Manufacturing Today
- Page 16
A Free Fuel Cell
Doosan Fuel Cell America Offers Big Savings to Big Power Users
>>> by Michael C. Juliano

Doosan Fuel Cell America, a South Windsor-based maker of fuel cells for businesses and factories, has also become a seller of fuel-cell-generated power.

The company, a subsidiary of Seoul, South Koreabased holding company Doosan Corp., recently announced plans to sell on-site electricity below market rate to commercial, industrial and municipal customers.

Under a partnership with Wells Fargo Vendor Financial Services, Doosan Fuel Cell America is providing its PureCell Model 400 fuel cells to Doosan Energy Solutions America, a new subsidiary focused on innovative energy products. Doosan Energy will then sell the electricity made by the units, which run on natural gas but can also use bio-fuels, through a power-purchase agreement in which customers pay for the electricity but not the fuel, installation or service costs.

“We’ll take that risk on our books and you’ll never pay a penny upfront or ongoing,” Michael Coskun, general manager of sales and business development, said during a recent board meeting of the Waterbury Regional Chamber.

A 20-Year Contract

To be eligible for the Doosan Energy Services, or DES, program, a customer must use at least 3.5 million kilowatt hours (kWh) of electricity per year per location, and commit to a 20-year contract, said Coskun, whose firm joined the Chamber in the spring. Customers are given one free PureCell unit for the first 3.5 million kWh, and may acquire additional units for free for every additional 3.5 million kWh consumed per year, he said.

Doosan Fuel Cell America will lock in the cost for the electricity made by the on-site PureCell units, which can produce at least 400 kilowatts of electricity and 1.7 million BTUs of useable heat per hour, at 1.5 cents per kWh below the rates offered by utilities.

“You have a built-in hedge against the market,” Coskun said, adding Doosan’s rate will continually change to beat the market rate by 1.5 cents. “That penny-and-a-half to bottom line is $50,000 per year in guaranteed electric savings.”

The units also provide another $10,000 to $15,000 per year in energy savings by generating heat as a by-product of making electricity that can be used to heat buildings and hot water, he said.

Doosan will pay “damages” for the life of the contract if the units break down or the company folds, agreeing to pay for the savings the customer would have received had the units or company stayed in operation, he said.

“There’s no hidden costs, there’s no hidden fees,” said Coskun, who came to the board meeting with David Giordano, who handles the company’s federal and state government relations. “It’s as transparent as it can be.”

Environmentally Friendly Power

Aside from the economic benefits, Giordano said the fuel cell technology offers an environmentally friendly way to produce electricity, given they produce no air pollutants, emit very little carbon dioxide and use virtually no water.

“This is the cleanest way to use natural gas,” he said.

So far, Doosan has installed two PureCell Model 400 fuel cell power plants through the DES program — a 1.38-megawatt plant at the Naugatuck Waste Water Treatment Plant and a 1.32-megawatt unit at the Waterbury Water Pollution Control/Sewage Treatment Plant. The one at the Naugatuck facility, at 500 Cherry St. Ext., began operating on July 1, while the unit at the Waterbury plant, at 210 Municipal Road, is expected to start up in December, Giordano said.

Waterbury Expects to Save $3 Million

Michael LeBlanc, finance director for the city of Waterbury, praised Dossan’s program. “The power purchase agreement with Doosan Fuel Cell is expected to save the city’s Office of Water Pollution Control — and city residents — $3 million over the 20 years of the contract,” LeBlanc said.

The city entered into the deal after sending out a request for proposal to manufacturers for fuel cells to participate in the state’s Low and Zero Emissions Renewable Energy Credit Program with Eversource, he said.

“Electricity is one of Water Pollution Control’s largest costs, because of running plant equipment and its sludge incinerator,” he said. “This is a continual effort by the city to control costs for ratepayers.”

Coskun said a dozen other entities in the state have become interested in the program, but declined to name them because they have yet to enter into official contracts. He said the company plans to keep the program limited to Connecticut and Massachusetts, and perhaps New York and California, because electricity is so much cheaper in other parts of the country.

“Connecticut has the highest electric rates in the continental United States,” he said.

Parent Firm in South Korea

Doosan Fuel Cell America was formed in 2014 when Doosan Corp. acquired bankrupt ClearEdge Power of South Windsor for $32.4 million and merged it with Fuel Power Cell of South Korea. ClearEdge Power, which acquired UTC Power in 2013, was founded in 2003.

Doosan Fuel Cell America has a 160,000-square-foot factory and headquarters at 195 Governors Highway in South Windsor, the former location for UTC Power. The company employs more than 300 workers at the South Windsor location.

More than 20 other installations have been carried out at venues statewide, including New Haven City Hall, Eastern Connecticut State University, Western Connecticut State University, Mount Sinai Hospital in Hartford, and Pratt & Whitney and Coca-Cola Bottling Co., both in East Hartford.