2011 Fuel Cell Industry Review

Report Highlights

The Fuel Cell Industry Review will provide a comprehensive summary of all major news and other events that affected the global fuel cell industry in 2011. Coverage will include:

• Technology advances
• Key mergers and acquisitions
• Business alliances and partnerships
• Research and development
• Government funding
• New products and their effect on industry advancement
• Current and pending legislation that will affect the industry
• Key industry events

The goal of BCC Research in compiling and publishing the Fuel Cell Industry Review is to provide key players with all important news from 2011 and an analysis of how the industry will be affected in one publication.

INTRODUCTION

Fuel cells produce electricity by electrochemical reactions.  After more than 170 years of research and development, the emphasis seems to be shifting to commercial applications of fuel cells rather than concentrating on the various types of fuel cells.  This has occurred generally based on appropriate and efficient performance at a given task with the driving force being economics rather than sparse government investment in the entire fuel cell sector.  The only emissions from a hydrogen-fed fuel cell are water, sometimes waste heat, and a tiny bit of carbon dioxide.  There is still a lot to be done in the area of infrastructure, storage, and the distribution of the fuel for a fuel cell, typically hydrogen, and some production issues related to materials and components solved.  There are also metal-air fuel cells that have some specific uses and are often called “batteries.”

Like batteries, fuel cells produce electric power.  Unlike batteries, fuel cells consume some type of “fuel” and do not store electricity.  Commercial fuel cells range from large, stationary arrays to small portable configurations.  High-temperature fuel cells require heat management equipment and insulation, not components that contribute to size reduction.  In the last three years, smaller, sealed, low-temperature, and truly portable fuel cell power sources have been developed and commercialized.  The type of electrolyte usually defines the fuel cell.  Note that to be an effective vehicle power source, fuel cells usually need to be configured with a battery system to store the power produced.  Transportation fuel cell types include the following:

• Alkaline fuel cells
• Solid oxide fuel cells
• Proton exchange membrane fuel cells

Of these, proton exchange membrane (PEM) designs and their variants are, by far, the most widely used.  A PEM fuel cell consists of two electrodes, the anode, and the cathode, separated by an ion conductive polymer electrolyte.  Each of the electrodes is coated on one side with a platinum containing catalyst.  Hydrogen fuel dissociates into free electrons and protons (positive hydrogen ions) in the presence of the platinum catalyst at the anode.  The free electrons are conducted in the form of usable electric current through the external circuit.  The protons migrate through the membrane electrolyte to the cathode.  At the cathode, oxygen from the air, electrons from the external circuit and protons combine to form pure water and heat, in order to obtain the desired amount of electrical-power-generated individual fuel cells in a stack.  Increasing the number of cells in a stack increases the voltage, while increasing the surface area of the cells increases the current.  Because of the need for a water-charged electrolyte, PEM fuel cells are limited to relatively low temperatures (60°C to 120°C).

Most PEM fuel cells operate using pure hydrogen or a hydrogen containing gas.  A variation is the direct methanol fuel cell (DMFC), which operates in a one molar (1M) to 3M aqueous methanol solution, which supplies methanol to the anode.  The electrochemical reactions are essentially as follows.  First, a methanol molecule’s carbon–hydrogen, and oxygen–hydrogen bonds are broken to generate electrons and protons, simultaneously a water molecule’s oxygen–hydrogen bond is broken to generate an additional electron and proton.  The carbon from the methanol and the oxygen from the water combine to form carbon dioxide.  Oxygen from air (supplied to the cathode) is simultaneously reduced at the cathode.  The ions (protons) formed at the anode migrate through the interposing electrolyte and combine with the oxygen at the cathode to form water.  The idea of refueling a fuel cell vehicle with an easy-to-store liquid instead of a gas is obvious.  However, this technology is not as mature as pure hydrogen fed PEM.

The primary topics considered in this year’s review of Fuel Cell Industry Review are transportation, stationary applications, portable application military uses, materials and components, and hydrogen generation and storage.  Also included are industry news items and some tangential items related to commercialization.  Specific cases include fuel cells being used at wastewater treatment plants, government buildings, universities, military bases, police stations, homes, and hospitals and even tried out in ferries and airplanes.  There are many other applications for fuel cells, including portable power, vehicles, buses and consumer electronics, which are being researched, demonstrated, and deployed by numerous organizations around the world.

WHICH FUEL CELL TYPES SEEM TO FIT IN WHAT APPLICATION?

The long sought after and desired application was to put fuel cell into cars.  That sector is currently being better served by the hybrid and electric vehicle combined with improved internal combustion engines (ICE).  The noted exceptions are buses and forklifts.  Forklifts work in closed spaces and the fact that they have essentially no emissions make this a real advantage for their operators.  Buses can put large compressed hydrogen tanks on their roof, follow fixed routes, and can be adequately serviced for fuel as they return to the garage at the end of their runs.  The issue of the fuel cell starting operation can be easily solved by starting the bus early enough to be operational in time for the route run.  Competition looming for fuel cell buses may be the compressed natural gas fueled bus or conversion of some older buses to hybrid battery-diesel operating systems.

Alkaline fuel cells are easily poisoned by the Earth’s atmosphere containing carbon dioxide.  This older and established fuel cell technology is generally limited to space craft or submarines.  Electrical efficiency is in the 50% range.

