Fuel cells create opportunities for safe, reliable, and sustainable energy production. There are four drivers behind the current increasing interest on fuel cells: declining supply of lithium-ion batteries; increasing worldwide government support; phasing out of battery-powered electric vehicles incentives; and upcoming high private investments.
179 years ago, fuel cell was conceived by Welsh scientist William Robert Grove. Fuel cell is a device that converts hydrogen and oxygen into water to produce energy. At the time, fuel cells could not produce enough energy to be deemed useful. Fast-forward to today: fuel cells could power cars, hospitals, schools, airports, homes, laptop, cellular phones, and beyond, in the most efficient and eco-friendly way. Unfortunately, despite these promising possible uses and the industry’s existence for over two centuries, fuel cells have not reached mainstream acceptance. Well, not yet.
Fuel cell’s main rival in replacing fossil-fuel petrol and diesel power for a more energy efficient and eco-friendly source of energy is the lithium-ion battery. Unlike the fuel cell, the lithium-ion battery has held sway for the last 25 years since its conception. In fact, the global lithium-ion battery market is valued around US$25 Billion compared to the much older fuel cell technology which is valued only around US$4 Billion. However, there is a chance that in due time, fuel cells will overtake lithium-ion batteries to be the dominant source of efficient and eco-friendly energy.
There are four drivers behind the current increasing interest on fuel cells: declining supply of lithium-ion batteries; increasing worldwide government support; phasing out of battery-powered electric vehicles incentives; and upcoming high private investments.
Economics has taught us about the basic problem of scarcity: while resources are limited, we are a society with unlimited wants. The same basic economic problem haunts the lithium-ion battery industry. Lithium-ion batteries require a host of metals: Cobalt, Lithium, and Nickel. Various research studies have warned us that Cobalt and Lithium supplies will be at a critical level by 2050. As the world’s power needs grow and the supply of lithium-ion battery materials declines, the race is on to find the next most suitable alternative energy source.
Fuel cell, like lithium-ion battery, is considered as an energy efficient and eco-friendly source of energy. Fuel cells are a reliable source of energy because it can produce electricity continuously as long as fuel and oxygen are supplied, unlike lithium-ion batteries which can run out of energy if the reactions present in their cells stop. Also, compared to lithium-ion batteries, fuel cells are safer to use as they are less prone to fuel leakages, potential explosions, or catching fire.
Several countries around the world are putting their money and effort in developing the fuel cell industry fast. Japan, Korea, USA, Germany, and China are examples of countries that have invested into the development of cost-effective fuel cell technologies, and have given subsidies and incentives for the use of fuel cell vehicles.
This table shows how the biggest economies in the world are supporting the fuel cell industry:
China’s commitment to the fuel cell industry is the most promising, because China’s 1.4 billion population can readily create the market and demand for fuel cells, and then drive these fuel cell technologies down the cost curve. Also, China’s generous subsidies on the use of fuel cells (companies can get as much as $30,000 from the central government per vehicle that runs on fuel cells) will probably increase production capacity and volume, and create economies of scale.
Apart from national governments, private investors are also betting on this industry. Over the next ten years, a group of private investor companies (together with BMW, Daimler, and Toyota) will invest around US$10 Billion to develop hydrogen technology and infrastructure.
One can also observe that the list of Fortune 500 fuel cell customers is growing. Thus, it is not surprising that in a KPMG survey of automobile executives, 78% of executives believe that fuel cell electric vehicles are the “golden bullet” of electric mobility, while 62% say battery-powered electric vehicles will fail.
The fuel cell industry might not have reached mainstream acceptance for a long time, but it is poised to offer desirable solutions, certainly on the mid- and long-term.
Some positive effects of these drivers on the fuel cell industry can already be witnessed. Firstly, in the last ten years, the cost of fuel cells has gone down by 60% and the cost of electrolyzers, an important component in hydrogen-fuel production, has fallen by 80%. Secondly, there have been breakthrough researches in the field. For example, last year, scientists found a way to maximize the effectiveness of platinum in fuel cells cutting down its cost. Platinum is an efficient catalyst for speeding up chemical reactions in fuel cells, but is also a very expensive component: the cost of platinum in fuel cells for a small 100kW car is higher than the cost of an entire 100 kW gasoline engine.
