Canadian Hydrogen and Fuel Cell Sector Profile 2012 WEB 2389-01 CHFC Sector Profile... ·...

Canadian Hydrogen and Fuel Cell

Sector Profile 2012

ii

Since 2004, the Government of Canada, the Canadian Hydrogen and Fuel Cell Association (CHFCA) and PricewaterhouseCoopers LLP (PwC) have collaborated to provide an extensive profile of the Canadian hydrogen and fuel cell sector. The 2012 Sector Profile follows a similar format to the previous eight editions and provides industry insight on Canada’s hydrogen and fuel cell sector for policy makers, investors and other stakeholders. The research adds value to business strategies, investment decisions, and the overall expertise across our country.

The Profile is published annually to monitor trends and recognize growth and achievements for this key influence of the Canadian economy. We would like to thank all the organizations that contributed to the development of the Canadian Hydrogen and Fuel Cell Sector Profile 2012.

Canadian Hydrogen and Fuel Cell Sector Profile 2012

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1

The Canadian Hydrogen and Fuel Cell Sector Profile 2012 measures performance indicators and provides industry insight to assess Canada’s position within an increasingly competitive global industry. Interest in clean energy research and technologies continues to gain momentum worldwide driven by concerns over the environment, economic development, and energy pricing. Hydrogen and fuel cells have become an increasingly viable commercial resource, and the Canadian sector is well positioned as an established leader in this field. By supporting hydrogen and fuel cell technology to help address climate change and sustainable energy issues, the Government of Canada, CHFCA and PwC create the opportunity to provide products and solutions for greenhouse gas emissions, air quality, energy security and economic development.

Introduction The Industry at a Glance in 2011:• Revenuewas$211million.

• Productsalesgenerated$99millionofrevenue.

• Research,developmentanddemonstrationexpenditureswere$136.6million.

• Employmentwas2,025.

• 123demonstrationprojectswerereported.

• 582researchpartnershipswerereported.

Mercedes-Benz F-Cell fuel cell electric vehicle

Chevy Equinox Fuel Cell Electric Vehicle and Shell hydrogen fueling station designed, manufactured and commissioned by Powertech Labs

2

ORganiz atiOn t yPe

Corporate organizations, including public and private companies, and subsidiaries, represented63%oftotalresponses.Government organizations accounted for18%,witheducationorganizations,and non-profit organizations including associations representing the remaining 19%ofrespondents.

HeadquaRteRs

Themajorityofrespondents(89%)reported headquarters of hydrogen and fuel cell activities in Canada. Others were headquartered in the United States and Europe.

yeaRs Of invOlvement in HydROgen and fuel Cell aC tivities

Fifty-one percent of respondents reported involvement in hydrogen and fuel cell activities for more than ten years.

aReas Of exPeRtise

The main area of expertise was researchorganizations(22%).Fuelcell developer or manufacturer and hydrogen production each represented 12%,followedbyprofessionalserviceprovider(9%).Policydevelopmentandprogramadministrationrepresented8%while systems integrator represented 7%,followedbyeducation,safetyandtraining(6%).Fuelcelluseroccupied5%whilehydrogenstorageaccountedfor4%.Suppliertodeveloperormanufacturer and commercialization supporteachrepresented3%,followedby fuel cell distributor or agent, hydrogendistributionandutility(2%each). The ‘other’ area of expertise category(3%)includedhydrogenfueling infrastructure.

Organization Profile

Organization Type

Private company40%

Public company15%Division/subsidiary

of public company8%

Governmentorganizations

18%

Educationorganization

18%

Non-profit organization incl. associations

1%

p. 2 Organization Type

Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%

p.2 Years of Involvement in Hydrogen and Fuel Cell Activities

Mobile –Auxiliary Power

5%

Mobile – Primary Power and Drivetrain

24%

Portable(including

micro)11%

Small Stationary 50kW or less

19%

Large Stationary > 50kW

14%HydrogenProduction

and Fueling Infrastructure

27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%

p.3 Hydrogen and Fuel Cell Facilities by Region

Provision of services

37%

Product sales59%

Canadian government supportrecognized as revenue

1%

p.4 Revenue by Category

Small Stationary50kW or less

14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%

Mobile – Auxiliary Power

21%

FuelingInfrastructure

50%

p.7 Focus of Demonstration Projects

Rest of Canada 4%USA5%

Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%

p.8 Employment by Region

Government9%

Academia andnon-profit

15%

Corporate76%

p.8 Employment by Organization

Remain the same (+/-5%)

