Fuel Cell Market Analysis

The following excellent article was originally published on 18 November, 2008. By the Institue fur Kraft Fahr Zuge in Aachen, Germany.
It is such an accurate and complete summary of my own research that I present it. The only difference I would have is an editors note I added near the bottom. I disagree that this technology is 4 years away from major market penetration. I believe it is imminent.

-Editor

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The application of Fuel Cell and Hydrogen technologies to the industrial and commercial markets takes the form of co-generation or tri-generation systems.

• Systems available today have total powers in the range 100kW to 2-3MW (higher power, modular, systems are possible but have not been installed) and produce electricity, heating and, sometimes, cooling.
• Most quoted efficiencies are 70-80% overall and 45-50% electrical, suggesting that co-generation using Fuel Cells will yield significant reductions in GHG emissions.
• In developed countries the existing industrial and commercial power/heat sources are responsible for approximately 20-25% of the total GHG emissions, making these sectors prime targets for Fuel Cell system introduction [1].

The arguments for introducing Fuel Cell technology into these sectors are as follows:

• Many countries are investigating distributed generation strategies, influenced by renewable sources such as wind, solar, tidal and others. Fuel Cell co-generation systems suit this strategy well [2].
  
• The industrial and commercial sectors already use well-established fuel chain infrastructures for on-site generation and heating, plus the energy utility grids.
  

Some industries already produce large quantities of potential fuel, suitable for reforming, as a direct by-product of their manufacturing/production processes.

• An excellent example is the chlor-alkali industry that, globally, produces 200 tonnes of hydrogen per hour. If used in Fuel Cell co-generation plants this hydrogen could produce more than 3GW of electrical power and heating.
  

Co/tri-generation system efficiencies are much higher than those based on more conventional, established technologies.

• Fuel Cell systems will offer these sectors large potential fuel cost savings.
• Industries and commercial businesses will be increasingly keen to exploit GHG emissions reduction opportunities as legislation impacts their bottom line.
• Legislation in some countries is already forcing the adoption of increasing quantities of energy from renewable or greener sources.
• Combined with increasing conventional fossil fuel prices in the long term, a significant market already exists for Fuel Cell systems [3].

The choice or availability of fuel influences the type of Fuel Cell and reformer technology selected. Fuel Cell distributed or co-generation development is following a number of potential technology streams but with varying levels of development achieved so far. The systems that are already being produced commercially are:

• Molten Carbonate (MCFC) for applications of 200kW-2.5MW.
• Phosphoric Acid (PAFC) for applications of 100-500kW.
• Proton Exchange (PEM) for high power applications of 250kW-1MW
• Solid Oxide (SOFC): Considerable development is still required before true commercialisation is a reality for SOFC, in spite of the significant number of companies active in this particular technology stream. Systems that have been announced so far will be suitable for many applications and operate at powers between 100-250+ kW.

All these Fuel Cell systems incorporate fuel reformers where necessary so that the unit can operate on alternatives to hydrogen.

Fuel Cell co-generation systems, furthermore, must compete with long-established technologies and utility grids that are, at present, cheaper but are far less efficient. The primary goals must be as follows:

• Reduce co-generation system costs to more competitive levels.
• Reduce cell-stack operating temperatures to enable improved cell chemistry and the use of cheaper materials for the cell stacks.
• Improve fuel reformer technologies to reduce fuel impurities and hence reduce cell degradation.
• Extend cell-stack lifetime.

Main Players

An overview of companies known to be developing fuel cell systems for commercial and industrial applications is presented. The main players known to be active in industrial and commercial applications of H2&FC systems .

These companies can be divided into

1. manufacturers of fuel cell stacks
2. system integrators who develop the actual products
3. Those that do both.

(Editors Note: not in original article) Some companies are emerging which integrate multiple renewable energy generation (OREG) with energy provision though Power Purchase Agreements, In Deregulated environments. These engineering companies use multiple renewable technologies to provide entire energy solutions to a variety of energy users.)

Some of the key players in this sect a highlighted in the text below.

• CFC Solutions (Germany) manufacture high temperature fuel cell CHP systems. To date, CFC have installed more that 20 of their HotModule® fuel cell systems throughout Europe. These systems typically generate 245 kW of electricity and 180 kW of heat. CFC use Fuel Cell Energy’s Direct FuelCell® technology [4].
  
• Fuel Cell Energy (Danbury, Connecticut USA) is continuing to develop modular Molten Carbonate Fuel Cell (MCFC) systems with powers ranging from 300kW up to 2.4MW. They claim to be able to build systems of up to 50MW using their existing, smaller FC modules. Fuel Cell Energy owns and operates a manufacturing plant in Torrington, Connecticut, with a capacity of 50 MW of fuel cells per year at present, with plans underway to increase the production capacity [5]. Fuel Cell Energy has been working closely with its partner Enbridge to develop more efficient plants. Using the energy produced from micro-turbines, that reduce the very high natural gas transmission network operating pressure to acceptable levels, FCE is able to increase the overall efficiency of their Fuel Cell system.
  
