Hydrogen Fuel Cells – North America & APAC Market Developments & Technology Overview

The fuel cell industry raised a lot of capital from investors in 2020-21. What successes have you seen from companies with regards to deploying this capital?

When we think about the main ways you’ve seen capital be deployed, it seems largely to be about scale, putting more capital in the field to put more fuel cells in the field and increasing manufacturing capacity. Have you seen any capital deployed to bring down costs or improve efficiencies? Has anything happened around improving the technology from a cost feasibility standpoint on a more secular basis?

You mentioned a key bottleneck with regards to infrastructure in the hydrogen vertical. Where are you seeing the most rapid adoption of fuel cells? You talked about power generation, energy storage and CCS [carbon capture and storage] as the main pillars, apart from hydrogen. Where are we seeing the most rapid adoption and why?

You mentioned building the value proposition is not just about cost reduction, but performance and so on. My understanding is that the R&D of your former company, FuelCell Energy, is to a large extent driven by extending design life and improving module output. Are these goals still feasible with current fuel cell technologies? Is there a risk that we could hit a ceiling with technological efficiencies in the near term?

What does the replacement cycle look like for modules if project lives are around 20 years?

You discussed commercial differences among the key North America fuel cell players. How would you compare their technological capabilities and their abilities to innovate faster than the rest of the pack? Have you noticed any major differences?

What’s your long-term assessment of the point at which capital intensity drops off and the earnings leverage kicks in? Will having to spend to get growth be a normalised feature of the industry long term? Can these companies eventually spend less on R&D and innovation and watch the money come in for once?

Global natural gas prices have been rising fairly precipitously. How do you see this impacting the fuel cell market? When could rising natural gas prices translate into longer-term uptake of fuel cells?

On the subject of competition between electrification and fuel cell technology, what comes to mind is your earlier comments around the reduction in TAM for the power generation fuel cell market, and also whether we would see more growth in Korea. I ask because my understanding is that by 2040, the country wants 15GW of utility-scale fuel cell capacity. As a result, a lot of American companies have been looking at the market. How much of this 15GW do you see American companies capturing vs local players such as Doosan?

What do you consider the long-term implications of fuel cell settlement with Posco and KFC [Korea Fuel Cell]? Does this change the competitive outlook at all in Korea?

What’s your view on APAC growth opportunities outside of Korea, such as in Japan or Australia? Those countries have talked about setting up hydrogen regimes, though this is obviously early days. Are fuel cell players that are currently in the market well-positioned to capture the APAC opportunities?

You sized the big two global markets, Korea and the US, at 200-300MW and 100MW of installations per year respectively, which seems to suggest a scalability issue. What are the biggest challenges that key players have faced when it comes to scaling their operations, including managing production costs and service warranty costs?

How much of the uptake issue that fuel cell players are facing would you attribute to cost-parity problems when it comes to clean energy alternatives? In a previous Interview, you mentioned that renewables were eating into fuel cell uptake, especially for the power generation market [see Fuel Cell Industry – Developments & 2021 Outlook – 29 March 2021].