台灣發展燃料電池電力系統之行銷策略研究

全文

(1)♁ 國立中山大學企業管理學系英語 MBA 碩士在職專班碩士論文. 台灣發展燃料電池電力系統之行銷策略研究 The Marketing Strategies Study of Developing Fuel Cells Power System in Taiwan. 研究生：何維孝撰指導教授：高明瑞教授. 中華民國. 九十四年六月.

(2) 謝. 詞. 本論文得以順利完成，首先衷心感謝指導教授高明瑞博士的悉心指導與鼓勵。從文獻的探討、研究方向的選擇、觀念架構之建立，以迄本文之撰寫，吾師不斷地予以指導與啟迪，使得我能克服困難並完成本論文。此外，承蒙本所劉常勇教授及國立第一科技大學邱彥婷教授擔任口試委員並提供許多寶貴的建議與指正，在此謹致以最深的謝意。在兩年求學的過程中，因為本身工作的緣故，遭遇許多的困難與不便，感謝英語 MBA92 的同學多方協助與相互勉勵；其中要特別提出感謝的有倪寶芳 (Sophie)、謝紀珊 (Jass)及黃玉萍 (Sakura)等幾位同學。此外，感謝香港籍 Edwards Ngai 先生協助修改英文，使得本文增色不少。另外，好友段定夫 (Andy) 先生所提供之想法與建議，在此一併致謝。最後，感謝內人邱淑媚小姐的包容與支持，使得我能無後顧之憂的學習；而我的雙親與家人的鼓勵與支持亦是功不可沒的。衷心感謝他們的付出。. 何維孝. I. Z謹識. ~. 于中山企研所. ~. 九十四年六月. ~.

(3) 摘. 要. 人類長期排放二氧化碳，已經使得溫室效應對於整個生態環境造成非常不利的影響。傳統的火力發電方式，其排放大量的二氧化碳，使得此溫室效應更形惡化。另一方面，傳統長距離的電力輸配方式，不但需要使用大量的土地及資本，整個電力輸送過程更易因天候等因素而中斷，造成電力供應的可靠度下降，對國家經濟發展及民眾日常生活影響甚鉅。有鑑於此，近年來對於利用各種清潔能源所發展的小型發電機組來提供分散式電力的需求日益增加。而在這些清潔能源當中，燃料電池發電已成為一項新興且極具潛力的產業。. 燃料電池是利用電化學的原理，直接將燃料中的化學能轉為電能並釋放出熱能的裝置，其具有高效率、低污染、降低溫室效應等特點，是而能在諸多能源替代技術選擇中脫穎而出，成為全球矚目的焦點。然而目前較高的成本，使其尚無法完全與其他傳統發電方式進行商業化競爭。依據先進國家的經驗，現階段必須依賴政府的政策支持及財務補貼才能有效吸引民眾及企業使用此清潔能源。此外政府應長期協助技術發展才能使其逐步降低成本，進而達成完全商業化的程度。. 本研究之主要目的在探討台灣發展燃料電池發電之可行性，並包含供給面、需求面及政策面等方面之研究。此外，針對台灣的現況，本研究認為現階段台灣電力公司將最有可能肩負起發展燃料電池發電的工作，是而以台灣電力公司的角度來提出產品（Product）、價格（Price）、推廣（Promotion）及通路（Path）等 4P 的行銷策略。. 最後，本研究並針對我國發展燃料電池，政府部門應著重的方向與作法提出若干建議。. 關鍵字：燃料電池、台灣電力公司、4P 行銷策略 II.

(4) Abstract The green house effect caused by the emission of carbon dioxide has adverse impact on the ecosystem of the earth. The traditional fossil power plants generate this green house effect by their tremendous amount of carbon dioxide during operation. On the other hand, for the traditional long distance power transmission that needs not only large amount land and capital investments but also is easy to be interrupted due to severe climate, which causes the minimize the reliability of the power supply. Moreover, it would affect national economic development and the quality of life. In this respect, the demand for the power produced from small clean power systems has significantly increased. In those clean power systems, fuel cells power industry becomes a burgeoning and promising industry. A fuel cell is an electrochemical energy conversion device that converts hydrogen and oxygen into water, producing electricity and heat in the process. It stands out of many alternative power sources for its high efficiency, low pollution, and capability of reducing green house effect and becomes a focus of global energy market. However, its higher cost leads to less competitive than the traditional power sources. According to the experience of advanced countries, at this starting stage, it has to rely on the policy support and financial subsidy of the governments to attract the early adoption. In addition, the long-term support to the technological development can help the cost reduction and the achievement of full commercialization level. The main purpose of this study is to discuss the feasibility of Taiwan’s developing fuel cells power system. According to Taiwan’s status, Taiwan Power Company (Taipower) plays an important role to develop the fuel cells power, so a 4P marketing strategy under the standpoint of Taipower including Product, Price, Promotion, and Path strategy has been presented. Finally, recommendations of developing fuel cells to Taiwan government are also included in this study. Keywords: Fuel Cells, Taiwan Power Company (Taipower), 4P marketing strategy. III.

(5) Contents. 謝詞摘要 Abstract Contents List of Figures List of Tables 1. Introduction 1.1 Research motivation 1.2 Research purpose 1.3 Research scope and structure 1.4 Research method and procedure 1.5 Limitations of the Research 2. Introduction of fuel cells 2.1 What are fuel cells? 2.2 Types of fuel cells 2.2.1 Proton Exchange Membrane Fuel Cell Technology 2.2.2 Alkali Fuel Cell Technology 2.2.3 Solid Oxide Fuel Cells Technology 2.2.4 Phosphoric Acid Fuel Cells (PAFC) 2.2.5 Molten Carbonate Fuel Cells (MCFC) 2.3 The applications of fuel cell 2.4 The introduction of Natural Capitalism 2.5 A SWOT analysis under the viewpoints of Natural Capitalism 3 The current status and future trend of fuel cells industry 3.1 The introduction of fuel cells industry structure 3.2 The analysis of supply side in the fuel cells industry 3.3 The analysis of fuel cells demand side 3.3.1 Market Analysis 3.3.2 Area Analysis 3.4 The analysis of policy side 3.4.1 USA 3.4.2 Japan 3.4.3 Europe. IV. Page I II III IV VI VII 1 1 5 6 8 11 12 12 14 15 15 15 16 16 18 20 24 32 32 35 36 36 38 40 40 41 42.

