How fuel cells are transforming energy markets

America’s clean energy future is now.  Fuel cells are no longer an “if” technology, but a “when”, and that “when” is today.

The technology began to gain traction over a decade ago when fuel cells showed that they fit well in a range of early applications, competing head to head with incumbent technologies.  Fuel cells have demonstrated their versatility as a reliable and clean power generation source in a number of sectors, including forklifts, data centers, and telecom towers, as well as growing popularity as an onsite, low-emission power source for retail stores and corporate facilities.  Fuel cell power generation is becoming more widespread, with more than a hundred thousand fuel cell systems operating worldwide.

Why are fuel cell sales and leases increasing in end-user markets?  The technology is versatile and reliable, capable of producing power for anything that needs it, whether it is a motive, stationary, off-grid, or portable application.  Fuel cells are a low-to-zero emission technology, producing energy electrochemically without combustion, and typically exempted from state air permitting requirements.  With few moving parts, fuel cells are very quiet, and, compared to some other technologies, the installation footprint is small.  These attributes allow the technology to be sited indoors or out, in places such as rooftops, basements, parking garages, building grounds, or near public spaces.

In addition, fuel cells are scalable, ranging from small portables to multi-megawatt (MW) utility-scale units, generating power at around 50 percent electrical efficiency.  Some fuel cell systems capture by-product heat which can increase combined electrical and thermal efficiency to 90 percent or greater.

Fuel cells utilize hydrogen, which can be extracted from virtually any hydrogen-containing source, including conventional (fossil fuels) and renewable resources (biogas, biomass, solar and wind).  Given these diverse sources of hydrogen, a synergy exists between fuel cells and both the renewable and fossil fuel industries.  As the fuel cell and hydrogen industries continue to grow, market expansion opportunities will also expand for these sectors.

Natural gas 

A growing number of fuel cells provide onsite power, and often by-product heat, to corporate facilities and campuses, data centers, retail stores, production facilities, county buildings, schools, and hospitals.  Conservatively, more than 200 MW of large stationary fuel cell power capacity is installed in U.S., primarily in California, New York and Connecticut, where state policy and emission goals promote the use of fuel cell energy.  Fuel cell power plants deliver high-quality power on a cost-competitive basis with the electric grid in some states and have been shown to deliver reliable power during storms and other events that compromise grid integrity.  Most of these fuel cell systems are powered by natural gas.

Several utilities operate multi-MW fuel cell systems, ensuring resilient power generation for the electric grid.  The largest utility installation, located in South Korea, is a 59-MW natural gas fuel cell power plant that provides continuous base-load electricity to the electric grid and high quality heat for a district heating system.  In the U.S., Delmarva Power (Delaware) operates 30 MW of natural gas-powered fuel cells to deliver continuous and reliable grid power, enough for about 22,000 homes.  Virginia-based energy company Dominion also has a 14.9-MW natural gas fuel cell facility in downtown Bridgeport, Connecticut, that produces power for the Connecticut Light & Power grid.  Other multi-MW natural gas fuel cell facilities are in the works for Connecticut-based United Illuminating and UIL Holdings Corp.  Some energy companies around the world also have marketing or distribution agreements with fuel cell manufacturers to promote natural gas-powered fuel cell systems among their customer base.

In addition, small (≤1 kilowatt) natural gas fuel cell systems are commercially available in Japan, where more than 100,000 residential fuel cell systems have been sold to power homes and apartment buildings.  This number should steadily grow to meet the Japanese government’s goal of using fuel cells to power 10 percent of Japan’s homes (about 5.3 million) by 2030.  Residential fuel cells also show promise in in Europe, where 1,000 residential natural gas fuel cell systems are in trials in 12 European Union member states.

Fuel cells are also included in several upcoming Connecticut microgrids designed to deliver resilient and reliable power to emergency shelters and first responders during power outages and other emergencies.

Biogas/Biomass 

Fuel cells can also take advantage of hydrogen-rich biogas.  The U.S. Department of Energy (DOE) estimates that U.S. biogas resources have the capacity to produce about 5 GW of power at 50 percent electrical efficiency.[i]  DOE also reports that the majority of biogas resources are located near large urban centers, ideally located near the major demand centers for hydrogen generation for fuel cell electric vehicles (FCEVs) and power generation from stationary fuel cells.[ii]

One biogas source is the methane by-product of wastewater treatment (anaerobic digester gas, or ADG), a greenhouse gas that is typically flared to the atmosphere, which can be turned from a liability into a resource to produce power onsite (called “waste-to-energy”).  Today almost a dozen municipal wastewater treatment plants in California and New York use ADG and fuel cells to generate power.  Microsoft has initiated a trial project in Wyoming, using a 300-kW ADG-powered fuel cell to power a small, off-grid data plant adjacent to the wastewater treatment plant and creating a 100 percent renewable installation.  Microsoft is pioneering the co-location of smaller data facilities and fuel cells near stranded biogas as an alternative to investing in the electrical infrastructure required by larger data centers.[iii]

In addition, biogas could play a role in the large-scale production of renewable hydrogen for FCEVs and fuel cell-powered material handling equipment.  DOE reports that 500,000 metric tons per year of methane is available from U.S. wastewater treatment plants, which could provide enough hydrogen to refuel 600,000 FCEVs daily.[iv]  U.S. landfills also produce 12.4 million metric tons of methane annually, enough hydrogen to refuel 13 million FCEVs a day.[v]  These sources could help to meet state requirements, like California’s mandate that 33 percent of hydrogen gas sold at fueling stations be derived from renewable sources.

