Fuel Cells Stack System

Main Components

3. Controller and Balance of Plant (BOP) System

Main Components

3.2 The analysis of supply side in the fuel cells industry

In this field, there are so many vendors providing different kinds of products or services. As we described in section 2.3, there are three main kinds application of fuel cells, power generation, transportation, and mobile equipments (portable power). Due to focus on the power generation field, this research collects the main fuel cells products information of the leading companies and summarizes them as below Table 3-1. In addition to these leading companies, there are many other vendors like Avista Labs, H Power, Hydrogenics, Xellsis, Zetek Power, also provide same services and their information can be found through internet easily (Fuel Cells Links 2005).

Table 3-1 The main characters and basic comparison among leading vendors

Company/Country Fuel Cell Type

Specification/Pow

er Output Range Application Ballard Power Systems/

Canada PEMFC 1 kW~250 kW Stationary, Residential

UTC Power/ USA PEMFC 60 kW~360 kW Stationary

Plug Power/ USA PEMFC 5 kW~50 kW Stationary, Residential

FuelCell Energy/ USA MCFC 250 kW~2 MW Stationary, Residential, Large Building Siemens Westinghouse

Power Corporation/

German

SOFC 250 kW~0.5 MW Stationary, Residential

Fuel Cell Technology

Ltd./USA SOFC 1 kW~50 kW Residential, Small

Building

Astris Energi/Canada AFC 2.5 kW~5 kW Residential, Small Building

3.3 The analysis of fuel cells demand side

From above Table 3-1 analyses, this research found the leading vendors all are from advanced industrialized countries. That is because the development of fuel cells needs technological strength and economic sources and these countries just own such

vantages. It is expected, in the future, the demand of fuel cells power in these countries will be higher than other countries.

3.3.1 Market Analysis

The fuel cells power system is an ideal power generation system. It can be connected to existing power system to provide regular or emergent power and it can also be set up at specific locations like house, factory, or hospital to provide power independently.

Up to now, in all fuel cells applications, the fuel cells power generation system is the one invested most and the only one already achieves commercialized stage. Now, there are more than 200 fuel cells power generation units operating in the whole world.

Though the technology and cost of fuel cells have been significantly improved in recent years, its cost is still too high compared to other power sources. The cost of traditional power sources like fossil, nuclear is about $800/kW, the micro turbine ’s is about $1000/kW, but the fuel cells’ is $3500/kW (Kao et al. 2002), so the fuel cells can not yet be used to thoroughly replace the traditional power sources.

According to the research of Freedonia Group (2001), the global fuel cells market will achieve 3.8 US billion dollars in 2005 and it will be triple, 10.5 US billion dollars, in 2010. At the whole fuel cells market point, the minimum cost of massive production

is $500~$1000, and it’s estimated, in all fuel cells applicatio ns, the fuel cells power generation system will be the first one to achieve largely commercialized scale.

So, in the short term, the potential market of fuel cells power generation system is to provide stable power source to commercial and industrial buildings and peak demand regulation; in the middle and long term, is to provide power to industrial equipments, communities, off-shore islands and being connected to power grid system.

In different types of fuel cells, due to their high operating temperature (600 to 1000 degree C), SOFC and MCFC can be used to mitigate carbon dioxide and besides, the heat resulted from the high temperature can be reused to drive turbine to produce extra power yielding a high, 70~80%, efficiency. SOFC and MCFC are proper choices for stationary power sources and PEMFC is suitable for residential or small scale power sources. Table 3-2 is a fuel cells stationary power market prediction presented by ABI (Allied Business Intelligence 2001).

Table 3-2 The prediction of global fuel cells stationary power market Year Proper Prediction Optimistic Prediction

2005 506 911

2006 1,013 2,734

2007 1,519 4,101

2008 2,278 4,921

2009 4,556 7,381

2010 6,834 11,072

2011 10,252 16,608

* Unit: Million Dollars

3.3.2 Area Analysis

Currently, the development of global fuel cells industries focuses on North America, Western Europe, West Pacific countries. In 2000, North America occupied 35% of market, Western Europe is 25%, Asia is 36% and others’ is only 4% (IT IS project of ITRI 2002).