(6) Contents (Continuous). 3.4.4 China 4 The current status of fuel cells industry in Taiwan 4.1 The technological development side 4.2 The policy side 4.3 Discussing the role of Taiwan Power Company 4.4 Taipower should look for more aggressive change 5 The 4P marketing strategies of fuel cells power in Taiwan 5.1 The Analysis Methods 5.2 Product Strategy 5.3 Pricing Strategy 5.4 Promotion Strategy 5.5 Path Strategy 6 Conclusions and Recommendations 6.1 Conclusions 6.2 Recommendations 7. Reference Appendix A 作者簡歷. V. Page 43 44 44 48 55 63 67 67 68 79 85 93 99 99 100 103 109 114.

(7) List of Figures. Figure 1-1 The sketch of a distributed power system Figure 1-2 The procedure of this research Figure 2-1 The basic theory of a fuel cell Figure 2-2 A sample of fuel cells stack Figure 2-3 A sketch of a fuel cell power system Figure 2-4 The environmental contribution of fuel cells Figure 2-5 A efficiency comparisons between different power sources Figure 3-1 The industry structure of the fuel cells power system Figure 4-1 The idle condition of Taipower’s power units Figure 4-2 The profit- making condition of Taipower Figure 5-1 The month power demand of recent five years Figure 5-2 The relationship between peak and average power demand Figure 5-3 The cost reduction trend of an emerging industry Figure 5-4 The Marketing Flows in the Marketing Channel for the fuel cells power system. VI. Page 3 10 13 13 14 24 26 34 61 62 72 73 84 98.

(8) List of Tables. Table 2-1 The comparisons among different types of fuel cells Table 2-2 The typical Fuel Cell applications Table 2-3 A comparison among different fuel cells fuel gases Table 2-4 Cost comparison between fuel cells power and green powers in Taiwan Table 3-1 The main characters and basic comparison among leading vendors Table 3-2 The prediction of global fuel cells stationary power market Table 3-3 The market prediction of fuel cells products Table 4-1 The main basic information of Taipower Table 4-2 The price comparison of main energies Table 5-1 The power usage records of AAA high school Table 5-2 The power usage records of BBB department store Table 5-3 The power usage records of Mr. C. VII. Page 17 19 29 31 35 37 39 55 57 72 75 76.

(9) 1. Introduction 1.1 Research motivation Owing to the increasing of atmospheric carbon dioxide due to combustion of fossil fuels (coal, oil, and natural gas), the greenhouse effect has caused the earth getting warm and warm. Such global warming would cause the polar ice caps and mountain glaciers to melt rapidly and result in appreciably higher coastal waters. The rise in global temperature would also produce new patterns and extremes of drought and rainfall, seriously disrupting food production in certain regions (Thomas Ackermann 2005). Finally, it may destroy the human and the earth.. To avoid devastation, people already paid a lot of attention and put hard efforts on this issue. As it is a global issue, United Nations has been promoting several important actions for it. In the 20th anniversary of Stockholm took place in 1992 in Rio de Janeiro, the UN Conference on Environment and Development, the "Earth Summit", agreed on Agenda 21 and the Rio Declaration. The Summit brought environment and development issues firmly into the public arena. Along with the Rio Declaration and Agenda 21 it led to agreement on two legally binding conventions: Biological Diversity and the Framework Convention on Climate Change (FCCC). It recognizes that the climate system is a shared resource whose stability can be affected by industrial and other emissions of carbon dioxide and other heat-trapping gases. The Kyoto Protocol is a document signed by about 180 countries at Kyoto, Japan, in December 1997. The protocol commits 38 industrialized countries to cut their emissions of greenhouse gases between years 2008 to 2012 to the levels that are 5.2 per cent below 1990 levels. From 2005, these countries will start to execute their promise of Kyoto protocol.. 1.

(10) Taiwan is not one of signed countries of Kyoto Protocol as her special diplomatic status. However, being a member of this earth village, Taiwan has her responsibility to save this world together; besides, Taiwan is always trying to breakthrough the diplomatic block and entering this international stage, so she must find some ways to reduce the emission of carbon dioxide and match the requirements of Kyoto protocol, thus, she can win respect and acceptance.. There are some approaches can be used to mitigate the greenhouse effect and reduce the emission of carbon dioxide and one of them is adjusting energy and power structure. In Kyoto protocol, it also clearly stated: “Draw together production of energy and service efficiency and manage, consume energy the efficiency of the equipment and manage, transport managing, economize the energy award”. So, finding a possible power source satisfying environment requirements is one motivation of this study.. Distributed electric power generation constitutes a new concept within the modern power industry. This new approach can have a significant impact on the future development of the power system structure. A study by the Electric Power Research Institute (EPRI) (Ackermann 2001), for example, indicates that by 2010, 25 % of the new generation will be distributed. A study by the Natural Gas Foundation concluded that this figure could be as high as 30 %.. Distributed power (DP) locates small electric generating systems geologically close to users and their facilities— in contrast to large central power-generating plants. Typical size of DP sources ranges widely from 1 kW to 10 MW (or more). Figure 1-1 (ABB website 2005) is a sketch of this distributed power system.. 2.