A recent demonstration has shown that renewable hydrogen can be produced in onsite in a tri-generation application, using a biogas-powered fuel cell to generate not only power and heat, but also a stream of hydrogen gas.  Orange County, California’s wastewater treatment plant successfully demonstrated a fuel cell tri-generation system in a two-year pilot project, producing power and heat, and routing renewably-generated gas at a publicly-accessible hydrogen fueling station located at the facility.

Another fuel cell tri-generation system operates today in Vancouver, Canada, using landfill gas (LFG).  In addition to producing power, a nearby hydroponic greenhouse uses the fuel cell’s waste heat, while renewable hydrogen is exported for vehicle fueling or industrial applications.  BMW also is examining the use of LFG-to-hydrogen gas at its South Carolina vehicle manufacturing facility as a low-cost source of hydrogen for the plant’s fleet of 275 fuel cell-powered material handling vehicles.

Facilities with biomass waste can also benefit from fuel cell power generation.  Gills Onions (California), America’s largest onion processor, converts 75 percent of its onion processing waste into low-emission, carbon-neutral power via a 600-kilowatt (kW) fuel cell.  The ADG-powered system provides baseload power to the facility and uses byproduct heat to support the processing of onion waste in the anaerobic digester.  The company says it saves about $700,000 annually in electricity costs and eliminates $400,000 in annual costs associated with hauling onion waste to farm fields.  The Blue Lake Rancheria Tribe (California) also takes advantage of local biomass, converting sawdust from a timber operation into hydrogen-rich synthesis gas in an integrated biomass-to-fuel cell power system.

Additionally, an option offered to some fuel cell customers lacking biogas resources is “directed biogas,” where the ongoing use of natural gas in a fuel cell system is offset by injections elsewhere of renewable biogas into a natural gas pipeline.

Wind and Solar 

Power-to-gas (P2G) is gaining traction as a method of storing excess power generated by wind or solar technologies.  Hydrogen is generated by passing an electric current (in this case, the excess renewable power) through water to split it into its components, oxygen and hydrogen gas.  The hydrogen can be stored underground for later use, offering the possibility of large-scale storage of excess renewable energy, or injected into a natural gas pipeline where it can transported downstream.  The renewable hydrogen can also be stored in tanks and transported for later use in fuel cells or for vehicle fueling, or can be stored and utilized onsite.

Germany is aggressively pursuing P2G as part of its Energiewende (energy transition) strategy, where a dozen P2G technology deployments are now underway.  In the U.S., Southern California Gas Company recently announced the nation’s first P2G demonstration to convert electricity from wind and solar resources to hydrogen and methane, testing the use of existing U.S. natural gas pipelines to store surplus power.

With continued growth in transportation fuel cell applications worldwide, and growing desire to produce 100 percent renewable hydrogen for vehicles, fueling applications could present a market opportunity for the solar and wind industries.

In California, three of nine hydrogen fueling stations use onsite solar electrolysis to generate hydrogen, with more on the way, and in the Northeast fueling stations generate hydrogen from onsite solar power (Connecticut) and wind power (New York).  The National Renewable Energy Laboratory (Colorado) generates hydrogen for transport vehicles using both wind and solar resources, and a solar-hydrogen station is planned at a federal facility in Hawaii.  Several stations also provide onsite solar-generated hydrogen in Japan and Europe.  This market will grow in coming years as auto manufacturers bring their fuel cell electric vehicles to market.

Material handling presents another potential application for renewably-generated hydrogen fueling.   Dozens of hydrogen stations exist today at U.S. warehouses, used to fuel the nation’s growing fleet of more than 7,500 fuel cell-powered forklifts.

Methanol 

Some fuel cells can be powered by methanol, an alcohol fuel that is reformed directly within the system.  Methanol has great potential for fuel cell use because it has more hydrogen atoms in each gallon than any other liquid that is stable in normal conditions.[vi]  Methanol is easy to transport and store, and is readily available as one of the largest chemical commodities in the world, with a global demand for 50 million metric tons every year.[vii]

Companies with methanol fuel cell products are finding markets in material handling and off-grid applications, such as power for telecommunications towers, monitoring equipment and sensors, hand-held electronics, and electronics in recreational vehicles and boats.

Methanol plays a growing role in developing markets for back-up and remote power fuel cells, especially in Africa, India, the Caribbean, and Southeast Asia.  Reliable power for utility grids, and often more importantly for cellular towers, is vital to economic growth, health, and public safety, and methanol-powered fuel cells are able to meet this need by using a common commodity that is readily available in these regions.  Hundreds of methanol-based fuel cell backup power systems now operate in telecom networks in the Philippines, the Caribbean, and in Latin America, where electric grids can suffer from extreme weather-related power disruptions.  In India, the government has mandated the use of clean energy at telecom sites, and fuel cells are seen as an attractive option to replace the polluting diesel generators that currently power many cellular towers.

A Growing Industry with Great Potential 

Well-known corporations have recognized the benefits of fuel cells and are taking advantage of this proven technology, with 10 percent of Fortune 500 businesses, and a quarter of the top 100 businesses on the Fortune list, now employing fuel cells.  The customer base for fuel cells is expanding as more companies adopt fuel cells.  Existing customers are placing repeat orders.  The industry is growing, with sales exceeding $1 billion mark in 2013.

As the fuel cell industry continues to grow, potential new markets and partnership opportunities will arise for allied energy industries that share the industry’s vision of a clean energy future.

The future is now.