According to the research of Freedonia Group (2001), the total fuel cells market of main countries will achieve 7.675 billion dollars in 2005 and 19.85 billion dollars in 2010 which is 2.5 times in 2005. Divided by applications, this total market of fuel cells power is 8.51 billion dollars in 2010 occupying about 43% of total market in 2010, showing forth the promising future of this clean power. The detailed data is summarized as Table 3-3 providing data and comparison of fuel cells potentiality in main countries. In those countries, for its strong technological ability and consuming power, it will own the highest market volume in 2010 and the next countries or areas are Europe and Japan respectively. But, if standing on growth rate comparing the market in 2005 and 2010, China has the highest growth rate, 575%, and South

Korea’s 370% follows behind while the average of total countries is 260%. This result reveals in the developing and planned type economy countries, fuel cells products may have huge market potential; the reason is they normally don’t have many traditional products, so the replacing cost is not as high as other advanced countries and fuel cells product has become a good option compared to other power sources when its technology and commercialized levels are getting mature and mature.

Moreover, it is obvious that the main application of fuel cells in future will focus on fuel cells power generation systems because the technology maturity and the trend of distributed power. The average ratio to total market in 2010 is 43%.

Table 3-3 The market prediction of fuel cells products

3.4 The analysis of policy side

As described in section 1, according to the Kyoto protocol, 38 committed

industrialized countries have to cut their emissions of greenhouse gases between 2008 to 2012 to levels that are 5.2 per cent below 1990 levels to mitigate the greenhouse effect, so main countries are aggressively promoting the development of green and clean power. Fuel cells power, as one of these clean powers, with the characters of high efficiency and environmental protection, have been applied to many civil and national defense industries, therefore it becomes one of the reducing carbon dioxide options; this result is helpful to accelerate the development and commercialization of fuel cells. Following subsections will summarize the main fuel cells policies of main countries.

3.4.1 USA

Fuel cells had gotten the attention of US government since 1960 when NASA applied it to its space programs. Due to the decrease of gasoline deposits and the influence of greenhouse effect, US Energy Department has strengthened the research and

development of fuel cells; the annual subsidy to fuel cells is over 20 million dollars in recent years. In 1995, US government listed fuel cells power as one of the key

technologies very important to the prosperity of US economy and national safety. Fuel cells power was also listed in the key technologies in the “Improving Climate Action Plan”, issued by Clinton government in 1997.

On the promotion and reward measures, to respond to the “Improving Climate Action Plan”, US government established the “United States Fuel Cells Development Plan”

subsidizing $1000/kW for fuel cells new user, which purpose is to accelerate the

commercialization of fuel cells and reducing the greenhouse effect. Hence, only in 1998, 42 new fuel cells power units, 200 kW PAFC type, were installed in whole country. Besides, to strengthen the national security, US government also promoted all military bases to install 200 kW fuel cells power units (Department of Energy USA 2005).

3.4.2 Japan

The development of fuel cells in Japan, fundamentally, is driven by government plans not only including many kinds of basic researches but also promoting Technology Corporation. In 1981, Japan government issued “moonlight plan” to start the basic research of PAFC and NEDO (New Energy Development Organization) advanced the

“distributed power” plan in 1991 (Prime Minister of Japan and His Cabinet 2005).

Henceforth, many Japan companies devoted to research fuel cells and corporate with US IFC Company, which made a big progress on PAFC development. Now, on the technological level of PAFC, Japan already caught up with US while the

commercialized level has exceeded US.

About other types’ fuel cells like MCFC, SOFC and PEMFC, Japanese government also put lots money into related research. In 2001, Japanese government has invested 7.2 billion Yen for the popularization of fuel cells, the practicality of fuel cells power system, the preparation of fundamental facilities and the subsides of technological development. Besides, Japanese government invested 120.6 yen in its “Millennium Project” to solve the most urgent three topics- computerization topic, aging society topic and environmental protection topic. On the environmental protection topic, the most important thing is to develop fuel cells and carry out the reduction of greenhouse effect (Kao et al. 2002).

On the measures of promotion and reward, Japanese government gave the new built fuel cells power unit a 10% tax free rate and 30% accelerated depreciation and Japanese Development Bank also provided lower interest rate loan up to 40% of investing capital to the fuel cells units installed in power utilities and residential house.

3.4.3 Europe

Though European countries started their research on fuel cells in 1950, now, their technological level is behind US and Japan because they did not continue those researches on fuel cells until 1980. To reduce the reliance on oil and achieve the commitment of Kyoto protocol, European Union (EU) is aggressively drive the

development of green and clean power and fuel cells power is one of them. Averagely, EU supports annual fifty to sixty millions Euro on developing fuel cells.

