Fuel Cells Power Up

Location: New York
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Tuesday, January 29, 2008

Fuel cells are creating a lot of fanfare. But is it warranted? While some say that those hydrogen-oriented devices and the clean byproducts they release are not inevitable, others say that they are playing key roles now that will only grow.

Hydrogen, a carrier of energy, has many applications. It can be used to fuel vehicles, power stations and heavy equipment. One of most burgeoning niches is that of back-up power whereby companies that provide essential services can ill-afford a loss of service and the subsequent revenues. Telecommunications enterprises, for instance, have been pushed by federal regulators and customers alike to beef up their operations and particularly after some natural disasters knocked out services for extended periods.

The telecommunications industry is currently spending $2 billion to provide back-up power to its cell towers. The fuel cell industry says that its technology is best in such cases, noting that it is more durable than batteries and cleaner and less noisy than diesel engines.

While the upfront costs associated with fuel cells are more, the industry says that they are ultimately more cost effective because they need less maintenance and provide greater reliability. Fuel cell maker Ballard says cell towers generally need only 20 hours of back-up service a year - something that fuel cells have shown they can effectively accomplish. This success, it says, comes alongside some recent federal regulations that require telecommunications' companies to maintain at least 8 hours of back-up power at cell towers and 24 hours at their centralized stations.

Every cell site has a base station that converts radio waves into a signal. And each one of those of sites has an electrical grid connection. Fuel cells, in essence, monitor this power from this grid. If power fades, it kicks on instantaneously and uses a reservoir of compressed hydrogen. While it takes more energy to create the hydrogen than it produces, the fuel cell industry says that the amount of power required by back-up applications is so small that it is economical to use the technology.

Take Sprint, which has deployed 200 hydrogen fuel cells to help maintain its wireless service in the event of outages: Fuel cells, it says, are a more optimal choice than lead-acid batteries and "noisy" diesel generators, noting they run on hydrogen gas and produce electricity through an electrochemical reaction. The only byproducts of the process are water and heat, and they are quiet.

"Fuel cells have a perfect application there," says Tony Cochrane, director of back-up power for Ballard. "They are longer lasting than batteries and can be sited more easily than diesel generators. We try to educate people on the amount of hydrogen they can store. Because it is a fairly new type of fuel, it requires some education on how to do this so that we do not have to get special approval for every installation."

While fuel cells have found a home in the back-up power business, they are also being used to generate heat and power both residentially and commercially. Fuel cell powered systems have been running in Japanese homes since 2005, providing cost savings of $600 to $800 per home a year, says Ballard. The use of fuel cell technology will further reduce carbon dioxide emissions by up to 40 percent when compared to conventional electricity generation using fossil fuels, it adds.

Residential fuel cells supply between 2-5 kilowatts of power and are mostly in the experimental stage. Meanwhile, those used for commercial enterprises can generate 200 kilowatts and are implemented if businesses need uninterruptible power or where access to the transmission grid is limited.

Practical applications are taking place. Dow Chemical and General Motors Corp. will integrate earlier fuel cell research and apply it to Dow's Texas operations in Freeport at its chemical and plastics production facility. The fuel cells will produce as much as one megawatt of electricity. If it works, Dow would pursue large-scale commercialization and use as many as 400 fuel cells to generate 35 megawatts of power. That would be enough to power 2 percent of Dow's Texas operations.

"Right now, utilities keep their primary power sources running all the time," says Patrick Serfass, head of the National Hydrogen Association. "Why not use the excess to split water and create hydrogen? Then they could use that energy to meet peak loads or to fuel vehicles and buses."

According to Energy Business Reports, the global fuel industry is expected to generate more than $18.6 billion in revenues by 2013. Those sales will come not just from the stationary market used to supply power and heat but also in the automotive and portable electronics industries.

To be sure, not all are on the hydrogen bandwagon. That's because hydrogen does not stand alone and it must therefore be separated from oxygen. Doing that requires energy produced by other fuels. If fossil fuels are used, the process then consumes more energy than it creates and the end result is likely more pollution. If renewable sources are used, the procedure is far more benign. But then questions arise about whether it is more efficient to make hydrogen or just produce electric energy directly.

If fuel cells are to reach their potential, both the innovative qualities as well as the cost of materials must improve. Certain applications such as those used for back-up power are further along than others in the automotive and stationary realms. To achieve a critical mass in all industrial segments, the federal government is helping to fund private initiatives. In the meantime, fuel cells will remain a small but increasingly important element of the energy economy.