PLUG POWER'S PEM FUEL CELL COMEBACK
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When Plug Power's remarkably compact hydrogen fuel cell came to
market a half-dozen years ago, it seemed like the ultimate in kewl
onsite heat and power. At just 5 kW of output, it aimed for adoption in
homes and small businesses, of which there are potentially tens if not
hundreds of millions of potential buyers worldwide. Based on its
intriguing proton-exchange membrane (PEM) technology, it didn't need
a windy day to operate it, so it's power was steadier than a wind
turbine (and much kinder to avian life). Nor did nighttime and/or rain
clouds put it out of commission like they do solar PV; rain or shine,
night or day, the PEM cell pumps out amperage. It makes not a whisper
of noise and hence is more "site-able" near residences and offices
than a microturbine-yet it generates lots of heat as a byproduct of
its steady electric yield. Natural gas or propane can fuel it, so any
home or small business might easily be ready to install one, and an
owner might even say bye-bye to grid power-or come close. As for
emissions, it earns an A+. Like most fuel cell types it yields zero
pollutants. With all these virtues, who wouldn't want a hydrogen fuel
cell--based power system someday or other?
PEM fuel stack technology
What was wrong with this scenario, though, notes Cynthia Mahoney,
manager of public relations and marketing for the late-1990s-era
startup in Latham, NY, was that "Fresh out the door, years ago, it
cost $175,000."
This reflected the high cost of manufacturing Plug Power's flagship
GenSys fuel cell stack, which was coupled to a remarkable if expensive
onboard fuel reformer, too. Of course, this figure wasn't meant to
remain as the eventual retail, but rather, costs were expected to
tumble in the natural order of things as high-volume production and
constant R&D would lower expenses.
A GlenCore H2 fuel cell installed in 2004 provides backup power for
UK-based Orange mobile phone service cell tower near Elgin, Scotland.
Even at its relatively high initial price tag, by about 2001 Plug Power
had reportedly fielded more than 400 GenSys fuel cells after having
come into existence just four years earlier in 1997. Early
installations had been funded largely by heavy subsidies from assorted
agencies that were naturally delighted to foster such a clean and
nearly ideal form of energy technology, and help it succeed. In those
early days, as Mahoney recalls, "Plug Power was clearly the leader in
the niche of small stationary power 100 kilowatt or less," and it was
busy making impressive strategic alliances domestically and abroad.
The crunch began to come, though, when the company tried to sell its
GenSys straight out as an unsubsidized commercial proposition to small
power users. The selling price remained far too high for them, and
ultimately the GenSys couldn't overcome the now-standard conundrum of
energy innovation-namely, without the would-be manufacturer signing
up thousands of would-be buyers, the cost of production stays too high
to make the product affordable. Thus there's the chicken-or-the-egg
problem of how to make one event happen without the other. Similar
economics have bedeviled photovoltaics, microturbines, Stirling
engines, and other technologies.
Left to right: Wagner Farms owner Peter Wagner, State Agriculture
Commissioner Nathan Rudgers, Plug Power CEO Dr. Roger Saillant, and
Renssler County Executive Kathy Jimino.
Secondly, and especially in this case, prospective markets don't
always clamber after the exotic, unknown, expensive hardware devices to
provide a basic commodity like electric power, and PEM fuel cells are
definitely a mysterious and untried new experience. Both the chemical
means of electrical production and the sophisticated reformer
technology-which yields hydrogen from a natural gas, involve
proprietary processes understood and serviceable only by a tiny number
of specialists. Who but for a few brave souls would be willing to dive
in there?
After facing several years of such obstacles, Plug Power's management
was reorganized early in the decade, and the marketing strategy
drastically revised.
