Fuel Cells: A Technology Coming of Age


The fuel cell has been in existence for over 160 years. In the 1830's, a Welch judge by the name of Sir William Robert Grove reversed the already well-understood chemistry principal of electrolysis and generated electricity. At the time, society was not intrigued with the fuel cell and had little grasp of the technology's potential. It was around the same time that the internal combustion engine was developed in Germany and vast, seemingly limitless, reserves of petroleum were being discovered all over the globe. It was the beginning of the fossil fuel age, and a larger segment of society was enjoying a higher standard of living through the utilization of cheap energy and machines to do work. The nonexistent understanding of the detrimental effects of combusting fossil fuels and lower resource consumption rates fueled the excitement of the day. Grove's invention was little more than a curiosity as the internal combustion engine and petroleum enthralled the age.

Fossil fuels and the internal combustion engine reigned supreme from Grove's day up to the present day and they probably will into the near term future. Looming on the horizon is the day when society will run out of fossil fuels. Academics, pundits and experts argue over the exact timing of the depletion of our natural resources. The one fact that remains the same in every discussion of consumption rates and timelines is that fossil fuels are a finite resource, that means once they are gone they are extinct, forever lost. Most of the predictions concerning when we will eventually run out of fossil fuels use current consumption rates to forecast when the actual day will come. What is discounted is that current consumption rates are not a static number. These rates are constantly increasing as the developing world desires a higher standard of living and one component of a higher standard of living is increased energy (i.e. fossil fuel) use. Whether people adhere to a number of 5 years or 50 years, common sense indicates that the inevitable is exactly that, mankind will eventually run out of fossil fuels. This event will threaten energy prices and energy security. Well, the next question is what can society do to avoid the turmoil that would surround ever-increasing fuel prices as demand outstrips supply? The answer is hydrogen, and fuel cells are the first step in a smooth transition to a hydrogen-based economy.

Environmental Concerns

Hydrogen and fuel cells have been receiving a lot of attention in the popular press lately. Environmental concerns regarding society's energy use, centering on global warming and urban air pollution, have forced industry to look at alternatives to fossil fuels. In the United States, energy use is the largest single source of air pollution. Fuel cells and their reduced or nonexistent emissions are a solution for reducing the current levels of pollution associated with energy use. A reduction in the level of air pollution encapsulating many major metropolitan areas results in a decline of pollution related medical conditions and an improved quality of life for the areas' inhabitants.

Many state governments have taken the lead in environmental protection and reducing urban air pollution. California, Massachusetts, New York and Delaware have all enacted strict measures to reduce air pollution in their respective states. To achieve a reduction in air pollution, the states have mandated that car manufactures are required, as a percentage of total sales in their state, to sell a certain number of low or zero emission vehicles. The market created by this legislation is estimated to be currently at 4 to 5 million cars a year. For vehicle manufacturers, this market is too lucrative and too large to ignore as many other states are considering similar environmental legislation.

Domestic Energy Security

The United States is extremely dependent on other, politically unstable and politically unfriendly, countries for its supply of oil. According to the US Department of Energy (DOE) reports, the United States imports more than 50% of its oil supply and this figure is expected to increase to 65% by 2020. The global demand for oil is increasing at 2% per year with global demand expecting to increase by 65% by 2020. The fuel flexibility characteristic inherent in fuel cells and the ability to produce hydrogen domestically would result in a decline in the dependence on foreign energy sources, greater national energy security, a reduction of the military forces now poised to defend our energy interests at a moments notice in the Persian Gulf and a decrease in foreign trade debt.

When most people think of oil, we think of gasoline and other fuels. Oil and its hydrocarbon products are intertwined with many things we take for granted today. Plastics, chemicals, fertilizers and many other common products are based on oil and its by-products. When utilizing a finite, rapidly shrinking resource the question becomes how can that resource best be utilized? The answer that comes to mind is; use it for the things where there is no other substitute. In terms of chemicals, fertilizers and others there is no substitute for oil as a raw material. Regarding energy, there are alternatives. These alternatives include renewables, with hydrogen as the energy carrier and storage medium, and domestically produced hydrogen from natural gas or off-peak electricity. The largest hurdle for hydrogen to overcome is a lack of infrastructure. This problem is by no means insurmountable with the proper investment by industry and government.

