Market Trends

HyGen Industries
Renewable Energy Developers

P.O. Box 6911 Eureka, Ca. 95502	Ph: 707-667-5329 e-mail: h24u@hygen.com

Market Trends:

The trend for the future of alternative fuels is potentially very profitable as the government mandates are responsible for driving the market. The graph and table to the right show what the federal, state and private fleet operator requirements are through the beginning of this century. Although currently well behind in all categories, there are major efforts underway to meet these goals as soon as possible by government funding programs, tax and fee credits, as well as through updating as systems and vehicles are retired. The trend for hydrogen is even more promising as hydrogen fuel cell electric vehicles come on the market in 2005. The trend for hydrogen improves significantly with the addition of hydrogen conversion vehicles.

Energy Policy Act Purchase Requirements of Light Duty Alternative Fueled Vehicles
Fiscal Year	Federal	State	Fuel Providers	Private
1996	25%	10%	30%	na
1997	33%	15%	50%	na
1998	50%	25%	70%	na
1999	75%	50%	90%	20%
2000	75%	75%	90%	20%
2001	75%	75%	90%	20%
2002	75%	75%	90%	30%
2003	75%	75%	90%	40%
2004	75%	75%	90%	50%
2005	75%	75%	90%	60%
2006 and beyond	75%	75%	90%	70%

Since the oil embargo of 1973, funding for hydrogen in congress has failed every year until 1992. The first hydrogen funding bill, the Matsunaga Act, named after the Senator from Hawaii, passed in 1992. Since that year (and efforts of some of our team members involved in the funding of the Solar Hydrogen Project at Xerox), funding has risen from the $5 million allocated in 1992 to over $35 million today, and legistlation pending that could provide up to $6.5 billion nation wid, and up to $500 million from state legistlation here in California. The SCAQMD in Southern California (charged with cleaning up the air in that district) has made hydrogen a main priority by supporting hydrogen efforts like the Solar Hydrogen Vehicle Project at Xerox, and fuel cell busses from Ballard as well as several ICE conversion and Hydrogen Hybrid Electric Vehicle Programs. The California Air Resources Board (CARB) even created a category to help Hydrogen ICE (HICE) and hybrid electric vehicles get the incentive they need with an e-ZEV category. This category takes into consideration the fuel cycle of EVs which use electricity generated from fossil fuel plants. The California Energy Commission (CEC) formally recognizes hydrogen as an energy carrier. Something the CEC would never do previously.

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GM and Ford are working with both HFCEVs and Hydrogen ICE vehicles. In fact most of the auto manufactures concur that they could put hydrogen vehicles on the road now if the infrastructure was developed for transportation. British Petroleum’s (BP) announcement acknowledging the Greenhouse Effect and it’s major venture effort into solar energy is tantamount to the tobacco companies breaking rank. ARCO has expressed in the past that we should not venture into changing our infrastructure to all the other alternatives and should go right from reformulated gasoline into hydrogen. It has expressed an interest in developing the hydrogen fueling station for the future. All this seems to us at HyGen (and many other experts worldwide) as a significant positive trend towards the full-scale implementation of the Hydrogen Economy in the early 21st century.

Who is going to provide the much needed, cleanly produced hydrogen required to fuel all those vehicles in order for them to qualify as Zero Emission Vehicles for the next millennium? HyGen will! We will provide it using United Technologies/Hamilton Sundstrand's SPE^ŽElectolyzers, which are the most efficient and advanced hydrogen generators on the market! We will power those generators with renewable clean energy from the sun, wind, and even wave/tidal sources.