Kerry-Ann is the manager and principal analyst of Fuel Cell Today, the leading organisation for market-based intelligence on the fuel cell industry.
As providers of research and analysis on the fuel cell industry, it sometimes feels that we’re constantly fighting to dispel the myths about fuel cells. One such myth is that fuel cells are 'always ten years away', that they’re never going to become a commercial reality. Our data prove that this is clearly not the case.
Over 40 discrete markets for fuel cells already exist and our statistics show that nearly 25,000 different fuel cell systems were shipped globally in 2009. Those figures compare with less than 5,000 systems shipped in 2005 – so a fivefold increase. Clearly fuel cells are a commercial reality NOW!
I've been in the fuel cell industry since the 1990s. From a personal perspective, I have seen a major shift since the 'fuel cell bubble' era of the latter part of that decade. So what has changed? Well, for one thing the late 1990s was about cars, cars and cars. Today, while markets for cars exist, they are very much in the minority. The most important markets today include my particular area of interest, stationary fuel cells - boxes which produce electricity for distributed generation or smart grid applications
There is fast growing customer demand for stationary fuel cell technology. That’s the other key change since the 1990s, a decade which was all about technology push. The thinking was that once the technology was ready then it would somehow become adopted. The market dynamics today are very different: in 2010 it's all about market pull. We've switched from a technology push to a market pull: customers are demanding products such as stationary fuel cells – and a host of other applications including forklift trucks.
This is not to say that the industry is without problems. The fuel cell industry still suffers from hype, from issues such as a lack of codes and standards or, in some cases, lack of insurance. However, these problems relate to market-based issues, not technology-based issues.
There are many different types of fuel cells, generating varying amounts of electricity, using diverse kinds of fuel and different electrolyte types. Fuel cells for combined heat and power and combined cooling and power are seeing huge demand across the world, but specific applications vary. For example, single home residential CHP applications in Japan generate an average of 800W of power, while a U.S. CHP unit for an apartment block typically generates 400kW plus. For UPS functions for base stations we are looking at 5 – 15kW, but for datacentres this jumps to well over 1MW. I could go on, but what this diversity of applications demonstrates is that the search for a 'winner' is inevitably going to prove pointless. We cover over 40 different market applications for fuel cells - some very exotic, some very standard. There is a market space for all of them: we're not going to see technological lock-in for a long, long time.
Looking into a crystal ball (well, a crystal ball based on Fuel Cell Today projections), we estimate that the power provided by the volume of stationary fuel cells shipped in just five years’ time will be well into the giga watts annually. And this is based on a 'business as usual' scenario - that is, no technological breakthroughs, no hike in carbon taxes, and no new technological forcing policies.
There will be a slight point of inflection for the industry between 2010 and 2011, but the real inflection point, in our view, will come between 2014 and 2015. The breadth and depth of applications being developed at the moment are astounding. In this issue of Cleantech magazine we discuss a selection of these, from military vehicles to fuel cell buses.
And fuel cell cars? There will be limited commercialisation by 2015 – but right now that is not where the excitement, shipments and reality of the business exist.
So fuel cells are not the industry of eternal promise. Fuel cells are real and they exist commercially today. If you personally don’t see them very often, that’s because they are boxes which stand still and quietly generate power in the corner. But that quiet industry is growing rapidly and major investment opportunities are emerging within it. Fuel cells are here today - and there will be many more of them here tomorrow!
September 2010
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