Technology Assessment (Sample)
Transcript of Technology Assessment (Sample)
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CONFIDENTIAL & PROPRIETARY 1
Technology Assessment:
Brighter BioEnergy Partners, LLC
Alternative Electrical Power Generation Technologies
Report Date:
January 9, 2008
EquityNet, LLC
866.542.3638
www.equitynet.com
http://www.equitynet.com/http://www.equitynet.com/http://www.equitynet.com/ -
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TABLE OF CONTENTS
1.0 Introduction .................................................................................................................................... 1
1.1 Executive Summary ............................................................................................................ 11.2 Background ........................................................................................................................ 2
1.3 A Perspective on U.S. Electric Power Energy Generation (since 2006) ............................. 2
2.0 Study Objectives .............................................................................................................................. 5
3.0 A Perspective on Alternative Power Generation Technologies ....................................................... 6
3.1 Impact of Energy Price Volatility and Other Factors on Technology Deployment ............ 6
4.0 Specific Issues Addressed in this Study ............................................................................................ 8
5.0 Study and Analysis Methodology ..................................................................................................... 9
6.0 Identification of Fuel Cell Technologies ......................................................................................... 10
7.0 Overview of Fuel Cell Technologies ............................................................................................... 11
7.1 Molten Carbonate Fuel Cell ................................................................................................... 12
8.0 Identification of FuelCell Energys Direct FuelCells ...................................................................... 14
8.1 Benefits of Fuel Cell Technology ............................................................................................ 14
8.2 FuelCell Power Generating Capacity Options ....................................................................... 14
8.3 FuelCell Energy, Inc and Potential Alternative Sources / Business Sector Competitors ........ 15
8.4 Performance of FuelCell Energy, Inc. ..................................................................................... 16
9.0 Integration with Brighter BioEnergy Partners Waste-to-Energy Conversion Processes .............. 18
10.0 Molten Carbonate Fuel Cell Cost Trends ....................................................................................... 19
10.1 Basis for Power Generation Cost Comparisons ................................................................... 19
10.2 12-Year Trend in MCFC-Based Installed Capacity Cost ........................................................ 19
11.0 Conclusions and Recommendations .............................................................................................. 21
12.0 Appendix ........................................................................................................................................ 23
12.1 References and Identification of Source Materials .............................................................. 23
12.2 Exclusions, Contact Information, and Disclaimers ............................................................... 2412.3 Assumptions and Limiting Conditions .................................................................................. 24
12.4 Attachments ......................................................................................................................... 25
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CONFIDENTIAL & PROPRIETARY 1
1.0 INTRODUCTION
1.1 EXECUTIVE SUMMARY
From data available from the U.S. Department of Energy, coal-fired plants continue to be the primary source of
electric baseload generation in the U.S. However, coals share of total net generation decreased in 2006, even
though total net generation increased by 0.1 percent. Most of the new electric power plants placed into service in
the United States since 1999 have been natural gas-fired plants, which are generally cleaner and more efficient
than coal plants. Natural gas generation showed the highest rate of growth of the traditional energy sources from
2005 to 2006.
The study and analysis reported here were designed to provide essential independently (non-vendor)-derived
information to provide Brighter BioEnergy Partners, LLC a sound basis for selecting an electrical power generation
technology to be combined with their anticipated waste-to-power conversion system(s).
For its primary waste-to-power conversion technology, Brighter BioEnergy Partners expects to use a plasma arc
converter system, potentially in association with biodigesters being used for certain biogenic and agricultural
wastes. On-site use of the off-gases for electrical power generation, combined with low-level heat recovery, could
reduce operational and fiscal constraints on the proposed project.
Five primary factors led to the identification of high-temperature fuel cells as the alternative technology of
choice, including: fuel flexibility; minimizing environmental impact; efficiency; operational reliability; and the
presence of certain financial incentives to adopt this technology.
A number of states are seeking to secure cleaner energy sources and are legislating Renewable Portfolio Standards
(RPS) to mandate that utilities provide a certain amount of their electricity from renewable sources such as solar,
wind, and fuel cells. Currently, 22 states have RPS laws on their books, and in 5 states, ultra-clean fuel cellsoperating on natural gas qualify as renewable. State and Federal incentive programs for purchasing and operating
ultra-clean technologies contribute to making high-temperature fuel cells an attractive alternative to traditional
power generation systems.
Capital and operating costs for high-temperature fuel cells and associated low-level heat recovery units (LLHRU)
were examined in light of trends over at least the past 10 years, and quantitative projections of costs at the likely
time of deployment by Brighter BioEnergy Partners are presented.
Using 8 criteria considered for the identification and qualification of alternative electrical power generation
technologies, the use of high-temperature (molten carbonate) modular fuel cells is identified as presenting the
greatest opportunity. This type of fuel cell, as produced and placed into commercial service by FuelCell Energy, is
specifically identified. FuelCell Energy appears to be a sound company and a leader in fuel cell technologydevelopment and commercial deployment. Further, it has been and continues to be aggressively pursuing cost-
reduction efforts in fuel cell power plants.
Recommendations are provided for possible next phases of design studies and more detailed engineering and cost
analysis.
Electricity demand is far outpacing new supply sources..,
Source: Wall Street Journal, October 17, 2007, pp A17
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1.2 BACKGROUND
The primary waste-to-power conversion technology is expected to use plasma arc potentially in association with
bio-digesters being used for certain biogenic and agricultural wastes. Both systems produce off-gases with good
energy content but with stream composition variable depending on waste stream (feedstock) input and process
operating variables. Such off-gas streams may not be suitable for sale or direct injection into natural gas
transmission lines without substantial and expensive treatment and measure for quality control that could imposesub-optimal operating conditions on the primary waste-to-energy system components.
On-site use of the off-gases for electrical power generation, combined with low-level heat recovery, could reduce
these project constraints. With appropriate contractual arrangements in place, excess electrical energy produced
could be sold into the grid.
Exhibit 1.1 (above) shows the essential context for captive electrical power generation. A more complete, albeit
still high-level, schematic representation of the Brighter BioEnergy Partners system is shown in Exhibit 9.1 of this
report (Integration with Brighter BioEnergy Partners Waste to Energy Conversion Processes).
