In an article in today’s New York Times (California Utility Regulators Not Quite Ready for Fuel Cells, Todd Woody looks at the impact of fuel cell adoption by some of California’s biggest energy users—California’s utilities. As fuel cell popularity grows, utilities in California have begun to promote their use to supplement power supplied by the grid. But not everyone is sold on the idea.
The latest fuel cell controversy stems from a preliminary administrative law decision by the California Public Utilities Commission. In reviewing whether or not it was reasonable for PG&E and SCE to spend $43 million on a set of fuel cells capable of generating up to 6 MW, administrative law judge Dorothy J. Duda stated that “it is unreasonable to spend three times the price paid to renewable generation for the proposed Fuel Cell Projects.”
Part of the decision was based on concerns that the fuel cells would run on natural gas and that, “the applications do not satisfactorily address how full ratepayer funding of utility-owned fuel cell generation would enhance private market investment and market transformation of the fuel cell industry.”
In contrast, the president of the California Public Utilities Commission, Michael R. Peevey, has recommended that the applications be approved (pending some modifications that would lower ratepayer contributions).
At issue is PG&E’s Fuel Cell Project, which involves the installation of fuel cells at Cal-State campuses in San Francisco and Hayward. By generating about 3 MW, these campus fuel cells would be used primarily for heating and cooling through the campus. SCE, on the other hand, is interested in installing 1.4-MW fuel cells at two other Cal-State campuses, as well as a 200-KW fuel cell installation at UC Santa Barbara.
These two utility-based fuel cell projects come on the heels of a growing adoption of the technology amongst large-scale energy users from the commercial sector, including Google, Walmart, and Whole Foods.
So what do you think? Does the future of fuel technology lie in utility-promoted projects like those mentioned above? Can commercial demand make a difference? And can the increasing profile of fuel cells as an alternative to traditional grid supply raise the profile of onsite power and distributed energy and their relationship to energy efficiency?