Hydrogen fuel cells. The name has a futuristic ring to it – but will they really be a game-changer in the energy industry? Historically, big oil and gas companies have dominated the world’s energy. Fossil fuels provide a lot of power for a relatively low cost. But with the modern dangers of climate change, the environmental impact of fossil fuels has drawn a lot of scrutiny. In this article, we’ll look at hydrogen fuel cells as a potential alternative energy option.
What Is A Hydrogen Fuel Cell
To get a little more specific, hydrogen fuel cells produce electricity, and can be used in a range of settings including transportation, material handling, and emergency power backup. Like a battery, fuel cells create electricity without any combustion or emission byproduct involved. The best part though? Hydrogen is actually the most common element in the world, so there aren’t serious supply constraints.
How Does A Hydrogen Fuel Cell Work?
Fuel cell technology is complex, but let’s walk through a basic overview. The “cell” in fuel cell refers to two electrodes: an anode (negative) and a cathode (positive) that both surround an electrolyte (like in Gatorade). Hydrogen is pumped into the anode, and air is pumped into the cathode. When the hydrogen molecules hit the anode, they are broken into electrons and protons. It’s these electrons and protons that finally create a flow of electricity as they travel to the cathode. Phew.
Are Hydrogen Fuel Cell Cars In Our Future?
Cars, of course, are one of the biggest fossil fuel burners. So, can we expect hydrogen fuel cells to storm the auto market? To give a consulting answer – it’s complicated. If investors put more money into hydrogen fuel cell cars, we could see more on the market in 10-20 years. But there are a couple of major roadblocks. The first is electric cars. Electric vehicles are a proven entity and have brands like Tesla to prove it. As of November 2020, battery-electric vehicle sales were up 162% from the previous 12 months. It will be difficult to convince investors to redirect money from EVs to hydrogen while the market is white hot. A second roadblock is infrastructure, something that electric vehicles still struggle with as well. It will be a lot of heavy lifting to build the number of hydrogen-fuel stations needed for mass consumer adoption.
Hydrogen Fuel Cells Pros And Cons
So, scaling might be a challenge, but let’s think of some other hydrogen fuel cells pros and cons. To start with the pros, we already mentioned how abundant hydrogen is. Secondly, the only byproducts of hydrogen fuel cells (heat and water) cause very little harm to the environment. A third pro is the power factor. Measured in terms of fuel by weight – hydrogen actually boasts an extremely high efficiency. There are plenty of other pros as well. Hydrogen fuel cells are quiet from a noise pollution perspective, and actually recharge faster than electric vehicle batteries.
Disadvantages Of Hydrogen Fuel Cells
Despite its abundance, hydrogen doesn’t exist “on its own” in nature, and the process to extract pure hydrogen is intensive. Which brings back up the issue of investment. Hydrogen fuel cell technology needs more backers to gain real traction. There is also the issue of regulation. Like finance or air travel, energy is a highly regulated industry. When new technologies come along it can be an arduous process to get all the necessary approvals in place. To summarize, while the potential is there, the disadvantages of hydrogen fuel cells loom large.
Hydrogen Fuel Cell Cost
The California Fuel Cell Partnership estimates that the price right now sits around $16 or $17 per kilogram. This is when filling up a light duty passenger-type car. Compared to gasoline, that is high. But that is to be expected for a new technology. Hydrogen fuel cell cost will come down as adoption increases and raw material extraction improves.
Leading Hydrogen Fuel Cell Companies
Many companies are jumping into the hydrogen space – which is a good sign. Here are some hydrogen fuel cell companies (and stocks) to check out:
- Ballard Power (BLDP)
- Plug Power (PLUG)
- ITM Power (ITM)
- Hydrogenics (Cummins) (HYGS)
- Quantum Fuel Systems (QTWW)
Future Of Hydrogen Fuel Cells
From a consulting perspective, what is the future of hydrogen fuel cells? Is it a buy or sell? Even though there are still many things to figure out, market sizing tells us there is profit potential. Grand View Research valued the global fuel cell market at $10.5 billion in 2019, with a CAGR of 15.5%. Translation – this is a growth market still in the early phases of maturity. We expect more players to jump in before that growth levels out. The market is still figuring out what the best use cases are for hydrogen fuel cell customers.
Profits are important, but there is arguably nothing more important than the planet. Hydrogen fuel cells represent a step in the right direction when it comes to reducing dependency on fossil fuels. If hydrogen fuel cells interest you professionally as a consultant, be sure to check out our Energy Sector Overview.
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