1.3 APERSPECTIVE ON U.S.ELECTRIC POWER ENERGY GENERATION DATA (2006 DATA)
Net generation of electric power increased 0.2 percent from 2005 to 2006, rising to 4,065 million megawatt hours
(MWh). According to the Bureau of Economic Analysis, the U.S. real gross domestic product increased 3.4 percentin 2006, and the Federal Reserves tally of total industrial production showed a 3.0 percent increase in 2006.
Notwithstanding these indicators of robust economic activity, which normally correspond to increases in demand
for electric power, milder temperatures than in the previous year contributed significantly to the relatively flat rate
of increase in electric power generation.
Exhibit 1.1. Electrical Power Generation Concept
Integrated
Waste-to-Energy
Conversion Systems
SolidsWater, Liquid Waste
Streams
(treatment & recycle)
Fuels(for backup & process
optimization)
Electricity
OUTFLOWS
Co-products
(minimized wastes
& discharges)
INFLOWS(waste streams &
fuels)
Gas
Systems Concept
(Flow Diagram)
Regional / Local Area
Industries, Municipalities,
& AgricultureWastes
Utilities
(electrical grid) Steam
Last Revised July 28, 2008 RRG
Power Generation;Waste Heat Recovery
(Fuel Cells)
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The three primary energy sources for generating electric power in the United States are coal, natural gas, and
nuclear energy. These three sources consistently provided between 84.6 and 88.6 percent of total net generation
during the period 1995 through 2006.
Petroleums share of total net generation peaked at 3.6 percent in 1998. It declined thereafter to a low of 1.6
percent in 2006. Conventional hydroelectric powers contribution declined from 9.3 percent in 1995 to 7.1 in
2006. Renewable energy sources, other than hydroelectric, contributed 2.4 percent of U.S. net electric generationin 2006. Since 1995, renewable generating capacity, on average, has accounted for 2.1 percent of net generation.
In that time, 2001 was the only year in which net generation by renewable resources was less than 2.0 percent of
total net generation (1.9 percent).
Electricity generation from coal in 2006 fell 1.1 percent from 2005 to 1,991 million MWh. In the past decade,
generation from coal declined only one other time (between 2000 and 2001). Coals share of total net generation
continued its slow decline over the past decade, from its peak of 52.8 percent in 1997 to 49.0 percent in 2006.
Coal-fired plants continued to be the primary source of baseload generation. However, its share of total net
generation decreased notwithstanding that total net generation increased by 0.1 percent. This was attributable to
continued growth in natural gas and nuclear generation, reflecting the cumulative effects of the growth in natural
gas-fired capacity and upgrades of nuclear power plants that emerged following 1997. It also reflects a reduction
in net summer coal-fired generating capacity, with 967 MW retired or de-rated, only partially offset by 542 MW of
new capacity.
Average annual growth in natural gas-fired electric power generation from 1995 to 2006 was 4.6 percent,
compared to 1.4 percent average annual growth for both coal and nuclear power generation. Most of the new
electric power plants placed in service in the United States since 1999 have been natural gas-fired, which are
generally cleaner and more efficient than coal plants. Natural gas generation showed the highest rate of growth
from 2005 to 2006 of the traditional energy sources, increasing 7.3 percent and reaching 813 million MWh. Part of
the growth in 2006 was attributable to the disruption of natural gas supplies in 2005 due to Hurricanes Katrina,
Rita, and Wilma, which all contributed to high natural gas prices nationally and to lower natural gas electric power
generation in Gulf Coast states. By 2006, more normal conditions had returned to the region, and natural gas
prices returned to a more competitive level.
Net generation at nuclear plants increased 0.7 percent in 2006 to 787 million MWh. Between 1995 and 2006,nuclear generation ranged from an 18.0-20.6 percent share of total net generation with an annual average growth
in net generation of 1.4 percent from 1995 through 2006, despite the fact that no new nuclear units had been
constructed. Continued growth in nuclear generation is due to the improved capacity utilization (the capacity
factors for nuclear plants have increased nearly 17.6 percentage points over the last decade) and to incremental
capacity upgrades to existing units. In 2006, upgrades produced 346 MW of incremental capacity and capacity
factors increased from 89.3 percent in 2005 to 89.6 percent in 2006. The increase in capacity, plus improved
capacity utilization, combined with the reduction in coal-fired generation contributed to the rise in nuclear
generations share of total net generation.
Net generation from conventional hydroelectric plants increased 7.0 percent over 2005, to 289 million MWh,
although the level was still lower than the peak year for hydroelectric production over the past decade (356 billion
kilowatt-hours in 1997). (The western U.S. experienced one of the most severe droughts in history from 1999
through 2004.)
Petroleum-fired generation fell 47.5 percent, to 64.4 million MWh and accounted for only 1.6 percent of total net
generation. Over the past decade, petroleum-fired electric power generation has declined at an average annual
rate of 1.3 percent. The large decrease in 2006 is directly attributable to sustained high petroleum prices following
the 50.1 percent price increase in 2005, as petroleum prices declined only 3.3 percent in 2006.
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Renewable energy, other than hydroelectric, grew 10.6 percent and accounted for 2.4 percent of net generation in
2006. The greatest growth in the renewable sector was in wind generation, which contributed 95 percent of the
growth in renewable energy. Wind generators produced 26.6 million MWh, 49.3 percent higher than in 2005.1
1Energy Information Administration, U.S.D.O.E., Energy Information Administration, Electric Power Annual with data for 2006,
(November, 2007).
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2.0 STUDY OBJECTIVES
This study and analysis were designed to provide independently, non-vendor-derived essential information as a
sound basis for selecting an optimal electrical power generation technology for integration into the waste-to-
energy conversion project being considered by Brighter BioEnergy Partners, LLC.
Among criteria considered during the identification and qualification of alternative electrical power generationtechnologies were that the alternatives must:
1. Be fully compatible with other technologies in the Brighter BioEnergy Partners Waste-to-Energy Project
2. Integrate with plasma arc and/or bio-digestion and utilize off-gases from those units with a minimum of
treatment and cost
3. Be responsive to environmental imperatives, particularly atmospheric emissions and water usage and/or
discharge
4. Provide efficient, preferably superior conversion of gaseous fuels to electrical power and allow integrated
low-level heat recovery
5. Anticipate a technological response to future costs associated with carbon emissions
6. Capture emerging technology and reduce risk of competitive obsolescence
7. Provide inherently safe and flexible operational capabilities8. Require no technological break-through, discovery, or invention for commercial deployment (i.e., have a
low inherent commercial risk).
