1 Stationary Fuel Cells Fuel cells for distributed power: benefits, barriers and perspectives Fuel cells are often portrayed as the answer to the world’s pressing need for clean, efficient power. They are also seen as a key component in a future »hydrogen economy« that will substantially reduce or eliminate pollutant and greenhouse gas emissions associated with current power generation and transport. However, questions about the technology still remain: to what degree are the expectations surrounding fuel cells realistic and can they deliver what they promise? Full Report can be downloaded at: www.panda.org/epo AN ACTIVITY of the WORLD FUEL CELL COUNCIL
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Stationary Fuel Cells
Fuel cells for distributed power:benefits, barriers and perspectives
Fuel cells are often portrayed as the answer to the world’s pressing need
for clean, efficient power. They are also seen as a key component in a future
»hydrogen economy« that will substantially reduce or eliminate pollutant
and greenhouse gas emissions associated with current power generation and
transport. However, questions about the technology still remain: to what
degree are the expectations surrounding fuel cells realistic and can they deliver
what they promise?
� Full Report can be downloaded at: www.panda.org/epo
AN ACTIVITY of the WORLD FUEL CELL COUNCIL
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pure form. The process of separating hydrogenfrom chemical compounds like water, natural gasand other carriers always requires energy. Themethod used to produce this energy determines theenvironmental impact and economic prospects ofpower generation in fuel cells.
The cleanest and most environmentally friendlyway to produce hydrogen is through renewableenergy. Electricity from wind and solar power canbe used to produce hydrogen by electrolysis as one component of the ultimate long-term vision of a fully renewable based energy system. Unfortunately the conversion of renewable electrici-ty into hydrogen and then back into electricity isassociated with significant energy losses and addi-tional costs.
For stationary fuel cell applications, this solarhydrogen path makes sense only with a high shareof renewables in the electricity generation system,because in these systems, a storage medium forelectricity generated from intermittent renewablesources such as wind or solar power is required. Inlarge electricity grids, stationary fuel cells run withsolar hydrogen are thus a longterm option whereasisland and remote applications could offer an earlyniche market.
Fuel cells can also operate on biomass-derivedfuels. In bio fuel applications, all combined heatand power (CHP) technologies have very low
The following report summary, which focuseson stationary fuel cells, addresses these questions.Stationary fuel cells are the type of fuel cells usedin buildings or power generation parks. They willmost likely enter the market before automotive fuelcells for technical and cost reasons.
What are fuel cells?
A fuel cell combines hydrogen with oxygen (fromair) in a chemical reaction, producing water, elec-tricity and heat. Fuel cells do not “burn” the fuel,the conversion takes place electrochemically with-out combustion. Fuelled with pure hydrogen, theyproduce zero emissions of pollutant and green-house gases at the location of the power plant.Where hydrocarbon fuels such as natural gas areused a “fuel reformer” (or “fuel processor”) isrequired to extract the hydrogen. In this case theproduction of hydrogen is connected to greenhousegas emissions and - very low - emissions of pollu-tants. However, the production and supply of thefuel also causes emissions. Therefore the futurerole of fuel cells and their environmental benefitshave to be assessed through life-cycle and energysystems analyses.
Where does the fuel come from?
Hydrogen, the most common chemical element, isnot naturally available in useful quantities in its
A fuel cell stackconverts chemi-cal energy into electricity andheat - without anopen flame. Photo: Sulzer Hexis
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greenhouse gas (GHG) emissions. The advantagethat fuel cells deliver in this application is the moreefficient use of limited – and often costly – bio-mass resources. Due to the high capital cost andthe technically challenging integration of still pre-mature components like gasification, gas process-ing and fuel cells, bio-based fuel cells are a long-term option for 2020 and beyond. Biogas producedfrom manure or sewage gas could, however, pro-vide an attractive early market.