52%

Significant increase(greater than 15%

of current employees)17%

Increase(between 5%

and 15%)23%

p.11 Plans to change employment in the next 18 months

Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%

p.9 Sources of Funding - Corporate

A-Base15%

Programs85%

p.9 Sources of Funding - Government

Other non-profitorganization

37%

NSERC/Canadian Foundation for Innovation

13%

Other 50%

p.9 Sources of Funding – Academia and Non-Profit

Other OEM13%

Public-privatepartnerships

26%

Hydrogen andfuel cell companies

26%

EnergyProviders

11%

Other 7%

p.10 Strategic Alliances

Declined3%

No reply40%

Completed survey57%

p.10 Profile participation rate

Technicians2%

Academic/research staff

26%

Undergraduatestudents

including coop13%

Canadian graduate andpostgraduate students

46%

International graduate andpostgraduate students

13%

p.6 People Involved in Research

USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%

Rest of Canada1%Rest of

Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%

p.4 Revenue by Region

R&DIn-house

48%

p.9 Funding Allocation by Area - Gov’t & Academia & Non-profit

R&DIntramural

35%

Marketing andbusiness development

1%Education,

safety and training5%

Policy development1%

Monitoringand reporting

1%

Demonstrationand pilot projects

9%

Europe11%

Other 3%

Germany 3%

Significantly decrease (greater than 15%)

3%Decrease

(between 5 and 15%)5%

Japan 1%

Japan4%

Automotive OEM17%

Public capital markets2%

Years of Involvement in Hydrogen and Fuel Cell Activities

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Areas of Expertise

Access to markets

Lack of funding

Technology development

p.2 Areas of Expertise

p.3 Technology Focus

p.4 Total Revenue ($ millions)

Hydrogen production

Research organization

Policy development andprogram administration

Fuel cell user

Professional services provider

Hydrogen distribution

Fuel cell developer or manufacturer

5 10 15 20 250

Other

Systems integrator

Education, safety and training

Commercialization support

Supplier to developer or manufacturer

Hydrogen storage

Fuel cell distributor or agent

22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45

Proton Exchange Membrane

Solid Oxide Fuel Cells

Hydrogen Production

Hydrogen Distribution

Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment

28. Growth since 2001

1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000

R&DRevenue Employees

$

p.7 Patents

200

100

0

300

400

235

351

Alberta

Canadian government (all levels)

Corporate operations

Parent, affiliatedor subsidiary

Research, non-profit,non-governmental institute

Contract work conductedfor another institute

0 20 40 60 80 100

12. Sources of Funding for R&D Expenditure by Organization

23%

68%

7%

7%

9%

Foreign government

University oracademic institute

1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%

GovernmentCorporate Academic and non-profit

290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending

p.11 Priorities to enhance competitive performance in 2012

0 5 10 15 20 25

Collaboration/strategic alliances

Gain market share

Better targetingof customers

Improving processes

Better marketor customer data

Plans for expansion(new products/new markets)

Other

Outsourcing

8%

1%

8%

21%

8%

Reduce costof operations

7%

6%

19%

12%

10%

p.? challenges faced in 2010

0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA

British ColumbiaQuebecOntario

0 5 10 15 20 25 30 35 40 45 50 55 60

16. Demonstration Projects by Region (Number of Projects)

51

Other

GovernmentCorporate Academia and non-profit

%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

3

maRket fOCus

Stationary applications, including bothsmall(19%)andlarge(14%)subcategories, combined represented thelargestareaofmarketfocusat33%.Fueling infrastructure, which includes hydrogen production, distribution and storage, represented the second largest stand alone area of market focusat27%.Inaddition,thecombinedmobile application subcategories of portable(11%),primarypoweranddrivetrain(24%)andauxiliarypower(5%)represented40%ofthemarketfocus. The results show that the market focus has remained stable from the 2011 Sector Profile.

teCHnOlOgy fOCus

ProtonExchangeMembrane(PEM)fuel cells dominated the focus of technologyactivitiesat37%withhydrogen production coming in second at20%,followedcloselybyhydrogenstorageat14%.Solidoxidefuelcellsrepresented8%,hydrogendistributionrepresented7%andtheremainingcategoriesrepresented7%oftheindustry’s technological focus. The ‘other’ areaoftechnologyfocus(7%)includeshydrogen infrastructure, reduction-oxidation, dual-fuel diesel engines, and safety.

