Fuel cells are electrochemical devices that convert hydrogen and hydrocarbons like methane into electricity. When deployed for stationary applications like distributed generation, backup power, off-grid power, and even utility-scale electricity production, fuel cells feature higher energy conversion efficiency than Rankine cycle-based thermal power generation systems, without emitting particulate matter, NOx, and noise. From the perspective of decarbonization, fuel cells are expected to facilitate the penetration of low-carbon hydrogen into industrial, residential, and commercial power markets, competing with fossil fuel boilers and gensets. Considering the factors described above, stationary fuel cells are attracting attention from investors and technology developers.
There are five types of fuel cells that can be used for stationary applications: solid oxide fuel cells (SOFCs), proton exchange membrane fuel cells (PEMFCs), phosphoric acid fuel cells (PAFCs), molten carbonate fuel cells (MCFCs), and alkaline fuel cells (AFCs). They operate with different electrolytes, reaction chemistries, and temperatures, but there are some common challenges, such as the shorter system lifetime and higher capital cost compared to the incumbent combustion-based solutions. To display a comprehensive overview of the technology landscape for stationary fuel cells and the distribution of players, we analyzed key developers with historical patent activity, academic publications, early-stage funding, and ongoing projects. This information serves to define future trends and, more importantly, helps identify opportunities for companies seeking to engage with players in stationary fuel cells. Note that the research institutes listed under the category of PEMFCs are limited to those focused on high-temperature PEMFCs (HT-PEMFCs), as the research on low-temperature PEMFCs is mostly for mobility applications.
Asia-Pacific's corporates, EMEA's research institutes, and the Americas'small and medium enterprises (SMEs) excel. The primary difference among the geographical regions lies in the dominant type of player, not the absolute number of players. In Asia, Japanese and Korean conglomerates of automotive OEMs and heavy industries have long engaged in the development and commercialization of fuel cells, thus leading in the number of patents. On the other hand, the fuel cells research portfolios of European institutions are diversified, with a prolific output of academic publications. Chinese research institutes also contribute to a substantial share of research output. The Americas region is home to the leading SMEs, including the public ones that have displayed strong fundraising capabilities, such as Bloom Energy and FuelCell Energy.
SOFCs are drawing the most innovation activity, driven by SMEs and research institutes. More than half of the SMEs and research institutes in the space of stationary fuel cells are working on SOFCs because of their high efficiency, fuel flexibility, and ability to deliver high-temperature heat along with electricity, which are beneficial for large-scale and versatile deployments. The extensive interests and efforts from academia and SMEs are partly attributed to the dedicated research programs funded by government agencies, such as the U.S. Department of Energy's SOFC program and EU's Horizon 2020 program, which have invested hundreds of millions of dollars in SOFCs over the past seven years.
Corporations have been approaching stationary fuel cells from different pathways. For example, through the acquisition of ClearEdge Power in 2014, Doosan has become the largest supplier of PAFCs in the world. Cummins is making progress in deploying PEMFCs through the acquisition of Hydrogenics in 2019 and has received grants from the U.S. Department of Energy (DOE) to develop SOFCs. Phillips 66 is performing in-house development of SOFCs and has also received funding support from the U.S. DOE. Posco licensed the MCFC technology from FuelCell Energy for utility-scale deployment in Korea, though it announced it intended to exit the MCFC business after significant losses.
Solid oxide fuel cells. Operating at 600 °C to 1,000 °C, SOFCs are capable of internal reforming of hydrocarbon gases and hence are able to run on fuels including natural gas, biogas, and lower-purity hydrogen. SOFCs can reach an electrical efficiency of up to 60% and a total efficiency of up to 90% when configured for combined heat and power (CHP). The innovation activities are mainly focused on addressing the degradation of stack materials and balance-of-plant components (e.g., cathode material poisoning caused by chromium evaporation) to extend the lifetime and enhancing the ionic conductivity of the electrolyte materials to improve power density. Despite the significant innovation activities, there are not many companies offering fully commercialized products. Bloom Energy is the leading SOFC company and generated $794 million in revenue in 2020. In addition, Mitsubishi Power offers a hybrid system of a 250 kW SOFC and microturbine, and Kyocera offers 0.7 kW and 3 kW SOFC units for residential and institutional use. Ceres Power is developing low-temperature SOFCs supported by steel plates. Convion is focused on system design and development, with the solid oxide stacks supplied by Elcogen. SOLIDpower (Germany) and Redox Power Systems (U.S.) are also notable startups.