Fossil fuels and nuclear power can also be usedto produce hydrogen. However, fossil fuels gener-ate greenhouse gas emissions and nuclear powercauses many problems such as waste disposal andsafety risks. Due to extremely high capital cost,low electrical efficiencies and prevailing technicalproblems, the use of coal gas in fuel cells withsubsequent CO2 storage is not seen as a successfulclimate strategy for the next decades. In addition,
The Solid Oxide Fuel Cell consists of many of theseceramic tubes. Eachof these tubes willdeliver 200 Watt. Photo: Siemens Westinghouse
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Basic principle of afuel cell: example of a Polymer Electrolyte Fuel Cell
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carbon disposal remains an open issue, as the safestorage of CO2 cannot be guaranteed presently.
The cleanest conventional hydrocarbon fuel to beused in fuel cells is natural gas. It has the lowestgreenhouse gas emissions per energy unit of allfossil fuels. While natural gas based CHP is notconsidered a sustainable energy source as such, itdoes represent an efficient way of economising theinevitable fossil energy input during a transitionperiod to a renewable energy supply system. More-over, natural gas can bridge the gap between ourfossil system and a future system because it offersthe possibility to gradually switch to renewablyproduced hydrogen (or biogas/synthesis gas). Thiscan then be fed into the pipeline distribution sys-tem and ultimately replace natural gas as a fuel.Therefore this report focuses on the environmentalbenefits of natural gas powered fuel cells in com-parison with conventional technologies.
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Can fuel cells help to reduce CO2
and pollutant emissions?
Fuel cells will enter the market too late to make asignificant contribution to the Kyoto commitmentsfor 2008/2012. In the mid-to-long-term, however,stationary fuel cells have a high potential for envi-ronmentally friendly energy conversion: they offerhigh electrical efficiencies and extremely low (fuel:hydrocarbon) or even zero (fuel: hydrogen) pollu-tant emissions. The potentially high electrical effi-ciency of fuel cell power plants is one of the majoradvantages of these systems. For each power range,fuel cells will offer higher efficiencies than theconventional competitors.
For instance, compared to separate electricityproduction in central power stations with a coalbiased electricity mix (such as the German electric-ity mix) or even compared to a lignite power plant,GHG reductions above 50% can be achieved withfuel cells powered by natural gas. In a life cycleassessment, each kWh of electricity produced by a
fuel cell will reduce the related CO2 emissions by atleast 40% compared to the existing fossil powergeneration in the current 15 countries of the Euro-pean Union (EU-15) and 20 to 30% compared tomodern separate production (modern gas plantsand boilers). However, compared to competingCHP technologies such as Stirling and reciprocat-ing engines or gas turbines, only low GHG reduc-tions, if any, can be achieved. This is mainly due tolower thermal efficiencies of fuel cells and itunderlines the necessity to optimise their total/ther-mal efficiency. Fuel cells powered by renewablehydrogen will reduce emissions almost 100% com-pared to fossil options.
This is how a futurepower plant basedon Molten Carbona-te Fuel Cells mightlook like. Source: mtu Friedrichshafen
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In order to estimate the total potential emissionreductions achievable in the EU-15 until 2020 thisreport adopts a market introduction scenario of theUnited Nations Environment Programme (UNEP).The UNEP projections envisage some 27 GW ofinstalled fuel cell capacity in OECD Europe forthe year 2020, which represents an optimisticstarting point for the analysis.
Under the assumption that fuel cells displace theaverage EU electricity and heat mix (excludingnuclear and hydropower), the estimated GHGreduction amounts to 55.4 Mt/a CO2 equivalents,which equals 1.3 % of the European GHG emis-sions in 1990, or 22.3 Mt/a CO2 eq., if the electric-ity mix includes nuclear and hydropower.
These reductions are the result of four separatemechanisms: the reduction due to a fuel shift (oiland coal to gas), an efficiency increase from aver-age to advanced power plants and heating systems,an efficiency increase from separate to combinedproduction, and an efficiency increase from mod-ern CHP to fuel cells. The first three would also berealised based on conventional CHP so that onlythe last effect can be fully attributed to fuel celltechnology. If one considers the coming need toreplace power generation capacity in Europe, acomparison of fuel cells to modern separate pro-duction (i.e. a natural gas combined cycle plantand a gas condensing boiler) is required. In thiscomparison a GHG reduction of 14 Mt/a CO2 eq.would be achieved.