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3.0 APERSPECTIVE ON ALTERNATIVE POWER GENERATION TECHNOLOGIES
Popular arguments for the consideration of alternative energy technologies abound, e.g.,
Highly centralized generation of electrical power is a paradigm that has outlived its usefulness.
Decentralized generation could save $5 trillion in capital investment, reduce power costs by 40 percent,
reduce vulnerabilities, and cut greenhouse gas emissions in half.
However, technology has improved and natural gas distribution now blankets the country. By 1970, mass-
produced engines and turbines cost less per unit of capacity than large plants, and the emissions have
been steadily reduced. These smaller engines and gas turbines are good neighbors and can be located
next to users in the middle of population centers. Furthermore, the previously wasted heat can be recycled
from these decentralized generation plants to displace boiler fuel and essentially cut the fuel for electric
generation in half, compared to remote or central generation of the same power.2
---------------------------
A primary motivation for undertaking this study and analysis was achieving a general awareness of the technical
advances and declining cost of fuel cell technologies and the multiple advances apparently available when that
technology is used in application environments similar to those in which Brighter BioEnergy Partners waste-to-
energy project is to be situated.
To provide a meaningful context for the study and analysis of fuel cell technologies, a limited comparison study of
other gas-fueled power generation technologies is necessary, including conventional co-generation approaches,
gas-fired turbines in combined cycle, and microturbine applications for distributed generation.
A key factor in the success of gas turbine electrical power generation has been the use of natural gas as a fuel.
Natural gas, composed mostly of methane and CH4, has been called the "prince of fuels" because it has the highest
heating value and is environmentally the most benign (that is, producing the lowest level of CO 2) among
hydrocarbon fuels. In the past, the relatively low long-term price of natural gas and its availability through
pipelines and from LNG plants and tankers helped drive the market for gas turbine power plants.
Very small gas turbines, called microturbines, continue to emerge in the market as a viable energy option fordistributed electrical power and cogeneration. These small gas turbinesranging from 30 to 400 kWare typically
fueled by natural gas. Microturbines are geared toward solving on-site energy demands, such as supplying
electrical power and heat for fast food restaurants. Several thousand of these units (priced from $850 to $1,500
per kilowatt) have been sold and installed in the last two years by Capstone, Elliott Energy Systems, and Bowman
Power Systems, among others. Some advocates of microturbines compare their future status in the electrical
power industry to that of the PC in a computer industry once dominated by mainframe systems. Time and the
marketplace will, of course, resolve these matters.
3.1 IMPACT OF ENERGY PRICE VOLATILITY AND OTHER FACTORS ON TECHNOLOGY DEPLOYMENT
Price volatility in the natural gas and electricity markets affects decisions regarding owning and operating emerging
energy technologiesspecifically, distributed generation (DG) equipment and combined heat and power (CHP)systems. Price volatility clearly impacts the perspectives and actions of end-use customer and energy services
companies as they relate to installation, ownership, and operation of DG/CHP systems and is a particularly
sensitive matter in Texas.
2Casten, Thomas R. and Brennan Downes, Critical Thinking About Energy: The Case for Decentralized Generation of Electricity,
Skeptical Inquirermagazine, January 2005;http://www.csicop.org/si/2005-01/energy.html
http://www.csicop.org/si/http://www.csicop.org/si/http://www.csicop.org/si/2005-01/http://www.csicop.org/si/2005-01/energy.htmlhttp://www.csicop.org/si/2005-01/energy.htmlhttp://www.csicop.org/si/2005-01/energy.htmlhttp://www.csicop.org/si/2005-01/energy.htmlhttp://www.csicop.org/si/2005-01/http://www.csicop.org/si/ -
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Distributed generation is the strategic placement of electric power generating units at or near customer facilities
to supply on-site energy needs. Combined heat and power (CHP) is the generation of electric or mechanical power
and thermal energy simultaneously from the same fuel source.
Distributed generation projects can be designed to produce electric or mechanical power only or to produce
electric or mechanical power and thermal energy (CHP). DG benefits as compared to power from the grid for
energy users may include enhanced reliability, superior power quality, independence from the grid, and lower
energy costs.
CHP offers individual and societal energy and environmental benefits over electric-only systems, in both central
power generation and distributed generation applications. CHP systems achieve increased efficiency in fuel use,
reduced emissions of air pollutants and greenhouse gases, and enhanced reliability of the electrical grid.
Industrial, institutional, and commercial facilities are the principal users of CHP, along with some utilities and
independent power producers.
End-use customers making DG/CHP investment decisions may implicitly or explicitly address energy price volatility
in the investment/planning context. Price volatility in this sense refers to long-term uncertainty about energy price
levels that influences investment planning. This uncertainty has a number of potential implications for investors.
For example, it might cause them to delay decisions to purchase appliances and equipment. Or, it might cause
them to invest in different types of equipment than they might otherwise, e.g., in a dual-fuel capable system
rather than a dedicated-fuel system. The ways in which potential DG/CHP investors could take price volatility intoaccount are varied, from demanding a higher rate of return on a project, to informal considerations of impacts, to
neglecting the issue entirely.
The five most common types of on-site generation technologies include:
reciprocating engines
small gas turbines
steam turbines
microturbines
fuel cells
(Except for fuel cells, these technologies are known as prime movers and convert fuel to shaft power or
mechanical energy.) In both DG and CHP applications, the mechanical energy from the prime mover drives a
generator for producing electricity. It may also drive rotating equipment, such as compressors, pumps, and fans.
