August 15, 2011

Fuel cell manufacturers and original equipment manufacturers (OEMs) continue to benefit from an increased U.S. military emphasis on energy security and logistical efficiency associated with the complex and challenging operational conditions being encountered in remote wartime environments such as Afghanistan.  At the same time, an almost complete dependence on a fragile and commercial power grid and other national critical infrastructure places military and homeland defense missions at an unacceptably high risk of extended disruption.  These factors are leading the U.S. Department of Defense (DOD) and other military agencies to explore fuel cells as an increasingly important part of their energy strategy for a variety of applications.  According to a new report from Pike Research, the escalating adoption of fuel cells will create a $1.2 billion market for military fuel cells by 2017, up from only $9 million in 2011.

“Performance is the most powerful driving force for the adoption of fuel cells by the world’s armed forces,” says research analyst Euan Sadden.  “Enhancing the overall capabilities and performance of the U.S. armed forces is the leading priority for U.S. military agencies in considering new technologies and products for funding and potential integration into various military systems.  Low noise and low heat signature represent two good examples, providing specific benefits to military users that may not be as important to other customers.  Overall, though, the most attractive attribute of fuel cell systems is their high energy density, particularly when compared to standard military batteries.”

However, adds Sadden, formidable barriers still face fuel cell manufacturers in their pursuit of the military market.  Cost, durability, supply chain shortfalls, fuel availability, and serviceability are all factors that will pose serious challenges in the years ahead.  Military users are the world’s most demanding customers for fuel cells and, while they will be less price sensitive than the commercial market in the near term, their performance and production scale requirements may ultimately prove too high a hurdle for some vendors to overcome.

Pike Research’s analysis indicates that the largest opportunity for military fuel cells lies with soldier wearable and portable power applications for devices such as radios, ruggedized computers, and night-vision goggles, in which fuel cells are primarily used as a replacement for portable batteries.  The firm forecasts that this category will represent more than 50% of the total military fuel cell market by 2017.  The second largest category will be remote sensors and surveillance devices such as unmanned ground sensors (UGS).

Pike Research’s report, “Fuel Cells for Military Applications”, examines the stationary, transport, and portable power applications for fuel cell technologies currently being explored and validated by the U.S. Department of Defense, including a detailed analysis of market drivers as well as potential barriers to adoption.  Forecasts through 2017 are also provided for those technologies and applications that are deemed as offering a realistic possibility of being deployed within that timeframe.  An Executive Summary of the report is available for free download on the firm’s website.

Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets.  The company’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Grid, Smart Transportation, Smart Industry, and Smart Buildings sectors.  For more information, visit www.pikeresearch.com or call +1.303.997.7609.