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Executive Summary

Transportation is one of the industries that have the greatest impact on our economy. Transportation industry will keep growing to meet the demands of our globally interconnected world. Most automobiles and trucks in the market rely on internal combustion engines (ICE), which are reliable, cost-effective and practical. However, their impact on our economy and environment will soon make these benefits obsolete. The present ICE technology not only emits pollutants into our natural habitat, but also depletes natural resources that irrecoverable. ICE vehicles consume 80% of the oil produced in the world, creating a massive demand for fossil fuel production. In order to transform the existing vehicles into more considerate options, existing technologies like hybrids must be powered with alternative fuels. It is clear that the automotive vehicle industry is in a dynamic era, and the need for ground-breaking inventions is greater than ever before. As an alternative to internal combustion engine powered vehicles, hybrid vehicles promise a smooth transition towards more advanced technologies. They fill the gap between high-efficiency short-range electrical vehicles and low-efficiency long-range motor vehicles. Today, there are 1.2 million vehicles in the market that have adopted the hybrid technology. In order to ensure the continuity of this growth, alternative fuels and engine technologies must be considered for the existing drivetrain. Almost all hybrid cars in the market are powered with conventional gasoline or diesel fuel. They also use the low-efficiency engines which are pending for an upgrade. On the other hand, scientists work seamlessly and invest their time in long-lasting solutions. In effort to help our client invest in the right technology, our team have assessed the potential development of three alternative fuels and three alternative engines that can promote economical, societal and environmental benefits: Natural gas, biofuel and hydrogen for alternative fuels; and Stirling, Winkel and fuel cells for engine technologies. Our client is a North American company that will be investing in developing the suggested technology to meet the target demand in 2020. After a preliminary analysis, it was found that Stirling hybrid vehicles running on natural gas as an area that required in depth analysis. Also, hydrogen fuel cells were elected as a final candidate due to their clean and efficient nature. The compatibility of these engines and their price/reward relationship will be assessed throughout this report. The final recommendation outlines two research roadmaps for the company to follow, in order to be on top of both technologies. Our end goal is not only to provide the answer for the future, but also guide our client towards it.

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Table of Contents Executive Summary ...................................................................................................................................................................................... ii 1.0 Introduction ........................................................................................................................................................................................ 1 2.0 Comparison between Engines and ICEs .......................................................................................................................................... 1

2.1 Stirling Engine................................................................................................................................................................................... 1 2.2 Wankel Engine .................................................................................................................................................................................. 2 2.3 Fuel Cells .......................................................................................................................................................................................... 2

3.0 Preliminary Analysis............................................................................................................................................................................... 3 3.1 Fuel Combinations with Stirling and Fuel Cells ................................................................................................................................ 3

3.1.1 Fuels for Stirling engine ............................................................................................................................................................ 3 3.1.2 Fuels for Fuel Cells ................................................................................................................................................................... 4

4.0 Interim Recommendation ...................................................................................................................................................................... 4 5.0 Stirling Hybrid Electric Vehicles (SHEV) with Natural Gas ................................................................................................................... 4

5.1 Fuel Efficiency .................................................................................................................................................................................. 5 5.2 Vehicle Performance ........................................................................................................................................................................ 5 5.3 Market Potential ................................................................................................................................................................................ 6 5.3.1 International Market ....................................................................................................................................................................... 6 5.3.2 Domestic Market ........................................................................................................................................................................... 7 5.4 Costs ................................................................................................................................................................................................. 8 5.5 Environmental Benefits ..................................................................................................................................................................... 8 5.6 Social / Political Factors ................................................................................................................................................................... 9

6.0 Hydrogen Fuel Cells (FCEV) ................................................................................................................................................................. 9 6.1 Fuel Efficiency .................................................................................................................................................................................. 9 6.2 Vehicle performance ...................................................................................................................................................................... 10 6.3 Market Potential .............................................................................................................................................................................. 10

6.3.1 International Market ................................................................................................................................................................ 10 6.3.2 Domestic Market .................................................................................................................................................................... 10

6.4 Costs ............................................................................................................................................................................................... 10 6.5 Environmental Benefits ................................................................................................................................................................... 11 6.6 Social / Political Factors ................................................................................................................................................................. 11

7.0 Final Analysis ....................................................................................................................................................................................... 12 7.1 Market Comparison ........................................................................................................................................................................ 12 7.2 Environmental Comparison ............................................................................................................................................................ 13 7.3 Technical Comparison ................................................................................................................................................................... 13

8.0 Recommendations ............................................................................................................................................................................... 14 9.0 Road Maps .......................................................................................................................................................................................... 15

9.1 SHEV Road Map ............................................................................................................................................................................. 15 9.2 FCEV Road Map ............................................................................................................................................................................. 15

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Index of Tables Table 1: Alternative Engine Technologies vs. Internal Combustion Engine ............................................................................................. 18

Table 2: Alternative Fuels .......................................................................................................................................................................... 18

Table 3: Equivalent Fuel Consumption of Stirling Hybrid ......................................................................................................................... 18

Table 4: Vehicle Performance of Stirling Hybrid ....................................................................................................................................... 18

Table 5: Equivalent Fuel Consumption of Fuel Cells ................................................................................................................................ 19

Table 6: Vehicle Performance of Fuel Cells .............................................................................................................................................. 19

Table 7: Environmental Comparison ......................................................................................................................................................... 19

Table 8: Vehicle Performance - SHEV vs. FCEV ....................................................................................................................................... 20

Table 9: Market Potential - SHEV vs. FCEV ............................................................................................................................................... 20

Table 10: Emission Performance - SHEV vs. FCEV .................................................................................................................................. 20

Index of Figures Figure 1: Chinese Income Per Capita & Gasoline Price ........................................................................................................................... 21

Figure 2: Gasoline Price vs. NGV Sales in China ..................................................................................................................................... 21

Figure 3: Sales by brand in China ............................................................................................................................................................. 22

Figure 4: Passenger Car Sales in China ................................................................................................................................................... 22

