Summary

THE FREEDOMCAR AND FUEL PARTNERSHIP

This is the report of the Committee on Review of the FreedomCAR and Fuel Research Program, Phase 2, chartered by the National Research Council (NRC). The Phase 1 review of the Partnership was published by the NRC in 2005. The FreedomCAR and Fuel Partnership is a collaboration among the U.S. government, in particular the Department of Energy (DOE); the U.S. Council for Automotive Research (USCAR), whose members are Chrysler LLC, the Ford Motor Company, and General Motors Corporation; and five key energy companies: BP America, Chevron Corporation, ConocoPhillips, ExxonMobil Corporation, and Shell Hydrogen (U.S.). The program supports the very wide variety of research activities needed to enable a transition pathway for automotive transportation. The pathway starts with internal combustion engines (ICEs) more efficient than today’s, proceeds through the increasing use of a variety of ICE hybrid electric vehicles, and then, by 2015, arrives at the point where the private sector can make a decision, based on information generated by the Partnership, about the commercialization of fuel-cell-powered vehicles fueled by economically competitive hydrogen produced from a variety of energy sources. Research goals have been established that, if achieved, promise to overcome the many high-risk barriers to achieving this vision.

A major strength of the FreedomCAR and Fuel Partnership is that the research it sponsors is determined by joint industry/government teams. This collaborative structure allows identifying both the long-range, precompetitive research needs, as envisioned by the automotive and energy companies, and the nation’s societal needs related to automotive vehicles and fuels, as articulated by govern-



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Summary The Freedomcar aNd FUel ParTNershiP This is the report of the Committee on Review of the FreedomCAR and Fuel Research Program, Phase 2, chartered by the National Research Council (NRC). The Phase 1 review of the Partnership was published by the NRC in 2005. The FreedomCAR and Fuel Partnership is a collaboration among the U.S. government, in particular the Department of Energy (DOE); the U.S. Council for Automo- tive Research (USCAR), whose members are Chrysler LLC, the Ford Motor Company, and General Motors Corporation; and five key energy companies: BP America, Chevron Corporation, ConocoPhillips, ExxonMobil Corporation, and Shell Hydrogen (U.S.). The program supports the very wide variety of research activities needed to enable a transition pathway for automotive transportation. The pathway starts with internal combustion engines (ICEs) more efficient than today’s, proceeds through the increasing use of a variety of ICE hybrid electric vehicles, and then, by 2015, arrives at the point where the private sector can make a decision, based on information generated by the Partnership, about the com- mercialization of fuel-cell-powered vehicles fueled by economically competitive hydrogen produced from a variety of energy sources. Research goals have been established that, if achieved, promise to overcome the many high-risk barriers to achieving this vision. A major strength of the FreedomCAR and Fuel Partnership is that the re- search it sponsors is determined by joint industry/government teams. This collab- orative structure allows identifying both the long-range, precompetitive research needs, as envisioned by the automotive and energy companies, and the nation’s societal needs related to automotive vehicles and fuels, as articulated by govern- 

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP ment, setting appropriate goals, and selecting the best way of achieving them. Such a collaboration is intended to speed the market deployment of radically new systems on a large scale. The FreedomCAR and Fuel Partnership started with a presidential commit- ment to request $1.7 billion over 5 years (FY04 through FY08), with appropria- tions thus far of about $243 million, $307 million, and $339 million in FY04, FY05, and FY06, respectively. The FY07 Continuing Resolution resulted in fund- ing of about $401 million. The FY08 Presidential Budget Request is for about $436 million. These funds are used to support basic research, applied research, development, and technology validation and deployment in the following areas: • ICEs using a variety of fuels, • Fuel cell power systems, • Hydrogen storage systems, • Electrochemical energy storage, • Electric propulsion systems, • Hydrogen production and delivery systems, and • Materials for lightweight vehicles. Specific research goals to be met in 2010 and 2015 have been established in each of these areas. There are 11 technical teams consisting of scientists and engineers from the USCAR member companies, energy partner companies, and national laboratories, as well as DOE managers of technology development: • Advanced combustion and emission control, • Fuel cells, • Onboard hydrogen storage, • Electrochemical energy storage, • Electrical and electronics, • Materials, • Hydrogen production, • Hydrogen delivery, • Fuel pathway integration, • Codes and standards (C&S), and • Vehicle systems analysis. Program oversight is provided by an Executive Steering Group consisting of the DOE assistant secretary for energy efficiency and renewable energy (EERE) and a vice-presidential-level executive from each of the Partnership companies. Within EERE, the DOE efforts are divided between the FreedomCAR and Vehicle Technologies (FCVT) program and the Hydrogen, Fuel Cells, and Infrastructure Technologies (HFCIT) program. In addition, research and development (R&D) on