(11) Figure 1-1 The sketch of a distributed power system (ABB website 2005). Overall speaking, there are four factors can be used to explain this DP trend:. 1.. Power market liberalization: These changes are driven by a move towards more liberalization to create a competitive market environment and permit the users to choose the power source as they like. The purposes of power market liberalization are to elevate the performance effectiveness of power utility and protect the consumers’rights.. 2.. The investment on electricity transmission is too large: In 1990, the total investment on electricity transmission exceeded the investment on building new power generating plants in U.S. Taiwan has a similar problem too. The total cost of Sixth Transmission line of Taiwan Power Company (Taipower) is NT$ 470 billion dollars which is about 2.5 times of building the No.4 nuclear power plant. It proves that the traditional power generation and transmission method is not economic any more.. 3.

(12) 3.. Control of the greenhouse effect: As described above, in the future, people need a power generating method which not only provides enough power but also emits zero or very less carbon dioxide to match the related environment requirements. 4.. The demand on reliable power: The natural disasters and peak demand exceeding capacity both can interrupt the power supply. Taiwan people will never forget the electric tower collapse caused power blockage of the whole island. It is also a pain that people here don’t have enough power supply in the hot summer and the power loss always caused a lot of financial loss to the semi-conductor industries. If we have a power source near our house, factory or locations and supply power according to our demand, then those nightmares will not happen again.. With current higher costs for distributed power and slow adoption of all new technologies, the DP trend is just starting to emerge. However, substantial generation projects are in place and their energy type can be classified as combustion type involving micro-turbines, Reciprocating Engine and Stirling Engine and the other type - non- combustion type including fuel cells, wind-powered generators, battery-storage systems, solar power, and others.. The second motivation of this study, under this distributed power trend and so many distributed power options, is to choose a power source and identify its market niches and potentials in Taiwan in the future.. 4.

(13) 1.2 Research purpose. From the above descriptions, a power source with zero or little carbon dioxide emissions and reliable and flexible characters will emerge out in the short future. As above section, there are many kinds of energy sources of DP. Technically, the most matured and commercialized products are micro-turbines’power sources like diesel engine, Reciprocating Engine and Stirling Engine, but they still have CO2 emission and noise pollution problems; however, fuel cells power system, though it is less commercialized than micro-turbines products, has little CO2 emission and less noise pollution. Besides, the so called renewable or green power like solar, wind, hydraulic and geothermal power products, are hard to compete with above two power sources due to their limits on very high cost and geographic necessity. According to Huang’s study (2000), in the short future, Taiwan should develop fuel cells technology to save the environment while list green power as long term options. So, after collecting and studying above related information, this study finds the “fuel cells power” is a highly potential power source in the future.. Fuel cells work by converting chemical energy to electrical energy, capitalizing on hydrogen and oxygen's strong propensity to bond and form water. Unlike gas turbines, this process doesn't emit air pollutants such as nitrous oxide and sulfur dioxide. And because fuel cells are more efficient than gas turbines, they emit far less carbon dioxide. Besides, fuel cell generators, has more than 50 percent efficiency much higher than current main-stream central power sources only having 35% efficiency, meaning they're ideally suited for saving power and create higher utilization of natural energy sources.. 5.

(14) The main purposes of this research are as below, and they will be described detailed in the following sections.. 1.. Studying the basic principles, products, and developments of fuel cells.. 2.. Discussing the industry structure of fuel cells and surveying the fut ure development of fuel cells power from supply side, demand side and policy side in this world.. 3.. Surveying the future development of fuel cells power from supply side, demand side and policy side in Taiwan and discussing of the role of Taiwan Power Company (Taipower).. 4.. Designing the possible marketing strategies for fuel cells power in Taiwan.. 5.. Providing conclusions and recommendations for this issue.. 1.3 Research scope and structure. The fuel cells technology has developed for more than 160 years but it still stays at the gemming stage. The reasons include the technology is not fully commercialized matured, the cost is too high, and the specifications of materials and components are not clear, so it still has a gap to the fully commercialized.. To match the research purpose 1 in section 1.2, this study will introduce the theory and applications of fuel cells in section 2. The basic principles of different kinds of fuel cells are quite similar and each of them has its own characters, vantages and disadvantages and it also can be applied to different uses like power generation. 6.

(15) system, car, computer battery and cell phone battery. Though there are different uses and products of fuel cells, this research will focus on the fuel cells power generation system products and give a more detailed research on it. Besides, this section also examines the fuel cells power based on the viewpoints of Natural Capitalism.. In Section 3, this research first discuss the structure of fuel cells industry then study the technologies, products, trends of main suppliers in this world. The rules or acts promoting the use of fuel cells power of main industrial countries are also discussed. This section fulfills the purpose 2 in section 1.2.. Section 4 is used to match the purpose 3 in section 1.2. It studies the current status of fuel cells power in Taiwan from technology, supply viewpoints, the related rules and policies of energy usage and the technology developments of fuel cells in Taiwan are also included. This research will discuss the role of Taiwan Power Company (Taipower) to explain why Taipower is possible to promote fuel cells power in Taiwan.. Standing on Taipower ’s position, in section 5, this research will try to explore possible marketing strategies for fuel cells power in Taiwan by using product, price, promotion, and path, (4P) viewpoints respectively. This result should satisfy the purpose 4 in section 1.2.. Finally, this research contributes some conclusions and recommendations in section 6 from the acquired results and learning of above sections.. 7.

(16) 1.4 Research method and procedure. The method of this research is case study. Case study research is not sampling research (Tellis 1997). The case study does a deliberate research for a specific case. It extensively collects information of the case, thoroughly understands the status and development of the case, gives a deep analysis for the case, identifies the cause and effect of the case, and finally provides suggestions to the case.. Why does this research choose this method? As describing above, the fuel cells power system is not fully commercialized and still under developing. Up to now, Taiwan businesses do not yet introduce these power products and the related research is very limited to several academic units, so for most Taiwan people, they are strange to these products.. The case chosen in this research is Taiwan Power Company (Taipower). As the monopoly in Taiwan power market and its stated-own characters, Taipower has the responsibility to satisfy the future power demand and at the same time, matching the government ’s policies, has to achieve the goal of reducing the carbon dioxide. Besides, Taipower is also highly possible to introduce some kinds of distributed power sources to enhance the reliability and flexibility for future power demand. Standing on the Taipower’s position, this research will try to explore the accessibility and possibility of introducing fuel cells power system and explain its possible strategies and developments in Taiwan power market.. By studying related research method documents (Tellis 1997, Yin 1993, 1994, Wang 1998), this research builds the main features described as below for this case study.. 8.

