[B]A Leap For Fuel Cells[/B]

[QUOTE]Connecticut Is Backing Showcase Plants To Feed Electricity Grid
April 15, 2007
By MARK PETERS, Courant Staff Writer

Empty lots and other out-of-the way properties in Connecticut are expected to become the new testing ground for fuel cells as a source of electricity generation for the region.

Seven proposals for fuel cell power plants recently were selected for funding by a state agency, and some could be under construction early next year. If built, they would be among the largest fuel cell plants in the world in places that include Bridgeport and Danbury.
The idea of a fuel cell power plant is simple: Interconnect a series of fuel cells - devices that create electricity from a chemical reaction using oxygen and hydrogen - and feed the power they produce into the regional electricity grid.

So-called fuel cell parks are much cleaner than traditional power plants and aren't expected to face opposition like a new fossil-fuel burning plant or high-voltage line.

However, until recently developers and fuel cell companies have been reluctant to try large-scale projects. Among the reasons: They're expensive to build, the technology to produce sufficient amounts of electricity has only recently been refined, and fuel cells typically need natural gas, a fossil fuel, to operate.

The proposed projects, backed by ratepayer subsidies, represent an attempt to prove they can work.

They are not intended to replace existing power plants, but to build Connecticut's reputation as a center for the fuel cell industry and to foster manufacturing of the devices in the state.

Even so, if the projects are constructed, they have the potential to add almost 70 megawatts to the power grid - enough electricity to power an estimated 60,000 typical homes. That's a much bigger application of technology, experts say, than what's been tried to date.

"The only way to get to that level is to start doing it. ... I think it is something that's long overdue," said Walter Nasdeo, an analyst for New York-based Ardour Capital Investments, a research and investment banking firm specializing in alternative energy. Ardour Capital assisted FuelCell Energy, the major supplier for the proposed plants, in a recent public stock offering.

The state's commitment to the fuel cell projects through the Connecticut Clean Energy Fund includes long-term contracts to buy electricity from the plants at 5.5 cents more per kilowatt-hour than the average wholesale market rate.

"The world is definitely watching," said Lise Dondy, president of the Clean Energy Fund.

The fund, financed through a surcharge on electricity bills, announced the projects that qualified for the above-market-rate contracts in late March.

Developers of the fuel cell projects have additional steps to take, including negotiating final contracts with utility companies in the state.

Stealth Generation

Leading the way on the plants is Danbury-based FuelCell Energy Inc., which is supplying fuel cells for all of the projects except for the smallest one, proposed by UTC Power in South Windsor, a subsidiary of Hartford-based United Technologies Corp. UTC Power had bid for other, larger projects that were not chosen.

FuelCell Energy has experience in the field, but on a smaller scale. Its largest project is a fuel cell plant that produces 1.5 megawatts of electricity - enough to power about 1,300 typical homes - on an unused tennis court. That project powers the San Diego Sheraton Hotel and Marina.

The Connecticut projects are far bigger.

In Bridgeport, developers are planning a 19.6-megawatt plant and a 13.7-megawatt plant.

The Danbury project is also a 19.6-megawatt plant. And in Milford, the proposed plant would produce 7.9 megawatts.

Although a 19.6-megawatt plant would produce enough electricity to power about 17,000 homes, all of the proposed fuel cell projects together would produce only a small fraction of the total daily statewide electricity demand, which can be more than 7,000 megawatts on a hot summer day.

Fuel cells were developed for use in spacecraft and submarines. They create electricity through a chemical reaction. Oxygen and hydrogen, typically derived from natural gas, is fed into the device.

The process within the cell produces electricity, with heat and water as byproducts.

Fuel cells have clear advantages over traditional, centralized fossil fuel plants and their hulking, smokestack-topped industrial buildings.

Fuel cells are quiet, and the only emission of concern is carbon dioxide, which is emitted in the process to create the hydrogen. They are also expected to be easier to site because of the smaller size and hushed operation.

"I would wager most people won't even know they're there," said Robert Babcock, president of Elemental Power Group, which is developing the proposed fuel cell plants in Bridgeport and Danbury.

In Bridgeport, the fuel cells would be placed inside an old industrial building. The site in Danbury would be a fenced-in lot. Each will have eight fuel cells that could be operated remotely.

The location for the plants in southwestern Connecticut should help relieve the strain on the electricity grid there. Existing plants and transmission lines in that populous area of the state have not been able to keep up with steadily rising demand.

"You get clean generation in the parts of the system where they need it," said R. Daniel Brdar, president and CEO of FuelCell Energy.

Brdar pitches his fuel cells in places from Connecticut to South Korea, where electricity is costly and wheeling it where it's needed is a problem.

His message is that the traditional way of providing power with large, centralized power plants and massive high-voltage lines needs to change, and fuel cell plants and on-site generation are clean, unobtrusive and can be added a megawatt or two at time.

But no one should expect to see a fuel cell cluster on every vacant lot anytime soon, or acres of them replacing nuclear power plants or plants that burn gas, oil or coal. Widespread use of fuel cells to feed the power grid is well down the road, said Kenneth L. Reifsnider, director of the Connecticut Global Fuel Cell Center at the University of Connecticut.

Still, he said, the projects being developed in Connecticut are important because of their relatively large scale.

Two Approaches

Cost has always been - and continues to be - the issue with fuel cells. The largest plants, in Danbury and Bridgeport, are expected to each cost $90 million. Part of the reason: Manufacturers don't yet have the scale of production that creates savings from large purchases and efficient, automated factories, experts say.

FuelCell Energy, Brdar said, has sold its fuel cells for less than the cost of making them just to get the product onto the market and build trust in the technology. The Connecticut projects will help the company take further steps to bring down costs.

"It really helps to launch the business for us," Brdar said.

FuelCell Energy's chief rival, UTC Power, is taking a different approach as it tries to produce a fuel cell that's not dependent on government incentives.

Its strategy is to install fuel cells in commercial and institutional settings and large, new developments, such as resorts and shopping malls.

UTC Power sees the thermal energy, or heat, produced by a fuel cell as another source of energy that could bring down prices, make the devices more efficient and reduce overall carbon emissions.

"From an environmental and economic standpoint, it doesn't make sense" to just use the electricity produced by a fuel cell, said Rob Roche, product manager for stationary fuel cells at UTC Power.

For the one UTC Power project the clean energy fund picked, the thermal energy will be harvested. Cytec Industries Inc. in Wallingford will use the electricity and heat produced by the fuel cells for various industrial processes, Roche said.

Thermal energy is being used in some of the FuelCell Energy projects the Connecticut Clean Energy Fund selected. But when projects grow, it becomes costly and difficult to find uses for all of the waste heat, Brdar said.

The environmental benefits of fuel cells over fossil fuel-burning power plants are clear.

The emission of traditional pollutants is considerably lower, and the devices are often more efficient.

But their classification as a renewable resource is debatable. That's how the state of Connecticut classifies fuel cells, which allows them to compete against wind, biomass and other alternative energies for contracts through the clean energy fund.

Contact Mark Peters at [email]mrpeters@courant.com[/email]. [/QUOTE]