The stationary fuel cell sector continues to be the trail blazer for the entire fuel cell industry. Technology costs are continuing to fall, new companies are coming into the space, and adoption is gathering steam in markets such as UPS, CHP, and residential power. As such, stationary fuel cells are gaining increased attention and interest from a variety of stakeholders.

—research director Kerry-Ann Adamson

The industry is still working on key technology barriers, including reducing CAPEX and standardization, Pike says. Market awareness of stationary fuel cells is also an ongoing issue, with a need to raise the technology’s profile.

In 2010, shipments of stationary fuel cells reached just above 9,000 units. The largest increase came from the residential CHP (resCHP) sector, driven by the commercial release of the Ene-Farm units in Japan. Outside of Japan, markets increased in power plants (South Korea), CHP and electricity generators (North America), and uninterruptible power supplies (UPS) for base stations (worldwide).

Adamson adds that early centers of adoption include Japan, Germany, and Denmark, particularly for residential CHP applications, and South Korea, the United States, and the United Kingdom are poised to be fast followers in this key application area. Another important application is large prime power fuel cells, which enable buildings to produce base load power. Commercial and industrial users are taking an increased interest in such fuel cells, driven by developments in the public policy environment as well as concerns over grid stability and volatility in energy prices.

Of the three main market sectors, the residential micro CHP (mCHP) sector is the largest, followed by projected rapid growth in the telecoms market. Of the three, the large stationary sector has, arguably, the highest market potential. However, due to the lowest number of companies with commercial product, it also has the slowest rate of adoption.

Pike Research’s analysis indicates that the competitive landscape is becoming increasingly crowded and established vendors such as UTC Power, FuelCell Energy, Altergy, Relion, Idatech, and Panasonic are being joined by high-profile startups such as Bloom Energy. However, while there are some 60 plus companies with active development programs, only a handful of these are shipping units that could be considered commercial. Pike estimates that in 2010, five companies represented more than three-quarters of all unit shipments in the global market.

This is set to change in the next two to three years, though, when a group of developers including Ceramic Fuel Cells and Ceres Power reach their self-publicized commercialization targets, and, as barriers to entry in some sectors are low and market pull is high, it is inevitable that new companies will be formed and that the level of competition will intensify.