Phosphoric acid fuel cells are also well established in stationary applications.  Some improvements continue to be made and have a typical power output greater than 50 kW.  The chief disadvantage cited is the high operating temperature about (200^°C or 392^°F) and an electrical efficiency in the 35% to 40% range.  The electrolyte is an immobilized liquid phosphoric acid.

The preferred stationary application fuel cell seems to be the solid oxide fuel cell or SOFC operating with an electrical efficiency of about 65% and providing electrical power of less than 200 kW.  The electrolyte is a ceramic and the operating temperature is the highest of any fuel cell at 1000^°C (1800^°F).

The molten carbonate fuel cell (MCFC) is coming off a second-generation improvement sponsored by the Department of Energy (DOE).  Molten carbonate fuel cells are designed to operate at higher temperatures than phosphoric acid or PEM fuel cells and can achieve higher fuel-to-electricity and overall energy use efficiencies than lower temperature cells.  In a molten carbonate fuel cell, the electrolyte is made up of lithium-potassium carbonate salts heated to about 1200^°F (650^°C).  At these temperatures, the salts melt into a molten state that can conduct charged ions between two porous electrodes.  Electrical efficiency is approaching 60% with typical electrical power of over 200 kW.  The fuel can be natural gas feed directly from a pipeline or methane.

At the anode, hydrogen reacts with the carbonate ions to produce water, carbon dioxide, and electrons.  The electrons travel through an external circuit creating electricity and return to the cathode.  There, oxygen from the air and carbon dioxide recycled from the anode react with the electrons to form carbonate ions that replenish the electrolyte and provide ionic conduction through the electrolyte, completing the circuit.

In 2003, FuelCell Energy, the molten carbonate developer, delivered its first commercial unit at the Kirin Brewery plant in Japan.  In 2011, commercial FuelCell Energy’s demonstration and commercial units are operating at over 50 installations worldwide.  Most of these are about 250 kW, although multiple units have been combined for larger installations.

The remaining types of fuel cells are variants of the proton exchange membrane fuel cell (PEMFC) or more commonly called a PEM.  The basic PEM uses an ion exchange membrane that is water based and operates at a fairly low temperature of 80^°C (176^°F) with an electrical efficiency of about 60%.  With a typical electrical power output of less than 250 kW, it can find applications in small vehicles and small stationary applications.  Its first cousin is the high-temperature PEMFC that uses an acid based ion exchange membrane.  Typical electrical output is less than 100 kW at operating temperatures in the 120^°C to 200^°C (248^°F to 392^°F) range.  A better known variant is the direct methanol fuel cell or DMFC with a typical electrical efficiency of 40% and for portable applications requiring less than 1 kW of electrical power.

VALUE OF FUEL CELLS IN GLOBAL MARKETS

Many fuel cell companies are unprofitable, but the opportunities for growth are promising.  When the appropriate fuel cell technology can stand on its own economic viability without government support, then the various technologies will become mainstream and a true growth industry.  Each end-use application has its own drivers and competitive barriers.  Fuel cells must be able to penetrate their specific market space without depending on government sponsorship.

In the stationary market, SOFC power is gaining traction in all applications, including central processing units, generators, backup and primary power, and auxiliary power units of all types.  The SOFC seems to be scalable and modular in installation and not dependent on the power grid.  The units can partner with batteries, diesel generators, solar, wind turbines, or ultracapacitors.  Quiet and no emissions are desired in forklift in-door and warehouse operations.  Fuel cell forklifts can run 2 to 3 times longer between fueling than batteries that need to be plugged in and recharged.  Labor charges are less with the fuel cell forklift.

Backup power and primary power are also growing markets for SOFC.  Then there are the federal investment tax credits for fuel cell use.  For business property owners, credits are available for 30% of the cost, up to $3,000.

At the present time, 2011, the global value of SOFC is estimated at $380 million.  This is certainly up from previous estimates of $264 million in 2006.  Growth rates over the next five years will certainly depend on currency valuations or devaluations and what happens to the euro.  The rise of the appreciation of SOFC in Asia may well offset that parameter.  Projected is a compound annual growth rate (CAGR) of 7% for SOFC in all markets through 2016, amounting to $532 million in 2016.

Long a favorite of developers and users isthe PEM and its variants.  Retail, grocery stores, and many others using portable devices have favored the PEM.  Many grocery stores tend to favor the older and supposedly more reliable and tested phosphoric acid fuel cell of UTC.  If your product is food you do not want to lose all your assets in a 12-hour to two-week power outage.  The PEM and its variants have applications in portable devices, some stationary applications, and some transportation devices.  Some analysts rate the shipments of portable devices as largest by money value.  This is an agreeable consensus of opinion.  The units fulfill their function in an efficient and cost-effective manner.  Four or five years ago, the PEM markets were valued globally at only about $127 million.  Today, it is a conservative $398 million in all applications.  In five years (2016), after increasing at a CAGR of 20%, this should reach $457 million worldwide for PEMs of all types. 

The following review covers the important events for fuel cells in 2011.  Join us next year for the expanded newsletter Power Sources and Advanced Vehicle Progress.  This new publication will be published once a month and available only as an electronic edition.  Readers should appreciate the expanded coverage and information.