Report PROOF

Fuel Cell Industry & PatentOverview 2015Created in partnership withBlue Vine Consultants and HGFIntellectual Property Specialists



ForewordFuel cell technology is very attractive with its highly efficient conversion of energy from fuelto electricity. The technology is a ready source of power for many applications and the marketpotential, together with the added draw of being part of a future green energy economy withhydrogen as the energy vector, has attracted a vast level of effort by many organisations sincethe 1980s.The technology has proved complex and the potentially enormous market growth has showntantalising promise for some time. In most cases the technology is competing with establishedand low cost incumbent technologies which have set a high barrier to commercialisation.However, the market promise appears to be starting to come to fruition, for instance in thecommercial growth of home-based chp units especially in Japan; in the rise of share pricesof emerging North American fuel cell companies reflecting the commercial progress by, forexample, Bloom Technologies, Ballard and Plug Power; most recently in the automotive marketactivity with heavyweight-auto OEM Toyota launching the Mirai to add to the previous launch ofthe Hyundai ix35; several other car companies are primed to follow suit.The story of the development of this complex technology is reflected in the large patentportfolio and the many academic publications. These have arisen as developers have madeprogress in the designs of stacks and systems and in establishing routes to overcome some ofthe challenges such as durability and cost and application-specific issues such as cold start forautomotive. Activities in manufacturing and cost reduction continue as the technology getscloser to increasing market penetration.Patents continue to be an important factor in the commercialisation as can be seen in thesuccessive purchases of former UTC patents by Ballard and Volkswagen, and Toyota’s action toshare its patents in the short term to stimulate the growth of the automotive market.This review shows how the latest stage in the development of the technology and itsemergence into the market is reflected in the patent activity; and how the technologydevelopment is reflected in the academic interest, with some deep insights from expertsinvolved in the industry.Dr Andrew M CreethCTO, ACAL Energy LtdFuel Cell Industry & Patent hgf.comOverview May 2015 bluevineconsultants.com

Fuel Cell Patent & Industry Overview 2015Executive SummaryIn this report we assess the state of the fuel cell sector by reviewing the industry from theperspective of the commercial players, patent activity and academic interest within the sector.From our research, we have identified over 100 companies globally that are manufacturersor distributors (or both) of fuel cells. The USA, Germany and Japan are mostly where thesecompanies are located, all of which have historically been hot spots of fuel cell activity.Analysis of the patent data shows that there has been an overall decline in fuel cell patentactivity over the last few years. This can be seen across all of the major patent offices globally,and in respect of the filing statistics of the major players. Based on this data, the declining trendlooks set to continue over the coming years. This could be a sign that the sector is maturing tothe point where companies are preparing for large-scale commercialisation or it may indicate aschism in the attitudes of, for example major OEMs with some remaining highly focussed on fuelcell technology and some becoming increasingly sceptical. The top patent assignees’ are alsoidentified, with Toyota heading up this list, followed by other automotive OEMs, and electronicsmanufacturers.Interest within the academic world on fuel cells has been increasing over the last decade. Thismay indicate renewed areas of fundamental research or increased academic effort to driveup efficiencies, for example, which may lead to downstream opportunities in the commercialexploitation of the technology.In-depth case studies of SFC Energy and Bloom Energy are presented which show howcompanies are successfully entering and penetrating markets. This is happening despite thehigh capital cost of the fuel cell, which is often cited as a reason for the lack of commercialisationof fuel cells.Finally, seven fuel cell industry experts were interviewed and their opinion on the outlook of thesector is presented. The general consensus is that the future of the industry is very promising,especially with the advent of several fuel cell vehicles in the near future.Based on our understanding of the industry, the data presented herein as well as thirdparty research and media articles, we believe that those of the major players which remainenthusiastic about the opportunities for fuel cells may well be moving towards consolidatingtheir existing technical positions to facilitate further commercialisation.i Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Contributor SectionAbout HGFHGF is one of the pre-eminent firms ofpatent & trade mark attorneys in theUK.  HGF has a reputation for providingcommercially-focussed IP advice and a highquality, client-focused service.Our attorneys invest a considerableamount of time working directly withclients to understand their needs and todevise the best IP strategy for protectingtheir intellectual assets. HGF is the winnerof many awards and accolades and haswithin its ranks acknowledged nationaland international leaders in securing andprotecting IP and devising strategies tomaximise value.Fuel Cell Industry & Patent hgf.com iiOverview May 2015 bluevineconsultants.com

About the AuthorsDr Chris MoorePartner at [email protected] is a partner in HGF and Head of our Birmingham Office. He advises SMEs, multinationalsand academic institutions on uncovering, protecting and leveraging their intellectual capital.Chris has been consistently ranked in the highest tier of patent attorneys in both Chambers &Partners and Legal 500. He has undertaken due diligence work for VCs, PE firms as well as inrespect of MBOs/MBIs.Chris’s practice covers chemistry and engineering fields, with specialisations in greentechnology (including fuel cells and other alternative energies), plastic electronics (PVs, OLEDs),aerospace and automotive technologies, , ceramics, polymers, metallurgy and analyticalchemistry/instrumentation.Jason LessardPatent Director at [email protected] is a Patent Director in our Birmingham office. He has a diverse background, havingworked in design and technical sales in Canada and Europe before entering the patentprofession, having successfully completed the USPTO Patent Bar Exam and having qualified asa European and UK patent attorney. This experience shapes his approach to advising clients; hedelivers commercially-focused outcomes that add real value to client’s businesses.Jason’s practice covers a wide range of mechanical and electromechanical technologies witha particular emphasis on aerospace, automotive and packaging. He has specific knowledgeand experience in injection moulding and plastics processing technologies, engines andtransmission systems, aerodynamics, defence & assault equipment, renewable energyharvesting equipment, medical devices and diagnostic systems.iii Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Contributor SectionAbout Blue Vine ConsultantsBlue Vine Consultants are an awardwinning company based within the energy,technology and sustainability sector. Theyprovide the valuable service of marketresearch, intelligence and strategy forinnovative, high tech and sustainabletechnologies.Blue Vine Consultants is primarilycomprised of Scott Hardman and AmritChandan as well as the Blue Vine Associatenetwork, which consists of various expertswithin the field from Academia andIndustry. Their respective expertise withinthe marketing and market research forenergy products has given them the basisand credibility to consult for companieshelping their clients to maximise theirprofit margins and international leaders insecuring and protecting IP and devisingstrategies to maximise value.Fuel Cell Industry & Patent hgf.com ivOverview May 2015 bluevineconsultants.com

About the AuthorsJohn Geoffrey MaillardDoctoral [email protected] is a doctoral researcher in Chemical Engineering at the University of Birmingham. AMasters level Chemical Engineering graduate, John has significant experience in team andgroup projects, working on tasks ranging from design of CHP and anaerobic digestion facilitiesat a paper recycling facility to competing in a industrial sponsored challenge to put forwardgreen solutions to the current energy crisis whilst meeting cost viability throughout. Consultingin research of novel fields for engineering companies like Teer Coatings (MIBA) and internationalresearch collaborations with Indian Universities underpins an ability to work successfully withboth private and public sectors. Scott HardmanBlue Vine Consultants [email protected] is a director of Blue Vine Consultants and a doctoral researcher working at the DoctoralTraining Centre in Hydrogen Fuel Cells and in the Business School at the University ofBirmingham. This combination of technical and business backgrounds enables him to advisecompanies on how to take high tech products to market. Scott has experience consulting withtechnology companies in the UK and Europe and is currently employed as a consultant for theEuropean Fuel Cell Forum. He has published in high impact international journals. Scott recentlyworked as a visiting scholar at UC Davis in California, where he researched energy trends inCalifornia, hoping to bring some of the innovation in this area across to the UK and EU.Dr Amrit Singh ChandanBlue Vine Consultants [email protected] Chandan is a director of Blue Vine Consultants. He is also a postdoctoral researcher inChemical Engineering at the University of Birmingham. He has experience consulting for avariety of companies ranging from SMEs to large corporations. Specifically, Amrit has a lot ofexperience in taking abstract technical concepts and turning them into Unique Selling Points.This enabled Amrit to lead on planning the marketing strategy for the roll out of a hydrogeninfrastructure on the east coast of the USA as part of the International Hydrogen DesignContest. His contributions, along with other team members, led the team from the University ofBirmingham to a joint first prize in this international competition. Amrit, along with Scott, wasnamed the Business Quarterly Magazine’s Emerging Entrepreneur in 2014.  v Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Contents 11 Introduction 31.1 Methods 42 Fuel Cell Manufacturers and Distributors 82.1 Geographic Distribution 102.2 Fuel Cell Manufacturers by Fuel Cell Type 113 Patent Analysis 113.1 Setting the Scene 153.2 Fuel Cell Patent Activity 153.2.1 Filing Statistics 203.2.2 Granted Fuel Cell Patents 223.2.3 Assignee Data 284 Academic Research Trends 295 Company Case Studies 295.1 Bloom Energy 305.1.1 Bloom Energy- Summary 315.2 SFC Energy 325.2.1 SFC Energy- Key Markets 335.2.2 SFC Energy- Summary 346 Fuel Cell Industry- Outlook from Experts 346.1 Changing Landscape within the Fuel Cell Industry 356.2 Early Markets for Fuel Cells 366.3 Fuel Cell Vehicle Market Introductions 376.4 Outlook from Experts- Summary 387 Conclusions

