Will 2020 be the decade of hydrogen and the fuel cell?

In a discussion with Innovation News Platform, David Hart, Director of Fuel Cells at E4tech, proposed five reasons to be optimistic for the future of the fuel cell.

The 2010s was the decade of the lithium-ion battery. In 2010, the global production base was 19 GWh and prices were above $1,100 per kWh. By 2019, this rose to 160 GWh and just $156/kWh – with both numbers still improving. The battery has gone mainstream for all sorts of energy and transport applications.

By contrast, the fuel cell market has been slow to hit its stride. However, our research shows that in the final year of the decade, global shipments exceeded 1 GW of total capacity for the first time. In fact, shipments exceeded 1.1 GW and would have been higher but for a number of late order delays in China that will now fall into 2020.

Is 1.1 GW a big number? From one perspective, no. This is roughly the same capacity as a single medium-sized nuclear power plant – and we’re talking about total global shipments.

From another perspective though, it is huge. The 1 GW number is a milestone that those of us in the industry have long-looked forward to. Even if more psychological than commercial, it’s a mark of a technology that is increasingly mature, and a market that is gaining confidence.

To reach that point as the 2010s draw to a close, inevitably sparks excitement about where we go from here. Could the 2020s be the decade of hydrogen and the fuel cell? Let’s hope so – with the threats of climate change and air quality only growing more urgent, we will need every technology at our disposal.

Five reasons to be optimistic:

1) Cars: driving the market

You can’t discuss fuel cells without talking about cars. The longstanding debate (conducted with almost religious fervour by those on each side) between battery (BEV) and fuel cell electric vehicles seems largely to have been settled in favour of the battery – at least in Europe and North America.

Not so in Asia though, where Toyota and Hyundai duke it out to be the hydrogen heavyweight. In 2019, sales of Hyundai’s NEXO (roughly 4,750) eclipsed Toyota’s for the first time (nearly 2,700), but more significant is the fact that between them, these two companies alone account for approximately two thirds of total fuel cell capacity shipped in 2019 – and they have big plans. Toyota will complete a 30,000 per year capacity factory this year, and Hyundai plans a line for 40,000 in 2022.

Honda and Daimler are the only other two car manufacturers with a commercially available fuel cell vehicle, but sales lag far behind. In Europe, all-in investment on batteries coupled with slowing sales mean there is limited appetite to invest in another branch of technology.

However, hydrogen cars are not confined to Asia. California has more cars running than anywhere else in the world, and some fuelling stations are even approaching capacity. There have been stirrings of demand in the North Eastern States, Canada and Europe too, and some mobility companies such as Green Tomato Cars in London are using hydrogen models daily, and adding to their fleets. If the likes of Hyundai and Toyota can consolidate their grip on Asian markets while making inroads elsewhere, fuel cell cars may run BEVs closer than many might think.

2) Heavy road vehicles

The long-haul market has been marked out as a key use case for hydrogen by many in the sector. Recharging time and the sheer weight of batteries count against electrification, while the ‘return to base’ model and possibility of ‘fuel corridors’ make hydrogen more attractive. The entry of heavyweights such as Cummins and IVECO into the sector bodes well for those in the fuel cell corner. Light duty commercial vehicles and specialist applications such as mine trucks are also coming around to the promise of fuel cells.

However, arguably the most exciting road transport markets for fuel cells right now are bus fleets. Slowly but steadily, more buses are being deployed, from a wider range of bus makers, in more places around the globe. Air quality concerns, paired with climate change imperatives, have led cities around the world to experiment with fuel cell driven bus fleets.

Here, Europe leads the pack. The JIVE (Joint Initiative for hydrogen Vehicles across Europe) projects targeted 290 buses across the continent, while the newer H2Bus Europe consortium targets 1,000, backed by €40m of EU money. Crucially, H2Bus aims to bring the vehicle price to less than €375,000 – down from €600,000 for JIVE – and a hydrogen price of €5-7/kg. That makes fuel cell buses competitive with all the other options.

As more metropolitan mayors enact laws to reduce pollution, expect this market to be a major source of growth.

