Almost ready for takeoff?
Hydrogen fuel cells have been touted as the next big thing in powering electric lift trucks, yet for many reasons adoption rates remain low. Here's why.
By Toby Gooley
Lift truck fleet managers are perpetually on a quest to find more efficient, less costly, and lower-maintenance equipment. That applies not just to the forklifts themselves but also to the power sources that keep them moving. The result has been significant improvements in existing power technologies as well as the development of new ones.
One of the newer options is the hydrogen fuel cell, which produces electricity through a chemical reaction between hydrogen and oxygen. While it's unlikely they will ever fully replace tried-and-true technologies like lead-acid batteries, hydrogen fuel cells do show promise. Proponents tout their labor savings, environmental benefits, and ease of refueling, among other advantages.
But like any developing technology, fuel cells also have drawbacks, and critics say there's good reason so few lift truck fleets are using them. That could soon change, however. Some recent developments suggest hydrogen fuel cells could see wider adoption in the next three to five years.
One of the main reasons fleet managers consider switching to fuel cells is that they offer significant labor savings. Fuel cells can be attractive in that regard because it takes less time to refill them than it does to swap out batteries. Refueling involves refilling an onboard storage tank with compressed hydrogen, so the fuel cells "can be refueled in a couple of minutes and be back in operation right away," says Andy Marsh, CEO of Plug Power Inc., a supplier of hydrogen fuel cells, fueling systems, and services. He contrasts that with changing batteries, which requires lift truck operators to take 15 minutes or more out of their shift and can leave them queued up outside a battery room instead of out on the floor moving pallets.
Only one fuel cell stack (an assembly of cells that produces the required amount of power) is needed per vehicle, while a multishift operation that changes out batteries requires a separate battery for each shift. Hydrogen-powered trucks, moreover, run longer than comparable battery-powered ones—most estimates say a fuel cell can power a vehicle for 12 hours. Place hydrogen dispensing stations at locations throughout the warehouse, and operators won't have to drive far to refuel. That eliminates some of the time lost driving to a battery room, which may be on the far side of the building.
Battery-powered trucks gradually slow down as voltage declines. Hydrogen fuel cells, by contrast, maintain constant power until the fuel tank is empty; Marsh compares it with a gasoline-fueled automobile, which performs at a constant level until the tank runs dry. He says the combination of constant power coupled with faster refueling can improve operator productivity by up to 10 percent, and that in some environments, it may be possible to handle up to 5 percent more moves on a shift than in a battery-change operation.
Grocery and food distributors are among the technology's regular customers. One reason is that hydrogen is well suited to temperature-controlled warehouses and DCs. Hydrogen cells have performed effectively at temperatures well below zero, according to the advocacy group Fuel Cells 2000.
Some companies' interest in fuel cells is driven by corporate sustainability initiatives, says Steve Dues, vice president, Crown Equipment Corp. Because their only byproduct is water and heat, hydrogen cells can be a good choice for environmentally conscious companies. And because fuel cell users are not buying electricity to charge batteries, they can reduce both their peak power demand and their overall energy consumption.
With scheduled maintenance, hydrogen fuel cells typically have a useful life of about 10 years. A lead-acid battery may need to be replaced every three years or so, says Marsh, who also notes that any battery's performance quality and longevity will vary depending on the application, run times, and other factors.
Critics often cite the high costs of hydrogen production, delivery, and storage and fueling infrastructure as major drawbacks. To help counter those concerns, supporters have issued a steady stream of favorable cost analyses of the total cost of ownership for hydrogen-fueled forklifts. One example is a 2013 study conducted by the federal government's National Renewable Energy Laboratory (NREL), which considered the capital costs of battery and fuel cell systems and the associated costs of supporting infrastructure, maintenance, warehouse space, and labor. The research found that for a multishift operation running six or seven days a week with about 60 Class 1 and Class 2 sit-down counterbalanced forklifts, fuel cells can reduce the total cost of ownership by about 10 percent. For Class 3 pallet jacks, costs can be reduced by 5 percent, the report said. (That's highly simplified; to get the full story, click here.)
