Fuel Cells Aren't Spewing Hot Air, But are They Cost Effective?

Location: New York Date: 2012-05-24

What’s going on in the fuel cell world these days? Those in the communications arena are saying that life is only getting better while those using the technology for on site generation are still trying to make headway.
Fuel cells can be used to fuel vehicles and to provide power to industry. And, they can be applied as well to telecom businesses, particularly for those niches that can’t afford to lose communications with those in the field: Think disaster relief or military missions.

“The volumes are still low and they are still competing with incredibly mature technologies,” says Michael Lefenfeld, chief executive of Signa Chemistry, in a phone interview. “But as efficiencies increase, they are are showing improvement in both cost and technology.”

Fuel cells to run laptops and cell phones are the domain of his company -- things that can juice up with a portable hand-held charger. Unlike a battery that drains down, such fuel cells can deliver a constant flow of energy to the device. Lefenfeld says that the U.S. military has been a huge supporter of that technology, noting that it can provide more energy in a smaller package that is lighter weight.

The telecommunications industry, generally, is currently spending billions 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 greater, the telecom sector says that they are ultimately more cost effective because they need less maintenance and provide greater reliability. How so?
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 the grid. If power fades, it kicks on instantaneously and uses a reservoir of compressed hydrogen.

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.

Consumer Behaviors

The industrial sector is also a prospect, especially those eco-minded businesses that need continuous power: Hospitals and chip-makers. As they gear up, others may follow and give fuel cells a chance to eventually break through. In some of those on site generation cases, the technology is used for back-up power and in others, it is deployed as the primary generator.

WalMart’s goal of becoming fully powered with green energy is one that fits right in. The retailer has installed two “Bloom Boxes” that generate a total of 400 kilowatts at two of its Southern California locations. It says that more such deployments are on the way.

Fuel cells, generally, convert hydrogen and oxygen into water, and in the process they produce electricity. They have an electrical efficiency rate of 47 percent compared to 30-35 percent for legacy combustion systems, says FuelCell Energy. In combined heat and power applications, where the heat is captured and used, the result is an overall energy efficiency of up to 80 percent, it adds.
The U.S. Fuel Cell Council adds that spending on research for such technologies is on the rise. It is also predicting that stationary fuel cells used to generate electricity will supply 1 percent of the energy consumed in this country by 2020.
"Stationary fuel cells have multi-pronged benefits that include low maintenance, longer life, and eco-friendly characteristics," says Frost & Sullivan Research Analyst Sayan Saha. “To be competitive, fuel cell technology developers need to search for effective but less expensive options. A huge operational and technological leap is still needed to ensure a significant reduction in cost of the fuel cells in the country."
A 2008 U.S. law aims to do just that by providing a federal investment tax credit that will last until 2016: $3,000 per kilowatt or 30 percent of the capital cost, whichever is less. Utilities can also get a tax credit.
The consensus among fuel cell chiefs interviewed by this writer is that such financial incentives are now necessary but over time, the industry must be able to thrive in free markets. Favorable legislation and regulation is more long lasting, they concur, because it embeds consumer behaviors.

Most of all, it's about developing products that customers need. It's about adding value. Advances in the communications market is one area but the industry also has its eye on supplying more and more on site power generation.

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