Industry Support For Molten Carbonate Fuel Cell Commercialization

John T. Nimmons, J.D. Managing Director Alliance to Commercialize Carbonate Technology Olympia, Washington USA 98510

The Alliance to Commercialize Carbonate Technology (ACCT®) is a working alliance of utilities and industry, created to help bring molten carbonate fuel cell (MCFC) technology into commercial markets by the year 2000. Its principal focus is the IMHEX® MCFC power plant under development by the team of M-C Power Corporation, the Institute of Gas Technology, The Bechtel Corporation, and Stewart & Stevenson Services, Inc. (the "Development Team"), although many ACCT members are also interested in other fuel cell technologies. This paper will describe ACCT's background, mission, approach and activities, as well as opportunities for those interested to join in ACCT's ongoing work toward MCFC commercialization.

ACCT's Background

ACCT was originally formed in 1991 by M-C Power Corporation, one of two leading American developers of MCFC technology. For the next several years, ACCT functioned simply as an informal utility and industry group that gathered periodically to follow the development of M-C Power's IMHEX® fuel cell technology. In 1994, as the technology neared the end of its development phase and approached the beginning of demonstrations and commercialization, M-C Power and ACCT participants agreed that the time was ripe for the Alliance to crystallize its mission and become a more formal, user-driven organization that could work closely with M-C Power's Development Team to help define the commercial power plant and support it into the market.

During 1994, representatives from utilities and industry worked intensively with the Development Team to define ACCT's new mission and design an approach and structure to achieve it. ACCT incorporated and began accepting formal memberships at the end of 1994. In just over a year and a half, its membership has grown to include twenty of the leading electric and gas utilities, natural gas pipelines, and other industries from all regions of the US, as well as from Canada and Sweden. In early 1996 ACCT increased its membership by over 30%, and it hopes to continue that trend for the next several years as MCFC power plant demonstrations create additional interest in the technology.

ACCT's Mission ACCT's mission is:

1. To help its member companies understand MCFC technology and the regulatory and business environment in which it will compete, and evaluate early MCFC applications and markets;

2. To help focus and support IMHEX® MCFC development and demonstration efforts in areas of critical interest to potential purchasers and users;

3. To provide opportunities for members to shape commercial power plant design, participate in demonstrations, and learn from early MCFC experience;

4. To build industry confidence that MCFC power plant performance, reliability, and cost targets can be met; and

5. To work with the Development Team to establish a framework for early commitments to purchase the first IMHEX® commercial units by the year 2000.

ACCT's Approach

ACCT's approach is to pursue these purposes through an active collaboration, both among member organizations serving on its working committees and its governing body, and between member organizations and representatives of the Development Team, who serve on ACCT committees and participate as non-voting members of the organization. In addition to its paid membership of industry and utility companies, ACCT works closely with its advisory members representing government and industry research'' organizations, presently including the U.S. Department of Energy, the Electric Power Research Institute, and the Gas Research Institute.

As a user-driven group, ACCT appreciates that many of its members are interested not only in M-C Power's IMHEX® technology, but also in other emerging fuel cell technologies that might serve different types of applications and markets. A number of ACCT's member companies also belong to organizations that support other fuel cell technologies. ACCT in no way discourages such participation, and in fact tries to keep its members up to date on the progress of all fuel cell technologies at its regular membership meetings.

ACCT's Ongoing Activities

During 1996, ACCT has pursued three types of activities in support of MCFC commercialization. These include advocating continued MCFC funding; profiling early buyers for commercial MCFCs; and working with M-C Power to structure industry participation in future demonstrations and cost-sharing for the remaining stages of commercialization. The following briefly describes each of these initiatives.