Figure 5: Map of Natural Gas Fueling Stations in the U.S. ....................................................................................................................... 23

Figure 6: NGV Sales in United States........................................................................................................................................................ 23

Figure 7: Gasoline Hybrid Electric Vehicle Sales in United States ........................................................................................................... 24

Figure 8: Production map of current Stirling engine manufacturers ......................................................................................................... 24

Figure 9: Fuel Cell Electric Vehicles System Cost .................................................................................................................................... 25

Figure 10: Approximate 2010 Federal Funding ........................................................................................................................................ 25

Figure 11: Fuel cell light duty vehicle sales by region, world market (2013-2030) .................................................................................. 26

Figure 12: Projected number of FCEVs on the road in California ............................................................................................................. 26

Figure 13: Fuel Cell Stack Durability Progress ......................................................................................................................................................... 27

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1.0 Introduction

The client is the vice president of research of a major North American auto manufacturing company. The fact that motor vehicles emit well above 900 million m3 of CO2 annually has led many automakers launch their long-term electric powered vehicle programs (World Resource Institute, 2013). High capital costs of electric vehicles and limitations on their driving range present problems for applicability. For years, the company has been focusing their attention on battery development for electric cars. However, hybrid vehicle market grew by 41% since 2009, far faster than the electric vehicles market. Given the current direction of the automotive world, our client has decided to discover potential improvements for the existing hybrid technology.

Our client’s objective is to increase their international sales while meeting new environmental standards. These goals guided us in our investigation and led to our final recommendation. To analyze alternative engine technologies and alternative fuels in terms of their industrial applicability and global market prospects, we looked at the benefits and drawbacks based different criteria. For engines, factors such as: driving range, fuel consumption, efficiency and emissions were considered. For fuels, factors such as: emissions, fuel efficiency and potential international markets were put into consideration. Based on these criteria, we determined that the Stirling engine and fuel cells have the most promising combination of technical features and market potential. Furthermore, natural gas proved to be the most effective fuel for the Stirling engine based on its low emissions, cheap cost and its growing popularity in the Asia-Pacific region. Both fuel cells and the Stirling hybrids running on natural gas should be added to the R&D roadmap, but be geared towards different markets to ensure global presence.

Our final recommendation outlines the list of advanced technologies that must be tested in the lab to clearly guide our clients towards launching these new technologies. Our ultimate goal is to provide R&D solutions to improve Stirling hybrid electric vehicles (SHEVs) and fuel cell electric vehicles (FCEVs) to keep both options open for the future. A tentative schedule for the research program is also included to give our client a concrete idea of their R&D time frame.

2.0 Comparison between Engines and ICEs

2.1 Stirling Engine The Stirling engines can reach up to 50%, dwarfing the 20% efficiency achieved by conventional combustion

engines (Timothy C. M. and Amory B. L., 2001). The fuel consumption rates tested by the U.S. PNGV program

also suggest that Stirling engines operating with Hybrid drivetrain consume 3.6-3.8 liters per 100 km, while this

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number ranges from 4.2 to 9.1 liters per 100km for conventional internal combustion engines (Peter Ahlvik and

Åke Brandberg.,2001 ). It has a longer lifetime, achieving approximately 30,000 to 100,000 hours of operation

without interruption (Electric Power Research Institute, 2002). The Stirling produces lower emissions than

conventional ICEs regardless of the type of fuel used. The major drawbacks with the Stirling engine are that it has

a slow response to speed changes and a low power density, but these problems are overcome when used as a

range extender in hybrid cars.

2.2 Wankel Engine Unlike other ICEs, the Wankel engine has its compression and combustion occurring in separate chambers, which creates the opportunity to use a wider variety of fuels. The Wankel also exceeds the other ICEs in the area of maximum power density; 860W/kg compared to 430-500W/kg. ICEs have a thermal efficiency somewhere between 20%-30%, while the Wankel engine has a lower efficiency that is somewhere between 19%-20% (Heron and Rinderknecht, 2010). Both ICEs and Wankel need 3 way catalysts, but the Wankel emits more hydrocarbons due to its tendency for incomplete combustion. This leads to a more complicated, thus, more expensive exhaust systems. Incomplete Combustion of Hydrocarbons can be formulated as follows:

CaHb + cO2 --> xCO2 + yCO + CH2O + zH2O + kH2 2.3 Fuel Cells Unlike the pollution caused by burning fossil fuels that conventional combustion engines usually create, the only

by-product produced by fuel cell engines if hydrogen is applied is water. Even if gasoline, natural gas or other

fossil fuels are being used, the amount of harmful emission is only 60% compared to ICE (World Energy Council,

2013). According to the World Energy Council website, the maximum efficiency fuel cells can achieve is 83%

under 25 degrees Celsius (77 Fahrenheit), while the maximum efficiency that a combustion engine can achieve is

only 14%~26% under 500 degrees Celsius (932 Fahrenheit) (Karim Nice and Jonahan Strickland, 2013). Fuel

cells can extract more power than the traditional ICE; they are about 30% - 90% more efficient than ICE with

gasoline (Fuel Cell Today, 2013). Fuel cells can perform at a lower temperature and pressure. The operating

temperature for fuel cells range from 80 degrees Celsius to 1000 degrees Celsius (176-1,832 Fahrenheit), this

range can be increased to as high as 2300 degrees Celsius (4,172 Fahrenheit) (Forsyhia Igot, 2002).

The major problem with fuel cells is lack of infrastructure. This can be solved if our client considers international

markets, where infrastructure is already in place. Another problem is that fuel cells are costly to produce which

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makes prices high and may reduce marketability. Testing fuel cells in a high income foreign market also mitigates

this problem.

3.0 Preliminary Analysis

Various engine types and their performance against internal combustion engines are summarized in Table 1. From the table we can see that the fuel cells have the highest advantages over ICEs, its only downside is its cost. As discussed earlier, this can be mitigated by international sales in a high income foreign market while research goes into driving down costs domestically. On the other hand the Wankel is the worst. Worse still, its problem with incomplete combustion is counterproductive to the client’s goal of reducing emissions. This coupled with the fact that the engine is less efficient compared to ICEs have led us to abandon this engine altogether. Thus we will only consider the Stirling engine and Fuel Cells for the rest of our investigation.

