Singapore’s fuel cell venture hits a snag
Rolls-Royce Fuel Cell Systems has torn up its production plans and gone back to the drawing board.
The Business Times
By RONNIE LIM
(SINGAPORE) Rolls-Royce Fuel Cell Systems (RRFCS) – a US$100-200 million alternative-energy joint venture (JV) in which the Singapore government has a stake – has torn up its production plans and gone back to the drawing board.
The project, which was started back in April 2005, had apparently targeted commercial production of its fuel cells this year. These plans may now be pushed back by as much as five years, BT understands.
RRFCS Pte Ltd – the Singapore subsidiary set up by the JV to undertake pilot production of equipment for small but powerful generators using fuel cells – is now in voluntary liquidation.
The JV was looking to make fuel cell-powered generators, each capable of providing a substantial amount of electricity – reportedly enough to power, for instance, 200 households, a hospital, a university or large commercial building.
The fuel cells were to generate electricity by combining fuel and air in an electrochemical reaction.
But BT understands that because of ‘technical issues’, the project has not been able to progress to production stage; hence the closure at this time of the Singapore operation.
‘The project has moved back again into R&D stage, which is being done in the UK and US,’ one source said, the latter because of new US government backing. It is understood that Rolls-Royce’s global fuel cell research is now US-led.
Last September, Rolls- Royce – which established its fuel cell systems US headquarters at Stark State College of Technology – announced that it was expanding its fuel cell research in North Canton, Ohio, adding another 60 jobs there.
Singapore consortium Enertek (comprising EDB Investments, Temasek Holdings and Temasek subsidiary Accuron Technologies), which earlier took a 25 per cent stake, is now understood to have a reduced stake in the JV with Britain’s Rolls-Royce.
‘Singapore’s collaboration in the JV remains,’ one source said. ‘The voluntary liquidation affects just RRFCS Pte Ltd, which was meant for the venture to scale up into the manufacturing stage.’
But this will likely be only around 2016 now, the source said.
Apart from an initial US$100 million, Rolls- Royce and the Singapore consortium were to have invested a further US$100 million in the venture. It is not known how much has been spent so far on the project.
When contacted about the closure of RRFCS’s Singapore operations, an EDB spokesman would only say ‘there is always risk associated with R&D work, and EDB continues to exercise utmost diligence in assessing and managing R&D projects. In the field of fuel cell research, Singapore also continues to build up its capabilities through agencies such as A*Star and Nanyang Technological University.’
Singapore, however, was not unaware of the risks involved.
The JV was a calculated bet at the outset, with then Second Minister for Trade & Industry Vivian Balakrishnan saying at its launch that Singapore must participate in the development of such alternative energy, even though ‘we can’t predict its future and final outcome’.
‘This project has significance . . . It is a model of how Singapore will function, and of Singapore’s niche in the value chain in the future,’ he had said.
Temasek managing director Tan Suan Swee had also cautioned at the time that there were commercial risks involved, in that the technology would not be easy to develop. But, if successful, it would be a major step towards reducing dependence on the world’s limited supply of fossil fuel.
This article was first published in The Business Times.