1 IntroductionFuel Cells are electrochemical devices that produce electricity by using a hydrogen-containingfuel and an oxidant, typically oxygen. The principal emission is water. Fuels cells are able toproduce power at high-efficiencies and with limited harmful emissions. A typical hydrogen-oxygen fuel cell emits water as the waste product.The fuel cell was first invented in 1839. The first commercial interest began in the mid 20thCentury with NASA using fuel cells to provide on-board power for manned space flight. Eversince, there has been interest in fuel cells for mobile applications, for example for use inautomobiles and for providing stationary power. Today the industry is complex with manydifferent companies producing diverse products which use different fuel cell chemistries.Over the years, the industry has experienced fluctuating levels of interest in the technology.Fuel cells hold great potential as power providers for a wide range of applications fromconsumer electronics to stationary power.This report examines the state of recent technologicaldevelopment, in terms of patent activity and academic interest, and provides some case studiesof businesses which have commercialised.The ‘Gartner hype cycle’, as it is commonly known, is used as a tool to plan and positionemerging technologies on a timescale and to make recommendations about the timing ofstrategic investments in technology. The basic dynamics of the hype cycle involves five stages:1. the technology trigger, 2. the peak of inflated expectations, 3. the trough of disillusionment,4. the slope of enlightenment and 5. the plateau of productivity. In this report, we will also belooking to see where fuel cells are in relation to the hype cycle. Academic research by SjoerdBakker suggests that fuel cells were at the peak of inflated expectations between 2002-2006.According to the Gartner market research firm fuel cells were emerging out of the trough ofdisillusionment in 2011, and they were looking towards reaching the slope of enlightenmentand eventually the plateau of productivity. Peak of In ated ExpectationsAttention/Expectations Trough of Plateau of Disillusionment Productivity Technology Slope of Trigger EnlightenmentFigure1.1: Hype Cycle Schematic Time1 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

This report includes an overview of manufacturers and system integrators and shows abreakdown of fuel cells by country, by continent and by fuel cell type. Up-to-date patent datais then presented. This data updates and augments that presented in the previous reviews(for example, Fuel Cell Today Patent Review 2012) and takes the data to the end of 2014,providing, we believe, the most comprehensive review of patent activity in the fuel cell arena.Subsequently, Academic Research tends are presented, to show that state of play in academicresearch as a comparison to the patent data. In section 5 two in-depth case studies of fuel cellcompanies are presented, these companies are SFC Energy and Bloom Energy, these companieswere selected due to their relative success within the sector, and their ability to identify marketswith real demand for fuel cell systems. Finally in order to get more context of the situation,seven people who can be considered experts in fuel cells were interviewed in order to get theirinsights into the sector, these findings are presented in section 6.In summary, this report reviews fuel cell patent activity, academic interest, case studies ofcommercial businesses and comments by acknowledged experts.Fuel Cell Industry & Patent hgf.com 2Overview May 2015 bluevineconsultants.com

1.1 MethodsTo establish a list of fuel cell companies, multiple references were used. News articles, industrialreviews, international programmes, company websites and company registrars such asCompanies House were used to build a complete picture of the company portfolios. Thisinformation is as accurate as was possible at the time of publication.With regards to patent analysis, all patent applications are classified by their technology typeaccording to an International classification system – the IPC system1. Fuel cells are classified inH01M8*,23, and we have used that IPC classification symbol to isolate fuel cell patent data.To derive the data presented below we have interrogated PatentScope, which is accessed viathe World Intellectual Property Office (WIPO), Global Patent Index, which is accessed via theEuropean Patent Office (EPO) and is based on their bibliographic worldwide patent databasecollection and worldwide legal status database, together with other corroborating sources asidentified in the text.In contrast to previous reviews we have not truncated our search results to look only at patentapplications at the European patent Office (EPO) and US Patent & Trademark Office (USPTO) butrather have investigated the position globally and across the Big 5 Patent Office group of China(State Intellectual Property Office – SIPO), Republic of Korea (Korean Intellectual Property Office– KIPO), Japan (Japan Patent Office – JPO), EPO and USPTO.The World Intellectual Property Organization (WIPO) administers the Patent Cooperation Treaty(PCT), an international system which allows patent applicants to file a single patent applicationwhich covers ca. 150 territories worldwide. Although patents are granted nationally, the PCT isan increasingly important system for the filing of patent applications and is included in the data,as indicated.Information on the number of academic research publications was obtained from GoogleScholar. Google Scholar allows for reviewing the presence of search terms, e.g. fuel cells, intitles and/or abstracts of academic papers. Comparisons of acronyms alone, full names of fuelcell types and combinations of acronym and full names were tested. Full names were chosenas this showed the most realistic comparison of numbers. A note on polymer electrolyte fuelcells: due to the naming convention around PEFCs, which are often referred as PEM fuel cells,there are circumstances where they are not referenced as PEFCs in the literature. This leads to asmaller number of papers being found. The number of papers which discuss proton exchangemembrane and/or PEM however, are an order of magnitude higher, as the label itself isapplicable to fields outside of fuel cells. Papers with PEMFC referenced are in the same quantityas those with simply SOFC referenced. Therefore it is quite likely that SOFCs and PEM are moreclosely aligned than this information might initially present. However, the data is still useful forhighlighting the trend in scientific academic publications.For the case studies, two fuel cell companies were selected; Bloom Energy & SFC Energy. Theresearch methods were the same as for the previously collated company data, with financialdata taken from company reports as well as some online financial reports. Further informationwas found in news articles and company websites.Furthermore, a collection of International academics and Industry experts were individuallyinterviewed. Where relevant their exact responses were used. When similar views were held, asummary of the research findings is presented.1 http://www.wipo.int/classifications/ipc/en/2 We note that WIPO accords fuel cell technology a wider classification (http://www.wipo.int/classifications/ipc/en/) than simply H01M8* but cross referencing within those classificationsidentifies patent publications which are not fuel-cell related. Hence we have used the moreprecise classification symbol than proposed by WIPO.3 http://web2.wipo.int/ipcpub/#viewmode=f&symbol=H01M0008000000&refresh=page3 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

2 Fuel Cell Manufacturers and DistributorsTable 2.1 shows the companies identified in this review, the type of fuel cell they use and thesector within which they operate. The companies represented here are manufacturers anddistributors of fuel cells.Table 2.1: List of Global Fuel Cell Manufacturers.Name Country Fuel cell Company Sector typeACAL Energy Ltd UK PEFC Fuel CellsAcumetrics USA (HQ) SOFC Portable powerAFC Energy UK AFC Fuel CellsAltergy Systems USA PEFC Fuel Cells Defence,AMI (Ultraelectronics) USA (HQ), UK, SOFC aerospace, Canada, Australia security, transport, energyAquafairy (partnered with Japan PEFC Fuel cells (RohmRohm) France PEFC are electronics)Areva (Helion Fuel cells aresubsidiary) Energy StorageAsahi Glass Japan SOFC Glass & CeramicsAsian Paci c Fuel Cell Taiwan(HQ), USA PEFC Fuel CellsTechnologies LtdAxane (Air liquid subsidiary) France PEFC Fuel Cells PEFC & Fuel CellsBallard Power Systems Canada DMFC PEFC & Fuel CellsBalticFuelCells GmbH Germany DMFC SOFC Fuel CellsBloom Energy USA PEFC Fuel CellsCEKAtec AG Switzerland PEFC Fuel CellsCellEra Israel PEFC Fuel CellsCellkraft AB Sweden SOFC Fuel CellsCera-FC South Korea SOFC Fuel CellsCeres power UK (HQ), Japan PEFC Energy ResearchComm Energie A tomique FranceDaimler AG Germany/USA PEFC AutomotiveDelphi UK (HQ), USA SOFC AutomotiveDoosan Heavy Industry (DoosanFuel Cells America inc. and Fuel South Korea PEFC & Heavy industries,Cell Power) (HQ), America PAFC engineering and constructionsElcogen OyElcore Finland SOFC Fuel Cells Germany PEFC Fuel CellsFuel Cell Industry & Patent hgf.com 4Overview May 2015 bluevineconsultants.com