3.1 Fuel Combinations with Stirling and Fuel Cells

3.1.1 Fuels for Stirling engine Biofuels: The use of biodiesel would cause a slight increase of 2% to 10% in the emission of oxides of nitrogen (United States Environmental Protection Agency, 2002). However, according to the data from Energy Future Coalition, the greenhouse gas emission released by corn ethanol and cellulosic ethanol are 17%-64% lower than that of conventional fuels (United States Environmental Protection Agency, 2002). According to the data published by U.S Department of Energy, the prices of biofuels are relatively higher compared to conventional fuels. A 20% biodiesel blend costs approximately $3.89 per gallon while pure biodiesel costs up to $4.19 per gallon in the current market. In addition to the high price, we cannot ignore the drawbacks of the process that transforms plants into biofuels (United States Environmental Protection Agency, 2002). This process consumes a lot of energy which is mainly generated from non-renewable fossil fuels. There may be potential in markets with surplus agricultural markets such as Brazil. However, combining biofuels with the Stirling engine will greatly increase the cost and make the engine lose its economic edge; this may make it unattractive as an option for most international markets.

Hydrogen: Hydrogen can also provide large amounts of energy. The energy in 2.2 pounds (1 kilogram) of hydrogen gas is about the same as the energy in 1 gallon of gasoline (US Department of Energy, 2013). However, due to its high low volume density a bigger tank than conventional engines is needed. There is a lot of research going into innovative storage of hydrogen; a good example is cryogenically freezing the hydrogen. The storage and distribution problems associated with hydrogen do not make it a good combination with the Stirling

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engine. Solutions offered for these problems greatly increase the cost and make it a hard sell for reaching our goal of international expansion.

Natural Gas: Natural gas provides reduced greenhouse emissions compared to petroleum-based fuels and may provide an effective option for reducing nitrogen oxide emissions compared to the best currently available technology for diesel trucks. Diesel trucks are beginning to deploy new technology to meet enhanced nitrogen oxide regulation, and natural gas trucks may provide a more cost effective means to meet tasks while meeting future NOx regulations (Murphy, P.J., 2010). CO₂ emission rates of commercially available CNG vehicles also prove to meet the emission limits based on the European Low Carbon Fuel Standard (The European Energy Commission, 2013). Due to the huge demand for natural gas in Asia, natural gas may provide a great opportunity to expand into international markets. It seems that natural gas is our best option as it has both low emissions and a huge market potential.

From the table below Natural Gas is the least expensive fuel option with a global market potential making it the most marketable. It also has low emissions and so is in line with the client’s objective. High costs for biofuels and hydrogen discourage combining these fuels with the Stirling. Moreover, fuel cells already use hydrogen so it will benefit us to research a different fuel for the Stirling so we can compare how the two fuels perform.

3.1.2 Fuels for Fuel Cells Fuel cells run on hydrogen so we are not considering other fuel sources for fuel cells. Instead, we are focusing on renewable and cost effective methods of producing and storing the hydrogen needed for the fuel cells.

4.0 Interim Recommendation

Considering the global developments in all three fuel and engine technologies, it was found that Stirling hybrid with natural gas and hydrogen fuel cells were the two most promising routes for the client to follow. Stirling engine is a highly efficient alternative to boost the driving range of existing hybrid technologies, and can be coupled with natural gas for enhanced performance. Similarly, hydrogen fuel cells require further attention for their clean and simple operation. The further stages of the assessment will be dedicated to assessing these two technologies in more detail.

5.0 Stirling Hybrid Electric Vehicles (SHEV) with Natural Gas

Stirling engines, dating back to 19th century, are a promising invention finally coming to fruition in the 21st century. Stirling engines convert almost every combustible fuel into electrical power. If properly implemented, they may

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provide a drivetrain that is easy to operate, quiet and clean. However, Stirling engines alone cannot provide sufficient torque to accelerate conventional passenger cars. In addition, it takes about 5 to 10 minutes for the engine to heat up to run well. Most consumers want their vehicles to start the minute they enter. To resolve this problem, researchers and scientists are working on novel solutions that integrate Stirling engines with hybrid vehicles. The goal of the project is to support the current hybrid electric drivetrain by extending its range using Stirling engine, and making it more fuel efficient. The electric motor will provide all the vehicle performance needed from the beginning and give the Stirling engine enough time to “boil” and function.

Given the current direction of global oil prices, it would be a viable solution for North American car manufacturers to position their R&D investments towards utilizing alternative fuels. Currently, Dean Kamen’s DEKA research is testing the DEKA Revolt, a Stirling hybrid vehicle that can potentially run on any fuel. The Stirling engine can operate with a variety of combustible fluids, including natural gas, hydrogen, biodiesel and even ethanol. In previous stages of our assessment, it was concluded that natural gas and hydrogen are the most abundant resources available both domestically and internationally. Yet, natural gas has proven to be more compatible with Stirling engines and promises further developments in terms of vehicle applicability, environmental considerations and socio-political constraints.

5.1 Fuel Efficiency Stirling hybrid vehicles are expected to lower our dependency on conventional gasoline by providing unrivalled fuel efficiency. In a technical paper produced collaboratively by University of Calgary and University of Windsor, the performance of Stirling engine hybrid electric vehicles was simulated using advanced computer programming. Results indicated that the Stirling engine combined with a series hybrid drivetrain works more efficiently than these two technologies used separately. A hybrid electric vehicle with a conventional ICE has a consumption rate of 67.2 MPG, while a Stirling engine alone operates with 50.0 MPG alone (Figueroa, 2001). When these two technologies are integrated, the range extends up to 75.9 miles per gallon, which is the second best performance among all vehicle technologies, after electric vehicles. The equivalent fuel consumption of each technology is summarized in Table 3. In terms of fuel consumption efficiency, Stirling hybrid electric vehicles are 84.5% more efficient than conventional ICEs, and 38.5% more efficient than hybrid vehicles operating with an ICE. Therefore, Stirling hybrid technology, whether or not used with natural gas, can easily advance in automotive industry in terms of fuel efficiency.

