the context of existing community infrastructure and activity. • Aid in the complementary growth of other centers across Southern Ontario – thereby developing a hydrogen Corridor.

17. Setting the Scene | The Canadian Industry | The Future Hydrogen Village Examples of Activities: • Hydrogen powered delivery trucks for Purolator courier fleet • Fueling infrastructure and hydrogen powered forklifts for General Motors plant in Oshawa • Residential heating and power generation using four solid oxide fuel cells at a townhouse-style student residence at the University of Toronto at Mississauga • Back-up power for computer network servers • Fuel cell-based back-up power system at a telecommunications switching station • Hydrogen fuel cell powered utility vehicles in conjunction with hydrogen production and refueling at the Canadian National Exhibition

18. Setting the Scene | The Canadian Industry | The Future The Path Forward – Partnership Opportunities • Demonstration Projects • Hydrogen Highway – conceptually, a Hydrogen Highway from Baja, California to British Columbia, Canada (“BC to BC”) • Funding programs that encourage North America wide participation • Sharing lessons from past Olympic Games and preparing to showcase NA capabilities/expertise in the 2010 Olympic Games • Joint Development • Providing enhanced access to R&D programs in all jurisdictions – at the institutional/corporate level • Joint education and outreach programs • Identify and set objectives to support core competencies in each country to ensure complimentarity rather than duplication • Government Support • State/Provincial governments encouraging transborder activities • Involvement of US, Canada and potentially Mexico in IPHE activity

19. Fuel Cells Canada Sponsoring Members

20. Fuel Cells Canada Members • NORAM Engineering and Constructors Ltd. • Palcan Power Systems Inc. • Pathway Design & Manufacturing Inc. • PEM Engineers Inc. • PricewaterhouseCoopers LLP • Propane Gas Association of Canada Inc. • Province of Ontario • Quebec’s Fuel Cells and Hydrogen Network • Queen’s RMC Fuel Cell Research Centre • QuestAir Technologies Inc. • Sacré-Davey Engineering • Sarnia-Lambton Economic Partnership • TD Securities Inc. • Tekion Solutions Inc. • Teleflex Canada Inc. • University College of the Fraser Valley • Westport Innovations Inc. • Zongshen PEM Power Systems • FTI International Inc. • Fuel Cell Technologies Ltd. • FuelCon Systems Inc. • General Hydrogen Corporation • Gowling Lafleur Henderson LLP • Greater Vancouver Regional District • GrowthWorks Ltd • Heliocentris Energy Systems Inc. • HERA, Hydrogen Storage Systems Inc. • HSBC Bank of Canada • H3 Energy • Hydrogenics Corporation • IESVic • Inco Special Products • Keen Engineering • Kinectrics Inc. • KPMG LLP • Marcon-DDM • Marsh Canada Ltd. • McCarthy Tetrault LLP • Membrane Reactor Technologies Ltd. • Methanex Corporation • National Bank Financial • National Research Council • Advanced Measurements Inc. • Alberta Research Council • Alternate Energy Corporation • Angstrom Power Inc. • Astris Energi Inc. • Azure Dynamics Corp. • Ballard Power Systems Inc. • BC Hydro • BC Transit • BOC Gases • Business Development Bank of Canada • Canadian Hydrogen Association • Canadian Hydrogen Energy Corporation • Cellex Power Products Inc. • ChevronTexaco Technology Ventures • Chrysalix Energy Limited Partnership • Clean Energy Canada • Conduit Ventures Ltd. • Deloitte & Touch LLP • Dynetek Industries Ltd. • Enbridge Gas Distribution • Energix Research • Energy QBD Inc. • Ford Motor Company

21. Thank you Alison Grigg, on behalf of Chris Curtis Fuel Cells CanadaAugust 27, 2005 Santa Fe, New Mexico