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Fuel Cells: White Knight for Natural Gas?

Fortnightly Magazine - March 15 2000

as methanol), producing power with water as a waste product and only a trace of hydrocarbon emissions. Success depends in part on a stable fuel supply and a delivery infrastructure.

Already hydrogen does fuel some industrial applications of DG, and its use may increase. "Down the road, there's a belief in a hydrogen economy where hydrogen would be an energy source more on par with natural gas," says Bill Liss, team leader-energy conversion at GRI. But that's 30 to 50 years off, adds Liss.

Natural gas, however, offers a ready delivery system to serve the emerging technology. Along with propane for rural and other remote applications, it is widely recognized as the practical choice for fuel cells in stationary power generation. Yet, notes Kevin Krist, principal technology manager of combustion and energy service at the GRI, "in both of those cases, the methanol and hydrogen would probably be made from natural gas."

In fact, natural gas seems particularly well suited to power residential fuel cells. In this respect fuel cells represent a major opportunity for the gas industry. According to the American Gas Foundation, new gas technologies such as natural gas fuel cells and microturbines may increase consumption of the commodity almost 60 percent over 1998 levels by 2020.

"Residential growth has essentially been stagnant since the mid-'70s," says Mark Krebs, director of market planning at Laclede Gas Co. Krebs explains that with insufficient volume, overhead costs increase and gas companies are forced to raise rates, which then hinders their competitiveness.

"Do residential fuel cells give us a light at the end of the tunnel?" Krebs asks. "An absolute maybe."

Adopted widely as the primary generation source in homes, fuel cells, in effect, would more evenly distribute natural gas flows throughout the year. No longer would residential gas flows peak in the winter, dropping off to nil in the summer, says Rhett Ross, director of development at Breakthrough Technologies Institute. The organization directs Fuel Cells 2000, a nonprofit initiative supporting the commercialization of fuel cells.

Ross explains, "Whether it is winter or summer, whether the winter is mild or severe, the natural gas companies can better forecast their loads, and they will be moving on an annualized basis rather than a seasonal basis."

But to some, the scenario sounds a little too good to be true.

"Regardless of the fuel cell, you're going to need something to convert natural gas to hydrogen," notes Krebs. "That technology is pretty iffy."

He adds, "I think, realistically, things are so dismal that there are a lot of people who have an 'any port in the storm' mentality. We, as an industry, have to make sure that we focus our efforts on our best shots."

Even if the technology does increase gas use in homes, it will take time for markets to mature.

"If fuel cells are widely adopted by residents, then it would solve [declining growth in that sector]," says Steven Taub, associate director for North American Electric Power at Cambridge Energy Research Associates. "But I wouldn't expect it to happen overnight. It's going to

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