In the Fifth EU Research Framework Program, EU supported 120 million Euros on the research and development of fuel cells. To carry out the substantial development, global climate change and ecological system, EU will invest 2.12 billion Euros on the fundamental research of energy and transportation. EU will bring fuel cells vehicles into many European cities, so in the coming future, fuel cells bus and cars will shuttle from cities in Europe (Kao et al. 2002).

In addition to EU, main European countries also actively developed fuel cells technology. RWE in German already built small co generation units by using fuel cells technology to provide the power demand of residential and commercial users.

RWE (RWE Power AG 2005) estimated the market share of fuel cells power will be 10% of total power market in 2015. Germany government, during the emerging stage,

will support ninety million Euros to develop and explore the fuel cells products. In British, the government will give tax subsidy to hydrogen fuel industries and will cancel the fuel tax of hydrogen thoroughly.

3.4.4 China

China did not have impressive progress on fuel cells technologies until 1990. Due to the breakthrough of fuel cells technologies in recent years, improving the power transmission in the remote area, increasing energy efficiency, reducing greenhouse effect and the reliance on oil, now, fuel cells is a popular potato in China. The

hydrogen energy was listed in the ten years programs, “1975”, “1985”, and “1995”, of Ministry of Science and Technology (Ministry of Science and Technology of China 2005). In recent years, China already developed 25 kW PEMFC vehicle and on the MCFC and SOFC also had significant achievements. In the recent ten years“2015”

program, China authorities listed hydrogen energy as one of the key technologies and subsidized 0.3 billion Renminbis (RMB) to support the research and development of fuel cells.

From the above subsections, main countries in this world already established positive and aggressive policies to promote the research and application of fuel cells, so it can be expected fuel cells will make a big leap in the coming future. Taiwan’s condition is also cared and it will be discussed in section 4.

4 The current status of fuel cells industry in Taiwan

This study is prepared in terms of the information collected from technological development and policy aspects that is described in the following subsections. The role of Taipower has been discussed in subsection 4.3. After reviewing Taiwan’s current status, the author thinks Taiwan Power Company (Taipower) is highly possible, either voluntary or required by the government, to introduce and build the fuel cells power system in near future.

4.1 The technological development side

Basically, the technology development of fuel cells in Taiwan is directed by Bureau of Energy under the Ministry of Economic, the Department of Industrial Technology (DOIT) under the Ministry of Economic and the National Science Council (NSC) of the Executive Yuan and each one of the m does his own duty. Bureau of Energy gives priority to develop stationary fuel cells power system, the DOIT mainly focuses on the fuel cells application to 3C (Computer, Communication, Consumer Electronics) products and civil utilization, and the NSC is responsible for the fundamental research of fuel cells (Kao et al. 2002).

Under the support of Bureau of Energy, the Energy and Resources Laboratories (ERL) of Industrial Technology Research Institute (ITRI) is the first organization devoting to the research of fuel cells. In 1988, it started the development of the key components like fuel cells stack and reformer and moreover, under the cooperation with Taiwan Power Company, it introduced a 250 kW Phosphoric Acid Fuel Cells (PAFC) power plant to process the example operation. It is because that PAFC is recognized its cost is hard to down to below $3,500/Kw, in recent years, the focus already shifted to the

more promising products- Proton Exchange Membrane Fuel Cells (PEMFC). By taking the subsidy of Bureau of Energy, ERL has been engaged in researching lower temperature PEMFC products since 1999 and successively completed the

development of 15 W, 30 W, and 150 W fuel cells stacks and the technology of producing MEA. In 2001, it set a four years project to develop a kW level stationary power system, which goal is to complete a 3 kW power generating system containing the development, design and assembly of the key components like stacks, reformer, hydrogen storage can and materials (Energy and Resources Laboratories 2005).

In recent years, the DOIT under the Ministry of Economic devoted itself to develop the fuel cells application of 3C products and civil utilization. Technically, this kind of fuel cells, Direct Methanol Fuel Cells (DMFC), is similar to PEMFC, its efficiency is lower but it has the merit of being miniaturized. This kind of fuel cells got much attention in US and Japan because it can be used to replace the current lithium battery to supply power to mobile phone, digital camera, laptop and so on (Department of Industrial Technology (DOIT) 2005). In Taiwan, this research and development is lead by the Materials Research Laboratories of ITRI.

