MORE INFO Solid State Energy Conversion Alliance Current Developers Molten Carbonate Fuel Cells Phosphoric Acid Fuel Cells

Using an electrochemical process discovered more than 150 years ago, fuel cells began supplying electric power for spacecraft in the 1960s. Today they are being developed for more down-to-earth applications: to provide on-site power (and waste heat in some cases) for military bases, banks, police stations, and office buildings from natural gas. Fuel cells can also convert the energy in waste gases from water treatment plants to electricity.

In the near future, fuel cells could be used in auxiliary power units (APUs) on heavy duty trucks and RVs or propelling automobiles and allowing homeowners to generate electricity in their basements or backyards. On a much larger scale, highly efficient megawatt-sized fuel cell advanced power systems will use natural gas and/or coal syngas to provide power to the U.S. electrical grid. These plants will operate with near zero emissions and significantly reduced water footprints, and will capture more than 90 percent of carbon.

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Fuel cells operate much like a battery, using electrodes and an electrolyte to generate electricity. Unlike a battery, however, fuel cells never lose their charge. As long as there is a constant fuel source, fuel cells will generate electricity. 

History of Fossil Energy's Stationary Power Fuel Cell Program

The U.S. Department of Energy's Office of Fossil Energy is partnering with several fuel cell developers to develop the technology for the stationary power generation sector. Industry participation is extensive. If the joint government-industry fuel cell program is successful, the world's power industry will have a revolutionary new option for generating electricity with efficiencies, reliabilities, and environmental performance unmatched by conventional electricity generating approaches.

For most of the 1970s and early 1980s, the Federal program included development of the phosphoric acid fuel cell system, considered the "first generation" of modern-day fuel cell technologies. Largely because of the R&D support provided by the Federal program, United Technologies Corporation and its subsidiaries manufactured and sold phosphoric acid fuel cells around the world.

In the late 1980s, the Department shifted its emphasis to development of advanced generations of higher temperature fuel cell technologies, specifically the molten carbonate and tubular solid oxide fuel cell systems.  Federal funding for these technologies has concluded.  Private commercial manufacturing facilities have been built and commercial sales have been achieved.

In the late 1990s and early 2000s, the Department's National Energy Technology Laboratory (NETL) began an ongoing effort with the Department of Defense (DOD) to promote fuel-cell market penetration by increasing manufacturing volumes to lower product cost. NETL managed DOD's climate change fuel cell program, also called the fuel cell rebate or buy-down program, through an interagency agreement. Funding grants of $1000/kW or one-third of total project costs, whichever was lower, were offered to those organizations installing a fuel cell manufactured in the U.S. Working with DOD's Construction Engineering Research Laboratory (CERL), hundreds of grants were awarded for the aforementioned fuel cell technologies.

While the first generations of fuel cells continue to spur interest in fuel cell technologies, the focus of the Department of Energy's Fossil Energy fuel cell program is to develop a much lower cost fuel cell and to develop fuel cell coal-based systems. The cost target is $700 per kilowatt or less, which is significantly lower (by about a factor of ten) than fuel cell products available before this R&D effort. At this cost target, fuel cells will successfully compete with alternative technologies. Ultimately, these low-cost fuel cells will be scaled up and integrated into large (greater than 100 MW) coal-based power plants.

In 1999, the Department of Energy formed the Solid State Energy Conversion Alliance (SECA) with a goal of mass-producing a solid-state fuel cell module that would cost no more than $700/kW. At this price, fuel cells will compete with gas turbine and diesel generators.

SECA is comprised of three groups: Industry Teams, Core Technology program participants, and federal government management.  The Industry Teams design and manufacture fuel cells usin team-specific approaches. The Core Technology program is made up of universities, national laboratories, small businesses, and other R&D organizations and addresses applied technological issues common to all Industry Teams.  Findings and inventions under the Core Technology program are made available to all Industry Teams under unique intellectual property provisions that serve to accelerate development.  The federal government management facilitates interaction between Industry Teams and the Core Technology program and establishes technical priorities and approaches.

The SECA program is currently structured to include three industry teams focused on developing coal-based systems: FuelCell Energy/Versa, Rolls-Royce Fuel Cell Systems, and United Technologies Corporation/ Delphi. Additionally, General Electric is providing support R&D and developing next generation technology.

SECA Program Leading the Way

Simplified Ragone plot showing how fuel cells compare favorably in specific energy per unit mass to other energy storage systems. (Winter et.al., Chem. Rev., ACS,2004, Vol. 104, No. 10); Click on image for larger view.

