Outlook on Fuel Cell Market and Technologies

Outlook on Fuel Cell Market and Technologies

April 7, 2023

By Dr. Ib I. Olsen, Ph.D.olsenii@ibd-associates

http://www.linkedin.com/in/ibolsen/

56 Pine Street – Suite 9BNew York, New York 10005

(p) 1.212.732.2497 (f) 1.646.304.6663www.ibd-associates.com

About IBD CleanTech Consulting• IBD CleanTech Consulting was created in 2009 as the CleanTech branch of IBD Associates.• IBD Associates was started in 2001 by a former McKinsey consultant and a CleanTech expert. We provide

business strategy and market research to a wide range of companies including several on the Fortune 500 list. We offer customized services across a number of disciplines. The core group brings with them over 50 years of experience from business strategy, business development, technology, and marketing areas. Furthermore, we draw on a wide variety of specialists in areas from accounting and law to market analysis and marketing.

• We have worked in the energy storage space since 1988, developing new batteries and fuel cells. We bring to the table 20 years of start-up experience in cutting edge battery development, and broad knowledge in CleanTech areas such as smart grid, photovoltaic, wind energy, fuel cell and bio fuel. Over the years, we have created alliances with university groups and state and federal organizations to facilitate technology transfer and commercialization, and we know the steps from basic research to final product from both a technical and a business aspect.

• Our customer base includes battery and fuel cell companies, product development companies, manufactures, system integrators, utilities, investment banks, and other financial institutions.

• In 2002 we started the energy storage company, Gaia Power Technologies, to sell products into the utility demand reduction and alternative energy market. The company had significant product sale and it installed in excess of 3 MWh of energy storage on a commercial basis. The products were installed mainly in US but were sold abroad as well. The company won several demonstration projects from New York State Energy Research and Development Authority, California Energy Commission and the US Department of Energy. The company was sold to the lead investor in 2009.

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Scope of Presentation

Fuel Cell Market and Technology 1) General • Requested is an update of the technical state and the state of commercialization of fuel cells in a two hour

on-site or web-based consultation by a renowned FC expert. • The request is triggered by press releases about FC R&D co-operations of major automotive OEMs and the

announcements that the market launch of FC-cars is planned until 2015. 2) FC Market/Application Areas: • What is the expected market value of the major fuel cell types (PEM, DMFC, SOFC, etc.) until 2020. (Graph

market value per year 2012-2020)? • How heavily depends the market introduction of FCs on subsidies? • In what application areas is the business case for FCs already positive (without subsidies)? • FC-Technology/Materials: • What are the major technical hurdles that need to be overcome for widespread market applications? • What are the major challenges in FC to be addressed to chemical companies (e.g. membranes)? • What kind of materials (e.g. chemicals) go into fuel cells; Breakdown market for FCs into market share for

components and materials (e.g. catalysts, membranes)? • Which companies are working on the materials & components, H2-supply, fuel cell development• FC Subsidies Governmental Interest: • How has the interest of governmental funding organizations in FC technology been developed over the past

years? • General Statement on the Future of FCs

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FUEL CELL TECHNOLOGIES AND OPERATIONAL PARAMETERS

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Fuel cell types

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Fuel cell types in more details

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FUEL CELL MARKET / APPLICATION AREA

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Fuel cell market covers a range of technologies and markets

• Fuel cells cannot be considered a single technology, but a collection of technologies that operate on the same principle.

• These technologies, which are generally classified according to the type of electrolyte used, have their own characteristics and offer a different combination of benefits in each case.

– Each technology are at various stages of maturity and are used in a limited number of markets

• The overall market has been divided into three verticals, which are also characterized by increasing power rating:

– Portable– Transportation– Stationary

• Due to the very wide power range there is a great difference between unit sales and MW sales per technology

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Expected market value of the major fuel cell types 2013 - 2020

• PEMFC fuel cells are leading in unit sales and in MW, but they are characterized by their small size

– Based on 2011 numbers the average PEMFC was less than 2.5kW and projected to be around 1kW in 2012

• MCFC has almost the same MW sales as PEMFC, but the unit sales is less than 100 and an average size of 1-2MW

• SOFC has entered the commercial market in the large stationary market providing a competition to the smaller MCFC units, but it is moving down in size and will compete with PEMFC and especially high temperature PEMFC due to its higher efficiency and its wider fuel range

• Incentives have driven the initial sales, and regulations such as environmental standards, feed-in tariffs, taxes on electricity will continue to play a role in framing the commercial market

• But as the price comes down, more and more commercial applications are identified and will drive the growth in sales.