Step one involved slashing the price to an affordable level and,
fortunately, this has succeeded rather impressively. Parting with the
hydrogen reformer was the main necessity. Doing so would cut the
manufacturing cost to a fraction of the original price. However, it
would also mean the PEM cells would need to be refueled by delivery
trucks bringing fresh tanks of pressurized gas, which greatly reduced
the product's usability and suitability. In fact, without a reformer,
the cell could no longer practically be run for primary energy. A
stripped-down model would thus need to discover a niche for itself as
backup. The good news here was that in this value tradeoff, the cost of
buying a PEM cell would fall to the low five figures.
Re-Configured, Re-Energized
Plug Power's fuel cell product transformation thus occurred in 2003,
and the result-dubbed the GenCore-offered essentially the same,
much-admired 48-PEM stack technology, minus the reformer. In addition,
to make the GenCore easily compatible with other building energy
systems, Plug Power attained Level 3 certification with NEBS (Network
Equipment Building Systems). Next, to enhance usability even further
Plug Power signed an agreement with Detroit Edison's NextEnergy to
provide future customers with Web-based monitoring and control.
One version of the resulting GenCore-designated the 5B model-could
thus offer backup performance and competitive pricing for industrial
applications; a second, the 5T, was tailored to serve the
ever-expanding global infrastructure of the telecoms.
In fact the latter sector has emerged as Plug Power's new primary
target market, and the company's efforts have largely (though not
exclusively) been focused here ever since. The market here is enormous;
it's estimated that a billion-and-a-half people worldwide are using
wireless phones, and in the US alone this translates into the need for
reliable backup support at about 174,000 cell sites serving 175
million-plus subscribers.
Though quite a step down from earlier ambitions for the GenSys, this
still represents more than one million remote stations, relay towers,
etc., serving wire line and wireless telephone, cable, networking, and
utility companies. Virtually all need automatic backup to fill in
during grid failures until the main power returns.
For this role historically, ordinary lead batteries have long been the
mainstay, but, as some system engineer will tell you, batteries pose
several drawbacks that a hydrogen fuel cell might overcome; a few
examples:
Batteries need to be housed inside temperature-controlled huts or other
shelters; Plug Power touts that its self-contained GenCore hydrogen
cell can withstand most outdoor environments. Hence, the range of
options for siting a fuel cell is thus enlarged, and some modest
construction expense is saved.
Batteries' remaining life becomes harder to gauge accurately over the
years, thus necessitating more in-person attention.
Battery disposal. As a hazmat governed by various regulations, this
entails more expense. Plug Power believes that its fuel cell technology
requires less maintenance than batteries, apart from occasional
refueling.
Lastly, as for relative cost, the GenCore is currently priced at about
$15,000, making it somewhat competitive if the reduced-maintenance
claim pans out and is factored in. Mahoney suggests that a 10-year
life-cycle cost for a GenCore appears to come out better than
comparable battery power, at least on paper. However, this remains only
theoretical, as no GenCore has been fielded that long yet.
Plug Power thus rolled out its new GenCore at a telecom show in June
2003. The following month the firm was already setting up a rigorous
field test of it for wireless giant Verizon. In this particular trial
in Albany, NY, technicians simulated thousands of multiple daily grid
failures to see whether and how the GenCore would kick on as a backup.
Further testing revealed how much runtime was yielded from a tank of H2
fuel. The GenCore passed these trials, Mahoney notes, then Verizon
certified the GenCore for network use and bought several units for a
phased implementation.
Altogether, during its first year or so of delving into the telecom and
utility markets, Plug Power reportedly shipped about 80 units. Several
dozen more have followed since. That's not really a bad start,
Mahoney observes, but she notes that the company is somewhat frustrated
to find that the industry is wary about making wholesale adoptions.
System engineers, she finds, tend to like fuel cells as such, but
policies require running the units through equipment-testing gauntlets
and phasing them in piecemeal to replace aging batteries rather than
upgrading networks comprehensively. "The technology is so new that
they're hesitant," she says.
In order to allay some of the concerns about after-sale service, Plug
Power recently signed contracts with leading telecom industry supplier
Tyco Electronics and has also arranged a deal with Professional
Teleconcepts to do installation and engineering. Unexpected snags also
crop up in attempting to site some GenCores (e.g., regulatory issues
that delay or thwart a preferred locale).
