Supply & Demand

Fuel Cells are in demand where power is in short supply

Fuel cell technology is turning up in unusual places. As the utilities—as well as commercial and residential customers—seek energy alternatives, fuel cells are emerging wherever government assistance or reliability needs are the greatest. These two factors have led to the emergence of fuel cells in specific geographical regions.

Most companies using fuel cell power are in remote locations, or using the power as a high-profile (and visibly government-sponsored) experiment. In any case, two of the most viable commercial fuel cell options are United Technologies Corp.’s PC25 and 25C, units that are large, heavy and expensive. On the other hand, smaller fuel cell units are coming down the assembly line at companies like Plug Power and Siemens, and they promise to offer another alternative in a steadily diversifying energy market.

Due largely to government incentives and a continued public interest in green technologies, fuel cell technology is gaining momentum, and fuel cell watchers predict it will join the growing number of mainstream power options over the next decade.

But many expected fuel cell energy to take off years ago. “We’ve been on this edge longer than expected,” said Russ Walters, assistant professor in the Department of Civil Construction and Environmental Engineering at Iowa State University. “It’s been on the verge for three years.” At this point, Walters said, utilities are the largest investors in this new technology. “Look at it as a generator,” Walters added. “Some (electrical) contractors do a lot of business in generators.”

In some parts of the country, however, fuel cells have already become a fact of life for electrical contractors. In Alaska, where commercial sites face high utility costs and greater vulnerability to outages, fuel cells are a common choice. Across the country in Long Island, N.Y., incentives and rebates make it a good enough option that many McDonalds there are now powering their restaurants with fuel cells. In fact, most Northeastern states offer some kind of rebate for using fuel cell energy.

In Alaska, where the cost of fuel is exorbitant (there are only two refineries in the state, despite Alaska’s large oil resources), fuel cell units are often the best or even the only option. In addition, the majority of power statewide comes from one company, Chugach Electric Association. This makes the need for backup power in the event of an outage a real concern.

For this reason, many Anchorage contractors have firsthand experience installing and maintaining them. Dalton NW Electric and Communications has recently installed fuel cell units at the Anchorage YMCA, as well as the Anchorage Post Office and Anchorage International Airport. Dalton President Jon Albright said the company provided some wiring as well as rebuilding the main switch and now oversees maintenance to the post office units. That maintenance, thus far, has involved minor repair work such as replacing cooling fans.

By contrast, the Long Island Power Authority (LIPA) purchased 45 fuel cell systems for installation across Long Island in 2003, including in private homes. It is part of New York’s Clean Air Initiative; a 5-year, $170 million program designed to support development and use of clean energy technologies including fuel cells. Half of the 5kW fuel cell systems will be installed at LIPA’s West Babylon Fuel Cell Demonstration Site, to connect to fuel cell systems that feed into the Long Island electrical grid.

New York Gov. George Pataki has set a goal of 25 percent of New York’s electricity needs supplied by alternative energy technologies within 10 years.

In addition to its grid-connection program for fuel cells at its West Babylon substation, LIPA has also been placing Plug Power fuel cells at commercial locations including Hofstra University and in the Babylon and East Hampton town halls. The Plug Power GenSys 5CS units transform natural gas to hydrogen to provide electricity to critical loads during grid outage.

Fuel cell watchers say clean energy solutions such as this one will grow as prices drop, and eventually every contractor will need to be aware of it. Large companies are installing fuel cell units in nearly every state, while manufacturers are preparing for the eventual use of fuel cells in power generation plants and in residences.

FuelCell Energy, Danbury, Conn., sells high-temperature fuel cell units in states that offer incentives, mostly in the Northeast and in California. The fuel cells they manufacture provide from 250kW up to 2MW. Some of those units are now working at the Sheraton Hotel, in Edison, N.J. “Our units qualify for incentive funding,” said Steve Eschbach, director of investor relations and communications at FuelCell. Eschbach said FuelCell will be reducing its costs as a result of research and development efforts to identify unnecessary costs in production and reducing them.