HydROgen and fuel Cell faCilities by RegiOn

Surveyparticipantsreported138locations for hydrogen and fuel cell facilities and activities in 2011. In total, 70%offacilitieswerelocatedinCanada,11%inEurope,8%intheUnitedStatesand4%inJapan.Theremaining7%wereoverseas in China, South Korea, India, Taiwan and Singapore.

Hydrogen and fuel cell activities took place in all provinces within Canada. Themajorityoffacilitiesandactivitiesresided in British Columbia, followed by Ontario, Quebec, Alberta, Saskatchewan, Manitoba,PrinceEdwardIsland,Newfoundland and Labrador, Nova Scotia, and New Brunswick.

Technology Focus Hydrogen and Fuel Cell Facilities by Region

Market Focus

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

4

In2011,42%ofrespondentsparticipatedinrevenuegeneratingactivities.Surveyparticipantsreportedrevenuefromhydrogenandfuelcellactivitiesof$211million,upnearly9%from$194millionreportedin2010.Halfofthecompaniessurveyedreportedlessthan$1millioninrevenuein2011.Inaddition,14%hadmorethan$5 millionofrevenueand22%ofrespondentsreportedrevenuebetween$1and$5 million.

Abreakdownofrevenuewasprovidedfor$170millionofthe$211millionreported.In 2011, the two categories that generated the most revenue were product sales withrevenueof$99million,andprovisionofservicesproducingrevenueof$62 million.

Foreign government funding and Canadian government support were recognized asrevenueandtogetherrepresented2%ofoverallrevenuein2011.Additionaldetails for government funding are provided in the research, development and demonstration and funding sections of this study.

Abreakdownbyregionwasprovidedfor$207millionofthe$211millionreported.The three countries with the most hydrogen and fuel cells related sales were Germanyat30%,Canadaat29%andUSAat25%.TheresultsindicatethatmostoftheCanadianrevenuewasgeneratedinBritishColumbia(27%).

Top three priorities identified by survey participants to enhance competitive performancewere:collaborationandstrategicalliances(21%),technologydevelopment(19%),andgainmarketshare(12%).

Survey participants were asked to identify challenges faced by their organization in 2011.Themainchallengefacedbysurveyparticipantswaslackoffunding(31%).Theeconomy(24%),accesstomarket(10%)andprofitability(10%)werealsoidentified.Labourshortagesandexchangerateseachrepresented6%followedbycompetition,whichaccountedfor4%.Otherchallengesidentifiedbycompaniesincludedmarketability,corporatereluctanceinincreasingR&Dspending,andovercoming barriers to commercialization.

Revenue

Revenue by Category

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Revenue by Region

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Total Revenue ($ millions)

Challenges Faced in 2011

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

5

In2011,67%ofrespondentsparticipatedinRD&Dactivities,reportingtotalRD&Dexpenditureofapproximately$136.6million.Totalresearchanddevelopment(R&D)expenditureamountedto$116.2millionor85%oftotalRD&Dspending.Demonstrationexpenditurefor2011was$20.4million.

Research, Development and Demonstration (RD&D)

R&D Demonstration Total

Corporate 83.0 13.3 96.3

Government 22.2 7.1 29.3

Academic and non-profit 11.0 – 11.0

Total RD&D 116.2 20.4 136.6

2011 Total RD&D Expenditure ($ millions)

sOuRCes Of funding fOR Rd&d exPendituRe

ThetablebelowprovidesabreakdownoffundingforR&Danddemonstrationexpenditurebysource.ForR&Dexpenditure,sourcesoffundingwereonlyprovidedfor$88.2millionofthe$116.2millionreportedbyrespondentsasexpenditure in 2011. Parent, affiliated or subsidiary sources funded half of the overallR&Dexpenditure(50%),followedbyCanadiangovernmentandcorporateoperationsfundingof28%and16%ofoverallR&Dexpenditure.Corporateoperationsfunded76%whileCanadiangovernmentfunded16%oftheoveralldemonstration expenditure.