• Portable and stationary markets plus specific verticals within the transportation sector will drive the initial sales

– Fuel cell powered passenger vehicles are the ‘holy grail’ for fuel cell manufacturer, but it is also one of the most competitive markets in the world. As can be learned from battery companies and electric vehicles, it can be a challenge to make a profit in this market

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Annual Unit Shipments 2008–2012

fct_review_2012.pdf

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Annual MW Shipments 2008–2012

fct_review_2012.pdf

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Unit and MW sales by fuel cell type 2008 - 2012

the_fuel_cell_industry_review_2012.pdf

Due to the very wide power range there is a great difference between unit sales and MW sales per technology

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Worldwide stationary fuel cell unit shipment forecast to 2022

2013

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Sales and unit price forecast 2013 – 2022Stationary fuel cells

• According to a recent report from Navigant Research, annual revenue from stationary fuel cells alone will grow from $1.7 billion in 2013 to $9 billion in 2022

• This is based on the number of stationary fuel cells shipped annually increasing from 21,000 in 2012 to more than 350,000 by 2022

• Based on those data the number of shipped fuel cells will grow with 35% to 40% per year but the average price will decrease with 12% per year

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $-

$1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

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$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000

Annual Sales - Stationary Average Unit Price

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http://www.navigantresearch.com/newsroom/more-than-350000-stationary-fuel-cells-will-be-shipped-annually-by-2022http://www.businesswire.com/news/home/20130506005278/en/Stationary-Fuel-Cell-Market-Reach-9-Billion

http://www.navigantresearch.com/

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Automotive fuel cell market 2015 - 2020

Pike Research in 2011 forecasted a rapid ramp-up starting mid-decade. Based on the model pipeline from several automotive manufacturer FCEV sales will total about 58,000 vehicles in 2015, indicating that about 950,000 FCEVs will be sold between 2016 and 2020, according to Pike Research. Asia Pacific will account for more than half of the global FCEV sales in 2020, though Western Europe will be experiencing the fastest growth rate by then.The US target for automotive fuel cells is 80kW net, which based on the unit sales of 380,000 would correspond to fuel cell sales in 2020 between US$1 and 3 billion (using either US target of $30/kW or the Japanese target of $100/kW)

http://gm-volt.com/2011/10/11/pike-forecasts-1-2-million-fuel-cell-vehicles-worldwide-by-2020/

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US Department of Energy Role

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Role of US incentives

• The major US incentive for fuel cells is and have been the Investment Tax Credit (ITC) which is scheduled to expire in 2017– It can be expected that significant push will come to play to extend the ITC

• California also has a Self-Generation Incentive Program (SGIP), which was scheduled to expire in 2012 but was extended to 2016

• The following slides represent projections by Oak Ridge National Laboratory in US on the effect of the ITC and SGIP on unit sales of fuel cells for the micro-CHP, backup power, and material handling markets, respectively. – The micro-CHP data did not see the effect of the SGIP in 2012 as it was extended

another four years.• The report otherwise projects a slight drop in unit sales with the expiration

of the ITC, but the sales curve picks up again the following year for all three markets as the technologies become commercial viable without incentives

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US PEMFC based micro-CHP sales projections

Status and Outlook for the U.S. Non-Automotive Fuel Cell Industry: Impacts of Government Policies and Assessment of Future Opportunities - ORNL/TM-2011/101

Projected effect of Federal investment tax credit (ITC) and California's Self-Generation Incentive Program. With recent extension the CA SGIP is extended to 2016

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US PEMFC based backup power sales projections


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US PEMFC based material handling units sales projections


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Commercial viable markets today

• There are a number of viable markets today:– The portable market

• Value proposition: Longer run time per weight and volume than batteries– Stationary backup power especially for telecom