5.2 Vehicle Performance The theoretical vehicle performance of Stirling hybrid vehicles was also simulated and compared with other technologies. Vehicle performance can be assessed under acceleration, maximum speed and maximum driving

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range. The theoretical results obtained from advanced computer programing suggest that Stirling hybrid vehicles have a driving range of 1,318 km, without real-time energy losses taken into account. Under similar conditions, conventional ICEs and hybrid electric vehicles had ranges of 702 km and 1171 km respectively. Vehicle performance with respect to various technologies is summarized in Table 4 (Figueroa, 2001).

It can be concluded from the simulation that the addition of a Stirling engine can significantly extend the range of hybrid vehicles, while achieving superior acceleration and maximum speed values. Since Stirling engines exert an extremely low torque, their acceleration is also remarkably low. Also, the Stirling engine cannot achieve desired maximum speeds without the support of hybrid electric drivetrain. The maximum speed achieved by a Stirling engine is 37.6% lower than hybrid vehicles. In terms of vehicle performance, the two technologies complete each other’s weaknesses and create an effective solution.

5.3 Market Potential Sales-wise, Stirling hybrid vehicles can gain significant market share if positioned in the right markets. The decision criteria for market segmentation will be the type of fuels available in both international and domestic markets. Since there are no applications of Stirling hybrid vehicles, sales performance of natural gas vehicles (NGVs) will be used as a projection for Stirling-Hybrid-Natural Gas sales.

5.3.1 International Market With its immense population, China stands out as one of world’s leading economies. Although mostly known for its imports, China has a developing middle-class that shows greater purchasing power over exported goods. In the past decade, the Chinese middle class has doubled their expenditure on imported goods, despite strict government taxes and tariffs. According to The Wall Street Journal, China's fast-growing middle class has been willing to put up with paying more to acquire imported goods and trendy products. The Cadillac Escalade Hybrid Base 6.0, which lists for just over $73,000 in the U.S., is priced at $229,000 in China (Burkitt, 2013). The demand for foreign vehicles has not been affected by high prices set by the Chinese government. It has been found that consumers give higher priority to long term costs. They tend to explore fuel efficient alternatives regardless of their steep initial costs. This sets a great opportunity for our client to promote high-efficiency, low-maintenance natural gas operating Stirling vehicles in this region.

In China, the gasoline prices are also strictly government regulated. The government plans a green economy for the future, with energy-savings doubling the rate of projected annual GDP growth. The exponential increase in gasoline prices over the past decade will undoubtedly increase the burden on Chinese consumers by the target year of 2020 (Figure 1) (Trading Economics, 2013). In the past couple of years, Chinese consumers have

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responded to the increasing fuel prices by purchasing more fuel efficient vehicles, such as NGVs. The sales of NGVs jumped from 48,000 to 165,000 in the last three years, accounting for 6% of the passenger vehicles market (Ma, 2013). This relationship between gasoline prices and NGV sales can be seen in Figure 2.

The growing interest of the Chinese society in imported vehicles is expected to gain momentum as better alternatives are made available by North American manufacturers. The American brand vehicles already constitute a solid portion of the total sales in China. In a recent study conducted by BBVA, it was found that American brands accounted for 9% of the total vehicles sales in China from 2009 to 2013 (Figure 3). Meanwhile, total vehicle sales have grown exponentially, pushing 130 million units in 2013 (Figure 4) (BBVA, 2012). The sales number of American vehicles in China can be projected to 2020 by extrapolating the past 3 years’ data. According to this forecast, the total sales volume is expected to reach 150,000 units in 2020, which is almost equivalent to 156,000 vehicles sold in the U.S. in 2013 (BBVA, 2012). In other words, American cars market in China alone will have an equivalent size with the current U.S. market. If the current trend continues over the next 7 years, the Chinese automotive market will present a unique opportunity for American car manufacturers to potentially double their sales.

5.3.2 Domestic Market In United States, applications of natural gas powered vehicles are governed by commercial use. Most of compressed and liquefied natural gas operating engines are heavy duty trucks and public transportation vehicles. Currently, there are 1,194 natural gas stations available nationwide. Due to the limited passenger vehicle applications, most of these natural gas stations are located in rural areas of mid-west where commercial applications such as mining and construction are more frequent. Figure 5 outlines the distribution of natural gas stations in the U.S.

In contrast to the Chinese market, U.S. market shows a decreasing trend for both CNGs and LNGs. Figure 6 clearly demonstrates this trend, as the combined number of natural gas vehicles sales drop from 1,000,000 units to 450,000 units from 2007 to 2011 (NGV Global, 2012). This decrease is an ominous sign for the development of natural gas operating vehicles in the U.S. Instead, gasoline hybrids have gained significant momentum over the past couple of years, as more than 26 North American manufacturers have introduced gasoline hybrid vehicles into the market (Figure 7). With current developments and infrastructure, a transition to alternative fuels may not promise immediate success. The U.S. gasoline hybrid market is currently in a growth phase. Hence, our client should focus their attention on improving the hybrid drivetrain efficiency. In order for gasoline hybrid vehicles to entirely outdate conventional combustion engines and gain competitive advantage over plug-in hybrids and electric vehicles, their range must be extended using Stirling engines. A successful implementation of Stirling

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hybrid vehicles with gasoline may pave the way for future developments in alternative fuels. But for now, an investment towards natural gas hybrids in the U.S. falls far beyond our target year of 2020.

5.4 Costs The initial cost of Stirling engine technology is the greatest challenge to the commercialization of this technology. High material costs and design issues translate to initial costs, which are difficult to reduce. According to EPRI Institute’s Stirling engine report (EPRI, 2006):

1. High-temperature heater head assemblies require large surface areas, and must be made from exotic materials that are particularly difficult to machine, braze and weld.

