The clean emission signature of high-temperature fuel cells makes them ideally suited for deployment in CHP mode to supply on-site energy to a variety of building types. Chris Pais from FuelCell Energy illustrates the point with a US office campus application.

DFC1500 fuel cell at Sonoma County and electric vehicle charging stations

Combined Heat and Power (CHP) is gaining increased recognition as an effective solution to meet our growing energy needs as well to reduce the environmental impact of power generation technologies by the effective utilization of waste heat. According to the US Environmental Protection Agency’s (EPA) CHP Partnership, CHP is currently used at about 3600 industrial and commercial facilities in the US. The agency puts the US’s combined CHP capacity at 82 GW – 8% of the country’s total generation capacity – and estimates that these plants deliver 12% of the electricity generated in the US. Several CHP technologies are commercially available in the marketplace, such as engines, combustion-free fuel cells, turbines and microturbines.

More than 800 municipal governments currently use CHP, generating more than 5600 MW of electricity, according to the US EPA. This article will focus on a case study where a high-temperature carbonate fuel cell was installed to serve the heat and power needs of a municipal office building complex in northern California.


In addition to cleanly and efficiently producing electricity, the fuel cell reaction produces heat, which can be used in a CHP setting to increase the system’s overall efficiency. The carbonate fuel cell lends itself particularly well for heat recovery, due to the high temperature (>370°C) of the exhaust gas. This high-temperature exhaust can be economically utilized for a variety of value-add applications such as hot water heating, steam generation or absorption cooling. In absorption cooling, the heat from the fuel cell replaces the mechanical energy (used in traditional chillers) to drive the refrigeration cycle.

For example, usage of waste heat from a high-temperature 2.8 MW carbonate fuel cell power plant enables its 43–47% lower heating value (LHV) electrical efficiency to be increased to a total thermal efficiency of up to 90%, depending on the thermal needs of a facility.


Sonoma County government in northern California consists of 26 departments and agencies. Serving a population of almost 500,000, it has a history of providing responsive public service while operating under sound fiscal principles. Consistent with being a responsible steward of the environment, and in an effort to reduce its greenhouse gas emissions, the county embarked upon a comprehensive energy project in 2008. The project included various energy efficiency initiatives, upgrades to the facilities and the installation of a 1.4 MW stationary fuel cell power plant.

The fuel cell is located in a complex of 14 office buildings on in Santa Rosa, CA . The peak power load of the office complex varies from 1.8 to 2.2 MW with the average load being 1.2 MW. The county selected a 1.4 MW fuel cell power plant manufactured by FuelCell Energy, as shown in Figure 2. Its key components are:

  • Direct FuelCell DFC Module – the DFC1500 includes one DFC Module, which performs the electro-chemical conversion of the continuous fuel supply into DC electric power. The module contains four fuel cell stacks. Each stack contains the assembly of electro-chemical cells that produce DC power. Resembling a large battery, each of the four stacks is constructed of about 400 fuel cells clamped together with manifolds inside an insulated enclosure.
  • Mechanical balance of plant (MBOP) – the MBOP comprises several components: sulphur removal system, main process skid, and the water treatment system skid. The MBOP supplies fresh air, cleans and heats fuel and water, and includes the control system.
  • Electrical balance of plant (EBOP): The EBOP comprises three sections; an inverter, a transformer and switchgear. The EBOP converts the fuel cell DC power into utility grade AC power.

Exhaust gas from the fuel cell is used to heat water, and this cuts the county’s natural gas consumption due to reduced use of a combustion-based boiler. ‘The county is saving more than $900,000 a year due to the generation of both electricity and heat from the fuel cell power plant,’ said Sam Ruark, Energy and Sustainability Co-ordinator for the County of Sonoma.

‘This project is also helping us reach our sustainability goals as the fuel cell plant emits virtually no pollutants and has a favourable CO2 emission profile, while lessening use of the boiler further reduces pollutants and CO2 emissions.’

The fuel cell power plant was placed into service in December 2010 and a formal ribbon cutting was performed in January 2011. Figure 3 shows the operating performance of the fuel cell since December 2010. The energy generated by the fuel cell meets expectations, except for a power interruption in July 2011 caused by a planned shutdown of the plant for facility switchgear maintenance. Subsequently, there were issues with the water quality (unexpectedly high turbidity in the incoming feed water) which clogged some components in the water treatment system and is being resolved.

The average availability since December 2010 has been 93.8%. Since the power interruption in July 2011, the availability has been 99.5%, with an availability of 100% in five of the last eight months. The electrical efficiency of the fuel cell since it was commissioned has closely tracked expected efficiency. The average electrical efficiency (LHV basis) since December 2010 has been 46.3%.


Analysis of project economics includes capital costs, operating and maintenance costs, infrastructure upgrades, power plant installation, the profit margin of the engineering firm and contractors for installation, and fuel costs. Including all these costs, the county is expecting a net annual savings of about $900,000 per year, bringing the simple payback of this specific project to about 7.2 years, or as short as 4.1 years for tax-paying entities that can benefit from the Federal Investment Tax Credit.

Typical current installed costs for a 1.4 MW DFC1500 power plant similar to that used for this project are about $3400–3600/kW for the equipment and about $800–1200/kW for installation with paybacks that can be as short as 3–4 years with incentives.

