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Glum Outlook for Hydrogen Fuel Cells, Says Lux

Linda Hardesty


The supply of hydrogen is not the problem with the lackluster uptake of hydrogen fuel cells, according to a report from Lux Research.

Despite a $83 billion global hydrogen supply chain, adoption of fuel cells is extremely limited, and hydrogen is rarely used in energy generation, says Lux. Capital cost, not hydrogen supply, will limit adoption to a mere 5.9 GW by 2030, creating a modest $3 billion market, says “The Great Compression: the Future of the Hydrogen Economy.”

Although hydrogen is expensive – hovering at about $6 per kg – for stationary applications it accounts for only 35 percent of the total cost of ownership (TCO) while capital costs and membrane replacement costs make up most of the difference. Another barrier to adoption of hydrogen fuel cells is the relatively low cost of other energy sources in comparison.

Proton exchange membrane (PEM) fuel cells for stationary telecom power and backup will reach $1 billion in 2030, while fuel cells of all types for residential, commercial and utility generation will not prove cost-effective, predicts Lux.

All fuel cells operate by electrochemically oxidizing the fuel source to create electricity. Beyond this most basic principle, the actual operation and operating conditions vary widely across the list of fuel cell technologies.

Despite Lux’s gloomy predictions, Bloom Energy, maker of solid oxide fuel cells, recently said it has become gross-margin-positive in 2012 and is on track to be profitable in 2013.

And ClearEdge, whose main product is a stationary, modular PEM, is expanding with the acquisition of UTC Power.

As for mobile applications, Lux expects PEM fuel cells will reach $2 billion on the backs of forklifts and light-duty vehicles, while buses will remain miniscule.



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