Sources of Funding for R&D Expenditure

$ millions % $ millions % $ millions %

Corporate operations $14.5 16% $11.3 76% $25.8 25%

Parent, affiliated or subsidiary organization $43.7 50% $0.6 4% $44.3 43%

Canadian government (all levels) $24.9 28% $2.3 16% $27.2 26%

Foreign Government $1.2 1.5% $0.6 4% $1.8 2%

Contract work conducted for another institute $0.9 1% $0.9 1%

University or academic institute $1.3 1.5% $1.3 1%

Other $1.7 2% $1.7 2%

Total $88.2 100% $14.8 100% $103.0 100%

2011 Sources of Funding for RD&D Expenditure R&D Demonstration Total

6

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Sources of Funding for R&D Expenditure by Organization

Research and Development

R&d by RegiOn

Geographic data was provided for $86.5 millionofR&Dexpenditure.BritishColumbialedallregionswith77%ofR&Dexpenditure.OntarioandQuebeccontributed10%and3%.Globally,Germanyprovided3%withtheUSAandJapaneachproviding1%oftheR&Dexpenditure.RegionsincludedintheRestoftheWorldcategory(5%)includeFrance,Denmark,BelgiumandChina.

PeOPle invOlved in ReseaRCH

Participantsreportedthatatotalof392people were involved in hydrogen and fuel cell related research activity. Of the total people involved in research, 46%wereCanadiangraduateandpostgraduatestudents,26%wereacademic/researchstaff,13%wereundergraduateandpost-graduatestudents,13%were international graduate and post-graduatestudents,and2%weretechnicians.

sOuRCes Of funding fOR R&d exPendituRe

The bar chart below represents sources offundingforR&Dexpenditureby type of organization. Corporate respondents received most of their funding from parent, affiliated or subsidiarysources (68%).Governmentorganizations received all of their funding from Canadian government sources(100%).Academicandnon-profitorganizations also received most of their funding from Canadian government sources(61%).

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


R&D by Region People Involved in Research

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Hydrogen fuel tank

7

sOuRCes Of funding fOR demOnstRatiOn

In 2011, Canadian governments funded 16%ofthereported$14.8 milliondemonstration expenditure and corporateoperationsfunded77%.

Fueling infrastructure was the main areaoffocusat50%ofoveralldemonstrationprojects.Amajority(83%)ofgovernmentprojectsfocusedon fueling infrastructure. Corporate organizationsfocusedmost(48%)oftheir attention on fueling infrastructure with23%oftheireffortsspentonmobile–auxiliarypowerprojects.

demOnstRatiOn by RegiOn

Canadian provinces hosted a total of 66%ofdemonstrationprojects.Themajority(42%)oftotaldemonstrationstook place in Alberta, followed by USA(12%)andGermany(10%).British Columbia and Quebec hosted 8%and6%oftotaldemonstrationsrespectively. Other Canadian provincesaccountedfor9%ofdemonstrations.Japanhosted2%ofdemonstrationprojects.Therestofthedemonstrations(11%)tookplacein other regions including: the United Kingdom (UK), France, Netherlands and China.

Demonstration Projects

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Focus of Demonstration Projects

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Demonstration Projects by Region (Involvement in Projects)

In2011,surveyparticipantsreportedtheirparticipationin123demonstrationprojectsaroundtheworld.Corporateorganizationsreportedinvolvementin110demonstrationprojects,whilegovernmentandacademicrespondentsreportedtheirinvolvementin6and7demonstrationsrespectively.

8

Surveyparticipantsreportedatotalof2,025employeesinvolvedinhydrogenandfuelcellactivitiesin2011.Thisisanearly2%increasefrom1,991employeesreportedin2010anda30%increasefromlevelsreportedduringtherecessionin2008.Surveyparticipantsonlyprovidedabreakdownbyregionfor1,625ofthe2,025employees.

