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Exclusive: The 2019 Fuel Cell Industry Review, Reviewed (Part 2)

By January 23, 2020

January 23, 2020

As noted in part 1 of Fuel Cells Works’ review of E4Tech’s The Fuel Cell Industry Review, the 2019 edition is now out. We strongly encourage all readers to download it at www.fuelcellindustryreview.com.

Asia Leads

After a few years of jockeying between Asia and North America for leadership in megawatts of deployment, Asia took a solid lead in 2019. This is in part due to the success of Hyundai’s Nexo fuel cell vehicle in its home market; a push into California could bring the two continents into closer balance again.

Asia Leads in Annual FC Deployments. Source: The Fuel Cell Industry Review 2019

Asia’s leadership reflects the fact that the Pacific Rim’s three economic powerhouses — China, Japan and (South) Korea — have each adopted aggressive hydrogen and fuel cell-related goals. Toyota and Hyundai between them represent two-thirds of worldwide fuel cell production, while China has launched itself at fuel cell technology as boldly as it embraced lithium-ion batteries and solar.

Even setting aside industrial policy goals, the three LNG import-dependent countries’ interest in hydrogen-related technologies makes sense, H2 being a scalable, emissions-free energy import. Since the author’s coverage of the topic three years ago Australia has developed a National Hydrogen Strategy to apply its LNG export expertise towards the export of sunshine, and the author’s home province of British Columbia has studied hydrogen exports’ feasibility as well.

A three-way race is highly desirable for the industry as well. If only one country was championing hydrogen and fuel cell technologies, it would be easier for policymakers to ease up on sector support. Having seen China overtake their leadership in batteries, one would guess that Japan and Korea would want to invest and scale heavily to maintain their industries’ primacy. China’s initial aim would likely be to produce commodity fuel cell stacks and materials, perhaps lacking others’ performance or durability, but at lower price points.

Heavy Heavy-Duty Interest

The Fuel Cell Industry Review noted the surging interest in the heavy-duty segment (commercial trucks) with three major players — Weichai, Cummins, and Bosch — now having staked positions in the fuel cell space. This was not only understandable but inevitable because batteries are like exoskeletons.

 

Heavy interest in Heavy-Duty Fuel Cells. Adapted from TheDrive.com.

In the natural world, exoskeletons are the superior option for small creatures, offering all manner of strength and weight benefits. But above a certain body size, exoskeletons are impractical; that’s why almost all large creatures are vertebrates — they have interior skeletons (endoskeletons). For the sake of completeness, there are some large ocean-going invertebrates — giant squid, for example — but in the marketplace of evolution, exoskeletons top out with the the emperor crab; there are no exoskeletal giants left. (Sorry, Mothra.)

The same trade-off holds between batteries and fuel cells; batteries are terrific for smaller vehicles, including passenger vehicles. They can also be a wonderful solution for some heavy-duty applications such as city trucks and buses. But as we raise the scale from passenger vehicles on up, fuel cells become an ever-more advantageous option.

Viewed through this lens, the three diesel technology giants’ interest in fuel cell technology is easily understood. Their heft will help normalize hydrogen and fuel cells in heavy-duty sector discussions, a phenomenon which has already happened in rail.

Working On The Railroad

The Fuel Cell Industry Review 2019 notes that the Alstom Coradia iLint fuel cell passenger train has reached 130,000 km (80,000 miles) of revenue service in Germany since 2018. More importantly, it did so with 95% reliability — an important consideration for any fleet operator.

The Coradia iLint has offered something of a “Roger Bannister moment”, proving that trains could be run on fuel cells. Dozens of follow-up orders have followed, and one presumes its success has accelerated interest in freight rail and marine applications as well. The Tokyo 2020 Olympics — highlighting hydrogen technologies to global audience — could prove catalytic as well.

A subtler impact of the iLint would be to help scale the use of hydrogen as a transport fuel. (While hydrogen is used extensively in petrochemicals and other industry — generally reformed off natural gas — its use as a transport fuel is still nascent.) High retail prices in California and elsewhere — owing to very modest levels of transportation hydrogen consumption — have “anchored” the incorrect expectation that hydrogen fuel prices will remain high.

That’s not the case and is as premature as believing lithium-ion battery prices would stay high forever. Fuel cell forklift market-maker Plug Power — already the largest consumer of liquid hydrogen in the United States — has cited costs on the order of US$5/kg, and even their current volumes will be dwarfed as the sector expands.

Looking To 2020 And Beyond

Without spoiling The Fuel Cell Industry Review 2019 (which, once more, can be downloaded from www.fuelcellindustryreview.com) the takeaway for 2020 is one of vigorous growth — a trajectory “firmly and strongly upwards”.

For the admittedly immodestly-named “Klippenstein’s Law” to hold — see Part 1 of this series — the fuel cell industry would need ship roughly 1.5 GW of product in each of 2020 and 2021 before reaching roughly 4 GW in 2022, roughly a quadrupling of 2019 levels.

Quadrupling global production in three years would be equivalent to compound growth of about 60 percent per year, so industry watchers can see if shipments reach 1.8 GW in 2020 (during which a Hyundai scale-up is expected) and 2.9 GW in 2021 (the first full year after an expected Toyota scale-up).

 

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