OPALCOGRAM 119
7/7/94

Doug Bechtel
It seems that the letters that I get back from you in response to the OPALCOGRAMS come in clumps. After my OPALCOGRAM on load management, I got several lengthy letters that I am still pondering, and other columns have prompted similar comments from our members. Over the last couple of weeks, I have received letters from two of you wondering if I am getting burned out on OPALCOGRAMS and urging me to continue.

One of the things I like about working at OPALCO is that it is an exciting place to work. The Board of Directors (and the manager and staff) really look towards the future. On June 30, a representative of the Electric Power Research Institute made a presentation to the Board of Directors and senior staff on fuel cells. Fuel cells are like personal computers - they keep getting more efficient and the cost for what you are buying comes down. The price of fuel cells for the foreseeable future will probably prohibit their widespread use at OPALCO. It’s going to be difficult to get power out of a currently available fuel cell for much less than 10 to 15 cents per kilowatt hour. That doesn’t mean that they don’t have a role at OPALCO.

The current generation of fuel cells comes in 200 kilowatt modules and operates at an efficiency of 40-45%. The cost of these is in the $600,000 range. The next generation of fuel cells will be in the 1,000 to 10,000 kW range and will be 50-60% efficient. The first of these second generation fuel cells is under construction in Santa Clara, California and will not be completed for another year or more. They will then undergo a couple of years of tests before becoming commercially available. The third generation of fuel cells is barely off the drawing board and will offer significantly decreased cost but probably won’t be available until well after the year 2000 .

The question that we need to address right now is the value of a fuel cell for OPALCO. A 200 kW fuel cell would generate _ of 1% of our winter needs, so it is not going to be a major supplier of electricity. At the same time, there is some merit for us to become familiar with these units and the technology so that we can determine what role they may play in OPALCO’s future. If we play our cards right, we may be able to get grant money to pay for half or more of the fuel cell.

We are currently updating our long-range plans for our transmission and distribution systems. Having a potential resource such as fuel cells available will affect the outcome of the plan. The availability of emerging technology leads us toward making smaller investments towards the future so that we are able to change course to accommodate new technology. We are going to have to be pretty tricky to buy ourselves 10 to 15 years without massive investments in our submarine cables, so that fuel cells have time to mature. I intend to pursue the fuel cell alternative and hope that I can present the Board of Directors with a plan that we can afford and will get us into the fuel cell business, even if it’s just a small unit to gain experience.nce.

Doug Bechtel