(17) 1.. Type: Yin (1993) has identified some specific types of case studies: Exploratory, Explanatory, and Descriptive. This case study has both exploratory and explanatory characters. In this research, the author first explore what is fuel cell power system, then explain why does it be chosen and how can it work in the future.. 2.. Information collection method: Yin (1994) suggested three principles of data collection for case studies, including use multiple sources of data, create a case study database, and maintain a chain of evidence. This research adopts the principle of using multiple sources of data and collects from documents, archival records, interviews and Taipower’s interior information.. 3.. Analysis strategy: Yin (1994) suggested that every investigation should have a general analytic strategy, so as to guide the decision regarding what will be analyzed and for what reason. He presented some possible analytic techniques: pattern- matching, explanation-building, and time-series analysis. In this research, explanation-building is chosen to analyze the information of the case study by building the explanation for the case study. The goals are not to make an absolute conclusion for this case but to develop advanced insights and thoughts for future study.. 4.. Description Structure: Wang (1998) presented six types structure of case study description or writing and the research chooses the line type analysis structure. The author study the case first, then collect related information and analyze them, and finally make some conclusions and suggestions.. Following the above case study method, this research develops its research procedure drawn as below figure 1-2. 9.

(18) Identify motivations, purpose, and scope. Identify research method and structure, and procedure. Information collection 1. Taipower internal database 2. Investigation reports 3. Journal and magazine 4. Supplier websites 5. Other data bases. Collected information management and analysis. Results discussions and modifications. Make conclusions and recommendations. Thesis writing, correcting and printing. Figure 1-2 The procedure of this research. 10.

(19) 1.5 Limitations of the Research. Although the author already did his best to complete this study, this research is still bounded by following limits.. 1.. About the future energy policy, it’s a very complicated issue involving economical, social, technological, and environmental considerations, different opinions confliction among the departments of Taiwan government and the process of power liberalization are also important. Limited by the author ’s capability and time, this research may not cover overall information.. 2.. Very few fuel cells products exist in Taiwan market now, so most people in Taiwan don’t have enough information or knowledge about fuel cells and it also caused the difficulty to do market survey and get quantitative data. Due to this limit, this research gives priority to qualitative information and analysis.. 3.. The author, as an employee of Taiwan Power Company, has more than ten years working experience in a large power plant. It could be somewhat subjective to study the company’s future policy as the employee’s status. Whether the author made some biases during the research process due to his specific role is unknown.. 11.

(20) 2. Introduction of fuel cells. 2.1 What is fuel cell?. A fuel cell is an electrochemical energy conversion device that converts the molecule of hydrogen and oxygen into water, and produces electricity and heat in the process. Every fuel cell has two electrodes, one positive termed as anode and one negative called cathode. The production of electricity takes place at the electrodes. A fuel cell has an electrolyte that carries electrically charged particles from one electrode to the other, and a catalyst, which speeds the reactions at the electrodes. It is just like a battery that can be recharged while you are drawing power from it. It can be recharged using electricity; however, a fuel cell uses hydrogen and oxygen.. In an ordinary combustion reaction, as in a flame or an internal combustion engine, essentially all of the energy released in the reaction is converted to heat. In a fuel cell, the reaction is done electrochemically, meaning that in the anode compartment the fuel is oxidized and in the cathode compartment, oxygen from the air is reduced to water. The two compartments are connected by an electrolyte that allows hydrogen ions (protons) to move from the anode to the cathode. A single fuel cell can generate very small amount of direct current (DC) electricity. Figure 2-1 (Energy Concepts 2005) shows the basic theory of a fuel cell.. 12.

(21) Figure 2-1 The basic theory of a fuel cell. Generally, fuel cells are assembled into a stack. To produce a usable amount of electricity, multiple fuel cells are combined into a fuel cell stack. The stack is essentially an assembly of individual fuel cells (each producing up to about one volt) designed to produce the desired electrical current and voltage for a specific application such as a residence or small commercial application. The direct current electricity produced can be varied over a wide range by altering the area and number of cells in the stack. Figure 2-2 (Fuel Cell Store 2005) is a sample of fuel cells stack.. Figure 2-2 A sample of fuel cells stack 13.

(22) Producing electrical power for a working application requires more than just the fuel cells stack. A fuel cell system may include fuel processing, thermal management, power conditioning, electrical grid connection, and energy storage modules. The power conditioning system provides regulated DC or AC power appropriate for the application. The successful integration of an entire fuel cell system is critical to achieve optimal performance. A fuel cell power system can be sketched as Figure 2-3 (Agilent Technologies 2005).. Figure 2-3 A sketch of a fuel cell power system. 2.2 Types of fuel cells. A fuel cell provides DC (Direct Current) voltage that can be used to power motors, lights or any number of electrical appliances. There are several different types of fuel cells, each using a different chemistry. Fuel cells are usually classified by the type of electrolyte they use. Some types of fuel cells show promise for use in power generation plants and others may be useful for small portable applications or for powering cars (Fuel Cells Links 2005). 14.

