Applications, opportunities and challenges for SOFC Brent Ness Director, Growth Office

Applications, opportunities and challenges for SOFC Brent Ness Director, Growth Office

WHO WE ARE Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. WORLD HEADQUARTERS Columbus, Indiana EST. FORTUNE 1919 500 RANKING (2016) # 148 55,400 EMPLOYEES WORLDWIDE More than 50 percent of the company s employees are located outside the United States. SALES / EARNINGS CMI In 2016, Cummins earned $1.39 billion on revenues of $17.5 BILLION STOCK SYMBOL CUSTOMERS Cummins customers are located in approximately 190 countries and territories that the company reaches through a network of more than 600 company-owned and independent distributor locations and approximately 7,400 dealer locations. Insert Data Classification 2

Cummins is comprised of complementary business units Cummins has a nearly 100-year-long track record of delivering leading power solutions. As we look ahead, we know our industries and markets will continue to change, and we are committed to bringing our customers the right technology at the right time. Engine Power Systems Components Electrified Power Distribution 1.1M+ Engines made in 2017 $7.8B 2017 sales Gensets & Industrial solutions 2kW 3.5MW $3.5B 2017 revenue Key Technology for meeting global emission standards $4.8B 2017 sales Energy storage Low & High Voltage battery pack & modules, BMS & inverters *new BU 8,000 Distributor & Dealer locations $6.2B 2017 revenue Public 3

There are changing growth drivers impacting the markets and customers we serve Insert Data Classification 4

Cummins is responding to drivers by focusing on eight key areas Insert Data Classification 5

Energy diversification is impacting many of our markets today Cummins core businesses will continue to thrive, but disruptive trends are changing the way we power the future of energy solutions. Insert Data Classification 6

There are drivers that make SOFC an attractive energy choice Performance (Noise, Efficiency, Maintenance) Technology Evolution (Better TCO) Range kw-mw GHG Regulations Green & Sustainability 7 7

Why might SOFC not always be five years away? Cell chemistry evolution has resulted in: Increased robustness (start / stops, thermal cycles) Startup time from 24 hours to minutes Ability to use lower cost materials Efficiency & Degradation improvements ~55% (fuel to electrical energy) conversion efficiencies available today Stack life in excess of 30K hours continuous operation is reality Efficiency degradation of < 0.25% per 1000 hours seems achievable Confidential, Subject to Non-Disclosure Agreement 8 8

SOFC make a strong business case in applications with continuous operation Lower power requirements with less transients Distributed energy, Hybrid systems Continuous operation with high annual operating hours Data centers, Telecom, APU s, Range Extenders 9 9

SOFC applications can be diverse and so are the requirements Common Requirements Quick Start High Power Density Transient Operation Low Cost Durability 10 10

SOFC causing disruption of data center power model.... potentially Grid Model SOFC Distributed TODAY TOMORROW Reliability improves due to simplicity Greatly simplifies the operation and construction Data Center efficiency improves Optionality for future benefits Provides path to zero carbon emissions Waste Reuse: heat, water recirculation, CO2 capture 11

No off the shelf product exists that meets Data Center power needs Stringent transient specification Price needs to get to $1500 / kw Cost effectively meet 99.999% power availability requirements Field experience and scale Cummins Confidential 12 12

APU Power & Energy Requirements for the CV industry are application specific Market Current APU Types APU Requirements (stand alone) Line Haul Truck Diesel Engine Battery Drivers for SOFC 1-7 kw Noise & Emission Regulations Fuel Efficiency Reefer Truck Diesel Engine 10-20 kw Fuel Efficiency RV Diesel Engine Battery 1-12 kw Quiet hour regulations at campsites Additional electrical (non A/C) needs include computer, TV, CPAP machine, interior lights, coffee maker etc. Operating Life: 10K (RV) 20K (Line Haul) hours Source: NREL 13 13

APU Technology Comparison SOFC system price has to reduce to $1000-1200/kW Technology Price Weight Pros Cons Diesel APU $8-12K 400-550 lbs AGM Battery APU $8.5-8.8K (+fuel operated heater) 400-500 lbs Thermal Storage 325 lbs + Extended operation Heating & Cooling Quiet Zero emissions Zero emissions Loud Emissions 8-10 hrs operation Additional heater Battery Life Additional heater No electrical power for hotel loads Price of HVAC, heater etc. additional 14

Transit Bus application is very demanding with high power, transient and energy requirements Annual Mileage: 33,000 mi Typical Operation: 16-20 hours/day, 300 days/year Peak Power Average Power Daily Energy Transient Up to 250 kw ~ 25 kw ~350 kwh/day Up to 130 kw/sec # of Stops 750 stops/day Accessory Power 10-30 kw 15

In a Transit Bus, SOFC enables fuel savings, down size the battery and extend vehicle range Energy Storage capable of managing all the peak power and transients SOFC operating under constant power (ON/OFF) mode for recharge Up to 55% in Energy Reduction Enables battery size reduction and range extension 100% of Mission 15-25 kw Optimum Size 16 16

SOFC technology has made significant progress and may be ready for commercialization... However... Verification still required to reliably produce power in mission critical (data center) applications Will volume really solve the cost problem? Significant investment required to deliver scale to markets Alternative technologies also advancing... Customers have choices 17

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