Specialty chemical companies calling in for opportunity in fuel cells.
(Focus 2002: Fine & Specialty Chemicals).(the benefits of fuel cells)(Statistical Data Included)
Author/s: Cynthia Challener
Issue: April 8, 2002
Although a young technology, fuel cells offer potential for chemical companies ranging from catalysts to engineering polymers and hydrogen.
As the world continues to deplete the available supply of fossil fuels and struggles with the environmental issues associated with the burning of such materials, many governments and industrial groups are looking to alternative fuel sources. Although still a nascent technology, fuel cells offer one of the most exciting opportunities to achieve clean sources of energy, and chemical companies see promise in this emerging market.
"Fuel cells are a disruptive technology that has the potential to radically change the energy system and address some of the big problems--crude oil shortage, emissions and efficiency. The emerging fuel cell industry is a unique growth opportunity for any chemical company that can position itself as a supplier of performing products. The emerging fuel cell industry will create rapidly growing demand for new products of the chemical industry," says Tore Land, CEO, Celanese Ventures GmbH, the venture company of Celanese AG.
Fuel cells have widespread applications, and therefore they offer market potential. Uses include stationary applications, such as a power source in hospitals, nursing homes, office buildings, and schools. They can be used in residential applications, where a given residence is connected to the grid to provide supplemental power, or installed as a grid-independent generator for on-site service. Other uses are in transportation (cars, buses and other vehicles); portable power (miniature fuel cells for cellular phones, laptops, pagers, video recorders and power tools; and landfill/wastewater treatment, reducing emissions and generating power from methane gas. It is believed fuel cells will find their early markets in assured power and remote power applications, according to Business Communications Company (BCC), a Norwalk, Conn.-based market research firm.
Currently, phosphoric acid is the best selling fuel cell chemistry. Last year UTC Technologies Corp. sold about twenty-two 200 kilowatt fuel cells. The cost is reportedly about $850,000 per 200 kilowatt unit installed. About 1,000 proton exchange membrane (PEM) fuel cells, each averaging about five kilowatts per unit, were put into service on an experimental and trial basis. The remainder are molten carbonate.
North American fuel cell manufacturers produced enough fuel cells to generate 14 megawatts in 2001, according to Alton Parrish, editor at BCC. If an average cost of $4,350 per kilowatt is assumed, the 2001 stationary market is about $60.9 million dollars for fuel cells that are producing electricity outside the laboratory.
The market research firm Frost and Sullivan projects the North American stationary fuel cell market will grow at a compounded annual growth rate of 49.6 percent by 2005. The European fuel cell market is expected to reach $42 million by 2008, with revenues reaching $16.3 billion by 2020 and $45.8 billion by 2040, according to Frost and Sullivan estimates as of October 2001.
For the hydrogen fuel cell market, annual growth of roughly 22 percent over the next five years is projected, if measured without contributions of government spending, according to BCC. If government spending is included in industry projections, annual growth is 9.7 percent for the next five years. Revenues to fuel cells companies are expected to replace government research grants. By 2007, the global hydrogen fuel cell market is expected to be $1.022 billion, which includes hydrogen storage technologies. If all government spending is included in the figure for 2007, the total fuel cell spending will be about $1.833 billion, according to BCC.
As a fledging market, the US government is playing an important role in developing the technology. "The US Department of Energy (DoE) is the driving force behind the fuel cell and nascent hydrogen energy industry," says BCC's Mr. Parrish. The FreedomCar initiative, a public-private partnership with the US government and the auto industry to promote the development of hydrogen as a primary fuel for cars and trucks, will spend about $150 million on PEM fuel cell car technologies this year. The DoE has another $70 million earmarked for solid oxide fuel cells (SOFCs) research this year and next, and the spending level will remain fairly constant for the next five years. Another $140 million at a minimum can be found supporting hydrogen production and fuel cell technologies (primarily stationary PEM fuel cells) within the DoE budget.
