UTC’s Fuel Cell Miracle Breakthrough

Fuel Cell Arrival at 360 State Street

Erik Robie, UTC Power’s Regional Manager of Sales, would most likely prefer I downplay the ‘miracle’ tone of this article, but that’s not possible. He played a pivotal role in the largest installation of a residential fuel cell in the world, and that will have a huge impact on clean energy production.  Sorry, Erik, but that’s big news.

It’s not every day I get to chat with hotshot engineering types, so I took advantage of the opportunity when Robie returned my call. He had just stepped off a plane in San Francisco and had an authentic quality about him that made me like him immediately. But frankly, what I really wanted to know was how to sell a power system worth over a million dollars to a very savvy developer. Did I mention this application in commercial residential use had never been tried before?

Erik Robie, UTC Power

For  background, installing fuel cell power in 360 State Street – a mixed-use development in New Haven, Connecticut, with 500 residential apartments - didn’t happen overnight. However, it may forever enshrine the developer, Bruce Becker, and UTC Power’s Erik Robie in that land called, “Darn, why didn’t we think of that?”

Certainly the development’s project has no competition in New Haven or anywhere else. The mixed-use development has been lauded by government officials, sustainability advocates and the broader community. Green building people will be drooling over 360 State - which is in pursuit of a LEED Platinum certification under USGBC’s pilot neighborhood development program – for some time to come.  To give you an idea, 360 has so many smart growth and energy efficiencies, their media people sent me the project’s LEED score card for reference.

Most existing building stock is old in New Haven, which has an historically low 1% vacancy factor for multifamily. Within the eco-delirium surrounding this project an excerpt from the developer’s press release actually seems somewhat humble:

“With its break-through utilization of fuel cell power and range of efficiency measures, 360 State has become a new green building model not only for Connecticut, but also for the multifamily housing world.”

Becker is not exaggerating even a tiny bit, as the 400 kW fuel cell power source located on-site is an innovative and exciting application of clean energy technology within a large-scale multifamily development and certainly has been ground-breaking.

GLL: Thanks, Erik, for taking the time to talk with us. Can we start with how and when the 360 State Street project first got started?

ROBIE: Well, it was about 2007 when we got the initial inquiry from the developer, Bruce Becker, and he was really ahead of the curve. His team was investigating alternative technologies and new innovative systems for his project. They were particularly interested in looking at the economics over that first year we were in contact. We’ve been installing fuel cells since 1991, and out of 270 systems, many were commercial uses like Verizon’s 300,000 square foot call-routing center in Garden City, Long Island, Whole Foods Market stores in Connecticut and Massachusetts and a Connecticut Cabela’s store.

GLL: Fuel cells have been around for a couple of decades, which makes me wonder why they had not been used for these large residential purposes before.

ROBIE: First there was a challenge doing a residential installation largely because of utility regulations. Sub-metering in Connecticut and several other states has not been permitted. That hasn’t changed in Connecticut yet, but Bruce is working with regulators hoping to make progress. Another issue is that a fuel cell needs a central hot water distribution system to tie into.  In the absence of a central system, it is very difficult and very expensive to retrofit this system. This is difficult to put into an existing building as it would require a bigger retrofit effort. And thirdly, there are less expensive and simpler systems “PTAC” with individual controls. Although they are not clean energy, we compete against these cheaper technologies.

GLL: So how did you overcome these issues with Becker & Becker?

ROBIE: Bruce [Becker]wanted to use a virtually pollution free system and was willing to work with us. He was also willing to change a few things in his design to accommodate the fuel cells’ requirements. In a new building these are relatively simple to do within the design and, as using the energy efficiently is critical to the economics of the system, the changes made sense.

GLL: Could you give us an example?

ROBIE: Well, Bruce designed the building to accommodate what we needed. For instance, he tied in the water source heat pump system and he made sure that the heat could be diverted to the pool as part of the system.  The cost most of the time for making a change was a small premium, but the payback for these changes was the ‘free heat’ by-product of the system.

GLL:  Before we go on, is there a simple way you can explain for our readers how a fuel cell works?

ROBIE: Sure. Actually, when I started at UTC Power six years ago, my job was pretty much education and really to explain, “This is what a fuel cell is” and “This is how it works.”  The easiest way to understand the technology is to think of a fuel cell as a big battery. It produces clean energy as there is no combustion in our process.

