News Archive 2000

Stuart-CKI - Driving the Hydrogen Economy in Asia

4 September, 2000 -- Hong Kong

The Investment

Cheung Kong Infrastructure Holdings Limited ("CKI") last week announced its acquisition of an 18% stake in Canadian hydrogen fuelling company, Stuart Energy Systems Corporation ("Stuart"). Stuart, a global leader in the development and provision of fuel-grade hydrogen generation systems, has mastered the challenge of converting hydrogen into a fuel that is both cost-efficient and easy to transmit.

In order to develop commercial activities relating to hydrogen fuel technology in the Asia Pacific region, CKI and Stuart have also formed a joint venture (CKI: 40%, Stuart 60%), which in turn has assigned to a 100%-owned CKI subsidiary the exclusive development rights for hydrogen infrastructure in Asia Pacific.

"Our partnership with Stuart is on two levels," said Mr H. L Kam, Group Managing Director of CKI. "At the head office level, we are partnering with Stuart to help develop its hydrogen generation products as the 'clean' fuel of the future. On the other hand, CKI is also acting as the exclusive distributor of Stuart's products in the Asia Pacific region. We see this as a 'one-two' combination in developing hydrogen fuel for the global arena, and bringing the benefits of hydrogen technology to the Asian market."

The Technology

The use of hydrogen is growing rapidly, especially as an industrial processing agent, as a regenerative power component and as a clean transportation fuel. Industrial applications of hydrogen include chemical and metals processing, manufacture of microchips, and food processing. Hydrogen is also used in regenerative power applications as a storage medium for electricity generated during low usage hours, which can be quickly and easily converted back into electricity to meet excess demand during peak hours. As global supplies of fossil fuels diminish, the availability of cheap, renewable energy is paramount.

The world's automobile manufacturers have also recognized the clean-fuel potential of hydrogen, and leading companies such as DaimlerChrysler and Ford have made equity investments in Ballard Power Systems, a manufacturer of fuel cells for use in hydrogen-powered vehicles. More powerful and efficient than diesel engines, hydrogen-powered fuel cells' only output consists of electricity and hot water.

Recognising the potential of distributed generation (i.e. multiple generating units serving small areas), Stuart has packaged its hydrogen generation technology into small units for personal use. The ability to create sufficient quantities of fuel-grade hydrogen from a low-cost appliance - whenever and wherever it is needed - has opened the doors to a whole new world of development in hydrogen powered applications. For example, small hydrogen generation units can be used to supply cooking fuel for individual households - providing a cleaner alternative to town gas. These personal units can also be used to refuel hydrogen-powered cars at home.

Stuart's products generate hydrogen on a price level that is competitive with gasoline, with the added advantage of being able to create fuel when and where it is needed. One of the major obstacles in the past was the transportation of hydrogen fuel. This has now been eliminated with the introduction of Stuart's scaleable electrolysis systems, which have paved the way for the development of small-scale, mass market hydrogen generation appliances. In addition, fossil fuels are not necessary for the operation of Stuart's technology, which has enabled energy systems to become completely independent of fossil fuels by extracting hydrogen from water.

The Market

Mr Kam explained, "The Cheung Kong Group places high emphasis on protecting the environment, and we have identified three approaches towards meeting this goal: 1) recycling waste material, 2) reduction of use of natural resources, and 3) reduction of emissions into the environment. We have already initiated programmes that follow the first two approaches - for example, through proactive recycling of fly ash from our coal-fired power plants into construction materials, and the development of energy-saving devices. Our investment in hydrogen power is an initiative towards actually reducing the amount of emissions released into the environment - addressing the problem at its source."

"Until now, environmental efforts have largely focused on reduction of use and recycling. However, these two approaches towards environmental protection sometimes come at the cost of certain creature comforts. For example, turning off air conditioners on hot summer days saves energy and reduces emissions, but consumers also suffer from increased heat and discomfort. The Cheung Kong Group is looking to develop environmental technology that preserves the environment while maintaining the same standards of living and comfort that we currently enjoy," continued Mr Kam.

The potential for hydrogen power in Asia is overwhelming. Already, concerns over air quality in major urban areas have led to demand for cleaner sources of fuel. Hydrogen power will find applications in Asia's transportation sector - initially for public transportation, and eventually personal vehicles. Major cities like Hong Kong, where air quality is becoming an issue, will be the key targets for hydrogen-powered vehicle applications.

The need to provide electricity to less developed areas not yet adequately served by power grids can be met by placing fuel cells where and when they are needed. Stationary regeneration could be used in conjunction with a renewable source, such as hydro-electric power, to produce hydrogen at night when electricity demand is low. Then, the hydrogen could be used to run fuel cells to meet additional demand during the day.

In addition, the growth of Asia's high tech industry is calling for greater reliability in power systems than the power utilities can achieve. In today's high tech economy, the technology industry requires extremely stable and reliable sources of power. Power grids currently supply about 99.9% reliability, but high tech operations require reliability at 99.9999%. On site fuel cells used as back-up generators can help to achieve this level of reliability.

Hydrogen can also be used as fuel in residential applications. Hydrogen, which burns cleaner than the town gas currently used for cooking and heating, could become a serious alternative to fossil fuels for home use, if pricing and handling are managed well. At the same time, Stuart products' ability to generate hydrogen when and where it is needed alleviates the need to store large quantities of fuel in the home - providing a safer, cleaner alternative.

One of the most interesting applications of hydrogen power is in countries like China. Given the availability of substantial water supplies - as there are in the PRC, a shift towards hydrogen power could relieve the country's dependence on imported fossil fuels - at the same time creating a cost-effective method of generating power for the growth of China's industrial, commercial and residential sectors.

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