Under the direction of the NSC, there has been more and more teams from academic circles and government research centers devoted to the research and development of fuel cells but most of them is still at the emerging stage. The research field of the Materials and Electro-Optics Research Division (MEORD) of Chung-San Institute of Science and Technology includes the development of electrode catalyst, gas diffusion layer and fuel cells stack design; Materials Research Laboratories of ITRI and the Fuel and Material Division of the Institute of Nuclear Energy Research (INER) put their focus on the key component development of mini fuel cells; besides, Yuan Ze

university set up a fuel cells research project, which short term goal is to develop the techniques of PEMFC and its long term goal will shift to DMFC and SOFC (Kao et al 2002).

For the key component-MEA, the MEORD, the Energy and Resources Laboratories (ERL) of Industrial Technology Research Institute (ITRI), Yuan Ze university and Asia Pacific Fuel Cell Technologies, Ltd. (APFCT) all devote themselves to research and develop this component, so it is expected, in this field, Taiwan has chance to achieve other advanced countries’ level. About the fuel cells stacks, as described above, the Energy and Resources Laboratories (ERL) of Industrial Technology Research Institute (ITRI) has successively completed the 15 W to 150 W stacks and the technology of producing MEA since 1988 and this achievement provides the base of completing a 1 to 5 kW stationary power system; besides, the APFCT already sold the fuel cells products with power from 300 W to 6 kW (APFCT 2005).

Most of R&D is implemented by state-owned organizations yet the Asia Pacific Fuel Cell Technologies, Ltd. (APFCT) is the only private company, which deals with this business. APFCT was founded by Dr. Jefferson YS Yang together with a core team of experienced fuel cell engineers and business experts and was incorporated in March 2000 with company headquarters located in Taipei, Taiwan, and a branch research laboratory in Anaheim, California, USA. Its operation strategies are to be the supplier of the commercialized 100 W to 10 kW PEMFC and the top research center of fuel cells in this world. Now, the commercial services supplied by APFTC include stacks and related components of PEMFC, fuel cells test station for teaching, developing fuel cells test station for researching and the hydrogen storage canisters with bigger flow rate. In the short future, APFTC will emphasize on the following goals: the automatic

technology of massively producing PEMFC, the R&D of fuel cells applications, and the R&D of key components in fuel cells system and the R&D of DMFC. To facilitate the development of fuel cells in Taiwan, APFTC suggests the Energy and Resources Laboratories (ERL) of Industrial Technology Research Institute (ITRI) should

accelerate the establishment of fuel cells testing center and accept the test commission from external companies; besides, the government should accelerate the establishment of related laws to construct a more completed circumstance for the development of fuel cells (APFCT 2005).

However, according to the investigation of the DOIT, the overall fuel cells technology of Taiwan is at least five years behind other advanced countries. As described in section 3.1, the whole fuel cells industry structure, including up, middle and down streams, is huge and involves various techniques, so it’s not easy to cover all of them at the same time. For current Taiwan’s level, except the fuel supply part of up stream business, possibly provided by CPC, Formosa and San-Fu Chemical Company, the other key components of middle and down streams all have to be imported due to falling behind of fuel cells technology (Kao et al 2002). In one word, if Taiwan really tries to have a foothold on this industry and compete with other countries, she has to integrate her resources and give a centralized development, i.e. develop all these three streams synchronically, then she may have a chance to breakthrough the technical bottleneck and build her own technical capabilities or for Taiwan industry, this fuel cells industry will only become another valet- manufacturing and low profit business for other countries.

4.2 The policy side

Taiwan is a densely populated island with very limited natural resources. Since energy plays a vital role in national economic development, the government established the Energy Commission under the Ministry of Economic Affairs in November 1979, and reorganized into Bureau of Energy in July 2004, to formulate and implement the national energy policy and other energy-related regulations. In addition, the Bureau of Energy guides the operations of energy enterprises and carries out such tasks as the

Taiwan is a densely populated island with very limited natural resources. Since energy plays a vital role in national economic development, the government established the Energy Commission under the Ministry of Economic Affairs in November 1979, and reorganized into Bureau of Energy in July 2004, to formulate and implement the national energy policy and other energy-related regulations. In addition, the Bureau of Energy guides the operations of energy enterprises and carries out such tasks as the