Name Country Fuel cell Company Sector typeElectro Power System Italy (HQ), USA PEFC Fuel CellsEl ring Klinger AG Germany SOFC, PEFC , Automotive DMFCEnymotion GmbH Germany Fuel CellseZelleron GmbH Germany DMFC Fuel CellsFirst Element Energy USA SOFC Fuel Cells DMFCFord Motor Company USA PEFC AutomotiveForesight Energy co. ltd Jülich China PEFC Fuel CellsForschungszentrum Germany SOFC & HT - R & D InstituteGmbH PEFC Germany PEFC & HT - R & D InstituteFraunhofer -Institute PEFC Energy, Batteries, Austria PEFC WeldingFronius GmbH USA (HQ), Korea(POSCO) MCFC Fuel CellsFuel Cell Energy Japan PAFC Japan DMFC ElectronicsFuji Electric USA (HQ), ElectronicsFujikura International SOFC Conglomerate Israel (energy, electric,GE (General Electric) Fuel cells PEFC healthcare etc) Fuel CellsGenCellGeneral Motors USA PEFC AutomotiveGenPORT Italy PEFC Fuel Cells (possibly OilGS Caltex (GS Fuel Cell is South Korea DMFC)subsidiary) Switzerland PEFCHexis AG (Sulz er) (HQ), Germany Germany SOFC Fuel CellsHIAT GmbH, JapanHitachi PEFC & R & D Institute DMFC DMFC, PEFC ElectronicsHonda Motors Co., Ltd. Japan PEFC AutomotiveHorizon fuel cells Singapore PEFC Fuel CellsHydrogen South Africa Systems South Africa PEFC(HySA Systems) Canada PEFC R & D InstituteHydrogenics South Korea PEFCHyosung Power & Industrial Canada PEFC Fuel CellsSystemsHyteon Power and industrial systems Domestic heating5 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Name Country Fuel cell Company Sector typeHyundai Motor Company South Korea PEFC AutomotiveIn nitium Fuel Cell Systems, USA (HQ), PEFC Fuel CellsInc.Intelligent energy UK PEFC Fuel Cells Denmark PEFC & Fuel CellsIRD A/S USA DMFCJX Nippon Japan PEFC EnergyKia Motors South Korea PEFC AutomotiveKyocera Japan SOFC CeramicsLG Fuel cell systems? South Korea SOFC Electronics (HQ), USA, UK SOFC Fuel CellsMaterials & System Research USA PEFC Fuel CellsM-Field SOFC CeramicsMico (KoMiCo) Taiwan SOFC, Heavy industries, MOLB, engineering and South Korea PEFC constructions SOFC electronicsMitsubishi Heavy power Japan PEFC Fuel Cellssystems PEFC Fuel Cells PEFC Fuel CellsMurata Manufacturing Japan SOFC Fuel CellsmyFC AB Sweden PEFCNeah Power Systems USA (possibly Fuel CellsNedstack Netherlands also AFC)New Enerday Germany SOFC Fuel CellsNEXT ENERGY EWE GermanyNextech Materials USANissan Motors Co., Ltd. Japan PEFC AutomotiveNMITE Ningbo Materials China SOFC I R & D InstituteInstitute of Technology andEngineering USA (HQ), Italy PEFC Fuel CellsNuvera fuel cells USA DMFC Fuel CellsOorja Fuel cellsPanasonic Japan PEFC , DMFC ElectronicsPaxitech France PEFC Fuel CellsPearl Hydrogen Technology Co.ltd China PEFC Fuel CellsPowercell ABProton Motor Fuel Cell GmbH Sweden PEFC Fuel Cells Germany PEFC Fuel CellsProtonex USA PEFC & Fuel Cells SOFCFuel Cell Industry & Patent hgf.com 6Overview May 2015 bluevineconsultants.com

Name Country Fuel cell Company Sector USA type Fuel CellsRedox Power Systems USA SOFC Fuel CellsReliOn Inc (part of Plug PowerInc) Germany PEFCRiesaer Brennsto zellentechnik France (HQ)RBZ GmbH PEFC InstituteSaint-Gobain Corporation SOFC CeramicsSamsung South Korea DMFC, PEFC, HT - ElectronicsSerenergy A/S Denmark PEFCSFC Energy AG Germany HT -PEFC Fuel CellsShanghai Shen-Li High Tech Co. DMFC Fuel Cellsltd China PEFC & HT -Siemens PEFC Fuel Cells Germany SOFC, MCFCSociété Bic Electronics France PEFC ConsumerSOFCpower ProductsSolidCell Italy SOFC Fuel CellsSony USA SOFC Fuel CellsSumitomo Precision Products Japan DMFC ElectronicsSun re GmbH Japan SOFC AerospaceSunrise Power Germany SOFC Fuel Cells China PEFC Fuel CellsSuzuki Motor Corporation Japan PEFC AutomotiveSymbioFCell France PEFC Fuel CellsThe Institute of Engineering Germany PEFC & InstituteThermodynamics at the German SOFCAerospace Centre (DLR) USA Japan SOFC Fuel CellsTMI Japan PEFC ElectronicsToshiba Fuel Cell Power SOFC CeramicsSystemsTOTOToyota Japan PEFC AutomotiveTruma Gerätetechnik GmbH & Germany HT -PEFC RecreationalCo. KG Germany vehicle productsUlmer Brennsto zellen PEFC Fuel CellsManufaktur GmbHUltracell (Brentronics) USA PEFC Military equipmentVersa Power (and Owners) Canada SOFC Fuel Cells USA SOFC Fuel CellsWatt Fuel CellZSW (Centre for solar Energy Germany PEFC & R & D Instituteand Hydrogen Research Baden - DMFCWürttemberg )7 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

2.1 Geographic DistributionGermany, the USA and Japan have the most significant presence in the fuel cell sector (Figure2.1). In the case of the USA and Germany many of these are fuel cell companies, and work onalmost every fuel cell type available. Whilst Japan has fewer companies involved than eitherthe USA or Germany, many of the Japanese companies involved in this field are internationallyrecognised electronics and ceramics companies, for example Panasonic. A number of Europeannations, and counties like Canada and China have between 4 and 6 companies involved in fuelcells. Despite these countries having a small number of companies, some are very prominentplayers such as Canada-based Ballard Power Systems and Intelligent Energy from the UnitedKingdom.Globally, there are more fuel cell companies in Europe than on any other continent (Figure2.2), with Asia and North America both having 25 companies. Most of South America, Africaand Oceania appear to have little in the way of industrial involvement in the fuel cell sector.South Africa and Australia both have 1 active fuel cell company each. However it should benoted that the Australian company is currently going through administration and so its futureis uncertain. This is despite both regions seeing some market demand for fuel cells. This canespecially be seen for stationary power generation in areas with regular black-outs and fortelecommunications.Total Number of Companies 40 40 DisDtirsitbruibtourtsoarsnadnMdaMnaunfaucftaucrteurrsebrsybcyocuonutrnytry Total Number of Companies35 35 30 30 DistDribisutrtiobrustors 25 25 ManMuafancutufarcetrurer 20 20 15 15 10 10 55 00 India MIenxidicao AusMterxailicao NetAheursltaranlidas NeStihgenrlaapnodrse SoSuitghnaAfpriocrae SouthAuAfsrtirica FiAnulsatrniad Fi Inslraaneld SwitzeIrlsraanedl SwitzTearilawnadn STawiewdaenn DSenwemdarekn Den Imtalryk Ca Intaaldya CFraannacdea FrCahnicnea ChiUnKa South KorUeaK South JKaorpeaan GerJmaapnayn GermUaSnyA USA CouCnoturyntryFigFuirgeu2r.e1:2F.1u:eFluCeellCl DelilsDtriisbturitbourtsoarnsdanMdaMnuafnaucftaucrteursrebrys bcoyucnoturnytirnyainscaesncdeinndginogrdoerrd. er. GloGbloabl DalisDtirsitbruibtiuotnioonfoMfaMnaunfaucftaucrteurrsers60 6050 50 48 4840 40 37 37FOuveelrCveiellwInMd3au0yst23r0y01&5Patent hgf.com 26 26 AsiaAsia 8 bluevineconsultants.com EuroEpuerope NortNhoArtmh eArmicaerica20 20 RestRoefsthoef tWhoerWldorld10 10