In the case of CHP applications, a heat recovery system captures and converts the energy in the prime movers
exhaust into useful thermal energy. The thermal energy from the heat recovery system can be used either for
direct process applications or indirectly to produce steam, hot water, hot air for drying, or chilled water for process
cooling.3
3Henning, Natural Gas and Energy Price Volatility (2003),
http://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdf
http://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdfhttp://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdfhttp://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdf -
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4.0 SPECIFIC ISSUES ADDRESSED IN THIS STUDY
In this study and analysis, consideration was given to the following points, ultimately resolving largely to the use of
high-temperature fuel cell technology in Brighter BioEnergy Partners waste-to-energy project:
Optimum project use of high to moderate fuel-value off-gases from both plasma arc converters for MSW
and bio-digester systems for biogenic and agri-wastes, both anticipating a range of feedstockcompositions (with resulting variability in off-gas composition)
Capital and operating costs projections for the project
Consideration of potential environmental benefits and / or negative impacts (on a comparative basis
against traditional electrical power generation technologies)
Operational flexibility and system expandability allowed by adoption of the technology
Providing a description of any potential constraints imposed on the project by adoption of the technology
identified during the course of the study.
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5.0 STUDY AND ANALYSIS METHODOLOGY
EquityNet used its well-established process for providing the study and analysis proposed here. This is a multi-step
process that included, but was not limited to, the following steps and procedures:
Background research and data collection
Projections of technology trends and costs (for high-temperature fuel cells and competitive technologies) Interim conferencing (telephonic) with client and subject matter experts for the target technology
analysis of integration issues
Report preparation by project managers and vetting by participating subject matter experts.
Capital and operating costs for high-temperature fuel cells and associated low-level heat recovery units (LLHRU)
were examined in light of trends over at least the past five years, and quantitative projections of costs at the likely
time of deployment by Brighter BioEnergy Partners were developed. Descriptive performance information for a
specific supplier of Molten Carbonate Fuel Cells (MCFCs), FuelCell Energy's Direct FuelCell (DFC), were collected
and organized for presentation herein.
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6.0 THE IDENTIFICATION OF FUEL CELL TECHNOLOGIES
Five primary factors led to the identification of fuel cells as the alternative technology of choice, including fuel
flexibility, minimizing environmental impact, efficiency, the presence of certain financial incentives to adopt this
technology, and operational reliability.
Fuel Flexibility: A number of industrial and municipal facilities and agricultural plants generate wasteswith high-energy values. These waste streams can be used in turn to generate hydrocarbon-rich off-
gases, synthesis gas, or biogas in subsequent waste-to-energy processes. Fuel cell power plants can
harness the hydrocarbon gases (largely methane) in these byproducts and then use the gas to power the
system in lieu of natural gas, making it a renewable energy source. In many places where off-gases and
digester gas production volumes and compositions are variable, fuel cell power plants are designed to
operate with automatic blending with natural gas. The electricity generated by a fuel cell power plant can
supplement or displace retail power consumed at adjacent facilities or sold to the grid.
Environmental Impact: With increasing energy demands and costs coupled with the growing public
awareness of the need for energy conservation, fuel cell power plants are increasingly being chosen for
on-site or distributedpower generation. Because of their very low emission of pollutants such as nitrogen
oxides (NOx) and sulfur oxides (SOx), as well as dramatically lower emissions of carbon dioxide (CO2), fuelcell power qualifies under several governmental and other environmental certifications, such as the
Leadership in Energy and Environmental Design (LEED) program and Renewable Energy Standards (RES).
MCFC-based power plants have also been designated as "Ultra-Clean" by the California Air Resources
Board (CARB) and exceed all 2007 CARB standards. Fuel cells also have the potential to substantially
reduce if not eliminate emissions generated by fossil-fuel-based backup generators that are often
required by facilities employing wind and solar power.
Efficiency: Fuel cell power plants are highly efficient in the use of hydrocarbon-rich gaseous fuels and
have an inherent Low Heating Value (LHV) efficiency. High temperature fuel cell-based power systems
offer clear efficiency advantages in comparison to other forms of distributed power generation. Certain
units are rated at 47% efficient in the generation of electrical power and up to 80% efficient overall in
Combined Heat and Power (CHP) applications. Typical fossil fuel-powered plants operate at about 35%
electrical power generation efficiency.
Financial Incentives: The Energy Policy Act of 2005 provides substantial financial incentives for fuel cell
power plants. Specifically, it grants a Federal investment tax credit of 30% or $1,000 per kilowatt
(whichever is lowest) of total project costs, as well as five-year accelerated depreciation. Californias Self-
Generation Incentives Program (SGIP) includes an $80 million annual allocation for renewable and ultra-
clean distributed generation technologies.
Reliability: Locating fuel cell-based power plant on-site and implementing real-time monitoring capability
assures end-users of increased reliability, a necessary requirement for applications such as manufacturing
facilities and hospitals. Unlike wind and solar technologies, which generally have an overall availability of
35%, fuel cell technology operates independently and has an availability of over 95%.
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7.0 OVERVIEW OF FUEL CELL TECHNOLOGIES
Growing demands for electrical power coupled with fuel cost pressures and
environmental constraints have created a need for new efficient and
sustainable sources of energy and electricity. Fuel cells have become an
increasingly promising potential source of power for military, commercial, and
industrial uses. Further, fuel cells are increasingly being deployed as stationaryand decentralized sources and in mobile units.
Fuel cells operate much like a battery, using electrodes and an electrolyte to
generate electricity. Unlike a battery, however, fuel cells never lose their
charge. As long as there is a constant fuel source, fuel cells will generate
electricity.
Three types of fuel cell appear to be most likely to continue being commercialized:
High-temperature solid oxide fuel cell (SOFC)
High-temperature molten carbonate fuel cell (MCFC)
Low-temperature polymer electrolyte membrane fuel cell (PEM)
Selection of a fuel cell technology for a specific application and in optimum response to local conditions requires
the detailed consideration of a number of factors, including but not limited to:
Exhibit 7.1. Example of a Direct Fuel Cell Power Plant
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1. Modeling and control of processes and systems
2. Base loading requirements
3. Materials selection and analysis for fuel cells
4. Fuel cell stack design and development
5. Anticipated operational lifetimes, MTBF, and maintenance cycles
6. Capability for handling fuel variability including gas-reforming technology
Consideration of these factors in addition to the criteria set out herein in Section 2.0 (Study Objectives), and the
five primary factors set out in Section 6.0 (Identification of Fuel Cell Technologies), pointed to MCFC as the
technology of choice.4
It is therefore MCFC technology that is analyzed in further detail in this report.