Under the assumption that CHP is developingquickly we must also compare fuel cells with com-peting CHP technologies, e.g. the reciprocatingengine in district heating CHP or the gas turbine inindustrial CHP applications. In this instance, andusing the UNEP scenario assumption, a GHGreduction in the order of 5 Mt/a CO2 eq. would beachieved.
In addition to climate change mitigation, fuelcells offer great advantages with respect to envi-ronmental impacts that are caused by criteria pol-lutants, such as acidification (mainly caused byNOx and SO2), eutrophication, summer smog orcarcinogenic substances. Compared to theseimpacts, fuel cell power plants yield reductions ofpollutants ranging from 40% (summer smog) toalmost 90% (eutrophication) depending on thebaseline technologies. The EU 15’s emissions situ-ation differs from the EU accession countries.Because pollutant emission levels are much higherin central and eastern Europe, the introduction offuel cells would lower emission levels significantly.
What are other benefits?
Fuel cells offer several technical advantages, suchas modularity, good partial load characteristics,dynamic response or high heat levels which arefavourable for industrial and cooling applications.In addition, advantages that are common to allcogeneration technologies, such as reduced trans-mission losses, reduction of required grid capacity,etc. can be made accessible. Moreover, fuel cellsmight open up a completely new market segment:that of domestic CHP (MicroCHP) with small-scale systems below 10 kW, which would provideheat and power for single and multi-family houses.Considering the large replacement market for gasheating boilers, a mass market for MicroCHP canbe expected. In fact, most major European heatingsystems manufacturers are currently active indeveloping domestic combined heat and powersystems.
The key to the market success of fuel cell heat-ing systems as seen as providing a “one-stop solu-tion” complete energy service package to the cus-tomer. In line with this emerging market for new
The transition from fossil to renewable energycarriers is urgent.What role will the fuel cell play?
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energy services (micro-contracting), fuel cellsoffer new business opportunities, e.g. for utilitiesthat aim to provide a broad range of supply ser-vices (multi-utility approach). In this context, fuelcells provide gas utilities with an opportunity toincrease sales and compensate for a decreasingneed for space heating – and thus domestic gasdemand.
New applications might arise from grid-relatedoperation of fuel cells that build on the dynamicperformance of electricity generation. Sophisticat-ed concepts such as the “virtual power plant” aimat the interconnection of a large number of fuelcells via communication technologies. This wouldenable central control and management of thedecentralised generating units, e.g. for the purposeof load levelling of intermittent power production.However, considerable technological obstaclesneed to be overcome.
What are the barriers to a broadmarket introduction of fuel cells?
As fuel cells have to succeed in an already com-petitive market, cost is seen as the major market
entry barrier. Stationary fuel cells are still between2.5 to 20 times more expensive than competingtechnologies, with the balance of plant (periphery)being responsible for a large share of total capitalcost. The challenge for fuel cell development is toreconcile the often conflicting requirements ofcost reduction and performance improvement. Forthis reason, there is still considerable uncertaintywith respect to the size and time scale of the mar-ket entry of stationary fuel cells. Today’s invest-ments in CHP should not be postponed, however,in order to wait for fuel cells. Conventional tech-nologies should instead be used to establish CHPinfrastructures that can be updated later with sec-ond generation fuel cell systems.
Traditional players in the heat market such as installation contractors play a decisive role in the dissemination of new heating technologies. They will need to be fully prepared in timethrough information dissemination and profession-al training in order for them to play an active rolein the promotion of fuel cells CHP systems.
Certain barriers that may hinder a wide spreadutilisation of stationary fuel cells apply to all CHP
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From largecogenerationsystems todomestic powerplants: statio-nary fuel cellscan be designedfor variousapplications.
