ARCHIVED - Evaluation of the NRC Fuel Cell and Hydrogen Program

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Executive Summary

An evaluation of the National Research Council's (NRC) Fuel Cell and Hydrogen (FCH2) Program took place in fiscal year 2007/08. NRC engaged Performance Management Network Inc. to conduct the evaluation of the FCH2 Program. The period covered by the evaluation study is 2003/04 through 2007/08.

The scope of this evaluation was NRC's horizontal Fuel Cell and Hydrogen (FCH2) Program. Specifically, the evaluation focused on the projects that were funded with the monies received from the T&I Program and matching A-base funds and supporting administrative functions. The evaluation did not assess other fuel cell and hydrogen research, outside of this funding envelope, that is currently underway at NRC.

The evaluation focused primarily on implementation issues but also assessed early stage impacts of the Program. The primary reasons for conducting an evaluation of the FCH2 Program at this time were to collect information on the progress to date, including lessons learned and best practices, and to support NRC's future planning and on-going management. In addition, the evaluation provides information to support decisions around funding renewal.

Information collection included a review of program documentation, external documents and project files, and key informant interviews.

Program Overview

In October 2003, the Federal Government announced the Climate Change Technology and Innovation (T&I) Program. As part of this program, a $215 million investment was made in the development and demonstration of hydrogen and fuel cell technologies. Responsibility for delivering on hydrogen and fuel cell priorities was split among Natural Resources Canada (NRCan), Industry Canada (IC), Natural Sciences and Engineering Research Council (NSERC) and the National Research Council (NRC).

A total of $7 million of the T&I Program's Hydrogen Economy Initiative was allocated to NRC to continue and expand support for NRC's fuel cell research. In addition, NRC committed to reallocate $15 million of existing A-base funding towards hydrogen research as a matching contribution over five years. The resulting NRC Fuel Cell and Hydrogen (FCH2) Program is a $22 million multi-disciplinary horizontal research initiative. The Program was designed to leverage NRC's national base of expertise, helping to bring together complementary technologies from across NRC with those at the NRC Institute for Fuel Cell Innovation (NRC-IFCI) in Vancouver (launched in 2002/03).

The FCH2 Program's activities can be divided into two categories: program management and research activities. Program management activities include: the project selection process including soliciting proposals, conducting external peer reviews and identifying projects; monitoring and reporting on program progress and an annual review of on-going projects; and, setting priorities and strategic planning (participation in the Hydrogen and Fuel Cell Committee (H2FCC)Footnote 1, discussion seminars).

The scientific research activities can be classified as early stage and applied R&D. Although not a specific project evaluation criteria, projects that involve multiple institutes and are inter-disciplinary are favoured over single-institute initiatives. Projects are funded in three main technology areas: Proton Exchange Membrane (PEM) Fuel Cells; Solid Oxide Fuel Cells (SOFC); and, Hydrogen Technologies.

Summary of Conclusions and Recommendations – Relevance

The evaluation found that there is a legitimate role for the Canadian government, namely to improve coordination between industry, federal programs and universities. This would help Canada remain competitive in this field, as was the case in the 1990s, when it played a leadership role.

Study findings (based on document review and interviews) support the conclusion that the FCH2 Program was relevant to the federal government's agenda and NRC's corporate vision as of approximately one year ago. The extent to which the FCH2 Program remains consistent with federal and NRC priorities in the future depends on how energy technology and research priorities are redefined in the near future.

Support for fuel cell and hydrogen research in general, and NRC's FCH2 Program more specifically, is consistent with the needs of Canadian industry and in line with the approach taken by other countries.

Recommendation 1: It is recommended that the FCH2 Program should continue to fund collaborative fuel cell and hydrogen research across NRC. Continued input from industry (through strategic planning and project review processes) will ensure that the Program continues to be relevant to stakeholders.

Response: Recommendation accepted. 

Funding fuel cell and hydrogen research is consistent with NRC's implementation of goal three of our Strategy:  "to contribute to Canada's priorities in health and wellness, sustainable energy and the environment – areas critical to Canada's future", and with the federal government S&T Strategy priorities in energy and environmental science and technologies. 

While the federal government has a key role to play in engendering collaboration among industry, federal programs and universities in order to accelerate technology development and transfer, government laboratories also play a leadership role in proof-of-concept R&D that is usually not done by universities or industry.

