January-February 2004

LA Utility Targets Molten Carbonate and Biogas for Fuel Cell Efficiency

With the recent installation of a 250-kW fuel cell plant at a Los Angeles wastewater facility, the Los Angeles Department of Water and Power strengthened its position in the field of distributed energy, and launched one of the few molten carbonate fuel cells to run on wastewater digester gas.

The Los Angeles Department of Water and Power's (LADWP's) new, molten carbonate fuel cell plant is manufactured by FuelCell Energy and gives LADWP a total of four operational fuel cells.

"This is a fairly significant step forward in the advancement of fuel cell technology," says William Glauz, manager of distributed generation for LADWP. "Most of the 100-kilowatt-and-larger fuel cells in operation today use the previous technology, phosphoric acid." The fuel cells are being installed near the Port of Los Angeles at the Terminal Island Wastewater Treatment Plant, which is the third LADWP site to use FuelCell's high-temperature, molten carbonate technology.

LADWP has been participating in fuel cell development and research since it field-tested a 40-kW phosphoric acid plant in the 1980s. Its first molten carbonate technology, a pretrial prototype supplied by FuelCell Energy, was installed in August 2001 at LADWP headquarters. After 18 months of successful operations, FuelCell updated the unit with a 250-kW DFC300A.

"We did field trials that were for precommercial development of the product," Glauz recalls. "Based on the trials, [the company] made improvements and developed a commercial fuel cell which we installed at our downtown headquarters in March 2003. It was the first one commercially designed for a North American, high-temperature, high-efficiency fuel cell."

Running for 18 months at a utility of LADWP stature was an important milestone, according to Scott Samuelson, director of the University of Irvine's National Fuel Cell Research Center."The critical need for the industry right now is a track record," he explains. "The LADWP facility is the first sustained operation of the high-temperature molten carbonate, and as we pass December [2003, the updated unit] will be approaching one year. You can see intuitively that this would be the minimum that the market would require for getting confident in the technology's performance for two, five, and 10 years."

As for the Terminal Island installation, the plant's conversion to using biogas is a joint venture, scheduled for completion by June 2004, between LADWP and the Los Angeles Department of Public Works Bureau of Sanitation. A success similar to the 18-month field trial could have a significant impact on the distributed energy marketplace, both economically and environmentally.

Compared to previous technologies, molten carbonate plants offer high efficiencies. The first generation of phosphoric acid fuel cells converts energy to electricity at ratings of 30–35%. Molten carbonate plants typically score energy conversion rates of 47% due to a high-temperature internal reformation process.

The electrochemical process of combining hydrogen and oxygen to make water generates temperatures of 600–700°C. The heat and water create steam for "cracking" the hydrogen off of the carbon inside the fuel cell and ultimately generating the hydrogen as part of the electrochemical process. Internal reformation saves a step in the process traditionally used by phosphoric acid plants and—because energy isn't needed to crack the hydrogen in a separate reformer—reduces pollution.

The process adds to molten carbonate's efficiency rating, but the truly impressive gains are realized by using the heat byproduct for cogeneration. Residual heat used to power microturbines, facility climate systems, or wastewater treatment processes can push efficiency ratings as high as 70–80%.

The Los Angeles Department of Public Works Bureau of Sanitation has been using landfill biogas to run microturbines at its solid resource landfills, and Bureau of Sanitation Chief Omar Moghaddam predicted that the success of the new fuel would accelerate a long-term plan to capitalize on the city's use of fuel cells and biogas.

"I am in negotiations with [LADWP] for two additional units of 500-kilowatts each for Terminal Island," Moghaddam says. "We need about 4,000 pounds of steam per hour to maintain about 200,000 gallons of digested sludge at 132° Fahrenheit." The electrical load at the facility is about 950 kW and it treats up to 20 million gal./day. Moghaddam says it's an ideal site for a field test because his ultimate goal is to scale a similar fuel cell system at the bureau's Hyperion Treatment Plant.

The Hyperion plant doesn't have any onsite power generation, but it has been taking advantage of biogas by a more traditional method. It treats 350 million–400 million gal. of wastewater per day and exports more than 2.5 billion ft.³ of gas per year to LADWP's Scattergood Generating Station. In return, the plant buys electricity at an average rate of $0.45/kWh.

"That includes a 12.5% utility tax," Moghaddam notes. "No other facility—either regional or in the state—can match our cost. When we switch over to fuel cells, we'll do even better because of the increased efficiency." The fuel cells will need to supply 20 MW for the plant's electrical load.

According to Samuelson, such plans bode well for the future of biogas and fuel cells. "Only the high-temperature fuel cells can play successfully in that market in general. Wastewater plants are taking off like gangbusters because they produce a perfect fuel for the fuel cell. Natural gas is about 90% methane, and digester gas from wastewater treatment plants is primarily methane." The combination of renewable and clean-burning fuel creates a win/win situation, he adds.

In fact, Steven Eschbach, investor relations director for FuelCell Energy, says the DFC300A is classified as an "ultraclean distributed-energy technology" and produces very little nitrogen dioxide and sulfur dioxide and particulates. Based on annual usage estimates, a 250-kW fuel cell power plant displaces 1.9 million lb. of carbon dioxide, 6,200 lb. of nitrogen oxide, and 16,000 lb. of sulfur dioxide.