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applications and are not specific to fuel cells.Among these, easy grid connection is a key tomarket success of fuel cells. Today, however, cur-rent distribution grids are not designed for large-scale integration of distributed power generators.All of the envisaged problems can be solved froma technical point of view but institutional arrange-ments for a fair and discrimination-free allocationof costs for upgrading, investment and manage-ment of grids are still lacking.
In this context, the interconnection of mid tosmall scale CHP plants to the grid is often hin-dered by restrictive conditions and complicatedprocedures. Problems arise with regard to connec-tion charges, determination of the point of connec-tion, safety and liability issues. Most importantly,a standardised technical interface needs to beestablished as do non-discriminatory rules for theallocation of connection costs that take intoaccount possible positive effects of distributedgeneration on grid investments and transmissionand distribution losses.
Regulatory regimes, however, still do not providesufficient incentives for grid operators to connect
distributed generation plants, and conditions differbetween member states, regions and utilities.Often, connection charges lack transparency andappear to exceed factual costs of the grid operator.Moreover, the administrative handling of CHP pro-jects is delayed due to low priority for the utility.
For this reason, the introduction of distributedgeneration is strongly linked with the controversialdebate on the unbundling of power generation andnetwork operation and the regulation of systemsoperators in order to assure a neutral stancetowards independent CHP plants.
Closely related to the aspect of interconnection,new traders for renewable and CHP electricity cansuffer from non-transparent and excessively highconnection fees and costs for stand-by and back-uppower. Whereas grid use fees are of less relevancefor a single project under a priority dispatch scheme,the marketing of “green power” is strongly affected.This limits the possibility to sell CHP electricity atpremium prices to specific market segments.
How to overcome the barriers?
There is still uncertainty surrounding the long-termdevelopment of the energy policy framework. Thishinders strategic investments into distributed gener-ation. For this reason, long-term target setting bythe EU and member states in terms of distributedgeneration integration would increase the reliabilityof market projections and investor confidence.
In parallel to the technical progress, therefore, aco-evolution of socio-economic and institutionalprerequisites has to take place to pave the way for asmooth market introduction.
Especially during the first phases of market intro-duction, additional incentives will be needed toclose the cost gap with competing technology.Energy policy can provide direct incentives forearly adopters, e.g. as investment subsidies, grants,tax deduction, etc.; stabilise market prospects fordistributed power generation by enhancing marketentries and competition together with a removal of barriers; and create general incentives for effi-cient and environmentally benign use of energy, e.g.energy and/or GHG taxes, emissions trading, airquality standards, noise pollution regulation, etc.
Small domestic fuelcell systems couldturn residentialhomes into a powerplant - but only ifthe right marketconditions supportcogeneration.
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ConclusionFuel cells are a potentially important option amongothers that may contribute to increased economicefficiency and environmental performance ofEurope’s energy system. It is therefore critical thatfuel cell policies be integrated into an overall guid-ing strategy for the sustainable development ofEuropean energy systems which aims for efficientuse of energy and the expansion of renewable ener-gy sources.
The transition from a fossil based system and itsfully developed infrastructure to a “renewablehydrogen system” as an ultimate goal will take along time. During the transition, research anddevelopment as well as deployment in niche mar-kets and lead applications can pave the road.
It is important to make clear that these demon-stration projects do not substitute, but supplementthe development of rational use of energy andrenewable energy carriers. The political and eco-nomic decisions for tomorrow’s power generationmust support the full range of climate friendly andsustainable technologies in order to surmount the“fossil fuel age”. With natural gas as a bridgingfuel, fuel cells will help to realise the renewableenergy economy and a carbon free power sector. ■
Full Report can be downloaded at:www.panda.org/epoFuel cells for distributed power: benefits, barriersand perspectives. By Dr. Martin Pehnt (ifeu, Hei-delberg) and Dr. Stefan Ramesohl (WuppertalInstitute), June 2003, commissioned by WWF inco-operation with Fuel Cell Europe.
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Energy for industry: fuel cells canalso provide industrial customerswith electricity and heat.Photo: mtu Friedrichshafen
