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Banking on the fuel-cell phenomenon

Fuel cells are a hot commodity-or at least a promising one. The possibilities of this alternative-energy technology are firing the imagination of Wall Street investors, home power-generation enthusiasts, and even some electrical contractors.Fuel-cell company stocks spiked dramatically during the last six months, with some manufacturers reporting five-fold increases in stock value. Manufacturers are

Fuel cells are a hot commodity-or at least a promising one. The possibilities of this alternative-energy technology are firing the imagination of Wall Street investors, home power-generation enthusiasts, and even some electrical contractors.

Fuel-cell company stocks spiked dramatically during the last six months, with some manufacturers reporting five-fold increases in stock value. Manufacturers are poised to mass-produce fuel cells, which would lower the price of the technology and open up the market for residential and commercial applications. Meanwhile, the Department of Energy (DOE) has requested more than $100 million for fuel cell R&D and production in the 2001 budget.

Currently, banks and other computer-dependent information companies show the most interest in fuel cells. That's because the technology provides a high-degree of uninterrupted power. Today's fuel cells offer up to 99.999% reliability. Power-quality professionals call that "five nines," which translates roughly into only 3 seconds of power downtime per year. Compare that to the average of 53 minutes a year of downtime in United States, and you can see the potential of fuel cells to save large financial institutions millions of dollars per year. An hour of downtime a year can cost a large bank millions.

Last year First National Bank of Omaha (FNBO), the seventh-largest credit card processor in the country with 6.5 million customers, selected fuel cells built by Sure Power Corp. in Danbury, Conn. to safeguard its computer system. Four of Sure Power's High Availability Power Systems (HAPS) have been providing electrical power for the firm's 200,000-sq-ft data center since June 1999.

The first floor of FNBO's data center, tucked 15 ft below ground, contains two redundant pairs of fuel cells, each about the size of a dumpster, and capable of producing 400kW of electric power. Because the center needs about 300kW to function, even if two of the four fuel cells failed, the bank would still have more than enough power generating capacity to satisfy all its needs. First National is also gaining an added bonus from the fuel cells. Because between 70% and 80% of the heat generated by the cells is recoverable, the operational fuel cells will produce enough heat to keep the building warm and melt snow around the building in the winter using coils built into the sidewalks.

Show us the money

The main problem with the fuel-cell market for electrical contractors so far is that there really isn't one. Though the potential is enormous for electrical-construction and maintenance professionals, the technology has yet to go mainstream through mass-production.

"We haven't installed any fuel cells yet-and we don't know any contractors that have," said Bill Gralike, director of field resources for Guarantee Electrical Co., St. Louis, one of the largest electrical contractors in the United States. Gralike said one prospective client, Bridge Information Systems, found the technology too cost prohibitive. Gralike said Guarantee explored fuel cells, continuous power systems employing flywheel systems and traditional UPS systems for the Bridge project.

"We ended up specifying traditional UPS systems, though I was impressed with the flywheel systems not needing battery storage space," Gralike said. "I thought fuel cells looked like a great technology for facilities that need absolute reliability, but currently they're too expensive."

Indeed, many companies that need absolutely reliable power are turning to the lower-priced flywheel systems. Dot-coms or net-banks can replace one or two redundant battery banks with an electromechanical flywheel. Flywheels, using one-tenth the floor space of an equivalent battery storage capacity, require essentially no maintenance. An electric motor runs, when there is power, to spin a one-ton steel flywheel. When the power fails, the motor reverses and becomes a generator, powered by the flywheel's inertia-good for 250kW and more, for as long as it takes to power up the standby generator.

Rob Colgan, director of marketing for the National Electrical Contractors Association (NECA), sees the fuel-cell phenomenon as a coming thing. "They're coming out of the lab and into the marketplace. It could be a matter of weeks or months before mass production drives the cost of them down to make them commercially viable for contractors," Colgan said. Colgan thinks contractors eventually will perform a lot of fuel cell installations.

"Clearly, fuel cell manufacturers envision units about the size of a refrigerator powering homes and businesses. And that could be a an enormous market for contractors."

Meanwhile, the DOE continues to pump more money into the promising technology to power a variety of products, including cars and buses. The DOE budget request of more than $100 million for fuel cell R&D and procurement in the FY2001 budget includes $5.5 million for Cogeneration/Fuel Cells -formerly the "Fuel Cells for Buildings" program. The funding will go toward developing a prototype fuel processor for a low-temperature fuel-cell system; completing the design competition for a 50kW PEMFC co-generator for buildings; and continuing R&D of a membrane that will operate in the 120 degrees-140 degrees C temperature range. The request is 55% higher than FY2000 enacted funding for this program.

The latest advances

In mid-February, Plug Power Inc. announced that it had run a hydrogen-powered fuel cell for more than 10,000 hours-a significant milestone. The company also opened a 50,000-sq.-ft manufacturing facility adjacent to its existing research and development facility in Latham, N.Y. The facility will begin producing Proton Exchange Membrane (PEM) fuel cells for field-testing later this year. Plug Power plans to begin commercial sales in 2001.

FuelCell Energy, Inc. has announced plans to build a 250kW fuel-cell power plant this year at a Mercedes-Benz production facility in Tuscaloosa, Ala. Southern Company, Alabama Municipal Electric Authority and Mercedes-Benz U.S. International Inc. are contributing to the pilot project.

Also in early February, Sure Power Corp. announced a partnership agreement with Piller, Inc., Osterode, Germany, for the use of their rotary technology in the design and manufacture of the fuel cell-based Sure Power High Availability Power System. Piller produces the Powerbridge flywheel energy storage system and the Uniblock and Triblock rotary uninterruptible power supply components. The agreement calls for the use of these and other Piller products integrated into the Sure Power High Availability Power System. Sure Power and Piller also agreed to use Piller's integration services for installing the Sure Power System.

"In the Internet age, when the global economy is dependent on computers, it's critical to recognize that computers in turn are dependent on uninterruptible computer grade power," said Keith Yeates, president, Piller Inc.

In early March, Plug Power Inc., in partnership with GE MicroGen, a subsidiary of GE Power Systems, announced it will develop a new heating system that combines a furnace, hot water heater and fuel cell system in a single appliance that provides both heat and electricity for the home. Under the agreement, Vaillant will obtain fuel cells and gas-processing components from Plug Power and then produce the fuel-cell heating appliances for European customers. The appliances will be tested in European markets in 2001, and sales are scheduled to begin in 2003.

The NYPA green projects

Meanwhile, the New York Power Authority (NYPA) recently inaugurated large cogeneration, or combined heat and power, projects that involve using heat left over from the generation process to supply more energy. One project includes a 200kW fuel cell at a Westchester County wastewater treatment plant in Yonkers, N.Y. It's the first fuel cell in the Western Hemisphere to run on a gas produced in the sewage treatment process. By processing the gas, the fuel cell yields hydrogen, which reacts with oxygen to produce electricity and hot water.

In addition, the Power Authority has installed a 200kW fuel cell powered by natural gas at a police precinct station in New York City's Central Park, and has a similar project at the North Central Bronx Hospital. Other NYPA efforts in distributed generation include 16 rooftop solar photovoltaic installations around the state with a total capacity of 565kW.

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