In2011,thelargestproportion(approximately84%)ofindustryemployeeswaslocatedinCanada,5%intheUnitedStates,andtheremaining11%overseasintheUK,France,Denmark,Belgium,Germany,ChinaandSingapore.InCanada,mostemployeeswerelocatedinBritishColumbia(952),followedbyOntario(210)andQuebec(143)withtheremaining64employeesdistributedacrossCanada.

54%ofcompaniessurveyedhadfewerthan10employees,20%had10to25employees,11%hadbetween25and50,and15%hadmorethan50employees.

Based on the data provided for the number of employees and total salaries, theaverageannualsalarypaidtoemployeeswas$57,180.Extrapolatingtheaveragesalaryfor2011tothe1,369employeesinCanada,thesectorcontributedapproximately$78.3millionindirectsalariestothenationaleconomy.

Employment

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

EmploymentEmployment by Region

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Employment by Organization

In 2011, corporate respondents reported351newlyapprovedpatentsand235patentsawaitingapproval.

Patents

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Patents

The entire fleet of material handling equipment at the new Walmart Perishable Distribution Centre in Balzac Alberta is powered by hydrogen fuel cells

9

CORPORate

Corporate participants report the top three sources of funding for 2011 from operations(52%),privateequity(19%)andgovernment(13%).Thefinancialrequirements for the next five years areestimatedtobe$544.9millionwithfunding expected to come from private equity(43%),publiccapitalmarkets(16%),operations(14%),andgovernment(5%)and22%fromothersources.

gOveRnment

The total budget for hydrogen and fuel cell related activities reported for 2011 for which government was directly responsible, (including employee salaries andbenefits)was$29million.Programscontributed85%offundingrequirementswithA-baseoperationscontributing15%.

aC ademia and nOn-PROfit

The total budget for hydrogen and fuel cell related activities reported for 2011, for which academic and non-profit was directly responsible, (including employee salaries andbenefits)was$6million.Thesourcesof funding for 2011 were from Natural ScienceandEngineeringResearchCouncilofCanada(NSERC)/CanadianFoundationforInnovation(13%),othernon-profitorganization(37%),andothersourceswithoutspecification(50%).

Funding Requirements

Continued education of governments and public capital markets on the benefits of investing in the hydrogen and fuel cell industry is an important part of the industry’s efforts to secure funding. Given the industry’s long developmentperiodanddemandingRD&Drequirements,adequatefinancingisnecessarytobringcommercialproducts to market.

About84%ofgovernmentfundingwasallocatedtoR&D,bothin-houseandintramural.Academicandnon-profitorganizationsfundingwasallocatedprimarilytoin-houseR&D(75%).BritishColumbiareceived69%ofthefundingallocation,26%wenttoOntario,4%wenttoQuebecandtheremaining1%wenttoSaskatchewan.

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Funding Allocation by Area – Government & Academia & Non-profit

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Sources of Funding – Government

Sources of Funding – Academia and Non-Profit

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Sources of Funding – Corporate

10

In 2011, respondents reported 142 strategic partnerships andalliances,upfrom118reportedin2010,demonstratingthe value and importance of relationships and partnerships to the industry. Hydrogen and fuel cell companies represented26%andpublic/privatepartnershipsrepresented26%ofstrategicpartnerships.Automotiveoriginalequipmentmanufacturer(OEM)represented17%ofpartnerships,followedbyotherOEMandenergyproviderswith13%and11%respectively.

Total

In partnership with Canadian academia/non-profit/associations 243

In partnership with industry in Canada 214

In partnership with Canadian government 52

In partnership with industry outside of Canada 40

In partnership with foreign government 23

Other 10

Total 582

Researchpartnershipspromoteclosercollaborationbetweenthe university research community and other sectors, including government and Canadian industry. Survey respondents indicatedtherewere582researchpartnershipsin2011.Because survey respondents may report partnerships that they have with each other, there is a possibility that the number of research partnerships are overstated. However, research partnerships as a percentage of the total should be representative of actual partnerships. Partnerships with academic/non-profit/associationsrepresent42%oftotalresearch partnerships. Partnerships with industry in Canada represented37%ofallresearchpartnerships.Thenumberofresearch partnerships signifies the necessity of pre-commercial collaboration in order to address common technical challenges. The table below illustrates the many varied types of partnerships and collaborations in the hydrogen and fuel cell sector within Canada and outside the country.

