The Dow Chemical Company, the world's largest chemical manufacturer, and General Motors Corp., the world's largest automobile manufacturer, have reached initial understanding on the world's largest fuel cell transaction to date.
The intent of this is for GM to commercialize its hydrogen fuel cell technology to generate electricity from hydrogen created as a co-product at Dow's operations in Freeport, Texas. The 30-square-mile complex in Freeport, 65 miles east of Houston, is Dow's largest manufacturing facility.
If tests proceed according to plan, Dow could eventually use up to 35 megawatts of power generated by 500 GM fuel cell units on an ongoing basis. This is enough electricity to power 25,000 homes for a year and is more than 15 times bigger than any other known fuel cell transaction. The test is expected to begin during the fourth quarter of 2003 and to run through 2005, with plans to commercialize starting in 2006. Dow and GM teams are currently working to remove the final hurdles for placing the fuel cells in Dow's chemical manufacturing facility. A final agreement between the two companies is expected to be signed in the next few months.
"This is a significant milestone -- not only from a technology and business perspective, but from an environmental one as well," says Bill Jewell, Dow's business vice president of energy. If the tests are successful, Dow could become the largest user of fuel cell generated electricity in the world. "Technology moves forward in steps. This step can prove the feasibility of manufacturing and using fuel cells in significant quantities."
Larry Burns, GM vice president of research and development and planning, and Peter Molinaro, global leader of climate change for Dow, jointly announced the arrangement in the U.S. capital.
"While this is a milestone event," Burns said, "and it points to a growing interest among businesses in using fuel cells to power factories and buildings, the most compelling reason for GM to collaborate with Dow is ultimately to reduce the cost of fuel cells and improve their durability so that we may put them in cars by the end of the decade."
Though Texas is the first place where Dow and GM will test this technology, the two companies are already discussing the use of fuel cells to convert hydrogen to electricity in other Dow locations in the U.S. and Europe.
"Using hydrogen to generate electricity is no longer reserved for spacecraft," said Dow's Molinaro. "This collaboration can place us at the threshold of common use of fuel cells to power significant portions of our economy. We are very excited about this collaboration with General Motors and about what it could mean in the pursuit of greater energy diversity, ultimately leading to a hydrogen economy."
"This is a small but significant step on the path to a more sustainable energy future," Molinaro stated. "We applaud this move by Dow to be a fuel cell pioneer and to explore new technologies that lead to a more sustainable energy profile," Burns added.
The Dow-GM opportunity typifies the type of creative deals that will arise in the new Hydrogen Economy.
"This is an excellent example of environmental stewardship making good business sense," Burns said. "By efficiently recycling co-product hydrogen with a fuel cell, Dow would be able to reduce its emissions and create electricity competitive with its other energy supplies. This kind of creativity will generate a stream of entrepreneurial thinking that will ultimately accelerate the arrival of the Hydrogen Economy. This deal is just a start."
"As we reduce costs and improve durability, new applications will emerge that serve industrial, commercial and, finally, consumer power and transportation needs," Burns said. "GM will continue to lead the development of these applications."
Both Dow and GM are members of the Green Power Market Development Group, a unique partnership between the World Resources Institute (www.wri.org) and twelve major U.S. corporations, dedicated to building corporate markets for green power. WRI praises the Dow-GM fuel cell plan.
"With a fuel cell transaction this size, Dow and GM continue to show that they are serious about alternative energy," said Jonathan Lash, president of WRI. "This collaboration between Dow and General Motors, two partners in WRI's Green Power Market Development Group, demonstrates the type of innovation and leadership that will be required to build sustainable energy markets."