South Korea is seeking to produce fuel cell systems more cheaply, Bloomberg reported.
The clean-energy technology converts hydrogen or natural gas into electricity.
Conglomerates based in South Korea are buying, investing in or partnering with US makers of fuel cells, hoping to introduce cheaper production methods that will make the complex systems more economical.
Fuel cells are less cost-effective than coal or gas, and price becomes critical when they’re aimed at industrial and commercial users.
South Korea’s goal is to do for fuel cells what China did for solar panels.
“Fuel cells are now at a tipping point, addressing real market needs,” the report quoted Henri Winand, chief executive of Intelligent Energy Holdings Plc, a British provider of fuel cell technology.
“The industry is where solar was 10 years ago, before China made it a commodity.”
Fuel cells work through a chemical reaction, and have little to no carbon emissions.
Electricity produced from fuel cells costs between 9 US cents and 12 US cents a kilowatt-hour, manufacturers say.
That compares with about 9 US cents for coal and 6 US cents for power plants that burn natural gas.
US companies have struggled to make the technology profitable.
“Parts of the US fuel cell industry would probably be gone without support from Korea,” Jeffrey Osborne, a Cowen & Co. analyst in New York, was quoted as saying.
Posco, South Korea’s biggest steelmaker, began working with Danbury, Connecticut-based FuelCell Energy Inc. in 2007 and is now its biggest customer and largest shareholder.
South Korea will take the largest share of the US$1 billion market for stationary fuel cells this year, followed by Japan and the United States, Navigant Research said.
The market is expected to reach US$15 billion by 2022.
South Korea is also promoting electric cars powered by fuel cells, an emerging rival to battery-powered vehicles.
Hyundai Motor Co. introduced its hydrogen-powered Tucson SUV, the world’s first mass-produced fuel-cell-powered car, in the US last year.
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