Strategic Alliances Research Partnerships

Strategic Alliances

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Number of Research Partnerships

11

Outlook

Lookingaheadto2013,participantswereasked to identify the top three priorities to enhance competitive performance. Responsesvariedwithcollaboration/strategic alliances identified as the toppriorityat21%,followedbytechnology development and gain marketshareat19%andat12%.Bettertargeting of customers represented 10%whileimprovingprocessesandplans for expansion each represented 8%.Reducedcostsofoperations,better market or customer data and outsourcing were identified as priorities for14%ofrespondents.

40%oforganizationssurveyedindicateplans to increase employment within thenext18months.Eightpercentof organizations plan to reduce employment, while over half anticipate that employment will remain the same.

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Priorities to Enhance Competitive Performance in 2013

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


Plans to change employment in the next 18 months

Hydrogenics Corporation

12

In the 2010 study, the organization profile questions were restructured to better align with the Worldwide Fuel Cell Survey and additional data was requested on funding requirements, revenuepriorities/challengesandplanned changes in employment.

All monetary results are presented in Canadian dollars.

A total of 127 organizations associated with hydrogen and fuel cells in Canada were invited to participate in the development of this sector profile. Thisisa30%increaseinthenumberof invitations sent out for the 2010 Sector Profile. Seventy-three completed responses were received, representing an overallresponserateof57%.

Not all respondents provided information for every category requested. No investigation was conducted as to the completeness of the data provided by respondents or reasons for non-provision.

In order to capture more information, the 2012 Sector Profile is also supplemented by publicly available information.

A participant list is included at the end of the report.

PResentatiOn Of data

Figures presented for 2011 were collected by an online questionnaire in 2012. Figures presented for years prior to 2011 are as reported in previous sector profiles, therefore, may not be fully comparable due to differing respondents and/orbasisofindividualresponses.

Methodology and Response Rates

Profile participation rate

Private company40%


of public company8%


18%


18%


1%


Apr 2012

Not provided15%

> 20 years18%

11 – 20 years33%

5 – 10 years26%

< 5 years8%



5%


24%

Portable(including

micro)11%


19%




27%

p.3 Market Focus

Rest of World7%

Rest of Canada15%

Ontario18%

Quebec9%

Alberta6%

British Columbia22%

USA8%



37%

Product sales59%


1%



14%LargeStationary

> 50kW2%

Mobile –Primary

Power andDrivetrain

13%


21%


50%



Quebec9%

Asia2%

Rest of Europe 6%

British Columbia58%

Ontario13%


Government9%


15%

Corporate76%



52%



Increase(between 5%

and 15%)23%


Government13%

Private equity19%

Other10%

Angel Investors4%

Operations52%


A-Base15%

Programs85%



37%


13%

Other 50%


Other OEM13%


26%


26%

EnergyProviders

11%

Other 7%


Declined3%

No reply40%

Completed survey57%


Technicians2%


26%


including coop13%


46%


13%


USA25%Germany

30%

Asia 4%

Rest of world 5%

BritishColumbia

27%Ontario 1%


Europe7%

p.6 R&D by region

British Columbia77%

Rest of the world5%

Ontario10%

Quebec 3%Germany 3%

USA 1%


R&DIn-house

48%


R&DIntramural

35%


1%Education,




1%


9%

Europe11%

Other 3%

Germany 3%


3%Decrease


Japan 1%

Japan4%

Automotive OEM17%


The 2012 Sector Profile is the ninth annual publication of information on the Canadian Hydrogen and Fuel Cell Industry. As in previous years, existing and potential members of Canadian Hydrogen and Fuel Cell Association, academic institutions, government stakeholders and partners in current hydrogen and fuel cell demonstration activities were asked to voluntarily complete a survey questionnaire.

While the survey questionnaire has remained substantially consistent from the survey’s inception, each year the organizers have refined the questions to gather more detailed information to better reflect the industry and its trends. Since the 2004 survey, sections relating to research, development and demonstration(RD&D)andfunding,specific questions were asked for three types of stakeholders:

• Corporate(publicandprivateorganizations);

• Government(governmentandgovernment agencies); and

• Academicandnon-profit(educationalorganizations, non-profit, and non-governmental organizations (NGOs).

