The Rise of Fuel Cell Microgrids: Special Report

April 13, 2017
Fuel cell microgrids are on the rise, the result of a natural pairing of two technologies — fuel cells and microgrids — that serve a mutual mission, according to a new Microgrid Knowledge report, “Fuel Cell Microgrids: The Path to Lower Cost, Higher Reliability, Cleaner Energy,”

Fuel cell microgrids are on the rise, the result of a natural pairing of two technologies — fuel cells and microgrids — that serve a mutual mission. Together, they meet today’s demand for energy that is cost-competitive, highly reliable, clean, quiet, contained, modular, scalable and community-friendly.

Special Report: “Fuel Cell Microgrids: The Path to Lower Cost, Higher Reliability, Cleaner Energy

Once futuristic, both technologies find themselves at the right time and place, as the North American grid becomes increasingly distributed. America flirted with the idea of microgrids for decades. But microgrids were largely confined to college campuses. Then in 2012 Superstorm Sandy jolted the nation into understanding the fragility of its centralized power grid and the value of distributed energy.

Today, a wide range of businesses, institutions and communities are installing microgrids. Fuel cells have followed a similar trajectory and now operate in more than 40 states, according to the Fuel Cell and Hydrogen Energy Association (FCHEA).

Navigant Research forecasts strong, growing demand for both fuel cells and microgrids over the next several years. Worldwide, fuel cell installations are expected to increase more than 10-fold, from 262 MW installed in 2016 to over 3,000 MW nine years later. That should put the market for new stationary fuel cells at $16.2 billion in 2025, according to the research firm.

“Technology breakthroughs are giving way to persistent cost declines, product improvements, and business model innovations, making fuel cells viable in a growing range of markets,” said Navigant in releasing its 3rd quarter 2016 report on stationary fuel cells. At the same time, microgrids grow in a separate Navigant forecast from 1.4 GW in 2015 to 7.6 GW in 2024. At that point, the global microgrid market could reach $20 billion in annual revenue.

The brawn and the brain of fuel cell microgrids

The marriage of these two increasingly popular energy sources brings brawn and brain together. The fuel cell offers reliable generation; the microgrid offers advanced intelligence.

This pairing is crucial to create economic and reliable energy. Here’s why: A microgrid may have several sources of generation, some of them intermittent or short-lived, such as solar energy or energy storage. The fuel cell, on the other hand, can run continuously 24 hours a day, seven days a week, 365 days a year (as long it has a fuel supply—often clean, natural gas). When its solar, batteries or other resources are unavailable, the microgrid can always count on the fuel cell to supply continuous power.

Therefore, the fuel cell acts as a kind of back bone that the microgrid can rely on as it configures its various energy resources —including power from the central grid.

What is a fuel cell? Fuel cells convert chemical energy from hydrogen rich fuels into electrical power and usable high quality heat in an electrochemical process that is virtually absent of pollutants. Similar to a battery, a fuel cell has many individual cells that form a stack. When a hydrogen-rich fuel, such as clean natural gas or renewable biogas enters the fuel cell stack, it reacts electrochemically with oxygen to produce electric current, heat and water. While a typical battery has a fixed supply of energy, fuel cells continuously generate electricity as long as fuel is supplied. Source: FuelCell Energy

With this back bone intact, the advanced microgrid controller multi-tasks, figuring out which resources to use at any given moment. It makes these decisions based on the goals set by the microgrid controller. The goal may be cost-effectiveness, reliability, environmental performance or another parameter the operator prioritizes.

Microgrids and fuel cells often create further efficiencies by employing combined heat and power (CHP). This technology captures waste heat created in electric production. It then puts the heat to good use warming and cooling buildings (with absorption chillers), or creating valuable steam or hot water.

Fuel cells are also:

▶ Modular and scalable. More can be added as the microgrid customer’s energy demand grows over time.

▶ Easy to site. Fuel cells can be installed inside or outside. They are community-friendly because they require little space and do not use up large swaths of land, as solar or wind farms may.

▶ Typically spared regulatory red tape and review due to their clean emissions profile. In fact, in many states no air permit is required for a fuel cell.

▶ Quiet because they have few moving parts.

Who benefits from fuel cell microgrids? Not surprisingly, fuel cells and microgrids find themselves popular among similar kinds of customers. These include those who seek highly reliable power, such as data centers, research facilities, hospitals, manufacturers, pharmaceutical companies, and public safety. Utilities also use fuel cells and microgrids as non-wires alternatives to help bolster areas of their grid in lieu of more expensive infrastructure upgrades.

“Fuel cells are a viable and effective technology for microgrids, especially in states where the utility grid is at risk,” said Morry Markowitz, FCHEA president. “Today fuel cells ensure continuous power to essential services, such as hospitals, first responders, data centers, and other critical facilities, while providing economic and environmental benefits to the communities they serve.”

Strong markets for fuel cell microgrids

While fuel cells can be found through much of the U.S., three states lead the way—California, Connecticut and New York. Interestingly, these states are also strong markets for microgrids.

California has more than 480 fuel cell systems, totaling more than 210 MW of power generation, according to FCHEA. Also an early proponent of microgrids, California is home to several utility, military and commercial microgrids—with more likely to come as the state maps out a new microgrid strategy.

Home of several fuel cell companies, among them FuelCell Energy, Connecticut has at least 35 MW of fuel cells in operation and 20 MW planned, reports FCHEA. A 63.3-MW fuel cell installation, now under development in Connecticut, will be the world’s largest fuel cell when completed. The state was the first in the nation to develop a grant program to spur microgrids.

New York has 14 MW of fuel cells, and more are likely as the state unfolds its Reforming the Energy Vision, a policy designed to create a more distributed grid. To that end, New York is in the process of allotting $40 million in grants to microgrids.

Read more about the rise of fuel cell microgrids in our report, “Fuel Cell Microgrids: The Path to Lower Cost, Higher Reliability, Cleaner Energy,” downloadable at no cost, courtesy of FuelCell Energy.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is the editor and founder of She is co-founder and former editor of Microgrid Knowledge.

Exploring the Potential of Community Microgrids Through Three Innovative Case Studies

April 8, 2024
Community microgrids represent a burgeoning solution to meet the energy needs of localized areas and regions. These microgrids are clusters of interconnected energy resources,...

Get the full report.

High Reliability Microgrids for an Uncertain Future

In uncertain times, there is a need for high reliability microgrids. Calculating reliability involves understanding the risks and consequences of outages. In this white paper,...