Unlike other fuel cell designs, MCFC internally reforms5
internal reformation
process
readily-available fuels such as natural gas or anaerobic
digester gas into the hydrogen gas required to actually power the fuel cell system. This
is a key ingredient to the MCFC Direct FuelCell
(DFC) produced by FuelCell Energy, Inc. and its ability to
operate at such high electrical power generation efficiency.
7.1 MOLTEN CARBONATE FUEL CELL (MCFC)
In essence, fuel cells are electrochemical devices that combine fuel with oxygen from the ambient air to produce
electricity and heat, as well as water. The non-combustion, electrochemical process is a direct form of fuel-to-
energy conversion, and it is much more efficient than conventional heat engine approaches. Fuel cells incorporate
an anode and a cathode, with an electrolyte in between (similar to a battery). The material used for the
electrolyte and the design of the supporting structure determine the type and performance of the fuel cell.
A general description of the MCFC technology with an integrated heat recovery system is provided in conjunction
with Exhibit 7.2 (see notes).
4The rapid advances in fuel cell system development have left current information available only in scattered journals and
Internet sites. A recent book, Advances in Fuel Cells,provides in-depth coverage of the topic over a broad scope. This volume
provides informative chapters on thermodynamic performance of fuel cells; macroscopic modeling of polymer-electrolyte
membranes; the prospects for phosphonated polymers as proton-exchange fuel cell membranes; polymer electrolyte
membranes for direct methanol fuel cells; materials for state of the art PEM fuel cells, and their suitability for operation above
100C; analytical modelling of direct methanol fuel cells; and methanol reforming processes. See Tim Zhao, K.-D. Kreuer, and
Trung Van Nguyen, Advances in Fuel Cells, Elsevier, ISBN 10: 0-08-045394-5, 499 pages.5Steam reforming (or hydrogen reforming or catalytic oxidation) is a method of producing hydrogen from hydrocarbons. On an
industrial scale, it is the dominant method for producing hydrogen. Steam reforming of natural gas, sometimes referred to as
steam methane reforming (SMR), is the most common method of producing commercial bulk hydrogen as well as the hydrogen
used in the industrial synthesis of ammonia. It is the least expensive method. At high temperatures (700 1100 C) and in the
presence of a metal-based catalyst (nickel), steam reacts with methane to yield carbon monoxide and hydrogen.
CH4 + H2O CO + 3 H2
Additional hydrogen can be recovered by a lower-temperature gas-shift reaction with the carbon monoxide produced. The
reaction is summarized by:
CO + H2O CO2 + H2
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Exhibit 7.2. Block Flow Diagram of MCFC System
Note 1: Water and fuel are preheated, the fuel thereby being humidified before being supplied to the anodes of the fuel cells.
Note 2: Fuel and water are heated to the required fuel cell temperature in a heat-recovery unit that transfers heat from system
exhaust gases. The heated humid fuel stream is sent to the fuel cell stacks where, as described above, the fuel is converted to
hydrogen, most of which is used in the electrochemical reaction.
Note 3: Fuel and air reactions for the molten carbonate fuel cell occur at the anode and cathode, which are porous nickel (Ni)
catalysts. The cathode side receives oxygen from the surrounding air. Hydrogen is created in the fuel cell stack through a reforming
process, which produces hydrogen from the reforming reaction between the hydrocarbon fuel and water. The gas is then consumed
electrochemically in a reaction with carbonate electrolyte ions that produces water and electrons. A fuel cell power plant consists ofmultiple fuel cells arranged in stacks to provide the required system voltage and power) and the equipment needed to provide the
proper gas flow and power conversion.
Notes 4 & 5: Residual fuel (4), i.e., fuel not consumed in the electrochemical reaction in the fuel cell stack, is supplied to a catalytic
reactor (5) to heat incoming air.
Note 6: The heated air flows to the cathode to provide the cathode reactants (oxygen from the air and carbon dioxide from the
anode reaction). The O2 supplied to the cathode, along with CO2 recycled from the anode side, reacts with the electrons to produce
carbonate ions that pass through the electrolyte to support the anode reaction.
Note 7: Cathode exhaust gas exits the system through the heat exchanger used to preheat the fuel and water supplied to the heat
recovery unit.
Note 8: Using fuel cell technology, the emission of CO2 is reduced due to the high efficiency of the fuel cells and the absence ofcombustion that avoids the production of NOx and particulate pollutants.
Note 9: With heat that can be extracted in the production of electric power (a bottoming process), co-generation using fuel cells can
represent a significant increase the efficiency of the power plant.
Note 10: The electron flow through the external circuit produces the desired power (DC current). An inverter is used to convert the
DC output to AC.
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8.0 IDENTIFICATION OF FUELCELL ENERGY'S DIRECT FUELCELLS
8.1 BENEFITS OF FUEL CELL TECHNOLOGY
FuelCell Energy's Direct FuelCell (DFC) power plants appear at this stage of
analysis to be an economical solution for reliable, Ultra-Clean baseload
power. State and federal incentive programs for purchasing and operatingultra-clean technologies such as DFCs clearly make the technology an
attractive alternative to traditional power generation systems.
An industry leader in fuel cell technology, FuelCell Energy has been
aggressively pursuing cost-reduction efforts in molten carbonate fuel cell
power plants. (See cost trend details in Section 10.0 of this report.) The
company also works closely with local governments to advance fuel cell
technologies. States seeking to secure cleaner energy sources are
legislating Renewable Portfolio Standards (RPS) to mandate that utilities
provide a certain amount of their electricity from renewable sources such as
solar, wind, and fuel cells. Twenty-two states currently have RPS laws on
their books. As of the date of this report, in five states (Connecticut, Hawaii,Maine, New York, and Pennsylvania) Ultra-Clean fuel cells operating on
natural gas qualify as renewable.
FuelCell Energys Direct FuelCell
(DFC) power plants meet these emission requirements and qualify for the SGIP.
In Connecticut, the Connecticut Clean Energy Fund (CCEF) is subsidizing 68 MW of new fuel cell power plants as
part of its "Project 100" program that is encouraging the installation of 100 MW of new renewable energy-
powered systems by state utilities. Internationally, the South Korea Ministry of Commerce, Industry and Energy
instituted a green energy program in 2006 that is providing financial assistance for environmentally efficient power
systems such as fuel cells. In Japan, FuelCell energy received the governments endorsement for DFC products
operating on anaerobic digester gas. (This was due to a favorable technical report on the performance and
availability of the DFC power plant at a municipal wastewater treatment facility in the city of Fukuoka.)
