FuelCell – Dan Haar: A shocking clear vitality reversal within the works

It’s been a curler coaster 12 months at Danbury-based FuelCell Power, and never simply due to coronavirus. The hydrogen vitality firm has proven indicators of latest momentum and for some time at the very least, had a lift from its dwelling state and deliberate to rent 100 individuals.

Till the increase ended abruptly, maybe unfairly.

One of many upswing moments got here on Sept. 28, when FuelCell Power gained — or fairly, appeared to win — bids for the best to promote energy from 4 areas totaling 11 megawatts to Eversource and United Illuminating. Doosan Gas Cell America, primarily based in South Windsor, additionally gained a bid, and a gasoline cell maker from California gained a bid.

Then on Nov. 16, in a extremely uncommon transfer, Connecticut utility regulators instructed Eversource to return and “re-evaluate” solar energy bids that had been disqualified in September and once more rejected in October after seven photo voltaic firms appealed. Eversource is about to announce the brand new set of winners Friday.

For FuelCell Power, an organization that has lengthy struggled to achieve a foothold within the clear energy market with its expertise primarily based on chemical conversion of hydrogen, it may change into one other in an extended line of snubs by the state in awarding contracts for renewable vitality tasks.

“I think there is an agenda bias for solar,” mentioned CEO Jason Few, who joined the corporate in 2019.

Competing applied sciences

I’m not going to weigh in on whether or not I consider that bias exists. What issues are the details behind the bids and the details of what’s taking place behind closed doorways at Eversource, on the Public Utilities Regulatory Authority and on the state Division of Power and Environmental Safety, which implements coverage and oversees PURA.

Gas cells do eat pure fuel — which some environmental activists oppose in any kind for brand spanking new vegetation. The expertise makes use of about 80 % of the pure fuel of standard vegetation, per megawatt-hour, however it creates no air pollution or greenhouse gases as a result of it doesn’t burn the gasoline.

It additionally hasn’t come down in price as quick as solar energy, although gasoline cell trade executives say they’re aggressive on price when all components are included.

There ought to be no bias as a result of the General Meeting has deemed gasoline cells Class I renewable technology.

Not like grid-scale photo voltaic and wind energy, gasoline cell is localized, proper the place the facility is required, so it doesn’t require pricey and environmentally nettlesome transmission. It runs 24/7, not intermittently, so it replaces present energy capability on the grid, in contrast to photo voltaic and wind, which nonetheless want back-up energy till somebody invents batteries for the entire grid.

When these batteries do come on line, mentioned FuelCell Power CEO Few, a longtime energy trade government, we’ll have to determine find out how to mine and deal with all that lithium.

Gas cell firms pay native property taxes and state gross sales taxes, in contrast to exempt photo voltaic. And gasoline cells take up little or no area, in contrast with wind and solar energy. One of many photo voltaic tasks that did win a bid would gobble up a number of acres of a suburban woodland in North Haven — a city which may have little or no say over permits for the mission.

Briefly, as state Home of Representatives Majority Chief Jason Rojas put it, there should be room for all of those applied sciences. “Clearly there’s a need to review the process here,” Rojas mentioned.

Stock price triples

The apparently profitable bids for FuelCell Power in Danbury, Derby, East Hartford and New Britain, and for Doosan in Enfield, principally at previous industrial websites, had been a part of a brand new effort known as the Shared Clear Power Facility (SCEF) Program. (Power individuals love acronyms virtually as a lot as navy individuals do.) The concept is to unfold the advantages of renewable vitality credit to households that don’t dwell in massive, sunny homes the place they will cowl a roof with photo voltaic panels.

FuelCell Power badly wants extra put in technology to display that its expertise works, to carry the associated fee per kilowatt-hour down, to point out help from its dwelling state and to extend the up-and-down employment we’ve seen over time on the Danbury headquarters and Torrington plant.

FuelCell, a publicly traded company, issued a press launch on Sept. 29 asserting the awards. After the presidential election, beginning on Nov. 12, FuelCell noticed its stock price triple, apparently because the market got here to consider President-elect-in-waiting Joe Biden will again the trade.

“To have the state of Connecticut reverse a decision after we’ve already announced an award would be extremely harmful to the company and certainly doesn’t support the growth objectives that we have in terms of hiring new people,” Few mentioned. “It’s a very important part of our growth efforts.”

FuelCell executives had fearful over the summer season that they’d be iced out. Then in early September, Eversource instructed state regulators that a lot of the solar energy bids didn’t observe the bid directions, largely associated to their documentation of management over the proposed websites. PURA took a glance and on Sept. 18, instructed Eversource to hold on, and choose from those that met the principles.

Naturally, the photo voltaic firms appealed. In a sharply worded rebuke on Oct. 9, PURA instructed them to strive once more subsequent 12 months; it’s a 6-year program with 25 megawatts per 12 months.

A re-evaluation can be unwieldy, PURA mentioned, and “would be unfair to those projects” that met the requirements.

‘Unreasonable, arbitrary, and capricious’

Over time that’s just about what the gasoline cell firms have been instructed once they complained about not being picked. In open bidding between 2013 and 2019, the state awarded bids for almost 800 megawatts of other energy technology, most of it exterior of Connecticut, principally photo voltaic and wind, zero for gasoline cells.

The exception was a carve-out, principally for gasoline cells, by the General Meeting, which led to profitable bids in 2018. FuelCell Power has about half of its almost 90 megawatts of put in energy base in Connecticut, so the story is blended and clearly the corporate must generate gross sales elsewhere in addition to right here.

The Nov. 16 reversal by PURA got here as a shock. “This ruling is not intended to favor any particular bidder or technology,” the order acknowledged. “The success of the SCEF program depends upon an open and competitive procurement process that encourages participation.”

PURA spokeswoman Taren O’Connor defined in an electronic mail that the bids weren’t “awarded” again in September; fairly, sure bidders obtained notifications from Eversource and UI that they’d been chosen.

“All bidders are told up front….that actual awards are subject to PURA review and approval, which is consistent with all other clean energy programs administered by PURA,” O’Connor wrote.

That’s true, however, as FuelCell Power and Doosan each mentioned in unexpectedly filed responses, that’s not how PURA has at all times operated. And extra to the purpose, nothing had modified since PURA rejected the photo voltaic appeals.

“Those long-standing principles have been uprooted in this case by the Authority’s sudden and drastic about-face,” FuelCell mentioned in a submitting calling the order “unreasonable, arbitrary, and capricious.”

“They certainly did not change the rules on our behalf when we’ve lost bids,” Few mentioned in my interview.

“It’s a big deal. It’s crazy what they did,” mentioned David Giordano, head of presidency relations at Doosan. “What bothers us the most is, they’re more concerned with how it affects the bidders that were disqualified but they’re not concerned with how this affects the bidders that were selected.”

Giordano mentioned the corporate that might host Doosan’s plant in Enfield had already began hiring and work on the location.

FuelCell Power is all the way down to 270 workers on the two essential Connecticut areas, from a excessive of almost 550 simply 4 years in the past, when the state Division of Financial and Neighborhood Improvement permitted a $30 million assist bundle. Earlier this 12 months the corporate obtained between $5 million and $10 million within the coronavirus Paycheck Safety Program aimed toward small firms — which it’s, technically — and that saved plenty of jobs.

With two rounds of latest capitalization, and a stock that’s instantly again up from the dumps, FuelCell Power is about for brand spanking new momentum, Few says. We’ve heard that earlier than and the corporate does have a great story to inform regardless of dropping tens of tens of millions of {dollars} a 12 months to this point.

What’s taking place in its dwelling state is a part of that story, and bears watching carefully.