FEATURE

Fuel Cells Bulletin April 201012

Ohio Third Frontier drives investment and innovation for fuel cell companies

As the fuel cell industry continues to grow and worldwide sales of fuel cells are projected to rise to between $6 billion and $12 billion by 2016, representing compound annual growth of 9–15%, companies are recognizing the importance of location. From startup funding to research and development to commerciali-zation, several factors – like access to funding, critical partnerships, and a skilled workforce – have become essential in the lifecycle of any fuel cell development effort.

With robust support for growing technology-based businesses, Ohio has emerged as a global leader for the fuel cell industry, because the

state offers companies the right combination of financial support, collaboration opportuni-ties, and entrepreneurial resources, including a robust talent pool that is skilled and educated in the technology.

A coordinated partnership of government, industry, and universities, as well as an existing manufacturing/advanced materials network, exem-plary government funding, and legal/regulatory framework, make Ohio a natural draw for the fuel cell industry. The result is a hotbed of fuel cell businesses that are making real products – today.

But what makes Ohio truly unique is one critical program that brings all of the elements

of business success together, driving new inno-vations in the state’s thriving fuel cell industry – the Ohio Third Frontier.

The Ohio Third FrontierEstablished in 2002, Ohio Third Frontier has an initial $1.4 billion, 10-year commitment to support technology-based economic develop-ment. Since its inception, Ohio Third Frontier has created or commercialized more than 600 companies, and has created $6.6 billion in eco-nomic impact in Ohio, representing a 9:1 return on investment. A renewal of the program will be decided on by voters in less than a month.

Within Ohio’s technology sector, Ohio Third Frontier and related investments are catalyzing the emergence of new technology clusters, fueled by recent and ongoing com-mercialization of new technologies. Emerging clusters include Ohio’s fuel cell network, which is supported by the Ohio Third Frontier Fuel Cell Program.

By Mike McKay – Manager, Technology Business Assistance Office, Ohio Department of Development, USA

Ohio is emerging as a leading region for fuel cell development, with several clusters of companies and research facilities growing up across the state. This article looks at the impact of initiatives such as the Ohio Third Frontier on helping to establish a sustainable fuel cell industry that is gearing up for com-mercialization of clean energy technologies for a wide variety of applications.

Figure 1. Location of Ohio Fuel Cell Coalition members and Ohio Third Frontier fuel cell award recipients, in 2004 (left) and 2008 (right).

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April 2010 Fuel Cells Bulletin13

The Ohio Third Frontier Fuel Cell Program supports research and development by addressing the technical and cost barriers to fuel cell com-ponents and systems commercialization in Ohio. Since 2002, the State of Ohio has invested more than $85 million in a variety of fuel cell-related projects throughout the state. This investment has been leveraged with more than $136 million in co-investment, and is responsible for creating nearly 300 jobs within Ohio’s fuel cell industry.

The goal of the Ohio Third Frontier Fuel Cell Program is to accelerate the development and growth of the fuel cell industry in Ohio by direct financial support to organizations seeking to: inves-tigate near-term specific commercial objectives with respect to products, processes, or services; commer-cialize new products, manufacturing processes or technologies; adapt or modify existing components or systems that can reduce the cost of fuel cell sys-tems or address technical and commercialization barriers; or demonstrate market readiness.

Fuel cell clustersOhio’s fuel cell clusters, defined as those organi-zations that have demonstrated a commitment to fuel cells, either through membership in the Ohio Fuel Cell Coalition or by participating in a winning team in the Third Frontier Fuel Cell Program competitions, have increased by 75% in the four years from 2004 to 2008 (Figure 1).

The Ohio Third Frontier and related tech-nology investments have driven the state’s existing advanced manufacturing base and the growth of the fuel cell sector in Ohio. In particular, the Ohio Third Frontier and Edison programs have catalyzed the cluster’s growth, by attracting companies and investors from other

states and countries. Indeed, Ohio has been ranked first in Site Selection magazine’s rankings for new and expanded business facilities in the US every year since 2006, and continues to be a preferred destination for fuel cell investments.

It’s no wonder Ohio is quickly becoming an attractive location for a full spectrum of fuel cell related companies, seeking a state partner that understands what it takes to build a suc-cessful fuel cell business, and offering support in the key elements of business growth.