(23) 2.2.1 Proton Exchange Membrane Fuel Cell Technology Proton Exchange Membrane Fuel Cells (PEMFC) operate at relatively low temperatures (60-160°C) have high power density, can vary their output quickly to meet shifts in power demand, and are suited for applications where a quick startup is required. PEM fuel cells can tolerate CO2 but are sensitive to CO pollution, which can result in reduced efficiency. The likelihood of increasing the efficiency, output/weight and output/volume ratios for this type of fuel cell by using other materials is great. On the other hand, the PEM is already competitive in its existing form in most areas. Mass production of the PEM fuel cells would also make it competitive price wise.. 2.2.2 Alkali Fuel Cell Technology. The Alkali fuel cells work on compressed hydrogen and oxygen and generally use a solution of potassium hydroxide in water as their electrolyte. The working temperature inside alkali cells are around 150 to 200°C. NASA preferred alkali fuel cells for the Space Shuttle fleet, as well as the Apollo program, mainly because of power generating efficiencies that approaches 70 percent. These cells also provide drinking water for the astronauts. Alkaline fuel cells are sensitive to CO2 . If air is used instead of pure oxygen in the fuel cells, the air has to be cleansed of CO2 . Another disadvantage is that the electrolytes are liquid and corrosive. The Alkali fuel cells are for military and space purpose, so it will not be considered for civil usage.. 2.2.3 Solid Oxide Fuel Cells Technology. Solid oxide fuel cells (SOFCs) use a hard, non-porous ceramic compound as the electrolyte. SOFCs operate at very high temperatures -- around 1,000°C. As a result they are highly efficient and heat can be recaptured for co-generation purposes, 15.

(24) resulting in efficiencies to 80 to 85 percent. Size, heat output and a long startup time make this fuel cell more suitable for stationary applications. There have been considerable difficulties with materials at this high temperature and research is being done both to develop new, more stable materials for these temperatures, and to decrease the operational temperature. SOFCs are at a relatively early stage of development compared to the other fuel cell technologies.. 2.2.4 Phosphoric Acid Fuel Cells (PAFC). Phosphoric acid fuel cells use liquid phosphoric acid as the electrolyte. The fuel cells are highly efficient with total efficiency of 80 percent achievable with waste heat produced by the fuel cell is used for the co-generation. PAFC power plants are usually large and heavy and require warm-up time. Because of this, PAFCs are used mainly for stationary applications.. 2.2.5 Molten Carbonate Fuel Cells (MCFC). Molten carbonate fuel cells use an electrolyte composed of a molten carbonate salt mixture suspended in a porous, chemically inert ceramic lithium aluminum oxide (LiAlO2) matrix. These systems are large and operate at very high temperatures (in the range of 600-700°C). These fuel cells are very efficient when the heat produced is used for co-generation. However, because MCFC fuel cells use a corrosive electrolyte, their durability is limited.. Except the Alkali fuel cells, the other four kinds of fuel cells are compared as below Table 2-1 (Fuel Cells Services 2005).. 16.

(25) Table 2-1 The comparisons among different types of fuel cells. Electrolyte. Size range. PEMFC. PAFC. Polymer. H3 PO4 Lithium. membrane. carbone. 3-250 kW. 100-200 kW. Natural gas, Fuel. hydrogen, propane, diesel. MCFC. SOFC. LiKaCo3 Zirconia. Stabilized. 250 kW - 10 MW. 1 kW - 10 MW. Natural gas, landfill gas,. Natural gas,. digester gas,. hydrogen. Natural gas, hydroge n, landfill gas, fuel oil. propane Efficiency. 30-40%. 36-42%. 45-55%. 45-60%. Self-reforming. No. No. Yes. Yes. No. No. Yes. Yes. Internal temperature. Commercial status. Some commercially. Commercially available. available. Likely commercializatio n. Environmental. Nearly zero emissions. Other Features. Co-generation. 17. Likely commercialization.

(26) 2.3 The applications of fuel cell. The fuel cell has been a huge success in the space program, and is used in all the US manned space vehicles. They are now beginning to be used in more ordinary applications, though they are still not in widespread use. They are expensive, and most current applications are for research or where a subsidy has been secured because of their particularly benign environmental properties. Nevertheless, in recent years encouraging progress has been made, and the environmental benefits of fuel cells should soon be much more widely available without the need for massive subsidy.. Fuel cells are silent and efficient, even at part loads. The advantages are particularly strong when issues of pollution and energy conservation are to the fore. One area where Fuel Cells are set to make a big impact is in power system development and it is highly suitable for combined heat and power (CHP) systems. In a CHP system a small power station is used to generate electric power and heat in places like a block of flats or a factory. The heat can be used, unlike in the large power stations where the heat energy is just wasted. Fuel cells, with their very high efficiency even at low powers, their silent operation, their simplicity and inherent reliability, are the best type of energy converter for CHP systems - the only trouble is that at the moment they still cost more.. The second application is adopted for transportation. US state governments have required that an ever increasing percentage of new car sales must be "zero emission" which in practice means electric. Rechargeable batteries are very heavy and take a long time to charge, which means that the fuel cell is much to be preferred. Buses are. 18.

(27) in many ways even better candidates for fuel cell power than cars, and they have been used very successfully in Canada and the USA. In Canada, more and more buses are equipped with fuel cell power system.. The third important area is used for mobile equipment. People all like to use mobile phones and portable computers, but for most flexible use people would like very long lasting batteries that can be recharged instantly. The energy density of hydrogen stored in metal hydrides, or in methanol, far exceeds any of the rechargeable battery technologies. Furthermore, hydrogen and methanol "refills" can be virtually instant. This is why there so much research development directed at methanol fuel cells.. These applications are summarized as below Table 2-2 (Fuel Cells Services 2005).. Table 2-2 The typical Fuel Cell applications PEMFC. PAFC. Transportation Co-generation (vehicles) Distributed power source Typical Applications. Distributed power source. MCFC. Co-generation. Co-generation. Distributed power source. Distributed power source. Small scale power supply Off-shore island Large scale power supply power supply (Residential house, building) Mobile power source (mobile phones and laptops). Transportation (vehicles). 19. SOFC. Middle to large scale power supply.