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 SuMMArY hydrogen production from coal and nuclear energy is carried out in DOE’s Office of Fossil Energy (FE) and its Office of Nuclear Energy (NE), and EERE’s biomass program pursues work on biomass and biofuels. The Office of Science’s Basic Energy Sciences (BES) program is focused on fundamental work in areas such as hydrogen production, hydrogen storage, fuel cell membranes and electrodes, and catalysts. The U.S. Department of Transportation (DOT) also participates in safety-related work. scoPe aNd FocUs oF The commiTTee’s rePorT This being the second biennial report, the committee has focused on assess- ing progress in each of the research and program management areas as well as the responses of program management to recommendations made in the Phase 1 report. The statement of task directed the committee to • Review the challenging high-level technical goals and timetables for government and industry R&D efforts in the various technical areas be- ing addressed by the Partnership. • Review and evaluate progress and program directions since the Phase 1 review toward meeting the Partnership’s technical goals, and examine on-going research activities and their relevance to meeting the goals of the Partnership. • Examine and comment on the overall balance and adequacy of the re- search and development effort, and on the rate of progress, in light of the technical objectives and schedules for each of the major technology areas. • Examine and comment, as necessary, on the appropriate role for federal involvement in the various technical areas under development. • Examine and comment on the Partnership’s strategy for accomplishing its goals. • Review and assess the actions that have been taken in response to recom- mendations from the Phase 1 review of the program. Shortly after the committee was formed, Congress asked the NRC to perform a related study that would develop a roadmap of the budgetary resources required to realize a significant percentage of hydrogen-fueled vehicles sold by 2020 in the United States. Accordingly, NRC appointed the Committee on Assessment of Resource Needs for Fuel Cell and Hydrogen Technology to carry out that study. Several members of the committee reviewing Phase 2 of the FreedomCAR and Fuel Partnership—that is, the authors of this report—also serve on the later com- mittee, and one is its chairman. The report from the later study will be published several months after the present report. The two committees have shared infor-

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP mation and attempted to achieve consistency to the extent possible and minimize duplication in performing their separate tasks. This Summary very briefly discusses the technical areas covered in Chapters 3 and 4 and includes the committee’s key recommendations. The body of the report contains additional observations, findings, and recommendations on each aspect of the program. The rest of the Summary contains overall comments and briefly addresses crosscutting issues and funding. oVerall commeNTs The FreedomCAR and Fuel Partnership is well planned, organized, and man- aged. It is an excellent example of an effective industry/government cooperative effort. There has been significant progress in most areas since the Phase 1 report, and the committee commends management on its thorough and generally recep- tive responses to the recommendations in that report. The major accomplishments are summarized in Chapter 5, Overall Assessment. Changes, however, take a long time to implement, especially if they require modification of an existing multiyear research contract or a reallocation of funding, which can take up to 2 years. This time factor places a premium on using the best systems analysis tools for program planning and decision making. There remain many barriers to achieving the objectives of the Partnership (see Chapter 5). These barriers include cost and performance at the vehicle, sys- tem, and component levels. To be overcome, some of these barriers will require invention, and others will require new understanding of the underlying science. And, even without these cost and performance barriers, broad economic and social issues might deter so fundamental a transition. Transition to a new, unfamiliar energy carrier, hydrogen, will have to be planned and managed with fact-grounded foresight. The current technology validation program is well conceived and is an important step in addressing those broader issues. The technical and cost challenges are being addressed by the research spon- sored by the Partnership. The committee believes that the expense of this research, if it overcomes these barriers, is justified by its potentially enormous benefits to the nation relative to its use of petroleum. Furthermore, with increased national interest in reducing greenhouse gas emissions, the research efforts of the Partner- ship are more needed than ever before. TechNical areas advanced combustion engines and emission controls Internal combustion engines (ICEs) will be the mainstay of the nation’s automotive fleet for a very long time, even if the goals of the fuel cell program and the hydrogen infrastructure program are met, enabling fuel cell vehicles to be

