Fuel Cells: Yes, Maybe, at Last?

fuel cell 2Before plug-in hybrids, and virtual power plants, and bikes that charge laptops, there was the fuel cell.

The fuel cell was supposed to become the next cool, big thing – many times – over the last 120 years (It was invented in the late 1800s.)

Remember how NASA generated excitement about the technology when it started developing hydrogen fuel cells for space travel in the 1960s? And then there was President George W. Bush’s mistaken optimism a decade ago. He envisioned children born during that era driving hydrogen fuel cell cars as teen-agers. My son is close to that age; he’s never heard of fuel cells.

So history might wag a finger at me for saying this, but I will chance it anyway: Watch the fuel cell industry; it may be the next big thing.

“It has taken a long time primarily because in their initial applications they were sort of a laboratory curiosity,” said Tony Leo, FuelCell Energy’s vice president of application engineering and advanced technology development. “They had a lot of commercial promise, but there was a lot of development to do.”

FuelCell Energy is one of the companies driving the new boom. The company develops and markets stationary fuel cells at its facilities in Connecticut and South Korea. I recently had the opportunity to talk to Leo, along with Kurt Goddard, FuelCell Energy’s vice president of investor relations. They offered their perspective on today’s fuel cell upswing.

US fuel cell shipments grew by five times between 2008 and 2012 and manufacturing increased by more than 60 percent from 2011 to 2012, according to the US Department of Energy.  California, Connecticut, New York, Ohio and South Carolina are the center of activity. Fuel cells in forklifts are a big deal, according to the DOE.

But the real growth comes from stationary fuel cells, those used to power buildings or the electricity grid, says Navigant Research in ‘Fuel Cells Annual Report 2013.’

It is there – in the stationary market – that FuelCell Energy is reaching big milestones. Since 2003, the company’s units have generated two billion kWh. That’s from 110 plants in 50 places around the globe. What’s impressive here is that it took the company eight years to generate its first 1 billion kWh, less than two years for the second billion kWh, and now it is likely to achieve its third billion kWh in less than a year.

This next billion kWh will come from a 15-MW fuel cell park recently completed in Bridgeport, Connecticut and a 59-MW fuel cell park, the world’s largest, in South Korea.

These are not the hydrogen fuel cells so often touted for vehicles. Instead, they use natural gas, today cheap and plentiful. Most of FuelCell Energy’s units are combined heat and power, so they benefit from that industry’s growth. Another market driver is the new emphasis on microgrids, a configuration nicely suited to fuel cell technology.

Tony Leo, FuelCell Energy

Tony Leo, FuelCell Energy

Still other fuel cell projects act as renewable energy options because they can run on biogas, or as low-carbon alternatives to combustion generation. (Fuel cells emit almost no pollutants; they electrochemically convert their fuel, rather than burn it, to make electricity.)

In addition, some fuel cell installations serve as a mechanism to ease electric grid congestion – the purpose of the Connecticut project.

So is the fuel cell a big, big thing or a niche big thing for the power industry?

“I wouldn’t use the word niche because we think it is a pretty big niche. What do you do if you are looking for clean, renewable onsite power, but you don’t have the appropriate profile or space for wind or solar? For many folks there are not a lot of other options,”said Kurt Goddard, FuelCell Energy’s vice president investor relations.

The fuel cell acts as complement to solar and wind energy on the grid; where solar and wind meet peak needs, the fuel cell can supply baseload power, he said.

“If you are in Arizona, solar makes all the sense in the world. The land is cheap, the solar profile is terrific, and you have the space. If you are in San Francisco, what do you do?” he said.

And then there is the NIMBY problem in the US.

“Choose any city on the coast. Coal and nuclear are pretty much unwelcome. Even permitting and siting transmission lines is becoming pretty difficult,” Goddard  said.

Fuel cells, however, do not attract public attention because they are quiet, non-descript, clean and require little space.

Kurt Goddard, FuelCell Energy

Kurt Goddard, FuelCell Energy

They do, have one big drawback. Fuel cells  are expensive. Costs run as high as 14 to 15 cents/kWh, making it impossible for fuel cells to compete purely on price in areas of the US where electricity is in the 6 cents/kWh range. They can be competitive, however, where electricity is costly. In, Connecticut, a state trying to attract fuel cell manufacturing jobs, average electricity prices are close to 16 cents/kWh. Incentives can bring fuel cell prices down to 10 to 12 cents/kWh.

But FuelCell Energy’s goal is to eventually compete without incentives. For that, fuel cells need to achieve market scale. Fuel cell prices will drop “as our volume increases, our costs are going down, and we able to address a bigger and bigger slice of the market,” Leo said.

FuelCell Energy sees this scale coming soon. Do you? How do fuel cells stack up against other efficient forms of distributed generation? Let us know what you think in the comments section.

 

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. coupling fuel cell plants with natural gas can lower our greenhouse gas emissions a lot!
    why not do it?

  2. It takes a long time to build and there are no new contracts

  3. George Schwab says:

    Absolutely there is scale coming soon. Utilities are in a big bind. Distributed generation is slowly allowing electric customers to install their own power. That removes paying utility customers so utilities have to raise prices to cover their costs. Higher electric prices drives more customers to DG. The only solution is for utilities to accept DG as another product to offer. This is what Dominion did in Bridgeport and will be adding DG in other locations. NRG energy understands this and set up a partnership with Fuel cell Energy to buy their fuel cell plants and sell the power under PPA programs to it’s customers. I believe we will see many more utilities following the leads of both Dominion and NRG starting in 2014. And none of this even touches the partnerships to sell fuel cell plants in both Europe through their FCES Germany partner and So Korea and Asia with their Posco. Energy partner.

Trackbacks

  1. […] FuelCell Energy’s recent sale of a university microgrid to NRG Energy offers a recent example.  The Connecticut-based fuel cell manufacturer sold the 1.4 MW university microgrid to the generation giant in late February. NRG will place the project into a yieldco, the first ever for a fuel cell. […]

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