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...
of fuel cells will drop significantly. "There is a very sharp slope here in the cost per kilowatt in terms of it coming down."
Miller compares IFC's older, alkaline technology fuel cell used in the space program, which cost $600,000 per kilowatt, to ONSI's phosphoric acid power plant, which today costs $4,000 per kilowatt. For proton exchange membrane (PEM) fuel cells, the technology du jour for residential and transportation applications, he adds, the "ultimate target is to get to $50 per kilowatt by 2010."
He concludes, "You can see if you use that slope that we are going to get competitive with the grid and microturbines very quickly."
DuPont serves most of the major PEM fuel cell manufacturers with its Nafion membrane, described by Paul Tangeman, manager-alternative energy, as "the heart of the proton exchange membrane fuel cell."
Says Tangeman, "We have been involved in serving the developmental aspects of the industry for many, many years, and providing the Nafion membrane to those people who are developing the fuel cell, downstream components and stacks, systems and so on."
(Nafion is an ion-containing perfluorinated polymer.)
Incumbent technologies including conventional generation do threaten fuel cells, says Tangeman. "But fuel cells have so much going for them in the long run in terms of energy efficiency and so on that they will be a winner, I think."
DuPont sees a potential total market for fuel cells that's anywhere from $10 billion to $40 billion. While the range is difficult to pin down with precision, Tangeman jokes, "It will be, as we say, either huge or large."
GE Power Systems estimates a somewhat smaller potential market of $14 billion for all of distributed generation. With Plug Power as a 25 percent investor, GE Power Systems formed GE MicroGen Inc. last year to market, sell, install and service Plug Power's fuel cells.
"We don't view [fuel cell business] as exposing GE to a significant amount of risk," says Barry Glickman, president of GE MicroGen. He explains that to complete its product portfolio of power generation offerings from central generation down to the residential range, GE in 1998 began an intensive investigation of DG in the capacity range of less than 50 megawatts. The company launched a global search for the most promising fuel cell technology and developer.
"We narrowed down the universe of fuel cell technologies to proton exchange membrane, and then we investigated literally dozens of potential developers of that technology and finally [chose] Plug Power in early 1999," recalls Glickman. "So in terms of managing the risk, the decision to settle on Plug Power was the product of a year worth of technical evaluation."
GE MicroGen is working with well-placed local partners to demonstrate the benefits of fuel cells to small end-users.
"From a GE MicroGen partnering standpoint, we're really looking for partners that bring access to residential and small commercial customers, a local sales presence, [and] a local service infrastructure." In addition to New Jersey Energy Resources, GE MicroGen has partnered with energy companies including KeySpan Energy and Flint Energies.
The key, says Glickman,