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 SuMMArY introduced in large numbers by 2020. Therefore, improvement in the efficiency of these powerplants through combustion research on advanced ICEs is a very important part of the Partnership. This kind of research has provided understand- ing that allows ICE engines to meet emission constraints and efficiency goals simultaneously. Many experts foresee additional incremental improvements, and there is intense pressure for automobile companies to increase engine efficiency, because it would have an immediate, significant effect on petroleum use. As a result, new findings are quickly translated into large-scale development activities and, if they are successful, will be rapidly deployed by industry. This makes it im- portant that the Partnership’s management continually evaluate the ICE research that is being funded to ensure that it is precompetitive. recommendation. The Partnership should formulate and implement a clear set of criteria to identify and provide support to ICE combustion and emission control projects that are precompetitive and show potential for improvements well beyond those currently being developed by industry. Fuel cells The development of fuel cells for vehicles and of an infrastructure to deliver hydrogen fuel promises to be one of the most efficient and least polluting ways to power personal transportation vehicles while providing the potential for meeting the Partnership’s major goals. Hundreds of fuel cell vehicles are now being built for field tests by auto manufacturers, but these early systems still need significant improvements in durability and cost before mass-produced vehicles can be built and sold. Therefore, an improvement in durability and performance and a reduc- tion in the cost of fuel cell systems remain major goals of the Partnership. Past R&D has led to important advances, and these continue to occur. Much remains to be done, ranging from basic sciences research to laboratory testing, as well as the validation of results in vehicle tests of complete systems in order to be certain that goals have been met. The breadth and magnitude of these efforts ne- cessitate continual reassessment of the goals and timing of the program elements to assure the appropriate allocation of funds as new knowledge is generated. Many uncertainties remain regarding the likelihood of meeting these goals and timing targets, but the potential benefits of fuel cells and the progress to date certainly justify current spending and increased future spending and budget allocations. recommendation. The Partnership should conduct sensitivity analyses on key fuel cell targets to determine the trade-offs and tolerances in engineering specifica- tions allowable while still meeting fuel cell vehicle engineering requirements. recommendation. The Partnership should reassess the current allocation of funding within the fuel cell program and reallocate as appropriate, in order to

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP prioritize and emphasize the R&D that addresses the most critical barriers. In particular, the Partnership should give membranes, catalysts, electrodes, and modes of operation the highest priority. It should also • Place greater emphasis on the science and engineering at the cell lev- el and, from a systems perspective, on integration and subcomponent interactions; • Reduce research on carbon-based supported catalysts in favor of develop- ing carbon-free electrocatalysts; • Ensure that Basic Energy Sciences (BES) funding of membranes, cata- lysts, and electrodes remains a high priority of the program; and • Apply the go/no-go decision-making process to stationary fuel cell systems initiatives that are not directly related to transportation technologies. onboard hydrogen storage Substantially improved techniques for storing hydrogen must be developed to meet the Partnership’s goals. Efforts to discover a viable alternative to compressed hydrogen gas are in their very early stages—too early to have confidence in their ultimate success. Therefore, almost all current auto company field test vehicles use 5,000 to 10,000 pound per square inch (psi) (35 to 70 MPa) compressed gas storage. Meeting the program storage goals almost certainly will require a storage technology as yet undiscovered, making the current search for new storage ma- terials and operating modes appropriate. The funding for this research increased substantially, from $26 million in FY06 to $34.6 million in FY07, although the FY06 appropriation was well below what was requested. The systems analysis techniques being developed should enable the allocation of these funds so that promising approaches are emphasized and progress speeded. recommendation. The hydrogen storage program should continue to be sup- ported by the Partnership at a high level since finding a suitable storage material is critical to fulfillment of the vision for the hydrogen economy. Both basic and applied research should be conducted. recommendation. The Partnership should rebalance the R&D program for hy- drogen storage to shift resources to the more promising approaches as knowledge is gained. The new systems engineering center of excellence (COE) should look at all of the system requirements simultaneously, not just the system weight percent storage goal, and guide this rebalancing.