The total installed cost of $9.7 million for this project included facility upgrades that do not apply to a typical fuel cell project. For Sonoma County, the Self Generation Incentive Program (SGIP) reduced the installed capital cost by about 30%. The rest of the capital was raised by a 4.98% interest loan from Bank of America with a repayment period of 16 years. The levelized cost of electricity is 12.4 US cents/kWh, which is at or better than grid parity in several locations.


The figures demonstrate an attractive payback period for fuel cells used in a combined heat and power setting. Apart from state incentives, the Federal Investment Tax Credit (ITC) provides a tax credit of 30% of project costs, up to a maximum of $3000/kW for fuel cell plants. In addition, the Energy Policy Act of 2005 provides for accelerated depreciation of fuel cell assets for tax purposes.

The County of Sonoma could not make use of the Investment Tax Credit since it is not a tax-paying entity. However, private equity capital that can take advantage of the ITC can be deployed for public entities that do not have a tax appetite. Such financing can yield very attractive economics in addition to providing the attributes of clean, baseload, on-site power. Applying the ITC to the Sonoma County installation would yield a simple payback of 4.1 years instead of 7.2 years. This makes for a very compelling case to deploy a fuel cell.

At the federal level, there are other incentives to encourage CHP deployment. The Energy Improvement and Extension Act of 2008 (EIEA), passed by Congress in October 2008, expanded federal energy tax incentives and introduced the CHP Investment Tax Credit (ITC), which is a tax credit for the costs of the first 15 MW of CHP property. To qualify for the tax credit, the CHP system must:

  • produce at least 20% of its useful energy as electricity and 20% in the form of useful thermal energy;
  • be smaller than 50 MW;
  • be constructed by the taxpayer or have the original use of the equipment begin with the taxpayer;
  • be placed in service after 3 October 2008, and before 1 January 2017;
  • be greater than 60% efficient on a lower heating value basis.

The 60% efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system’s energy source. The ITC may be used to offset the alternative minimum tax, and the CHP system must be operational in the year in which the credit is first taken.

In addition to the federal and state benefits and incentives, some states are introducing a feed-in tariff (FiT) programme for CHP projects that further help the project economics.

In California, the California Public Utilities Commission (CPUC) collaborated with the California Energy Commission (CEC) to establish the CHP FiT programme in response to the Waste Heat and Carbon Reduction Act (Assembly Bill 1613). This programme was announced in December 2011 and requires investor-owned utilities to purchase excess power from small, new, and highly efficient CHP facilities at a known fixed price under a standardized contract.

By allowing system owners to sell excess electricity to the investor-owned utilities at a reasonable price, the programme helps encourage more efficient sizing of CHP systems and maximize the utilization of waste heat.


In addition to the cost savings, the combustion-free nature of fuel cells results in a clean emission signature and a reduction in greenhouse gas emissions. For this project, the County of Sonoma estimates an annual reduction of 3800 tonnes of carbon dioxide based on a regional grid average. The fuel cell installation is also expected to reduce NOx emissions by 3 tonnes per year, SOx emissions by 0.7 tonnes/year and PM10 emissions by 0.1 tonnes/year, when compared with the average grid in California.


CHP projects are a cost-effective solution to the growing demand for clean, sustainable and environmentally friendly energy. Generating power where it is being used reduces the need for large central generation stations and an expanded transmission infrastructure. Utilizing the heat generated locally increases efficiency, reducing fuel usage and subsequent greenhouse gas formation.

The clean emission signature of high-temperature fuel cells make them well-suited for CHP deployment; they are ideal for baseload power production and generate clean electricity at high efficiencies, and the high temperature waste heat can be used in a variety of ways. The returns of fuel cell power projects attract private capital, which can provide cost-effective energy solutions to public entities through long-term power purchase agreements.

While the cost of fuel cells continue to decrease, federal and state incentives and CHP FiT programmes currently in place make fuel cell projects economically and environmentally feasible for both the private and public sectors today.


What is a fuel cell?

Figure 1. Schematic of a carbonate fuel cell

A fuel cell is a device that converts the energy that is present in a fuel into electricity using an electro-chemical process, rather than combustion.

A fuel cell is similar to a battery in some respects. But while a battery converts stored chemical energy to electrical energy, a fuel cell does not store energy in the form of internally contained reactants. Instead, fuel and oxidant are continuously fed to a fuel cell, which converts the energy in the fuel to electricity through an electro-chemical reaction between the fuel and oxygen.

Like a battery, a fuel cell consists of two electrodes: an anode (which is supplied with fuel) and a cathode (which is supplied with oxygen, typically ambient air).

The electrodes are separated by an electrolyte, which conducts the ions between the electrodes, and drives an external electrical load, as shown in Figure 1 above. Unlike a battery, a fuel cell continuously generates electricity for as long as fuel is supplied to it.

The type of fuel cell described in this article is a carbonate fuel cell where the electrolyte is a carbonate salt operating at a temperature exceeding 1000°F (540°C).

Fuel cells require hydrogen as the fuel source. However, due to the absence of a well-established hydrogen infrastructure, the carbonate fuel cell was designed to produce hydrogen internally from a readily available fuel source such as natural gas or renewable biogas.

In the carbonate fuel cell, the hydrogen conversion system is integral to the fuel cell, resulting in higher efficiencies than those achieved with low-temperature fuel cells.

Since the energy conversion in a fuel cell takes place electro-chemically without combusting the fuel, the resulting emissions are clean and free of the pollutants (such as NOx, SOx, PM10) normally associated with the combustion process.

Chris Pais is the manager, Application Engineering, with FuelCell Energy, CT, US.

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