The architects of Ohio Third Frontier looked strategically at Ohio’s historic strengths in industrial sectors, supply chains, and manu-facturing, as well as national laboratories and research institutions. The program aims to fill in any missing gaps related to risk capital and entrepreneurial skills, and was designed to catalyze connections between business and academia in order to support technology com-mercialization. The result is a comprehensive support network that helps Ohio’s technology-based companies develop their technologies into products, to get those products to market, and to succeed commercially (Figure 2).

Focus mattersIn 2004, the state released the Ohio Fuel Cell Roadmap, which was intended to serve as a guide for the State of Ohio as it worked to maxi-mize involvement in the fuel cell industry by Ohio companies. The Roadmap was prioritized to include those programs and activities that had been deemed to be most important and where Ohio’s state government could play a valuable role. While there were many things that the state could do, the Roadmap was focused on those

activities that the state must do to achieve its objectives. Those activities include:

Since the Ohio Third Frontier Fuel Cell Program was introduced and the Roadmap was released, a number of lessons have been learned. Among the greatest lessons is that focus is important. In recent years, many states have initiated some type of pro-gram or fund to support renewable or advanced energy technologies. Most of those programs and funds are broad-based, and support a wide range of energy-related technologies. Most are also designed as environmental programs, to help reduce green-house gases or improve air quality.

What makes Ohio’s fuel cell initiative unique is that it is an economic development program, and is a comprehensive approach to building the industry. This focus has not been over-looked by fuel cell companies throughout the world, many of which have established partner-ships with Ohio companies. Several have ulti-mately made the decision to locate significant operations in Ohio. Having a program that is focused on a specific industry is tremendously important to companies in that industry.

Industry coalitionJust as the State of Ohio was kicking off its Fuel Cell Program in 2003, industry leaders

Figure 2. Types of organizations in Ohio’s fuel cell cluster, in 2004 (left) and 2008 (right).

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Fuel Cells Bulletin April 201014

from across the state came together to form the Ohio Fuel Cell Coalition. Today, the coa-lition is a united group of industry, academic, and government leaders working collectively to strengthen Ohio’s fuel cell industry, and to accelerate the transformation of the industry to global leadership in fuel cell technology and applications.

The Ohio Fuel Cell Coalition represents the Ohio fuel cell community to multiple audiences, seeks to expand market access, fosters technological innovation, and advances the competitiveness of the Ohio fuel cell community. Today it has more than 100 member organizations, primarily from the industry, but also from universities and government.

By acting as a focal point for the Ohio fuel cell community, the coalition creates awareness, education, and opportunities for its members that would be difficult to create without such an organization. The Ohio Fuel Cell Coalition creates greater opportunities to link the aca-demic and industrial communities in pursuit of economic development and job opportunities for Ohio students and workforce members, as well as creating wealth for enterprises with operations in Ohio. The coalition has helped bring together industry and university members to work together and collaborate on projects for both state and federal funding, and it provides a strong voice to advocate on behalf of the indus-try to state and federal leaders.

Pat Valente, Executive Director of the Ohio Fuel Cell Coalition, says the Ohio Third Frontier has been a tremendous help for busi-

ness growth within the State of Ohio, and for the fuel cell industry overall. ‘I don’t know if we would have had the growth in Ohio that we’ve had without it,’ he says.

The Ohio Third Frontier Fuel Cell Program has been successful at promoting effective partnerships among and between companies, universities, and not-for-profit organizations in part because it requires that each proposal be a collaborative effort com-prised of two or more independent firms, higher education institutions, or nonprofit or government research institutes. The Ohio Fuel Cell Coalition has helped by creating an environment in which companies and univer-sities can network and become partners on fuel cell-related projects.

Innovation and business success The Ohio Third Frontier has played a critical role in driving new business success, and for providing a much-needed platform for existing companies to expand and grow through the creation of innovative new products.

One example is found in GrafTech Corporation, located in Parma. With a 120-year history in Ohio, GrafTech has always been a leading innovator, producing the arc carbons that allowed the City of Cleveland to become the first city in the world to have electric street lamps, and enabling the lighting necessary for early color motion picture photography. The Ohio Third Frontier provided four grants total-

ing more than $3.4 million to help GrafTech continue to build on its innovative past with new products and market opportunities.

With Ohio Third Frontier support, GrafTech has pioneered the use of lightweight, corrosion-resistant, graphite-based materials used to produce flow-field plates for fuel cells. These novel materials are now found in fuel cells that provide power for a variety of applications including buses, forklift vehicles, and backup power applications. The company sees future applications in consumer electronics and sta-tionary power.