(28) 2.4 The introduction of Natural Capitalism. Natural Capitalism: Creating the Next Industrial Revolution (Paul Hawken, Amory Lovins, and L. Hunter Lovins 2000), is the first book to explore the lucrative opportunities for businesses in an era of approaching environmental limits. Natural Capitalism describes a future in which business and environmental interests increasingly overlap, and in which businesses can better satisfy their customers' needs, increase profits, and help solve environmental problems all at the same time.. In this book, the authors have a very profound opinion about future economy: In the next century, as human population doubles and the resources available per person drop by one-half to three-fourths, a remarkable transformation of industry and commerce can occur. Through this transformation, society will be able to create a vital economy that uses radically less material and energy. This economy can free up resources, reduce taxes on personal income, increase per-capita spending on social ills (while simultaneously reducing those ills), and begin to restore the damaged environment of the earth. These necessary changes done properly can promote economic efficiency, ecological conservation, and social equity.. The principles of Natural Capitalism provide the basis for a complete rethinking of business. They show how, contrary to conventional wisdom, far greater profits are achieved through protecting and enhancing nature, culture, and community than by harming them. This book introduces four central principles of natural capitalism that are a means to enable countries, companies, and communities to operate by behaving as if all forms of capital were valued. This research will use these four central principles to examine the fuel cells as below to know whether fuel cells match those. 20.

(29) principles of Natural Capitalism or not and a more detailed SWOT analysis will be described in section 2.5.. 1.. RADICAL RESOURCE PRODUCTIVITY. Through fundamental changes in production design and technology, leading organizations are making natural resources stretch five, ten, even 100 times further than before. The resulting savings in operational costs, capital, and time quickly pay for themselves, and in many cases initial capital investments actually decrease.. As this research described above, fuel cells power system has a much higher efficiency, up to 50 to 60%, than most other power systems’ 30 to 35% efficiency. It means it can radically increase resource productivity. For example, a power plant with traditional combustion cycle having about 30% efficiency, using natural gas as its fuel, can generate 100 kW electricity and lots of carbon dioxide but if it uses a fuel cells power system, then using same amount of natural gas, it can generate about 200 kW electricity and very little carbon dioxide. So, it’s obviously that fuel cells power meets the first principle.. 2. BIOMIMICRY. Natural Capitalism seeks not merely to reduce waste but also to eliminate the concept altogether. Closed-loop production systems, modeled on nature's designs, return every output harmlessly to the ecosystem or create valuable inputs for other manufacturing processes. Industrial processes that emulate nature's benign chemistry reduce dependence on nonrenewable inputs, eliminate waste and toxicity, and often allow more efficient production.. As figure 2-4 (UTC Fuel Cells 2005), fuel cells can eliminate 40,000 pounds of acid rain and smog-causing pollutants from the environment per year and reduce 21.

(30) carbon dioxide emissions by more than 3.5 million pounds per year. Actually, as the technology of fuel cells getting mature, i.e. when the pure hydrogen time comes, there will not be any CO2 emissions from fuel cells power system. No doubt, fuel cells can also meet this second principle.. 3.. SERVICE AND FLOW ECONOMY. The business model of traditional manufacturing rests on the sporadic sale of goods. The Natural Capitalism model delivers value as a continuous flow of services— leasing an illumination service, for example, rather than selling light bulbs. This shift rewards both provider and consumer for delivering the desired service in ever cheaper, more efficient, and more durable ways. It also reduces inventory and revenue fluctuations and other risks.. In a service economy, the product is just a beginning. The manufacturer's leasing and ultimate recovery of the product means that the product remains an asset. The minimization of materials use, the maximization of product durability, and enhanced ease of maintenance not only improve the customer's experience and value but also protect the manufacturer's investment and hence its bottom line. An economy based on a service-and- flow model could also help stabilize the business cycle, because customers would be purchasing flows of services, which they need continuously, rather than durable equipment that's affordable only in good years.. Simply speaking, this principle describes a future of using leasing instead of buying. Consumers lease something from the providers and pay some fees; the providers get the revenue from leasing and do not need to produce as more as before, thus we can lessen the usage of natural resources and materials. In section 22.

(31) 5, this research will discuss the path and promotion of marketing fuel cells power system in Taiwan and will have a deeper discussion for this part.. 4.. INVESTING IN NATURAL CAPITAL. Natural capital refers to the earth's natural resources and the ecological systems that provide vital life-support services to society and all living things. These services are of immense economic value; many are literally priceless, since they have no known substitutes. Yet current business practices and public policies typically ignore their value. As a result, natural capital is being degraded and liquidated by the wasteful use of energy, materials, water, fiber, topsoil, and ecosystems. This works toward reversing worldwide planetary destruction through reinvestments in sustaining, restoring, and expanding stocks of natural capital, so that the biosphere can produce more abundant ecosystem services and natural resources. Any good capitalist reinvests in productive capital. Businesses are finding an exciting range of new cost-effective ways to restore and expand the natural capital directly required for operations and indirectly required to sustain the supply system and customer base. Because fuel cells power can reduce the emission amount of carbon dioxide, which means it can help mitigate the air pollution, rebuild our atmosphere and return a clean earth. So, even indirectly, fuel cells can still invest the natural capital and meet this character.. Natural Capitalism shows how these four principles will enable businesses to act as if natural capital were being properly valued, without waiting for consensus on what that value should be. Collectively, fuel cells’ techniques offer a powerful menu of new ways to make resource productivity the foundation of a lasting and prosperous economy. 23.

(32) Figure 2-4 The environmental contribution of fuel cells (UTC Fuel Cells 2005). 2.5 A SWOT analysis under the viewpoints of Natural Capitalism. From section 2.1 to 2.3, this research gave an overall introduction of fuel cells power system and as described, currently, fuel cells have its own vantages and problems. In section 2.4, this research also raised the main points of Natural Capitalism. To verify the business and environmental competitiveness of fuel cells, a SWOT analysis under the viewpoints of Natural Capitalism is presented as below:. 24.