13

The Canadian hydrogen and fuel cell sector is recognized for its role in the development of clean technology applications.In2011,approximately51%of respondents reported involvement in hydrogen and fuel cell activities for over 10 years suggesting a relatively stable industry. From this base, the industry continuestodrawRD&Dinvestmentand talent. As reported by survey participants, more Canadian graduate and post-graduate students conducted research related to hydrogen and fuel cells suggesting the sector is attracting new and younger players. The industry also continues to be innovative with an11%increaseinthetotalnumberof

approvedandpendingpatentsfrom527in2009to586in2011.

In 2011, the Canadian hydrogen and fuel cell sector reported:

• employmentat2,025;

• revenueof$211million,withBritishColumbia representing the largest revenue region in Canada;

• continuedcommitmenttoRD&Dwith$136.6millionofexpenditures;

• astablenumberofdemonstrationprojects(123)comparedto128in2010 and an increase compared to 86 in 2009;

• aconsiderableincreasebothinthenumber of strategic alliances 142 and researchpartnerships582comparedtoprior years; and

• hydrogenandfuelcellrelatedfacilitiesandactivity,RD&Dexpenditureandemployment were largely concentrated in British Columbia.

gROw tH sinCe 2001

Aninitialsectorprofile,TheEconomicImpact of Industrial Hydrogen Activity in Canada, conducted by Sypher MuellerandNaturalResourcesCanadain 2001, provided the first glimpse into the sector’s early days. Subsequent Government of Canada, Canadian Hydrogen and Fuel Cell Association and PricewaterhouseCoopers Sector Profiles have updated the original industry benchmark study to demonstrate an active hydrogen and fuel cell sector within Canada. Although some data may not be fully comparable due to differing methodology and response rate, we can see significant growth in the industry between 2001 to 2011:

• Revenuehasgrown118%from$97 millionin2001to$211millionin 2011

• R&Dexpenditureshavedecreasedby24%from$179millionin2001to $136 millionin2011.

• Employmentintheindustryhasincreasedby14%from1,772in2001to2,025in2011.

Conclusion

Access to markets

Lack of funding





Hydrogen production



Fuel cell user




5 10 15 20 250

Other

Systems integrator




Hydrogen storage


22%

12%

12%

9%

8%

7%

6%

5%

4%

3%

3%

2%

2%

3%

0 5 10 15 20 25 30 35 40 45



Hydrogen Production


Hydrogen Storage

Metal-Air

Molten Carbonate

Direct Liquid

Other

1%

7%

7%

37%

8%

2%

2%

14%

20%

0

50

100

150

200

250

2008

p.8 Employment


1,500

1,000

0

2,500

2006

2007 20092006

2007 2008 2010

0

50

100

150

200

250

300

2005 2006 2007 201020042003200220010

500

1,000

1,500

2,000

2,500

3,000


$

p.7 Patents

200

100

0

300

400

235

351

Alberta






0 20 40 60 80 100


23%

68%

7%

7%

9%

Foreign government


1%

3%

14%

0% 20% 40% 60% 80% 100%

100%61%


290

179

134

276

188

97

133 135 133

177

128

2011

215

142

Feb 2011

Patentsapproved

Patentspending


0 5 10 15 20 25


Gain market share


Improving processes



Other

Outsourcing

8%

1%

8%

21%

8%


7%

6%

19%

12%

10%


0% 5 10 15 20 25 30

Profitability

Economy

Exchange rates

6%

31%

6%

Other 9%

24%

10%

10%

GermanyUSA


0 5 10 15 20 25 30 35 40 45 50 55 60


51

Other


%

%

%

Millions Employees

Utility 2%

Direct Methanol 2%

2,000

500

2009

2,001 1,9912,043

1,7651,556

2,025

2011

2010 2011

Competition 4%

Labour shortages

15

12

5

5

4 2

2

1

1

1

12

JapanUK

Rest of Canada

184

136

2008 2009

194

1

1

23

23

195

215 211

133

194

168

237

218211

168

195

211

Growth Since 2001

The Government of Canada, the Canadian Hydrogen and Fuel Cell Association and PwC would like to thank the organizations that took part in this survey. By participating, stakeholders from private industry, government and academic showed their support for

improving publicly available industry intelligence. This information will be used to support funding decisions, influence alliance partnerships, and strengthen the overall competitive position of the Canadian hydrogen and fuel cell industry.

