Fuel Cells — Microgrid Backbone Generation Assets Part 2

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Here’s another great repost from the good folks at Riverview Consulting:

Microgrid Backbone Generation Assets, Part 2: Fuel Cells

Note: This is Part Two of a three-part series that will address several options for backbone generation in a microgrid. This post will focus on fuel cells, a technology that uses a fuel source and oxygen to create electricity through an electrochemical process. The previous post in this series focused on generator sets, a traditional form of auxiliary power, and the third part of this series will focus on microturbines, an up-and-coming alternative.


In the first post in this series, I mentioned that my apartment building in Cambridge has two large diesel generator sets that provide electricity to the building during power outages. What I did not mention was that if the power outage had continued throughout the night, I, along with the rest of the tenants in the building (and the tenants in the neighboring buildings), would have had to try to sleep with the noise of two large diesel engines churning throughout the night.

Obviously, it is better to have a little noise pollution than no heat and electricity, but aren’t there any options that can provide electricity without all the noise of a generator set? The answer is yes; fuel cells not only produce power quietly, but as an added bonus they can also produce power cleanly. In addition, fuel cells also do not take up much more space than a comparably sized generator set. For example, Bloom Energy’s 200 kW fuel cell system (pictured below) is approximately the size of a parking space.

A picture of a Bloom Energy Fuel Cell via Gigaom

Like generator sets, fuel cells are not only for emergency standby power. They can also be used as a form of backbone power generation for a microgrid (as a side note, much research and development effort is being dedicated to developing fuel cells for use in transportation applications). There are already numerous microgrids incorporating fuel cells. For example, University of California at San Diego’s microgrid, one of the largest in the country at 42 MW, includes 2.8 MW of fuel cells (click here to read more about this microgrid).

Fuel cells are a bit more complicated than generator sets, so I will start by providing a general overview of how fuel cells work before discussing some of the many different types of fuel cells. I will then explore how fuel cells can be integrated with a microgrid and then briefly compare fuel cells to generator sets.

What is a Fuel Cell?

As explained by the US Department of Energy on its Fuel Cells website, a “fuel cell uses the chemical energy of hydrogen to cleanly and efficiently produce electricity with water and heat as byproducts.” When pure hydrogen is used, the only outputs from a fuel cell are water, heat, and electricity. But, how does this actually work? To answer that question, I will turn to the excellent primer provided by the US Department of Energy (most of the information in this section comes from this DOE website).

A typical fuel cell consists of an electrolyte and two catalyst-coated electrodes. One of these electrodes is a cathode, which means the chemical process of reduction, or a gain of electrons, occurs at this electrode. The other electrode is an anode, which means the chemical process of oxidation, or a loss of electrons, occurs at this electrode. The fuel (typically hydrogen) is fed to the anode where a catalyst separates the hydrogen’s negatively charged electrons from positively charged protons. At the cathode, oxygen combines with electrons and, in some cases, with species such as protons or water, resulting in water or hydroxide ions, respectively. The electrons from the anode cannot pass through the electrolyte to the positively charged cathode. Thus, they must travel via an electrical circuit to reach the other side of the cell, and it is this movement of electrons that produces electricity. The diagram below illustrates this in a simple manner.

A simple diagram of how a generic fuel cell works. Source: Department of Energy.

For a visual explanation of how a fuel cell works, check out this excellent animation from the US Department of Energy: http://www1.eere.energy.gov/hydrogenandfuelcells/fuelcell_animation.html

Although each fuel cell only produces a tiny amount of energy, numerous fuel cells can be “stacked” into fuel cell systems to produce significant amounts of energy. By grouping together many individual stacks of fuel cells, a wide range of electricity loads can be met with fuel cell technology. In addition, the heat produced from the reaction in the fuel cells can be harnessed for space heating purposes.

As an interesting note, fuel cells have actually been around since the German scientist Christian Friedrich Schonbein first discovered the electrochemical concept behind fuel cells in the early 1800s. However, it was not until the late 1950s that commercial fuel cells began to emerge in response to NASA’s energy needs for early space flights. Thus, an understanding of the concept behind fuel cells has been around almost as long as the concept behind generator sets.

Different Types of Fuel Cells

Fuel cell classification is primarily based on the type of electrolyte used. According to the US Department of Energy’s Fuel Cell website, “this classification determines the kind of chemical reactions that take place in the cell, the kind of catalysts required, the temperature range in which the cell operates, the fuel required, and other factors. These characteristics, in turn, affect the applications for which these cells are most suitable.”

The Department of Energy identifies five main types of fuel cells that are relatively mature: Polymer Electrolyte Membrane, Alkaline, Phosphoric Acid, Molten Carbonate, and Solid Oxide. The chart below provides details on each of these types of fuel cells, including typical size, efficiency, advantages, and disadvantages. In addition to these five main types, there are numerous experimental fuel cells that are in early stages of development. As the chart illustrates, typical sizes range from 1 kW all the way up to 3+ MW (plenty of power to serve as the backbone generation asset in a microgrid). In addition, with efficiencies in the 35-60% range, fuel cells far surpass the efficiency of generator sets. Even higher efficiencies can be achieved by using the heat produced by fuel cells instead of just letting it go to waste.