Launching advanced technology to market means parrying challenges from
rival R&D streams as well. Efforts by a half-dozen DOE-funded
teams-each devoted to its own variant of the advance small-fuel-cell
challenge-is ongoing, and breakthroughs can pop up at any time to
compel a response (see sidebar).
In any event, implementing GenCores "one-by-one" makes for a
continual learning process, she says, as each new success is yielding
feedback and fosters continual improvement.
Two recent and very enthusiastic adoption cases illustrate how GenCore
is apparently making at least some headway in the difficult but
potentially very significant niche of reliable power backup.
Telecom Cabin in Scotland Wilderness
Orange, a UK-based telecom, needed a new cell tower to provide coverage
to its subscribers in Rhynie and Elgin, Scotland. Selected as a good
site for this structure was the Huntly Nordic Ski Center in Elgin,
nestled in an environmentally sensitive wilderness. The tower would be
situated several miles from the electrical grid, and thus
line-extension to it would be extremely costly, notes Orange
spokesperson Pip MacLennan. Also, given the potential harm that would
be caused by digging or setting power lines near ski trails and slopes,
line extension was doubly undesirable. Orange thus decided to install a
liquefied petroleum gas (LPG) generator from Harrington Generators for
primary power.
As for backup, Plug Power happened to approach Orange about using a
GenCore-and the engineers sort of went "ape" over the idea,
regarding hydrogen fuel cells as great technology for them, not only
for the secondary role proposed, but as a potential primary power
solution for scores of similarly remote and otherwise difficult sites
in the telecom's expanding network.
When the first GenCore arrived in Scotland, local engineers liked it so
much that they set about endurance-testing the PEM for viability as a
main power source, even though the GenCore was hardly designed for
this. How long, they wondered, could a fuel cell keep going flat out?
"You could say we possibly were trying to 'break it,'" explains
operations manager Martin Murphy, "by the amount of starts, stops,
and runs we put it through." One reason for the firm's intense
interest is that electric rates in the UK are higher than in the US,
making the payback on the system potentially, he says, "a very
economical value as opposed to our regional electricity supply."
Running the GenCore for twice it's 1,500-hours rated life cycle
indeed broke it, so that a second was purchased and installed early in
2004. It has played the standby role, for which it was designed, ever
since. Whenever the primary generator conks out, as occurs fairly
often, Murphy is finding that "the fuel cell always cuts in within
ten seconds" and continues running, sometimes for many hours until a
technician arrives to fix the primary generator. During its first year
of backup power operation, the fuel cell logged hundreds of hours of
run-time this way, during which, as Murphy reports, "It performed
admirably" and did not fail once. The ski center's manager Peter
Thorn adds that, "The system is quiet and has had no impact
whatsoever on our skiing environment."
Monitoring the ups and downs of the ski slope's cell tower takes
place by remote, via a dialup modem, Murphy says. Start/stop, accessing
the event log, and even assorted testing procedures can thus be done
from anywhere. In-person maintenance visits have been only minimal
("once a year") he adds. A fuel gauge calculates the remaining
supply based on tank pressure; when the gauge dips below half, the
depleted tank is scheduled for replacement. A gas truck driver follows
a "very simple" hookup procedure, the valves being numbered and
labeled. Murphy observes, too, that considering how many hundreds of
hours the cell needs to run, "It's hard to believe we only need to
refuel it twice a year."
Bottom Line
The GenCore's cost, Murphy calculates, "is almost coming near to
parallel" with that of the DC power generator-a discovery that
probably bodes well, he adds, for future GenCore implementations for
Orange, because the economics would come out even better if units were
purchased in quantity. As of early 2005 Orange managers were seriously
exploring a large-scale deployment, he says, in which each GenCore
would serve, "as a kind of UPS backup system instead of a diesel or
gas generator." GenCores might also replace or reduce the number of
batteries used for normal backup on these sites, he adds. As of March
2005, Orange was considering getting as many as 20 more GenCore units
"as standby" to be installed, he says, "at strategic sites that
have grid availability but don't have very reliable grid sites, and
that have suffered multiple-means failures over the last 12 to 18
months."
