Fuel Cells Re-inventing Auto Industry

A study by Frost & Sullivan says a race for supremacy has started as part of a revolution in automotive technology, and this revolution threatens to unleash a paradigm shift that will change the face of the global automotive industry.

LONDON, England, UK, 2001-11-06 [SolarAccess.com] The ‘new wave’ is centred on fuel cells as the industry’s hope of being able to sustain individual mobility, by delivering clean energy to power automobiles. The study, ‘European Fuel Cell Market for Vehicles, Components & Fuel Retailing,’ says three main factors pose a threat to the existence of the internal combustion engine. The first is the rapid depletion in global stocks of crude oil over the next 50 years; the second is the growing prevalence of harmful pollutants in the atmosphere, principally carbon monoxide and nitrogen oxides from the combustion of fossil fuels; the third is the cost of energy, which has increased significantly over the past three decades, as has overall demand. These are immediate problems that require long term solutions, according to study co-author Tif Awan, who estimates the market for fuel cell power-trains at Euro 3.2 million this year. Frost & Sullivan forecasts that market will accelerate to 2008, when revenues will reach Euro 47.7 million. Revenues are expected to reach Euro 18.5 billion by 2020 and Euro 52 billion by 2040. The main competitive arena at the moment is research and development, says Awan. “For companies choosing to be at the forefront of this revolution in automotive powertrain technology, research and development will be imperative,” he explains. “It is where the long term competitive advantage will be created.” Key players are vying to deliver a credible fuel cell powertrain to market within the next two years, with the larger players including DaimlerChrysler and Ford. The majority of European automakers have fuel cell development programs under way. “Perhaps the most significant program is Xcellsis,” says Awan. That joint venture was set up by Ford, Daimler Chrysler and Ballard Power to produce fuel cell engines. General Motors recently claimed that it leads in fuel cell stack power, with its 76 kg system that has continuous power output of 134 horsepower and peak output of 173 horsepower. GM says it intends to make gasoline-fed fuel cells an interim strategy until a hydrogen infrastructure is established, but it has unveiled a prototype stationary power unit that runs on natural gas, methane or gasoline. The Frost & Sullivan study says there are still several challenges to be faced. “The road to mass market depends on numerous considerations such as cost, for example,” it concludes. “The current cost of a fuel cell engine is in the region of €750 per kW compared to €20/kW for an internal combustion engine. A significant proportion of the cost element can be attributed to material costs, but effective research and development will play a vital role in bringing these costs down and enabling mass production.” Another challenge is to produce and transport hydrogen for fuel cells. Fuel suppliers have yet to map a clear route to achieve the ultimate goal: a scenario where pure hydrogen can be retailed to users of fuel cell vehicles, as gasoline is today. The industry faces enormous infrastructure investments, which cannot be recouped in the short- to medium-term by fuel revenues. “Consumer demand must be present to justify the investment in infrastructure, and yet the infrastructure must be present to supply developing demand,” adds Awan. “Co-ordination of investment from fuel suppliers, car manufacturers and governments is required to progress in a direction that is to everyone’s benefit.” The industry is debating which intermediate fuel can be used instead of direct hydrogen. “It seems that gasoline has a stronger business case, due to the existence of the current distribution infrastructure, and the lack of customer acceptable problems,” says Awan. “However, gasoline is still plagued by reformer technology problems, while methanol reforming is well established. Methanol producers are also promoting the environmental benefits of using stranded and flared natural gas.”