• Value proposition: Longer run time, cleaner power, and more uptime than a generator

– Small auxiliary power units (APU’s) especially for marine and recreational vehicles• Value proposition: Longer run time than batteries, low noise and no emissions

compared to generators – Material handling equipment (fork lift)

• Value proposition: Longer run time / increased productivity than with batteries, low noise and no emissions compared to propane or gasoline powered units

• As can be seen, in all cases the value proposition extends beyond simple $/kWh or km/liter• As the fuel cell companies and their suppliers move down the learning curve we can expect

the cost to decrease and the reliability to increase which will open up other market verticals

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FUEL CELL TECHNOLOGY / MATERIALS

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Fuel cell power plant: Major system components

The fuel cell system is composed of four principal components:• Fuel processing

• Hydrogen generation from hydrocarbons, removal of poisonous impurities, moisture control

• Fuel cell stack• Conversion of oxygen and fuel into water and DC current

• Electric power conversion• Conversion of DC current produced to a voltage (AC or DC) for use in the application

• Balance of plant• Fuel, air, and thermal plus overall control

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Technical hurdles and major challenges

• The major challenge for fuel cells is cost per kWh produced.• The cost per kWh can be broken into

– Capital cost of fuel cell (amortized over expected life time)– Efficiency of converting fuel into kWh– Self consumption of fuel cell during standby and during operation– Operating life of sub components and how frequent do they need to be

changed out• The technical hurdles touches each of these line items.• Government sponsored R&D programs in EU, US, Japan, and Korea addresses all

the items and they have set performance goals for each• Capital cost is also tied to moving towards mass production and streamline

manufacturing processes.– Incentive programs such as the US Federal ITC program and California SGIP

helps increase production volume

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Automotive PEMFC fuel cell high volume cost status from various countries

2007 and 2008 High Volume Values 2015 High Volume Goals

IPHE Fuel Cell Cost Comparison Report.pdf

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US DOE technical target for automotive fuel cell

fuel_cells.pdf

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US DOE technical target for residential micro-CHP fuel cell

fuel_cells.pdf

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Breakdown of cost by PEMFC fuel cell component – US 2008 values

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PEMFC membrane electrode assembly

• As PEMFC has the highest unit and MW sale it is an attractive area to investigate for a chemical company

• As the membrane electrode assembly represents around 50% of the cost of a PEM fuel cell and is the part that typically has the shortest lifespan, several chemical companies have focused on this part.

• The main focus has been on platinum reduction and replacement, on membrane life, and on seal integrity

M K. Debe Nature 486, 43-51 (2012) doi:10.1038/nature11115

Kinetic activities of the main Pt-based electrocatalyst systems.

Example of work on catalyst loading and morphology for PEMFCIt becomes a compromise between cost, activity and life

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Historical and projected price of PEMFC and DMFC residential units

Historical and Projected Selling Price of 1kW PEMFC CHP Units in Japan, 2005 2018‐

Historical and Projected Selling Price of DMFC Appliances in the EU, 2004 2018‐


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Forecasted component cost of PEMFC fuel cells for micro-CHP, backup power, and material handling unit – US market

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3M Membrane-Electrode-Assembly (MEA)

roll-to-roll MEA process with electrode lamination

Perfluorinated-Sulfonic Acid (PFSA) MembraneThickness < 20 micronDense, symmetricSolvent cast

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ACTIVE COMPANIESPartial List – If you know of other companies active in the space please feel free to contact me

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Fuel Cell Developers 1/2

Company Location Technology

Acumentrics SOFC Corporation Westwood, Massachusetts, United States

SOFC

AFC Energy Surrey, United Kingdom AFCAltergy Systems Folsom, California, United States PEMFCAutomotive Fuel Cell Cooperation Corp. Burnaby, BC, Canada PEMFCBallard Power Systems Burnaby, Canada PEMFCBIC Consumer Products Shelton, Connecticut, United States PEMFCBloom Energy Sunnyvale, California, United States SOFCCellkraft AB Stockholm, Sweden PEMFCCeramic Fuel Cells Ltd. Noble Park, Australia SOFCClearEdge Power Hillsboro, Oregon, United States PEMFC / PAFCDDI Energy Inc. Airdrie, Canada SOFCDelphi Automotive Systems, LLC Troy, Michigan, United States SOFCElcogen AS Tallinn, Estonia SOFC

