Dow and GM Launch Phase II of World's Largest Industrial Fuel Cell Program

MIDLAND, Mich., Nov. 29, 2004 -- The Dow Chemical Company and General Motors Corp., today launched the second phase of their joint project to prove the viability of hydrogen fuel cells for motor vehicles and possibly for distributed power generation. The project has now expanded from a single GM test cell, installed in February 2004, to a multi-cell pilot plant at Dow's Texas Operations in Freeport, TX.

"In the first phase of this project, we collectively learned a lot about generating power from byproduct hydrogen via fuel cell technology, and now we're ready to build on what we've learned," said Gordon Slack, Dow's Global Business Director for Energy and Climate Change. "Dow is excited to contribute to this important project. It represents another step in the search for cost-effective fuel alternatives, with the potential to help reduce greenhouse gas emissions."

From a Test Cell to a Pilot Plant

During the second phase, the fuel cell pilot plant will be integrated into Dow's chemical and plastics production facility via the power distribution grid and Dow's hydrogen clean-up and pipeline system. While generating real- world data to enable further development of the technology, these fuel cells will also supply up to 1 megawatt of energy for use in Dow's Texas Operations.

Phase II objectives include: building on key learnings from Phase I and demonstrating fuel cell reliability for Distributed Generation; improving and optimizing the reliability of power from the fuel cells; investigating fuel cell waste heat recovery opportunities; and understanding hydrogen purity requirements.

"The biggest benefit for GM is learning to work with real world hydrogen that has some impurities in it, and not the pure hydrogen you get in a lab setting," explained Timothy Vail, GM's director of business development for fuel cell activities. "Not only can we test the effects of hydrogen purity, we can also test different generations of fuel cells, all in a controlled setting. We learn about durability and reliability. GM is excited about the progress of the Dow installation. Moving from the test stage to the pilot stage represents a big leap forward in system design."

A Step Toward Cost-Effective and Sustainable Energy

If Phase II proves successful, the project will transition to Phase III, large-scale commercialization by 2007. Ultimately, Dow and GM could install up to 400 fuel cells at Dow facilities, to generate 35 megawatts of electricity, equivalent to the amount of power needed for 25,000 average sized American homes.

"This project is yet another demonstration of our commitment to exploring cost-effective alternatives to fossil fuels for power generation," said George Kehler, Dow's Commercial Manager for Renewable and Alternative Energy. "We strongly support efforts to increase fuel diversity in the U.S. and to reduce our nation's dependence on extremely high-priced domestic natural gas. Inflated and volatile domestic energy and feedstock costs continue to undermine the global competitiveness of U.S. manufacturers. For the sake of our nation's economy, we need to find better solutions. Fuel cell technology can be a part of that solution in the future."