The concept is tantalizing: Use abundant hydrogen to fuel vehicles and power plants, producing nothing but water and heat as a byproduct. The advent of hydrogen fuel cells would help provide the energy the world needs, while slashing greenhouse gas emissions and curbing our dependence on oil.
If that notion seems too good to be true, that’s because it has been. Despite a flurry of investment in fuel cells over the past two decades, the vision articulated by former President George W. Bush of an America leading the world in producing “pollution-free” vehicles that run on hydrogen has seemingly evaporated into thin air.
But the fuel cell is far from dead—indeed, it is gaining a commercial foothold in some niches, evidenced most recently by news that megaretailer Walmart is expanding its use of fuel cells to power forklifts at its stores.
Such implementations of fuel cells, which use hydrogen and oxygen to produce energy via an electrochemical reaction, are small but growing exponentially. According to a US Department of Energy (DOE) report released last October, annual global shipments of fuel cell systems increased sixfold between 2008 and 2012. And at least one major analyst forecasts that the market for some fuel cells will grow from $1.4 billion to $40 billion by 2022.
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Fuel cells come in a wide variety of types and applications, from stationary cells that produce energy for both primary and backup power to systems used in vehicles like cars and forklifts. But so far, the cost of producing fuel cell technologies remains a barrier to widespread adoption, as does a lack of fueling infrastructure for hydrogen cars
Still, industry players speak with an awareness of the gap between the lofty hopes that have been pinned to fuel cells and the market reality. “Fuel cells can’t do everything for everyone,” said Chip Bottone, president and CEO of the Connecticut-based power company FuelCell Energy, “but we are getting to a point where we could play a very significant role.”
Lower emissions, but higher costs
Fuel cells come in a wide variety of types and applications, from stationary cells that produce energy for both primary and backup power to systems used in vehicles like cars and forklifts. But so far, the cost of producing fuel cell technologies remains a barrier to widespread adoption, as does a lack of fueling infrastructure for hydrogen cars.
And hydrogen, despite being abundant and clean when employed in a fuel cell, must be harvested. Nearly all the hydrogen produced in the United States comes from natural gas in a process called steam reforming. Other potential feedstocks include coal or biomass. It is also possible to use emissions-free nuclear or renewable power to harvest hydrogen by electrolysis—running an electric current through water to break the bond between hydrogen and oxygen.
Even when fossil fuel is used as a feedstock to produce hydrogen, fuel cells can offer significant emissions benefits. Research by the the US Department of Energy’s National Renewable Energy Laboratory (NREL) suggests that in a “well to wheels” analysis, hydrogen cars fed by natural gas can cut greenhouse gas emissions by more than a third compared to conventional gasoline cars, and by more than half if the hydrogen is produced from biomass. Emissions are zero once the fuel cell is operating.
Here are three areas where fuel cells are making inroads, plus another one that shows promise:
Forklifts
In February, Plug Power announced a deal to supply 1,738 hydrogen-powered forklifts and associated infrastructure to Walmart. Although Plug had been around since 1997 and had never seen a profit—explaining why its shares sank from nearly $1,500 in 2000 to 15 cents in 2013—over the course of the next two weeks, the company’s stock nearly tripled in value.
Short-selling was a factor in the run-up, but there was no denying that 1,738 was a big number, one that confirmed a real and growing market for materials-handling equipment (MHE) powered by fuel cells. NREL research suggests the switch from lead-acid batteries makes sense: In a test of 490 units that operated for a total of 1.5 million hours, the lab found them to be reliable and capable of saving about 10 per cent in costs.
“If you have a big distribution center and have several dozen forklifts running, you’ll see productivity gains using fuel cells,” said Keith Wipke, who manages fuel cell research programs for NREL. A fuel cell forklift can be refueled in a minute or two, a small fraction of the time it can take to swap out a battery. Fuel cell forklifts offer another edge, too: While the battery-powered forklifts degrade in performance as their charge winds down, fuel cell forklifts run at full power until empty.
A big chunk of the deployment over the past five years was driven by 2009 stimulus-related funds, as well as incentives that won’t last forever. NREL says that continued, long-term growth of fuel cells in the MHE sector could hinge on whether the systems that are put into use prove to be as durable as promised.
Electricity for homes and businesses
The world’s largest fuel cell plant, a 59-megawatt facility in South Korea that opened earlier this year, provides both power and heat to homes in Hwasung. Another fuel cell “park” is set to be built in Seoul. Those cities join several municipalities and companies that are using fuel cell power plants to provide baseload electricity for homes, data centers, fulfillment centers, and similar applications.
Government subsidies have played a key role in the approval of these projects. In the United States, for example, stationary fuel cells are aided now by incentives in a few states and by a federal tax credit of up to 30 per cent that expires in 2017. The relatively low price of natural gas as feedstock for these plants is helping as well.
Fuel cell power plants still are not close to competing with the size and cost-effectiveness of large gas-fired power plants, but when they can overcome their most persistent obstacle—high capital costs—they can deliver significant amounts of relatively clean, continuous-baseload energy that beats grid rates in states where energy costs are high.
Chip Bottone of FuelCell Energy, which provided the systems for the South Korea plant, acknowledges that competing on price will be key for fuel cells. “We can’t be a business that needs a significant incentive,” he said. Bottone said his company could build systems with a capacity of one megawatt or more that could deliver electricity at a cost of 13 to 14 cents per kilowatt-hour. With the current incentives, he said, they can “play in the nine to ten range,” which is about the average retail going rate in the United States.
Continue reading here on fuel cells’ use in telecoms and transport.
