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The science behind HFI has been well documented. Electrolysis, itself, is well understood and it has been known for over thirty years (since a 1974 study by the Jet Propulsion Lab of the California Institute of Technology for NASA) that the addition of hydrogen to fossil fuels, burned in internal combustion engines, will increase the efficiency of that engine. This premise has been validated by a number of papers published by the Society of Automotive Engineers (SAE). The concept is valid with any fossil fuel (diesel, gasoline, propane, natural gas) or bio-fuel (biodiesel, ethanol) though it is most effective in diesel engines. Among other, more subtle effects , the presence of the hydrogen alters the initial stages of the unfolding combustion dynamic, altering the kinetic chemical pathway which the combustion follows 1. The net effect is to alter the time at which maximum heat energy is released relative to the power cycle, increasing the adiabatic efficiency of the engine (typically a modern diesel engine runs around 40% efficient - an increase of only 4% in the adiabatic efficiency results in a 10% decrease in fuel consumption!).
Note that the results are not simply caused by the displacement of a small amount of fossil fuel with an equivalent volume of hydrogen. Rather, the increase in efficiency is gained by getting more useful work out of the fossil fuel itself, resulting in less energy wasted in the form of heat, light and sound.
As an integral part of the research and development cycle, HFI delivers products geared toward specific vertical markets which have gone through an extensive field trial and testing verification stage.
1 Due to the proprietary nature of this technology, and the competitive advantage afforded HHT by our detailed understanding of the mechanisms involved, a full explanation of the science and intellectual property will only be made available to those who undertake a comprehensive NDA.
Competitive Analysis
With the primary focus at HHT being on the HGV and light truck markets, the principle competition comes from manufacturers of "passive" emissions control technologies. There are a variety of advanced exhaust treatment products, including diesel particulate filters and diesel oxidation catalysts but, while they offer comparable emissions reductions to HFI, in every case they increase fuel consumption (by increasing back pressure on the engine) by an average of 3.5%-a stark contrast to the fuel savings achieved by HFI. The existing market for these devices is literally billions of dollars, with companies such as Arvin Meritor, Johnson Matthey, and Delphi each transacting over $1/2 billion in related sales, not to mention dozens of smaller manufacturers around the world. Clearly, HFI enjoys a unique position within the realm of emission control devices, and it's ability to address both the problems of increasing fuel costs and increasing government regulation of exhaust emissions ensures it a large and receptive marketplace.
While the technology has started to attract serious investors, and competition, there is broad recognition of the technical superiority of the HFI technology. A recent analysis by Capstone Investments (HGS Update, 4.12.07), for example, noted: "The CHEC unit was roughly two-thirds the size of the Hy-Drive unit and experienced similar emission reductions and fuel savings, with an average savings of 8-12%. The HFI appeared to have more features ... and capacity to download software updates ...".
Indirect competition would include technologies such as fuel cells, battery-powered vehicles, hybrid vehicles, alternative fuels, and other emission reduction alternatives, such as diesel oxidation catalysts and diesel particulate filters. Of these, the only truly price-competitive products are the diesel particulate filters, but their use, while accomplishing the goal of reducing PM comes with the financial penalty of reducing fuel efficiency by 3.5 - 4% and does nothing to reduce CO2. Diesel oxidation catalysts, similarly, reduce engine efficiency, and the emissions benefits come with equipment costs on par with an HFI HT.
Hybrid vehicles are gaining customer acceptance, but are not, in fact, a competitor to the HFI system since the HFI system can be regarded as a complementary technology. Indeed, as mentioned earlier, "hybrid" may soon refer to the hybrid of hydrogen-hydrocarbon, not gasoline-electric. Alternative fuels, such as ethanol, again can be seen as complementary technologies since the HFI device can be used in conjunction with them. As part of its long-term vision, CHEC will develop partnerships with companies in the bio-fuel industry to develop hydrogen blends that will make those fuels even cleaner and less expensive.
Longer term, the company recognizes that other applications of hydrogen hold extraordinary potential as the source of 100% of the energy for fixed and mobile engines, and a strategy to exploit its competitive advantage and develop a comprehensive family of hydrogen technologies. Already, millions of tonnes of hydrogen are used in industrial processes, particularly in the oil and gas industry, to improve fossil fuel feedstocks. In the future, as cost effective production techniques are implemented, 100% of fuel demand, particularly in remote locations and on islands, will be met by the combustion of pure hydrogen.
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The success HFI has experienced to date is directly attributable to its ability to address the following three key external market forces:
Fuel Costs
Rising fuel costs make for a convincing argument that the HFI application will find an ever-increasing and ever-more appreciative customer base. There are finite amounts of oil in the ground, the oil sands are enormously expensive to exploit, and demand for fossil fuels has been surging around the world as markets in developing countries expand to meet the growing economic demands of their citizens.
Environmental
There is clearly emerging global consensus, both from the public and from the various levels of government, on the necessity to reduce emissions for reasons of climate change and urban health. Smog is becoming a major health problem for North American cities and for other large urban centers around the world, and the health costs and reduction in quality of life are becoming both more obvious and quantifiable. Climate change poses a major threat to the on-going stability of our ecosystems and economies, which has been recognized by the ratification of the Kyoto protocol in February 2005 and the recent COP 11 Summit in Montreal. Governments are showing an increasing willingness to motivate the penetration of technologies, such as HFI, through emission regulations, such as California’s near-zero emissions vehicles (ZEVs), Ontario’s Drive Clean Program, and the progressively tighter regulations in the EU, Japan and even China.
Energy Security
Fed by the perception that fuel stocks are limited, countries, such as Iceland, Sweden, and the US, are looking to extend the life expectancy of their existing fossil fuel infrastructures explicitly through the use of new technologies with a particular emphasis on hydrogen technologies. The perception of the need to increase energy security aligns nicely with the HHT corporate strategy of being a global leader in providing engineering solutions for fuel and emission reductions in a world moving from a fossil fuel economy to a hydrogen economy.
HFI addresses these three major concerns, particularly the most important market driver–cost. As mentioned earlier, the direct economic benefit of HFI is a reduction in fuel consumption ranging, with market tests having proven savings between 10-30%. The resulting fuel savings make it possible to be cash-flow positive from “day one” by taking advantage of the leasing options offered by HHT.
Use of the HFI system results in significant reductions in emissions of carbon monoxide, sulfur dioxide, hydrocarbons, particulate matter, nitrogen oxide, and greenhouse gases (GHG), such as carbon dioxide. More than just “green” marketing points, the reduction in GHG's, and can generate revenue in the form of Emission Reduction Credits in many jurisdictions around the world. Having cleaner engines creates an ancillary economic benefit to customers since such emission reductions will allow owners of aging fleets to meet current and emerging emission regulations without having to replace existing equipment.
Finally, the use of HFI technology results in, an increase in torque and horsepower, as well as reduced engine wear and decreased maintenance expenses, creating additional savings for users.
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