A Revolution On Hold

Mar 16, 2005 4:22 PM, By Michael Eby, Editor-in-Chief

More than four years ago in this column I shared my thoughts with you on the topic of fuel cells. I admitted my fascination with these devices and discussed several high-profile projects in Washington, Alaska, and Canada. I even predicted that I wouldn’t be surprised “if we all look back on these days as the advent of the fuel cell revolution.” In hindsight, it appears I was a little premature with my prediction. I failed to realistically factor in a host of internal and external forces that ended up working against the technology’s widespread acceptance and deployment.

So what happened? Why didn’t the revolution take place? Well for one, the dot-com bubble burst, taking with it an enormous amount of potential capital dollars pegged for building out on-site power delivery systems to feed the massive server farms required to run these Internet–based companies. Soaring natural gas prices also hurt the economic model for installing distributed gas-fired turbines at these and other industrial and commercial facilities. Advances in new low-emission engine gen-sets that run on a variety of fuel types and mixtures and cost much less to purchase and operate than fuel cells were introduced to the market. And it didn’t help that the high price of fuel cell units continued to prevent them from competing with traditional on-site power system technologies.

But despite these setbacks, the fuel cell community continues to move forward with its research and development efforts and demonstration projects. It’s now estimated that 250 stationary fuel cell systems are currently generating power for industrial and commercial facilities like hospitals, data processing centers, and semiconductor plants around the world. And the list just keeps growing. The most promising applications for stationary systems appear to be combined heat and power systems, which provide electricity and heating to the building or structure. In fact, the U.S. Department of Energy estimates that combined power projects could represent approximately four gigawatts of capacity by 2025.

So what is it going to take spark this revolution? As noted in the Hydrogen, Fuel Cells & Infrastructure Technologies Program Multi-Year Research, Development and Demonstration Plan, published by the U.S. Department of Energy this month, a key objective in the commercialization of stationary fuel cells is to develop a distributed generation PEM fuel cell system by 2010 that operates on natural gas or LPG and achieves 40% electrical efficiency and 40,000 hours durability at $400 to $750/kW. But the only way for manufacturers to meet this goal is to identify less expensive materials and fabrication methods for membranes, catalysts, and bipolar plates. They must also find a way to raise the operating temperature of the PEMs to increase performance and improve heat and power cogeneration and overall system efficiency. Only then will these devices be able to compete with traditional forms of on-site generation.

Although the fuel cell revolution appears to be on hold, I still haven’t lost faith that someday it will reach its tipping point as a cost-effective on-site power generation technology. And to make sure you’re totally prepared to jump into this market at that time, this month’s cover story written by staff writer Amy Florence Fischbach provides an overview of the current state of fuel cell technology and discusses the current market conditions for these fascinating power generation units. Even if you didn’t believe me four years ago, trust me when I tell you you’ll get a leg up on the competition by educating yourself on the topic now.