According to a new report from Fuel Cell Today, a London-based market intelligence firm, annual global fuel cell shipments are set to triple between 2011 and 2012, with shipments of fuel cells for materials handling vehicles (MHV) set to double. MHV make up just a small portion of the global fuel cell market, and an even smaller portion of the total forklift market, but the report predicts rapid growth in both areas, particularly in North America.
“The market for materials handling vehicles has enjoyed several years of support in the United States and this looks set to continue,” reads the report, which estimates more than 3,100 fuel cell transport units will be shipped in 2012. That’s double last year’s figures and nearly 25% greater than the height of Recovery Act-subsidized shipments. “The large fleets of hydrogen fuel cell MHV have proven their viability, repeat orders are being placed without subsidies, and U.S. companies are looking to expand their operations overseas. We now expect government focus to shift slightly towards small fleets where the installation of a hydrogen infrastructure is not currently cost efficient.”
Meanwhile, larger fuel cell installations continue to pick up momentum, such as the recent plans announced by home improvement giant Lowe’s to build a new facility with a 165-forklift hydrogen-powered fuel cell fleet. Andy Marsh, CEO of Plug Power, said the battery replacement units commissioned for the job provide an instantaneous payback over batteries.
The report echoed this claim, stating, “The economics of replacing battery technology with fuel cells has also been studied by the National Renewable Energy Laboratory which reported that a total cost of ownership comparison between fuel cell and battery MHV indicated significant cost savings for refueling labor, power pack maintenance, and infrastructure space.”
Yet even at that scale, Lowe’s will have its hydrogen delivered to the facility in liquid form, supplied by a United States hydrogen production network Marsh said is a legacy of the space program. Marsh estimates that domestic usage of that network is only 15 to 20 percent of capacity, meaning Lowe’s and other fuel cell users dependent on trucked-in liquid hydrogen will likely never have a problem with access to fuel.
But Marsh says government efforts to facilitate small-scale hydrogen refueling stations, for example the “Hydrogen Highway” initiative along New York’s I-90 and I-87, might be overly focused on the virtually non-existent fuel cell automobile market. “If some of the DCs on that route were brought into that project, much of the cost could be borne by corporate entities that would be using the lion’s share of the hydrogen,” Marsh said. “As a taxpayer myself, thinking about putting a hydrogen station in with government subsidies to fuel three cars makes no sense. If you can have a center primarily paid for by people using it commercially, with smaller subsidies from the government, you could build up the infrastructure much faster and we’d be much more successful as a country with the deployment of this new technology.”
Gus Block, director of marketing and government affairs for Nuvera, agreed, but said there are ways to move toward hydrogen infrastructure as a shared resource from the opposite direction. By packaging fuel cell battery replacement units for MHV with small-scale, on-site production facilities that convert natural gas and water to hydrogen, even smaller logistics operations will soon be able to benefit from the technology, as can larger operations that prefer to transition more conservatively. Government subsidies and the practical legalities of public access to those refueling stations could be addressed later, Block said.
Block added, “There is no question that the materials handling market is paving the way for hydrogen fuel cells in both on- and off-road transportation.”
Both Marsh and Block agreed the rise of fuel cell technology will grow in step with the increased utilization of natural gas, the primary feedstock for hydrogen production, and that infrastructure growth must be geared toward making it a shared resource. “How can hydrogen infrastructure be used for backup power, buses, cars, materials handling trucks, tuggers in DCs, etc.,” asked Marsh. “I think the government should have a more holistic view.”
Eventually, says Marsh, fuel cell s for MHV will compete aggressively with battery technology outside of the traditional big three niches: new building, the change from LPG to electric, and the replacement or relocation of a battery room. “Right now for large fleets, particularly in a new facility, it would be hard not to go with fuel cells,” says Marsh. “But in a couple of years, some of the same people who today are worried about justifying fuel cell technology to a manager are going to have a hard time explaining to their managers why they’re going with batteries.”
