Solid Oxide Fuel Cells Ready to Market?

Market Incentives

The main market incentives for SOFC are similar to fuel cells: environmentally friendly with negligible greenhouse gases emissions; increase in the demand for electricity and power deregulation incentives (such as DG); national security: lower dependence on foreign fuels such as oil, aging energy infrastructures, high power promise and energy conversion efficiency of fuel cells, Legislations: Hydrogen Energy Act (2001), FreedomCar (Jan. 2002), National Hydrogen Energy Roadmap Nov. 2002), California Act for Clean Air, Hydrogen Fuel Initiative (Jan 2003), FutureGEN (Apr. 2003), and supportive funding programs.

An additional advantage of SOFC systems is tested reliability and low-maintenance design for large stationary market applications.

More than one factor should be considered in developing fuel cells, including SOFC, such as where the fuel (mainly hydrogen) comes from, how is it produced, how efficient is it, how costly, and what is the infrastructure in place (distribution channels for fuel delivery).

The main U.S. support program for SOFC is funded through the Solid State Energy Conversion Alliance (SECA), a R&D initiative toward commercialization of fuel cells provided by the U.S. Department of Energy (DOE). SECA is a partnership between the DOE, national laboratories, and the industry to accelerate the use of fuel cells for power generation of stationary applications – residential, commercial, and DG applications as well as transportation and portable applications. Several partnerships are already in place for SOFC: Delphi and Battelle (Pacific Northwest National Lab), General Electric (GE Power Systems and GE Fuel Cell Systems) using the previous Honeywell/Allied Signal technology, Cummins Power Generation and McDermott including SOFCo (formed by McDermott and Ceramatec Inc.), and also Siemens Westinghouse Power Corp. that partnered with Fuel Cell Technologies (FCT) to develop residential SOFC units and Ford for APU transportation applications.

Are SOFC Ready for the Market?

According to Solid Oxide Fuel Cells, the global market value of SOFC is forecasted to reach $347 million by 2008 with an average annual growth rate (AAGR) of 22% per year. The North American market represents about 57% of the global market, or about $198 million.

Due to their high-energy conversion efficiency (up to 40-60%), low toxic emission, and flexibility in fuel choice (natural gas, diesel, gasoline, liquid petroleum, biomass), SOFC are being developed for the whole range of possible applications: stationary, transportation, military, and portable. In view of the present technical state of development and with the high energy conversion efficiency of hybrid stationary SOFC system (combining SOFC with a gas turbine, for example) of up to 85%, SOFC are expected to play a significant role in residential CHP (1 to 10kW) and larger CHP or power plant stationary applications, which represent about $56 million (2003 estimate) of the total application-related SOFC market value. This SOFC market is expected to grow at an AAGR of 24% per year. Emerging applications for SOFC are auxiliary power units (APU) and premium portable applications, although these are not expected to play a significant role for SOFC within the next decade or so. What limits a faster market penetration is intrinsic to fuel cells: cost, fuel availability and infrastructure, proven reliability and performance compared to other competitive technologies. In this regard, SOFC does show promising results, especially as a CHP unit for residential, commercial or larger stationary applications.

PEMFC vs SOFC: What’s the Score?

PEMFC (proton exchange membrane fuel cells) are already available on the market, and BCC Inc. report RE-122: Fuel Cells for Large Scale Applications predicts they (about 60% of all U.S. fuel cell funding initiatives) will represent a North American market value of about $340 million by 2007. This represents about 1.7 times the estimated value of the SOFC market for 2008.

First pre-commercialized SOFC systems are expected to reach the market in 2004-2005 depending on the application markets: mainly larger stationary for North America (such as CHP or power plant) and residential systems for Europe. Other emerging markets include Japan, Australia, China, and Korea. Globally, SOFC development is still at an early commercial stage and further developments remain R&D oriented.

According to SECA, SOFC should be ready to move from R&D to pre-commercialization stages in 2005 and then mass-commercialized around 2010 for stationary applications. Commercial mobile applications (such as APU) are not foreseen until 2015-2020.

Conclusions

The main challenges that SOFC has to overcome to reach full commercialization within the next decade or so are cost, reliability, and performance (especially regarding fast thermal cycling). Although great progress has been made in the last 10 years, further materials and technical improvements in design – especially toward lower manufacturing system costs and operating temperature – are needed. In addition, similarly to other fuel cell systems, the development of a proper parallel fuel delivery support structure (fuel infrastructure and distribution channels) and wide availability (ideally unlimited resources and convenient refueling: tank, cartridges) is critical. North America (mainly the U.S.) has taken the lead in terms of technology development, legislative incentives, and funding initiatives.

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