Figure2.1: Fuel Cell Distributors and Manufacturers by country in ascending order. Global Distribution of Manufacturers6050 4840 37 Asia3020 26 Europe North America Rest of the World10 Europe 2 North America Rest of the World 0 AsiaFigure 2.2: Global Distribution of fuel cell manufacturers by continent9 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

2.2 Fuel Cell Manufacturers by Fuel Cell Type Figure 2.3 shows a breakdown of which fuel cell types companies are working on. In the case where a company works on more than one type of fuel cell they are represented in each fuel cell type. Unsurprisingly, over half the field is represented by PEFC companies (inclusive of High Temperature PEFC companies). SOFC represents a third of the industry, with the rest being filled by the smaller (but not necessarily less successful) alternative electrolyte systems. PePrecrecnetnatgaegeDDisitsrtirbiubtuitoinonofoFf uFeuleCl eClellMl Manaunfuafcatcutruerresrsbyby FuFeuleCl eClellTl yTpyepe 5656 3434 1010 22 22 11 PEPFECFC SOSFOCFC DMDFMCFC PAPFACFC AFACFC MCMFCCFCFigFiugruer2e.32:.3F:uFeuleCleClleMll aMnaunfuafcatuctrueresrbsrborkoeknednodwonwinnitnotfoufeulecleclletlyl tpyepeFuel Cell Industry & Patent hgf.com 10Overview May 2015 bluevineconsultants.com

3 Patent Analysis 3.1 Setting the Scene To help to quantify patent activity in the fuel cell arena we first present data showing overall patent activity for the years 2005 to 2014. Published Patent Applications 2500000 250000 2000000 200000 1500000 150000 1000000 100000 500000 50000 00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Worldwide PCTs Figure 3.1: Published patent applications for the years 2005 to 2014. Patent applications are typically published eighteen months after filing, which means that the publication data provides an indication of the patent application filing position, albeit with an 18 month lag. Publication under the PCT system also occurs eighteen months after the first filing date of a patent application for an invention. Figure 3.1 shows an overall increase in the annual publication of patent applications (blue bar), rising from just over 1.5 million in 2005 to over 2 million in 2014. Similarly, the number of published PCT applications (red line) rises from just over 150,000 in 2005 to over 200,000 in 2014. The increase in the numbers of patent applications shows no hint of slowing down and we would expect the rate of filing (and hence publication) to maintain its current pace. The important features to note are that patent publications, and hence patent filings are increasing year-on-year (the slight dip in 2010 corresponding to a dip in patent filings 18 months prior to that) and that the figures indicate that in 2014 the PCT route was a more preferred than it was in 2005. The ratio between all publications and PCT applications appears to have increased up to about 10:1 in 2014, from 12.2:1 in 2005.11 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

The most important patent offices around the world are those of China, Japan, USA, Europe andRepublic of Korea, the so-called ‘Big 5 Patent Offices’. The publication data relating to patentapplications at each of those offices is shown in Figure 3.2. Published Patent Applications By Top 5 O ces7000006000005000004000003000002000001000000 2009 2013 2005 USA EPO China Japan KoreaFigure 3.2: Published patent applications for the years 2005, 2009, 2014 at the Big 5 Patent O cesThe most notable changes are the huge increase in publications at the Chinese office (+380%)and the large decrease at the Japanese Patent Office (-25%). The numbers of applicationspublished at each of the USPTO, EPO and KIPO has increased, with the EPO showing the largestmarginal growth (ca. +13%) but the USPTO now outstripping the JPO in terms of the absolutenumber of published applications.In contrast to previous reviews, we prefer to use patent applications as published, rather thanthe number of patents granted as the most appropriate metric of R&D activity. This is becausethe filing of a patent application is the first public acknowledgement that an invention mayhave taken place and filing is independent of down-stream issues for the applicant and atthe respective patent office and, importantly, because the number of patents granted in anyparticular year is substantially lagged as compared to when the research activity actually tookplace. The time it takes for a patent to be granted depends on how the applicant chooses toprosecute the application and on the pendency time at each patent office.Fuel Cell Industry & Patent hgf.com 12Overview May 2015 bluevineconsultants.com

The pendency time is dependent upon several factors, including the underlying law (there is no universal patent law), the activity in any particular sector and the productivity of the patent examiners in that particular sector in dealing with the applications which they are asked to examine. The pendency statistics for each of the Big 5 Patent Offices are shown below (Figure 3.3). Figure 3.3: Patent pendency data at the Big 5 Patent Offices4 4 Source WIPO - World Intellectual Property Indicators, WIPO Statistics Database 2014.13 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Taking the mode of the pendency time for patents granted in each of two time periods (from2000-2002 and from 2010-2012) as a guide to overall pendency at the Big 5 Patent Offices,the data indicates that the Chinese and Japanese Patent Offices have significantly reducedpendency times, whereas Europe and Korea have shown a small improvement over timeand pendency at the USPTO has increased. Given the apparent reduction in filings at the JPOand increase at the USPTO these figures are, perhaps, less surprising. Of note though is theperformance of the Chinese Patent Office which appears to have reduced pendency timesby about 2-3 years against a backdrop of greatly increased filings. It is of note that the JPOpendency statistics appear to be moving towards a distribution more akin to those of the otherpatent offices, possibly due to the change in Japanese law which reduced the deadline for filinga request for examination, thereby truncating the patent grant procedure, especially for foreign(PCT-route) patent applications.In Summary:The number of patent applications has risen year-on-year between 2005 and 2013 whenmeasured both in terms of the total world-wide published applications and those pursued viathe PCT route. Of the major patent offices around the world, China is the stand-out growthterritory. We believe that this is due to the increased use of the patent system by Chinesenationals as well as applications filed by foreign companies. In contrast to China, the patentactivity at the Japanese Patent Office appears to have significantly reduced over the sameperiod. In the other three territories (EPO, KIPO, USPTO), there has been growth, albeit at a moremodest rate than in China.Fuel Cell Industry & Patent hgf.com 14Overview May 2015 bluevineconsultants.com

3.2 Fuel Cell Patent Activity 3.2.1 Filing Statistics In Figure 3.4 and Figure 3.5 we show the annual filing data for fuel cell patents as compared to total patent filings. Published Patent Applications Worldwide 2500000 12000 2000000 10000 1500000 8000 1000000 6000 4000 500000 2000 00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 All Technologies Fuel Cell Figure 3.4: Published total fuel cell publications for 2005 to 2014 In terms of total filings of fuel cell patent applications there is a marked decline in the number of filings since the high point in 2007 from over 10,000 to under 5000, a -55% decline. We note that this conclusion is in stark contrast to that provided in the 2012 Fuel Cell Patent Review presented by Fuel Cell Today5. We can only surmise that the reduced data set used in that report as compared to the data presented herein has led to the different conclusions. We note that our data is consistent with that presented by WIPO6 and so we conclude that worldwide patent activity in the fuel cell space has dramatically decreased since 2009, and shows no signs of increasing. 5 httpL//www.fuelcelltoday.com/analysis/patents/2012/2012-fuel-cell-patent-review 6 WIPO - World Intellectual Property Indicators, WIPO Statistics Database 2014 pp34.15 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Published PCT Patent Applications250000 1400200000 1200150000 1000 800100000 600 50000 400 20000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 All Technologies Fuel CellFigure 3.5: Published PCT fuel cell publications for 2005 to 2014The data of Figure 5 shows that the PCT route is increasingly favoured by fuel cell patentfilers. The trend of PCT fuel cell applications is in contrast to the trend in total fuel cell patentpublications for 2010 to 2014. Indeed, although the overall filing statistics show a decline infuel cell applications the decline is less stark in fuel cell PCT publications as compared to totalpublications of patent applications for the years 2005 to 2014 when calculated as a function ofthe overall publication statistics (-67% for (Fuel Cell: Total) as compared to -43% (Fuel Cell: PCT)).With regards to the publications in the Big 5 Patent Offices, the data is shown in Figure 3.6.Fuel Cell Industry & Patent hgf.com 16Overview May 2015 bluevineconsultants.com