As an example of government support, in June 2001 the management consultant firm Arthur D. Little (ADL) was awarded $3.83 million by the DoE to develop and analyze fuel cell technologies and fuel options. DoE made $17.9 million in cost-shared financial assistance awards to companies for funding new research in advanced fuel cells--ADL, Nuvera Fuel Cells Inc. and Mechanology LLC. ADL has three contracts--$425,000 to assist DoE in A evaluating fuel cell options for vehicle fuel cell power systems; $2.2 million to develop a next-generation hybrid compressor/expander module to provide compressed air and energy recovery in a PEM fuel cell system; and $580,000 to analyze the viability of the use of fuel cells as auxiliary power units for on-road vehicles. Roughly 20 to 25 percent of the project will be funded by ADL.
In addition to the US government, private companies, including the major auto and energy companies, and the European, Japanese and Chinese governments are involved in research and development for fuel cell and hydrogen production for energy. Overall volume for fuel cell vehicles is projected to be 50,000 to 100,000 units per year by 2010, with fuel cell investments of select players totaling $5.24 billion from 1997 to 2004, according to the management consulting firm Roland Berger Strategy Consultants.
The largest order for hydrogen fuel cells, valued at $223 million, was given to Apollo Energy Systems Inc. of Fort Lauderdale, Fla., by Hydrolec Inc. of Jacksonville, Fla., in January 2002. The order calls for shipment of 2000 Apollo Power Plants (alkaline fuel cell, lead cobalt battery, DC to AC inverter and other hardware) per month to Hydrolec for use as backup power in hydraulic and electric elevator systems.
Before fuel cells reach greater use, issues of cost and reliability need to be addressed. "While the stack and reformer are meeting performance goals, moving parts, such as pumps and compressors, are reportedly not able to perform for thousands of hours in continuous 24-7 operation without failing," explains BCC's Mr. Parrish. Stationary fuel cells must operate reliably and continuously for 40,000 hours and require only an annual inspection. Automotive fuel cells require a 5,000-hour lifetime.
One issue that needs to be addressed is the costs of catalysts, a major cost in reformers. Catalytic autothermal reforming currently relies on platinum, ruthenium, palladium and other noble metals. Cheaper and more durable catalytic materials are needed. The PEM fuel cell stack also relies heavily on platinum, and to a lesser degree on ruthenium and palladium. For automotive applictions particularly, fueling infrastructure/hydrogen storage is also an issue.
Platinum accounts for about 20 percent of the total costs of a 50 kilowatt PEM fuel cell system for vehicles, says BCC's Mr. Parrish. The system requires about 200 grams of platinum and about 45 grams of ruthenium. The estimate is based on a platinum loading in the fuel cell's membrane electrode assemblies (MEA) of 0.8 milligrams per square centimeter. The fuel processor requires about 18 grams of platinum and the fuel cell's MEA about 182 grams. Researchers have proven that a similar performance can be had from the fuel cell with platinum loadings as low as 0.1 milligrams per square centimeter, and other experiments have show similar performance at 0.02 milligrams per square centimeter platinum loading.
In a PEM fuel cell, the membrane electrode assembly, which consists of the anode, cathode, membrane electrolyte and gas diffusion layer is more than 80 percent of the fuel cell stack. A 50 kilowatt stack is estimated to cost about $11,000 or $220 per kilowatt, notes BCC's Mr. Parrish. The DoE goal is to bring the system cost down (including a reformer) to about $2,500 per vehicle. The current cost is about $14,000 per fuel cell engine, including platinum and ruthenium costs of about $3,000.
Current estimates for PEM stationary fuel cells are more than $3,600 per kilowatt installed. These costs need to fall to about $1,500 to $1,200 per kilowatt to be competitive with other means of generating electricity, says BCC's Mr. Parrish.
Chemical Companies Position
The opportunities in fuel cells relate to the manufacture of membranes and catalysts, which will be the beneficiaries in the PEM market, as well as makers of hydride storage products. Johnson Matthey, Engelhard, UOP and OMG are the catalyst suppliers to the fuel cell industry, according to BCC. Among the companies supplying hydride storage products are Energy Conversion Devices, Millennium Cell, Powerball Technologies, Ergenics and Hydrogen Components. Membranes are dominated by DuPont and its Nafion membrane. Others working in this area include Celanese, W.L. Gore, Asahi, OM Group and Johnson Matthey.
Johnson Matthey is focusing on catalysts and catalyzed components for low-temperature fuel cell systems. The company makes fuel cell catalysts, electrodes, MEAs, fuel processing components for reforming, carbon dioxide cleanup, after-burners and exhaust emission control and integrates these fuel-processing components into systems. "We are focusing on these areas as they are key to the fuel cell system and make use of our core competencies," says Louise Potter, marketing specialist, Johnson Matthey Fuel Cells, a business unit of Johnson Matthey PLC.