In addition to clean power, such performance generates a less measurable—but equally attractive—public relations byproduct for southern California politicos. Government agencies, businesses, and environmental groups often clash in Los Angeles. Yet Mayor James Hahn and various city leaders, energy policymakers, and environmental group representatives were all smiles at the ribbon-cutting ceremony in September 2003.

The timing and location were especially appropriate. During the summer of 2003, southern California had its first smog alert in five years. Shipping activities in the Port of Los Angeles are a major source of air pollution yet are difficult to address due to the financial impact on the local and national economy. The summer bout of poor air quality didn't do much for the area's image, but it might help to justify the high cost of fuel cells in future municipal utility budgets.

Estimates for the new plant are running at $2.3 million (including the cost of developing the gas-processing converter). Other than $250,000 in grant funding from the United States Department of Defense, LADWP is footing the bill. It's expensive, but it's the right strategy, insists Glauz. "It's possible to get a payback on this project, but it takes many years, and we are not doing it at this point for business purposes," he says. "It's more for the perfection of the technology and to gain experience in installing and operating this type of equipment."
At present, a combustion-engine generator can be installed for $500–$700/kW; fuel cell plants can be ten times as expensive. Glauz notes, however, that prices don't need to be down in the $500–$700 range because of the new technology's efficiency and cleanliness. He says the industry is looking for a competitive range of $1,200–$1,500/kW. Nonetheless, it's a substantial reduction of 75–80% from current pricing.

Eschbach notes that FuelCell Energy has a very aggressive cost-reduction effort in progress but that presently funding grants are still an important part of the equation because his company and others are in an early commercialization phase and have yet to overcome high cost and low volume. Currently FuelCell's facility can manufacture 50 MW/yr. "Our backlog of orders has been as high as 12-plus megawatts, so we're not quite at full capacity," Eschbach says.

After the investment comes the question of operating costs. LADWP still is analyzing such factors as maintenance, labor, and replacement parts. Glauz anticipates lower overall costs because fuel cells have far fewer moving parts than combustion engines. Typical maintenance schedules, however, include filter replacements every three to six months, and eventually the anode and cathode assembly within the fuel cell stack will degrade. FuelCell currently estimates a lifespan of three to five years for the fuel cell stack assembly (with the power plant lasting 20-–30 years or more). Glauz is hoping the assemblies will last longer, especially since they represent about 30% of a plant's cost.

Meanwhile, the lack of information won't delay LADWP's adaption of fuel cells into an existing program for customers that generate their own electricity. "It's a good program because it saves us the expense of having to build new central power plants with the transmission-and-distribution infrastructure that is required," Glauz explains. "Instead we'll work with customers and offer them services, such as installing and potentially operating a localized power plant for them."

Glauz sees a variety of markets that could take advantage of the cogeneration potential inherent in molten carbonate systems. Hospitals and hotels, for example, have a need for heat and uninterrupted electricity. Generally they would require 200 kW, with larger institutions needing 1 MW or more. Pennsylvania Power and Light operates a 250-kW fuel cell for each of two Sheraton Hotels in New Jersey. Each hotel has 300 rooms and a 250-kW base load to maintain functions, such as lights, climate control, and door locks. Peak loads can reach 750 kW.

Glauz listed other power-sensitive markets, including credit card processing facilities and grocery stores with heavy-duty freezers. Colleges and universities are also a possibility; although not dependent upon uninterrupted power, they are still large consumers and have value as working environments for fuel cell engineering.

Whatever the market, the offering will include a financial boost from the Southern California Gas Company, which operates a self-generation incentive program sponsored by California's Public Utilities Commission. Funding is generous, running from $1,000 to $4,500/kW, depending on the class of power generator. Renewable energy qualifies for the $4,500 maximum, although there is a limit of 50% of the total cost.

LADWP also has plans for a rebate program that would likely promote renewable-energy sources. "At this point, there isn't a fuel cell available for residential use, so this would focus on our larger commercial customers," Glauz says. "Eventually we may get to the point where various products are available for residential customers, and we would have a marketing campaign to get the word out."

"Eventually" might arrive sooner than some would expect. In 2004, the utility will begin testing small, residential-scale, 5-kW solid oxide fuel cells. Competition also could arrive soon. FuelCell has developed commercial distribution alliances for its carbonate Direct FuelCell technology with MTU CFC Solutions GmbH, a company of DaimlerChrysler AG in Europe; Marubeni Corporation in Asia; and Caterpillar, PPL Energy Plus, Chevron Energy Solutions, Alliance Power, and Enbridge in North America.

A vibrant and competitive marketplace will be a welcome addition to the industry, states Samuelson. What is occurring now as an alternative to buying a fuel cell is having a company like Caterpillar install and operate the fuel cell while just charging the customer an hourly rate for electricity used. He notes, "Those types of entities are beginning to come to the market because they see it's going to be successful based on tests such as [those] the LADWP is now running."