NRC is currently working with NSERC and NRCan to define a Hydrogen and Fuel Cell National Program that would favor even greater alignment of federal government activities and identify opportunities for collaborations among researchers from government laboratories, universities and industry. Industry is involved in the planning process for the program through one-on-one interviews and workshops and will continue to be involved through ongoing consultation and coordination and advisory mechanisms that will be put in place to guide the overall National Program.

The recommendations listed below are made on the assumption that the FCH2 Program will continue to be funded and appear as an activity in NRC's Program Activity Architecture.

Summary of Conclusions and Recommendations – Success

Findings show that the FCH2 Program has demonstrated some near-term results in the areas of research project delivery and project results. As well, the program increased communication and cooperation among NRC institutes and supported new research collaborations within NRC, thus improving internal capacity. Although approximately 70% of FCH2 projects funded involved more than one institute on paper, some project activities were better integrated across institutes than others. It appears there could be improvement in this area if there were stronger collaborations between institutes participating in this program.

The extent to which the Program successfully met longer-term objectives is mixed. The program has raised the profile of all NRC fuel cell and hydrogen research externally as evidenced by the Canadian and international partnerships that are in place currently. However, the limited resources, lack of an umbrella NRC fuel cell strategy to guide this horizontal program, and lack of long-term funding are challenges that could limit the continued achievement of longer-term objectives. While the Program has successfully built some capacity within NRC (HQP, partnerships) there is no funding structure in place to sustain these results.

Recommendation 2: It is recommended that an umbrella strategic plan for fuel cell and hydrogen R&D at NRC be developed. It is recommended that the strategy build upon an assessment of industry's needs, identify R&D priorities and include expected performance targets for specific technologies. The strategy should identify those areas where intra-institute collaboration can be implemented in a cost-effective manner.

It is recommended that industry be fully engaged in any future strategic planning exercises and that mechanisms to improve communication with industry be continued (e.g. the NRC Fuel Cell and Hydrogen Program Business Coordinating Committee, IFCI Advisory Committee).

The FCH2 Program should be situated within this broader technology strategy as one component of NRC's overall program of support for fuel cells and hydrogen. It is recommended that the chief architect of the strategy be a senior researcher with a strong technical background in fuel cell / hydrogen R&D and capable of engaging researchers across NRC institutes in the development of priorities and technical performance targets.

Response: Recommendation accepted. 

Collaborations among institutes were encouraged and supported by the program. Intra-institute collaboration has evolved over the five-year period as new expertise developed and created opportunities. While collaborations with industrial partners were also promoted, the highly competitive nature of this industry at the time prevented the creation of multi-partner collaborations. Consultations under way as part of the National Program development indicate that this situation has changed and that industry is now more inclined to collaborate in order to accelerate technology development in this field.

The proposed Hydrogen and Fuel Cell National Program will identify target areas which can contribute to Canada's priorities in sustainable energy and environment and which will help the Canadian H2 and FC industry remain competitive. Industry is already fully engaged in the planning exercise through one-on-one consultations, interviews and workshops. New channels to improve communication with industry will be maintained. The governance structure being developed for the program will also have industry at its core. 

Technology Development Projects TDP supported as part of the National Program will involve at least two industry partners and have clear deliverables with identified receptors in a 3 to 5 year timeframe.

Areas for inter-institute collaboration will be identified and implemented in the context of Technology Development Projects. A key criterion for each project will be the participation of at least two of the leading organizations (NRC, NRCan, university researchers supported by NSERC), two industry partners and more than one institute from NRC.

The H2 and FC National Program planning exercise is being led by the DG of the NRC Institute for Fuel Cell Innovation. Each Technology Development Project will have two Research Leads (from each of two of the Program's founding organisations). NRC institutes and external partners are currently engaged in developing the TDPs.

NRC contributions to these projects will be reviewed in the context of NRC's overall Hydrogen and Fuel Cell activities.

Summary of Conclusions and Recommendations – Design, Delivery and Cost-Effectiveness

The FCH2 Program design represents a new delivery approach for NRC, with new management challenges and costs. The resources available limit the ability of the program to develop multi-year, fully collaborative projects. To effectively manage an inter-institute program, such as FCH2, requires a full-time Program Director and support. Therefore, the level of program funding available must warrant and support this additional administrative cost. Inter-institute projects also have additional overhead and management costs associated with them, which can be significant in the early days of a research partnership.

