Estimates of Fuel Cell Market Size, Potential Vary WidelyArticle from Environmental Business Journal Volume XIII No.7/8 2001 |
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While several industry groups and consultants have made estimates of the current and future size of the markets for fuel cell applications, accurate projections are elusive. "Companies in the business of offering market projections, their published data differs by at least a factor of 10," said Bob Rose of the U.S. Fuel Cell Council. "The divergence in projections seems to be increasing rather than decreasing." Levels of equity investment and R&D expenditures are also not known, according to Rose. "We are not yet at the point where we're able to characterize the industry in traditional Wall Street snapshot terms. We're working on that." The third Fuel Cell Industry Review published by Business Communications Co. Inc. (Norwalk, Conn.) estimates the fuel cell market at $218 million in 2000. BCC says "with commercialization of most of fuel cell technology rapidly falling in place" the market will reach $2.4 billion in 2005, or an average growth rate of 62%. Estimates by Clean Edge (p.22) put the market at $200 million in 2000, $2.5 billion in 2005 and $10 billion in 2010. Vehicle applications are currently ahead of power supply. Morgan Stanley Dean Witter estimates that 40,000 cars will be outfitted with fuel cells in 2004, 160,000 cars in 2007 and 600,000 cars in 2010. Nesbitt Burns analysts forecasts are a bit more optimistic at 50,000 cars and 150 buses in 2004;100,000 cars and 3,000 buses in 2007; and 1.0 million cars and 12,000 buses in 2010. For power supply, analysts have forecast sales for 250-kw stationary units of 500 in 2004, 2,500 in 2007, and 6,000 in 2010. These forecasts are based on percentage growth rates in electricity consumption and are not based on specific analyses of potential buyers. Morgan Stanley Dean Witter estimates the total installed stationary power generation capacity in North America, Europe and Japan is about 2,600,000 MW. The annual new capacity addition is about 80,000 MW and the annual replacement capacity, about 45,000 MW. They have projected the market share for fuel cell stationary power to reach 0.7% of capacity additions and replacements, or 900 MW, by 2010. The price of a fuel cell depends on the size and the supplier. A 100-watt Dais fuel cell costs $4,000. A miniaturized 100-watt unit used in defense applications from Ball Aerospace costs $35,000. A 1-kw cell from Hydrogenics costs $75,000 and a 200-kw fuel cell from ONSI Corp. (South Windsor, Conn.), a subsidiary of United Technologies costs $600,000. H Power's Gibbard offered this educated guess for stationary power markets. "Now we don't have any substantial market in stationary power fuel cells. Five years from now, we'll have significant numbers of units being sold in the rural environment and also in grid-connected locations in the United States. Five years from now, the best we could do would be total annual power production in the range of about 500 megawatts, half a gigawatt.... That's assuming H Power is in full production at our South Carolina plant and there are perhaps four competitors each about at the same level." Gibbard says certain elements are critical to the development of fuel cells for stationary power. "The most important is reliability. Everyone in the business, us included, is working diligently now to test, internally and externally." Fuel cells need "to demonstrate the kind of reliability that one would associate with a furnace. That is mean time between failure on the order of 10,000 hours" with a service infrastructure for replacing filters and other parts. "The other factor is decreasing costs, getting a supply chain in place that can supply the subsystems and components at commercial prices," said Gibbard. "That can also can include things like simplifying a system so it has fewer and cheaper components. Everybody is working very hard on that." "From where people are today to where we need to go is a three to four-fold cost reduction... for the first commercial units," said Gibbard. He considers that goal achievable. "Now we're making completed units in batches of one to 10. When we start thinking of making them on a continuous basis, say 20,000 a year, we'll get enormous cost reductions due to purchasing more materials, more efficient manufacturing processes.... The most important thing now is reducing the cost of the membrane electrode assembly, the heart of the system where the electricity is generated."
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