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 SuMMArY recommendation. In the event that no onboard hydrogen systems are found that are projected to meet targets, the Partnership should perform appropriate stud- ies to determine the risks and consequences of relying on pressurized hydrogen storage. It should consider production and delivery issues as well as effects on vehicle performance, safety, and costs. electrochemical energy storage Improved battery performance, durability, and cost are critical to gaining more widespread acceptance for hybrid and plug-in hybrid automobiles (includ- ing fuel cell hybrids). Very significant progress has been made during the last 2 years, and lithium ion batteries have been developed that can meet several of the FreedomCAR 2010 goals, including weight, volume, and cycle life requirements, with good prospects for meeting the remaining goals as well as the calendar life requirements. New approaches have increased the safety and abuse tolerance of these batteries. Cost is the largest remaining barrier, with estimates of current cost about two times the 2010 goal. Substantial additional research is ongoing to find lower cost materials. The success of this effort will largely determine the viability of these batteries in mass-produced hybrid and plug-in hybrid electric vehicles (PHEVs). A significant additional breakthrough in battery technology is needed to en- able a competitive all-electric automobile that would help meet the FreedomCAR goals. Furthermore, the potential benefits of PHEVs in reducing petroleum con- sumption have been recognized by the Partnership, yet there seems to be a lack of urgency in finalizing and executing the R&D plan for PHEVs. recommendation. The Partnership should conduct a thorough analysis of the cost of the Li ion battery for each application: hybrid electric vehicles (HEVs), PHEVs, battery electric vehicles (EVs), and hydrogen-fueled fuel cell HEVs. The analysis should reexamine the initial assumptions, including those for both market forces and technical issues, and refine them based on recent materials and process costs. It should also determine the effect of increasing production rates for the different systems under development. recommendation. The Partnership should significantly intensify its efforts to develop high-energy batteries; in particular it should look for newer higher- specific-energy electrochemical systems within the long-term battery research subactivity and in close coordination with BES. recommendation. The Partnership should move forward aggressively with com- pleting and executing its R&D plan for plug-in hybrid electric vehicles.

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP electric Propulsion, electrical systems, and Power electronics HEVs, PHEVs, EVs, and fuel cell vehicles all require electric propulsion and power electronics systems, along with appropriate electronic controllers, to translate electric energy into vehicle propulsion. Improvement in the size, weight, efficiency, and cost of these components is a significant part of the challenge of making such vehicles competitive in the marketplace. Higher-temperature operation of these components and the integration of power controllers and electric motors to improve the performance of vehicle electric propulsion systems are the most important efforts being supported by the electrical systems and power electronics program, and appropriately so. Higher speed electric motors for vehicle propulsion are being studied in order to reduce their size and weight. The Partnership supports a wide range of research activities associated with these electrical devices aimed at incrementally improving each of the constituent technologies. Continued improvement in their respective properties is required to help enable viable mass-produced vehicles employing electric propulsion. recommendation. The Partnership should conduct a meta-analysis and develop quantitative models to identify fundamental geometric limitations that ultimately set bounds on and lead to the realization of the size, mass, and cost of power converters and electric propulsion systems in relation to the physical properties of materials and processes such as dielectric strength, magnetic saturation, and thermal conductivity. This will allow the various ongoing and future efforts to be benchmarked against the theoretical boundaries of what is possible and enable the establishment of appropriate directions in research goals. structural materials The Partnership has set a target of a 50 percent reduction in vehicle struc- tural mass with no increase in the cost of the materials involved. From a program management standpoint, either this mass reduction must be achieved or the size and mass of the vehicle powerplant, most other components, and the vehicle’s fuel storage capacity will have to be increased. This Partnership and the earlier Partnership for a New Generation of Vehicles have a long history of research into structural materials for lightweight vehicles that is described in earlier reports. Based upon that work, it is likely that the proposed 50 percent reduction in mass can be achieved. However, it is also quite certain that, within the time frame of the Partnership, this reduction cannot be achieved without incurring a cost penalty. The program management should, ac- cordingly, realistically assess the cost of making the required mass reduction and adjust the cost targets of the other components appropriately. The Phase 1 report recommended reduction of funding, but the lightweight materials programs have continued unabated. In addition, the committee believes that much of the fund-