8.2 FUELCELL POWER GENERATING CAPACITY OPTIONS
FuelCell Energys DFC300MA system is a self-contained electrical power generation system capable of providing
high-quality baseload power up to 300 kW, with 47% efficiency 24 hours a day, 7 days a week.
Featuring ultra-low emissions, low operating noise, and a small footprint (600 sq. ft), the DFC300MA is suitable for
locations where traditional power generation technologies are not feasible or desirable. The DFC300MA can be
used for low-cost on-site power generation, cogeneration and Combined Heat and Power (CHP), distributed energy
grid support, and grid congestion relief. The system is suitable for a wide range of applications, including
manufacturing facilities, food/beverage processing plants, hotels, hospitals, universities, and utilities.
FuelCell Energys DFC1500MA system is a self-contained electrical power generation system capable of providing
1.2 MW of high-quality baseload power. The system has an electrical efficiency rating of 47%, giving it higherefficiency than other distributed generation plants of similar size with virtually no air pollution.
The DFC1500MA features ultra-low emissions and low operating noise and is suitable for locations where
traditional power generation technologies are not feasible or desirable. The DFC1500MA is easily installed in
comparison to other power generation technologies due to its modular design.
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The DFC1500MA can be used for low-cost on-site power generation, cogeneration, and Combined Heat and Power
(CHP), distributed energy grid support, and grid congestion relief. The system is suitable for a wide range of
applications, including wastewater treatment, manufacturing, large hotels, hospitals, and universities.
8.3 FUELCELL ENERGY,INC AND POTENTIAL ALTERNATIVE SOURCES /BUSINESS SECTOR COMPETITORS
FuelCell Energy notes in its 10K Risk Factors, that Other companies, some of which have substantially greaterresources than ours, are currently engaged in the development of products and technologies that are similar to, or
may be competitive with, our products and technologies.
While several companies in the U.S. are involved in fuel cell
development, FuelCell Energy appears to be the only domestic company
engaged in significant manufacturing and commercialization of
carbonate fuel cells. Emerging fuel cell technologies (and companies
developing them) include proton exchange membrane fuel cells (Ballard Power Systems, Inc.; United Technologies
Corp. or UTC Fuel Cells; and Plug Power), phosphoric acid fuel cells (UTC Fuel Cells), and solid oxide fuel cells
(Siemens Westinghouse Electric Company, SOFCo, General Electric, Delphi, Rolls Royce and Acumentrics).
FuelCell Energy, Inc. engages in the development, manufacture, and sale of fuel cell power plants for electric
power generation. Its core carbonate fuel cell products include Direct FuelCell and DFC Power Plants. The
company's carbonate fuel cell products electrochemically produce electricity from hydrocarbon fuels, such as
natural gas and biomass fuels. In addition, FuelCell Energy is developing hybrid products and planar solid oxide
fuel cell technology products. The company's power plants generate approximately 200 million kWh of power
using various fuels, including renewable wastewater gas, biogas from beer, and food processing, as well as natural
gas and other hydrocarbon fuels. Its products serve various commercial and industrial customers, including
wastewater treatment plants, hotels, manufacturing facilities, universities, hospitals, telecommunications/data
centers, and government facilities, as well as grid support applications for utility customers. The company has
operations in North America, Canada, Europe, Japan, and Korea. FuelCell Energy was founded in 1969 and is
headquartered in Danbury, Connecticut.6
Ballard Power Systems, Inc. engages in the design, development,manufacture,
and sale of proton exchange membrane (PEM) fuel cells. It operates in threesegments: power generation, automotive, and material products. Its power
generation segment offers PEM fuel cell products and services for the
residential co-generation, materials handling, and back-up power markets. Automotive segment provides PEM
fuel cell products and services for fuel cell vehicles. Material products segment designs, develops, manufactures,
and sells carbon fiber products primarily to automotive manufacturers for automotive transmissions, and gas
diffusion layer materials for the PEM fuel cell industry. The company has operations primarily in the United States,
Canada, Japan, and Germany. Ballard Power Systems was founded in 1979 as Ballard Research, Inc. and changed
its name to Ballard Power Systems, Inc. The company is headquartered in Burnaby, Canada.7
Energy Conversion Devices, Inc. commercializes materials,
products, and production processes for the alternativeenergy generation, energy storage, information
technology, alternative energy generation, energy storage,
and information technology markets. The company operates in two segments (United Solar Ovonic and Ovonic
Materials). The United Solar Ovonic segment designs, develops, manufactures, and sells proprietary thin-film solar
(photovoltaic or PV) modules, which are lightweight, thin, flexible, and durable products for converting sunlight
6http://www.fuelcellenergy.com/
7http://www.ballard.com/
http://www.fuelcellenergy.com/http://www.fuelcellenergy.com/http://www.fuelcellenergy.com/http://www.ballard.com/http://www.ballard.com/http://www.ballard.com/http://www.ballard.com/http://www.fuelcellenergy.com/ -
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into electricity. It sells these PV modules to commercial roofing materials manufacturers, builders and building
contractors, and solar power installers/integrators, who incorporate these PV modules into their products and
services for commercial sale. The company also sells PV modules for ground-mounted and residential applications
and, for some applications, manufactures and sells framed PV products.
The Ovonic Materials segment invents, designs, and develops materials and products based on its materials
science technology, principally amorphous and disordered materials. The company is commercializing NiMHmaterials and consumer battery technology through this segment internally and through third-party relationships,
such as licenses and joint ventures. It licenses NiMH battery technology to NiMH battery manufacturers,
principally for consumer applications and produces proprietary positive electrode nickel hydroxide materials for
use in NiMH batteries, which it sells to licensees of its NiMH battery technology. The company also engages in pre-
commercialization activities for various emerging technologies, such as Ovonic solid hydrogen storage
technologies, Ovonic metal hydride fuel cell technologies, and Ovonic biofuel reformation technologies.
Ovonic is developing rugged, kW-scale metal hydride fuel cells targeted at backup and mission-critical power for
military and commercial applications.
