A multi-component multi-phase lattice Boltzmann model is presented to study the dynamic behavior of droplet coalescence in the flow channel of proton exchange membrane fuel cell. The original pseudopotential multiphase model is developed to realize high density and kinematic viscosity ratios, low spurious velocity, good thermodynamic consistency and independent adjustment of surface tension. Multi-component Laplace law and capillary wave tests are conducted to validate the capability of model in capturing static and dynamic characteristics. A new method for multiphase open boundary is proposed, enabling the droplet to pass the outlet naturally. The droplet coalescence is studied elaborately with the consideration of different droplet size arrangement, distance between two droplets, wall contact angle and gas flow velocity. The droplet shapes are shown with detailed description during the coalescence processes, and the evolutions of droplet height and position throughout the whole processes are measured. Results show that droplet coalescence is beneficial for droplet motion, because the shear force exerted on the droplet, which is determined by the droplet height and gas flow velocity, is strengthened during the coalescence.