FuelCell’s projects include an innovative program using an Ohio coal mine’s methane-to-fuel units. “We placed the unit on top of the mine, put a tube in the fissure and used that fuel,” Eschbach said. The fuel was then sent to the American Electrical Power (AEP) in Hopedale, Ohio. The power plant uses approximately 55,000 to 80,000 cubic feet per day of the coalmine methane gas containing up to 47 percent methane. AEP is purchasing the electricity generated at the site under a power purchase agreement with Northwest Fuel Development Inc. Other fuel cells are generating power in downtown Los Angeles. “We’re very encouraged by the marketplace,” Eschbach said. Most of the company’s sales take place, “where electricity (costs) are high, infrastructure is set and funding is available.”

Shure Power Corp., also in Danbury, Conn. is a systems integrator that patents fuel cell power for proprietary use in places such as the Bank of Omaha in Omaha, Neb. Executive Vice President William Cratty predicts fuel cells will become more commonplace as a commercial power source between 2007 and 2008. By then he expects technology to have improved to the point that the large United Technologies 40,000-pound units will be more manageable in size, and eventually more inexpensive. That drop in price may not happen right away. Traditionally, new technology prices drop as demand increases production and lowers costs for manufacturers. That may not happen, as long as customers feel the technology is too expensive.

That is where incentives have stepped in. Many states offer rebates to those who use fuel cell generators to power their businesses or to augment the power they are already using.

In the meantime, fuel cell vendors are preparing for the increasing demand. Plug Power Inc. in Latham, N.Y., makes smaller fuel cells such as those in Long Island that eventually could be used for residential power. Their generators include fuel cell heating appliances delivered to customers as part of the European Union’s Virtual Power Plant Program. Systems are operating in multifamily homes and small businesses throughout Europe, which, along with Asia, has been using fuel cell energy in much higher volume than in the United States.

In Omaha, Neb., Commonwealth Electric Co. of the Midwest (Des Moines, Iowa) bought four ONSI PC250 fuel cell units from Shure Power and installed them at the First National Bank of Omaha in 1998. The units offer greater reliability to the bank data center, and are tied in with a complex web of utilities, generators and fly wheel UPS units.

“That’s what makes it complicated,” said Commonwealth Senior Vice President Gary Demmell. Installation of the fuel cells themselves was straight forward, (power connections, natural gas hookups and hot water systems) while connecting to the complex system design was the greatest challenge. Once the units were in place, Commonwealth offers maintenance assistance which includes changing the fuel stacks every four to seven years.

In the meantime, PPL Corp., Allentown, Pa., installed two DFC300A power plants in New Jersey last year, one at the Sheraton Parsipanny Hotel and one at Ocean County College in Toms River. PPL has already installed three other DFC300A power plants at end user sites: Air Station Cape Cod in Bourne, Mass., and two at Zoot Enterprises, a credit processing company in Bozeman, Mont. In addition, DFC-based fuel cell power plants are operating at 15 locations throughout the world and have generated over 12 million kilowatt-hours at customer sites. Caterpillar Inc., Peoria, Illinois, is also getting in on the action. They joined forces with FuelCell Energy Inc. in 2002 to install the largest fuel cell power generation plant in Illinois. The 250kW Direct FuelCell power plant can supply electricity to more than 250 average homes. It is connected to the Peoria area electricity grid. The alliance agreement between Caterpillar and FuelCell Energy involves distribution and development of ultra-low emission fuel cell power generation products for both industrial and commercial use. The agreement calls for the companies to develop power plants in the 250kW to 3MW range, incorporating FuelCell Energy’s fuel cell module. FuelCell Energy’s fuel cell power plants are already operating at hospitals, universities, wastewater treatment plants, hotels and computer data centers.

“Electrical contractors should be preparing themselves,” Walters said. “We’re not quite at the point to get into it yet, but there’s a desire to find out what is going on so they can jump on it,” Walters said. EC

SWEDBERG is a freelance writer based in western Washington. She can be reached at


About the Author

Claire Swedberg

Freelance Writer
Claire Swedberg is a freelance writer based in western Washington. She can be reached at .

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