A revolution is occurring in automotive technology; a revolution so immense that it threatens to unleash a paradigm shift that will change the face of the entire global automotive industry. The genesis of this ‘new wave’ is to be found in a device called a fuel cell. It is the industry’s best hope of being able to sustain individual mobility in the new millennium by delivering ‘clean’ energy to power automobiles.
As Europe embarks on the journey that is the 21st century three main factors equally pose a threat to the existence of the internal combustion engine and therefore to the mobility it enables. The first issue is the rapid depletion in global stocks of crude oil over the next 50 years. The second concern is the growing prevalence of harmful pollutants in the atmosphere principally Carbon Monoxide (CO) and Nitrogen Oxides (NOx) from the combustion of fossil fuels. The third factor is the cost of energy, which has increased significantly over the past three decades, as has the overall demand for energy.
These are immediate problems, which require long-term solutions, according to Tif Awan, co-author of a new study by automotive analysts Frost & Sullivan, ‘The European Fuel Cell Market for Vehicles, Components and Fuel Retailing.’ Mr Awan believes the race for supremacy in the fuel cell powertrain market has already begun.
The study found the market for fuel cell powertrains had revenues of around 3.2 million Euros this year. Frost & Sullivan forecasts the fuel cell market will gather pace up to 2008 when revenues will reach up to 47.7 million Euros. With small series production kicking off around this time the only way is forward. Revenues are expected to reach 18.5 billion Euros by 2020 and onto a phenomenal of 52 billion Euros by 2040.
The main competitive arena at the moment is research & development, Mr Awan points out. “For companies choosing to be at the forefront of this revolution in automotive powertrain technology, research and development will be imperative, it is where the long term competitive advantage will be created.”
“As the race heats up key players are vying to deliver a credible fuel cell powertrain to market within the next two years. “
The majority of European automakers have fuel cell development programmes currently under way. “Perhaps the most significant programme is Xcellsis,” Mr Awan continues. “This joint venture was set up by Ford, Daimler Chrysler and the fuel cell company Ballard Power Systems to produce fuel cell engines.” Xcellsis, now wholly owned by Ballard, is set to deliver 30 Mercedes fuel cell buses for commercial use as early as the end of 2002.
There are still several challenges to face along the way. “The road to mass- market depends on numerous considerations. Cost, for example. The current cost of a fuel cell engine is in the region of €750 per kW compared to around €20/kW for an internal combustion engine. A significant proportion of the cost element can be attributed to material costs, effective research and development will play a vital role in bringing these costs down and enabling mass production.”
Another challenge is the development of the technology. Fuel cell vehicles use hydrogen. At room temperature this is a gas and in addition it has to be produced either through electrolysis from water or by reforming a suitable carrier fuel such as methanol, natural gas or perhaps gasoline. Electrolysis, although feasible, is in its infancy. This leaves reformation. The question arises whether this should be on-board or off-board. The primary disadvantage of the former is the cost of the reforming unit; the advantage of the latter is efficiency, however then the key issue becomes storage. The choice is between compressed gas at very high pressure and the dangers this entails or liquid. Hydrogen is in liquid state at minus 270 degrees Celsius or just 3 degrees above Absolute Zero (3 Kelvin); at this temperature storage has to be in cryogenic tanks that are extremely expensive.
Fuel suppliers have yet to map out a clear route to achieve the ultimate goal: a scenario where pure hydrogen can be retailed to users of fuel cell vehicles just as gasoline is today. The industry is facing enormous infrastructure investments, which cannot be recouped in the short to medium term by fuel revenues.
Mr Awan says the industry is also facing a catch 22 scenario. ”
“Consumer demand must be present to justify the investment in infrastructure, and yet the infrastructure must be present to supply developing demand.”
In the immediate future, the industry is debating which intermediate fuel can be used instead of direct hydrogen. “It seems that gasoline has a stronger business case, due to the existence of the current distribution infrastructure, and the lack of customer acceptable problems,” says Mr Awan.
“However, gasoline is still plagued by reformer technology problems, while methanol reforming is well established. Methanol producers are also promoting the environmental benefits of using stranded and flared natural gas.”
Incorporating the revenues of all three major fuel alternatives, Frost & Sullivan estimates the total fuel revenues derived from automotive fuel cell use will be 17 billion Euros by 2040.