American fuel cell market development

Abstract

Over the past three decades several attempts have been made to introduce fuel cells into commercial markets. The prospective users recognized the attractive features of fuel cells, however they were unwilling to pay a premium for the features other than the easily-calculated fuel cost savings. There was no accepted method for a user to calculate and the accrue the economic value of the other features. The situation is changing. The Clean Air Act signed into law by President Bush on November 15, 1990, mandates a nation wide reduction in SO 2, NO x and ozone emissions. This law affects specific utilities for SO 2 reduction, and specific regions of the country for NO x and ozone reductions — the latter affecting the utility-, industrial- and transportation-sectors in these regions. The Act does not direct how the reductions are to be achieved; but it specifically establishes a trading market for emission allowances whereby an organization that reduces emissions below its target can sell its unused allowance to another organization. In addition to the Clean Air Act, there are other environmental issues emerging such as controls on CO 2 emissions, possible expansion of the list of controlled emissions, mandated use of alternative fuels in specific transportation districts and restrictions on electrical transmission systems. All of these so-called ‘environmental externalities’ are now recognized as having a real cost that can be quantified, and factored in to calculations to determine the relative economic standing of various technologies. This in turn justifies a premium price for fuel cells hence the renewed interest in the technology by the utility and transportation market segments.