The company operates in the United States, Germany, China, Japan, Italy, and internationally. Energy Conversion
Devices was founded in 1960 and is headquartered in Rochester Hills, Michigan.8
Plug Power, Inc., together with its subsidiaries, engages in the design,
development, and manufacture of on-site energy systems for energy
consumers worldwide. It focuses on platform-based systems, which
include proton exchange membrane, fuel cell, and fuel processing
technologies. The company offers its GenCore product, which provides direct-current back-up power for
telecommunication, broadband, utility, and industrial uninterruptible power supply market applications. It is also
developing its GenSys product, which offers remote continuous power for light commercial and residential
applications; prototype fuel cell systems that provide electricity and heat to a home or business; as well as
hydrogen fuel for a fuel cell vehicle. The company's customers include telecommunications companies, utilities,
government entities, and distribution partners. It has strategic partnerships with Honda R&D Co Ltd. of Japan;
Vaillant GmbH; General Electric Company; Engelhard Corporation; and Pemeas. Plug Power was founded in 1997
and is based in Latham, New York.9
In addition to developments in fuel cell technologies, competition in this electrical power generation sector arises
from such companies as Caterpillar, Cummins, and Detroit Diesel: companies that manufacture mature
combustion-based equipment, including various engines and turbines, and have well-established manufacturing,
distribution, and operating and cost features. Significant competition may also come from gas turbine companies
like General Electric, Ingersoll Rand, Solar Turbines and Kawasaki, which have recently made progress in improving
fuel efficiency and reducing pollution in large-size combined-cycle natural gas-fueled generators.
8.4 PERFORMANCE OF FUELCELL ENERGY,INC.
A significant indicator of the health and future prospects of a company is the extent of its on-going R&D work,
efforts to improve productivity, competitiveness, and long-term profitability. FuelCell Energy is working to develop
next-generation fuel cell products focusing on a combined-cycle Direct FuelCell/Turbine (DFC/T) power plant,
Solid Oxide Fuel Cells (SOFC), the co-production of hydrogen, electricity and heat (DFC/H2), and liquid fueled
military applications.
8http://www.energyconversiondevices.com/
9http://www.plugpower.com/
http://www.energyconversiondevices.com/http://www.energyconversiondevices.com/http://www.energyconversiondevices.com/http://www.plugpower.com/http://www.plugpower.com/http://www.plugpower.com/http://www.plugpower.com/http://www.energyconversiondevices.com/ -
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The historical trends related to product revenues and the prospect for future revenues reflected in the backlog of
orders, if any, are also significant indicators of the robustness of an enterprise. The data displayed in Exhibit 8.1
were uniquely developed as part of EquityNets research and show these factors as an indicator of FuelCell
Energys marketplace performance.
Also of note, regarding the status of the company, in 2006, FuelCell Energy was selected by U.S. Department of
Energys National Energy Technology Laboratory to re-direct its Solid State Energy Conversion Alliance (SECA)
program to coal-based solid oxide fuel cell (SOFC) power plant development. The objective of this new 3-phase,
$85 million, ten-year program is to develop multi-MW class SOFC power plants operating on coal-based syngas.10
10See FuelCell Energy, Inc. annual reports athttp://fcel.client.shareholder.com/annuals.cfm.
Exhibit 8.2. FuelCell Energy, Inc. Financial Performance Data
FISCAL YEAR END October 31, 2002 2003 2004 2005 2006
(Dollars in thousands, except per share data)
Product sales and revenues $7,656 $16,081 $12,636 $17,398 $21,514
Research and development contract revenues $33,575 $17,709 $18,750 $12,972 $11,774
Total Revenues $41,231 $33,790 $31,386 $30,370 $33,288
Net loss to common shareholders ($48,840) ($67,414) ($87,407) ($74,263) ($84,222)
Basic and diluted loss per share:
Continuing operations ($1.25) ($1.71) ($1.84) ($1.51) ($1.65)
Discontinued operations $ $ $0.01 ($0.03) $
Net loss to common shareholders ($1.25) ($1.71) ($1.83) ($1.54) ($1.65)Total assets $289,803 $223,363 $236,510 $265,520 $206,652
Total shareholders equity $271,702 $205,085 $202,705 $130,964 $100,795
Total cash and investments $220,538 $153,440 $152,395 $179,960 $120,587
Exhibit 8.1. Marketplace Performance of FuelCell Energy, Inc.
Product Revenue & Backlog
0
2,000
4,000
6,000
8,000
10,000
12,000
12/ 31/ 99 12/ 30/ 00 12/ 30/ 01 12/ 30/ 02 12/ 30/ 03 12/ 29/ 04 12/ 29/ 05 12/ 29/ 06 12/ 29/ 07 12/ 28/ 08
Revenue
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Backlog
Revenue
Backlog
http://fcel.client.shareholder.com/annuals.cfmhttp://fcel.client.shareholder.com/annuals.cfmhttp://fcel.client.shareholder.com/annuals.cfmhttp://fcel.client.shareholder.com/annuals.cfm -
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9.0 INTEGRATION WITH BRIGHTER BIOENERGY PARTNERSWASTE-TO-ENERGY CONVERSION PROCESSES
The primary waste-to-power conversion technology that Brighter BioEnergy Partners is expected to use is plasma
arc conversion potentially in conjunction with bio-digesters for certain biogenic and agricultural wastes. Both
systems produce off-gases with good energy content but with a variable composition depending on waste stream
(feedstock) input and process operating conditions. Such off-gas streams may not be suitable for direct sale or for
injection into natural gas transmission lines without substantial and expensive treatment and measures for qualitycontrol that could impose sub-optimal operating conditions on the primary waste-to-energy system components.
On-site use of the off-gases for electrical power generation, using high-temperature fuel cell technology combined
with an integrated low-level heat recovery, could reduce these project constraints. Five primary indicators point to
the use of such high-temperature fuel cells as the alternative technology of choice, including fuel flexibility,
minimizing environmental impact, energy efficiency, the availability of certain financial incentives to adopt this
technology, and operational safety and reliability. With appropriate contractual arrangements in place, excess
electrical energy produced could be sold into the grid.
