The need for decentralised prime power continues to drive demand

LONDON, Sept. 26, 2024 -- The pace of deployment of stationary fuel cells continues to accelerate, driven by supportive regulations and incentives in key country markets, a desire for a reliable decentralised prime power, and greater availability of non-fossil gas feedstock post-2030.

The global stationary fuel cells market saw annual installations reach 344.9MW in 2023, with an additional 417.9 MW forecast to be installed in 2024. Capacity additions by 2035 are forecast to reach 1,420.2 MW a year, by which time annual industry revenues will be $4.71 billion, up from $1.42 billion in 2023.

The United States and South Korea continue to dominate in terms of annual deployments, with Frost & Sullivan predicting that these two countries alone will account for a combined share of close to 80% of MW installations in 2024.  Europe and Japan trail significantly behind, representing just above 5% and 14% of global MW installations, respectively, while the rest of the world accounts for the remainder. Sizable utility installations drive South Korea's share, whereas in the United States, demand is primarily fuelled by commercial & industrial end users seeking reliable prime power sources. China is forecast to be the fastest-growing country market, with a CAGR of 42.1% between 2023 and 2035, a figure that could rise further if the country introduces clear regulatory support.

Industry Gradually Overcoming Cost & Supply Challenges

Over the past two years, the industry has been facing manufacturing challenges, similar to other sectors grappling with supply chain congestions and fluctuating material prices.

Manufacturers have tried to mitigate the impact of that by building greater resiliency into their supply chains, but it has driven up costs, reducing the competitiveness of the solutions. Volatile fossil fuel prices have also made it hard to predict expenditure for end users. On the positive side, cost inflation has now largely peaked, allowing manufacturers to refocus on cost reduction. Fossil fuel prices still have the potential for volatility, but greater availability of gas due to substantial new LNG projects coming online will help keep prices lower in future years.  

Large Industry Universe, Yet a Small Number of Key Participant Dominate

There are a large number of industry participants, many of them relatively small regional solution providers, or companies focussed on the motive power industry, contributing only modest volumes to the stationary sector. However, in terms of projects in the field, four participants – Bloom Energy, HyAxiom (a Doosan company), FuelCell Energy and Panasonic - continued their dominance well into 2024.

Jonathan Robinson, Global Power & Energy Research Director at Frost & Sullivan, comments: "MW installations recovered strongly in 2023 after a weak 2022, and 2024 will break all records. The market has huge potential, given the continued demand for decentralised energy solutions. Manufacturers have strengthened supply chain resilience and are now actively focused on reducing costs."

He adds: "South Korea and the United States will continue to be engines of growth, but there is potential in other country markets. Supportive regulations will be crucial for future development."

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