The program management and administration was effective, and was improving over the course of the Program. The annual workshops and reports are examples of effective horizontal program management tools.

Overall, the ability of the Program to meet its objectives in the longer-term is hampered by uncertainty around on-going program funding both at the federal level and within NRC.

Recommendation 3: It is recommended that the costs associated with horizontal programs be fully reflected in the program plans. For these programs, additional NRC committees may be required to ensure that work is coordinated (e.g. the Business Activity Committee set up by FCH2 Program). With this additional overhead comes additional costs that need to be recognized upfront.

Response: Recommendation accepted.

The five-year NRC Fuel Cell and Hydrogen Program included overhead costs associated with coordination, program management, planning review, travel and workshops. 

Overhead will continue to be recognized in the future program budget plan.

Recommendation 4: It is recommended that the current annual progress reporting, which provides a basis for on-going benchmarking of program performance, continue. Possible improvements that could be made are: more information on research results; a discussion of progress towards technical performance targets (once these have been defined, see above); and an assessment of impacts of technology transfer activities on industry. Periodic (annual) reporting could also include follow-up on technology transfer activities cited in the previous years' performance reports.

Response: Recommendation accepted.

Program reporting will continue with particular emphasis on results and impacts from the projects undertaken as part of the Hydrogen and Fuel Cell National Program. Each TDP will be monitored by a Project Manager and deliverables and milestones will be tracked on an ongoing basis. Regular project reports will be required and projects will be reviewed periodically by the TDP Steering Committee composed of industry, OGDs and university representatives. The overall impact of projects will be assessed annually and at project close-out.

Recommendation 5: It is recommended that the project selection committee consider the level of collaboration anticipated for the project while reviewing project proposals and priority should be given to those with higher levels of collaboration (i.e., inter-institute projects with significant collaborative research activities as opposed to single institute projects or those with institutes working in parallel, not together).

Response: Recommendation accepted. 

Each Technology Development Project under the Hydrogen and Fuel Cell National Program will involve participation from more than one of the three partner organizations, at least two industry partners and more than one institute from NRC. Projects will be industry-driven with clear deliverables with identified receptors in a 3 to 5 year timeframe.

Summary of Conclusions and Recommendations – Future Opportunities

The future funding sources for the FCH2 program (through either eco-ETI (the new federal Energy Technology Initiative) or the NRC National Program) are in question. In the absence of an NRC fuel cell strategy, or federal direction, it is difficult to conclude on the FCH2 Program's future.

Recommendation 6: It is recommended that one-year bridge funding for the FCH2 Program be put in place on April 1, 2008. This investment is required to keep NRC-ICPET, NRC-IMI and other institutes engaged in fuel cell research while decisions related to the NRC National Program and the eco-ETI Program are made. In the absence of this funding, researchers (for whom fuel cells are not their primary focus) are likely to re-direct their efforts to complementary research areas and momentum built by the FCH2 Program over the last five years will be lost.

Response: Recommendation not accepted.

Funding for the five-year NRC Fuel Cell and Hydrogen Program ended in March 2008 and projects were planned to come to an end at that time.

Funding for NRC future work on Hydrogen and Fuel Cell will not be available from the eco-ETI program.

The intent is to have a strategic plan in place as part of the Hydrogen and Fuel Cell National Program in partnership with NSERC and NRCan before starting new projects.

Recommendation 7: It is recommended that future program funding strategies reflect the reality that fuel cell and hydrogen technology development has a 30 to 40 year development horizon. The current arrangement of a five-year program with funding approval required for each project on an annual basis does not cost-effectively support this type of activity.

Response: Recommendation not accepted.

The purpose of NRC five-year funded initiatives and programs is to do just the opposite, e.g. to foster collaboration and work on industry-driven projects with short term impacts. The medium-term technology development and incremental work can be done as part of institutes a-base funded activities, and the longer term activities by university researchers.

It is possible, however, to have a strategy that covers needs on the longer term (10 to 15 years) with a focus on the first five years after which the progress on R&D projects will be assessed.

Footnotes

Footnote 1

The H2FCC is a partnership of federal departments working together with industry and academia to help facilitate and co-ordinate the continuing development and commercialization of Canadian-made technologies built for the hydrogen economy.

Return to footnote 1 referrer

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