In a regular battery, the chemicals required for the electrical production are contained inside the battery and they eventually require re-charging. In a fuel cell, the chemicals, hydrogen and oxygen come from outside the cell, but the process is basically the same. The main difference is the system takes the chemicals from external sources, so there is no need to be re-charged. All we need is a natural gas pipeline, the same low-pressure line used in homes and businesses.

GLL:  Can you explain how the natural gas is used and how the system works?

ROBIE: We strip the hydrogen from the natural gas. The hydrogen is mixed with oxygen from the air and that electrochemical reaction produces the electricity on site. The heat by-products of the system are used to produce hot water, to heat pools and for space heating or air-conditioning in the building. The pure water that results is used in the production process, so nothing is wasted. The whole process is very efficient and, of course, the thermal heat by-products are free.

GLL: I understand that almost all of 360 State Street’s 500 residential units’ energy needs will be met by the system, but will the system produce any extra energy to sell to the grid?

ROBIE: Yes it will. Actually when 360’s fuel cell spins the meter backwards during off-peak times, it will sell that electricity to the utility at a retail, not a wholesale rate. Another big environmental system benefit is that the fuel cell is 85 percent to 90 percent efficient. The efficiency of the normal grid is only about 33%, which gives you a good point of reference.

GLL: The idea of independent energy production appeals to a Yankee like me for many reasons including national security, but these systems are not cheap to produce. How is the market responding to that and how are your clients financing these large installations?

ROBIE:  First of all, we expect the prices of these systems to come down and there are a lot of engineers working on making that happen within our company and that of our two major competitors right now. In the meantime, UTC Power is focusing on its residential-use large-scale fuel cell installations in just five states: Connecticut, Massachusetts, New York, New Jersey and California. These states have access to natural gas and state funding for alternative energy systems which, when combined with the other federal incentives and available grants, make the cost sufficiently competitive.

GLL: 360 State Street expects its payback to occur in 5.5 years for the cost of the system, but they received grants and state and federal incentives that cut their upfront cost almost in half. Is this typical for this kind of clean energy system?

ROBIE: The payback for the fuel cell production system without government incentives and grants averages about ten years. When available grants and state and federal incentives are used, the payback is essentially halved.  Without that assistance, even though it is a renewable power source and has so many other benefits, the fuel cell cannot compete against the standard fossil fuel system.

GLL: Who are your main competitors and are they pursuing large residential installations?

ROBIE: We do have competition, but there are only two other major fuel cell manufacturers: FuelCell Energy of Connecticut and Bloom Energy, which is on the West Coast. As we developed the large residential installation, we are actually the only company pursuing that sector.

GLL: I understand that a fuel cell has no moving parts, so that maintenance is less cumbersome.

ROBIE: Well, actually, there are moving parts like simple fans but no major ones. The main benefit of the system is that it is an electrochemical reaction as opposed to a combustion process. This makes the entire operation virtually pollution-free. [Editor's Note: It is the burning of natural gas that causes greenhouse gas emissions and burning is not part of the fuel cell process.]

GLL:  A lot of property owners prefer their systems be managed by on-site staff. Would that work with a 400 kW fuel cell like the one you installed at 360 State Street?

ROBIE: Candidly, most people don’t want to be responsible for actual power generation and with our maintenance agreement they don’t need to be. UTC Power is responsible for all power generation and our service contract is bumper-to-bumper. Occasionally we have an on-site or highly skilled maintenance person who wants to see the workings of the cell. Once we take the panels off, it is not something most of them have ever seen. It is just good economics to allow us to service everything.

GLL: Obviously, a different system has unique maintenance requirements, so can you give us an example of what servicing entails?

ROBIE: UTC Power maintenance on-site is comprised of changing air filters, monitoring and testing within specified systems performance ranges and relatively clean tech work. We also remotely monitor and trouble shoot the system, which is pretty instantaneous and keeps things operating smoothly. The fuel cell system can run when the grid has failed, and that is one of the main reasons it has been so popular with commercial users like Verizon and other companies in which power is so critical to their businesses. Obviously, multifamily power accessibility is pretty critical as well.

GLL: Are there any more residential installations planned?

