"Competition Intensifies in Domestic Fuel Cell Market... Export Success Key to Differentiation"

As competition in the domestic fuel cell market intensifies, analysts suggest that success in exports will be a key differentiator among companies.

On September 18, Yoo Jaeseon, a researcher at Hana Securities, stated, "Competition is diversifying as two new players, Mikopower and HD Hydrogen, have entered the annual general hydrogen power generation bidding market, which totals around 1,300 gigawatt-hours (GWh) each year." He added, "Bid prices continue to decline. This is likely due to simple reductions in bid prices rather than improvements in productivity."

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Fuel cells are classified as new energy sources, along with hydrogen energy and integrated gasification combined cycle (IGCC) power generation. Fuel cells are facilities that convert the chemical energy of fuel into electrical energy and, unlike batteries, can continuously generate electricity as long as fuel is supplied. In 2012, the Renewable Portfolio Standard (RPS) market saw an expansion in fuel cell adoption thanks to high weighting factors, but due to issues such as oversupply, fuel cells are now managed under a separate regulation called the Clean Hydrogen Portfolio Standard (CHPS).

According to the recently announced 11th Basic Plan for Long-term Electricity Supply and Demand, the target for domestic fuel cell capacity in 2038 has been set at approximately 3.6 GW, which is lower than the previous 10th plan. In particular, the annual increase is projected to decrease to 150 megawatts (MW) per year from 2035, and to 100 MW per year after 2037. As policy targets are reduced and bidding competition intensifies, the profitability burden on domestic companies continues to grow.

Researcher Yoo commented, "Over time, the space for government-designated general hydrogen (grey hydrogen) may shrink. In the clean hydrogen (green hydrogen) market, unlike hydrogen co-firing using existing facilities, new capital expenditures are required," adding, "It is essential to enhance the economic viability of fuel cells."

He continued, "If the supply conditions for clean hydrogen improve and the volume of general hydrogen bidding decreases, price competition in the domestic fuel cell market could intensify further," and "in North America, demand is emerging for power generation fuel cells that overcome price disadvantages through rapid delivery. Going forward, export success may serve as a key differentiator for companies in this sector."