Electric Competition Moves On
The recent months have brought a flurry of activity in a number of states:
ARIZONA: The Arizona Corporation Commission approved rules opening...
executive director of the U.S. Fuel Cell Council.
"It's relatively unusual for a company to go from soup to nuts on its own," says Rose. "A company like United Technologies might be able to do it, but that's only because it has Carrier in-house, whereas a company like Plug Power needs a GE Fuel Cell Systems in order to get access to not just the GE badge, but also the market that GE already sells into."
Private-public partnerships have led the development of fuel cells at least since the days when International Fuel Cells first worked with NASA to supply electricity to the manned space missions. Today nearly $1 billion is spent annually in worldwide R&D for fuel cells, according to a recent report from AdvanceTech Monitor. Of that funding, much of it by government agencies in the United States, Europe and Japan, 80 percent is directed at the development of fuel cells for transportation. Experts say that once technological advances and economies of scale driven by the transportation sector can produce a reliable fuel cell in the range of $50 per kilowatt, the technology will be transferred to power generation. Early adoption of fuel cells for power generation in Europe and Asia also might make their cost more competitive in the United States.
"It's very clear there's been a history of private-public partnerships," says GRI's Liss. But Liss points to the recent involvement in fuel cell partnerships by electric companies as a big indicator of change.
"In the past there's been some opposition from electric utilities from smaller power systems as a competitive threat," notes Liss. "The fact that more and more electric utilities are becoming investors and believers in the opportunity for distributed generation, including fuel cells, is interesting from a partnership standpoint and interesting from a standpoint of possibly having a better climate for the introduction of these products."
Besides the big investment dollars involved, obstacles that remain before fuel cells can be commercialized also represent risk. For instance, price per kilowatt, interconnection to the grid, product performance and safety issues, customer acceptance and competing technologies - including cheap grid power - often are cited as impediments and threats to the widespread adoption of fuel cells.
"The risks are significant both from a technical and a product development and commercialization perspective," says Liss.
Yet it's worth noting that many "conservative" Fortune 500 companies have done the research and are pursuing the fuel cell market, whether as fuel cell manufacturers, materials and components suppliers, or distributors. Cost, product performance and the other concerns will be resolved in due time, they say.
"We're investing very substantial amounts of money in the technology," says IFC's Miller. "I don't know what the risks [would be]; we're providing more reliable power and cleaner technology."
Miller admits, however, "There are a lot of competing technologies for the distributed power market." Microturbines hold promise, he says, but fuel cells in the long run will be the winning DG technology. In addition to offering high efficiency and a design with no moving parts, says Miller, the cost