ICELAND: January 24, 2008


REYKJAVIK - At first glance, the red ship hardly looks like a herald of the future. Even its owner admits the hull needs a coat of paint and the interior some spit and polish.


But in a few weeks, the Elding -- Icelandic for "Lightning" -- will be transformed into the world's first hydrogen-equipped commercial vessel, the latest sign that Iceland is pushing hard to become the first nation to break free from the constraints of fossil fuel.

Come April, visitors to Europe's northernmost capital will get a taste of that future by taking whale-watching tours aboard the ship, or renting one of the world's first hydrogen-powered hire cars.

The conversion of the Elding to hydrogen power will initially be confined to the use of a fuel cell to power the engine that runs its lighting, but for 43 euros (US$62.26) a trip, the ship will offer whale-watchers unprecedented peace.

When the crew spot whales at sea, they shut down the main engines to let people hear the mammals swim and blow water -- an experience owner Vignir Sigursveinsson said had been marred in the past by the rumble of a diesel auxiliary engine below.

"When we have the hydrogen machine, the boat will be completely soundless, which will make the experience of seeing the whales in their natural habitat even more magical," Sigursveinsson told Reuters.

Besides appealing to tourists seeking greener travel, the 155-passenger ship will take Iceland a step closer to its goal of converting its entire transport system to hydrogen by 2050.

Jon Bjorn Skulason, head of Icelandic New Energy, the venture between companies, academia and the government shepherding the process, said the ship would help show whether the fuel could work at sea: essential if Iceland wants to convert its fishing fleet, one of the world's largest.

"We think, with the testing we're doing over the next two or three years, our society will be quite well prepared to accept this technology on a larger scale," Skulason said.

Icelanders seem ready to embrace hydrogen as a fuel. Skulason cited one survey that showed 93-percent public acceptance, a fact that he attributed to the relatively few negative associations the gas has for Icelanders.

In Japan, it is sometimes linked in the public consciousness to atomic bombs, while for some in the United States it recalls the 1937 Hindenburg airship disaster.


"JUST DIFFERENT"

With limited global supplies of oil and gas and mounting worries about greenhouse gas emissions, the race to find an ideal green transportation fuel is gaining urgency.

Since hydrogen can be made from plain water and produces only electricity and water vapour when burned, its backers see it as a prime candidate.

But producing it from water takes electricity: according to 2005 data from the International Energy Agency, 67 percent of the world's electric power still comes from non-renewable sources such as coal, gas and other fossil fuels.

Two-thirds of electricity in volcanic Iceland is already derived from renewable sources -- its plentiful rivers and waterfalls and the geothermal heat that boils beneath its crust.

This has allowed the country to break new ground in hydrogen testing, with the world's first commercial hydrogen refuelling station in 2003 and the first hydrogen-powered rental cars last year.

"It has a very exotic energy system where hydrogen could make sense," said Dolf Gielen, senior energy analyst at the International Energy Agency's Energy Technology Office.

The North Atlantic country with a population of just 300,000 is in big-league company in testing the scope for hydrogen.

Countries including the United States, Japan, Canada, Germany and France are also exploring the fuel, but Iceland leads many with its progress on dry land.

The hydrogen filling station, at first reserved for three buses in a European Union-backed pilot, opened to cars late last year and will fill the fuel tanks of the Elding.

Now one of dozens in the world, the station looks similar to its petrol-dispensing counterpart, but is instead hooked up to water, and power to separate the water into its components, hydrogen and oxygen.

The oxygen is dispersed, while the hydrogen is compressed for piping directly into vehicles.

Skulason said hydrogen was safe when treated with respect, but people would need to learn its peculiarities.

"Not long ago you could see people smoking when they were refuelling cars," he said, adding that now drivers know to treat gasoline with respect.

"We're not saying hydrogen is more or less dangerous than gasoline. It's just a different thing."


HYDROGEN-FUELLED RENTALS

The station's expansion coincided with the November arrival in Reykjavik of 10 specially adapted Toyota Priuses. The cars, which charge their batteries with internal combustion engines that burn hydrogen instead of petrol, joined a Daimler Chrysler fuel-cell car imported in mid-2007.

Seven went to Icelandic companies for testing in their corporate fleets, while three went to the rental company Hertz, which now offers hydrogen-fuelled rentals.

Skulason expects to see up to 20 hydrogen-powered cars on the road by year-end and twice that after 2-1/2 years. By 2030 or 2035, he believes most of Iceland's vehicles could be hydrogen-fuelled, although this depends on the arrival of affordable models.

So far, he said, customer feedback had been positive.

Margret Lindal Steinthorsdottir, marketing manager of Hertz in Iceland, said she has had queries about the rentals from all over the world, although few have led to bookings so far.

"But we remain optimistic. The weather has been awful, the tourist season has not begun and the cars are expensive to rent," she said.

Skulason said Icelandic New Energy made a forecast seven years ago for how long it would take Iceland to convert fully.

"We're maybe somewhere between 12 and 18 months behind schedule. So if you think about a 50-year timeframe, that's very little," he said.

Full conversion will take time. It will need changes to infrastructure, affordable hydrogen cars -- now as much as five times as expensive as conventional ones -- and, in Iceland's case, a viable shipping technology.

"Hydrogen may work for whale-watching, but it is challenging for most shipping applications because of the long distances travelled and therefore significant amounts of hydrogen storage volume needed," said the IEA's Gielen. (Reporting by Kristin Arna Bragadottir, writing by Sarah Edmonds; editing by Sara Ledwith and Andrew Dobbie)


Story by Kristin Arna Bragadottir


REUTERS NEWS SERVICE