Proponents also point out that the U.S. and some state governments currently offer grants and tax incentives to encourage fuel cell adoption (a factor NREL considered in its analysis). They note that the biggest payback comes in new facilities where the fueling infrastructure is designed into the building and grounds, as opposed to retrofitting an existing facility.
Those advantages have prompted Ace Hardware, BMW, Kroger, Procter & Gamble, Walmart, Whole Foods, and others to give hydrogen a try. It's worth noting, however, that while a few are using hydrogen at multiple sites, most of the programs announced so far are pilots or involve only a single facility. This suggests that companies see value in fuel cells but may not be convinced there are enough benefits to merit adoption across the board.
Fleet managers are being cautious, says Dues, because "there are a number of [return on investment] considerations that have yet to be fully resolved. These include the complexity of the technology, total cost of ownership, reliability issues, and the absence of a refueling infrastructure to support widespread adoption." He ticks off other concerns that are giving potential users pause: the need for further technology development, high acquisition costs, the limited number of suppliers, and the expected 2016 expiration of the U.S. government's 30-percent fuel cell investment tax credit.
Despite supporters' claims to the contrary, some observers believe hydrogen fuel cells' drawbacks will be difficult to overcome. Some early fuel cell adopters have returned to lead-acid batteries, and more are likely to do so, says Mark Tomaszewski, manager, emerging technologies for EnerSys, a manufacturer of batteries and other motive power sources.
In his estimation, the biggest concerns revolve around the high costs of some aspects of hydrogen usage—of the fuel itself; of building the complex delivery, refueling, and storage infrastructure (a project Plug Power's Marsh acknowledges typically takes 16 weeks); and of maintenance for cells and infrastructure. Tomaszewski estimates that one kilogram of hydrogen delivers 20 kilowatt-hours of energy to a lift truck, and that $10 of hydrogen produces the same amount of work in a truck outfitted with fuel cells as approximately $2 of electricity in a battery-powered truck. (This example is based on an estimated cost of $20 for one-half of a battery charge for a reach truck.)
Tomaszewski also considers the unscheduled maintenance rate for hydrogen fuel cells and supporting infrastructure to be high. He points to a report by the less-than-truckload carrier FedEx Freight, which conducted a four-year pilot with the U.S. Department of Energy. FedEx Freight converted a fleet of 40 Class 1 forklifts at a terminal in Missouri to hydrogen. In its 2012 update on the project, the carrier noted that it had encountered problems with fueling and operating fuel cells in cold weather (later resolved by adding heaters to each truck, among other measures), and that the power units required frequent unscheduled repairs. A separate NREL study, also in 2012, found that more than 70 percent of the repairs to the hydrogen fueling infrastructure it reviewed were unscheduled. Unscheduled maintenance means unexpected downtime, something no warehouse or DC can afford.
As for labor, battery stalwarts say that opportunity and fast charging—where batteries are partially charged during breaks and between shifts at strategically located charging stations—eliminate concerns about operators' productivity. Time-consuming equalization is not a problem, either, they say. It generally takes place at night (opportunity charging) or on weekends (fast charging), according to PowerDesigners USA, a maker of battery charging systems.
Availability is a widely mentioned concern. Hydrogen production is limited in some areas of the country, most notably in western states outside of California and Texas. Deliveries typically are made via tank truck, and both fuel producer and delivery driver must be specially licensed and trained in handling the potentially dangerous gas. In cases where reliable delivery isn't feasible or cost-effective, users may opt to produce their own hydrogen. However, the cost of infrastructure, safety measures, and maintenance may be prohibitively expensive for some.
Critics question whether hydrogen-fueled lift trucks are as environmentally friendly as supporters say they are. One study conducted by the U.S. Department of Energy's Argonne National Laboratory found that, when the emissions produced during the end-to-end cycle of hydrogen production, storage, delivery, fueling, and vehicle operation are taken into account, a hydrogen-powered lift truck may account for more greenhouse gas emissions than a battery-powered truck.