In 2000 Johnson Matthey made a significant investment in fuel cell testing facilities at its research center in the UK. Last year, it began a phased multimillion dollar investment in an MEA manufacturing facility in Swindon, the UK. Johnson Matthey has invested in the US to expand its catalyst production capability, fuel processing components and system development. The company expects to earn significant revenues by 2005 and significant profits by 2010, says Ms. Potter. Currently, the only fuel cell products commercially available from Johnson Matthey are the HiSpec range of fuel cell catalysts.
A "meaningful portion" of Engelhard's $83 million in R&D expenditures is devoted to its fuel cell program, says Terry Poles, director, fuel cells at Engelhard Corp. Engelhard's materials science portfolio matches the critical needs of PEM and solid oxide fuel cells particularly, but its products have been used in all types of fuel cells.
The company already has commercial sales of fuel cell catalysts and adsorbents that currently are used in many of the stationary and mobile fuel cells being demonstrated. For the fuel reformer, Engelhard offers oxidation, reforming, shift and carbon monoxide destruction catalysts as well as sulfur-removal sorbents. It also provides anode and cathode catalysts for the fuel cell stack as well as combustion catalysts to destroy any remaining fuel that is not used in the stack. Engelhard's existing catalyst and adsorbent manufacturing facilities will be used to produce fuel cell products for the foreseeable future.
Engelhard is involved in many fuel cell alliances and commercial arrangements with partners in a variety of industries, including automotive and power generation. "These arrangements are largely proprietary to enable us to work closely with our customers to customize our products for their fuel cell designs," notes Mr. Poles. One of its publicly disclosed alliances is with Plug Power Inc., a developer of residential and automotive fuel cells, which involves developing and supplying advanced catalysts to increase the performance and efficiency of its fuel processor.
OM Group (OMG) gained technology related to fuel cells with its 2001 acquisition of Degussa AG's Metals Catalysts Cerdec ([DMC.sup.2]). Included in the acquisition were [dmc.sup.2]'s business units for fuel cells, automotive catalysts, precious metal chemistry and management, technical materials and jewelry and electroplating. OMG's fuel cell business dates back to the mid 1980s, when Degussa began research and development focusing on electrocatalysts for phosphoric acid fuel cells (PAFCs). During the 1990s, the emphasis switched to PEM fuel cell technology, MEAs and fuel processing catalysts. By early 1998, the fuel cell research and development program was converted to an autonomous business unit.
OMG is commercializing products primarily for PEM fuel cells, but it also includes direct methanol fuel cell components in its business strategies. "We believe these technologies offer significant commercial advantages over competing technologies such as combustion-based generation and storage batteries. Based on these beliefs, OMG is investing in and developing the products required for clean, efficient fuel-cell power generation," explains Rob Privette, director of US fuel cell development at OMG.
Besides having a position in base metals-related technologies, OMG also has a strong position in precious metals, catalysis, nanotechnology, and coatings and surface science. Roughly one-fourth of the world's primary platinum group metals demand is processed by OMG, says the company. Competency in precious metals management and trading will be critically important to businesses selling millions of MEAs and fuel processing catalysts annually, says OMG's Mr. Privette.
OMG opened a new North American office for fuel cells in Auburn Hills, Mich., in 2000. Last year, the company announced the operation of a new continuous manufacturing line capable of 300,000 MEAs annually. OMG expects to complete a new 4,000-square-meter production facility in the first quarter of this year. This facility will house a new MEA production line expected to start up in 2003 as well as provide necessary office space. The new line will have a design capacity of several million MEAs annually. The company is conducting focused product-oriented research into MEAs and fuel processing catalysts.
OMG is currently supplying customers with standard MEA and fuel processing products. The pMembrain MEA is available for hydrogen and reformate operation and for customer-specified formats and operating conditions. The Protonics fuel processing products are used for hydrocarbon fuel reforming and carbon monoxide removal using water-gas shift and preferential oxidation.