Some locales suffer 10 hours of failure per month; meaning that a
GenCore as the backup would operate 100 hours to 150 hours a year and
have a 10-year lifespan. For comparable batteries alone, Murphy's
department might fork over, he says, "about 6,000 pounds [GBP] over a
5-year period" within a utility cabin; moreover, he finds that after
doing 4 to 6 hours of continuous backup operation during longer power
outages, batteries have to be supported by a mobile generator.
Batteries also require more time for maintenance, disposal and
replacement. All in all, he sums up, "When we take these figures and
put them together, we come up with the fact that the GenCore 5-kilowatt
unit as a standby unit is real cost-effective in terms of maintaining
our sites."
Orange is also considering buying and testing one of the GenSys
units-which are rated at 40,000 hours-for use as a primary power
source. Installation is planned for summer 2005.
Due to the apparently stronger commercial potential for its products
abroad, Plug Power announced recently that it has expanded its
strategic partnerships overseas, and in 2004 added a half-dozen new
distributorships to exploit the opportunities.
Oneida County, NY, Rural Telephone Company
A tiny local exchange carrier here uses Nortel switching equipment to
provide dial tone and high-speed Internet to 3,900 rural customers. In
spring 2004, Larry Combs, director of switch operations for Northland
Communications, needed to replace some aging backup batteries in some
of the system's 17 digital equipment huts. In the event of outages
(which happen a lot, he says) the batteries come on and give
uninterrupted phone service until main juice is restored.
Plug Power approached Combs at about this time and outlined the
advantages of not buying a new battery, but installing a 5-kW, 48-V
GenCore 5T fuel cell instead; primarily, it would produce long-term
savings and end the chore of battery replacement. After he heard the
spiel, he says, "We thought, 'That's a great solution for us.
It's clean. It's not going to take up any room inside a remote
building-it's an outside cabinet. And, for what we need," he
adds, "for the power consumption that we're going to be using at
these locations when we lose power," it was right-sized. Most of the
17 hut sites are remote, so the more reliably self-sustaining they are
the better, in terms of reducing operational expense. Plug Power's
salesman also showed him impressive results of considerable testing.
Lastly, disposal of batteries is costly, and Combs liked the idea of no
more hazmat paperwork.
Plug Power's asking price was comparatively high for the output,
though. The company wanted a sale for another good demo case, and so
made Combs "a really good deal on it," he says. He also anticipates
that the overall life-cycle cost will come out in favor of the GenCore
vis-à-vis comparable batteries, "but," he adds, "as a trial, its
anybody's guess. I really don't know how long a fuel cell will
last," he says, but the average time he gets from a string of
batteries is 10 or 15 years.
Combs ordered a unit to try out at a hut housing racks of digital loop
carrier relays and DSL equipment serving 300 customers; it arrived and
was easily installed last July. The unit resides within its own
3-foot-wide by 4-foot-high self-contained cabinet on a concrete pad.
Next to it stands a 3-foot-wide by 6-foot-tall hydrogen storage bin for
several fuel tanks. "We were nervous in the beginning about it," he
admits. "You've got some hydrogen tanks sitting out there under
pressure," and this bothered him, but Plug Power reassured him of the
tanks' integrity, and they're constantly monitored with sensors. He
has configured downloading of operational logs daily. All in all, he
says, he has been extremely impressed with Plug Power's engineering
expertise and reassurances. The transfer to the new alternative "was
a really smooth transition," he says, but he's leaving the
batteries in place as a second backup until he gains full confidence in
the newer technology.
