In proton exchange membrane fuel cells (PEMFC), gas diffusion layers (GDL) play a critical role of supplying the oxidant and the fuel to the cathode and anode besides facilitating transfer of the electrons generated to the current collectors. In the present paper, a new low cost activated carbon fabric of high porous nature has been investigated for its suitability as substrate layer in PEMFC electrodes alternative to the carbon paper. The critical parameters like permeability, porosity, fuel cell performance are compared with standard substrate layer after optimizing the electrode structure. Economic analysis for a 1 kW power system reveals that there exists a considerable cost reduction by about 50%, with reference to the substrate layer.

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