Fuel cells face static future

For decades the car industry has touted hydrogen fuel cells as a potential green alternative to the internal combustion engine, but while manufacturers continue to struggle to commercialise the technology there is growing evidence that less glamorous applications could soon provide fuel cells with a route into the mainstream.

That is certainly the view of Jan van Dokkum, president of UTC Power, the fuel cell division of engineering conglomerate United Technologies, who believes that after countless false dawns the fuel cell market is fast approaching commercial viability -and it is as a source of onsite energy for buildings rather than as the engine for snazzy green cars that fuel cells will enjoy their long-anticipated breakthrough.

Speaking following his keynote address at the recent Grove Fuel Cell Symposium, van Dokkum insists that fuel cells can deliver the reliable, highly efficient and clean energy that environmentally conscious businesses are looking for.

Up to now those businesses that have installed fuel cells to provide electricity for buildings have tended to use them to replace back up generators while continuing to get power off the grid, but according to van Dokkum it is a model that needs to be reversed. "When you are powering mission critical sites, such as datacentres, there is an understanding that you need to have access to power both off the grid and onsite," explains van Dokkum. "But if you use a fuel cell to generate power onsite you can get 90 per cent efficiency off your fuel, compared to less than 40 per cent efficiency for the electricity off the grid. It makes sense to run the onsite generator continuously and just use the grid as back up and to help cover peak loads."

The source of this huge difference in fuel efficiency lies in the waste heat generated by hydrogen fuel cells. Whereas around 60 per cent of the energy generated for the grid is lost, primarily as waste heat when fossil fuels are burned, the heat generated by onsite fuel cells can be easily captured and used to heat the building, provide hot water, and, through absorption chiller technologies, even drive air conditioning and cooling systems.

"We target about 38 to 40 per cent efficiency from our fuel cells in terms of converting fuel into electricity, but then when you take a combined heat and power approach and capture the heat to drive other processes you can get 80-90 per cent efficiency," explains van Dokkum.

It is this efficiency that provides fuel cells with their green credentials. Most hydrogen fuel cells, including those offered by UTC Power, are fuelled by hydrogen that has been converted from natural gas. While this conversion process, known as reformation, ensures that fuel cells can be cost effectively refuelled simply by connecting them to the gas supply it also results in carbon emissions.

However, van Dokkum argues that the ability to wring 90 per cent efficiency out of the fuel means that despite the associated emissions fuel cells can still deliver a reduction in the energy's carbon footprint at least in line with the 80 per cent cut in emissions called for by The Stern Report.

But if it is climate change concerns that have raised the profile of fuel cells, van Dokkum is adamant that a minimal carbon footprint is not the only advantage that onsite fuel cells have over the grid. "For buildings such as hotels the interest in fuel cells is primarily due to the environment, but for banks and datacentres they see fuel cells' reliability as a means of delivering power security," he claims.

The technology also has several advantages over other alternative forms of onsite energy, van Dokkum argues, providing greater reliability than solar and wind power and easier installation in existing sites than geothermal generation technologies. "It is very much a plug and play technology," he adds. "We are installing fuel cells on roofs, in basements and in car parks and once they are in there is virtually no maintenance."

But given these myriad benefits why are fuel cell-powered onsite generators still such a novelty? Why doesn’t every building requiring high availability power, every datacentre, every hotel, every hospital, have a hydrogen fuel cell in the basement?

According to van Dokkum the market in the US is still worth no more than "a couple of £100m" with installations confined to a few forward-thinking universities, government departments and corporate campuses.

The cause of such low adoption levels, argues van Dokkum, has little to do with the viability of the technology and everything to do with economics. "The big difference between [power from onsite] fuel cells and traditional systems is cost," he complains. "To install a 200KW fuel cell at the moment costs $1m and if you want to build a commercial business that is not going to cut it – it can't be a volume business at that price."

At such a high price point UTC Power's current fuel cell technologies cost $4,000 per KW, making them far more expensive than not just the grid but also other onsite power generation technologies. "A reciprocating engine costs $1,800 to $2,000 per KW installed, while a micro turbine costs $2,000 to $2,400… we are not even close to the alternatives in terms of price," admits van Dokkum.

But van Dokkum is convinced that a combination of soaring energy prices and innovative new fuel cell manufacturing techniques could soon ensure that fuel cells become cost competitive.

"Our main focus now is on getting manufacturing costs down and we aim to go to market in the second half of 2009 with a 400KW unit with a CHP mode and a life expectancy of 10 rather than 5 years that will deliver power at $2,500 per KW," he says. "That will mean that a building can get quiet, reliable power running at 90 per cent efficiency that can compete with the grid on price. It will become a technology that delivers a financial pay back even before you think about the environmental benefits."

Van Dokkum admits that to achieve this cost competitiveness UTC will initially have to sell the new cells at below cost, but is confident that as soon as demand reaches higher volume levels manufacturing costs will plummet making the technology commercially viable. He recognises that such economies of scale would be easier to achieve with greater support from government in the form of tax breaks for those companies that install fuel cells, but reckons the technology will ultimately make the breakthrough regardless.

It is a prediction that will sound familiar to many within the clean tech sector, but given the depth of UTC's pockets - the company also owns air conditioning giant Carrier and lift manufacturer Otis - the increasing price of conventional energy, the apparent ease of fuel cell installation, and growing concerns over carbon emissions it has a ring of plausibility.

"Using fuel cells as onsite generators will prove their breakthrough application," insists van Dokkum. "I believe we will see them used in cars, but when you consider that you’d have to build a whole network of hydrogen refuelling stations it will take years before they are widely available outside of major cities. But for commercial properties we are already seeing how fuel cells can deliver clean, reliable and highly efficient energy."