Published Patent Applications By Top 5 O ces 700000 5000 600000 4500 500000 4000 400000 3500 300000 3000 200000 2500 100000 2000 1500 0 1000 500 0 2005 2009 2013 China Japan USA Korea EPO China Fuel Cell Japan Fuel Cell USA Fuel Cell Korea Fuel Cell EPO Fuel Cell Figure 3.6: Published fuel cell patent applications for the years 2005, 2009, 2014 at the Big 5 Patent Offices. As expected from the overall fuel cell patent publication data (Figure 4), the overall publication statistics across the Big 5 Offices shows a marked decline, with publications at the JPO showing the absolute largest decline (57%), but a marginal decline of 40% as a function of the total publications for the same period (that is publications of fuel cell patent applications as a function of total patent publications). By contrast, the position in USA is an absolute decline of 46% and a marginal decline of 50%. This indicates that although filing statistics as a whole are down for fuel cell patent applications, the position in Japan is marginally more robust than in USA, for example. The publication data for fuel cell application is shown again in Figure 3.7.17 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Published Fuel Cell Patent Applications By Top 5 O ces5000450040003500300025002000150010005000 2009 2013 2005 China Japan USA Korea EPOFigure 3.7: Published fuel cell patent applications for the Big 5 Offices for 2005 to 2013.Notwithstanding the increased growth in total patent publications at each of SIPO, EPO, KIPO,USPTO, publications of fuel cell patent applications shows a decline for the period 2005 to 2013at all five patent offices. Published fuel cell applications in USPTO and EPO have shown a steadydecline whereas the position in Korea and China rallied in 2009 and then appeared to markedlydecline to 2013.The absolute and marginal7 decreases in publications of fuel cell patentapplications are shown in Table 3.1 for the period 2005 to 2013.Table 3.1: Decline in publications of fuel cell patent applications at the Big 5 Patent Offices2005 - 2013. O ce Absolute Decline (%) Marginal Decline (%) China 39 83 Japan 57 40 USA 46 50 Korea 43 46 Europe 32 417 The marginal decrease is calculated as the amount of decrease in fuel cell patent activity ascompared to overall patent activity.Fuel Cell Industry & Patent hgf.com 18Overview May 2015 bluevineconsultants.com

The data demonstrates that there is both an absolute and marginal decline in the number of fuel cell applications which are being published at each of the Big 5 Patent Offices. This demonstrates that filers of patent applications for fuel cell technology are not keeping pace with the overall position and, moreover that the marginal decline is not uniform across the Big 5 Offices, demonstrating that Europe and Japan appear to be more preferred as filing destinations (as compared to technology overall) for fuel cell technology than China and USA. The year-by-year data is shown in Figure 3.8. Published Fuel Cell Patent Applications By Top 5 Offices 12000 10000 8000 6000 4000 2000 0 2006 2007 2008 2009 2010 2011 2012 2013 2005 Other Japan USA China Korea EPO Figure 3.8: Annual publications of fuel cell patent applications. The data from Figure 3.5 is shown in Figure 3.8 divided according to the publication territory. Interestingly, publications for those patent offices not counted as part of the Big 5 Offices appear to be relatively stable over time. There is also evidence that the publication data for JPO shows an increase from 2012 to 2013. In Summary The overall annual number of publications of fuel cell patent applications has decreased and shows no sign of increasing to the record highs of 2007/2008. This is in stark contrast to the overall patent filing statistics which continue to show robust growth across the world (with the notable exception of Japan). The latest available data for Japan may show signs of a recovery in the absolute number of fuel cell patent applications and publications, although it is too early to confirm if this is a real or a transient effect. That said, the marginal decrease in fuel cell applications in Japan is less stark than in the rest of the world indicating that Japan is likely to remain the single most important territory for fuel cell patent applications.19 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

3.2.2 Granted Fuel Cell PatentsAs was stated above, the number of patents granted is not an effective metric for determiningthe growth or development of fuel cell technology because grant of patents is, at least in part,at the behest of the local examiners and the law under which they operate. Nevertheless wepresent data below for the number of granted fuel cell patents.Figure 3.9 shows the annual number of granted patents for the Big 5 Patent Offices. Fuel Cell Patents Granted By Top 5 Offices40003500300025002000150010005000 2012 2014 2010 China EPO Japan USA KoreaFigure 3.9: Granted fuel cell patents for the Big 5 Patent Offices 2010 – 2014The data shows that the JPO is by far and away the most significant authority for grantingpatents in the fuel cell space with the position in the USA remaining stable over time and theSIPO and KIPO showing marginal increases in the number of granted patents.Given that the number of applications filed and published in each office is reducing we wouldexpect patent pendency in fuel cell technology to decrease ahead of patent pendency in otherhigher growth technology areas.The position for the rest of the world appears to remain fairly constant over time.Fuel Cell Industry & Patent hgf.com 20Overview May 2015 bluevineconsultants.com

Granted Fuel Cell Patents By Top 5 Offices 8000 7000 6000 5000 4000 3000 2000 1000 0 2012 2014 2010 Other Japan USA China Korea EPO Figure 3.10: Granted patents for the Big 5 Patent Offices 2010 to 2014 The data confirms that there is a slight increase in the number of patents being granted in fuel cell technology between 2010 and 2014 but that a peak was reached in 2012, perhaps indicating that there will be a continuing decline in the number of patents granted. The number of patents granted by Patent Offices other than those in the Big 5 group appears to have decreased over the period. In Summary The number of patents granted annually around the world has remained in excess of 5000 since 2010. Given the decrease in filing numbers and the decrease in pendency times we would expect to see some stability in the number of patents being granted but with a trend downwards over time. It is clear that Japan remains the single most important territory for granting fuel cell patents. This means that any business wishing to commercialise their fuel cell technology world-wide must continue to consider their patent position in Japan.21 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

3.2.3 Assignee DataPatent FilersThe data presented below (Figure 3.11, Figure 3.12 & Figure 3.13) shows the top ten filers ofpatent applications in the fuel cell space for 2010, 2012 and 2014. Top 10 Filers of Fuel Cell Patent Applications - 2010 25% 20%1600 15%1400 10%1200 5%1000 0% 800 600 400 200 0 Worldwide PCTs/WorldwideFigure 3.11: Top ten filers of fuel cell patent applications in 2010.Fuel Cell Industry & Patent hgf.com 22Overview May 2015 bluevineconsultants.com

Top 10 Filers of Fuel Cell Patent Applications - 2012 600 45% 40% 500 35% 400 30% 25% 300 20% 200 15% 10% 100 5% 0 0% Worldwide PCTs/Worldwide Figure 3.12: Top ten filers of fuel cell patent applications in 2012. Top 10 Filers of Fuel Cell Patent Applications - 2014 350 40% 300 35% 250 30% 25% 200 20% 150 15% 100 10% 50 5% 0 0% Worldwide PCTs/Worldwide Figure 3.13: Top ten filers of fuel cell patent applications in 2014.23 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

In each case the bar shows the absolute number of patent applications filed by a particularentity and the line shows the proportion of those applications which were filed as PCTapplications.As expected, the lists are dominated by Japanese corporations with Korean (Samsung andHyundai), US (General Motors) and European (Daimler) corporations making up the remainderof the number.In each of the three years Toyota, Honda and Panasonic make up the top three, in each of thethree years filing well in excess of 200 patent applications each. These businesses are by far andaway the most active in the fuel cell arena, confirming their continued enthusiasm for fuel celltechnology.The proportion of the filed applications being filed as PCT application is not uniform, indicatingthat different patent filing strategies are being deployed by each company. Toyota and Nissan,for example, appear to be increasing the proportion of their patent applications which are filedas PCT applications (6% to 10% to 12% and 6% to 21% to 35% respectively) whereas Hondaappears to have a relatively stable rate of PCT applications (ca 5%) and General Motors, Hyundaiand Samsung appear to make little use of the PCT route for fuel cell technology inventions.Notwithstanding that the PCT route is not uniformly deployed by fuel cell patent filers wepresent below the country of residence for PCT patent applications on a year-by-year basis.Fuel Cell Industry & Patent hgf.com 24Overview May 2015 bluevineconsultants.com

