Stationary Fuel Cells Lack Luster of Transportation Brethren

While state programs to develop fuel cell?powered cars that hum down hydrogen highways captivate the public?s imagination, corresponding state policies to promote fuel cells in California?s growing distributed-generation system have failed to create the same buzz. In fact, the failure of residents and businesses to seize upon state incentives to draw juice from fuel cells has caused the California Stationary Fuel Cell Collaborative to return to the policy drawing board. The collaborative, housed at the California Air Resources Board, is a public-private venture. ?California is the leader in fuel cell transportation,? said Robert Wichert, technical director of the U.S. Fuel Cell Council and a member of the collaborative, formed in 2001. However, the stationary fuel cell has not fared as well, and the collaborative is reassessing its strategy to deploy fuel cells in California. Stationary fuel cells are advancing more quickly in other states?including Texas, Pennsylvania, Ohio, and Michigan?which have more liberal incentives, net metering, interconnect policies, and exit fees, according to Scott Samuelson, director of the National Fuel Cell Research Center at the University of California at Irvine. ?It?s a paradigm shift in the way we generate electricity,? said Samuelson. ?It?s growing, but very slowly.? To encourage renewable technologies and reduce peak demand for electricity, the state created a self-generation incentive program administered by the California Public Utilities Commission. Under it, renewable technologies?including fuel cells that operate on landfill or sewage plant digester gas?can qualify for incentives of $4.50 per watt of capacity up to 50 percent of the total project cost. The program provides $100 million a year in incentives for the gamut of self-generation equipment through 2007. ?We?ve only had one [fuel cell] project go in so far that?s been totally installed,? said John Galloway, a regulatory analyst at the CPUC who manages the incentive program, which began in 2001. That fuel cell runs on natural gas, so it qualified for a subsidy of only $2.50 per watt up to 40 percent of the cost. Two additional fuel cell project applications are pending. Stationary fuel cells operate continuously and are used to provide baseload power for buildings and industrial processes. However, fuel cell projects do not qualify for self-generation incentives when the applicant cannot use all of the electricity produced; for instance, during weekends or evenings. The lack of a net-metering policy also hampered the economics of fuel cells, according to Wichert. Net metering hooks generating projects to a utility?s system and keeps track of power sent to the grid. Recent enactment of AB 1214, which requires utilities to offer net metering to fuel cell generators, may give the technology a needed boost. Another feature of the self-generation incentives program, in which payments are reduced for projects cofunded by other public subsidies, also has limited interest in fuel cells. For example, Galloway said, if a renewable fuel cell project received subsidies from other agencies equal to 20 percent of the project cost, the CPUC?s incentive would cover only half of the remaining 80 percent, or only 40 percent of the total cost.

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Stationary Fuel Cells Lack Luster of Transportation Brethren

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