This year as in the past, ACCT has actively supported efforts to ensure continued US government funding for MCFC development through the next few critical years. This year's activities come at an especially critical time. Accelerated moves toward competition and restructuring among US electric utilities have dramatically reduced the availability of industry research, development and demonstration funding just as MCFC technology moves into its most costly demonstration phase. For this reason, it has been especially critical to maintain public funding at levels that fuel cell developers need to meet schedules and achieve milestones previously announced to the industry they are counting on to buy and use their products. Toward this end, ACCT has appeared before US Congressional committees responsible for MCFC funding, and has facilitated its members' efforts to make their support for MCFC development known to key members of the US Congress.

Industry support for MCFC development itself depends on industry confidence that there will be viable applications and markets for the technology when it becomes commercial. Among the IMHEX® Development Team, Stewart and Stevenson Services will be responsible for North American distribution and sales of the commercial power plant. However, Stewart and Stevenson expects to work with companies interested in sub-distributorships or other arrangements that can help move the technology to market. ACCT member companies are among those with such interests, since they are not only prospective MCFC users, but potential sub-distributors, installers, and energy service providers for MCFC power plants. As. a result, many ACCT companies have strong interests in understanding what markets are likely to develop for commercial MCFCs.

ACCT's Market Committee began addressing this question in mid-1995. It decided then that, given the rapid changes occurring in the US electric industry, a conventional market analysis conducted in 1996 would be of little value when the technology becomes commercial at the turn of the century. The Committee also recognized that early commercial markets are especially critical for fuel cell technologies, since necessary cost reductions depend in part on achieving early mass production economies. The Committee therefore chose not to proceed with a global assessment of long-term MCFC markets, but instead to focus on a more immediate and relevant inquiry: namely, who will be the "early adopters" of the technology, what distinguishes them from adopters in a more mature market, and what attributes of an MCFC power plant are of most interest to them?

To begin to answer these questions, ACCT and M-C Power have retained experienced energy and utility market consultants to survey key industrial and commercial market segments. The purpose of their study is to profile "early adopters" and to identify power plant attributes of special interest to them. Study results due this fall are expected not only to provide market intelligence for ACCT members interested in purchasing, distributing, installing, and servicing onsite power plants, but also valuable information on product design and definition for the Development Team as it proceeds to develop the first commercial units. Moreover, this "early adopter" study is proceeding in parallel with several other market analyses being performed independently for M-C Power. The results of these various studies should come together soon to provide a useful foundation for investment decisions by ACCT member companies as well as the Development Team.

A third area of activity for ACCT in 1996 has been to work with M-C Power to structure industry participation in future demonstrations, and to develop cost-sharing incentives for the remaining stages of commercialization. The next milestone for M-C Power's program is to demonstrate a 250 kW power plant at Naval Air Station Miramar in San Diego (see artist's rendering below).

M-C Power 250 kW Miramar Demonstration Power Plant - Courtesy T. Bourke.

Once the Miramar plant is up and running, attention will turn to planning for the first 1 MW IMHEX® prototype power plant, expected to begin operation in 1998 or early 1999. Although funding for development of this plant is included in M-C Power's existing five-year contract with the US Department of Energy, the contract requires substantial industryl cost-sharing. Accordingly, ACCT member companies have been working with M-C Power to define the needs of potential cost-sharing participants and the kinds of incentive structures needed to bring forth investment. These discussions are likely to continue through 1996 and into 1997. They are expected to provide a foundation for developing a framework for later commitments by individual ACCT member companies and others to purchase the first commercial MCFC power plants when they become available.

The types of collaborative efforts between ACCT and the Development Team described here are intended to continue during the next several years. If they establish confidence in early MCFC markets and succeed in generating continued federal support and increased industry investment, ACCT will have performed a valuable function for its members, and for the overall fuel cell commercialization effort. ACCT continues to welcome new members, whether they are new to fuel cell technology and simply wish to follow its development, understand its applications and participate in its progress, or whether they are already confident that it can meet their strategic business needs in the year 2000 and beyond and eager for the competitive advantages that early commitment can bring.

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