Published Fuel Cell PCT Patent Applications By Top 10 1400 1200 1000 800 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Japan USA Korea Germany China Figure 3.14: Top 10 countries of residence for fuel cell PCT applications 2005 to 2014. This data (Figure 3.14) accords with the presented in Figure 3.5, demonstrating that there is little patent filing activity for PCT patent applications in the fuel cell space outside of the top ten filing countries. It is of no surprise given the graphs presented above that Japan, USA and Germany dominate the PCT patent filing statistics. However, it should be noted that the position with regards to Japan is likely to be understated, due to the relatively low take-up of the PCT route by some of the major Japanese companies filing in the fuel cell space (see Figure 3.13). It is also interesting to note that although Samsung is one of the top ten patent filers in 2012 this is not indicated in the Korean country statistics due to Samsung’s relative lack of use of the PCT route. In Summary: The filing data is dominated by three large Japanese corporations. However, the rate and number of patent filings even for those businesses has nose-dived in the period 2010-2014. The filing statistics for Toyota, for example, show a decrease from 1468 (2010) to 309 (2014), the reduction of patent filings from Honda being less marked at 477 to 320 over the same period.25 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

Granted PatentsWe present the data for the assignees of granted patents for the European and US Patent Officesbelow (Figure 3.15, Figure 3.16 & Figure 3.17). TToopp 1100 AAssssiiggnneeeessGGoorrffaaoonnfftteeFFdduuee-- ll22CC00ee11ll00ll UUSS && EEPPOO PPaatteennttss140140120120100100 80 80 60 60 40 40 20 20 0 0Figure 3.15: Top ten assignees of US and EP fuel cell patents 2010 TToopp 1100 AAssssiiggnneeeessGGoorrffaaoonnfftteeFFdduuee-- ll22CC00ee11ll22ll UUSS && EEPPOO PPaatteennttss18011680011460011240011020010800 6800 4600 2400 200 0Figure 3.16: Top ten assignees of US and EP fuel cell patents 2012Fuel Cell Industry & Patent hgf.com 26Overview May 2015 bluevineconsultants.com

Top 10 Assignees of of Fuel Cell US & EPO Patents Granted - 2014 160 140 120 100 80 60 40 20 0 Figure 3.17: Top ten assignees of US and EP fuel cell patents 2014 Perhaps as expected, Toyota and Honda feature highly on the list of assignees of granted patents but the list also includes several players not otherwise mentioned. As stated above this could be a function of the time it takes for patents to be granted in the USA and is unlikely to be because of businesses not wanting to utilise the US patent system. Whilst Toyota and Honda continue to obtain significant numbers of granted patents, it is noted that both businesses are continuing with their strategy of endorsing at least a proportion of their fuel cell patents as licence of right8 in the UK, at least.9 Clearly the patent landscape in Europe and USA is likely to be highly diverse with many significant players, meaning that businesses wishing to deploy their technology would be wise to conduct full and rigorous freedom to operate analyses prior to commercialisation. In summary: The annual number of granted fuel cell patents issued by the EPO and USPTO remains high, with Japanese and Korean businesses dominating the list of businesses being awarded patents. Whilst patents can be used to stop competing activity there appears to be an increasing number of patents which are endorsed licence as of right which may well present opportunities for other businesses to access fuel cell patents at a fraction of the cost than might otherwise be the case, notwithstanding the announcements earlier this year by Toyota. 8 A patent endorsed licence of right attracts a reduction in the annual renewal fee in exchange for the patentee agreeing to licence the technology to whoever asks for such a licence. 9 In the past six months 15 separate patents have been so-marked by either Toyota or Honda (see https://www.ipo.gov.uk/p-dl-licenceofright.htm for details).27 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

4 Academic Research TrendsThe number of papers published over the last decade has been progressively increasing year onyear, with Solid Oxide Fuel Cells, Direct Methanol Fuel Cells and Polymer Electrolyte Fuel Cellsbeing the most prominent. The number of papers on Direct Methanol Fuel Cells had significantlyincreased in and around 2007. This has subsequently reached a plateau but nonethelesshighlights the interest that this particular branch of fuel cells has received. The less prominentfuel cell types such as Molten Carbonate, Alkaline and Phosphoric Acid, have seen less publishedresearch. Given that these fuel cell types are more mature than SOFCs or PEFCs commerciallythis isn’t surprising.SOFCs have long been the most widely researched fuel cell type according to this data. This islikely due to the technology being relatively young. DMFCs overtook PEFCs in 2004 and becamethe second most published fuel cell type with research peaking in 2007, since then publicationin this area have been falling. In 2011 the number of PEFC publications overtook DMFC andtoday they are the second most researched fuel cell type in terms of number of publications. Research PapersNo. of papers 4000 Solid oxide fuel cell 3500 Polymer electrolyte fuel cell 3000 Direct Methanol Fuel Cell 2500 Molten Carbonate Fuel Cell 2000 Alkaline fuel cell 1500 Phosphoric acid fuel cell 1000 2002 2004 2006 2008 2010 2012 2014 500 Year 0 2000Figure 4.1: Growth in the number of publications published yearly, broken down into thedifferent types of fuel cells being researched.Fuel Cell Industry & Patent hgf.com 28Overview May 2015 bluevineconsultants.com

5 Company Case Studies 5.1 Bloom Energy Currently, Bloom Energy sells a range of stationary power generation products, which are collectively called the “Bloom Energy Server”. This SOFC based FC system operates at 980 oC and can be run on a variety of different fuel types. The smallest Bloom Energy Server is a 100 kW system that was reported to cost between $700-800K (ca. €550,000 to €620,000). In addition to the 100 kW unit, Bloom produces 160 kW and 200 kW energy servers. Thus far, the majority of the customers have purchased the Bloom Energy Server mainly due to its ability to provide uninterruptable power. In 2007 (the last year such information is publically available), the US had 240 minutes of grid black-out which cost an estimated $100bn (€87 billion). The US gas grid, which the Energy Servers utilise, has a close to 100% reliability. This allows users to capitalise on the benefits of Fuel cells. For example, eBay installed 500 kW of Bloom Energy Server and a further 6 MW at their Salt Lake City (Utah) data centre site. Indeed, their data centre was the first in the world to use a FC system as the primary power source with the standard electricity grid as the backup. For eBay, alongside uninterruptable power, the following added values are also enjoyed: 1. Meet their targets of carbon emission reduction 2. Reduce their energy usage 3. Reduce the cost of purchasing and maintaining costly generators and UPS components. 4. Promote themselves as a green corporation. The added values of the Bloom Energy Server are therefore attractive to large corporations, especially in the USA, where power outages are a common event and can last between 90 to 240 minutes. Corporations cannot afford to be out of power as revenue will be lost. The importance of maintaining website operation 100% of the time is demonstrated by the case of Amazon.com. In 2013 the website went down for 15-40 minutes, during this time Amazon is estimated to have lost $1-2.5million (€0.87-2.18 million) in sales alone. Further to this their share price fell by ca. 10%. As a result, this situation highlights the benefits and added value of a FC system that operates independently of the main power grid and can maintain power 100% of the time. Bloom Energy’s success in this market is partly due to support from the national and state incentives. In 2010 alone Bloom Energy and its clients received over $200 million (€175 million) in subsidies from the California Self-Generation Program (SGIP). There are several levels of support on offer from the SGIP, which also varies by system. FC based generation systems receive a flat rate of $1.65/W (€1.43/W) in subsidy as long as the amount of power generated is below 1MW. Between 1-2MW and 2-3MW, the owner of the FC will realise $0.83/W (€0.72/W) and $0.41/W (€0.36/W), respectively. For example, a 100 kW Bloom Energy Server running on natural gas would receive a subsidy of $165,000 (€143,000) off its purchase price. For systems above 30 kW, 50% of this subsidy would be paid upfront which would significantly help with installation costs. This means that it is in fact possible to get a significant return on investment in 5 years from installation. If run on biogas the subsidies can rise to $8.25/W (€7.20/W).29 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

