Key Trends in the Fuel Cell and Hydrogen Industries
The use of clean energy systems is picking up pace at various parts of the globe all with the aim of addressing issues related to energy security and sustainability, reduction of harmful greenhouse gas emissions, and stimulating the global economy. With recent technological breakthroughs, the use of hydrogen and fuel cells on renewable energy infrastructures and electrified vehicles can help address these needs.
California is at the forefront of establishing the large-scale facilities and installations needed to support fuel cell vehicles as well as hydrogen fueling stations that will receive funding through the state’s Self-Generating Incentive Program or SGIP. The following provides a brief overview into the fuel cell and hydrogen industries, key industry trends and market outlook.
Benefits of Hydrogen and Fuel Cells as Clean Energy Technologies
Hydrogen is categorized as a clean fuel and when used in conjunction with fuel cells there will be no harmful by-products and emissions except for water and heat. Aside from this, consumers can realize the following additional benefits as outlined below:
  • Fuel cell manufacturing can generate high-quality jobs and help strengthen the economy
  • Hydrogen is derived from renewable resources and can be used to generate electricity. The generated electricity can in turn be used to produce hydrogen creating a reliable and renewable power generation cycle
  • The production and transportation of hydrogen has matured in over 100 years of existence and manifested risks no greater than the production of gasoline or natural gas
  • Emission-free methods of producing and storing hydrogen are now cost-effective and have efficient processes for carbon capture
  • Hydrogen can be produced locally and will not be affected by volatilities and instabilities of the world market
  • Fuel cells using hydrogen have twice the energy efficiency of standard internal combustion engines
  • Unlike engines, fuel cells have no moving parts and thus produce no noise and vibrations and requires minimum maintenance
  • High-quality direct current is generated by fuel cells and this can be used to power a wide variety of electrical and electronic appliances and devices at all scales – from micro power to high megawatt power plants
  • Unlike the batteries in electrified vehicles which require recharging and downtime, hydrogen fuel cells have minimum downtime and refueling requirements
Issues and Challenges
Despite the tremendous potential fuel cell and hydrogen technologies in terms of providing a domestic, low-emission, renewable energy source, full commercialization and widespread acceptance of this industry will not come without major issues and challenges. Some of these issues include:
  • Hydrogen and fuel cell technologies is still young and has not yet stabilized as compared to more standard energy technologies in terms of cost and performance. This is the same predicament facing other alternative energy sources right now.
  • Although safe and lightweight hydrogen systems are available right now, their production is still at low volumes and not yet cost-productive
  • Public misconception about how unsafe and unreliable hydrogen is continue to prevail among communities and the general populace
  • Standards and regulations in the fuel cell and hydrogen industries are not yet consistent among the international community although a strong commitment to coordination and cooperation is present
Market Updates and Trends
The fuel cell and hydrogen industries received tremendous federal support when they received $42 million in funds from the Recovery Act of 2009 plus an additional cost-share funding from industry participants that amounted to more than $54 million. The funds will support the deployment of over 1000 fuel cell systems which will be used primarily as back-up power sources.
In California , plans are underway to install 45 hydrogen fueling stations by the year 2017. This will support the deployment of more than 4300 Fuel Cell Electrified Vehicles (FCEV) in the state by 2014 which is expected to grow to over 50,000 units by 2017. As of 2010, there were already four hydrogen stations that are accessible to the public and four more stations are expected to be deployed towards the end of 2011.
Fuel cells and hydrogen technologies continue to pick up in early markets and establishing their niche and presence as an energy source in the future. Industries focusing on the use of hydrogen fuel cells include the following:
  • Telecommunications – will use fuel cells as backup or primary power supplies for cell towers
  • Warehouses – fuel cells will be used to power forklifts and other handling systems and equipments
  • Energy Retailers – will sell fuel sells for heating and cooling homes and small businesses
  • Large Facilities – fuels cells will be used to as additional power sources for large facilities such as manufacturing plants, public buildings, and hotels
  • Auto Manufacturers – major names in the automobile industry are planning to come up with their own versions of fuel cell vehicles by the year 2015
  • Bus Companies – Transit agencies will be incorporating fully integrated hybrid fuel cell / battery electrical systems in passenger buses. 12 of these new fuel cell buses are being introduced in the San Francisco Bay Area, each of which will be 5,000 pounds less that previous versions of fuel cell buses
Fueling the Future
In the latest report from market analyst Pike Research, 2011 will be a major year for the market development of the fuel cell industry and is expecting a tremendous increase of commercial applications that will be using these technologies. In 2010, the industry gained revenues in excess of $750 million despite the global economic recession and this trend is expected to continue in 2011 and in the years to come as developments and government policies continue to mature.