Fuel cells powered from natural gas – they're clean, but are they renewable power?

The state of Connecticut says yes, and FuelCell Energy (NSDQ: FCEL) says that's good news.

The Danbury, Conn.-based maker of large-scale fuel cells for stationary power generation anticipates that it will nearly double its projected backlog of 48 megawatts of projects with another 43 megawatts of projects recently awarded by the state of Connecticut. 

The projects are at electricity grid substations, natural gas stations and hospitals, which is a decent overview of the types of clients, including military and industrial and commercial facilities, that have about 50 megawatts of FuelCell Energy devices installed to date.

Some run on natural gas, as do FuelCell Energy's devices being installed by South Korean utility POSCO Power. Other projects, like one that started operations last week in California, run on biogas derived from agricultural waste, wastewater and other renewable or waste sources (see Green Light post and San Diego to Get Four Fuel-Cell Power Plants).

Those are "renewable under any standard," said FuelCell Energy CEO Dan Brdar. But in Connecticut, even fuel cells that run on natural gas are considered renewable power under the state's renewable portfolio standard, he said.

Other markets are joining suit. Those that haven't, such as California, offer other incentives that fuel cells can take advantage of, such as bonuses for companies that generate power on-site, he said.

The main reason, he believes, is that fuel cells offer one of the most efficient ways to convert hydrocarbons – or the hydrogen in them at least – to energy without all the nasty emissions that come from burning them.

Fuel cells convert hydrogen from a variety of sources into electricity through a chemical reaction with oxygen, yielding only water as an end product. Some fuel cell technologies, such as those using proton exchange membranes, need very "clean" hydrogen to operate well, while others, such as direct methanol fuel cells, are made to run on other fuels.

Fuel cells for portable or vehicle applications are being developed by such companies as Protonex Technology, Medis Technologies, UltraCell, Jadoo Power, Smart Fuel Cell and Toshiba (see Uncle Sam Wants Portable Fuel Cells).

Those making fuel cells for vehicles have been disappointed by the Department of Energy’s decision in May to cut funding for fuel cell vehicle research (see Green Light post). 

Other providers of stationary fuel cells for distributed generation include Ballard Power Systems (NSDQ: BDLP), Plug Power (NSDQ: PLUG) and United Technologies (NYSE: UTX) (see Plug Power Puts Fuel Cells in Forklifts).

Unlike those devices, FuelCell Energy's molten carbonate fuel cells run at very high temperatures. That does limit their use to stationary devices, but it also allows 50 percent efficiencies in converting hydrogen to energy, Brdar said.

Molten carbonate fuel cells also don’t need expensive materials like platinum as catalysts, as do proton exchange membrane-based fuel cells. But the high temperatures also make it harder to maintain molten carbonate fuel cells, along with another high-temperature sodium oxide fuel cells, according to the Department of Energy.

FuelCell Energy is working on a DOE-funded research project aimed at making sodium oxide fuel cells that can convert coal-derived syngas to electricity, Brdar said.

It has also developed a way to combine its fuel cells with natural gas turbines, using the fuel cell's excess heat to boost their efficiency to around 60 percent, he said.