Fuel Cell Markets Juicing Up

Global fuel cell spending—including research and development funding and investment in fuel cell enterprises, as well as commercial sales—is forecast to climb 10.9 percent annually to $10.2 billion in 2015 and then nearly double to $19.0 billion in 2020, according to World Fuel Cells, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Commercial demand for fuel cell products and services (including revenues associated with prototyping, demonstration and test marketing activities, as well as actual product sales) will more than triple to $2.9 billion in 2015 and then triple again to $9.3 billion in 2020. As a result, the share of total fuel cell expenditures accounted for by commercial demand will rise from one-eighth in 2010 to nearly half of all outlays in 2020. Market gains will be driven by continuing technological advances, helping bring costs down to competitive levels in a growing number of applications, and bolstered by improved economies of scale as fuel cell manufacturers increase production.

This is good news for the lift truck market. Sales of fuel cell products and services used in motive power applications will grow fivefold to $180 million in 2015 and then triple to $600 million in 2020, outperforming industrial stationary power fuel cell demand, according to Freedonia.

“Fuel cells are much quieter and less polluting than diesel engines, and they can be refueled much more quickly than batteries can be recharged,” Freedonia’s analysts say, “which will help spur market gains as system costs continue to come down.”

In April 2011, for example, WinCo Foods announced plans to replace the lead-acid batteries used to power 184 lift trucks at its Modesto, California distribution center with Plug Power fuel cells. The company reported that it was doing this both to reduce electricity consumption and to increase productivity by eliminating the need to swap out batteries.

North America is by far the largest regional market for motive power fuel cells, the report says, with more than 1,200 fuel cell-powered lift trucks estimated to be in use at the end of 2010.

In the automotive market, although fuel cells used in motor vehicle applications will account for only one-half of one percent of the total number of systems sold in 2020, they will make up the largest single share of demand in dollar terms. A number of major automakers have announced plans to begin offering fuel cell vehicles commercially in 2015 or before, and sales are forecast to ramp up from what are currently extremely modest levels, consisting mostly of revenues associated with prototyping, demonstration and test marketing activities. With a number of products already on the market, electric power generation applications accounted for well over half of all commercial fuel cell demand in 2010.

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