This Editor and long-time supply chain industry analyst recently had the opportunity to speak with Andy Marsh, President and CEO of Plug Power Inc.
This company was formed around the belief that the world is driving toward an electric future. The company started by building a market where one didn’t exist before – in the material handling space. Now, that vision has broadened to include a world that includes hydrogen cities – where electric airport delivery vehicles, electric package delivery vans, sea port cargo equipment, passenger vehicles and more are all powered by hydrogen and fuel cells.
The provider of Hydrogen Fuel Cell (HFC) technology is an innovator in the area of hydrogen powered material handling equipment. Customers that have adopted Plug Power’s HFC approach in material handling equipment include adoption from Amazon, Walmart, and other well-known corporate logos. A published report indicates that Amazon signed on for forklift fleets among 11 warehouses and Walmart’s deployment includes 22 warehouses.. The company recently celebrated its 10 millionth refueling by customers, up from 5 million less than a year-ago.
Our interest in speaking with Marsh was to determine the long-term value-proposition of HFC fuel cell powered equipment within heavily utilized assets, those that permeate global logistics and transportation movement needs.
Marsh explained that his company recognized early-on the business value dimensions of HFC powered vehicles in high utilization equipment, and that is why material handling equipment was targeted as the initial strategy. The value-proposition included a far faster fueling cycle than traditional lead-acid rechargeable batteries, more efficient use of equipment along with simplified maintenance. Marsh indicated customers experiencing upwards of 6 or 7 percent improvement in overall operational costs of material handling equipment.
Noted was that HFC powered vehicles can be twice as efficient as lithium-ion battery powered vehicles because of a higher energy density factor that provides an extended operating range and a faster re-fueling cycle. Thus, HFC can lend itself to more high volume operational and logistics needs such as light and heavy-duty trucks, buses, and other forms of transport,
Marsh further observed that market interest in HFC technology has been on the increase, particularly in areas such as China, Europe, and Japan. Such interest includes investing in needed infrastructure to support added hydrogen re-charging fueling sites. He pointed to China as a future adopter of HFC powered trucks and busses. That country has upwards of 1.5 million electric-powered vehicles currently in operation across China’s roads, many of which are for commercial purposes. The country’s current five-year plan calls for subsidies in fuel cell infrastructure expansion needs.
Within the U.S., the National Aeronautics and Space Administration (NASA) has for a long time, been the largest consumer of liquid hydrogen to fuel rockets, and thus the prime demand source for this type of energy. Supplies of the fuel are derived from gas waste streams that would have been burned-off. Thus, with broader vision and commitment, the U.S. has an opportunity to lead in HFC fuel cell adoption in the area of operational equipment.
Regarding the overall future of HFC, Marsh is rather optimistic. He views fuel cells as being 3-4 years behind the lithium adoption curve due to scale and application. He acknowledged the need for added fueling infrastructure and supply sourcing and cited the year 2027 as a potential milestone for HFC being at peer competitive cost with other fuel sources in most developed countries. Some countries will lead in such efforts and will therefore accelerate in that adoption cycle. Marsh noted that he continues to be impressed with the progress being made in both China and Europe.
As for this company’s futures, Marsh pointed to more announcements in the commercial trucking area, specifically next-generation HFC technology applied to heavy-duty trucks.
Plug Power is dedicated to a belief that HFC, alongside lithium-ion battery technology, will play a major role in an increasingly electrified world, and in corporate efforts to provide a new level of operational cost efficiencies while exceeding corporate commitments to sustainability and green supply chain imperatives.
© Copyright 2018. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.