As with other companies, DuPont's association with fuel cells dates back to the space program, when DuPont first sold its Nafion membranes for fuel cell applications. Over the last five years, new developments have occurred, and beginning in early 2001 DuPont founded a new business unit, DuPont Fuel Cells, to draw on and pull in applicable technologies within DuPont.
Within fuel cell applications, DuPont is expanding from membranes into MEAs for PEM fuel cells. PEM is a natural starting point for DuPont based on its strength in polymer science, analytical science and catalysis, says David Peet, director of DuPont Fuel Cells. The company expects initial returns as early as 2004/2005, as several PEM manufacturers are expecting to commercialize products then.
DuPont's mission is to be the leading supplier of membranes and components for PEM fuel cells. The products being developed are fuel neutral and can run on hydrogen, direct methanol or reformate (from natural gas). DuPont introduced new products last year, also under the Nafion trade name.
The company has a commercial manufacturing plant for Nafion membranes for fuel cells in North Carolina and opened a pilot facility in 2001 in Pennsylvania for making membrane electrode components. In 2000 DuPont opened a new fuel cells technology and development center in Wilmington, Del., and also has an R&D center for conductive plates for PEM fuel cells in Kingston, Ontario, Canada. DuPont Canada Inc. will begin developing conductive flowfield plates for fuel cells and plans to expand its research center with a $19 million investment from a federal technology partnership fund. DuPont hopes to deliver the first commercial prototype plates to the industrial marketplace later in 2002.
DuPont is also working globally with several fuel cell systems developers, including Mechanical Technology Corp., Albany, N.Y., to develop microfuel cells for small/portable electronic devices.
Celanese Ventures, which has had a fuel cells program since 1995, is focused on PEM fuel cells because of the broad potential applications in stationary systems and cars and because it fits in with the company's competencies in polymers and catalysis, the core of MEAs, says Celanese Ventures' Mr. Land. Celanese is also the sole producer of the high performance polymer polybenzimidazole, the critical polymeric material for its high temperature membrane.
Celanese is focusing on MEAs and performance materials for the fuel cell. The company offers the only MEA worldwide that can be operated at temperatures of up to 200 degrees Celsius. In addition, Ticona, the engineering polymers business of Celanese AG, offers high performance polymers for bipolar plates, the endplates, and various components for the fuel cell system.
Celanese intends to commercialize its MEA products through partnerships and alliances, which would give the company an avenue into the marketplace while also providing the company with insight into the system integration process. "In these relationships with future prospective customers, we are positioned as a future strategic vendor," explains Mr. Land.
The company is investing in R&D and pilot manufacturing facilities for high temperature MEAs. The company is building an MEA pilot manufacturing facility that is expected to be operational in the second half of 2002.
Industrial gas players also see opportunity in fuel cells. Air Products and Chemicals Inc. formed a Fuel Cell Energy Solutions group in early 2001, but as a merchant supplier of hydrogen, the company is interested in all types of fuel cells that use hydrogen as a fuel. "Hydrogen is a fuel source that is abundant, efficient, renewable, and non-polluting. Utilizing hydrogen as a fuel source has many benefits ranging from environmental, to the domestic economy in making the US more competitive internationally, and at the same time increasing US energy self-sufficiency," says Venki Raman, business development manager for Fuel Cell Energy Solutions, at Air Products.
Air Products has commercialized hydrogen fueling stations, hydrogen safety training, and certain hydrogen supply products to fuel cell systems. It is also developing hydrogen fueling stations for clean transportation applications, and the technologies and systems for hydrogen generation, purification and handling. The company is also involved in several fuel cell technology development agreements, including ones with Ballard Power Systems and the Ford Motor Company.
Air Products installed a hydrogen refueling station for the three Ballard fuel cell buses, which were operated on a daily basis in Chicago for two years as part of a demonstration project ending in 1999, and also provided liquid hydrogen fuel for this project. The company has also in-stalled a fueling station at Ford's R&D center that can dispense both liquid and gaseous hydrogen, as well as one for the California Fuel Cell Partnership in West Sacramento. Recently Air Products signed an agreement with Japan Metals and Chemicals Company Ltd. to pursue a joint development program for hydrogen storage systems that use metal hydride alloys for fuel cell markets. Last year, Air Products also formed a joint development agreement for developing the process for converting sodium borates to sodium borohydride with Millennium Cell Inc., a company with proprietary technology to safely generate and store hydrogen.