The Office of Management and Budget cited the SECA program as leading the way in Government-industry partnerships (Budget of the United States Government, Fiscal Year 2007). OMB's description of the SECA program helps illustrate DOE's efforts to demonstrate the future of coal. OMB stated, "The SECA program leverages private-sector ingenuity by providing Government funding to Industry Teams developing fuel cells, as long as the Teams continue to exceed a series of stringent technical performance hurdles. This novel incentive structure has generated a high level of competition between the Teams and an impressive array of technical approaches. The SECA program also develops certain core technologies that can be used by all the Industry Teams to avoid duplication of effort. The program exceeded its 2005 performance targets, and it is on track to meet its goal for an economically competitive technology by 2010."  

SECA Fuel Cell Coal-Based Systems

In order to address the issue of scalability and integration with advanced generation central power plants, DOE combined the SECA cost reduction activities with the SECA Fuel Cell Coal-Based Systems program. The goal is to develop and demonstrate the fuel cell technology required for central power station applications to produce affordable, efficient, environmentally-friendly electricity from coal. The restructured program leverages the advances made in solid oxide fuel cell (SOFC) technology under the SECA Cost Reduction program, extending coal-based SOFC technology to large central power generation.

The research will help meet the Nation's future energy needs while achieving near-zero emissions in coal-fueled central power station applications. Key systems capabilities to be achieved include 50 percent or greater overall efficiency in converting the energy contained in coal to grid electrical power, the capture of 90 percent or more of the carbon contained in the coal fuel (as CO2), and a target cost per kilowatt, exclusive of the coal gasification unit and CO2 separation subsystems.

Coal-based power production systems that incorporate SOFCs have the potential for significantly higher efficiencies, lower emissions, and reduced water requirements than conventional technologies and will help the development of state-of-the-art coal-fired power plants such as Integrated Gasification Combined Cycle (IGCC). SECA combined-cycle systems will focus on the development of large (greater than 100 MW) commercially viable Integrated Gasification Fuel Cell (IGFC) systems that could achieve overall efficiencies approaching 60 percent by 2025.

Cost - the Major Hurdle

So why aren't fuel cells being installed everywhere there is a need for more power?

The primary reasons are the cost of premium fuels and the cost of fuel cell systems. Fuel cells developed for the space program in the 1960s and 1970s were extremely expensive ($600,000/kW) and impractical for terrestrial power applications. During the past three decades, significant efforts have been made to develop more practical and affordable designs for stationary power applications. But progress has been slow.

The SECA Cost Reduction Program will bring about dramatic reductions in fuel cell costs, cutting costs to target costs per kilowatt by the end of this decade. To this end, SECA has met its first set of cost reduction and performance targets.

The Core Technology program provides comprehensive applied research support in ten focus areas: Cathodes, Anodes and Coal Contaminants, Interconnects, Seals, Contact Pastes, Cross Cutting Materials and Manufacturing, Fuel Processing, Power Electronics, Modeling and Simulation, and Balance of Plant. This structure and the provisions in place reduce cost by leveraging resources so that all Industry Teams do not engage in separate applied research programs by paying multiple times for the same research done once in the Core program. This approach also ensures that only major issues are addressed.  Core program areas are also funded by special topics under Science Initiatives, Small Business Innovative Research (SBIR), Basic Energy Sciences, University Coal Research, and Historically Black Colleges and Universities.

Tax Incentives and Other Support for Fuel Cells

MORE INFO IRS Guidelines on Energy Credits for Homeowners  Fuel Cell and Hydrogen Energy Association Summary of Fuel Cell Tax Incentives

The Energy Policy Act of 2005 includes the first tax incentive for fuel cell power plants at the Federal level. To qualify, a fuel cell facility must be an integrated system comprised of a fuel cell stack assembly and associated balance of plant components that convert a fuel into electricity using electrochemical means; and which has an electricity-only generation efficiency of greater than 30 percent and generates at least 0.5 megawatts of electricity; and which is placed in service after December 31, 2005, and before January 1, 2009. The taxpayer can claim the 1.5 cents-per-kilowatt-hour (indexed for inflation) credit for a five-year period commencing on the date the facility is placed in service. 

Many states have financial incentives to support their installation. In fact, the South Coast Air Quality Management District in southern California and regulatory authorities in both Massachusetts and Connecticut have exempted fuel cells from air quality permitting requirements. Some  states have portfolio standards or set asides for fuel cells. Additionally, there are major fuel cell programs in New York (NYSERDA), Connecticut (Connecticut Clean Energy Fund), Ohio (Ohio Development Department), and California (California Energy Commission).  Certain states have favorable policies that improve the economics of fuel cell projects. For example, some states have net metering, and some have net metering for fuel cells which obligates utilities to deduct any excess power produced by fuel cells from the customer's bill.