Assessment of the Distributed Generation Market Potential for Solid Oxide Fuel Cells

The focus of the solid oxide fuel cell (SOFC) program at the National Energy Technology Laboratory (NETL) is to develop low-cost, highly efficient solid oxide fuel cell power systems that are capable of simultaneously producing electric power with carbon capture when integrated with gasification. To accomplish this goal, research and demonstration projects are being undertaken to enhance the reliability and the robustness of the SOFC system. NETL's SOFC technology roadmap is focused on developing and demonstrating progressively larger megawatt electric (MWe) class natural-gas-based systems to validate and advance SOFC technology for natural gas and gasified coal-based utility scale power generation. As the SOFC technology advances from its current state to utility scale, it is possible that MWe class systems could penetrate the distributed generation (DG) market segment. If the SOFC technology were to penetrate the DG market, this would have the added benefit of lowering system costs by establishing operational experience and a manufacturing base. This report analyzed the strengths of the SOFC system in conjunction with relevant DG market segments in the United States (U.S.) and determined that natural gas compressor stations, grid strengthening, and data centers were potential early market-entry opportunities. These three DG market segments are projected to demand two gigawatts (GWs) of additional power between now and 2018 and 25 GWs between now and 2040. Historical experiences with related technology, including effects of increased production capacity on capital costs, were used to evaluate the market penetration necessary for a cost competitive DG SOFC system. This analysis showed that the DG SOFC system becomes cost competitive with other fossil-fuel based DG technologies after 25 MWe of installed capacity, around 2025, based on the demonstration of the first SOFC DG unit in the year 2020. The SOFC DG application validates and enables the technology for utility scale systems with carbon capture, and forms an essential first phase of the NETL technology development roadmap, which is based on the vision to develop a commercially competitive utility-scale system with carbon capture.