(33) l. Strength. 1.. Almost Zero Emissions -Match Bio-mimicry principle: as described above, a fuel cell device only emits water vapor if fueled with pure hydrogen. According to an investigation (UTC Fuel Cells) as above Figure 2-4, fuel cells can eliminate 40,000 pounds of acid rain and smog-causing pollutants from the environment per year and reduce carbon dioxide emissions by more than 3.5 million pounds per year. So, in the long run, fuel cells have the potentials to return a clean earth.. 2.. High efficiency-Match Radical Resource Productivity principle: Since fuel cells do not use combustion, their efficiency is not linked to their maximum operating temperature. As a result, the efficiency of the power conversion step (the actual electrochemical reaction as opposed to the actual combustion reaction) can be significantly higher than that of thermal engines. In addition fuel cells also exhibit higher part- load efficiency and do not display a sharp drop in efficiency as the power plant size decreases. Heat engines operate with highest efficiency when run at their design speed and exhibit a rapid decrease in efficiency at part load. Figure 2-5 (Micro-Vett 2005) shows the efficiency comparisons between different power sources.. 3.. Low temperatures-Match Radical Resource Productivity principle: Fuel cell systems suitable for automotive applications operate at low temperatures. This is an advantage in that the fuel cells require little warm up time, high temperature hazards are reduced, and the thermodynamic efficiency of the electro-chemical reaction is inherently better.. 25.

(34) 4.. Reduced number of energy transformations -Match Radical Resource Productivity principle: When used as an electrical energy generating device, fuel cells require fewer energy transformations than those associated with a heat engine. When used as a mechanical energy generating device, fuel cells require an equal number of conversions, although the specific transformations are different and efficiencies are higher.. Figure 2-5 A efficiency comparisons between different power sources (Micro-Vett 2005). l. Weakness. 1.. Hydrogen supplement : As discussed in the last section, a fuel cell uses oxygen and hydrogen to produce electricity. The oxygen required for a fuel cell comes from the air and the hydrogen is not so readily available, however. Hydrogen has some limitations that make it impractical for use in most applications. For instance, people don't have a hydrogen pipeline coming to their house, and currently, people can't pull up to a hydrogen pump at your 26.

(35) local gas station. Hydrogen is difficult to store and distribute, so it would be much more convenient if fuel cells could use fuels that are more readily available. This problem is addressed by a device called a reformer. A reformer turns hydrocarbon or alcohol fuels into hydrogen, which is then fed to the fuel cell. Unfortunately, reformers are not perfect. They generate heat and produce other gases besides hydrogen. They use various devices to try to clean up the hydrogen, but even so, the hydrogen that comes out of them is not pure, and this lowers the efficiency of the fuel cell.. 2.. Contaminants sensitivity: Fuel cells require relatively pure fuel, free of specific contaminants. These contaminants include sulfur and car-bon compounds, and residual liquid fuels (depending on the type of fuel cell) that can deactivate the fuel cell catalyst effectively destroying its ability to operate. None of these contaminants inhibit combustion in an internal combustion engine.. 3.. High-cost catalyst: Fuel cells suitable for automotive applications typically require the use of a platinum catalyst to promote the power generation reaction. Platinum is a rare metal and is very expensive.. 4.. Ice: Any residual water within the fuel cells can cause irreversible expansion damage if permitted to freeze. During operation, fuel cell systems generate sufficient heat to prevent freezing over normal ambient temperatures, but when shut down in cold weather the fuel cells must be kept warm or the residual water must be removed before freezing.. 27.

(36) l. Opportunity. 1.. Hydrogen- Match the Service and Flow Economy: Even though hydrogen is a current weakness of fuel cells development, it connotes a huge market in the future. Without pure hydrogen, fuel cells can be driven by others. Some of the more promising fuels are natural gas, propane and methanol. Many people have natural- gas lines or propane tanks at their house already, so these fuels are the most likely to be used for home fuel cells. Methanol is a liquid fuel that has similar properties to gasoline. It is just as easy to transport and distribute, so methanol may be a likely candidate to power fuel-cell devices. Table 2-3 (Methanex Corporation 2005) is a comparison among hydrogen, methanol and gasoline from the viewpoints of environment, economics, health and safety. So in the future, business related to these fuels service and supplement may have a huge potential market.. 2.. Rapid load-following-Match the Service and Flow Economy : Capable of operating on multiple fuels, such as natural gas, propane and hydrogen, fuel cell systems can be deployed to operate in parallel with the grid, as independent energy sources or to complement solar and wind generating systems. Fuel cells exhibit good load-following characteristics. Fuel cell systems, however, are comprised of predominantly mechanical devices each of which has its own response time to changes in load demand. This character will bring a business opportunity for fuel cells system maintenance and components supply service when fuel cell systems are popular.. 28.

(37) Table 2-3 A comparison among different fuel cells fuel gases Hydrogen. Methanol. Gasoline. Urban Smog Forming Emissions. ++. ++. +. Greenhouse Gas Emissions. ++. ++. +. Air Toxics Emissions. ++. ++. +. Water Pollution. ++. +. 0. Energy Security. ++. ++. +. Fuel Costs. --. +. ++. Vehicle Costs. 0. -. --. Fire Safety. -. ++. 0. Human Intake. ++. --. 0. Environment. Economics. Health and Safety. +: Positive Impact; - : Negative Impact. 3.. Refueling time -Match the Service and Flow Economy: Fuel cell systems do not require recharging at all. Rather, fuel cell systems must be re- fueled, which is faster than charging a battery and can provide greater range depending on the size of the storage tank. When considering its opportunity, this part must be combined with the fuel supply of fuel cell systems.. 4.. New technology: Fuel cells are an emerging technology. As with any new technology, reductions in cost, weight and size concurrent with increases in 29.

