What role will fuel cells play in our alternative energy future?

We conducted a yearlong research project on the potential application, and benefits, of using fuel cells in buildings. Our goal was to get an understanding of how, when, and where this technology is being deployed in the building industry today, and to speculate on the next generation of a high-performance built environment that could incorporate this technology.

We studied aspects of environmental, economic, and policy considerations as well as the current and projected state of fuel cell technology. We presented these findings at a roundtable discussion in March 2015, hosted in San Francisco, alongside presentations by industry experts to inform our broader findings and implications.

Fuel cells are electro-chemical energy conversion devices that generate electricity by combining positively charged hydrogen ions and oxygen. They were invented in 1838 and first used commercially by NASA for space probes, satellites, and capsules. Clean energy legislation, incentives, and policy are making fuel cells more accessible today, which has contributed to an accelerating demand and utilization of the technology in the past five years. The Department of Energy (DOE) anticipates that fuel cells will become economically viable for mass-market adoption around 2030, based on similar cost/kilowatt trends observed for solar cells and wind turbines in the past.

Reliability, efficiency, and sustainability are among the key advantages of fuel cell technology compared to other energy sources. Further, fuel cells are well suited for on-site energy generation, which provides benefits such as heat recovery potential and minimization of transmission losses.

Reliability: Fuel cells have been demonstrated to be 10x more reliable than power from the grid, and function with fewer moving parts to break over time. They can allow buildings to go “off grid” and potentially eliminate other backup power systems that are often more hazardous.

Efficiency: Conventional coal, petroleum, and natural gas power plants produce electricity at efficiencies between 27 and 42 percent, with “real” efficiency (after transmission and distribution losses are accounted for) between 10 and 15 percent. Fuel cells in production today achieve approximately 50 percent electrical efficiency, and that can increase to over 85 percent when utilized in conjunction with heat recovery.

Sustainability: Increased efficiency means fuel cell systems require dramatically less fuel to produce a similar amount of power. They do not involve the combustion of fuel, so reduce nitrogen oxide, sulfur oxide, and particulate-matter emissions to negligible levels, while simplifying carbon sequestration. An even greater boon comes from a drastic reduction of fresh-water consumption for power generation.

We see additional benefits specific to the application of fuel cells in the built environment. Fuel cells not only are more reliable, efficient, and sustainable, but also a) are more modular and scalable than other power generation sources, suitable for application in standalone facilities as well as at the utility; b) generate very little noise and no vibrations, making them suitable for on-site installation without neighborhood/community impact; and c) offer the potential for direct current (DC) power output on-site, reducing conversion losses and providing additional efficiency/environmental benefits.

Water is also a key opportunity. While much attention has been given to the use of fossil fuels and the production of CO2 in the generation of electricity, few realize the impact power generation has on the world’s fresh-water supply. In 2010, an estimated 161 billion gallons of water per day, over 45 percent of all water used in the United States, was used in conjunction with power generation. Fuel cells can eliminate or drastically reduce this draw on our fresh-water supply, requiring little to no water to produce a megawatt of power.

Grid infrastructure also takes up millions of acres of real estate for power transmission lines, substations, and power plants. With an increased adoption of distributed generation (generating power at the point of use) not only is it possible to substantially reduce transmission losses, but it may be possible to free up valuable land for development, agriculture, or to give back to nature. Fuel cells are an ideal technology to utilize for distributed generation.

Additional advantages are available, depending on building type, that range from heat capture to enhanced fuel utilization efficiency, which support environmental impact reduction goals for corporations and commercial office buildings. Understanding the current energy utilization levels of different building types alongside opportunities specific to fuel cell application helps to identify areas for potential application today, as well as in the future as the technology continues to evolve and become more accessible.

Fuel cells are anticipated to follow a similar technology adoption trajectory as solar and wind generation, with policy and market forces driving down the cost of installation to a price point comparable to diesel generation and micro turbines by 2030. While the “first” cost of a fuel cell system today is estimated at $8,000/kilowatt (with an average payback of 20 years), a future cost of $2,000/kilowatt is projected, reducing average payback to three years and vastly increasing applicability.