May 10, 2010
Whole Foods Market, Inc. is aggressively trying to cut its energy consumption. Among its strategies is installing hydrogen-powered fuel cells at certain of its locations to supply anywhere from 50-90 percent of its electricity. The same system can also be used as backup power in case those stores should get cut off from the grid.
To the extent that businesses derive their power from such onsite generators, the wear and tear on the electric grid is diminished and reliability for customers is enhanced. Costs, technology and fuel supply are still hurdles. That is why the charge will be led by those customers, regulators and environmentalists seeking better performance and cleaner surroundings.
"To maximize success in today's environmentally conscious society, it is absolutely imperative to adopt sustainable solutions," says Frost & Sullivan Energy Senior Research Analyst Vikas Ravindran.
In some cases, fuel cells used for onsite power are the primary generators and in other cases, they are used to back up power delivered by the utility. According Frost & Sullivan, fuel cells have efficiency rates of 40-49 percent compared to other competing technologies that are 30-35 percent efficient. If cogeneration is used -- the ability to recycle the steam that is produced -- then the efficiency rate jumps to 80-85 percent.
Higher efficiencies, steadfast reliability and environmental concerns will work to expand fuel cell markets in the early years, the research firm says. To get past cost and technological issues, however, the fuel cell makers must achieve economies of scale.
To that end, a 2008 law sets the federal investment tax credit for fuel cells through 2016. It also increases the benefit from $1,000 per kilowatt to $3,000 per kilowatt or 30 percent of the capital cost, whichever is less. Furthermore, utilities are now entitled to receive the tax credit when they purchase such technologies -- a major development as power companies were once considered obstacles to such expansion, arguing that fuel cells interfere with their own electricity sales.
In the case of Whole Foods, it has installed fuel cells at stores in Connecticut, California and Massachusetts that supply as much as 400 kilowatts from UTC Power. The energy is not just used for electricity but also to cool the refrigeration units and to heat the stores in the winter months.
"Whole Foods Market is excited to be able to use this clean and highly efficient technology at our (stores) to help reduce our impact on the environment and lessen our overall energy demands from traditional sources," says Kathy Loftus, Whole Foods Market global leader of sustainable engineering and energy management.
Big Splash
Hydrogen does not normally "stand alone" in nature. If it's in water, for example, it must be separated from oxygen. The goal then is to produce pure hydrogen. That process requires other fuel sources to break the elements apart.
To be sure, concerns exist over the conversion route. Some say that the amount of energy used to make hydrogen is more than the amount of power produced by fuel cells. If fossil fuels are extracted to make the hydrogen, then more pollutants would be released. Green energy, meanwhile, could create the electricity to produce hydrogen but it may not be as predictable or as cost effective.
Businesses that need uninterrupted power are the primary markets for fuel makers. Telecommunications enterprises, for instance, have been pushed by federal regulators and customers alike to beef up their operations and particularly after some natural disasters knocked out services for extended periods.
The fuel cell industry says that its technology is best in such cases, noting that it is more durable than batteries and cleaner and less noisy than diesel engines. While the upfront prices are more, the industry says that fuel cells are ultimately more cost effective because they need less maintenance and provide greater reliability. Fuel cell maker Ballard Power Systems says that cell towers generally need only 20 hours of backup service a year -- something that fuel cells have shown they can effectively accomplish.
Every cell site has a base station that converts radio waves into a signal. And each one of those of sites has an electrical grid connection. Fuel cells, in essence, monitor this power from the grid. If power fades, it kicks on instantaneously and uses a reservoir of compressed hydrogen. While it takes more energy to create the hydrogen than it produces, the fuel cell industry says that the amount of power required by backup applications is so small that it is economical to use the technology.
Bloom Energy, which has made a big splash with its solid oxide fuel cells that generate around 100 kilowatts, says that it converts any fuel source into electricity. Running on a fossil fuel, it says that its systems are approximately 67 percent cleaner than a typical coal-fired plant. Those powered by green energy, meanwhile, can be 100 percent cleaner. Businesses installing such technology can expect to get a return on investment in three to five years, it adds, noting that FedEx and Bank of America are among its clients.
"We believe that we can have the same kind of impact on energy that the mobile phone had on communications," says Dr. KR Sridhar, chief executive of Bloom Energy. "Just as cell phones circumvented landlines to proliferate telephony, (fuel cells) will enable the adoption of distributed power as a smarter, localized energy source."
Over time, hydrogen-powered fuel cells will gain increasing traction in the marketplace. Until then, they will have niche applications and will be used by those enterprises concerned with environmental quality and system reliability.
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