Long viewed as a potential “next big thing” for power generation—often drawing unwarranted hyperbole in the process—and more recently as niche distributed generation, fuel cells are finally beginning to make some noise at grid scale.
Hydrogen- and natural gas–powered fuel cells have been deployed over the past decade in behind-the-meter and microgrid applications for on-site generation, where their simplicity, reliability, and very low emissions offered advantages over diesel generators and similar solutions. The waste heat generated by the fuel cell process also allows them to step into on-site combined heat and power applications. Their ability to use renewable fuel such as biogas even enables them to fill renewable energy mandates in some areas. Such systems have typically been sub-megawatt scale or, at most, a few megawatts in capacity.
One good example is the fuel cell system at the Gills Onions processing plant in Oxnard, Calif. The two-cell, 600-kW system, supplied by Danbury, Conn.–based FuelCell Energy (FCE) and installed in 2009, runs off biogas generated from onion waste in an anaerobic digester. The $10.8 million system saves Gills more than $1 million a year in avoided energy and waste handling costs, meaning it will have paid for itself in less than a decade.
Sunnyvale, Calif.–based Bloom Energy has installed about 100 MW of these types of systems around the world. A 6-MW Bloom system powers online auction giant eBay’s massive data center in Salt Lake City.
A number of other applications have seen uses for fuel cell generation. Wastewater treatment plants and landfills are a growing niche because of their ability to cleanly and efficiently generate power from waste gases that would otherwise need to be flared. The U.S. military has looked at employing fuel cells as replacements for tactical diesel generators, and Sandia National Laboratories is researching ways to cut emissions at ports on the U.S. West Coast by supplying shore power from barge-mounted fuel cells.
Moving to Grid Scale
Though these creative applications continue to draw attention, over the past few years, the combination of falling costs, more powerful fuel cells, and cheap natural gas has generated interest in using fuel cells for grid-scale baseload generation. In particular, gas prices under $4/MMBtu make fuel cell generation competitive in many areas—without subsidies. With the renewable energy subsidies that are available for some projects, fuel cells have become financially attractive options.
Grid-scale fuel cells use different technology from more familiar solid-oxide fuel cells, which are more compact but so far do not scale as well. FCE’s design uses a molten carbonate electrolyte and porous nickel catalysts. Because of the support equipment required for the design, larger systems are more efficient.
In December 2013, Dominion opened a 14.9-MW fuel cell plant in Bridgeport, Conn. The five-cell plant, supplied and operated by FCE, also captures waste heat and directs it to an organic Rankine cycle turbine to generate additional electricity. The plant was partly funded by the Clean Energy Finance and Investment Authority, which supports investment in renewable energy in Connecticut.
Then, this spring, POSCO Energy opened a 59-MW fuel cell facility in Gyeonggi Province, South Korea, currently the largest fuel cell power plant in the world. Two smaller fuel cell plants, at 10 MW and 11 MW, are also operating in South Korea, and the three projects are just the start of a planned 230 MW of fuel cell capacity the nation is in the process of rolling out. A 19.6-MW plant in Seoul is expected to come online by the end of this year.
Back in Connecticut, FCE signed an agreement earlier this month with United Illuminating to supply 5.6 MW of generation at two sites in Bridgeport and New Haven. Both plants will supply electricity directly to the grid and are planned for operation in 2015.
The Big Time?
Perhaps the biggest sign of fuel cells reaching grid-scale viability has been the recent interest from major power sector companies.
In mid-July, Korean manufacturer Doosan Corp. bought fuel cell company ClearEdge Power to form the Doosan Fuel Cell Group with another acquisition of a Korean fuel cell firm. Doosan plans to leverage ClearEdge Power’s 400-kW fuel cell design to pursue projects worldwide.
NRG Energy, the nation’s largest merchant generator, has been on a shopping and investment spree the past two years, with acquisitions and projects both large—it bought Edison Mission Energy’s assets out of Chapter 11 bankruptcy for $2.6 billion in March—and small (the company has also been supporting development of home-based Stirling engines). NRG CEO David Crane has made clear his goal of disrupting traditional utility business models and fostering cost-effective distributed generation.
NRG previously had a small stake in FCE along with a co-marketing agreement signed in August 2013. At the end of July, the two companies announced that NRG would be expanding its investment to the tune of $35 million; NRG is also establishing a $40 million revolving construction and term loan facility for FCE to use for project development. The deal will give NRG a 6% stake in FCE, while the credit facility will make it easer for FCE to develop new projects and sell the finished plants to long-term investors.
NRG officials underlined their faith in fuel cell generation when the deal was announced. “We believe that clean distributed power generation from fuel cells will be one of the key technologies that drive our country toward a cleaner energy future,” Mauricio Gutierrez, NRG’s chief operating officer, said.
Meanwhile, Exelon Corp. announced in late July that it would buy 21 MW worth of fuel cell plants from Bloom Energy. Exelon said these would be installed at 75 corporate sites in four states.
—Thomas W. Overton, JD is a POWER associate editor.