I attended the Fuel Cell Expo, part of Japan’s 14th World Smart Energy Week conference and exhibition in Tokyo, mainly so that I could talk about the situation here in Europe. I presented the findings of a new study led by Delta-ee on business models for the stationary fuel cell market, which was funded by the Fuel Cell and Hydrogen Joint Undertaking.
At the same time, the Expo is the place to go for an update on what’s happening in the world’s most established market for fuel cells and micro-CHP. This post gives some of my key highlights from the fair, which centre on connectivity, competition and commercialisation.
Advances in connectivity leading to wider energy system – and societal – benefits
Suppliers are now looking at connectivity to unlock more value for end users of micro-CHP. One presentation from a major gas supplier explained how it had developed a power interchange system for use with fuel cell units in apartments / condominiums. When one user is not generating at full capacity, output from their unit can be ramped up so the excess generation is automatically directed to top-up a neighbour who’s using more power than their own fuel cell can supply.
Signals are sent every minute between all units in the building – in this case 190 – and, importantly, the internal grid and metering system ensures that the gas usage is charged for fairly – people don’t pay for the gas they don’t use for themselves. This method of control allows more systems to run at peak output for longer; making them more efficient and potentially alleviating stress on the network at times of peak demand.
Connectivity with a conscience
Another speaker focussed on the expanding remote monitoring and control capabilities available to individual end users. Of course, the fuel cell it sells (Aisin Type-S) is now smart speaker-enabled (I can imagine some of the cultural nuances that’ll need to be accounted for when systems come to the British market: ‘Alexa, it’s like a sauna in here…’)! And, I can see some appeal in running a bath via remote control (though would I also need a smart plug?).
But the functionality that mainly grabbed my attention was the option for people to use a shared app to check if their elderly relatives had run their own evening bath. The point being that they could unobtrusively check if things were all right and be alerted if they weren’t.
You could do this with other types of heating system as well, but this was the first time I’d heard of this use for smart heating controls. Something that won’t just appeal to the early adopters of this kind of tech, but which should add value for all users. Smart security without the webcam and home alarm. And from our research we know that peace of mind can be a big selling point in the heating sector.
The growing threat from South Korea
There is a seemingly endless line of stack developers. The Expo always brings a few other companies to our attention, and this time was no exception. The South Korean pavilion in particular was packed with loads of them – EG Corporation and HnPower being two genuinely new names for me – developing fuel cell micro-CHP for the residential market.
More familiar names on show included the likes of MiCo and STX. Both SOFC, both – I’m told – on the verge of market entry in South Korea. These companies will have a tough task trying to export to Japan, however the Korean government gives an even more generous subsidy than the Japanese – around 75% to 80% off the equipment costs. Installation will still add on a hefty margin for customers, but with some new players to add to the handful who are already selling, South Korea could conceivably challenge Germany as the number two market for fuel cell micro-CHP in the near future.
Attention shifting to the small-commercial sweet spot
A final observation was how else the market is expanding – in terms of product availability for different kinds of customers. Historically, the market has focused on either the very large scale (Bloom, Fuel Cell Energy, Posco) or the very small (Ecowills, ENE-FARMs, and Stirling engines) – barring a couple of exceptions like ClearEdge Power/Doosan.
But, with the launch recently of a 3kW from Kyocera and 4.2kW product by Miura (both Japan), attention is starting to shift to the small commercial size range. Neither of those two were on display at Big Sight… although there was still a strong emphasis on new products rated from a few kW to several 10s of kW.
Not all were CHP products, several were power-only, but it was clear from the likes of Brother (4.4kW), Tokyo Gas (5-10kW), Fuji Electric (40kW) and even Toshiba at 100kW, that the sights of many suppliers are set on opening up the hitherto under exploited commercial market opportunity.
A key point in my presentation was that our financial modelling highlighted how the commercial segment could be a sweet spot in the European market for fuel cells. At relatively modest production volumes from each manufacturer (1,000 per year), fuel cell CHP would become cost-competitive with the incumbent and already economically-compelling gas engine CHP. And this is without the need to use a particularly innovative ‘new energy’ business model of the kind we see appearing more and more in the heating sector.
There aren’t many companies developing in this size range in Europe though (although during the fair Ceres Power did announce a new 5kW SOFC). Those who are should take note of this growing interest and pool of players in Japan that will, I’m sure, soon be looking to Europe as well – as Kyocera has already stated publicly.
Get in touch if you are interested to learn more about our work for the European Commission or about any other Delta-ee research in this area.