(38) reliability and lifetime remain primary engineering goals. Any new technologies all have their potentials, especially the technology like fuel cells having so many inspiring characters. If the current weakness can be overcome, fuel cells will have a shining future.. l. Threat. 1.. Lack of infrastructures: An effective hydrogen infrastructure including storage, transportation and distribution has yet to be established, if it can’t be built, it will have adverse influence on the popularization and prosperity of fuel cells. It is necessary for government to make a integral plan and policy to make the infrastructure possible.. 2.. Green Energy: As an innovative energy, fuel cells are somewhat different with green energy, i.e., renewable energy including solar, wind, hydraulic, geothermal, ocean and biomass powers. Their vantages are they use the natural resources instead of consuming them, so they neither produce any pollutions produced by current power supply facilities nor leave any harmful wastes to our earth. On the other hand, their current common problems include very high cost, technological bottlenecks, geography limited and so on. According to above Huang’s study, in the short future, Taiwan should develop fuel cells technology while list green power as long term options. Table 2-4 contains the cost comparison between fuel cells power and green power in Taiwan (Kao et al 2002). This comparisons echo the research of Huang that in the short run, fuel cells are more promising but in the long run, other green energies may exceed fuel cells.. 30.

(39) Table 2-4 Cost comparison between fuel cells power and green powers in Taiwan. Fuel Cells. Cost. 1999. 2004. 2010. 2020. Installation. 100. 45. 35. 28. 3.39. 1.57. 1.25. 1.03. 35. 35. 35. 35. 1.64. 1.64. 1.64. 1.64. 210. 90. 50. 35. 10.67. 4.57. 2.54. 1.78. 50. 50. 50. 50. 3.63. 3.63. 3.63. 3.63. Power Generation Installation. Wind. Power Generation Installation. Solar. Power Generation Installation. Biomass. Power Generation. *Installation Cost: NTD/kW; Power Generation Cost: NTD/kWh. According to above SWOT analysis, integrally, fuel cells power can meet these four principles and make profits both on business and environment. However, currently, fuel cells are not perfect, there still is some weakness needed to be overcome as soon as possible.. 31.

(40) 3 The current status and future trend of fuel cells industry. 3.1 The introduction of fuel cells industry structure. Fuel cells technology is being developed, so it is not fully commercial matured from its raw materials supply to its applications. Basically, in this industry structure, the upstream includes fuel, raw materials and components supply; the middle stream contains the manufacture of cells and stacks, fuel cells tests, and the down stream mainly is fuel cells applications and manufacture.. From top to down, the structure of fuel cells industry includes the design of fuel cells, technology development, materials, fuel supply, tests and other auxiliary products and services. In the fuel cells power generating system, its main components are fuel cell stacks subsystem, fuel processing subsystem, controller subsystem. The fuel cell stack subsystem is composed of electrodes, electrolytes, catalysts and graphite plates. The fuel processing subsystem mainly contains fuel reformer and hydrogen storage system. As described above, after the commercialization of fuel cells, the most possible fuels are the carbon hydrogen compounds including methanol and natural gas, so it needs a reformer to generate the needed hydrogen from those carbon hydrogen compounds. Besides, why do fuel cells need a controller subsystem? That is because the power generated from fuel cells is direct current (DC) power, while in the real world, most electrical equipments are driven by alternative current (AC) power, so it needs this controller subsystem to invert this DC to AC power. The other auxiliary products including heat exchangers, air pumps, and control valves all are necessary to complete an integrated power generating system. The industry structure of the fuel cells industry is depicted as figure 3-1 (Energy and Resources Laboratories (ERL) of ITRI. 32.

(41) 2002).. Although the development of fuel cells has been carried over a century and there are more than 500 companies investing in this field, this industry is still in an emerging stage. The main reasons are the pre-commercialized activities, like technology development, products development, relying on the support of governments or non-profit organizations (NPO). But, when the technology is getting mature and the market is forming, more and more private businesses will control technology and occupy important positions in the market.. This research tries to analyze this fuel cells market of this world from supply side, demand side and policy side, described in below subsections.. 33.

(42) The Industry Structure of a Fuel Cells Power Generation System 1. Fuel Cells Stack System l l l. Main Components and Items. l l l l l. 2. Fuel Processing System Reformer l Reactor Design l Heat Exchanger l Air and Water Pump l Air sensors l Pressure Vessel l Nobel Metal l Water Pump. MEA Spacers O-Ring Assembly Nobel Metal Carbon Plate Carbon Cloth Carbon Powder. l l l l l l l. Hydrogen Storage Storage Material Pressure Vessel Controller Heat Exchanger Sensor MEA Water Pump. 3. Controller and Balance of Plant (BOP) System l Circuit Design l Components l Charger Main Components l Assembly and Items l Inverter l Air, Water Pump l Heat Exchanger l Air Sensor. Figure 3-1 The industry structure of the fuel cells power system. 34.

(43) 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. 35.

(44) 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 36.

(45) 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 37.

(46) 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%.. 38.

(47) Table 3-3 The market prediction of fuel cells products. Country. United States. 2005 Total. 2010 Total. Fuel Cells. Fuel Cells. Market. Market. Growth. 2010. Ratio. Rate. Total Fuel. (Fuel Cells. (2010. Cells Power. Power /. /2005). Market. Total). 2.5 billion. 6.5 billion. 260%. 2.5 billion. 40%. 2.3 billion. 5.5 billion. 240%. 2.3 billion. 42%. Japan. 2.0 billion. 4.8 billion. 240%. 2.0 billion. 42%. Canada. 0.475 billion. 1.1 billion. 230%. 0.56 billion. 50%. China. 0.225 billion. 1.3 billion. 575%. 0.75 billion. 50%. South Korea. 0.175 billion. 0.65 billion. 370%. 0.4 billion. 60%. Total. 7.675 billion. 260%. 8.51. 43%. Western Europe. 19.85 billion. * Unit: US dollar. 39.

(48) 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 40.

(49) 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). 41.

(50) 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, 42.

(51) 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.. 43.

(52) 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 44.

(53) 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. 45.

(54) 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. 46.

(55) 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.. 47.