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 SuMMArY ing currently allocated to the application of lightweight structural materials will not affect this cost penalty significantly and might be better used in other parts of the program. recommendation. Based on the 50 percent weight reduction as a critical goal and the near-certainty that some (probably significant) cost penalty will be as- sociated with it, the Partnership should develop a materials cost model (even if only an approximation) that can be used in a total systems model to spread this increased cost in an optimal way across other vehicle components. recommendation. The materials research funding should largely be redistrib- uted to areas of higher potential payoff, such as high-energy batteries, fuel cells, hydrogen storage, and projects associated with infrastructure issues. However, materials research for projects that show a high potential for enabling near-term, low-cost mass reduction should continue to be funded. hydrogen Production, delivery, and dispensing hydrogen fuel Pathways The Partnership envisions a gradual transition from petroleum-based fuel to hydrogen as the main energy carrier for transportation vehicles. There are many pathways that such a transition might follow, and each needs to be analyzed and understood. The transition envisioned is likely to take place in complex ways over sub- stantially more than a decade as the population of fuel cell vehicles grows. It is reasonable to expect hydrogen initially to come from existing centralized produc- tion facilities and to be distributed by tube trailer or liquid carrier. These supplies are likely to be supplemented, increasingly, by distributed generation in service station forecourts, using steam reforming of widely distributed natural gas, or by water electrolysis powered by the electric grid, perhaps during off-peak periods. Such methods are likely to continue to be used until fuel demand in populated areas is sufficient to justify the distribution by pipeline of hydrogen from central- ized sources and produced in several different ways. Even then, some remote areas are likely to continue to be supplied by the methods used early in the transition. With all of these potential pathways, more extensive scenario analysis of the transition and emergence of mature hydrogen-fueled systems is needed to enable us to understand the most critical factors in production and delivery as the market develops. recommendation. DOE should continue its studies of the transition to hydro- gen, extending them to 2030-2035, when the number of hydrogen vehicles in use could increase rapidly, and use the results of these studies as a basis for evaluating

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0 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP the potential roles of different transitional supplies of hydrogen fuel as demand increases substantially, including both forecourt production at the fueling station and centralized production using the most cost-effective means of distributing the hydrogen. hydrogen Production and Deliery Hydrogen is currently produced in large quantities in centralized plants and is widely distributed in both gaseous and liquid forms for a variety of uses. However, the challenges of producing it and delivering it in appropriate quantities over several years to a growing transportation vehicle fleet are significant. Given concerns about carbon dioxide emissions and the need for ubiquitous delivery points and safety, many scenarios and a variety of raw materials and production processes must be considered and analyzed. The Partnership’s production goals for vehicular hydrogen assume that it will come from a diverse set of feedstocks. Natural gas reforming is the most straightforward method of distributed hydrogen production at local service sta- tions during the transition period. However, this process will result in greenhouse gas emissions and increased imports of natural gas, and because its space require- ments (and that of other distributed generation schemes) could limit its use, it will need further study. The development of carbon capture and sequestration (CCS) technology in FE will pace the possible economic production of hydrogen from coal. DOE has made important progress in identifying the potential supplies of biomass for con- version to hydrogen and other fuels. However, extensive research, development, and demonstration work on biomass production and conversion to hydrogen must be completed and water and land issues addressed to determine the amount of hydrogen that can be sustainably produced at a competitive cost. Basic research is required to determine the feasibility of new processes for producing hydrogen with nuclear reactor heat, and more research is needed to enhance electrolysis technology for splitting water. Unlike the distribution of gasoline or diesel fuel, hydrogen distribution will consume substantial energy and incur significant costs. These energy losses and costs need to be considered in choosing appropriate delivery methods during various stages of the transition. recommendation. DOE should put more emphasis on the space require- ments for forecourt hydrogen generation by studying ways to minimize these requirements. recommendation. DOE should conduct a systematic review of the CCS program as it affects the schedule for and program assumptions about hydrogen production from coal. This review should identify indicators of incipient program slippage