2. The cooler section also requires large surface areas to permit sufficient heat transfer with minimal void volumes, which is costly to produce.

3. The regenerator assembly has a need for very fine mesh heat-transfer matrices that can operate near heater head temperatures, and therefore requires high-temperature materials which more expensive than other alloys.

In addition to Stirling engine’s costs, hybrid electric drivetrain system also experiences steep cost related to rare metals:

1. Electric motors require electrical conductors, soft magnetic materials, insulating materials, and magnetic field sources. Currently, there is a limited number of suppliers for these materials.

2. High energy product permanent magnets depend upon the availability of rare earth metals, particularly, neodymium.

On the bright side, the supply of neodymium is controlled by China. If Chinese law makers decide to adopt this technology in the long run, supply of neodymium can be increased through government incentives. However, for now, the initial costs of developing a Stirling hybrid vehicle seem to depend on the mass production. The cost of manufacturing Stirling engine ranges from $2,000 to $36,000. In terms of cost per energy output, the least expensive estimate was $333/kWe, provided by Sigma Electroteknisk at 100,000 units per year (Figure 8). With increased production, the unit cost of Stirling engines will decrease, however, Stirling hybrid retail prices still depend on precious materials and their design.

5.5 Environmental Benefits One of the primary objectives of Stirling hybrid developers is the engine’s environmental compatibility. So far, various tests and research show that an optimum Stirling hybrid engine design can easily achieve emission limitations. Like every other vehicle technology, Stirling hybrid technology was also assessed for hydrocarbon, nitrogen oxide and carbon monoxide emissions. Results obtained from the computational analysis have indicated

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that Stirling hybrid technology could potentially decrease all three of these pollutants. Referring back to the performance simulation, it can be seen that Stirling hybrids produce considerably lower levels of emissions, compared to gasoline hybrid vehicles (Table 7) (Figueroa, 2001).. Based on the theoretical data obtained from the computer simulation, Stirling hybrids qualify for Bin 2, which is the second highest air pollution score that can be attained, according to the U.S. Environmental Protection Agency (EPA, 2013).

5.6 Social / Political Factors According to Environmental Protection Agency’s credit multiplier rule for model years 2017 to 2021, there are generous benefits for purchasing plug-in hybrid vehicles. In the compliance calculation for GHG Emissions, plug-in hybrid electric vehicles begin with a multiplier of 1.6 in model year 2017 and phase down to a value of 1.3 by model year 2021 (C2ES, 2013). In other words, consumers who apply for vehicle credits within this period will be eligible to receive more financial support bylaw.

6.0 Hydrogen Fuel Cells (FCEV)

2012 was the year that automotive industry moved its concentration from fuel cells demonstration to mass

production. An increase of 21% in unit shipments of fuel cells between 2011 and 2012 uncovers the truth that

automakers, fuel cells industries and the government are ready for the market introduction of FCEV. Some

automakers such as Hyundai decided to develop the FCEV by itself. The initiative became a pilot program that

planned the production of 1000 vehicles between 2013 and 2015, before moving to mass production (D.Carter,

2013). However, the shortage in hydrogen refilling stations in North America is an obstacle that stands in the way

of hydrogen fuel cells. Before investing millions of dollars in the technology, a comprehensive market analysis

should be conducted on behalf of our client. It could be a viable option to collaborate with other automakers in

order to take advantage of shared resources. For example, BMW and Toyota decided to co-develop a fuel cell

vehicle platform by 2020 and share technologies including a fuel cell system, hydrogen tank, eclectic motor and

supporting battery system. With the market size for fuel cell technology expected to grow significantly by 2020,

the competition among Asian and European automakers will become fierce.

6.1 Fuel Efficiency The simulation made by University of Calgary and University of Windsor also includes the comparisons between ICE and fuel cells in terms of equivalent fuel consumption. These comparisons were carried out based on the assumption that each technology was under its ideal condition. According to the results (shown by Table 5), the

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efficiency of fuel cells is 50 MPG, which is 21% higher than that of conventional ICE. However, it is 34% lower than the efficiency of Hybrid ICE (Figueroa, 2011).

6.2 Vehicle performance Durability is one of the biggest concerns of fuel cells vehicle performance. Contaminants from impure hydrogen fuel can degrade the lifetime of fuel cell engines. According to the data provided by the U.S Department of Energy (Shown by Figure 13), durability has increased substantially from 29,000 miles to 57,000 miles since 2006. However, it is still far away from the target of 150,000 miles, which is required for FCEV to compete with internal combustion engine (DOE, 2012). In addition to durability, our team also compared the FCEV with conventional and hybrid ICE in terms of acceleration, maximum speed and maximum driving range. As shown by Table 6, fuel cells vehicles range in the middle among three technologies in all three categories (Figueroa, 2011).

6.3 Market Potential

6.3.1 International Market According to a latest report published by Navigant Research, the worldwide sales of FCEVs will reach 1000 in 2015. The report also forecasts that it will increase to 2 million by 2030 (Navigant, 2013). As shown by Figure 11, the main constraint on demand of FCEVs before 2020 is the shortage of hydrogen refueling stations. Most of the automakers will speed up their approach for their commercialized production and aim the markets such as Germany, United Kingdom, Japan and Korean since these countries have less geography to cover for HRS infrastructure and sufficient government support.

6.3.2 Domestic Market California is the pilot region for the deployment of FCEVs in the U.S. According to the technologies market report

published by DOE, the California Fuel Cell Partnership (CaFCP) planned to build more hydrogen refueling stations

in the 2015-2017 timeframe. CaFCP anticipated that 68 hydrogen stations will be ready to serve 20,000 FCEVs in

California by 2016 (DOE, 2012). CaFCP also published a California road map, in which, a survey concludes that

more than 50,000 FCEVs will be on the road in California by 2017 as shown by Figure 12 (DOE,2012).

