Telco Energy and Infrastructure Efficiency Alkammonia and Cleancom Projects November 2014 Robert S Kelly Confidential 1
Alkaline Fuel Cells for Off-Grid and Back-up Power
Bob Kelly AFC Energy Joined as April 2013 Leads global strategy Air Products USA 7 years focused on industrial hydrogen Lead the Hydrogen Energy group for Americas/Asia 20 + installations Industry History BP Chemicals SOHIO Thermal Ceramics International Speaker US/Asia/Europe/S America/Eastern Europe 3
References to: • Alkammonia – Development of NH3 feedstock fuel cell system • Project Clean com – Deployment feasibility study Confidential 4
Executive Summary Current Market: • The rapid growth in the market for mobile communications has seen a massive deployment of cell tower installations globally. Where grid stability (electricity) is unreliable a market currently exists for • Off grid (prime power) • UPS • These markets are currently served by a variety of energy sources notably • Diesel generators • Hydrogen (PEM) fuel cells
Executive Summary Technology Technology: • A key component of the project is to use ammonia as a fuel for the AFC systems. • AFC’s have an inherent advantage in that they can tolerate traces of ammonia • The technology is within AFC current core competence Commercial proposition: • Calculations show that the TCO for an ammonia system is competitive with diesel. • The larger UPS market would be targeted subsequently based on the success of off grid installations.
Technical Feasibility
Current Technology Hydrogen Cylinders Hydrogen Cylinders Confidential 8
Comparable Technology Existing AFC V3 stack Ammonia cracker Ammonia cylinders Existing technology that 10 times the energy Electricity needs to be adapted for content than hydrogen to the the application AFC Balance of Plant cylinders customer To be developed based on Alpha and Beta system designs
Initial system design (Alkammonia) High level System P&ID developed for Alkammonia 10
Initial system design (Alkammonia) 11
Commercial Feasibility
High Level Business Case Mobile communications growth has led to a rapid increase in cell tower installations globally • Where electrical grid stability is unreliable a market exists for: • Off grid primary power • Uninterrupted power supply (UPS) • These markets are currently served by a variety of energy systems, notably • Diesel generators • Hydrogen (PEM) fuel cells • Main primary power markets • Africa • Quickly developing market • Tens of thousands of towers already • Very unreliable grid • India • 500,000 telecom towers in India alone 1 • Set to double in the next 4-5 years 2 • 95% of all sites in India require a back-up generator 3 • The assoc. of mobile operators (GSMA) acknowledge the potential of fuel cells • GSMA see ammonia (NH3) as a suitable fuel 13 1: The Economic Times, Jun 6, 2012; 2: Several sources, i.e. rcrwireless.com 2011, 3: GSMA report: “ Energy for the Telecom Towers”, 2011
Off Grid the challenge • It is estimated that as many as 1.6 billion people exist without the security of available energy. • A significant number of these people live in third world or emerging nations – Example approx. 65% of Africa's population are not grid connected. • The use of solar/wind has gone someway to tackling the problem however issues remain to establish alternatives to local (rental) generators that(running on diesel) are CO2 positive to the environment and expensive to maintain and secure. Confidential 14
Extract from Lightingafrica Africa is home to one of the world’s largest off -grid populations; approximately 590 million people live with no connection to their national electric grid. As a result, large segments of the continent’s population rely on hazardous forms of flame-based lighting, which produce very low levels of light output and require regular purchase of fossil-based fuels. This off-grid population presents a sizeable market opportunity for producers of low-cost alternative lighting products, such as those that are LED based and charged through solar or other means. The Lighting Africa initiative aims to address the lighting needs of off-grid populations by making safe, affordable, durable, and environmentally sustainable lighting available to the masses. Lighting Africa recognises that engaging in this emerging market is a challenge to manufacturers that require in- depth market research to design, develop, and deliver products and business models suited to local market needs. Lightingafrica.org Key Drivers: Cost Portability Ease of replenishment Safety Confidential 15
AFC Right to Play • AFC has the ability to – Replicate the current business model – Offer longer runs (hrs) – Offer lower costs of ownership – Eu funds (minimum AFC investment) • AFC has the right to play in this space
Basic Running Costs (Time) Fuel 1.5Kw load Hydrogen 65kg cylinder = 8kWh or 5 hours Methanol 2 litres/hr Diesel 1.25 litres/hr Ammonia 68kg cylinder 260kWh 7 days Confidential 17
Strategy for entering the Off- Grid power market
Strategy • Develop a small scale unit using existing AFC technology • Utilize existing grant funding • Derive and develop a business structure leaving the new venture as a standalone business • Possibly vertically integrated. • Possible group/subsidiary formed
Off Grid the challenge • The largest market for potential customers of off-grid power falls outside the developed world, where long standing infrastructures exist today. Approximately 1.6 billion persons globally, representing >20% of the our global community are yet to have access to electricity mainly in • Rural Asia (including Russia) • The African continent and particularly – Sub Saharan Africa. • Conveniently for the purposes of this analysis, sub Saharan Africa holds potential for the deployment of ammoniac fuel cells based on the presence of existing merchant business via Afrox (Linde) • According to the A.R.E. (Alliance for rural electrification) over 80% of Africa's rural population does not have grid access, and 550 million Africans do not have access to electric light. • Even in relatively "developed" South Africa, 22 million persons lack electricity. Confidential 20
Amenable Markets • The project initially set goals of establishing the availability of a sold market amenable to the use of fuel cells as a source of either back up or off grid power. • The exhaustive nature of this exercise was negated to identify geographical spaces where ammonia was available on an economic scale based on the TCO (total cost of ownership) for the system. • The team took the lead from Linde gas, the world largest supplier of merchant ammonia and used its product availability matrix to identify markets that would be immediately amenable to the use of ammonia as an energy carrier. Confidential 21
Determining Amenable Markets • The supply of industrial gases is essential a three fold initiative. – Bulk pipeline – On site generated – Merchant • Due to the inherent nature of the application and the remote and varied location of the end user it was determined that a merchant (delivered) model would offer the best and most economic supply solution. • Merchant models are heavily biased in terms of logistics and supply frequency. Confidential 22
Ammonia vs Diesel • The global energy market has been a shift (since 2009) in the parity between oil (diesel) and natural gas (ammonia) prices. – The basic feedstock for diesel being oil and similarly the basic feedstock for ammonia being natural gas based on either fuel equivalence or simple feedstock value. • Added to this to reduction in diesel subsidies we can forecast that the gap between fuel costs based on energy equivalence will continue to widen. Confidential 23
Ammonia vs Diesel Increasing divergence in oil and natural gas prices Source US Department of Energy Confidential 24
Conclusion • Based on A. Availability of ammonia region by region B. Desired/required energy costs • The specified target market for immediate evaluation and demonstration would be – sub Saharan Africa – South Africa Confidential 25
Financial Analysis • To be economically viable variable (fuel)costs must have a diesel gallon equivalent of ~ € per kg of ammonia • Based on survey results the viable sites for economic demonstration would be City Tank Size 50 100 S Africa Johannesburg 68 kg Pretoria 68 kg Namibia Windhoek 68kg Botswana Gaborone 68kg • These sites could be expanded based on the efficiency and competitive nature of alternate technologies Confidential 26
Demonstration
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