A comparison of the Bloom Energy Server to a diesel and battery system can be seen in Table 5.A comparable diesel generator would cost approximately $20,000 (€17,500) and a battery basedUPS that could provide 50 kW of power would cost approximately $42,000 (€36,000). Typically indata centres a hybrid system comprising of both a battery system and diesel generators is used.The batteries are used for immediate power supply when a power outage occurs. The dieselgenerators are then used for the remainder of the power outage. A diesel and battery systemwould be lower in cost. Despite these lower costs, the Bloom Energy servers are often stillpreferred due to longer run times, less noise and less CO2 emissions.Table 5.1: The Bloom Energy Server compared to a Diesel and Battery back-up power unit. Diesel ICE Battery Bloom Energy ServerPurchase Price $20,000 $42,000 $700,000 100 kW 50 kW 100 kWMax NominalPower 96 db - 70 db c. 8 hours 6.4 mins ContinuousNoise 675 kg CO 2/MWh - 386 kg CO 2/MWhRun timeCO2 emissions5.1.1 Bloom Energy- SummaryPrior to using Bloom Energy Servers, companies like eBay can be considered to be non-consumers, because their needs were not being properly met. Prior to using Energy Servers,eBay along with many other companies used a back-up power system comprising of batteriesand large diesel ICE generators. These systems were the only back-up power solution availableto the companies, but were not truly fit for purpose. They did indeed supply back-up powerto the companies, but this was in an undesirable package; the systems were capital intensive,underutilised, maintenance intensive, polluting, noisy and had a high risk of failure. An EnergyServer can be used 100% of the time, requires less maintenance, has zero tailpipe emissions, isquiet, helps towards giving large corporations a ‘green’ image and benefits from subsidies fromgovernment organisations in the US.Fuel Cell Industry & Patent hgf.com 30Overview May 2015 bluevineconsultants.com

5.2 SFC Energy SFC Energy is a German based FC company producing energy solutions for consumers, defence and industrial customers. The company was founded in 2000. SFC Energy use DMFCs, which are known for having a high cost which is due to high platinum loadings and also because of specialised materials that are used, for example the Nafion membrane. The company mainly concentrates on low power fuel cells typically between 25W-100W, therefore keeping overall costs relevantly low. Historically, joint development agreements, defence clients and the consumer sector have been important sources of revenue for SFC Energy. More recently there has been a shift towards industrial clients. SFC Energy had previously been looking to incorporate some of their products into electric mobility in the form of on-board range extenders or battery chargers and hybrid drive trains specifically for light electric vehicles. However, they are no longer interested in this market. One important market that SFC Energy has always targeted and that has remained a significant source of revenue is the Recreational Vehicle (RV), Motorhome and Caravan market. This was one of SFCs first commercially successful markets [48]. SFC Energy has also concentrated on traffic management systems, monitoring, security systems and off-grid power; these markets are now important sources of revenue for SFC Energy. In 2011, industrial sales overtook declining sales to the consumer segment (Figure 1). Today the most important market for SFC Energy is the industrial segment with 77.1 % of revenue coming from this sector. 14.7 % comes from the Consumer market and 8.2 % is from the Defence and Security sectors. 60000 50000 40000 30000 20000 10000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Consumer Industry Defence Total Yearly Revenue Figure 5.1: Revenue generation by market sector and total yearly revenue. Sales in the defence and industry sectors did occur before 2008 and 2009 but no data is available in SFC Energy reports.31 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

By the end of Q4 2012 SFC Energy had reached sales volumes of 24,000 FC units worldwide.Today this figure is over 30,000. In 2014, SFC Energy generated €53,613,000 in revenue (Figure1), of which €4,100,000 was from consumer sales of fuel cells. The cost per kilowatt for theconsumer FC units is very high at approximately €50,000 /kW. As of 2015, the 105 Wel EFOYCOMFORT units cost €5,000. Sales are mainly to the RV market, with a smaller number of unitsalso being installed in yachts and stationary cabins. SFC Energy has won over 26 awards forinnovation, product design and enterprise. By 2008, 37 European manufacturers of motorhomesoffered EFOY fuel cells as a standard or optional extra. In general, the majority of SFC Energy’scustomers are in Europe; with 60.3% of revenue coming from this market, with 31% from NorthAmerican customers. The remainder is from the rest of the world, but primarily Asia (5%). In 2013industrial sales made up €24,969,000 (€33,079,000 Q1-Q3 2014) of revenue, making it the largestmarket sector. The growth has been partly attributed to growth in the Oil and Gas sector andin Traffic Technology, and has been achieved partly by the acquisition of Canadian distributioncompany, Simark.5.2.1 SFC Energy- Key MarketsSFC Energy currently sells a range of products to a number of markets. The main product in theconsumer market is their EFOY COMFORT FC power unit. The unit was originally only marketedto motorhome and caravan users. However, recently marketing towards yacht users hasincreased where the challenges for power provision are similar to motorhomes. In 2013, EFOYbegan selling fuel cartridges in the Caribbean in order to increase fuel access to users in thisregion. A number of yacht companies including Marex Boats and Leonardo Yachts install EFOYCOMFORT’s as factory fitted options on their boats. In 2013, SFC Energy sold 1697 units of theEFOY Comfort; this is far lower than the peak year in 2008 when they achieved 4210 unit sales.SFC Energy has packaged a unique combination of added values into the COMFORT and hassold these to a market where consumers desire these values. Importantly, in these markets,alternative solutions do not exist. This means that the COMFORT allows consumers to dothings that were previously not possible. In Motorhomes and RVs the COMFORT servesas a replacement for a leisure battery or a diesel ICE generator. In many US and Canadiannational parks, ICE generators are banned or their use is highly restricted. This is also the casein some Australian National Parks. In these scenarios, the EFOY COMFORT offers a quiet andenvironmentally benign way to generate power. The unit is significantly more expensive thancomparable battery or ICE but consumers are willing to pay this in order to access the benefitsof the technology. The EFOY COMFORT is not without compromise.SFC Energy markets its EFOY PRO range of products to industrial customers specifically forthe monitoring of remote terminals in the oil and gas industry. SFC Energy list Canada as animportant market as it has 175,000 gas wells and 125,000 oil wells currently in operation. In thissector, fuel cells are used for pumps, monitoring, the transmission of data and pipeline securitymonitoring. EFOY PRO’s are also used in wind farm monitoring, telecommunications back-upand continuous power, mobile and stationary surveillance, environmental data measurementand traffic management systems in off grid locations. In order to break into the North Americanmarket, SFC Energy acquired Simark who specialise in the distribution, service, supply andproduct integration for power products to the Canadian oil and gas industry. This markethas been a significant source of growth for SFC Energy (Figure 5.1) and will hopefully lead tocontinual increases in unit sales and revenue in SFCs most important market sector.Fuel Cell Industry & Patent hgf.com 32Overview May 2015 bluevineconsultants.com

SFC Energy has a range of products for Defence and Security applications. The added values that SFC Energy’s products offer in this market arise mainly due to significant weight savings. This market has seen substantial growth in recent years and is the second largest contributor to SFC Energy’s revenue. SFC Energy products offer longer run times, lighter operational weights and quieter operation compared to competitor technology. On vehicles, the EMILY 3000 can be used to power electrical systems when the vehicle is stationary. This means the engine does not need to be idling, thus saving fuel, resulting in longer mission times, and reduced noise and heat signatures. 5.2.2 SFC Energy- Summary The success of SFC energy has been due to the fact that they have been able to both develop functional fuel cell systems, but also it is thanks to their ability to identify markets with demand for fuel cell products. Indeed some of the markets they have targeted are small, such as the RV and Motorhome market, which may be reaching saturation. Therefore SFC provide important lessons for other players in the industry, they is to develop a functional product that has real market demand. Further to this it is important to identify more than one market where the products will be valued.33 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

6 Fuel Cell Industry - Outlook from ExpertsIn order to gain more insight into the industry beyond quantitative data was gathered byinterviewing a number of experts within the field. During the interviews some key trendsemerged, these were that the landscape of the industry is changing, where the early markets forfuel cell might be, and the market introduction of fuel cell vehicles, which is occurring now.6.1 Changing Landscape within the Fuel Cell IndustryThe opinion of the experts was that the fuel cell industry has not seen particular growth innumber of companies in the last year. In fact experts mentioned the closure Topsoe Fuel Cells,Lilliputain Systems and ClearEdge Power (though its subsequent purchase by Doosan FuelCell may make that irrelevant). However, General Electric have returned to the fuel cell fieldby opening up a plant in Malta NY, where they have a wealth of experience which could seethem become strong entrant into the market. Alongside this, interviewees noted a number ofsupply chains and ancillary fields building up around the fuel cell field. However, many existingcompanies are now looking to consolidate.With regard to larger companies, the experts believed that they may not wish to ‘cannibalise’their existing markets through the introduction of fuel cell products, especially when themargins on those existing products are better. This might even be the case with companies whoalready have a suitable fuel cell product available if they decide to commercialise it. Daimler inparticular are mentioned for having been involved In the fuel cell research area for a long timebut continuously push their release dates back. However with the future market looking towelcome the advent of the fuel cell vehicles from the likes of Hyundai and Toyota, there may bea shifting point where the balance of companies involved starts to move towards having a handin this potential market. The presence of larger corporations whose business is not primarily fuelcells was generally seen as positive.“We are seeing more conventional companies offering fuel cell components, which is good forgrowth”Dr. Olivier Bucheli, co-director of the European Fuel Cell ForumFuel Cell Industry & Patent hgf.com 34Overview May 2015 bluevineconsultants.com