Thunderstorms knock out the power quite often in the summertime, he
says-five or six times in 2004. During one such event in late summer,
the new fuel cell got its baptism of fire, during which, he says, "it
kicked over without a hiccup," performing flawlessly then and ever
since, he reports, "with no glitches or alarms or failures at all."
When grid power is restored, a sensor detects this and activates a
relay switch to reconnect to main power seamlessly and deactivate the
GenCore power. Fuel consumption thus comes to "only a trickle," but
the level can be checked by dialing in and, if low, a signal message is
automatically triggered. At the current rate of use, he says
approvingly, "it will last a long time.
It's really neat," he sums up. "The only byproduct is water."
Other Small Fuel Cell Applications
Telecoms are but one component of Plug Power's recent marketing
makeover. Other initiatives have been underway with similar industries
needing reliable, competitively priced backup energy for occasionally
extended operation, or needing an uninterruptible power supply for
remote, unattended systems-e.g., utility switching substations,
irrigation pumps, and wastewater management sites. To support electric
utility needs specifically, for example, Plug Power recently began
offering three floating ground configurations of the GenCore-enabling
48-V, 108-V, and 120-V DC applications primarily for use at critical
distribution points among the more than 100,000 utility-owned
substations in the US. Next, in August 2004 the company announced
availability of a new 24-V DC configuration specifically for wireless
telecom service providers. The company has also conducted and published
the results of various harsh climate performance tests under conditions
such as high altitude, extreme temperatures, simulated fire conditions,
and wind-driven rain. In March 2005, the GenCore line received approval
from the US General Services Administration for wide-scale use at
federal government sites. Similarly, Plug Power also recently finalized
a five-year agreement with the NY State Office of General Services to
provide backup power systems to government entities. And lastly, in
order to facilitate easier refueling of its burgeoning PEM cell base,
the company recently signed a five-year collaborative agreement with
Airgas Inc., the country's largest distributor of industrial gases.
Apart from the GenCore line, Plug Power continues to support and
develop the GenSys and bide time until cost-reduction efforts succeed
and market opportunities emerge. During 2004, 56 GenSys units were
shipped to provide onsite heat and power at assorted military
installations, college campuses, and agricultural and residential
sites. Many are still subsidy-funded, e.g. with grants from New York
State to provide power and warmth to some upstate dairy farms. At
Wagner Farms in Rensselaer County, for example, a GenSys yielded about
4,800 kWh of continuous electricity during 2,000 hours of operation. In
order to sustain PEM technology towards its long-term goals and
commercial success, funding from government sources remains key, as do
tax incentives and favorable regulation.
A third product track is Plug Power's stand-alone H2 fuel cell
"generator" (i.e., reformer) product, the GenSite. The very first
unit was shipped in 2004 and is now producing hydrogen for a cooling
system within Detroit Edison's Saint Clair Power Plant. GenSites are
under development primarily with an eye for eventual use in refueling
the nascent fleet of hydrogen-powered vehicles. An intriguing-if
long-range-R&D effort in this regard is underway between Plug Power
and Honda Motors to produce a home-energy fuel cell system that would
yield heat and electricity for home use while also powering a vehicle
on the road. The "Home Energy System II" (HES II) undertaking is
merely a prototype, Mahoney says, and any commercial products that may
eventually result lie "very far into the future."
Plug Power's hundreds of installations thus far are continuing to
yield steady feedback, which, says Mahoney, will translate into future
improvements, innovations, and cost-reduction measures. She sees an
analogy with the portable cell phone industry, which started decades
ago but needed more than a few years to overcome rather similar
obstacles related to production economics, regulatory climate, and
infrastructure. "It's very exciting technology," she sums up,
"but, like any new product, it will take a few years."
DAVID ENGLE, a writer based in La Mesa, CA, specializes in
construction-related topics.
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>http://www.forester.net/de_0507_back.html
>When Plug Power's remarkably compact hydrogen fuel cell came to
>market a half-dozen years ago, it seemed like the ultimate in kewl
>onsite heat and power...