1. Business of Hydrogen and Fuel Cell Forklifts in South Carolina Shannon Baxter-Clemmons, PhD South Carolina Hydrogen and Fuel Cell Alliance Scott Greenway, PhD Greenway Energy LLC June 16, 2011 This presentation does not contain any proprietary, confidential, or otherwise restricted information.

2. Hydrogen 101 A non-profit public/private partnership of academic, government and business coordinating resources in South Carolina to advance commercialization of hydrogen and fuel cells. Areas of focus: –Education and Outreach –Infrastructure Development –Policy Development and Implementation –Research and Technology Transfer The South Carolina Hydrogen and Fuel Cell Alliance

3. Hydrogen 101 2010 & 2011 South Carolina is one of the Top 5 Fuel Cell States State of the States: Fuel Cells in America Top 5 (alphabetical) California, Connecticut, New York, Ohio, and South Carolina.

4. Hydrogen 101 SC Hydrogen and Fuel Cell Permitting Law Passed into law in 2010 South Carolina is the first state in the US to permit hydrogen and fuel cell deployments at the state level using existing internationally recognized codes and standards. Policy is a result of cooperative work between: state officials industry representatives codes and standards experts Municipal Association of South Carolina

5. Hydrogen 101 Hydrogen 101: State and Local Government Education DOE Award implementation started in 2008 Goal: To accelerate the on-going construction of the hydrogen economy in South Carolina and the Southeast by providing accurate and reliable information to state and local decision-makers. Initially started with educating state and local decision makers Definition of “decision makers” shifted to include bureaucrats, economic developers, and business decision makers. Greenway Energy developed economic models

6. Hydrogen 101 Feedback –H 2 technologies sound good, but it would be good to better understand applications where they financially make sense –What is the status of the technology? When will we see everyday applications of fuel cells? –Where does the hydrogen come from? –How can we improve market adoption? –How can I help? –Financial support is tough in this economy but what other things can we do to promote the technology in the marketplace?

7. Hydrogen 101 Bridgestone-Firestone Plant GENCO warehouse in Aiken, SC Creates jobs for operation, maintenance, and distribution of technology Hydrogen Fork-Lifts Market Value Proposition Key Strategy to increasing hydrogen through put of local hydrogen station

8. Hydrogen 101 Activities in Response to Feedback H 2 501 – Early Markets for Hydrogen Technologies –H 2 Technology Case Studies H 2 Lift Truck Case Study Telecom Backup Case Study –(Under review with Economic Dev. Focus Group) Combined, Heat, and Power (CHP) Study –(Under review with Economic Dev. Focus Group) –Novel consensus economic models used to help decision makers understand opportunities –Working with 3 rd parties – economic developers and technology consultants to improve model output utility –Developing case study parameters to best illustrate ideal and borderline cases –NEW Hydrogen 101 Webpage Case Studies and Company (Trulite and Proterra) “Value Proposition” models to be posted on a new webpage, Summer 2011

9. Hydrogen 101 Fuel Cell Applications in the Near Future Battelle Report identifies key early PEM fuel cell markets: –Back-up Power –Lift Trucks –Airport vehicles Other Markets for Fuel Cells –Combined Heat & Power

10. Hydrogen 101 Fuel Cell Lift Trucks Class 1 – Sit Down Truck Class 3 – Ride Behind Palette Jack

11. Hydrogen 101 Battery vs Fuel Cell Forklifts 5-10 min ~ 8 hr ~ 6 hr (no fade) ~ 2 hr (fade) 15-20 min ~ 6 hr (no fade) ~ 2 hr (fade) Fuel Cell Forklift & Refilling Station Battery Forklift & Charging Station Battery Forklift & Changing Battery Run Time Voltage 8 hr Run Time Voltage 6 hr2 hr Difficulty to Steer During Voltage Fade

12. Hydrogen 101 Rules of Thumb Approx. 15-17 min/truck/shift of labor saved A 5% reduction in trucks needed and corresponding labor reductions 5 year battery lifetime can be significantly shorter in warm climates Fuel cell lifetime is 10 years with regular maintenance Opportunity fueling means that a regular battery change is not needed with each shift change Fuel cell lift trucks get 30% federal tax credit and have no SC sales tax 50% bonus depreciation may apply

13. Hydrogen 101 Value Proposition Fundamentals Class I - Battery Trucks –$5,500 battery –20 min switch (non-productive time) –1 switch per shift –$1/ Op. hr. maintenance –3 kWh/truck/hr –$0.072/kWh –$1000/truck/yr – Battery Room Exp. –5 yr. lifetime with maintenance Class I - Fuel Cell –$40,000 fuel cell –3 min H 2 fill (non-productive time) –Opportunity filling –$1.5/ Op. hr. maint. –0.2 kg H 2 / Op. hr. –1.8 kg tank in truck –$5/kg H 2 (molecule) –$250k/yr H 2 storage lease –5% Fleet reduction due to productivity gain –10 yr lifetime with maintenance

14. Hydrogen 101 Non-Amortized Cash Flow Analysis 40 Truck Fleet

15. Hydrogen 101 Lift Trucks Deployed in South Carolina Bridgestone/Firestone –43 Class 1 Lift Trucks –23 adopted in 2007, 20 additional in 2009 –On-site hydrogen tube trailer delivery GENCO –27 Class 1 Lift Trucks –Adopted in 2010 –Liquid Storage from Sage Mill Hydrogen Station BMW –Phase 1 86 Units – Mixed Classifications –Phase 2 2 nd fleet using Reformed Landfill Gas

16. Hydrogen 101 Lift Truck Analysis Conclusions In a 24/7 heavy operation, as few as 35 trucks can make a positive case due to battery life In lighter usage, about 40-50 trucks are a good starting point to consider the switch High labor costs are a strong driver for economics The price of Hydrogen comes down with use and is essential to economics Need high tax burden to take full advantage of federal tax rebates after 2010 Payback can be less than 5 years in current market Cost of capital could add expenses if financed

17. Hydrogen 101 Contact Shannon Baxter-Clemmons, PhD Executive Director baxterclemmons@schydrogen.org baxterclemmons@schydrogen.org 1225 Laurel Street Columbia, SC 29201 www.schydrogen.org