Inside ClearEdge Power's $500M fuel cell deal

The Oregon-based company has landed the biggest utility fuel cell deal in the world. But it's not just the size that makes this agreement stand out.
Written by Kirsten Korosec, Contributor

Oregon-based fuel cell maker ClearEdge Power has landed a 50-megawatt, $500 million deal with Austrian utility Güssing Renewable Energy. As far as I can tell, it's the biggest fuel cell order with a utility in the world. But the size isn't the only factor that makes this agreement stand out.

Two pieces of the deal are particularly notable. For one, the fuel cells, which use a chemical reaction to produce both electricity and heat,  will run off of biogas converted from wood chips and plant waste.  Güssing Renewable Energy, an investor in ClearEdge, will produce the biogas. (The image to the right is a schematic of the utility's Hofbauer reactor which will produce the biogas). Typically, ClearEdge Power's refrigerator-sized fuel cell modules hook up to a customer's natural gas supply and through its fuel processor draws the hydrogen molecules with oxygen. While natural gas is widely available, it's not a renewable energy source. Plus, it's subject to price volatility.

Secondly, this is a distributed energy generation deal. Meaning, the utility won't build one large-scale 50-megawatt fuel cell farm, where it will be connected to the grid. Instead, small fuel cell farms up to 200 kilowatts in size will be placed in neighborhoods, Mike Upp, vice president of marketing at ClearEdge, told me in a phone interview yesterday. ClearEdge's fuel cell modules generate between 5kw and 25kw of electricity. One module can provide enough heat and power to four or five European houses or one 5,000- to 6,000-square-foot home in the U.S., he said.

Upp said the company is already piloting some fuel cell-biogas modules. Small test units will be rolled out in the next six months in Austria. Over the next 36 months, ClearEdge Power will deliver 8.5 megawatts of power. By 2020, the fuel cell maker will provide 50 megawatts of renewable energy in Austria. There's a potential to expand in Germany, Upp said.

The fuel cell units aren't cheap. One unit is $56,000 and costs an additional $5,000 to $20,000 to install. In other words, fuel cell power makes economic sense in only a few markets. Namely, those countries or states where energy costs are high and incentives for fuel cells are generous. Austria, and the rest of Europe for that matter, has both.

Until recently, ClearEdge primarily targeted the high-end residential market, those early adopters with the interest and money, said Upp. ClearEdge has recently pushed into multi-family housing and light commercial markets and have installed fuel cell modules for small hotels, schools and apartments. California is the No. 1 fuel cell market in the U.S., Upp said. New Jersey, Connecticut, New York and Massachusetts also have incentives and high energy costs.

Photo: Images of Güssing Renewable Energy's Hofbauer Reactor via ClearEdge Power


This post was originally published on Smartplanet.com

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