Matthew Klippenstein (@ElectronComm) reporting for FuelCellsWorks.com.
The 15th annual Fuel Cell Expo — the world’s largest — was held this past February in Tokyo, anchoring the World Smart Energy Week conference. Attendance topped 66,000 over the three-day event, which featured more than 2,500 exhibitors spanning fuel cells, batteries, solar photovoltaics, wind, smart grid, biomass and even thermal (!) power generation.
Disclosure: In light of the fast pace of hydrogen and fuel cell developments in Asia, and with the conference getting little coverage in North America, Toyota provided airfare for the writer to attend and report back on details.
305,000 Ene-Farm deployments to date
It’s impossible to talk about fuel cells in Japan without mentioning Ene-Farm — the country’s highly successful micro-CHP program — so that’s where we’ll start. The one-sentence version is that Ene-Farm reinvented the low-tech natural gas-burning boiler for the 21st century, using fuel cells to produce both heat and power. The technology is efficient, offers added resilience in the event of natural disasters, and reduces Japanese households’ electricity bills.
In micro-CHP, the “CHP” stands for Combined Heat and Power, and “micro-” refers to the fuel cells being quite small. Their maximum power output is on the order of 700 watts. About the same amount of heat is recovered from the fuel cell exhaust gases, and is used to heat water for the household’s hot water tank.
Wringing the heat out of the fuel cell exhaust allows Ene-Farm units to achieve excellent energy efficiencies; almost all the energy losses from electricity generation go to heating the water. Panasonic claims a 97% overall energy efficiency (Google Translate recommended) or 87.6% based on hydrogen’s higher heating value.
Annual Ene-Farm sales in Japan.
Source: Advanced Cogeneration and Energy Utilization Center Japan.
In reference to the section heading, as of December 31, 2018 a total of 292,654 commercial Ene-Farm units had been deployed in Japan. At time of writing — early April — installations are probably above 305,000 units. Panasonic’s PEM-based fuel cells represent about half the installation base. Toyota-affiliated Aisin Seiki offers a solid oxide model (“Ene-Farm S”); over the years, other market participants have exited.
It’s commonly reported that about 250,000 Ene-Farms had been installed as of 2018. Why the discrepancy? The key is to remember that the Japanese government supports Ene-Farm deployments through incentives, and the government’s fiscal year ends in March. At the end of the fiscal year ending in March 2018, about 250,000 Ene-Farms had been deployed; by the end of the calendar year ending in December 2018, installations surpassed 290,000.
With the Japanese government authorized about 50,000 Ene-Farm incentives per year — and few people choosing to install Ene-Farms without incentives! — that translates into about 12,000 installations per quarter. Add that to the totals at the end of calendar 2018 and we get 305,000 units.
Growing Through Incentives
The Japanese government’s decade-long support for the Ene-Farm program follows standard industrial policy of supporting fledgling industries with high initial subsidies, which are gradually reduced as the industry matures and costs come down, rendering subsidies unnecessary.
The chart below from a Japanese Ministry of Economy, Trade and Industry (METI) presentation shows that micro-CHP costs fell almost two-thirds in eight years. (Prices shown are pre-subsidy prices.)
Ene-Farm micro-CHP costs and installation base.
Source: METI, New Era of a Hydrogen Society, February 27, 2018.
While Japan’s aspirational goal of 1.4 million Ene-Farms by 2020 won’t happen, and 5.3 million by 2030 may also be too ambitious, it remains the residential fuel cell front-runner.
Europe has deployed about 10,000 fuel cell micro-CHP systems to date, with Japanese companies participating in the market as fuel cell stack suppliers, having developed expertise and scale through the aforementioned industrial policy.
Korea has been another early mover in fuel cell power generation; the January 2019 Hydrogen Economy Roadmap of Korea (page 17) notes that in addition to 308 MW of large-scale fuel cell power generation, an additional 7 MW of fuel cells powered 3,167 homes/buildings in the country.
And Then Outgrowing Incentives
The Japanese micro-CHP sector hit a milestone in 2019-2020, as the target price for PEFCs (proton exchange membrane fuel cells, generally abbreviated as PEMFCs) has fallen low enough that they longer qualify for incentives. Ene-Farm units using SOFCs (solid oxide fuel cells) still qualify for a modest amount.
This is explained in the Japanese Fuel Cell Association’s Ene-Farm FAQ. Google Translate doesn’t translate images, so with assistance from his partner, the writer has annotated the key graphic.
Main Image: Ene-Farm promotional image. Source: Daiichi-home.com