6.4 Costs The unit cost of fuel cells has continually decreased since 2002. According to the data (Figure 9) published by the

U.S Department of Energy (DOE), the unit price decreased more than 80 percent from $275/kw to $47/kw in the

past 10 years. It will approach the target of $30/kw set by DOE (D.Carter, 2013). The costs of onboard hydrogen

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storage are highly dependent on the material used. Carbon fiber tanks are commonly used in the industry and

cost from $15/kwh to $18/kwh while the commercialization target is $2/kwh (D.Carter, 2013).

Internal Costs: Although the economics of scale will bring the benefit of high quality and low cost, current FCEV

technology is still not completive compared to the internal combustion engine. The precious metal, platinum, in

the catalytic converter and materials used in the onboard hydrogen storage increase the manufacturing cost. In

order to gain more market share, cost reduction becomes the priority task for the R&D at its current stage.

External Costs: There are total of 208 hydrogen refueling stations (HRS) in service worldwide as of March 2013,

with 80 in Europe, 76 in North America, 49 in Asia and three in other regions (DOE,2012). The 225% increase in

the number of new HRS opening indicates the market preparation for the launch of FCEV and some local

governments and organizations made significant contributions to it. For example, the California Energy

Commission invested $18.69 million on hydrogen refueling infrastructure in June 2013, which makes California a

hotspot for FCEV and other low-emission vehicles. The investment covers the cost of seven new HRS and

upgrading existing ones. H2USA is planning to build HRS across the whole country and preparing the USA for the

mass production of FCEV (D.Carter, 2013).

6.5 Environmental Benefits The fuel cell engine is a device that produces electricity by splitting electrons out of hydrogen. Without any fuel

being burned, the fuel cells engine is wildly recognized as a clean technology with water vapor as its only by-

product. It cannot be ignored that producing hydrogen fuel itself requires a lot of energy. Currently, most of the

hydrogen is extracted from coal or natural gas which results in emitting carbon dioxide. However, the amount of

greenhouse gas emission generated annually from this process is still 30%-50% less than that produced by

gasoline-powered vehicles according to the data from the DOE (DOE, 2012).

6.6 Social / Political Factors Seeing the benefits that fuel cells vehicles can bring in the future, many governments began to support this

technology. The U.S government and U.S Department of Energy’s office of Energy Efficiency and Renewable

Energy are continuously launching programs aiming to promote FCEV. During a caucus in April 2013, 27 senators

signed a funding of $147.8 million for the fuel cells and hydrogen infrastructure (D.Carter, 2013). In Asia, the

Japanese government’ strong capital subsidies for fuel cells industry increases the possibility of commercially

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launching a FCEV by 2015. The JX Nippon Oil & Energy Corp. already made a commitment to build 40 hydrogen

refueling stations in two years, which put Japan on the right track to its target of 100 hydrogen stations by 2015

(IPHFC, 2011). In China, the central government provided funding of $20 million a year for 5 years to FCEV

research while the Chinese Academy of Science invested $12 million over 3 years on hydrogen technology

(IPHFC, 2011). This government support will accelerate the development and promotion of the fuel cells market in

China. Based on the research our team did, there is little political issues exist that limits the development of FCEV.

In contrast, the support and subsidies from government and corporation offer great opportunities. Figure 10

shows the approximate 2010 federal funding around the world.

7.0 Final Analysis

SHEVs and FCEVs have proven to be the two strongest candidates that have the potential to make an impact on the alternative vehicles market. Both technologies are likely to deliver long-lasting solutions to the growing needs of our natural and built environment. However, the final road map requires a more concrete answer. In pursuit of a final recommendation, two technologies will be compared in broader perspectives, in terms of their market applicability and long term environmental status. Given the magnitude an R&D investment, it is critical for our team to sort out the potential benefits of both candidates in the areas that matter the most for our client and, ultimately, the customers.

7.1 Market Comparison Our assessment team compared the two technologies in terms of their market potential, production cost and government support. The market potential is measured by the projection of the global demand by 2020. According to table XXX, the market potential of the Stirling hybrid is 170 times greater than that of hydrogen fuel cell with 3,400,000 and 20,000 units respectively. The option of natural gas also adds up to SHEVs global market potential. The main reason for the low market potential of FCEVs is the constraint of insufficient number of hydrogen refueling stations around the world. Based on the existing hybrid electric vehicle sales, SHEVs have a greater potential to achieve fast and high volumes of sales. It is safe to assume that SHEVs will benefit from the existing hybrid electric vehicles market too, as long as they achieve better or similar vehicle performance. Based on their current market size, fuel cells and hybrid electric vehicles are in their introduction and growth phases of their product lifecycle (Figure 14). In 2020, it is estimated that HEVs will have a more saturated consumer market than fuel cells. If SHEVs can sustain the current HEV prices, or manage to lower down prices, they can penetrate into the existing HEV market more easily in 2020.

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Currently, FCEV has lower manufacturing cost with only $47/KW, compared to SHEVs with $333/kW. However, SHEV is a new engine creation which has never been mass produced before. Future investments in R&D on this technology can lead to novel solutions that may reduce production costs of Stirling engines. On the other hand, the federal government has increased its support for the purchase of hydrogen fuel cells. According to the Environmental protection Agency’s credit multiplier rule, U.S consumers who want to buy FCEVs are expected to receive a higher credit, hence, more financial support for to finance their down payment. And yet, the government’s response to the new SHEV program is unknown. It is difficult to project social and political factors that are tied into the marketability of vehicle sales. Given the current direction of alternative vehicles market, SHEV will generate faster return on investment compared to fuel cells, which are expected to rise later.

7.2 Environmental Comparison An analysis of technology emissions against environmental standards needs to be performed in order to discern what research roadmap will meet the client’s objective of reduced emissions. According to the standards put forth by the EPA, fuel cells, along with electric cars, are the only vehicles that qualify for Bin 1. In other words, fuel cells achieve the perfect air pollutant score in terms of their greenhouse gases and pollutant emissions. This makes Fuel Cells ideal for a future in which global emission regulations will keep getting tighter, as is currently happening in Europe. Although not as clean as fuel cells, the Stirling engines qualify for Bin 2 category as outlined by the EPA. This means that SHEVs will meet the client’s objective of clean emissions and fall well within regulation standards in the foreseeable future. Fuel Cells are more environmentally friendly than the Stirling engine, but the Stirling engine is still a very environmentally friendly option with an air pollutant score somewhere between 8-9, making it far superior than the vehicles being used today. Last but not least, the option of natural gas as an alternative fuel can further reduce pollution in large markets such as China. Overall, fuel cell is the more prudent option in terms of environmental considerations, especially in markets like the UK and Germany where emission regulations are getting stricter than the U.S.

