The Great Lakes Zephyr - Wind Energy & Hydrogen Journal

From the Alternative Power digest Yahoo group:

Japan To Launch Major Field Tests For Home Fuel Cell
Systems
Tuesday July 15, 1:01 am ET

TOKYO -(Dow Jones)- A group of Japanese firms,
organizations and local governments will join forces
this year to carry out large-scale field tests of
home-use fuel cell systems, as Japan seeks to lead the
world in the lucrative next-generation energy market.

Japanese companies are shaping up as pioneers of the
new technology and hope to commercially launch in 2005
a stand-alone fuel cell co-generator that provides
power and hot water to the home. Fuel cells generate
electricity, without pollutants, via an
electrochemical reaction that uses oxygen and
hydrogen.

By using such co-generators, homeowners can cut their
power and gas costs, as well as cut carbon dioxide
emissions. The market for the cleaner fuel cell
systems - dubbed mini home power plants - is widely
expected to take off by 2010.

"We started field-testing from last October in 12
sites mainly in major metropolitan areas. This year we
will add 31 new sites throughout the country," an
official at the New Energy Foundation said Tuesday.

The government-backed foundation is leading the
subsidized project. The next round of testing will
commence around September, he said.

The number of companies providing fuel cell systems
will also increase to 11 from last year's six, he
said.

New entrants include Ishikawajima-Harima Heavy
Industries Co. (J.ISH or 7013), Mitsubishi Heavy
Industries Ltd. (J.MHI or 7011) and Hitachi Ltd. (HIT
or 6501). Matsushita Electric Industrial Co. (MC or
6752), Sanyo Electric Co. (SANYY or 6764) and Toyota
Motor Corp. (TM or 7203) were among the original
providers.

Firms and organizations, which will cooperate by
installing the systems and conducting on-site testing,
include major power suppliers Tokyo Electric Power Co.
(J.TER or 9501) and Kansai Electric Power Co. (J.KEP
or 9503), oil refiners Japan Energy Corp. and Idemitsu
Kosan Co. , and the Japan Gas Association, an industry
body representing city gas suppliers.

Before the commercial launch of the systems, "we need
to accumulate field data under various working
environments, including cold regions," the official
said. Most of necessary field testing will probably be
completed in the annual project starting this year, he
added.

The fuel cell co-generators will use city gas,
liquefied petroleum gas, naphtha and kerosene to
extract hydrogen.

The domestic market for such co-generators is forecast
to grow to about Y290 billion in 2010 - Y180 billion
in the home-use market and Y110 billion in the
business-use market, Osamu Tajima, general manager at
Sanyo's fuel cell research department, told Dow Jones
Newswires in April.

Sanyo expects that by 2010 fuel cell co-generators
will replace about one third of Japan's annual
gas-powered water heater shipments of about 1.2
million units.

But to make that happen, Sanyo and other makers will
have to overcome a daunting task - reducing the price
of the state-of-the-art device to an affordable level.

"We don't expect users to start feeling they are
reaping benefits unless the unit price is lowered to
Y500,000 or so," Tajima said. His view seems to be an
industry consensus.

With that price, and based on current power and gas
rates, the combined cost of initial investments and
running costs for fuel cell systems will fall below
those for conventional full-automatic water heaters
about five years after installation, Sanyo estimates.

Five other system providers in the project are Ebara
Corp. (J.EBA or 6361), Kurita Water Industries Ltd.
(J.KUW or 6370), Nippon Oil Corp. (J.NPO or 5001),
Marubeni Corp. (J.MRB or 8002) and Toshiba
International Fuel Cells - a joint venture between
Toshiba Corp. (J.TOS or 6502) and International Fuel
Cells Llc. of the U.S., according to the New Energy
Foundation.