Will fuel cells finally come good in 2018?

 By Mike Scott

Fuel cells have been the next big thing for more than a century, but in all that time they have resolutely failed to trouble the mainstream. Tesla founder and CEO Elon Musk summed up the views of many when he called fuel cells “incredibly dumb”…

Yet, according to the Fuel Cell Industry Review, the sector posted a third year of steady growth in 2017, increasing 30 percent after rises of 73 percent and 61 percent respectively in 2016 and 2015. This means that sales have more than tripled in the last three years. Could the technology finally have turned a corner?
There is a group of fuel cell companies that have been publicly-listed for around two decades, but between them, Ballard Power Systems of Canada, Plug Power, Hydrogenics and FuelCell Energy have yet to return a profit.
Greentech Media reports that shipments could increase by more than half in 2018 to breach the 1,000 MW mark for the first time. What is important about these figures, Greentech suggests, is that “these volumes and growth rates are consistent with those seen in solar and wind in earlier decades; this year’s 670 MW of fuel cell shipments compares favorably with 454 MW for solar PV in 2002 and 500 MW for wind in 1994,” the publication suggests.


A matter of popularity

It is a bit of a mystery why fuel cells are not more popular than they are, given their many advantages. In vehicles, they offer longer range, better energy density and quicker refuelling than batteries, and they can be used in buses, trains, trams, ships and aircraft as well as cars. They can also be used as stationary systems and can produce both heat and electricity.
They can use hydrogen produced from natural gas or through the use of water and renewable electricity, making them a true transition technology that can help the energy system to decarbonize. Hydrogen is also a form of energy storage whereby wind or solar farms create the gas when they are producing more power than the grid needs. Hydrogen has the advantage over batteries that it can be stored for long periods of time, allowing the creation of seasonal energy storage to cover shortfalls in solar, wind or hydro production.
Yet still fuel cell sales have failed to take off like other clean technologies. While every automotive manufacturer has committed to produce more electric vehicles, only Toyota, Hyundai and Honda seem really committed to fuel cells, although German manufacturers BMW, Daimler and Audi are also working on hydrogen cars.

The vehicles issues

Part of the problem is that hydrogen vehicles need infrastructure – unlike electric vehicles, they cannot be just plugged in at home or work. But there is a chicken and egg dilemma, with potential suppliers reluctant to build filling stations if there are no cars, and manufacturers holding back on producing cars because of a shortage of refueling facilities. That is starting to change – Shell has announced its first hydrogen refueling stations in the U.K., while a German joint venture is looking to open 400 stations by 2023. Japan aims to have 320 stations by 2025 and in the U.S., the Alternative Fuels Data Center says there were due to be 50 stations by the end of last year. By 2032, there will be almost 5,000 hydrogen filling stations worldwide, reported Green Car Reports last year.

2015 fuel cell electric vehicle Toyota Mirai (Turbo-myu-z, Wikimedia)

The other issue is that the cars are expensive, with Toyota’s Mirai, the best-selling fuel cell model retailing in the U.K. at around £60,000 and the company allegedly losing money on every vehicle it sells. In the U.S., the car sells for around $57,500, of which the fuel cell system cost $50,000 in 2015. The company wants the next iteration of the system to cost $13,000-$17,000 by 2020.
Global Market Insights predicts the market for fuel cell electric vehicles will reach $9 billion by 2024, driven by new technologies and lower costs, leading to 300,000 FCEVs being on the road. As a result, there is every chance that the learning effects that so helped drive down costs in solar and wind can be harnessed for fuel cells, leading to rapid cost reductions and increased sales.
However, the Fuel Cell Industry Review says that “while supportive policies have enticed customers to the table there is not yet a sizeable market that fuel cells supply on truly commercial terms, nor is one likely to emerge in 2018″. It seems that fuel cells’ time is coming, but it is not here yet.

READ MORE: Is hydrogen the future of the car? by Mike Scott

about the author
Mike Scott
Journalist. Environment, Sustainability, Climate Change, Investing, Energy, Supply Chain, Transport, Circular Economy, Stranded Assets, ESG, Smart Cities, Wealth Management, Family Offices, Asset Management, EU.