7.3 Technical Comparison Factors such as acceleration, range and maximum speed highlight the strengths and limitations of each technology in terms of achieving desired vehicle performances. The Stirling engine has quicker acceleration compared to fuel cells. However, fuel cells have a greater maximum speed and higher engine efficiency than the Stirling engine. Although fuel cells engine efficiency is much higher than the Stirling engine’s efficiency, the Stirling has one of the highest engine efficiencies as it is the closest to the Carnot cycle. With an even distribution

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of advantages and limitations, the two technologies seem to be at par. From a technical perspective any one of these technologies will satisfy current consumer expectations.

8.0 Recommendations

Based on the prospect of both options, our client should direct their research towards SHEVs in short term and FCEVs in long term. As discussed in the market comparison section, SHEVs can be synchronized with the existing HEV technology and gain customers from the existing hybrid market. However, the cost of SHEV must be decreased in order to make it more appealing for manufacturing. Since compressed natural gas is an alternative fuel option for Stirling hybrid vehicles, the costs that will generate from the expensive storage materials must be eliminated. Similar concerns govern the development of fuel cell which is currently challenged by high capital costs and lack of advanced storage technologies. Our client should develop a 7 year-long research strategy that will aim to benefit both options at the same time. The suggested technologies should be explored: Advanced Storage Technologies for Hydrogen and Natural Gas: Despite significant improvements to the compressed and liquefied gas storage capabilities of alternative vehicles, storage remains as a critical challenge to spread deployment of gaseous transport fuels. The heavy and bulky storage tanks not only affect the vehicle performance but also incur additional costs to the already expensive drivetrain system. At present, metal hydrides are achieving a lot of attention, but, the technologies still require improvements in the lab before they are able to compete in the field. External Combustion Mechanism for Stirling Engine: Advanced computer simulations suggest that Stirling hybrid drivetrain can reach extended drive range and achieve optimum fuel efficiency. Yet, there is insufficient scientific research on how to implement such a mechanism. As discussed earlier, Stirling engine is an externally combusted system, meaning that it requires and external heat source to combust the fuel in the “expansion” compartment. So far, it is unclear how natural gas or gasoline will be used to heat up and run the engine at the same time. More R&D will be required to design a suitable mechanism to run the Stirling engine. Catalytic Converter for Fuel Cell Engine: The precious metal platinum has been always preferred by the industry for its stability. This is due to the highly corrosive working environment, caused by the presence of acidic chemicals in the fuel cell engine. In order to reduce the cost, the R&D should launch a long-term program to find a substitute catalyst such as base metal or graphene-based systems. Another approach is to adopt a system similar to a redox flow battery to replace the cathode side of the fuel cells, and achieve the goal of overall

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platinum loading reduction by up to 80% (Carter, 2013). The ACAL Energy, who is the leader in this technology, stated that this replacement of the cathode could reduce the cost by 25%.

9.0 Road Maps

9.1 SHEV Road Map 2013:

1. Launch R&D program to integrate Stirling engine with hybrid drivetrain. 2. Collaborate with DEKA Research in order to access previous test results. 3. Initiate research to reduce the production cost by adopting advanced storage technologies for natural

gas. 2013-2015: Test SHEV with both natural gas and gasoline application to explore if natural gas provides superior engine performance. 2017: Introduce a concept SHEV operating with gasoline to the U.S market. 2020: Based on the success of gasoline SHEVs and natural gas vehicles (NGVs), introduce concept SHEV running with Natural Gas to the Chinese market.

9.2 FCEV Road Map

2013-2020: 1. Collaborate with other manufactures, sharing resources such as fuel cell systems, electric motors and

supporting battery system. 2. Build R&D and manufacturing facilities in California to take advantage of local hydrogen resources and

government incentives. 3. Launch a long-term program on finding a substitute catalyst such as base metals or grapheme-based

systems. 4. R&D on material used on the onboard hydrogen storage such as low-cost carbon fiber or metal hydrides

technology 2020-2030: Introduce concept vehicles in California, Japan, South Korea, Germany and United Kingdom.

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REFERENCES

1. Power Sector Opportunities for Reducing Carbon Dioxide. World Resource Institute. Web. 18 Oct. 2013 2. Timothy C. M., Amory B. L. Vehicle Design Strategies to Meet and Exceed PNGV Goals. The Hypercar Center Rocky Mountain

Institute. Snowmass, CO. 3. Peter Ahlvik and Åke Brandberg. Well-To-Wheel Efficiency for Alternative Fuels From Natural Gas Or Biomass. Swedish National

Road Administration. October 2001. 4. Stirling Engine Assessment – Technical Report. Electric Power Research Institute. Palo Alto, CA. 2002. Ref. 1007317. 5. A. Heron and F. Rinderknecht. Comparison of Range Extender Technologies for Battery Electric Vehicles 6. World Energy Council, Fuel Cell Efficiency, Web< http://www.worldenergy.org/focus/fuel_cells/377.asp > 7. K. Nice and J. Strickland, How Fuel Cells Work, Web 2013 <http://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/fuel-

cell5.htm> 8. Fuel Cell Today, The Fuel Cell Industry Review 2013, Web < http://www.fuelcelltoday.com/news-events/news-

archive/2013/september/fuel-cell-today-publishes-the-fuel-cell-industry-review-2013> 9. F. Igot, Internal Combustion Engine Versus he Hydrogen Fuel cell,Page5, Sep 2002 10. United States Environmental Protection Agency, A Comprehensive Analysis of Biodiesel Impacts on Exhaust Emissions, Oct

2002 11. P.J. Murphy, The role of Natural Gas as a Vehicle Transportation Fuel. Massachusets Institute of Technology. June 2010. 12. Carbon and Sustainability Reporting Within the Renewable Transport Fuel Obligation. The European Energy Commission.