Department of Energy chart comparing different types of fuel cells. Source: http://www1.eere.energy.gov/hydrogenandfuelcells/fuelcells/pdfs/fc_comparison_chart.pdf

Integrating Fuel Cells with Microgrids

Unlike generator sets, fuel cells have minimal moving parts and require little in the way of maintenance. Thus, they can deliver highly reliable power as long as they have a source of fuel. Although most fuel cells use natural gas delivered by the highly reliable national natural gas transmission and distribution system, even higher levels of reliability can be achieved by using closed-loop systems where hydrogen is produced on-site via electrolysis by other renewable energy assets such as wind or solar. These closed-loop systems have the added benefit of producing absolutely zero greenhouse gas emissions.

On the note of emissions, even systems that do not use renewable energy to produce hydrogen have significantly lower emissions than coal or natural gas power plants. For example, Bloom Energy’s 200 kW fuel cell system produces ~0.39 tons of CO2/MWh when using natural gas. In comparison, the US coal power plant fleet produces ~1.40 tons of CO2/MWh and the US natural gas power plant fleet produces ~0.48 tons of CO2/MWh (see this page for more information).

While you would not want to constantly cycle a generator set on and off, certain types of fuel cells can be switched on and off relatively quickly and frequently without concern about damaging the equipment. This characteristic makes fuel cells an attractive choice for use in a microgrid that might be called upon on short notice to provide power to alleviate stress on the main grid. Although most fuel cells currently installed are only for backup power during an outage, they could relatively easily be incorporated into a microgrid as the backbone generation asset.

Cost of Fuel Cells

With regard to cost, fuel cells are certainly more expensive per kilowatt of installed capacity than a generator set, but fuel cells are rapidly falling in price. The below chart from the National Energy Technology Laboratory illustrates the rapid reduction in price per kilowatt of the fuel cell stack. Including the rest of the costs associated with a fuel cell system (design, installation, balance of system, etc.), the fully loaded cost is ~$700/kW. As a reminder, generator sets tend to be in the $300-$600/kW range, but generator sets are a relatively mature technology and the installed cost will likely not decrease significantly faster than the cost of fuel cells.

Decreasing cost of fuel cells over time. Source: National Energy Technology Laboratory.

In terms of fuel costs, a natural gas generator set will cost more per kWh of energy produced because it operates at a lower efficiency (~25%) than a similarly sized natural gas powered fuel cell system (35-60%). In addition, the maintenance costs of a fuel cell system will typically be lower than that of a generator set.

Although I did not find a reliable estimate of Levelized Cost of Energy (LCOE) for generator sets, I did find Bloom Energy’s LCOE estimate of $0.09 to $0.11/kWh after incentives for its natural gas powered fuel cell systems. Considering that the fuel cost alone for a natural gas generator set at commercial natural gas prices is ~$0.11/kWh, the LCOE of fuel cell systems is almost certainly lower than that of generator sets (and diesel generator sets had fuel costs in the ~$0.28/kWh range).


Given the reliability, the relatively low LCOE compared to other distributed energy resources, the low greenhouse gas emissions, small footprint, and wide range of power capacities, a fuel cell system is an excellent choice for the backbone generation asset in a microgrid. As the fuel cell market continues to mature, I expect that more and more organizations will use fuel cells instead of generator sets for backup power. Similarly, as the microgrid market grows, I expect we will see fuel cells playing a large part in future microgrids.

If further commercialization efforts and economies of scale continue to cut the price of fuel cell systems in the coming years, fuel cell systems could potentially completely replace generator sets in locations with reliable access to natural gas.

Greater reliability, cleaner electricity, and lower costs. Sounds like a win-win-win. Now how can I get a fuel cell system for my apartment building so I don’t have to listen to diesel generators the next time the power goes out?

If you have any questions about the topics discussed in this blog post or how Riverview can help your organization explore microgrid options, please send us an email: info@riverviewconsultinginc.com

-JJ Augenbraun and the Riverview Consulting Team

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2 thoughts on “Fuel Cells — Microgrid Backbone Generation Assets Part 2

  • Found this link that shows Municipal Wastewater Treatment Plant which is paired with Fuel Cell Technology… Just wanted to share these…

    “New fuel cell sewage gas station in Orange County, CA may be world’s first”

    “It is here today and it is deployable today,” said Tom Mutchler of Air Products and Chemicals Inc., a sponsor and developer of the project.

    Pretty impressive in my opinion…

    2.8MW fuel cell using biogas now operating; Largest PPA of its kind in North America

  • I like this article, things are moving quite quickly in this space. I think it is worth mentioning that fuel cells are a whole lot more diverse than people often suggest they range from a few watts (used mainly for battery charging) to multi mega watts systems (have a look at what the South Koreans are doing with FuelCell energy) and, depending on type, can fill a number of roles within the energy market from base load/uninterpretable power (like Blooms system) to peak shaving (like Panasonic’s little domestic hot water system). There are also an increasing number of oddities gaining traction like German submarines, BOC’s building site lighting units and Plug powers forklift trucks. All good clean fun to my mind.

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