Fuel Cell Energy - the Future Alternative

To better support my clients who have interests in energy (and water) related matters associated with security, humanitarian services, and stability operations in fragile, unstable regions, I attended the Third Annual Energy Symposium in Washington DC, sponsored by the Vermont Law School Alumni. Topics focused on current critical technological and regulatory policy designs that have bearing on “grid modernization” with a decentralized grid structure, both in the US and abroad. Remarks from a wide breadth of academia, government and private sector captured efficacies of popular clean and sustainable and/or renewable alternative power generation sources, perceived weaknesses in the centralized grid structures, and hair hurting complexities in regulatory and associated rate design architectures. All this was indeed a learning experience on multiple levels to better understand strategic, mechanical and environmental relationships between energy production and distribution at national levels (i.e., the USA, EU).    

A thoughtful description of four trends was offered: aging infrastructure, changes in business models, increased regulation and shifting consumer demands. That all said, what I thought was missing from discussions were issues of critical mass to consideration of reforming aspects of an aging national-level power grid in concert with introduction of large scale alternative sources of [clean] renewable energy production, i.e., de-carbonized energy production.   

Many assumptions drove observations and pronouncements. For example, there was an assumption that a centralized grid was somehow categorically inefficient and insufficient in a post-modernized era and only a decentralized, distributed grid strategy could serve a growing, socially conscious population of 320+ million people in the USA (or similarly in the EU, Indian Subcontinent etc.). Another example, that energy efficiency (EE) and distributed generation (DG) utility programs could be somehow finessed across regulatory agencies and utilities largely by acceptance of international sustainable development goals and acceptance of creative rate design mechanisms and revenue riders on regulations. There was broad acceptance or optimism of the USA’s successful compliance with emission targets set by the recent Paris Agreement (ratified by 39% of 200 attending nations and not the USA) which conveys a central aim to strengthen a global response to the threat of climate change by keeping a global temperature rise this century well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5°C. Social Justice was discussed as an inherent component of energy policy, as well as, decoupling matters of revenue requirements from policies concerning utility companies. Quite a variant of pragmatic points of view and top-down (i.e., gov’t driven, mandated) consumer requirements. What was noticeable lacking from the day’s conversation were: realities of consumer market demand and demand signals beyond noting such demands do change; the required scope and scale of alternative renewable sources of power generation necessary to make any substantive contribution; the enormous level of integrated planning across dozens of layers of authority and accountability that’s not currently supported by policy, technology or institutional skill sets, and; the fundamental roles of local, state and federal level governance that varies between jurisdictions (and nations with representative governments). A message was painted, intended or otherwise, that a de-carbonized decentralized grid was indeed achievable by 2030 or by at least 2050, and secondly, [load] demand response management could be sufficiently enabled to meet shifting public demand signals in concert with energy efficiency investments in solar, wind and efficient use of enhanced battery storage technology. Many noble and reasonable points were offered but aside from assumptions, valid or otherwise, there was no substantive discussion of “how” changes are to be planned and executed much less the myriad of business, technology and societal implications borne from such activity that would have to be addressed and accommodated by the same pool of resources used for capital expenditures on modernization. Perhaps too much to discuss in the time of the agenda but the contextual imperatives were seemingly absent from the calculus of many prepared remarks, questions and answers. Stepping back to consider the bigger picture, I believe today’s long term challenge is to design, develop, manufacture and deliver an alternative energy technology, in concert with thoughtful and practical continued use of fossil fuels, that serves both centralized and decentralized grids with low-cost economic development in both developed and fragile, unstable or emerging population areas. A credible "champion" is needed to rally and harmonize Herculean efforts to effectively migrate and integrate sorely needed, long term clean, renewable power generation capabilities to a nation that has the world's more abundant, diverse and economically accessible amounts of fossil fuels. 

Although the day’s discussion was primarily focused on the USA’s national grid with remarks of current initiatives in the EU, I extrapolated elements applicable to consideration in smaller, lesser developed regions where the fundamentals of security, safety, quality of life and survival are not taken for granted.       

For example, in Central America, now is perhaps the time to introduce such a technology that satisfies practical expectations of environmental protection, performance and efficiency standards to deliver reliable loads to the region’s outdated power grid and of what may be designed in the future. Fuel cells (or fuel cell energy – FCE), which provide clean, reliable and measurably more efficient power generation, offers Central America a more practical option for generation, distribution and waste management. Alternative, renewable power sources for national level consumption such as solar farms require a substantial physical footprint. Wind generated power is simply inefficient absent numerous infrastructure that are frequently plagued with social, cultural and safety related challenges depending on location. Increasingly abundant LNG would be a low cost, acceptable fuel source for FCE power generation (expansion of the Panama Canal enables uninterrupted low cost delivery of LNG). Fuel cells are inherently quiet; they have no regulated emissions, require minimal land use or topographical requirements, generate electric power through an electro-chemical process with an output that’s simply water (the same water used for irrigation, cooling of other power generation systems or for industrial purposes). In short, FCE is not only safe but is the most efficient power generating technology available as determined or measured by its substantially greater output relative to the fuel input to the generating process (e.g., natural gas, biogas, separated hydrogen etc.). Whereas the technology is rather straightforward, it’s Central America’s various regulatory institutions and governance processes that will likely preclude success if not addressed in advance of introducing private sector solutions. The low cost of development provides an opportunity for the private sector to invest in partnership with the government (e.g., PPP, PPAs) perhaps with the assistance of institutions such as the World Bank, IMF, IDB etc. There’s an opportunity to do things right with substantial ROI if the private sector is willing to navigate the risks associated with corruption and bureaucratic inefficiencies.  

 FCE power generation offers practical, dependable load solutions for centralized national and regional level grid architectures, support in remote and emerging populated areas, and is safer and more cost effective in terms of waste and environmental management. Oh, the “how” aspect of that discussion is already in place.