The Ohio Third Frontier is also making direct investments in Ohio companies which are using research and development to retool and stay competitive, as can clearly be seen in the stories of traditional manufacturers like Crown Equipment Corporation.

Created in 1945 as Crown Controls Corporation in New Bremen, Crown got its start by first manufacturing temperature controls for coal-burning furnaces, and then television antenna rotators. It diversified in several directions before finding its niche in the materials handling industry in 1956. Its lift trucks are now used in a variety of applica-tions, such as transporting goods through the narrow aisles of warehouses, distribution cent-ers, and manufacturing facilities.

Today, Crown is putting a new-economy spin on an old-economy industry. Already one of the world’s leading lift truck manufacturers, Crown now wants to be the industry leader in the application of fuel cell technology.

Eric Jensen, the firm’s Manager of New Technology Research and Development, says fuel cells make perfect sense for their custom-ers, who must now recharge lift truck batteries an average of every eight hours.

‘Batteries have six to 10 hours of runtime,’ says Jensen. ‘Some of our customers have three batteries for each vehicle – one is in the vehicle, one is cooling, and one is being recharged. To change a battery, it can take 20 to 30 minutes, during which time the vehicle is out of service and an employee is tied up with maintenance.’ Translation: lost productivity.

The fuel cells now being applied to lift trucks do everything a battery does, but can be refu-eled more quickly using a hose from a tank, Jensen says.

In 2008, Crown received an Ohio Third Frontier Fuel Cell Program grant valued at $977 000 to help with the first phase of a project to study the technical and commercial barriers to the application of fuel cells in its lift trucks. In 2009, it received a subsequent $1m grant to research integration of fuel cells into the manufacture of its vehicles (Figure 3).

Figure 3. Crown Equipment Corporation is investigating the integration of fuel cells into the manufacture of its materials handling vehicles, such as rider pallets.

Abundant opportunities for collaboration

As more fuel cell companies come to Ohio for the business support, there are more oppor-tunities for collaboration. A continued goal of the Ohio Third Frontier is to initiate and nurture synergies between entities, accelerating speed to market.

One example of this collaborative suc-cess is UltraCell Corporation, of Vandalia. In 2007, UltraCell moved its manufactur-ing from California to Ohio because of the latter’s growing importance in the fuel cell industry.

UltraCell collaborated with Mound Technical Solutions of Miamisburg to win a $1 million Ohio Third Frontier grant. UltraCell was looking to manufacture a more powerful version of its XX25™ portable fuel cell product, called the XX55™, which is used for computing communications and other applications. Mound Technical Solutions was looking to sell its fuel cell testers, which were being used to help UltraCell develop its prod-ucts (Figure 4).

With Ohio Third Frontier’s help, the collab-orative partnership created between these two companies has resulted in the creation of jobs and the development and commercialization of products. UltraCell ultimately won addi-tional Ohio Third Frontier awards, including three Ohio Third Frontier Fuel Cell Program grants totaling nearly $3 million.

The grants enabled UltraCell to win a two-year contract with the US Department of Defense’s Air Force Research Laboratory, which is headquartered at Wright-Patterson Air Force Base in Dayton, Ohio. UltraCell will develop portable fuel cell systems for use by soldiers in the field.

‘Advanced portable fuel cell technology will play a key role in the future of the US dismounted war fighter,’ says Lt. Mark Roosz, Program Manager at the Air Force Research Laboratory.

Connecting with academic talent

In addition, Ohio’s ability to connect its busi-nesses with the broad array of academic talent across the state helps in the development of fuel cell and hydrogen related research. The state funded an investment in project devel-opment and testing facilities that provide the world’s most powerful fuel cell devel-opment resources. These facilities at Case Western Reserve University, The Ohio State

University, the University of Toledo, Cleveland State University, and Stark State College of Technology form the first level platform for resources that can serve the fuel cell industry.

One of the best examples of business-academic partnership success is found in the collaboration between Rolls-Royce Fuel Cell Systems and Stark State College of Technology.

In 2006, Rolls-Royce opened its US subsidiary, Rolls-Royce Fuel Cell Systems Inc, located on the campus of Stark State College of Technology. Rolls-Royce Fuel Cell Systems is leading the global fuel cell devel-opment program that is aimed at developing a MW-scale commercially viable solid oxide fuel cell power system by the end of the dec-ade. Currently, the company procures materi-als, components, and services from nearly 200 Ohio companies.