EnerFuel West Palm Beach, Florida, United States

PEMFC

First Element Energy Lenexa, Kansas, United States PEMFCFuelCell Energy Danbury, Connecticut, United States MCFC

FutureE Fuel Cell Solutions GmbH Nuertingen, Baden-Wuerttemberg, Germany

PEMFC

Horizon Fuel Cell Technologies , Singapore PEMFCHydrogenics Mississauga, Canada PEMFC

http://www.fuelcells.org/top_200.cgim

Manufactures fuel cell stacks for use in stationary, portable, and motive applications.

http://www.fuelcells.org/top_200.cgim?id=88



















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Fuel Cell Developers 2/2


Manufactures fuel cell stacks for use in stationary, portable, and motive applications.

Company Location TechnologyInfinity Fuel Cell and Hydrogen, Inc. Windsor, Connecticut, United States PEMFCInfintium Fuel Cell Systems Carrollton, Texas, United States PEMFC

Intelligent Energy Loughborough, Leicestershire, United Kingdom

PEMFC

IRD Svendborg, Denmark DMFCM-FIELD Energy LTD. Taipei, Taiwan, Province of China PEMFCMES sa Stabio, Switzerland PEMFCNedstack PEM Fuel Cells 6802 ED Arnhem, Netherlands PEMFC

Nuvera Fuel Cells Billerica, Massachusetts, United States

PEMFC

Oorja Protonics Inc. Fremont, California, United States DMFCPalcan Energy Corporation Vancouver, BC, Canada PEMFCPlug Power Inc. Latham, New York, United States PEMFCPowerCell Sweden AB Göteborg, Sweden PEMFCReliOn Spokane, Washington, United States PEMFCSerEnergy A/S Hobro, Denmark PEMFCSFC Energy AG Brunnthal-Nord, Germany DMFCSOFCpower Spa Mezzolombardo - Trento, Italy SOFCTopsoe Fuel Cell A/S Lyngby, Denmark SOFCTropical S.A. Athens, Greece PEMFCVersa Power Systems Littleton, Colorado, United States SOFC




http://www.ird.dk/
















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Components & Testing

Company LocationBallard Material Products Lowell, Massachusetts, United StatesBASF Fuel Cell, Inc. Somerset, New Jersey, United StatesBing Energy International Tallahassee, Florida, United StatesBorit NV Geel, BelgiumCatacel Corp. Garrettsville, Ohio, United StatesDanish Power Systems Lyngby, DenmarkElectroChem, Inc. Woburn, Massachusetts, United StatesESL ElectroScience Laboratories King of Prussia, Pennsylvania, United States

FKK Corporation Kyoto, JapanFreudenberg Fuel Cell Component Technologies Weinheim, Germany

FuelCellsEtc College Station, Texas, United StatesFuelCon AG Barleben, GermanyGreenlight Innovation Burnaby, BC, CanadaIlika Technologies Southampton, United KingdomInnovaTek Richland, Washington, United StatesIRD Fuel Cells, LLC Albuquerque, New Mexico, United States

Johnson Matthey Fuel Cells Swindon, United KingdomMetro Mold & Design, LLC Rogers, Minnesota, United StatesNeodym Technologies Vancouver, British Columbia, CanadaNexTech Materials, Ltd. Lewis Center, Ohio, United StatesPrecision Combustion, Inc. North Haven, Connecticut, United StatesPRECO, Inc Somerset, Wisconsin, United StatesScribner Associates, Inc. Southern Pines, North Carolina, United States

Senior Flexonics Bartlett, Illinois, United StatesVairex Air Systems Boulder, Colorado, United States

Makes the .nuts and bolts. of a fuel cell, including membranes, catalysts, and carbon fibers.



























