Hydrogen fuel cells power Wegmans produce

CASS TOWNSHIP, Pa. - A Wegmans fresh-produce warehouse here in central Pennsylvania offers a glimpse of a long-touted fuel of the future.

Instead of traditional lead-acid batteries, the supermarket operator is using hydrogen fuel cells to power the electric forklifts and pallet trucks used to load trailers for deliveries of potatoes, strawberries, and mangoes to many of its stores, including the five in the Philadelphia area.

"They're great," said Wegmans employee Dave Kloos recently while pumping a pallet truck's suitcase-size fuel cell unit full of hydrogen from a hose, a process that takes about three minutes. "The hydrogen lasts twice as long as the battery charge. The weight doesn't bog it down," he said.

The things Kloos likes about hydrogen fuel cells were important factors in Wegmans Food Markets Inc.'s decision to adopt the fledgling technology, which is gaining popularity in distribution centers across the country, particularly in the green-conscious and high-turnover supermarket industry.

Fuel-cell-powered forklifts are part of a slow but steady move away from complete dependence on fossil fuels. UPS Inc. last week added 50 hybrid-electric delivery trucks to its Philadelphia fleet.

Wegmans, of Rochester, N.Y., was not motivated primarily by the desire to score green points with consumers, however. The main driver for the $6 million project was an effort to boost the amount of produce shipped through the facility near Pottsville from nine million cases last year to nearly double that this year, maintenance manager Dave Allar said.

Workers are now filling orders night and day, instead of just at night. That means pallet trucks get much more use, but they were limited by the need for lead-acid batteries to spend eight hours charging for an eight-hour shift. Plus, the batteries lose power over time, just as a flashlight beam grows weaker with use.

To meet its shipping goal, Allar said, Wegmans either had to buy more spare batteries and expand battery-charging capacity or make the leap to a new system for powering the pallet trucks, also called pallet jacks.

Despite the higher cost of the fuel cells, which list at $17,500 compared with $2,500 to $3,000 for lead-acid batteries, "we were still about 10 percent less in total capital costs over the life of the jack" - before counting government subsidies, Allar said.

Allar said he negotiated a substantially lower monthly service fee for the trucks, supplied by Lift Inc., of Lancaster. Using fuel cells also eliminated the need for an outside maintenance person to change the heavy batteries, clean them, and charge them.

The cost of the hydrogen - estimated at $4 to $5 per kilogram by an industry analyst - is more than electricity, but not by much, Allar said. The comparison was helped by a 30 percent increase in electricity prices this year, when rate caps expired, Allar said.

Wegmans, which employs more than 350 at the distribution center, also received subsidies: a $1 million grant from the Pennsylvania Energy Development Authority toward the fueling system provided by Air Products & Chemicals Inc. and a 50 percent cost-share from the U.S. Department of Energy for the first 130 fuel cells it buys.

Like many other forms of alternative energy, hydrogen fuel cells, which create electricity through a chemical reaction, have long received government support.

The latest big push came when George W. Bush in his 2003 State of the Union Address committed $1.2 billion over five years to speed research into hydrogen fuel cells.

But last year, the Obama administration tried to cut spending on hydrogen fuel cells to $68 million in fiscal 2010 from about $200 million in fiscal 2009 after deciding that they would not provide a practical solution any time soon. Congress restored much of the money.

David Friedman, research director for clean vehicles at the Union of Concerned Scientists, said treatment of fuel cells showed the chronic weakness of federal energy policy.

It has been a combination of "support for cheap fossil fuels and the silver-bullet philosophy," which involves "jumping from technology to technology, and when it doesn't save the world in five years, they call it a failure and move on," Friedman said.

Despite the hot-and-cold treatment by the White House, "fuel cells have made huge improvements over the last five years," Friedman said. The Energy Department recently estimated the manufacturing cost of a fuel cell at $45 per kilowatt, less than half the cost four years ago.

Niche markets, such as forklifts, are necessary and important to the advancement of fuel cells, because they can help bring the cost down, but they are "not going to be enough" to be a wedge that opens up bigger markets, such as cars, Friedman said.

As it is now, fuel cell manufacturers are still burning through cash. Plug Power Inc., of Latham, N.Y., the supplier of fuel cells for Wegmans, lost $41 million last year on just $12 million in revenue. Its shares closed at 42 cents on Nasdaq Friday.

Plug Power is the biggest supplier of fuel cells for forklifts, a potential $1.5 billion market, and is expected to be profitable in that segment this year, according to Peter Wright, an analyst with Tradition Equities in New York.

Robert McClellan, chief operating officer at Accurate Lift Truck Inc., of West Berlin, Camden County, which sells and leases forklifts from three locations, does not deal in fuel cells yet, but he expects to. "It's the wave of the future, more than likely," he said.

A barrier to the use of fuel cells in passenger cars - beyond their six-figure price tags - is the lack of enough fueling stations. With forklifts, that problem is eliminated because they circle back past the fuel pump anyway.

Allar, the Wegmans maintenance manager, is so pleased with the fuel cells that he would like to convert the forklifts and pallet trucks at a neighboring grocery distribution center to fuel cells earlier than planned.

As to a new building covering 11 acres that is scheduled to open in early 2012, "we're planning it without a battery charging room," Allar said.