• NedStack (Arnhem, the Netherlands) have developed low power PEM fuel cell stacks that they sell to integration companies. NedStack is also developing a much larger PEM system, for industrial / commercial power applications, with a power output as high as 1MW [6].

• Nuvera (Italy) is continuing the third phase of development of the Forza™ high power PEM Fuel Cell system specifically for chemical process industries. The hydrogen by-product of many chemical industries is an ideal fuel for this system. Nuvera expect Forza to produce up to 250kW at a net efficiency of 55-60%. Forza is being developed to allow many modules to be combined in systems with maximum powers of 2-3MW [7].
  
• Rolls Royce Fuel Cell Systems (UK) are developing industrial/commercial SOFC co-generation systems for commercialisation in 2010. Their first field trials should start in late 2008 or early 2009.

• UTC Power (South Windsor, Connecticut, USA) is a single source developer, integrator and supplier of on-site, stationary co-generation and tri-generation PAFC systems with powers ranging from 195-400kW electrical plus additional heating and cooling outputs [8].
  
• Wärtsilä (Finland) have developed a 20 kW SOFC CHP system for commercial applications. Their unit, called WFC20, is based on planar SOFC technology developed by Tospøe Fuel Cells A/S (Lyngby, Denmark). In July 2008, Wärtsilä’s SOFC CHP system was demonstrated at the Vaasa Housing Fair where it was used to supply electricity and heat, while being fuelled by landfill gas.
  

Recent Developments

• Since early 2007 Fuel Cell Energy’s largest customer, POSCO Power of Korea, has ordered nearly 40MW of systems, for delivery in 2008-2010.
  
• UTC Power, a United Technologies Corp. company, announced in July 2008 that four models of its PureComfort® combined cooling, heating and power systems had met the emissions limits of the California Air Resources Board. This will allow UTC systems to be sited in any suitable location in California. CARB has now ordered 4 systems from UTC as part of the California Distributed Generation certification program.
  
• On 11 June 2008, UTC Power announced that the New York Power Authority (NYPA) had selected the company to supply 12 fuel cells totalling 4.8 MW of power for the Freedom Tower and three other new towers under construction at the World Trade Centre site in lower Manhattan.
• Delivery of UTC’s PureCell systems will begin in January of 2009. This installation has already attracted considerable interest from the building and site system services communities [9]. An overview of some of the recent key milestones is presented below.
  

Key Milestones and Future Developments for applying H2&FC technology to the Industrial and Commercial Market Sectors

Drivers and Barriers

Fuel cell technology holds considerable promise for the industrial and commercial market sectors. The potential flexibility and efficiency of stationary systems, plus the many applications for which they would be ideal sources of power, are certain to be recognised.

• Fuel Cell systems are used predominantly in niche industries at present, but this is likely to change rapidly as the technology gains acceptance and recognition.
• This does depend on many elements of course, including costs, lifetimes and air quality/emissions/GHG offsetting legislation.

The findings of this study indicate that large co- and tri-generation systems available to the market now can offer significant advantages over existing technologies.

True commercialisation is limited, however, by the unproven nature of Fuel Cell-based systems and by suspected cell stack lifetimes. There is a strong, well-developed existing market for conventional products and limited Government subsidies available, in only a very few countries, to encourage Fuel Cell technologies. The high overall efficiencies of Fuel Cell systems do not yet adequately outweigh the inertia within these markets, though that situation is changing.

Only a small number of companies are successfully exploiting these markets and, until now, only to a very limited extent. Fuel Cell systems require considerable further development and have made only the smallest dent in the dominance of existing energy generation technologies. Recent shifts in Government energy strategies towards renewables, GHG emission reduction and distributed generation will improve the prospects for the future, but slowly.

More companies are carrying out research and development than are producing commercial systems. Competition should increase and help to drive the cost of the Fuel Cell systems down in time. This analysis suggests that is not likely before 2012-2015.

The current industrial and commercial uses for Fuel Cell systems are niche applications only that use existing fuel infrastructures and hence rely on the available fuel reformer technology.

Manufacturers must build on their successes so far and find new opportunities by:
Continuing development of reformers to improve efficiency and maximise cell stack lifetimes through fuel impurity reductions.

Use modular systems that can be adapted to specific requirements but benefit from economies of scale from common components, cell stacks and balance of plant machinery.

Improving overall system efficiencies to further distinguish between Fuel Cells and conventional generation technology.

In conclusion, the Industrial and Commercial market sectors have huge potential for growth - approximately 10 billion GWh per year is generated globally for these markets alone. Continued investment in R&D towards better products, plus increased take-up rate of Fuel Cell systems in the near future due to improved public acceptance of the technology, will ensure growth. There is no doubt that these market sectors will be critically important to the whole Fuel Cell industry.

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