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Hydrogen Supply

Company LocationAvālence, LLC Milford, Connecticut, United States

Cella Energy Kennedy Space Center, Florida, United States

Element 1 Corporation Bend, Oregon, United States

H2scan Corporation Valencia, California, United States

Hy9 Corporation Hopkinton, Massachusetts, United States

ITM Power Sheffield, United Kingdom

Linde North America, Inc. Murray Hill, New Jersey, United States

PDC Machines, Inc. Warminster, Pennsylvania, United States

Powertech Surrey, BC, Canada

Proton OnSite Wallingford, Connecticut, United States

Süd-Chemie Inc. Louisville, Kentucky, United States

Supplies the hydrogen source for fuel cell end-users. Also includes developers of hydrogen infrastructure and hydrogen storage.













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FUEL CELL SUBSIDIES GOVERNMENTAL INTEREST

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R&D grants, subsidies, and incentives

• US– US DOE continue to support R&D in fuel cells– Deployment is supported through Federal investment tax credits– California has a self generated incentive program paying $2.03/kW installed capacity for micro-CHP– California require gasoline providers to install hydrogen filling stations– New York regularly support deployment through NYSERDA, but it is on case-by-case– Connecticut Clean Energy Fund (CCEF) has provided grants to commercial, industrial and institutional

customers towards the capital cost of new fuel cells since December 2005

• EU– EU continues to support R&D in fuel cells– Individual countries support the installation of hydrogen filling stations for vehicles and they have

aggressive goals for fuel cell and/or electric vehicles – Germany has a co-generation incentive including fuel-cells and UK has a feed-in tariff for residential fuel

cells up to 2kW

• Japan– Incentives for residential micro-CHP– Aggressive goals for fuel cell and/or electric vehicles

• South Korea– Up to 90% subsidies for micro-CHP– South Korea has long-term, low-interest loans for the customers and manufacturers of commercialized

fuel cells, as well as a tax-deduction system for fuel cell power plants.http://www.fchea.org/index.php?id=25

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THE FUTURE OF FUEL CELL

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Conclusion

• Technology– PEMFC has the highest unit and MW sales today, but it is dominated by smaller units and

the trend may be for even smaller systems– SOFC is gaining foot hold in the stationary and APU market. Initial commercial products

are in the 100kW range, but new products are coming out with lower power

• Market drivers– Current market drivers are: extended operation life / higher fuel efficiency; less noise;

less / no harmful emissions

• Current commercial markets– Portable units; backup power; APU’s; material handling equipment

• Almost commercial markets– Micro-CHP; electric bikes / motor cycles

• The big unknown– Deployment and adoption of fuel cell vehicles– Is hydrogen the best carrier or should it be methanol, methane, DME, or another higher

density component

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APPENDIX – SUPPORT SLIDES

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Fuel cell types

• Low temperature fuel cells,– Alkaline fuel cell (AFC),– Phosphoric acid fuel cell (PAFC),– Proton exchange membrane fuel cell (PEM or PEMFC)– Direct methanol fuel cell (DMFC)

• High temperature fuel cells– Carbonate fuel cell, often called Molten Carbonate Fuel Cell (CFC or MCFC)– Solid oxide fuel cell, ceramic fuel cell (SOFC)

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Common commercial fuel cell types

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Proton Exchange Membrane Fuel Cell (PEMFC)

• Electrolyte: Solid polymer membraneCatalyst: Platinum is the most active catalyst for low-temperature fuel cellsOperating Temperature: Around 175-200⁰FElectrical Efficiency: 40-60 percent

• PEM fuel cells operate at relatively low temperatures, have high power density, and can vary output quickly to meet shifts in power demand. PEMs are well-suited to power applications where quick startup is required, such as automobiles or forklifts. Single PEM units range from several watts to several kilowatts, and can be scaled into larger systems – the largest to date is a 1 megawatt PEM stationary power plant. PEM systems are available today for a variety of applications, with sales focused in the telecommunications, data center and residential markets (primary or backup power), and to power forklifts and other material handling vehicles. PEM fuel cells are also used in buses and demonstration passenger vehicles – major auto manufacturers anticipate the start of commercial fuel cell vehicle sales around 2014-2016. PEMs are fueled with hydrogen gas, methanol, or reformed fuels.