Other industrial gas players also are involved in fuel cells. Last December, Air Liquide signed a framework agreement with France's nuclear research agency CEA for fuel cell research. This effort will continue the work of Air Liquide's Axane joint venture with Nuvera, which focuses mainly focuses on membrane fuel cells and hydrogen storage. Nuvera is the fuel cells division of Italy's Gruppo De Nora. In November 2001, the BOC Group joined Chrysalix Energy, the private equity joint venture formed to develop fuel cell technology that also includes BASF Venture Capital, Shell Hydrogen BV, Ballard Power Systems AG and Westcoast Energy Inc.
BASF has developed a catalyst for producing hydrogen from methanol in cooperation with Ballard Power Systems. The catalyst is used in DaimlerChyrsler's methanol-based fuel cell care Necar 5 and other fuel cells from DaimlerChrysler, Ford and Mazda. BASF's fuel cell research includes catalysts for producing hydrogen, new electrodes and cooling protection systems, polymers, sealing materials, membranes and bipolar plates from injection molding.
Shell Hydrogen BV, created in 1999 to pursue and develop business opportunities related to hydrogen and fuel cells, is a global business unit of the Royal Dutch/Shell Group. The company is looking at not only hydrogen supply, but also catalyst technology, process control and process engineering.
Shell Hydrogen is taking a two-phase approach in its fuel cells program. In the first phase, the company is developing fuel reformer technology that will produce hydrogen from existing hydrocarbon fuel with reduced carbon dioxide emissions. At same time, Shell is supporting early development of a long-term hydrogen infrastructure capable of completely replacing the existing hydrocarbon-based one.
Shell is working with UTC Fuel Cells to develop a new generation of fuel processors to give passenger vehicles good driving performance and mileage characteristics under the Hydrogen-Source partnership. The company is also involved in a joint venture with Hydro-Quebec and Gesellschaft fur Elektrometallurgie to develop a convenient, metal-hydride hydrogen storage system that will operate at the low temperatures compatible with PEM fuel cells. Specifically, HERA Hydrogen Storage Systems Inc. is developing metal alloys that work at room temperature and meet the energy needs of fuel cells for automobiles with a mass of no more than 100 kilograms. Other partners include the California Fuel Cell Partnership, Ballard Power Systems, Siemens Westinghouse Power and Icelandic New Energy.
In January, Shell Hydrogen, Mitsubishi and Johnson Matthey created a venture capital company, Conduit Ventures Ltd., to focus on fuel cells and related hydrogen technology. With the help of other investors, the three companies hope to raise up to $100 million for the Conduit fund,
Vehicle Processor Catalyst Beds
Reformer Catalyst Bed
Function ATR HTS LTS
Temperature C[degrees] 1,030 430 230
Catalyst Pt/Ni [Fe.sub.3][O.sub.4]/ Cu/ZnO
Cr[O.sub.3]
Support Alumina Alumina Alumina
Bed Volume (L) 14.6 11.8 15.1
Bed Weight (kg) 19 15 21
Reformer Clean-Up Beds
Catalyst
Bed
Function Prox Sulfur Removal NH Removal
Temperature C[degrees] 205 490 80
Catalyst Pt ZnO Activated Carbon
Support Alumina None None
Bed Volume (L) 7.1 2.8 5.6
Bed Weight (kg) 8 8 3
The above table reflects estimates for the amount of catalyst needed in
a hydrocarbon reformer for a fuel cell vehicle for autothermal reforming
(ATR), the high temperature shift reaction (HTS), the low temperature
shift reaction (LTS), and preferential oxidation (PROX) of carbon
monoxide as well as clean up of the reformate stream so only 99.99
percent pure hydrogen reaches the fuel cell.
