Until very recently, fuel cells were considered largely a non-grid technology. But, technological improvements in the areas of reliability, efficiency, and the ability to use multiple fuel sources have started to change that perception. Danbury, Connecticut-based FuelCell Energy‘s (FCE) role in the fuel cell industry dates back to the 1970s, when the company began performing extensive research and development into fuel cell technology for military applications. Since then, FCE has commercialized its patented Direct Fuel Cell (DFC) technology, and generated over 900 million kilowatt-hours (kWh) of electricity at over 50 installations worldwide.

As policymakers continue to scratch their heads about the costs and benefits of this still-emerging technology, FCE is trying to keep busy. The company recently announced the completion of the world’s largest grid-tied fuel call generation facility, which provides 11.2 megawatts (MW) of generation capacity for an investor-owned utility in South Korea. But, what is perhaps even more significant is FCE’s claim that it has driven the price of fuel cell power down to about 15 cents per kilowatt-hour (kWh), which is competitive with grid power in many U.S. markets.

image via Fuel Cell Energy

What does this mean for the company, the state of the fuel cell industry and the future of grid power? To find out, we spoke with Tony Leo, FCE’s Vice President of Application Engineering and New Technology Development.

EarthTechling: The 11.2-MW grid-tied system is the largest utility-scale fuel cell power plant in the world. Could you tell us a little bit more about the process involved in bringing that system online & what the long-term benefits will be?

Tony Leo: The system consists of four DFC3000 2.8-MW units, each of which is a standard product of ours. We manufactured the fuel cells at our production facility in Connecticut and shipped them to POSCO’s assembly facility in South Korea. They then built the power plant one unit at a time, so the customer scaled up the power capacity of the facility in a sequential manner. Korea has a Renewable Portfolio Standard program that establishes a high price for power, so the benefit to the utility is really an economic one. The price of Renewable Energy Credits fluctuates, but fuel costs are much higher there than in the U.S. After incentives, they are earning around $.20 per kWh.

ET: Many Americans tend to think of fuel cells as an expensive, and typically off-grid energy technology. How might grid-tied distributed fuel cells help utilities deal with the challenges of an aging grid infrastructure, while also integrating other renewable energy technologies cost-effectively?

TL: The most direct benefit is that fuel cells allow utilities to distribute power generation near areas that are experiencing increased load growth. If you can do that, you can forego the need to invest in transmission and distribution upgrades. It also saves energy, because that transmission and distribution process involves an extra cost, in energy losses. Another benefit is that if you’re putting the generation near the users, they can also use the waste heat, in the form of steam and hot water to local users. We incorporated this [combined heat and power] functionality into the design of our South Korea facility. Those local users now have to burn less fuels, so you are doubling your money, so to speak, on the amount of carbon you can reduce. As utilities integrate other renewable energy technologies, such as solar and wind, they tend to be intermittent and uncontrollable.

Our fuel cells provide a nice baseload power generation that takes the pressure off the distribution grid to move intermittent power around, and it can help stabilize the distribution grid.

image via Fuel Cell Energy

In addition to the South Korea facility, FuelCell Energy also has several innovative grid-tied facilities (about 190 MW installed or on-order) in the U.S. Some of these, like the unit at Sierra Nevada Brewery, operate on anaerobic digester gas. A fuel cell car charging station in California uses FuelCell Energy technology to charge fuel cell vehicles from biogas produced by the nearby sewage treatment plant.

ET: A few of your U.S.-based fuel cell systems use biogas as a fueling source, both in wastewater treatment plants and food processing. What challenges do you encounter in deploying these types of systems, and what needs to be done to expand this market?

TL: When we put a fuel cell at a wastewater treatment plant, we’re going to need to run it on biogas in a flare or burned in an engine because they can turn off those emissions if they need to. Those types of projects tend to be more expensive because, unlike with natural gas, they need to clean the gas before they burn it. But, in many cases, that cost can be offset by incentives, and by the fact that biogas is free.

image via Air Products

ET: So, I’m going to end on kind of a theoretical question for you. What does the future of grid power look like to you?

TL: First, the cost of electricity will continue to go up, because demand will start to increase. As we recover from this recessionary period, we are going to bump up against the problem that we have built no new generation. Nuclear power is out of the question in most parts of the world, and most other large generation facilities run into NIMBY issues. Distributed generation offers a way around that. We see two markets for this technology: first, the natural gas-powered market, which uses low-carbon and low-emission natural gas.

Like the Korea plant, these have the potential to use on-site CHP. The other segment is the renewable segment, including wastewater treatment, food processors, landfill gas, agricultural waste, etc. Both of these markets are growing, but the large grid-connected market is growing fastest, just because of the scale.

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