Multifunctional semiconductor CeO2 is used as an electrolyte for a fuel cell application, delivering meaningful power density and better OCV. Further, surface doping of Al was employed to attain the CeAlO2 (ADC) electrolyte with enriched O-vacancies surface layer enabling high ionic conduction and excellent power density of 1020 mW/cm2 at 520 °C. It is noticed that surface doping entailed the band alignment between CeO2 and ADC due to the difference in Fermi level establishing space charge region, which further constitutes built-in field enhancing the charge transportation and minimizing the e-conduction. Furthermore, the theoretical calculation was performed to assist the formation of O-vacancies in the ADC structure. These findings suggest surface doping is the best approach to attain excellent performance and designing new electrolytes and electrodes for advanced low-temperature ceramic fuel cell technology.