Furthermore, you can't simply drop a fuel cell into any lift truck. The truck manufacturer must conduct extensive testing and, if necessary, take steps to ensure performance and safety won't be compromised, says Scott Carlin, electric product planning and product support manager for Toyota Material Handling U.S.A. Inc. His company is working with suppliers of alternative fuels to verify that they and their products comply with Toyota's testing protocols and safety standards. Other manufacturers have similar programs; examples include Crown, which says it has qualified more than 30 forklift models for use with hydrogen fuel cells, and The Raymond Corp., which believes it has the largest number of fuel-cell-qualified models of any lift truck OEM, according to Arlan Purdy, Raymond's product manager of energy storage systems and emerging technologies.
But there's more work to be done. Operators know when lead-acid batteries are losing their charge, but they can't say the same for fuel cells. "You want to be able to get some communication to the operator that the fuel cell will be shutting down," Purdy says. "Lift trucks that were designed for batteries are not set up to 'listen' to that kind of communication."
Yet another criticism is that the whole system—cells, deliveries, fueling stations, storage, and so forth—is too time-consuming and expensive for users to manage. Each element may have a different vendor, which adds complexity. Create a one-stop package, the thinking goes, and more forklift fleets will be willing to take the plunge.
Plug Power, which is not profitable, believes that approach will overcome some potential users' objections and will accelerate adoption. Based on customer feedback, it recently created a turnkey service called GenKey, which includes its GenFuel fueling infrastructure, GenDrive fuel cells, and GenCare aftermarket products and services. The company also has a distribution agreement with Praxair to provide liquid hydrogen to GenFuel installations. "We've taken it from what customers perceive as a complicated transaction in which they may be dealing with three providers to one where they can now come to one expert in all three of these areas," Marsh explains. "We've made it seamless for customers to buy, and that's had a great deal of impact on our growth." Marsh appears to have hit on something: The company shipped 857 GenDrive units to material handling customers in the third quarter of 2014, up from just 155 units in the third quarter of 2013.
NACCO Materials Handling Group Inc. (NMHG) appears to be heading in a similar direction. The wholly owned subsidiary of Hyster-Yale Materials Handling Inc. announced in December that it had acquired Nuvera Fuel Cells Inc., a manufacturer of hydrogen fuel cells and hydrogen generation and dispensing products. NMHG's Hyster and Yale operating divisions plan to integrate and factory-fit fuel cell technology directly into many of their lift truck models. The company said the acquisition would allow Hyster and Yale to also provide hydrogen generation and refueling capabilities, while retrofitting and servicing would be provided through Nuvera-authorized dealers.
The Nuvera deal represents a vote of confidence in the future of a technology that has struggled to gain market share. Still, NMHG acknowledges the tough road ahead, saying it expects Nuvera to generate "significant operating losses" before it can "fully commercialize the technology and achieve break-even results." The company also said it expects to spend as much as $50 million over the next two to three years for research and development, and to commercialize the technology.
Clearly, hydrogen fuel cells have many advantages and disadvantages, and opinions differ on their near-term outlook where lift truck applications are concerned. Raymond's Purdy, for one, believes market share will remain at around 2 to 5 percent. "We don't see that structurally changing until the ROI has been figured out," he says. If automakers expand the market for hydrogen-fueled vehicles, he adds, then infrastructure costs may change and hydrogen could become more common in forklifts.
Lift truck makers say they will be well prepared if that day comes. "From what I see, interest [in alternative fuels] has been increasing—so much, in fact, that forklift manufacturers are now creating positions to support these new technologies," says Toyota's Carlin. "I would expect that over the next five years, testing will continue, and as people become more confident in the overall benefits of the newer technologies, [they] will be embraced as a major alternative to lead-acid."
But until manufacturers overcome hydrogen's drawbacks, says Dues of Crown, lead-acid batteries will remain the dominant energy source for electric lift trucks. "Alternative power sources," he says, "will gain market share as they prove they can solve customer problems at a competitive price."
About the Author
Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
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