Fuel Cells for Large Scale Applications

Report Highlights

• The North American fuel cell market currently is valued at about $251 million in 2002 and is expected to increase over the next five years at AAGR (average annual growth rate) of 20.6%, reaching $642 million.
• The hydrogen-fed “Big Four,” i.e., proton exchange membrane, solid oxide, molten carbonate and phosphoric acid fuel cells, comprise 89% of the market, and their share will increase over the period.
• Phosphoric acid fuel cells are, at present, the best selling fuel cell chemistry.
• Alkaline fuel cells are not expected to grow beyond their current value of $22 million.
• Metal-air fuel cells will rise in their niche market at an AAGR of 19.1% from $5 million in 2002 to $12 million in 2007.
• The business is ripe for a number of changes beyond technology, with more than 1,000 companies involved in some fashion worldwide.

INTRODUCTION

STUDY GOAL AND OBJECTIVES

This comprehensive technical market report evaluates markets for fuel cells in large-scale applications, which are broadly defined for purposes of this report as applications larger than man-portable systems. Mostly these are systems that generate more than 1 kW of power. The technical evaluations in this report focus on the main types of hydrogen-fed fuel cells as well as the metal-air power cells. The qualitative and quantitative values are exclusive to the U.S. and North America, but the international aspects of the of fuel cells are not overlooked. Existing and developmental fuel cell technologies for large-scale fixed and mobile power applications are evaluated and the companies involved are profiled. The goals are to provide meaningful information, unbiased analysis and an assessment of the applications suitable for fuel cells now and in the future of power generation.

REASONS FOR DOING THE STUDY

The future of power generation has already begun. A hundred years ago energy meant steam engines and waterpower. There was plenty to go around. Electricity was still largely a novelty. Things changed and by mid-century America and most of the industrialized world were primarily running on electrical energy produced by fossil fuels and hydroelectric power. Hydropower is essentially working at its limit, and Mother Nature can cripple it with a few years of drought. Crude oil is not an infinite resource. Then the issues of pollution from coal and crude oil need to be addressed. There is tremendous interest in distributed power generation, which conserves resources and is both climate- and environment-friendly.

Today we are still producing energy pretty much as we did fifty years ago. The picture has changed yet again. Increasing populations and industrialization increase the demand for energy every year, but the ability to supply that demand is increasingly questionable. The age of fossil-fueled power plants is drawing to a close, due both to dwindling oil reserves and environmental concerns. In America, for example, the 2001 energy crisis in California mingled flawed energy policies with energy distribution glitches. The Enron scandal revealed as much about questionable energy policy manipulation as it did corporate mismanagement. It would appear that, even as we run out of traditional sources of energy, mankind has found ways to complicate the problem through greed and mismanagement.

Man is not likely to change, but it appears that the methods and patterns of energy production are going to have to. We shall need more and more power; power that is nonpolluting, affordable, plentiful, and adaptable to both stationary and mobile applications. Hydrocarbons are not the future; they are being exhausted and their byproducts have polluted the planet. The handwriting is on the wall. Now what? Fuel cell commercialization opportunities in the U.S. market are focused in several large-scale areas: re-powering, central power plants, industrial generators, and commercial/residential generators.

We are entering the age of renewable natural power sources-and the fuel cell. Fuel cell technologies are being used for some stationary power, residential power and portable power applications. Future applications appear to be possible in bus engines and car engines. Orders for larger fuel cells to produce electricity in competition with existing power stations and grid electricity will emerge in the United States and Europe.

Which fuel cell technology will benefit first and where? Are we truly going to have a "hydrogen" economy? This BCC, Inc. technical market study seeks to answer many of the questions surrounding fuel cells in the power-generation market.

CONTRIBUTION OF THE STUDY AND FOR WHOM

This technical market report is designed to be as comprehensive as possible. It is created to be useable by a broad audience of , technical, investment, and regulatory professionals. This document is an information source for an emerging industry as well as a reference on a developing technology. It presents analysis and forward thinking evaluations that will be of advantage to manufacturers, material suppliers, and to local, state, and federal government entities. Corporate planners will benefit from the report's evaluation of the demands for large-scale fuel cell applications and the companies involved in their development and manufacture. Others may well find the broad discussions of energy policy and the structure of the electrical power industry in the U.S. of considerable value in understanding the opportunities and problems facing the fuel cell industry over the next decade.

SCOPE AND FORMAT

This technical market report covers large-scale fuel cell applications (all applications requiring power sources greater than those for hand-held or man-portable devices) through 2007. Smaller-scale applications such as cell phones and laptop computers are examined in the forthcoming BCC, Inc. report, E-118 Fuel Cells for Small Scale Applications.

All hydrogen-fueled fuel cells are evaluated by type in this report. Metal-air power cells appropriate to large-scale applications are also examined. Costs for the various fuel cell materials and configurations are considered. The values cited are lower than some of the billion dollar markets predicted in various reports. These probably refer to complete systems. In this context, we have conceptually addressed a common denominator of just the fuel cell stacks.

METHODOLOGY

Initial research for this report included an analysis of available technical and literature and an evaluation of available fuel cell industry records. Governmental publications, including pertinent studies, analyses, reports and correspondence were examined, including a wide range of material from Federal and state agencies, regulatory bodies, nongovernmental organizations and congressional sources. Discussions were held with industry experts, company representatives, Federal researchers and university scientists. Field trips to civilian and military fuel cell research facilities and laboratories provided essential data for fuel cell application evaluations.

The dollar "value" of fuel cells for large-scale applications, which appears in various tables throughout the report, includes in addition to sales, all R&D and grant monies provided by governmental or nongovernmental sources for any developmental purpose. The market value listed as "Federal" is not the monies proposed by the government, but the money spent by NASA, Armed Forces, and the Coast Guard on fuel cells. This report primarily addresses fuel cells in the U.S., but international factors that impact the domestic market are also examined separately. All currency values are in U.S. dollars, and costs are adjusted to reflect this usage. Engineering and design, real estate and transportation and shipping costs are excluded.

INFORMATION SOURCES

Additional information sources for this study include online research, patent literature searches, technical journals and magazines, and interviews with industry principals. Other sources include product literature from material producers and equipment suppliers and the BCC, Inc. monthly newsletter Fuel Cell Technology News.