State sending mixed messages to fuel cell industry

Late in 2015, the state Department of Economic and Community Development announced it would invest $30 million in grants and loans to help the growth of FuelCell Energy, a Danbury company with a manufacturing facility in Torrington.

With the state’s help, FuelCell expanded its plant, adding an estimated 325 jobs to its workforce of 538 employees. Producing fuel cell power plants for a global market, FuelCell is a clean industry providing the well-paid, manufacturing jobs Connecticut needs.

A U.S. Department of Energy report released in November cited Connecticut as among the top fuel-cell production states in the country, with more than 600 companies feeding into the industry’s supply chain, generating 3,400 jobs directly and indirectly, $340 million in annual labor income, and $39 million in state and local tax revenues.

If a state is going to help boost and grow a business (and that’s an argument for another column), this looks like a good pick.

The small power-generation plants produced by FuelCell push natural gas through the fuel cells, setting off electrochemical reactions that produce electricity and, as a byproduct, water. The plants are quiet and produce no hydrocarbon pollution. The state Department of Energy and Environmental Protection places them in the same class as solar and wind power.

More electric generation can be produced by bundling a number of these plants together.

Unlike solar panels made in China, fuel cell production is U.S. based. These power plants can fit in relatively small spaces, often reusing former industrial “brownfield” sites. Installed in urban settings or connected to manufacturing operations, they add system redundancy. A 5.6 megawatt FuelCell Energy plant serving the Pfizer research plant in Groton assures that a power outage will not disrupt the sensitive experiments constantly going on there.

Fuel cell power plants operate 24 hours, while solar panels only produce energy when the sun is out and wind turbines need a stiff breeze. Solar farms chew up large expanses of open space, while finding locations for wind farms often proves controversial.

This is not to say solar and wind production should not be part of the energy mix. It is to say that encouraging the homegrown fuel cell energy industry makes a lot of sense.

Having invested DECD funds into the fuel cell industry, and given its potential for growth, one would think Connecticut officials would coordinate efforts to support the technology. However, in 2013 and again last year, when DEEP awarded contracts to produce about 800 megawatts of clean-power generation for Connecticut, not one award went to fuel cell technology.

It is not as if the industry did not try. In 2016, fuel cell companies submitted 14 bids.

DEEP selected 21 solar power and eight wind projects. Unlike the fuel cell proposals, most will be built out of state, the power transmitted here. And, by the way, the state charges fuel cells a sales tax, generating revenue, while solar equipment is exempt.

The shutout was particularly bad news for Montville. Among the proposals was a fuel cell facility that would have utilized the former NRG coal plant, generating 15 MWs of electricity, enough to power 15,000 homes, and producing an estimated $9.3 million in local taxes for Montville over 20 years, along with about 120 jobs, according to FuelCell.

Winning a DEEP bid provides the chance to negotiate a 20-year deal to supply power to the state grid, helping Connecticut meet the goal of getting 20 percent of its electricity from clean and renewable power by 2020.

In making its selections, DEEP focused 75 percent of the scoring on price. Solar, in particular, came in cheaper, but not by much. The pricing approach minimizes other important factors, including economic benefits and tax revenue generation. With its Connecticut manufacturing base, helping the fuel cell industry grow would produce state jobs and taxes, providing a return on that state investment.

While DEEP should not hand the industry all the work, shutting it out doesn’t make sense.

Fuel cells are being incorporated into the state’s power grid in other ways, DEEP notes. Legislation under consideration would encourage United Illuminating and Eversource, which control most of the distribution network in Connecticut, to add more fuel cell plants to their power mix.

In rewarding any future clean-energy power projects, however, it would be good to see DECD and DEEP pushing in the same direction, rather than having one agency investing to help an industry grow and the other making decisions that put that investment at risk.

Paul Choiniere is the editorial page editor.

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