14

C anadian HydROgen and fuel Cell assOCiatiOn (CHfC a)

The Canadian Hydrogen and Fuel Cell Association (CHFCA) is the national association accelerating Canada’s world-recognized hydrogen and fuel cell sector. As the sector’s collective voice, the CHFCA works to raise awareness of the economic, environmental and social benefits of hydrogen and fuel cells. We are a national, non-profit association providing services and support to Canadian corporations, governments and educational institutions promoting development, demonstrating and deploying hydrogen and fuel cell products and services in Canada. Our members cover most types of hydrogen and fuel cell technologies, components, systems supply and integration, fuelling systems, fuel storage, and engineering and financial services.

TheCHFCAwasformedinJanuaryof2009asaresultofamergerbetweenthe Canadian Hydrogen Association (CHA)andHydrogen&FuelsCellsCanada (H2FCC). The merger unites the members of the former associations to create a vibrant, influential association thatrepresentsthemajorityofthestakeholders in Canada’s hydrogen and fuel cell sector.

industRy C anada

Industry Canada’s goal is to enhance the competitiveness of Canadian industry. The organization is responsible for maintaining channels of communication with key sectors to facilitate informed advocacy of industry interests in government decision-making and to convey the government perspective back to industry; analyzing the challenges and opportunities that face key sectors in the economy; developing policy options for possible government response to extraordinary challenges and opportunities; and delivering the subsequent programs and services.

Mercedes-Benz F-Cell fuel cell electric vehicle

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Eric Denhoff PresidentandCEO Canadian Hydrogen and Fuel Cell Association

16047607176 [email protected]

For more information on the Canadian hydrogen and fuel cell sector profile please contact:

PwC

PwC understands and supports the fuel cell industry in Canada and around the world. Our Clean Technology network of professional staff drawn from over 154,000peopleinover153countrieshas a firm grasp of the issues facing companies in the industry as it evolves towards commercialization. We are continually expanding our knowledge and client base with the goal of being the pre-eminent advisor to the industry in local, national and global markets.

Eric Barker SeniorAdvisor,EmergingTechnologiesDirectorate Industry Canada


Mike Pacholek Partner PwC


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2012 Participants

A.V. Tchouvelev & Associates Inc.

Air Liquide Canada

Atlantic Hydrogen Inc.

Automotive Fuel Cell Cooperation (AFCC)

Ballard Power Systems Inc.

Bereskin & Parr

Canadian Hydrogen and Fuel Cells Association

CCS Global Group

Dana Canada Corporation

dPoint Technologies

Enbridge Gas Distribution

FCTEK Holdings Ltd.,

Greenlight Innovation

HRH Consulting

HTEC Hydrogen Technology & Energy Corp.

Hummingbird Hydrogen Corporation

Hydrogen Link

Hydrogen Research Institute

Hydrogenics Corporation

Hyteon Inc.

Industry Canada

Isowater Corporation

Ku Group

Lambton College of Applied Arts and Technology

McMaster University

Mercedes-Benz Canada

Nalcor Energy

National Research Council (NRC)

Natural Resources Canada, CANMET

Natural Sciences and Engineering Council of Canada

New Flyer Industries Canada UL

Next Hydrogen Corporation

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NORAM Engineering & Constructors Ltd.

Palcan Fuel Cells Ltd.

Phoenix Canada

PowerDisc Development Corporation Ltd.

PowerTech Labs

Profile Composites

Queen's RMC Fuel Cell Research Centre

Ryerson University

Sacre-Davey Engineering

Saskatchewan Research Council

Simon Fraser University

Tekion

TISEC Inc

Transport Canada

Université du Québec à Trois-Rivières

University of Alberta

University of British Columbia – CERC

University of Ottawa

University of Toronto, Mechanical & Industrial Engineering Deparment

Walmart Canada

2012 Participants

BC Transit 20 fuel cell electric bus deployment in Whistler, BC

Canadian Hydrogen and Fuel Cell Sector Profile 2012 WEB 2389-01 CHFC Sector Profile... ·...

Documents

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