Fuel cells are devices which convert chemical energy possessed within the fuel into electricity via a chemical reaction with the help of an oxidizing agent. Fuel cells produce electricity using hydrogen or other hydrocarbon fuels such as natural gas or methanol. Fuel cell is one of the fastest growing alternate backup power options primarily due to the utilization of hydrogen as fuel. Conventional electricity generation methods utilize fossil fuels and considering the depleting fuel reserves, fuel cells are a feasible option as hydrogen is abundantly available. In addition, fuel cells are eco friendly as their by product only comprises of nitrous oxide unlike conventional technologies. In addition, the lack of moving parts or combustion process results in lower noise levels for fuel cells as compared to other incumbent technologies. Based on measurements, a stationary fuel cell power plant produces less than one ounce of pollution per 1,000 kilowatt-hours of electricity. On the other hand, conventional power generating sources produces up to 25 pounds of pollutants on consumption of the same amount of electricity. Fuel cells are the most efficient power back up option primarily due to their broad range of operation time and can be integrated in to a variety of devices such as refrigerators.
The eco friendly nature of fuel cells among other advantages has resulted in governments of various countries pushing for its development and technological advancement. Various countries such as Norway, Finland and Denmark have opened hydrogen fuel station in order to strengthen their hydrogen fuel infrastructure. The American Recovery and Reinvestment Act (Recovery Act) was passed in 2009 that manage the hydrogen and fuel cells project portfolio. This Act helps in accelerating the commercialization of fuel cells manufacturing, installation, maintenance, and support services. Fuel cells projects received $41.6 million from the Recovery Act and an additional $54 million cost share from industry participants. The U.S. Department of Energy is extensively involved in fuel cell research and have over 300 patents on fuel cell technology. The extensive support from governments is expected to greatly boost the fuel cell market over the next six years. The greatest opportunity in the market lies in terms of development and commercialization of fuel cell commercial vehicles. The increasing need for reduced emissions and better fuel economy has resulted in development of fuel cell enables commercial vehicles that utilize hydrogen fuel. This results in substantially lower emissions and improved fuel efficiency. Hyundai and Daimler are prominent players in the Fuel cell electric vehicles (FCEV) market; both are planning to begin commercializing their FCEV offerings by 2015.
Key products covered in the report include Proton Exchange Membrane Fuel Cell (PEMFC), Direct Methanol Fuel Cell (DMFC), Solid Oxide Fuel Cell (SOFC), Molten Carbonate Fuel Cell (MCFC), Alkaline Fuel Cell (AFC) and Phosphoric Acid Fuel Cell (PAFC). Other fuel cells such as Regenerative Fuel Cells (RFC), Zinc Air Fuel Cells (ZAFC) and Direct Carbon Fuel Cells (DCFC) have also been included in the study. PEMFC was the most dominant form of fuel cell and accounted for over 40% of global installed capacity. In terms of units shipped, PEMFC had a far higher share of close to 88% in 2013. The high share is primarily due to the wide applications such as in forklifts, automobiles, telecommunications, data centers, primary systems, and backup power systems. DMFC was the second largest sold fuel cell type and sold over 3,000 units in 2013. These units produce small amount of power but over a longer duration making them ideally suited for use in mobile phones, cameras and laptops. MCFC are used in large stationary power plants and hence have high installed capacity making them the second largest fuel cell category in terms of installed capacity. These are also expected to witness fastest growth in terms of unit shipment at an estimated CAGR of 56.6% from 2014 to 2020.
Fuel cell market volume share, by application, 2013
Portable fuel cells applications include personal electronics, APU, portable products and consumer products such as laptops and mobile phones. UPS, residential power and CHP are applications of stationary fuel cells. Transportation applications comprise fuel cell electric vehicles and auxiliary power units. Portable fuel cells dominated the market in terms of unit shipments accounting for over 70% of global unit sales in 2013. The smaller size results in portable cells having lower installed capacity as compared to stationary fuel cells which dominate the market in terms of installed capacity. The global installed capacity for stationary fuel cells exceeded 93 MW in 2013 and is expected to grow at a CAGR of 30.9% from 2014 to 2020. The use of fuel cells in transportation is still not very popular, but with the continuous research and development by different governments and companies, the fuel cell vehicle market is likely to grow over the forecast period.
North America was the largest market for fuel cells in term of installed capacity and unit shipment owing to regulatory scenario in the region and advancements in technology. The region accounted for over 40% of global fuel cell installed capacity in 2013 and is expected to maintain leadership over the next six years owing to the commercialization and adoption of fuel cell commercial vehicles. Asia pacific was the second largest market in 2013 accounting for 40% of installed capacity in 2013. Japan is the major market in the Asia-Pacific region that deals in fuel cells followed by South Korea. Due to large demand of CHP systems in Japan and other countries, the market of fuel cells is growing in Asia Pacific. In the coming years, markets in other countries such as China and India are also likely to increase as technological capabilities and government support in these countries is expected to increase. Europe is expected to witness fastest growth in terms of fuel cell installed capacity at an estimated CAGR of 33.1% from 2014 to 2020 primarily due to growing hydrogen fuel infrastructure in Germany, Norway, Denmark and Sweden.
The fuel cell market is highly consolidated with the top five companies accounting for over 80% of market share in 2013. Fuel Cell Energy dominated the market with a share of over 30% in 2013 and is expected to continue dominance by building and maintaining the plant at Bridgeport under contract to Dominion Resources Inc which is expected to be one of the largest fuel cell plants in North America. The other key companies in the market include Ballard, Clearedge, Toshiba and Panasonic.