January 2008. Web. 12 Oct. 2013 13. D.Carter and J.Wing, The Fuel Cell Industry Review 2013, September2013 Web < http://www.fuelcelltoday.com/news-

events/news-archive/2013/september/fuel-cell-today-publishes-the-fuel-cell-industry-review-2013> 14. U.S Department of Enegy, 2012 Fuel Cell Technologies Market Report, October 2013 15. [20] International Partnership for Hydrogen and Fuel Cells in the Economy, 2011 Hydrogen and Fuel Cell Global Policies

Update, November 2011 16. Navigant Research, Fuel Cell Vehicles, June 2013 17. L. Figueroa, O. Fauvel and G. Reader, Performance of Stirling Engine Hybrid Electric Vehicles: A simulation approach, January

2011 18. B. Dumaine, Has the fuel cell car’s time finally come, August 2013 19. Environment & Energy Management News, Fuel Cell Vehicles’a $1.8 Billion Market in 2030, January 2013 20. Federal Vehicle Standards. Center for Climate and Energy Solutions. Arlington, VA. October 2013. 21. L. Burkitt, In China, Veil Begins to Lift on High Consumer Prices. The Wall Street Journal. Sept. 4,2013. 22. Automobile Market Outlook: China - Economic Analysis BBVA Research. Hong Kong, China. June 2012. 23. China Disposable Income Per Capita. Trading Economics. October 2013. Web

<http://www.tradingeconomics.com/china/disposable-personal-income> 24. W. Ma, China Raises Natural Gas Prices. The Wall Street Journal. June 28, 2013. Web

<http://online.wsj.com/news/articles/SB10001424127887323689204578573342538389084 >

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APPENDIX

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TABLES

Engine Efficiency (%)

Fuel Consumption (litres/100km)

Maximum Driving Range (km/hr)

Emissions (g/km of CO)

ICEs 20-30 4.2-9 156 1.17 Stirling 50 3.6-3.8 152 0.011 Wankel 19 5.85 120 4 Fuel Cells 83 4.7 157 0

Table 1: Alternative Engine Technologies vs. Internal Combustion Engine

Cost ($/gallon) Emissions(g/km of CO2) Potential International Market Biofuels 3.89-4.19 78-88 Places with abundant agricultural produce. Natural Gas 2.14 67-119 Global, especially huge demand in China. Hydrogen 4.49 0 Global, may do well in markets with high average

incomes due to cost. Table 2: Alternative Fuels

Equivalent Fuel Consumption Technology Litres / 100km MPG Conventional ICE 5.7 41.3 Hybrid ICE 3.5 67.2 Conventional Stirling 4.7 50.0 Stirling Hybrid 3.1 75.9

Table 3: Equivalent Fuel Consumption of Stirling Hybrid

Vehicle Performance Technology Acceleration Maximum Speed (km/hr) Maximum Driving Range (km) Conventional ICE 17.0 156.0 702 Hybrid ICE 11.0 158.0 1171 Conventional Stirling N/A 93.0 851 Stirling Hybrid 13.0 147.0 1318

Table 4: Vehicle Performance of Stirling Hybrid

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Equivalent Fuel Consumption Technology L / 100km MPG Conventional ICE 5.7 41.3 Hybrid ICE 3.5 67.2 Fuel Cells 4.7 50.0

Table 5: Equivalent Fuel Consumption of Fuel Cells

Vehicle Performance Technology Acceleration Maximum Speed (km/hr) Maximum Driving Range (km/hr) Conventional ICE 17.0 156.0 702 Hybrid ICE 11.0 158.0 1171 Fuel Cells 11.0 157.0 917

Table 6: Vehicle Performance of Fuel Cells

HC (gr/km) CO (gr/km) NOx (gr/km)

Hybrid ICE 0.205 0.888 0.335

Stirling Hybrid 0.002 0.009 0.003

Bin 2 0.002 1.3 0.012

Table 7: Environmental Comparison

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Technology Candidate Efficiency Vehicle Performance

Acc. (km/s2) Speed (km/h) Range (km)

Stirling Hybrid 50% 13 147 1318

Hydrogen Fuel Cell 83% 11 157 917

Table 8: Vehicle Performance - SHEV vs. FCEV

Technology Candidate Market Potential (1000's units)* Cost ($/kW) Gov't Incentives

Stirling Hybrid 3,400 $333 1.3 credits

Hydrogen Fuel Cell 20 $47 1.7 credits

Table 9: Market Potential - SHEV vs. FCEV

Technology Candidate Emissions (gr/km)

HC CO Nox

Stirling Hybrid 0.002 0.009 0.003

Hydrogen Fuel Cell 0* 0* 0*

Table 10: Emission Performance - SHEV vs. FCEV

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FIGURES

Figure 1: Chinese Income Per Capita & Gasoline Price

Figure 2: Gasoline Price vs. NGV Sales in China

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Figure 3: Sales by brand in China

Figure 4: Passenger Car Sales in China

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Figure 5: Map of Natural Gas Fueling Stations in the U.S. (DOE, 2012)

Figure 6: NGV Sales in United States

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Figure 7: Gasoline Hybrid Electric Vehicle Sales in United States

Figure 8: Production map of current Stirling engine manufacturer

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Figure 9: Fuel Cell Electric Vehicles System Cost (D.Carter, 2013)

Figure 10: Approximate 2010 Federal Funding (IPHFC, 2011)

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Figure 11: Fuel cell light duty vehicle sales by region, world market (2013-2030) (Navigant, 2013)

Figure 12: Projected number of FCEVs on the road in California (DOE, 2012)

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Figure 13: Fuel Cell Stack Durability Progress (DOE, 2012)

Figure 14: Expected Lifecycle of Fuel Cells and HEVs