What’s driving the SOFC market?6 September 2023
The capability of the solid oxide fuel cell (SOFC) to run on hydrogen and at higher efficiency than alternative fuel cells when providing combined heat and power (CHP) is an enticing prospect. But which applications will be key to the success of the SOFC industry?
Above: SOFC market share by application, 2023 (source IDTechEx)
A new IDTechEx report, Solid oxide fuel cells 2023-2033: technology, applications and market forecasts, provides a comprehensive overview of the solid oxide fuel cell market, including an assessment of the key technology trends and major players, as well as granular 10-year market forecasts for solid oxide fuel cell demand (MW) and market value (US$), segmented by application areas.
IDTechEx projects the total SOFC market value (mobility plus stationary power) to reach US$6.8 billion by 2033.
Due to high operating temperatures, ramp up/ down times can be long for solid oxide fuel cells, while the associated large change in temperature can lead to degradation of ceramic components, specifically if there is a mismatch of thermal expansion coefficients between neighbouring components.
As such, SOFCs are best suited to applications where continuous power output is required, and utility-scale power generation is one such market sector. Use of the generated thermal energy to provide heat and hot water to nearby facilities adds to the appeal of the overall system.
The IDTechEx report details OEMs providing SOFC systems for zero emission utility scale power generation, partnerships that have been established with utility providers and case studies illustrating key examples of applications.
Grid independence allows companies to operate with reliable power generation, even during power outages. A clear example of this ability can be seen with Walmart making use of SOFCs provided by Bloom Energy to ensure supermarkets can remain open at all times, 24/7.
An advantage for SOFCs in commercial and industrial applications is their ability to operate in CHP mode, raising the overall efficiencies of the fuel cell system towards 90%, higher than competing alternative fuel cell technologies, and providing heat directly to the commercial or industrial space.
On the other hand, data centres and telecommunication networks are also energy intensive, but in these cases CHP is not required as overheating of the servers is the main cause for concern with respect to temperature control. For this reason, several players have stated to IDTechEx that they will not pursue power generation for data centres as a viable application area for their SOFCs. One notable exception is Bloom, which says data centres are a good fit for its SOFC offerings.
For on-grid residential applications, a suitable choice for backup power would be lithium-ion batteries charged from the grid. Batteries are more readily available and at a cheaper price point than low-power SOFCs. Another drawback of SOFCs is their longer start-up time and therefore fewer possible cycles.
With connection to the gas network, SOFCs can supply combined heat power on a continuous basis and pairing with batteries provides a buffer for dealing with intermittent demand in residential applications.
Japan is the most mature, and largest, market for residential CHP SOFCs.
Off-grid operation, with on-site gas storage coupled to a solid oxide fuel cell can provide continuous power.
The possibility of running the fuel cell in reverse (rSOC), powered by renewables such as solar, and producing hydrogen on site is an interesting concept – allowing the fuel cell to then run on this generated fuel.
However, the hydrogen must be stored on-site, a much less convenient fuel than a hydrocarbon. Residential off-grid applications are a relatively small market with approximately 0.1% of people in high income countries living off-grid.
Future outlook, and the return of major players
So, what does the future look like for the solid oxide fuel cell market? Partnerships have been announced aimed at high volume manufacturing, due to come online within the next five years, with different companies targeting varied applications. In other cases, such as vehicles (including marine), limited success for SOFCs is expected, with alternative fuel cell technology (PEM) set to dominate.
The major negative aspect of PEM technology is the necessity for ultra-high purity hydrogen. Solid oxide fuel cells overcome this thanks to their ability to operate on a range of fuels and, therefore, potential use in a wide range of applications.
High operating temperatures are a double-edged sword for SOFCs: enabling this fuel flexibility due to the capability to internally reform light hydrocarbons but, as already noted, introducing potential stresses due to mismatched thermal expansion coefficients of neighbouring components.
Despite the positive aspects of SOFCs, with commercial opportunities ranging from utility-scale power generation to off-grid residential applications, many large players exited the market between 2010 and 2018. Siemens Energy was an early mover in the early 21st century, but its focus shifted to PEM fuel cells and electrolysers. Delphi produced a SOFC auxiliary power unit (APU) for heavy-duty trucks circa 2010, but little commercial activity has been seen recently, including after its acquisition by BorgWarner. Ballard is a recognisable name in the fuel cell industry and was one of the first major players to enter the SOFC market when it acquired Protonex in 2015. However, this new solid oxide division was quickly divested in 2017, leading to the formation of Upstart Power. Perhaps the most notable movement was seen when LG Fuel Cell ceased operations alongside Rolls Royce Fuel Cell Systems in 2018, despite reportedly investing over $350m into SOFC R&D and launching a prototype system.
Haldor Topsoe was another company to cease activity, when its focus was shifted to solid oxide electrolysers in 2014. However, arguably, the first green shoots of recovery for the SOFC market were seen when Haldor joined the SOFC4Maritime project in 2021. GE Power Conversion also returned to the market in 2021. Previous activity was seen between 2006 and 2014 before a partnership was announced with Ceres Power in 2021 – also focusing on the marine sector, particularly cruise ships. Ceres operate a licensing model and have entered into partnerships with several large players, such as Bosch, Weichai, and Doosan, with high-volume manufacturing of the licensed SOFC technology to commence in the coming years. In terms of internal R&D, Cummins is developing SOFC technology of its own and stated to IDTechEx that system availability is set for 2024.
Regulation and economic policy are determining the demand for fuel cells in the APAC region specifically, and a JV has been established between Noritake, Toto, and NGK Spark Plug, targeting the commercial launch of SOFCs by 2025.
So does the movement of big players towards the SOFC market, either entering or returning, indicate impending growth for the sector? The hype must be tempered by comparing to the status of PEM fuel cells, which are the leading solution for fuel cell power in the mobility sector for a variety of reasons, while also being better suited to emergency power than SOFCs due to shorter ramp up times and longer lifetime across multiple cycles.
Despite strong opportunities in sectors requiring 24/7, always-on power, such as commercial and industrial applications, the total annual MW installation of SOFCs is expected to be an order of magnitude lower than that for PEM fuel cells over the coming decade.
However, the emergence of promising opportunities, coupled with fuel flexibility and the onset of high-volume manufacturing by big players, could accelerate the growth of the SOFC market and change the outlook dramatically.
Author: Dr Conor O’Brien, Technology Analyst, IDTechEx, Cambridge, UK