ROBIE: Large-scale residential use hadn’t really been on the radar screen, but now that one project is done, that has changed overnight. Of course, there are a lot of things that have to occur, like legislation that allows sub-metering, but multifamily has become a very attractive market for us.

GLL: What else would you like me to tell people about UTC Power’s fuel cell energy?

ROBIE: Not only does the fuel cell provide energy savings, but it is the cleanest 24/7 technology on the market today and will operate when the grid is down.

GLL: Are you as thrilled about 360 State Street as the rest of us are?

ROBIE: Actually, I am. That development is starting to educate people that these systems are commercially viable. They are cost effective, they are available and they are working. It’s good economics and good, clean, renewable power.

GLL: I think you said it all right there. Thanks so much for the education.

ROBIE: It was my pleasure.

Shortly after our conversation, it was announced by the Department of Energy (DOE) that UTC Power’s affiliate, United Technologies Research Center in East Hartford, Connecticut, would receive two of the DOE’s 12 awards in the category of, “Advanced Building Control Strategies, Communication and Information Technologies, for Net-Zero Energy Buildings”.  Of the total $22,497,833 total awarded in this category, UTC’s two projects will receive $1,866,627 (out of a total cost of $2,333,284) and $1,998, 766 (out of a total cost of $2,498,457) respectively.  As hydrogen/oxygen talk can get a little Star-Trekkie, (see below if you are interested in tech talk for geeks), it is important to emphasize that this is clean, combustionless, power-generating technology available wherever there is a natural gas supply.

Today’s cost of the fuel cell system is expensive when compared to the other conventional technologies - more than a million dollars for large systems like the 400 kW fuel cell installed in 360 State Street –  but incentives and grants can cut up to half the cost. The state and federal incentives that subsidize clean energy production are critical to market acceptance. Many emerging industries are given government assistance and this practice is not without precedence. In fact, it is interesting to note that fossil fuels are still subsized even today. In 2008 the global subsidy for fossil fuels was $557 billion, the last year for which figures are available.  This is an excerpt from the International Energy Agency’s statement on these subsidies:

“The IEA analysis has revealed that fossil fuel consumption subsidies amounted to $557 bn [billion] in 2008. This represents a big increase from $342 bn in 2007. Fluctuations in world prices, domestic pricing policy changes, and shifts in demand can all be responsible for year-to-year differences in subsidy estimates. Since 2008, a number of countries – including China, Russia, India and Indonesia – have made notable reforms to bring their domestic energy prices in line with world prices. These efforts are expected to contribute to a reduction in the cost of energy subsidies to these countries in 2009.”

In the full announcement, the IEA recommended a responsible phasing out of these subsidies in favor of clean, efficient energy subsidies.  GreenLandlady seconds that recommendation.

Contact Homer Purcell or Erik Robie at UTC Power at 360-900-POWER for more information on fuel cell technology for your large commercial or residential project. If you are interested the full technical explanation of fuel cell power, continue reading below:

FACTS FOR ENERGY GEEKS: A fuel cell is a renewable power source that uses an electrochemical process to combine hydrogen fuel and oxygen to produce electricity, heat and water.  The fuel cell is very clean technology even though it uses natural gas as a starting point. What keeps the energy produced clean is that the process merely strips the hydrogen out of the natural gas, but there is no burning of the gas.  This process can be summarized as follows:

  • The fuel processor reforms the fuel (natural gas) to hydrogen gas
  • The hydrogen gas feeds the fuel cell stack
  • Hydrogen gas and air are combined in a ‘magical’ electrochemical process
  • The process produces direct current (DC) power, pure water and heat
  • The byproduct water is used in the power plant operation
  • The DC power produced is conditioned to provide high quality alternating current (AC) power output
  • The usable heat is then redirected to create hot water, space heating, air conditioning and cooling

Fuel cells also operate without combustion making energy production virtually pollution free.  Although the cells use natural gas, because of the system’s high efficiency, they can extract a lot of energy from a small amount of fuel and produce a lot of electricity.  Although this is ground-breaking usage in multifamily, the total system efficiency of this kind of electricity production - including the residual thermal energy produced which gets used for space heating/cooling/conditioning, heating water and heating pools -  makes it a perfect match for residential use. (See UTC Power’s site for the entire technical explanation of how fuel cells work.)

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