Fuel cell projects widen footprint in Fairfield County

When it comes to building clean energy-generating infrastructures, Danbury-based FuelCell Energy Inc. is a high-voltage competitor.

Taking on the megawatt class of on-site power generation one fuel cell power plant at a time, the company is expanding its customer base and manufacturing footprint in local and global markets.

FuelCell started as a government-contracted research organization in 1969. Through its work on fuel cell energy, the organization began creating its own prototypes and demonstration projects in 1992. Over time, FuelCell refined its existing models and eventually started putting its commercial power plants on the market in 2003.

Despite the company”™s longstanding presence in Fairfield County, fuel cell energy projects are a relatively new undertaking in the state and region. Within the past two years, however, FuelCell Energy started gaining traction on its home turf.

The company has now completed two projects in Connecticut: a 1.4-megawatt clean energy project at Central Connecticut State University in New Britain, online in January 2012, and a 14.9-megawatt Bridgeport-based fuel cell park owned by Richmond, Va.-based Dominion, a national energy maker/marketer/transporter, that was finished in December 2013.

The Dominion Bridgeport FuelCell plant is an example of the signature electro-chemical process that converts natural gas into electricity. The reliable returns have allowed Dominion to sell the output of its fuel cell power station to Connecticut Light & Power Co. under a purchase agreement.

This month, FuelCell secured one of its largest fuel cell project agreements with United Illuminating Co., the Connecticut-based regional electric distribution company. The plan is to build two 2.8-megawatt fuel cells, one of which will be in Bridgeport as part of a renewable energy park initiative on the site of a former landfill near Seaside Park. The site of the second fuel cell has yet to be announced, but it will be located in one of United Illuminating”™s coverage areas, according to United Illuminating officials.

On the heels of the United Illuminating announcements, FuelCell struck a deal with the University of Bridgeport to install a 1.4-megawatt fuel cell power plant on campus, sealing a 12-year agreement. This would allow FuelCell to build, own and operate a fuel cell power plant, through which the university purchases power to heat and run 80 percent of its campus buildings.

One megawatt can power about 1,000 homes, which means the University of Bridgeport fuel cell project is equivalent to powering about 1,400 homes, said Kurt Goddard, vice president of investor relations at FuelCell. The university anticipates saving $3.5 million in energy costs over the next 12 years once the infrastructure is completed, he added.

The concentration of fuel cell projects in Bridgeport is not a coincidence, Goddard said.

With brownfields in Bridgeport that need remediation, Bridgeport Mayor Bill Finch has been on the forefront of bringing more energy-efficient projects into the city, he said.

“What”™s unique about Bridgeport is that Mayor Finch is very supportive of our projects,” Goddard said. “He”™s been a real ally in getting clean power generation for the city, whether solar or fuel cell. His administration is developing an eco-technology park. As a result of the revitalization that”™s been going on, clean technology businesses have moved to Bridgeport and fuel cell plants are part of that.”

Not only is this the time and place for Connecticut to build fuel cell power plants, but it”™s also an opportunity to expand jobs in the state, said Chip Bottone, CEO of FuelCell Energy.

“When we build these plants, we add value at the user level,” Bottone said. “Whether to a hospital, manufacturing company or a school, it makes them more competitive and helps them retain more jobs and save money. Second, fuel cell energy employs about 560 people in the state of Connecticut. We add economic value to the state and we have fairly high-paying jobs. Third, we pay sales tax on these projects, so we add economic revenue to the state. Solar projects are exempt from sales tax, but we”™re not.”

FuelCell uses technology that combines hydrogen from natural gas or renewable biogas with oxygen to create electric currents and heat, Goddard said. The output is electricity, heat and water, without combustion, which makes the fuel cell an attractive option to clean and renewable energy, he said.

With a production facility in Torrington, FuelCell remotely operates more than 50 fuel cell power plants in nine countries. Its most recent expansion was in the South Korean marketplace. Marketing include utilities, manufacturers and universities, Goddard said.

The company has been enhancing its product and gradually cutting down the cost of building each power plant for the past five to eight years, Bottone said. But the costs can be further reduced if more investors are putting their investments into fuel cell projects.

“As we do more deployment and get people to finance these projects, they bring a lower cost to capital and allows us to create more value,” Bottone said. “We need to get more projects deployed. There”™s a reason why we do bigger projects. There”™s a financial model to think about: the project cost, the operating cost and financing cost. So we”™re working on reducing the cost of the product, and lowering our cost to capital.”

There”™s also a statewide incentive to invest in renewable energy projects such as fuel cell, Bottone said. Connecticut provides low-emissions renewable energy certificates, or LRECs, through an investment tax credit program. LRECs are sold to utility companies, which must obtain a certain number of the certificates under the state”™s renewable portfolio standards program. The state”™s demand for putting more clean energy back on the electric grid keeps companies accountable for investing in more renewable energy projects such as fuel cell energy, Bottone said.