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 SuMMArY and, through systems analysis, the program consequences of possible delays, leading to recommendations for management actions that would compensate for these delays. recommendation. The Partnership should increase funding for electrolysis ef- forts to advance the technology, demonstrations, and systems integration. BES should support, as appropriate, fundamental research in catalysts, membranes, and coatings as well as in new concepts. recommendation. DOE should undertake a systems study to assess the rela- tive importance of barriers to biomass production, availability, transportation, and conversion to hydrogen in order to identify the areas that most affect com- mercial availability, giving them priority attention in the program. This study should address technical barriers already identified, including their impact on the environment, and help define policies for land and water use and government- sponsored commercial incentives that would stimulate commercial expansion of the biomass options. recommendation. DOE should involve the energy partners in all biomass pro- grams related to conversion to hydrogen or hydrogen carriers as early in the programs as possible. recommendation. DOE should increase funding for the delivery and dispens- ing program to meet the market transition and sustained market penetration time frames. If DOE concludes that a funding increase is not feasible, the program should be focused on the pipeline, liquefaction, and compression programs, where a successful, if only incremental, short-term impact could be significant for the market transition period. crosscUTTiNG issUes safety Safety is recognized as a critical, overarching factor throughout all of the Partnership activities. One part of the effort is assuring that all activities involving hydrogen are carried out in a safe manner and that lessons learned are put into standard practice. Another part is research on the safe use of hydrogen for fueling and operating vehicles and developing appropriate codes and standards. The safety activity was funded at well below requested levels until 2007, when its budget increased to $13.8 million. This money is helping to support many organizations developing vehicle and component standards, work on fuel- ing station design, fast fueling to 70 MPa (10,000 psi), and the development of hydrogen quality standards. There is also an extensive program on unintentional

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP releases of hydrogen, its behavior, safety sensors, and materials compatibility with hydrogen. The task of developing adequate safety codes and standards is immense and unlikely to be completed by 2010. Getting new codes and standards adopted can easily take 7-10 years, and lack of appropriate regulations could impede the introduction of hydrogen vehicles into the marketplace. This underscores the importance of developing the underlying knowledge and providing it to codes and standards organizations as soon as possible. recommendation. DOE should establish a program to address all end-to-end safety aspects as well as codes and standards. Such a program could be viewed as an extension of the current quantitative risk analysis activity, which is focused on filling stations. This task should be adequately funded and expanded. The priority for expansion should go to (1) the vehicle and (2) the fuel distribution system. recommendation. The Department of Transportation (DOT), including all rel- evant entities within it, should develop a long-range, comprehensive hydrogen safety plan with budget estimates and milestones to 2015. The milestones de- veloped in this plan should be integrated into the milestones and roadmap of the codes and standards technical team. Technical Validation (learning demonstration Program) This program collects data from fuel-cell-powered vehicles being driven on public highways and from hydrogen refueling stations located in a variety of environments around the country. The data collection process is well conceived and is establishing a credible metric for the state of the art for hydrogen supply and fuel cell vehicle systems. Results from this program are pooled and shared and are being used effectively to guide the technical teams and analysis efforts and to set priorities for the overall program. The second generation of vehicles now being put into the program by auto manufacturers will validate overall progress under real-world conditions. This program is an essential way for the Partnership to learn about the real-world performance of the technologies it is developing. recommendation. DOE should continue to disseminate the results of the techni- cal validation activity to supporting organizations outside the Partnership in order to promote widespread innovation and competition. DOE management needs to systematically evaluate the information being generated by each project to deter- mine when the project should be terminated. On the other hand, DOE management should not prematurely drop support for the overall technical validation and learn- ing demonstrations, because their importance cannot be overemphasized. DOE and the Partnership should develop a long-range plan for technology validation that continues until at least 2015.

