Turning the Corner: Fuel Cells Now Poised for Major Growth

Current market research claims that one or two corners towards mainstream adoption of fuel cells will soon be turned.

On the face of it, fuel cells are an extremely attractive energy alternative, typically using oxygen and hydrogen as fuel, and producing only water and heat as by-products. This is an excellent value proposition in terms of environmental impact, but in practice, fuel cells have been a long time coming. For well over a decade, notebook PC users have been told their battery woes will soon be over, and that, “Fuel cells are just around the corner.” That corner has never been turned, and companies trying their hand at fuel cells have found profits extremely elusive. Nevertheless, current market research claims that one or two corners will indeed soon be turned.

According to the Industry Review 2011, published by http://www.fuelcelltoday.com, “Over the last five years there has been a twenty-fold increase in shipments of fuel cells, with year-on-year growth in both units and megawatts shipped. In 2010, total shipments of fuel cells grew by 40% compared with the previous year, approaching a new high of 230,000 units. Portable fuel cells accounted for 95% of this total, but there was substantial growth in other sectors.”

The same publication forecasts that shipments in 2011 will surpass 285,000 units worldwide, growing by 25% compared with 2010. “Polymer electrolyte membrane fuel cells (PEMFC) lead 2011 unit shipments, accounting for over 95% of the total, and regionally North America dominates with a 50% share of total units.”

In terms of revenue growth, a recent report from Pike Research indicates that global fuel cell industry revenue climbed sharply during the 2008-2010 period, increasing from around US$260 million in 2008 to nearly US$670 million two years later – an increase of more than 250%.

The corner is being turned, claims Pike Research, “…the shift from a sector centered on R&D to a fully commercialized fuel cell industry is well underway.” Next year will be pivotal, when “…growth in the industry will accelerate rapidly beginning in 2012, with strong growth anticipated over the next six years. Global fuel cell revenue is expected to surpass US$28 billion by 2017.”

Fuel cells have of course hit media headlines for their potential use in electric vehicles (EVs). The issue is an urgent one for the EV industry since lithium-ion batteries will not be a viable option over the long-term. Lithium is a finite resource. Nevertheless, according to Pike Research, “…the real driver of the industry is the stationary fuel cell sector. In 2010, fully 50% of all fuel cell systems shipped were for stationary applications. Certain big-ticket markets, such as residential, are already seeing shipments in the tens of thousands. A number of early adopter sectors have emerged, including residential units (particularly in Japan), power for both grid-connected and off-grid mobile telecommunications base stations, and combined heat and power (CHP) plants for a variety of markets, including hospitals and hotels.”

The market research firm adds, “Significant volumes for transportation fuel cells in cars and buses are still several years away, as automakers gear up for fuel cell vehicle (FCV) launches in 2015…. While cars and buses will continue to dominate the headlines, applications such as remote monitoring, residential, and uninterruptible power supplies will continue to gain traction and grow.”

As regards APAC, Pike Research notes that, “…recent investments in fuel cell technology, particularly in Japan, Korea, and China, along with the increasing adoption of fuel cells for a range of applications, will result in a burgeoning market within the Asia Pacific that will reach US$6.7 billion by 2017, up from just US$52.8 million in 2011.”

China will emerge as a major player, says FuelCellToday.com, in its The Fuel Cell Today Industry Review 2011: “China has the potential to become a world leader in fuel cell technology and announced in August its ten-year blueprint for the nation’s new energy car industry. According to reports, one plan from the blueprint is to increase China’s annual production of electric cars, hybrid vehicles, hydrogen fuel cell cars and solar cars to 15 million units by 2020.”