1. COPYRIGHT © 2010 BALLARD POWER SYSTEMS INC. ALL RIGHTS RESERVED B A L L A R D P O W E R S Y S T E M S PUTTING FUEL CELLS TO WORK NOVEMBER 2010 Utilizing Renewable Energy Resources for Distributed Generation Michael Goldstein VP & Chief Commercial Officer

2. NOVEMBER 2010P A G E 2  Fuel cells have unique ability to provide base load power, power regulation, or load cycle as required to meet the demands of distributed generation Application of Fuel Cells in Smart Grid Source: EPRI chemical plantutility wind PV fuel cell micro CHP commercial building industrial complex hybrid fuel cell turbine

3. NOVEMBER 2010P A G E 3 Fuel Cell Attributes Ideal for Distributed Generation  Fuel Cell Applications in BC’s Energy Mix: Base load power from by-product hydrogen Remote community electrification Peaking power applications Combined heat & power from natural gas  Key Drivers of Fuel Cell Adoption: By-product hydrogen High efficiency Dispatchability Lower transmission cost

4. NOVEMBER 2010P A G E 4 Key Driver #1: By-Product Hydrogen Availability  ~1,000 MW of by-product hydrogen available globally  Sufficient to power ~800k-1M homes for a year  Often vented or combusted for heat  Low-cost fuel for electricity production through fuel cell system  Sources: Chlorine production Sodium chloride production Petrochemical refineries Production of acetylene, ethylene & styrene

5. NOVEMBER 2010P A G E 5 Key Driver #2: High Efficiency Operation  Combined efficiency of 40% to 80% fuel heat fully dispatchable electricity utility point of use

6. NOVEMBER 2010P A G E 6 Key Driver #3: Dispatchability solar wind Problem: Renewable energy & demand for electricity (load) do not coincide electrolyser hydrogen storage CLEARgen™ Solution: Energy storage with fuel cell system tidal fully dispatchable electricity

7. NOVEMBER 2010P A G E 7 Key Driver #4: Reliability & Cost of Transmission Infrastructure  Lower Transmission Cost: Locate generator close to load Reduce transmission losses Reduced infrastructure costs Increased security, grid reliability

8. NOVEMBER 2010P A G E 8 Example #1: By-Product Hydrogen Generator  Fuel cell system to offset power requirements at K2 Pure Solutions’ Californian bleach plant  Benefits: Offset power demand on site Sell excess electricity to utility Zero GHG emissions 48% efficiency 15-20% IRR possible Enablers: Capital grant (SGIP) Low cost fuel Net metering

9. NOVEMBER 2010P A G E 9 Example #2: Remote Community Electrification  Renewable power for remote, off-grid communities to displace diesel generators  >300 communities across Canada isolated from grid, ~3,000 worldwide  Benefits: Reduces/eliminates reliance on diesel Low noise No transmission losses Dispatchable Zero GHG emissions  BC Hydro's Hydrogen-Assisted Renewable Power (HARP) initiative  Bella Coola demonstration project Enablers: Capital purchase incentives Clean energy mandates

10. NOVEMBER 2010P A G E 10 Fuel Cell Success Will Be Policy Driven  Volume will come through: Clean energy mandates (RPS, Clean Energy Act) Feed-in tariffs Capital purchase incentives Net metering programs  Canadian value proposition Local, high-value jobs Retain fuel cell leadership Global export markets Clean, green energy ‘ Levelized Cost of Energy’ ~$0.06-$0.13/kWhr (reflecting US Federal and California state incentives) Product Cost Reduction volume driven ~45% to date