For many countries worldwide, fuel cells for distributed generation have generally been shelved for the distant future.
However, Japan’s government plans to roll them out to 5 million homes. This could have major implications for the world of distributed generation and community microgrids.
The 2011 Fukushima earthquake and tsunami has left Japan with a major power crisis and the country is frantically searching for more power supply devices that are strong enough to withstand disasters, as well as complement utility services. Fuel cells are able to offer this since they are not dependent on centralized power plants and therefore cut the risk of blackouts such as those that occurred in Japan following the Fukushima accident.
In addition to this, fuel cells also help Japan to reduce its energy consumption. Its grid has been buckling under the pressure since the closure of its nuclear reactors after the accident.
Japan’s current fuel cell market
The country’s fuel cell market is currently made up mostly of individual users who have small systems in their homes. Bloom Energy Japan is now targeting larger power consumers such as office buildings, factories and data centers.
While the centralized power distribution system remains the main player, according to Shigeki Miwa, chief executive officer of Bloom Energy Japan, it is still taking strain. He says that the adoption of decentralized power distribution is complementing the centralized power system.
Bloom Energy Japan, a venture between SoftBank Corp. Japan’s third-largest mobile carrier, and Bloom Energy Corp. of the U.S., was formed to supply power from Bloom’s fuel cells to customers in Japan. Bloom’s units generate electricity from gas without burning the fuel which is a more efficient process that reduces carbon emissions.
Local government wants to adopt fuel cell power since they need a secure power supply to keep disaster centers operational during large-scale disasters. Local utilities are unable to provide this kind of security at the moment.
Creating Industrial & Commercial Markets
Japan’s industrial and commercial users are also beginning to see the significant value in fuel cell power generation and manufacturers are requesting large-size systems. Distributed power generation is attractive to them since they are energy-intensive sectors and they need a reliable source of energy. The centralized system is unable to offer them this.
This trend is already catching on in the US and South Korea where fuel cells receive major governmental support in the form of policies and subsidies. Some US data centers are turning to fuel cells since this solution is producing cheaper electricity than the grid. This is due to the low natural gas price and federal and state incentives.
According to Fuji Keizai, a market researcher, the global fuel cell market for commercial and industrial use is set to reach a value of US$7.4 billion by 2025.
Mr Miwa says that fuel cells could initiate a more decentralized power generation-just like large-size computers evolved into personal computers and tablets.
Japan has launched an ambitious research program to lower the costs of fuel cells and create national standards.
There is no doubt that a decentralized system of power generation and distribution can help during a crisis but it should be viewed as more than that. In comparison to the centralized system, it has the ability to provide a more resilient and reliable source of energy.
It can also be viewed as a greater investment especially if it can provide quality and diversity of services that utilities are unable to compete with. We discuss these opportunities in our article Microgrids-More Than Just a Back-Up Plan. With the development of energy storage solutions and the cost reduction of generation technologies, these localized grids will continue to grow in popularity.