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 SuMMArY recommendation. DOE management should maintain adequate support for technical validation as it is essential to the overall Partnership. This support should be balanced and cover both the vehicles themselves and the fuel infrastructure needed. To achieve the rapid learning that the overall project requires, DOE should also keep the validation activities focused on their primary purpose—the accu- mulation, analysis, and dissemination of experience from the field. Safety should be stressed throughout the learning demonstration program, because an accident early on could attract publicity out of proportion to its true consequences. decision making and strategic Planning Management of the FreedomCAR and Fuel Partnership is a complex task because of the Partnership’s breadth, its technological sophistication, and its need for ongoing commitments from automobile companies and energy companies, as well as the federal government. The organization of the Partnership provides for the involvement of appropriate people to perform the needed tasks, all of the way from research scientists to those providing strategic direction. The earlier Partnership for a New Generation of Vehicles (PNGV) proved that this basic structure is effective. A program of this scope requires effective decision-making and strategic planning processes to ensure its objectives are appropriately focused and that good progress is being made. Program management requires a variety of system analysis tools applicable to accomplish this, and during the 14 years of the two programs, several such tools have been developed (Chapter 2). Individual activi- ties of the program have used these tools effectively to explore various scenarios and to set and modify goals. What is still needed, however, is a tool to quantita- tively assess how the various technology options being pursued will impact the overall goals of reducing petroleum consumption, air pollutants, and greenhouse gas emissions when the options are deployed in the marketplace. Such a tool is under development and is scheduled for completion in 2008. It should be used in conjunction with panels of outside experts who can give the program managers and the Executive Steering Group advice on the validity of the models, technical risk and market risk, the role of possible market interventions, and the best role for DOE vis-à-vis the private sector in the development of various technologies. The importance of reducing U.S. petroleum consumption and greenhouse gas emissions is ever more recognized, which makes a high-level review and assess- ment of this program and its effectiveness very timely. recommendation. DOE should accelerate the development and validation of tools that can be used to model propulsion system and vehicle technologies and fuels and determine their potential impact on the overall Partnership goals of re- ducing petroleum use and air pollutant and greenhouse gas emissions. Sensitivity analyses, from worst case to best case scenarios, should be performed to assess

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 rEViEW Of ThE frEEDOMCAr AND fuEL PArTNErShiP these impacts. Models, input data, and assumptions should be independently re- viewed to validate and refine the models and lend credibility to the conclusions derived from them. recommendation. The Partnership should use its technical and cost systems analysis capabilities to provide an essential component to manage its program, to assess progress in meeting technical and cost targets, to examine the impact of not meeting these targets, to adjust program priorities, and to make go/no-go decisions. In the committee’s judgment, the activities being pursued by the Partnership have a critical role to play in carving out a sustainable path for the U.S. transporta- tion system. As anticipated at the inception of the program, this path will include a wide variety of new and improved propulsion systems, vehicle technologies, and fuels. The program goals are very challenging, and the importance of achieving them becomes more pressing each year. The committee believes that it is time to step back and, with the knowledge already gained, engage in a strategic review in the context of other ongoing domestic and international activities focused on ve- hicle and fuel technologies. The leadership of the Partnership is eminently quali- fied to oversee this review with the goal of ensuring that the activities undertaken in the next few years are adequate to meet the challenges now evident. recommendation. The Executive Steering Group of the FreedomCAR and Fuel Partnership should establish a high-level planning group to develop a strategic plan appropriate for the next phase of the nation’s collaborative R&D program for vehicle and fuels technology. Program Balance and Funding The total FY07 budget for the hydrogen-related activities that make up the Hydrogen Fuel Initiative (hydrogen technologies and fuel cells) within DOE is about $274 million, and the total funding of relevance to the charter of the commit- tee is about $401 million (see Chapter 5). Overall program funding is consistent with recommendations of previous in-depth studies and is consistent with the President’s commitment of $1.7 billion over 5 years (FY04 to FY08). The committee has proposed an overall assessment of the program goals in each technology area and expects this to provide a better basis for judging the adequacy of funding in each area as the program moves forward beyond FY08. The committee also has noted some specific areas that should be expanded (i.e., electrolysis; hydrogen delivery/distribution; forecourt designs with minimum space requirements; fuel cells; safety, codes and standards) and has indicated that the proposed reduction in FY08 funds for the technology validation program be

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 SuMMArY restored. Structural materials research is the only endeavor where the committee feels some funds should be reallocated to more critical projects. The committee also recommended that a strategic planning assessment be performed to ensure that the program activities are adequate to achieve its goals, which are of great strategic importance to the United States. Such an assessment should be part of the recommendation to develop a broad forward-looking stra- tegic plan and would provide a basis for determining longer-term funding needs, given the importance of U.S. energy security and reductions in greenhouse gas emissions. In addition, the ongoing NRC study on hydrogen resources will cer- tainly provide useful information on priorities of the overall effort to develop a transportation system that includes hydrogen-powered vehicles. The committee notes that the congressional practice of earmarking funds has severely restricted the ability of DOE to effectively manage some parts of its program. There is concern about insufficient funding in three other areas as well: the DOE CCS program, the DOT hydrogen safety program, and the hydrogen from biomass activity, but these concerns were not investigated in detail by the committee.