3) Rail and marine

Hydrogen fuel cells’ transport possibilities aren’t limited to the road as commercial rail applications are already operating, and marine ones will soon follow.

For example, Alstom’s fuel cell hybrid Coradia iLint has locked up 130,000km of revenue generating service in Germany with 95% reliability. Alstom and its competitor, Siemens, are both investing heavily in fuel cell powered trains – because the demand is there: the UK (where nearly 60% of track is not electrified) announced the phase out of diesel trains by 2040 and French operator SNCF has the same target set for 2035. No surprises, either, that Korea is also a keen market as it seeks to transform to a hydrogen economy. The technology is proven, and demand is growing. A study on using fuel cells and hydrogen in the rail environment suggested that 20% of newly purchased trains could be hydrogen-fuelled by 2030.

In the marine sector, small vessels have operated in some cities, but the race is on to scale up to larger ships and boats. Ferry projects in Scotland, Norway and California are underway, while other companies are investigating use cases from fishing boats to luxury yachts.

4) Beyond transport

Though the bulk of successful fuel cell deployments are in transport applications, that is not the limit of the technology. For example, stationary fuel cells have found great success in the Japanese micro CHP market, where more than 300,000 domestic fuel cell systems provide residents with their power and hot water – a far cleaner option than in Europe where boilers still rule – though Germany now has a few thousand fuel cell CHP units too.

Remote and portable fuel cell applications are another area that has struggled to hit stride, but also shows promise. In theory, fuel cells can outperform batteries in many off-grid applications but have been hampered by high cost and complex engineering. However, appetite is growing. Certain military applications are well-suited to fuel cells where remoteness or length of mission makes batteries impractical. In October 2019, naval ship builder thyssenkrupp Marine Systems revealed one of its fuel cells had clocked more than 70,000 hours propelling a submarine – a crucial technology as it matches nuclear propulsion for silence with lower cost and safety implications.

Drones, though, may be the golden opportunity for ‘portable’ fuel cells. Already unmanned aerial vehicles (UAVs) are used for anything from pipeline to windfarm to forestry monitoring, and use cases multiply constantly. Hydrogen fuel cells offer greater runtimes, reduce recharging time and cut the number of UAVs needed to service a given area. This market is still young, but if visions of future skies full of Amazon delivery drones are to be believed, fuel cells may well be the technology that makes it possible.

5) Context is key

However, despite all the exciting use cases gaining momentum, fuel cells’ success hinges on infrastructure. While fuel cells using natural gas or methanol face less of a challenge, transport applications usually use hydrogen. To be cost-effective at scale, there must be a robust and extensive global hydrogen supply chain covering the creation, storage and distribution of hydrogen throughout our economies.

In this regard, there are reasons to be cheerful. Interest in hydrogen beyond fuel cells is growing. Countries like the UK and the Netherlands that face a challenge fully greening heat are investigating hydrogen as a substitute for natural gas, and companies worldwide with difficult-to-decarbonise industrial processes, such as steel and cement production, are developing hydrogen solutions. Countries such as Australia and Chile see the export of clean hydrogen as a new economic opportunity. As environmental pressures increase and quick wins and low-hanging fruit elsewhere reach their limits, expect these projects to pick up speed, creating momentum and demand for that robust hydrogen supply chain that will benefit fuel cells alike.

And where do we go from there? That’s anyone’s guess – and cause for great excitement. I envisage a world where batteries and fuel cells between them account for the vast majority of our transport needs, with fuel cells scattered in every corner of our economies. Some of these use cases will be familiar, some will be completely new. Once fuel cells are mature enough to be available ‘off-the-shelf’ they become a viable option for innovators and entrepreneurs solving society’s problems, just like such an individual can pluck a battery system off a shelf today. And that will be an incredibly exciting place to be. If I write this article again in 2030, I don’t know exactly what new technologies I’ll be writing about alongside the likes of road and rail – but I look forward to finding out.

The Fuel Cell Industry Review 2019 by E4tech is available now for download here.

David Hart
Director for Fuel Cells and Hydrogen
E4tech
+44 (0)20 3008 6140
enquiries@e4tech.com
www.e4tech.com/

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