Hartford Business Journal

14 Hartford Business Journal • July 10, 2017 www.HartfordBusiness.com from page 1 And for waste-to-energy plants, policy tweaks could help drive up long-stagnant prices of renewable energy credits, which plants earn and sell to reap a secondary rev- enue stream. The stakes are high for both sectors, which employ thousands of workers in the state but have experienced layoffs and cut- backs recently due to slower demand. In December, for example, Danbury's Fuel- Cell Energy said it was cutting 96 jobs, or 17 percent of its workforce, as a result of weak- ened demand for its products. It, along with all other fuel cell manufacturers in Connecti- cut, also lost out last year on major long-term energy contracts put out to bid by the state. Meantime, a trash-to-energy plant in Wall- ingford recently closed. Energy attorney Lee Hoffman recently told an industry crowd that Public Act 17-144, which was signed by Gov. Dannel P. Malloy on June 28, could be a boon to both sectors. "It has so much in it," said Hoffman, who prac- tices at Pullman & Comley in Hartford. Fuel cells Connecticut's energy policies have treated fuel cells more favorably than most states, helping manufacturers like FuelCell Energy and South Windsor's Doosan install more of their clean-energy units here than in any other parts of the country, except California. But hopes of further expanding the home- grown industry were dashed late last year when the Department of Energy and Environ- mental Protection (DEEP) failed to select any of the dozen or so fuel cell projects — some looking to find buyers for as much as 20 mega- watts of power — that bid into a competitive selection process for utility contracts. The fuel cell projects lost out because they submitted higher-priced bids than solar and wind developers. For example, DEEP recently disclosed that the average cost of the highest-ranked fuel cell bid was 14.3 cents per kilowatt hour, higher than solar (8.1 cents per kilowatt hour) and wind (9.9 cents per kilowatt hour). The new state law, originally proposed by Malloy, puts out to bid new long-term utility contracts with different selection criteria. In particular, it excludes solar projects, leaving the competition to fuel cells, wind power, landfill methane, anaerobic digestion and certain hydropower and biomass facilities. And while bidders will still be compet- ing on price, new additional scoring criteria could give a leg up to fuel cells. For example, greater weight will be given to projects that improve distribution system reliability; fuel cells are considered a steadier source of power than many other renewables like wind and solar, which depend on weather conditions to produce energy. It's not yet clear when DEEP would open up the new bidding process but the agency could select as much as 1,100 gigawatt hours worth of generation, which equals 4 percent of the total electricity distributed annually by utilities Eversource and Avangrid. Utilities could finance or even own an additional 30 megawatts of fuel cells. "The short answer is it's a big opportu- nity," said Arthur "Chip" Bottone, CEO of FuelCell Energy. The new bidding process could revive the prospects of a 63-megawatt fuel cell park pro- posed in Beacon Falls, which was sidelined last year after DEEP didn't select it for any long-term utility contracts, Bottone said. Torrington's O&G Industries and FuelCell Energy are construction partners on the pro- posed project. David Giordano, Doosan's manager of government affairs, said the new law repre- sents "another opportunity for us to do multi- megawatt projects." Doosan was part of an unsuccessful bid last year to develop a data center and 20-megawatt fuel cell park in New Britain. "We were very disappointed last time when we weren't selected," Giordano said. "I hope this makes a difference." Fuel cell advocates say supporting the industry would benefit Connecticut's econ- omy by preserving and growing jobs in the state and generating additional tax revenues. Greater reliance on fuel cells and other renewable energy sources, however, could result in higher energy costs for consumers. Waste-to-energy For waste-to-energy plants, Connecticut's move away from landfilling its non-recyclable trash has made it the nation's most prolific incinerator. But competitively priced natural gas has driven down prices waste-to-energy plants can fetch for the power they generate, putting pressure on their bottom lines. In addition, when plants burn trash they also generate renewable energy credits, which they sell to New England utilities and retail suppliers as an added revenue source. But for years, the supply of waste-to-energy credits has outpaced demand, lowering their overall market value. Meantime, solar, wind and fuel cell renewable credits sell for much higher, making them more attractive to buyers. Those tough economic conditions led New Jersey-based Covanta to recently close its Wall- ingford trash-to-energy plant. Five plants remain in the state, the largest of which are in Bridge- port and Hartford, and combined they incinerate more than 2 million tons of trash a year. The new law aims to revive waste-to-ener- gy credit prices by increasing the number of credits utilities and other electricity retail- ers must purchase. The law also tweaks the penalties companies must pay if they fail to acquire the mandated number of credits. Connecticut is trying to reduce the amount of trash it burns, but the plants will likely con- tinue to play an important role, even if the state can eventually reach its goal of divert- ing 60 percent of its waste stream through recycling, reduction and other methods. Ted Michaels, president of the Washing- ton, D.C.-based Energy Recovery Council, said in an interview that the new law "will make a real difference on market value." "It's going to value the attributes of waste- to-energy accurately," said Michaels, whose members include trash-to-energy Connecti- cut operators Covanta and Wheelabrator. n Alternative energies seek second wind Keeping Tabs In addition to providing a boost to fuel cell manufacturers and waste-to- energy power plants, Public Act 17-144 also requires the legislature to provide a ratepayer impact statement on future energy-related bills, starting in 2019. That should help lawmakers and rate- payers better understand the costs of investing in renewable energy sources like solar, wind and fuel cell projects. (Top photo) The 15-megawatt Dominion Bridgeport Fuel Cell Park, which uses FuelCell Energy units. (Bottom left) Gov. Dannel P. Malloy's administration has been favorable to fuel cells. Here, he speaks at the unveiling of a fuel-cell powered microgrid in Woodbridge. (Bottom right) A closer view of the Woodbridge fuel cell, supplied by FuelCell Energy. P H O T O S | C O N T R I B U T E D

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