Deregulation of the Electric Industry

The utility industry in the United States is undergoing a radical change. An industry once dominated by monopolies, is now being transformed to allow for competition and customer choice. This deregulation allows consumers to choose how their electricity is being generated and what impact, as individuals, their energy use will have on the environment. Fuel cells offer the opportunity for greatly reduced emissions and increased efficiency, when fossil fuels are used to produce the hydrogen, or zero emissions and a completely renewable energy source when coupled with a renewable energy system generating the hydrogen.

Deregulation and fuel cells have opened the opportunity for distributed generation plants. Distributed generation is the industry term for generating electricity at the place where the electricity is to be used. Distributed generation avoids the enormous capital costs, underutilization of plant assets and transmission losses associated with a centralized distribution system that is the current model for the utility grid. Fuel cells are quiet, emit minimal to zero pollution, and avoid the site and permitting regulations that plague traditional generation methods. For an energy services company, a fuel cell power plant is a practical method to cost effectively add environmentally friendly capacity where it is required.

Internationally, the demand for energy is expected to increase by 50% over the next ten years. Fuel cells and distributed generation will allow developing nations to under go the "cellular phenomenon" when structuring their utility grids. In many developing countries, phone lines are almost non-existent. Instead, cell towers have been erected and people communicate via cell phone. This allowed phone system operators to avoid the staggering cost of running a phone line to every residence and building. Fuel cells could have the same effect by allowing developing countries the opportunity to install smaller community and industrial based energy generation sites. This avoids many of the costs associated with establishing a large utility distribution and grid system (distributing hydrogen via pipeline has been estimated to be around ¼ as expensive as transmitting an equal amount of energy in the form of electricity over transmission lines) in addition to the pollution associated with fossil fuel energy plants.

The Stock Market

Either through the recommendation of their financial advisor or featured on a nightly news program, fuel cell companies have been receiving a lot of attention lately from investors. Traditionally, the energy sector is a relatively stable sector that has not received much attention in the past. Now and in the near future, fuel cell companies are offering products that will revolutionize an industry that has not seen any major improvements in their technology or its industry structure (forthcoming deregulation) since the 1930's. Combine the forthcoming improvements in the utility industry with the recent announcements, by every major vehicle manufacturer, concerning fuel cell's ability to replace the internal combustion engine and fuel cell stocks have become some of the upwardly mobile stocks on the market.

Economic Growth

Fuel cells and hydrogen have the enormous ability to create many new jobs as society begins the transition to a Hydrogen Economy. New employment opportunities will abound as manufacturers require additional workers to fabricate, design and test fuel cell systems, components and other related services. Other areas revolving around hydrogen production, storage and other related products will create additional jobs. A DOE study concluded that by meeting the demand, in California alone, for zero emission vehicles with fuel cells, over 700,000 new jobs would be created in the fuel cell manufacturing industry. A study conducted by the Wisconsin Energy Bureau has found that three times as many jobs would be created in the state by investing in renewable energy instead of fossil fuels.

Conclusion

Fuel cells and hydrogen are riding some powerful historical trends. Throughout history, mankind's energy use has moved towards a higher hydrogen ratio in the chemical composition of the fuel and a reduction in the other components. Starting with wood, then to coal, oil and natural gas, society's shift in type of fuel is simply a movement along a hydrocarbon chain. As the form of the fuel changed, more of the carbon, from which a significant percentage of the pollution associated with fossil fuels originates from, was eliminated. Hydrogen and fuel cells complete the process of eliminating the dirty carbon and finish the task of employing pure, clean hydrogen. Aside from history, fuel cells and hydrogen are riding the momentum created by an increased environmental awareness, the inevitable extinction of our fossil fuel reserves, sound economic policy and the optimism of the stock market.