In an industry that has lagged behind its clean-power cousins in terms of recognition, fuel cells are poised to be a strong player in the power market in the years to come.
“Fuel cell energy is 95 to 97 percent available. Solar is available 12 to 15 percent of the time,” Joel Rinebold, director of energy initiatives with Connecticut Center for Advanced Technologies, said. “If you buy kilowatt-hours from fuel cells, it will be there when you need it. It’s extraordinarily reliable.”
Last year had ups and down for fuel cell companies in Connecticut, a state considered to be on the frontlines of the technology. Fuel cell plants, using ambient air and a hydrogen-rich fuel such as natural gas, create electricity and heat through an electrochemical reaction without producing noxious emissions.
In 2016, three microgrid projects powered by fuel cells were funded by a state grant program. Two of those projects were built by Danbury-based FuelCell Energy.
The industry, however, felt slighted by the state’s Department of Energy and Environmental Protection in October when no fuel cell projects were selected for long-term, state-run energy contracts. The 20-year power purchase agreements with United Illuminating and Eversource allow for a constant flow of revenue to finance projects. Solar and wind energy projects received all of the clean-power contracts.
One rejection was particularly painful for FuelCell Energy. At 63.3 megawatts, Beacon Falls Energy Park was to be the largest fuel cell plant in the world, with FuelCell Energy manufacturing and operating the plant for developer O&G Industries.
“Those selections were very focused on price,” Dennis Schain, communications director at DEEP, said. “In other areas, and when price is not the focus, fuel cells have been the power of choice.”
Schain said the state has been good to the fuel cell industry in other ways, as well. Connecticut is one of eight states to classify fuel cell energy as Class 1 renewable. The classification allows fuel cell plants to fit into the Connecticut Renewable Portfolio Standard, a policy that sets specific goals for energy from renewable sources.
Rinebold said fuel cell plants are considered renewable, even though most plants manufactured today require natural gas, because hydrogen is the main energy source and could be obtained through renewable sources.
“That (classification) is part of what the state is doing to support the industry. We recognize the contributions fuel cells can make and we are definitely supportive,” Schain said. “We understand they were disappointed with the RFP selection, but they have done well in other areas.”
Michael Bishiop, senior vice president and CFO of FuelCell Energy, questioned the state’s overall commitment to the industry and said his company in particular is receiving mixed signals. In 2015, the state’s Department of Economic and Community Development announced $30 million in low-interest loans and tax credits to help fund a major expansion of the company’s Torrington manufacturing facility. The expansion will essentially double the space of the site. A portion of the funding was tied to job growth.
Gov. Dannel Malloy visited the facility in Torrington shortly after announcing the funding.
Then, according to Bishop, the state threw a curveball by not selecting fuel cell projects for the long-term contracts in October. Shortly after the decision not to award Beacon Falls Energy Park a contract, FuelCell Energy laid off 17 percent of its workforce, with cuts coming from both its Danbury headquarters and in Torrington.
“The administration has been very supportive, publicly, of fuel cells and wanting to allow deployment in the state,” Bishop said. “There’s a bit of a disconnect between the public policy of the state versus some of the actions that state agencies have taken. You see DECD investing significantly in our factory expansion because they see value in it. Then you have DEEP not selecting any fuel cell projects in the latest round of decision making. We’re scratching our heads a little bit about how some of these decisions are made.”
Chip Bottone, president and CEO of FuelCell Energy, had equally harsh words over the perceived disconnect.
“I think the state needs to get its act together and recognize, from a policy perspective and energy perspective, what is the right thing for the state economy. We’ve had to make adjustments at our factory in our run rate,” he said. “We bring a massive intersection of value when you bring that collective, no-biased discussion.”
FuelCell Energy, however, sees a strong future for its industry. Bottone said the lack of fuel cell projects selected in 2016 set his company back in terms of hiring, but he expects to start hiring again in 2018 and beyond.
He said the fuel cell industry creates jobs in Connecticut, while many solar cells are manufactured in China.
Rinebold said the state has been supportive of the industry, but more can be done.
“They (fuel cell companies) haven’t received everything they’ve asked for, but the state listens and that’s a good thing,” he said. “The state has done a good job, but in a competitive environment we have to be extraordinarily thoughtful in how to do better.”
Citing a study by the Northeast Electrochemical Energy Storage Cluster, Rinebold said the fuel cell industry in Connecticut supports 600 supply chain companies, 3,400 jobs, and produces $726 million in revenue and $40 million in state and local tax revenue.
Moving the Beacon Falls Energy Park project forward would go a long way in pushing the industry into the future. Despite not selecting it in October, DEEP gave the project a boost in January by granting an air permit to build the plant.
“At this point, there is nothing specific on the books to address that (funding the project),” Schain said. “That’s a business decision they will have to make.”
Bishop expects the project to move forward.
“The project is fully developed and shovel ready,” he said. “We hope there is a new process in 2017 where we can wind up with an energy contract.”
©2017 The Hour (Norwalk, Conn.) Distributed by Tribune Content Agency, LLC.