6.2 Early Markets for Fuel Cells The experts noted that the military market has been an important niche for the development of fuel cell technologies. For a number of years fuel cell companies have seen success in military applications by supplying portable power for soldiers. This weight reduction is highly desired in comparison with multiple batteries and stationary power generation, allowing for cleaner and quieter power generation. Submarines also provide an attractive area for certain fuel cell systems for similar reasons to onsite power generation. Applications like power for ships when pulling into harbours or docks which have restrictions on emissions represent highly attractive niche markets, as are certain recreational markets such as campervans and yachts. Fuel cell forklifts have had a recent surge in the market, with Plug Power having a very successful year in terms of orders. Ultimately the uptake of certain applications, like micro-CHP is highly dependent on the environment in which they are being offered. For Japan, South Korea and North America, where the risk of power outages or emergencies lead people to place a higher value on the reliability of their network, fuel cell micro-CHPs have added value. However, in Europe, due to the robust nature of the European electricity grid/system, it may take the advent of increased renewables in the market to allow increased possibility for fuel cells to be able to take advantage of the more intermittent nature of the renewables (especially in hydrogen form). “For Japan, South Korea and North America, where the risk of power outages or emergencies etc. lead people to place a higher value on the reliability of their network, fuel cell micro-CHPs have added value ” Professor Ludger Blum, Forschungszentrum Jülich35 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

6.3 Fuel Cell Vehicle Market IntroductionsWith the advent of fuel cell vehicles on the horizon, the potential impact on the industry hasalmost all members of the industry watchful and hesitantly excited for the outcomes. In 1993,Daimler were working on fuel cell cars, and over twenty years on we’ve yet to see a fuel cellvehicle market emerge. With the release Hyundai’s ix35 (also known as the Tuscan) and Toyota’sMirai planned for release in the next year, there are clearly models being made available. Ifcompanies like Ford, Nissan, Renault and Daimler aim to release their vehicles in 2017, there maybe a reasonable selection of vehicles available to customers, so there is a belief that FCVs maystart to emerge within the automotive sector at large numbers.However, a common point raised is that even if the market grows at a reasonable pace,the question of how much these vehicles will be sold for, and how much they will cost tomanufacture is still highly debated, and some experts believed this may dissuade companiesfrom entering the market. By comparison, the Toyota Prius is often quoted as taking 10 years tobecome profitable. In Europe, most automotive companies didn’t invest in hybridisation initially,missing out on market share and had to play catch up as a consequence. There is a concern thatthis may occur with fuel cell vehicle.Most believed that fuel cell vehicle development is positive. The influence of fuel cell vehiclescould have over the potential future deployment of fuel cell products will most likely besignificant, as an increase in vehicles will lead to more technological maturity and a greateravailability of hydrogen and hopefully at lower costs.However, experts did have a concern about the lack of hydrogen infrastructure to supportvehicle rollouts. To combat these misgivings, Japan, Germany and California have significantplans to get a large number of hydrogen refuelling stations up and running in the next 1-5 years.Furthermore, a number of states are looking to establish refuelling stations to help encouragepeople to not only feel their vehicles are viable within their own states but also country-wide.An interesting recent development is the announcement from Toyota that they plan to sharealmost 6000 fuel cell patents. Professor Steinberger-Wilckens believed that this was a riskmitigation strategy.“Automotive Companies don’t want to be alone in their market”Professor Robert Steinberger-Wilckens, University of Birmingham & PLANETOn the whole experts were hopeful for the fuel cell vehicle markets, however were aware thatmarket growth would be slow and would be significantly dependant upon the growth of ahydrogen infrastructure.Fuel Cell Industry & Patent hgf.com 36Overview May 2015 bluevineconsultants.com

6.4 Outlook from Experts - Summary Within the industry expectations appear to be high, and there is confidence that fuel cells will start to emerge in more markets globally. Despite the fact that the fuel cell industry has been through a number of peak and troughs, or hype cycles, these experts remain hopeful that fuel cells are finally ready for larger scale market introductions. “We’ve moved on and have entered into an incredibly exciting time for fuel cells because the societal, political and technological drivers are there to develop and deploy much better than they could 20 years ago” Professor Nigel Brandon OBE FRENG, Imperial College London “The application will define the winner for fuel cell success, not the fuel cell” Dr. Brian Borglum, Versa Power Systems “If you look at ENE.FARM, the societal benefits and cultural backing, it makes sense even without subsidies” Professor Nigel Brandon OBE FRENG, Imperial College London37 Fuel Cell Industry & Patent hgf.com Overview May 2015 bluevineconsultants.com

7 ConclusionsFuel cells offer an interesting prospect in these uncertain times where energy security and“greening” of energy supply are of great interest. When assessing the state of the industry it isimportant to consider many of the contributing factors. Indeed past reports have reviewed theindustry in terms of units and kW shipped. This report looks at trends in patent data as well asdata showing research trends, and information on active companies.From our report, it is clear that the fuel cell industry is in an interesting position. On the onehand, there are many companies currently manufacturing and distributing fuel cells, with ourresearch showing more than 100 active companies globally. A majority of the companies arebased in the US, Germany and Japan. It is interesting that some of the largest companies inthe industry are also those who control large stakes in incumbent technologies, from whichthey draw most of their profitable business. If some of these companies are to commercialisefuel cells they will need to accept that it may, at the beginning at least, lead to a drop in salesof existing products. A situation that is mirrored within the automotive industry with electricvehicle sales displacing internal combustion engine vehicle sales.From the patent analysis, it is clear that patent activity within the sector has been in declinesince 2008-2010. Reasons for this decline could be that there is innovation saturation within thefield, or that this decline is a holdover from the recession. However, it is possible this decline inpatent activity is because companies are closer to commercialisation of their products. This isfurther supported by the increase in scientific journal publications, which have been steadilyincreasing over the past decade. This indicates that research is on-going, but that it is notyielding new patents. Research may be going into consolidating existing technologies in orderto improve on them and make ready for commercialisation.Whilst patent data does suggest a decline within the industry, there is evidence elsewhere thatfuel cells are becoming more mainstream, with many larger companies now investing in theindustry. The drivers are in place for the future to be paved with fuel cell products, especially iflarger companies and governments can push forward to bring the products to market.From the two case studies, it is clear that fuel cells can be commercialised, however it isimportant that the right markets be found for such an endeavour. SFC Energy and Bloom Energyshow excellent market penetration, which is based on the added value that the fuel cell has.These companies were able to leverage the unique beneficial attributes of fuel cells and marketthem to consumers with existing demand.Fuel cells have been overpromised in the past, in particular with fuel cell vehiclecommercialisation being promised far sooner than it could ever realistically be delivered.Though fuel cell vehicles only represent a portion of what fuel cells can offer, they are one of themost high profile applications of fuel cells, certainly from the consumer perspective. Therefore,even if they do not achieve commercial success they will raise the profile of fuel cells among thepublic, along with yielding significant technological advancements applicable throughout theindustry. Alongside these products, companies such as Panasonic and Toshiba, are looking tobring fuel cells into homes through micro-uCHP units.From this report it is clear that the fuel cell industry is one of mixed messages, with the numberof patens falling, yet academic research outputs increasing. Additionally there have been recentclosures of companies, alongside companies re-entering the fray. What should be taken fromthis is not that the industry is in decline; rather it is looking to consolidate. Instead of breakingnew ground with new technologies, applications and materials the industry is looking to buildupon what has already been achieved and turn years of technological progress into profitablebusiness. The next great barrier to fuel cell market success may not scientific or technical innature, rather for companies to succeed they will need to identify markets and consumers whodemand fuel cell products.Fuel Cell Industry & Patent hgf.com 38Overview May 2015 bluevineconsultants.com

www.hgf.com HGF Limited @hgf_ipwww. bluevineconsultants.com Blue Vine Consultants @BlueVineConsultAcknowledgementsThe authors of this report would like to acknowledge the help and support received from theABIA program (Accelerating Business Innovation Activities) at the University of Birmingham,which is an ERDF funded programme. Furthermore, the authors would like to thank the variouscontributors, including; Lois Milner, Laura Allerston, Aimee Jackson, Charlotte Webber and Dr.James Wilkie.