Source: US Department of Energy
Fuel Cell Types
Fuel Cell Type Electrolyte Efficiency % Power Range
PEM Proton 30-50 0.012-kw to 250 kw
exchange membrane
SOFC Yittria stabilied -- 25 kw-3 mw
zirconium dioxide
MCFC Potassium/Lithium 50-57 250 kw-3 mw
PAFC Phosphoric acid 35-40 50 kw-200 kw
Fuel Cell Type Temp Range Heat Use
PEM 180 Hot water
SOFC 1,800 High
pressure steam
MCFC 1,200 High
pressure steam
PAFC 400 Hot Water & Steam
Kw = kilowatt
Mw = megawatt
PEM=proton exchange membranes
SOFC=solid oxide fuel cells
MCFC=molten carbonate fuel cells
PALFC=phosphoric acid fuel cells
Source: Business Communications Company
Fuel Cell Industry Revenues ($MM)
All Chemistry 2000 2001 2002 2003
Hydrogen Fuel Cells (HFC)
Total PEM 111.8 135 160.2 204.3
Total MCFC 31.1 38 45.3 54.7
Total PAFC 16.7 20.3 25.9 28.5
Total SOFC 29.7 39.1 50.2 63.5
Subtotal Hydrogen fuel
cells 189.3 232.4 281.6 331
Total Storage 23.9 32.1 40.8 52.4
Total Reforming 34 46 60.4 71.3
Total HFC & Storage 247.2 310.5 382.8 454.7
Total US Gov.
Research Spending 357 367 364 390
EU Spending 107 110 109 130
Asia 71 73 73 78
Total Gov Spending 534 550 572 598
AAGR% 3.8
Total Metal Air 12.8 16.9 23.7 28
DMFC Spending 13.7 19.3 37.3 28.1
All Fuel Cell Spending 821.7 915.3 1026 1208
Total AAGR 8.7%
The numbers include revenues of fuel cell companies that report revenues
plus a portion of the revenues (grant money) of research and development
companies. There are over 800 companies involved in the fuel cell
industry. Estimates are conservative.
AAGR = annual average growth rate
DMFC = direct methanol fuel cells
MCFC = molten carbonate fuel cells
PAFC = phosphoric acid fuel cells
PEM = proton exchange membranes
SOFC = solid oxide fuel cells
RELATED ARTICLE: Leading Systems Integrators in the Fuel Cells Market
PEM Fuel Cells
Ballard
Plug Power
H Power
UTC Fuel Cells
Proton Energy
Idatech
Nuvera Fuel Cells
Avista
DCH Technologies
Solid Oxide Fuel Cells
Siemens
Global Thermoelectric
McDermott
Sulzur Hexis.
Phosphoric Acid
United Technologies
Alkaline
United Technologies (suppliers for the space program)
Astris Energi for stationary and vehicle applications.
Molten Carbonate
Ansaldo
Fuel Cell Energy
Fuel Cell Technologies
Source: Business Communications Company
chemicalmarketreporter.com
Spring 2002 ...
CETC Proposes Work with Calgary Fuel-Cell Developer, Global Thermoelectric Inc.
CETC has presented a project proposal to Global Thermoelectric Inc. of Calgary. Global Thermoelectric is currently developing a fuel-cell cogeneration system for residential buildings. If the project proceeds, Global will fund R&D at CETC that will lead to the addition of modelling capabilities to CETC's ESP-r/HOT3000 building simulation engine. A customized graphical interface will also be created to enable Global to use the simulation engine in its R&D efforts to optimize the integration of its fuel cell with space and water heating systems.
This work will build upon a recently completed project for Fuel Cell Technologies. As with this previous project, CETC will retain all intellectual property rights. Final negotiations over scope of work and cost are proceeding well and a contract initiation is anticipated this Spring 2002.
..................................................
CETC Presents Fuel Cell Software to FCT
On November 14th 2001, CETC's Dr. Ian Beausoleil-Morrison and the simulation software team of the Buildings Group delivered a custom software package to Fuel Cell Technologies Limited (FCT) of Kingston, Ontario. The development team traveled to Kingston to present the software and provide a demonstration.
This R&D tool was developed to help FCT optimize the integration of the fuel cell with space and water heating systems and to market the technology and explore niche markets. The residential software incorporates a residential fuel cell modelling component, HVAC modelling templates, and two house geometries with options for different building envelope properties (e.g. windows and wall construction) as well as on-line documentation.
The high combined efficiency of the unit FCT is developing with CETC technology should be sufficient for supplying a house's electrical demands as well as offsetting space and water heating requirements. CETC will offer maintenance and technical support, as well as training for FCT staff members over the next year.
buildingsgroup.nrcan.gc.ca ... original reports
buildingsgroup.nrcan.gc.ca ... about CETC |