The outcome of the collaboration is more than $18 million in grants – more than $10 million of which came from Ohio Third Frontier and the Ohio Department of Development – generated during the past five years to develop fuel cell curricula, support industry research and development, and pre-pare technicians for this emerging field.

With the assistance of an Ohio Third Frontier Wright Project grant in 2003, Stark State College of Technology constructed a revo-lutionary $4.7 million Fuel Cell Prototyping Center, to help Ohio create and retain high-quality jobs. Completed in the fall of 2006, the center is designed for use by emerging fuel

cell-related companies to assist them in pre-commercialization prototyping and demonstra-tion stages of the development of fuel cell-based power generation systems. Not surprisingly, the charter tenant in this groundbreaking center is Rolls-Royce Fuel Cell Systems.

Mark Fleiner, CEO of Rolls-Royce Fuel Cell Systems, says the portion of money the state carved out for fuel cell projects was the decid-ing factor that caused Rolls-Royce to choose Ohio for its development center.

‘Our extensive research found that Ohio is the place investing real green dollars in building an industry around fuel cells,’ says Fleiner. ‘Ohio is putting money toward edu-cating a workforce; supporting businesses that supply materials, components, systems, and subsystems; and providing economic incentives for university and industry col-laborations.’

A talented, skilled workforce

The Ohio Department of Development refers to Rolls-Royce’s development as a ‘double pay-off,’ in that it is creating high-tech jobs while providing opportunities for Stark State students to gain experience in a growing industry.

Stark State is now offering a one-year fuel cell technology technical certificate and schol-arship as part of the mechanical engineering technology program. The program incorporates mechanical, electrical, and chemical technolo-

April 2010 Fuel Cells Bulletin15

Figure 4. UltraCell Corporation has moved its manufacturing operations to a new facility in Vandalia, Ohio. The company is looking to commercialize its fuel cell technology for portable applications.

FEATURE

PATENTS

gies to provide education for the application of scientific and engineering principles focused on alternative energy sources and more specifically, fuel cell technology.

Stark State College’s campus has become a key piece in Ohio’s fuel cell industry.

In addition to creating educational pro-grams and opportunities to feed the growing industry, the Ohio Third Frontier enables companies to leverage Ohio’s history in manufacturing to tap into an existing skilled workforce and retrain existing workers for the fuel cell industry. Companies like GrafTech and Crown Equipment Corporation have already leveraged the benefits of transferring the skills of an existing workforce. Many more will follow suit as Ohio Third Frontier support helps the industry shift and grow.

This talent pool of trained fuel cell workers thrives in Ohio because of a more relaxed and balanced lifestyle that enables executives and their employees to be successful in both their personal and business lives, without sacrificing one for the other. This is good news for the fuel

cell industry. Employees like their lives in Ohio and want to stay here.

The economic impact of the Ohio Third Frontier on the fuel cell industry is substantial. However, a more important consideration is the Ohio Third Frontier’s long-term effects on the state’s system of creating innovation at all levels, including companies, entrepreneurs, universities, research institutions, and national laboratories.

The goal of the Ohio Third Frontier is to be the spark that ignites spontaneous, market-driven growth, which ultimately transcends the public investment. With ongoing care and nurturing, those seed investments become embedded deeply enough to have a meaning-ful and lasting positive impact on the fuel cell industry in Ohio and across the globe.

For more information, contact: Michael McKay, Manager – Technology Business Assistance Office, Technology and Innovation Division, Ohio Department of Development, 77 South High Street, Columbus, OH 43215, USA. Tel: +1 614 644 9159, Email: Michael.McKay@development.ohio.gov, Web: www.development.ohio.gov/Technology

16Fuel Cells Bulletin April 2010

More informationOhio Third Frontier: www.ohiothirdfrontier.comOhio Third Frontier Fuel Cell Program: www.ohiothirdfrontier.com/FuelCellProgram.htmOhio Fuel Cell Coalition: www.fuelcellcorridor.comOhio Fuel Cell Roadmap (2004): http://ow.ly/1vY55GrafTech Corporation, Fuel Cells: www.graftech.com/markets/fuel-cells.aspxCrown Equipment Corporation, Fuel Cells: www.crown.com/usa/about/eco-logic_fuel_cell.htmlUltraCell Corporation: www.ultracellpower.comRolls-Royce Fuel Cell Systems: www.rolls-royce.com/energy/energy_products/fuel_cellsStark State College of Technology, Fuel Cell Technologies: www.starkstate.edu/fuelcell

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