Proton exchange membrane fuel cells.PEMFCs are the primary option for fuel cell electric vehicles (FCEVs), with the highest level of technology readiness and load-following capability, but their large-scale stationary applications are complicated by water management and platinum catalyst poisoning caused by fuel impurities (CO and H2S) at low operating temperatures (ca. 80 °C). Toyota, Honda, and Nissan have invested heavily in the development of PEMFCs and accumulated extensive IP and know-how, but there are no clear plans to upscale PEMFCs from the kW to the MW scale. One exception is Ballard Power Systems, which has deployed a 1 MW PEMFC-based power system in France. In addition, Plug Power has launched stationary PEMFC products for backup power, and Toshiba offers 100 kW PEMFC modules. In March 2021, Loop Energy shipped the first stationary fuel cell modules to Ecubes in Slovenia. Advent Technologies is developing high-temperature PEMFCs with novel electrolyte materials, which could simplify water management and improve fuel flexibility.
Phosphoric acid fuel cells. Given the lower power density (which results in larger-sized systems), higher operating temperature (150 °C to 200 °C), and higher tolerance for CO than PEMFCs, PAFCs are suitable for stationary applications. Doosan is the dominant manufacturer of PAFCs and offers a 460 kW system with the technologies and assets acquired from ClearEdge Power and UTC Power. Fuji Electric offers a 100 kW PAFC product. Most of the existing PAFCs are deployed in the U.S. and Korea.
Molten carbonate fuel cells. Similar to SOFCs, MCFCs also operate at high temperatures (600 °C to 700 °C) with high efficiencies (50% to 60%) and fuel flexibility, but the durability of stack materials remains to be improved. The only notable MCFC player is FuelCell Energy, which reported revenue of $70.9 million in 2020. The company's ongoing projects include a 2.8 MW biogas power plant in Tulare, California, a combined 8.8 MW power plant in Groton, Connecticut, and San Bernardino, California, utility-scale projects in Yaphank, New York, and Derby, Connecticut, and the Toyota hydrogen project in Long Beach, California. One noteworthy development is MCFC's application for carbon capture: FuelCell Energy collaborates with ExxonMobil to demonstrate carbon capture from refinery flue gas using MCFCs.
- Alkaline fuel cells. Based on the use of cheap KOH electrolyte and nonprecious metal electrocatalysts like nickel (anode) and carbon-supported silver (cathode), AFCs have the lowest capital cost among the five types of fuel cells. However, AFCs have low power density and are vulnerable to CO2 poisoning of the electrolyte. Therefore, innovation activities for AFCs are highlighting the development of CO2-resistant anion exchange membranes of higher ionic conductivity. The AFC company to monitor is U.K.-based AFC Energy, which received its first commercial orders in 2020, worth $1.5 million. GenCell Energy is developing alkaline fuel cells for backup and off-grid power.
Overall, SOFCs and PEMFCs are the two types of fuel cells displaying the highest potential for adoption in stationary applications. The vast investments in SOFCs, such as the hundreds of millions of capital raised by Bloom Energy and the hundreds of millions of R&D funding from government agencies, will lower the manufacturing cost and improve the products' lifetime. As it is a proven technology for mobility applications, it is not difficult for companies like Ballard Power Systems and Plug Power to deploy PEMFC stationary power systems below 150 kW if there is high-purity hydrogen or a gas purification system.
However, to answer the question of which type of fuel cell will succeed and when we need to consider whether and where fuel cells will outcompete the incumbent power generation solutions. It is certain that fuel cells will not be competitive for hundreds- or even tens-megawatt-level power generation in this decade, as gas turbines are simply more scalable, reliable, and cheap. But fuel cells are making progress in some smaller markets for backup or off-grid power, such as data centers, telecom towers, and microgrids. For distributed generation and industrial processes, SOFCs and MCFCs are promising, as they can produce heat for sector coupling. One example project is FuelCell Energy's trigeneration process for Toyota's Long Beach FCV facility running on the biogas from a wastewater plant.
The fate of fuel cells is closely tied to the evolution of the hydrogen economy. Besides the capital costs and technological maturity of stationary fuel cells, the high cost and limited supply of hydrogen, along with the lack of hydrogen infrastructure, are holding fuel cells back from advancing to the next level of demand. However, the development of fuel cells will not be a decisive factor in the progress of the hydrogen economy; instead, it is the progress of the hydrogen economy that will have a crucial influence on fuel cells. As low-carbon hydrogen penetrates the energy sector, it will create opportunities for stationary fuel cells in providing both heat and power to the residential and industrial sectors. Companies seeking to replace diesel gensets and small-to-medium-scale industrial boilers should consider engaging with stationary fuel cell players, especially in SOFCs and PEMFCs, for cost and performance metrics. In the long run, companies should monitor the growth of the hydrogen economy and potentially disruptive fuel cells technologies, such as robust SOFC stack materials and high-temperature PEMFCs.