One of our recent comments discussed the economics of fuel cells in the developing world.  Even in the developed world, the "basic" type of fuel cells, the Proton Exchange Membrane (PEM) cell, are still very expensive.  One part of this expense is due to the fact that fuel cells are still not produced in very large quantities, and cannot benefit from economies of scale.  If the cells begin to be used outside of their current, limited market for automobiles and stationary electricity generation, the price per fuel cell will probably decrease substantially.

However, one of the other major cost factors is the price of fossil fuels.  Almost all of the hydrogen fuel used in the PEM fuel cell is currently made from natural gas, meaning its cost is tied to the cost of that resource.  A 2004 study in Energy Policy (Fuel Cell System Economics, Lipman et al.) concluded that fuel cell-based electricity production could be competitive with other energy sources, but that this competitiveness depended on relatively low prices for natural gas.  If hydrogen could be produced from water on a large scale, the natural gas cost issue could be addressed.

How these issues would affect fuel cell applications in the developing world is hard to predict.  Thoughts from readers? Post a new comment