A Connecticut Fuel Cell In South Korea's Grid

Breakthrough contracts revive hydrogen hopes in electric power

Photo: Fuelcell Energy

Good Digestion

A fuel cell plant powers a Kirin Brewery operation in Tokyo, which runs on its waste gases in a self-contained system.

If you had asked a decade ago about fuel cells, you would have learned that two Connecticut companies dominated the U.S. market for small power plants, their only real application at that time. After a lot of ballyhoo in the meantime about putting fuel cells in cars and the ”hydrogen economy,” the same two Connecticut companies still reign in the fuel cell market today, selling essentially the same technology. Now one of them looks to be taking off, having received a big boost from some unlikely customers in Asia, beginning with a Japanese brewer. Fuel cells finally seem set to become a significant player in electric power.

FuelCell Energy (FCE), in Danbury, Conn., was founded in 1969 as Energy Research Corporation. It has focused single-mindedly on the molten carbonate cell, which operates at a relatively high temperature. Fuel cells cause hydrogen to react with oxygen, across an electrolyte and with the help of catalysts at the cathode and anode, to produce an electric current and water as a by-product. Generally, fuel cells run at temperatures that make it necessary for the catalytic elements in the electrodes to be made from expensive materials like platinum or palladium, and the catalysts tend to be sensitive to impurities like carbon monoxide. The Danbury cell, running at about 600 °C, consumes the carbon monoxide along with its hydrocarbon fuel. Its internal steam reforming system, which can take the hydrogen it needs from coal gas, natural gas, or waste processing and digester streams, distinguishes the FCE fuel cell from all the others.

FCE's big break came in 2003 with an order from the Japanese beer maker Kirin Brewery Co., in Tokyo, where a battery of cells would consume the brewery's digestive gases while producing electricity to run the plant. Further business came from a variety of customers in the United States and Asia, almost always organizations that wanted to brag about using an innovative green energy system.

Having gained some attention in Asia with the Kirin order, FCE took another big step up the path toward full commercial viability this year, when South Korea's leading independent power producer, POSCO Power Corp., in Seoul, placed an order for 25.6 megawatts of fuel cell power plants and entered into a 10-year manufacturing and distribution agreement with the company. That agreement affirmed POSCO's faith in the commercial promise of the technology. Its purchases doubled FCE's orders and unequivocally made FCE the world leader in stationary fuel cells. A second Connecticut company, United Technologies Corp.'s UTC Power, in South Windsor—maker of the fuel cells that powered the Apollo vehicles on their trips to the moon—is the next-most-important player.

Since obtaining the breakthrough Kirin order in 2003, FCE boasts that it has brought its system costs down by 70 percent. Tony Leo, the company's vice president of applications engineering, says it set up a team to drive down costs systematically, using ”value engineering” techniques to assess every component of a plant. That led to a decision to separate the fuel cell stacks, the dc-ac converter, and the thermal system rather than put all three major components in one expensive enclosure.

FCE is aiming to get installation costs down to US $2 per watt by 2012, compared with $3.25 or more five years ago. Analysts at ThinkPanmure and Lazard Capital believe that FCE has reasonable prospects of achieving profitability within 18 to 24 months because of its successful cost cutting and the diversity of promising markets for its product.

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