• High-temperature PEM (HT-PEM) fuel cells are similar to PEM fuel cells, but operate at higher temperatures, between 250⁰F and 390⁰F. HT-PEMs are often integrated with fuel reformers, permitting operation using wider variety of input fuels. HT-PEMs can be used to power vehicles as range extenders for batteries, and small scale commercial buildings and homes.

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Direct Methanol Fuel Cell (DMFC)

• Electrolyte: Solid polymer membraneCatalyst: Platinum is the most commonOperating Temperature: Around 125-250⁰FElectrical Efficiency: Up to 40 percent

• DMFCs are similar to PEM fuel cells in that they both use a polymer membrane as the electrolyte. However, in DMFC systems the anode catalyst itself draws the hydrogen from liquid methanol, eliminating the need for a fuel reformer. The low operating temperature makes DMFCs attractive for miniature applications such as cell phones, laptops, and battery chargers for consumer electronics, to mid-size applications powering electronics on RVs, boats, or camping cabins.

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Alkaline Fuel Cell (AFC) and Phosphoric Acid Fuel Cell (PAFC)

• Alkaline Fuel Cell (AFC)• Electrolyte: Potassium hydroxide solution in water

Catalyst: Can use a variety of non-precious metal catalystsOperating Temperature: Around 225-475⁰FElectrical Efficiency: 60-70 percent

• NASA has used hydrogen-fueled AFCs on space missions since the 1960s to provide both electricity and drinking water. AFCs are poisoned easily by small quantities of CO2, and are thus deployed primarily in controlled aerospace and underwater environments.

• Phosphoric Acid Fuel Cell (PAFC)• Electrolyte: Liquid phosphoric acid ceramic in a lithium aluminum oxide matrix

Catalyst: Carbon-supported platinum catalystOperating Temperature: 350-400⁰FElectrical Efficiency: 36-42 percent

• PAFCs can operate using reformed hydrocarbon fuels or biogas. Anode and cathode reactions are similar to PEMs, but since operating temperatures are higher, PAFCs are more tolerant of fuel impurities. PAFCs are frequently used in a cogeneration mode, in which byproduct heat is captured for onsite heating, cooling, and hot water (also called combined heat and power, or CHP). PAFCs are commercially available today with systems operating around the world at high-energy demand sites such as hospitals, schools, office buildings, grocery stores, manufacturing or processing centers, and wastewater treatment plants

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Molten Carbonate Fuel Cell (MCFC)

• Electrolyte: Typically consists of alkali (Na & K) carbonates retained in a ceramic matrix of LiHO2

Catalyst: High MCFC operating temperature permits the use of lower-cost, non-platinum group catalystsOperating Temperature: Around 1,200 ⁰FElectrical Efficiency: 50-60 percent

• The high operating temperatures of MCFCs means that hydrocarbon fuels can be converted to hydrogen within the fuel cell itself (internal reforming). MCFCs are not prone to CO or CO2“poisoning” – they can even use carbon oxides as fuel – making them more attractive for fueling with gases made from coal. MCFCs are ideal for large stationary power and CHP applications, and are available as commercial products, with dozens of power plants deployed at food and beverage processing facilities, manufacturing plants, hospitals, prisons, hotels, colleges and universities, utilities, and wastewater treatment plants worldwide.

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Solid Oxide Fuel Cells (SOFC)

• Electrolyte: A solid ceramic, typically yttria-stabilized zirconia (YSZ)Catalyst: High SOFC operating temperature permits the use of lower-cost, non-platinum group catalystsOperating Temperature: About 1,800⁰FElectrical Efficiency: 50-60 percent

• High-temperature SOFCs are capable of internal reforming of “light” hydrocarbons such as natural gas, but heavier hydrocarbons (gasoline, jet fuel) can be used, though they require an external reformer. There are two configurations of SOFC fuel cell systems: one type uses an array of meter-long tubes, and another uses compressed discs. Tubular SOFC designs are closer to commercialization and are being produced by companies around the world. SOFCs are suitable for large stationary applications, and are being deployed across the country at data centers, office buildings and retail stores. SOFCs are also being demonstrated for use as vehicle auxiliary power units and tested for small stationary applications, such as homes and apartments in the U.S., Japan, and Germany.

Outlook on Fuel Cell Market and Technologies

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