Exhibit 9.1. System Concept for Considering Alternatives in Electrical Power Generation
BioEnergy
ConversionSystem(s)
Feedstocks
(Handling / blending)
Raw GasesStream
SolidsStream
WasteStreams
Gas Treatment,Fractionation,
Storage/Handling
Solids Treatment &
Materials Handling
WasteTreatment & Recycle
(on-site)
Feedstock
(backup & energybalance)
Electrical(Grid)
Waste StreamsTDFCoal
Power Generation(Alternatives &/or
Multiple units)
BioEnergy Partners, LLC:Electrical Power Generation Considerations
Last Revised: Oct 27, 2007 / RRG
System - INFLOWS
Utilities
OUTFLOWS(co-products;
minimized waste)
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10.0 MOLTEN CARBONATE FUEL CELL COST TRENDS
10.1 BASIS FOR POWER GENERATION COST COMPARISONS
Around the world, natural gas-fired turbine combined-cycle plants are regularly operating at efficiencies well
above 50%, with a capital cost in the range of about $600 per kilowatt. (Regular steam plants are $1,200 to $1,600
per kilowatt, and nuclear plants cost $1,500 to $3,000 per kilowatt.)
The capital investments needed to support electric-generating capacity growth are substantial. Building 154
Gigawatts of new coal-fueled capacity by 2030 would entail capital investments on the order of $230 billion at an
average capital cost of $1,500 per kW of installed capacity.
These new plants will be subject to stringent EPA requirements including New Source Performance Standards to
reduce emissions of sulfur and nitrogen oxides, particulate matter, and mercury. The Clean Air Act also requires
the use of Best Available Control Technology, determined by states on a case-by-case basis. Roughly one-third of
the capital investment required to build new coal generation capacity is dedicated to air and water pollution
control equipment. Ultimately, these future state-of-the-art generating facilities will lead to a cleaner
environment.11
For geothermal sites in California and Nevada, the capital cost of incremental generation capacity averages about
$3,100 per installed kilowatt (kW). For California sites alone, the average capital cost of incremental generation
capacity may be somewhat lower, at about $2,950 per installed kW. These cost estimates include the following
components:
Exploration (up to siting of the first deep, commercial-diameter well)
Confirmation drilling (up to achieving 25% of required capacity at the wellhead)
Development drilling (up to achieving 105% of required capacity at the wellhead)
Construction of the power plant (including ancillary site facilities)
Transmission-line costs
The capital cost for specific geothermal projects ranged from about $1,000 per kW (for a small expansion at an
existing project), to values in excess of $6,000 per kW (for deep, low-temperature resources at remote locations).Of the 4,300 gross MW of most-likely incremental capacity available from both California and Nevada, about 2,500
gross MW is available at a capital cost less than the average of $3,100 per kW. Considering geothermal fields only
within California, about 2,000 gross MW of incremental generating capacity is available at a capital cost below the
average of $2,950 per kW.12
Recently, there has been a great deal of attention focused on fuel cells and their high thermal or thermodynamic
efficiencies, often quoted in the 50 to 70 percent range. But when the need to externally produce mostly pure
hydrogen from a hydrocarbon fuel is included, overall thermal efficiencies can drop to about 30 percent for a 200
kW unit, with capital cost of as much as $5,000 per kilowatt. Molten carbonate fuel cells (MCFCs) internally reform
gas into the hydrogen gas required to power the fuel cell system, and this internal reformation process is a key
ability to operations with high electrical power generation efficiency.
10.2 12-YEAR TREND IN MCFC-BASED INSTALLED CAPACITY COST
With both the technical feasibility demonstrated and compatibility of the use of fuel cells (MCFC) with the
technologies for waste-to-energy conversion anticipated by Brighter BioEnergy Partners appearing to have
11http://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdf
12www.geothermal.org/articles/Lovekin.pdf
http://64.226.55.6/technology.phphttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://64.226.55.6/technology.php -
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numerous advantages, the likely determining factor for the adoption of MCFC for use in their project will be costs
for both installed capacity and operational.
The cost for installed capacity for MCFC has consistently trended downward for more than a decade (Exhibit 10.1
below), while costs for certain other systems have increased, largely due to increasing requirements to meet
environmental constraints.
Comments made previously in Section 3.0 of this report concerning the impact of natural gas pricing on energycosts are ameliorated to a large degree in the Brighter BioEnergy Partners proposed project. The fuel gases in
that project are to be produced from multiple waste streams (and may reasonably be taken to be renewable
energy sources independent of pressures on natural gas pricing).
Operational costs for MCFC-based power generation facilities (of the size anticipated by Brighter BioEnergy
Partners) are projected to be similar to those for other power generation plants, but they may be substantially less
where fuel (natural gas) costs are included. Projections for technical improvements that will extend the present
40,000-hour charge life and maintenance cycle ratings demonstrate the potential to further reduce MCFC
operational costs.
Exhibit 10.1. Fuel Cell (MCFC) Market Price: Trending Towards Grid Parity
Source: FuelCell Energy (including projections from 2006 through 2009).
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11.0 CONCLUSIONS AND RECOMMENDATIONS
This study and analysis were designed to provide essential, independently-(non-vendor)-derived information as a
sound basis for selecting an optimal electrical power generation technology for integration into the waste-to-
energy conversion project being considered by Brighter BioEnergy Partners, LLC.
Using explicit criteria for the identification and qualification of alternative electrical power generationtechnologies, the use of high-temperature (molten carbonate) modular fuel cells is identified as presenting the
greatest opportunity. This type of fuel cell, as produced and placed into commercial service by FuelCell Energy, is
specifically identified as a best fit to the selection criteria.
A recommendation for a possible next phase of design studies and more detailed engineering and cost analysis are
provided assuming a conventional three-phase approached as outlined below. This technology assessment serves
as the Level I Analysis.
Level I Analysis (Alternatives Identification and Screening Analysis)
The primary purpose of the Level I analysis is to establish whether a technology is potentially a "good candidate"
for use in a proposed project. After the identification of candidate technologies against a set of predeterminedproject criteria, this level of analysis typically uses "rules-of-thumb" or typical performance characteristics of
various technology systems and averages of annual costs. Level I analysis may also provide rough estimates of
energy cost savings, installed cost, and payback period for selected technologies. The cost accuracy of this level of
analysis is, at the best, 30 percent.
If results of Level I analysis are encouraging, these should be discussed with potential project participants. During
these discussions, it is important to point out the "limited accuracy" of this level of analysis. If all section criteria
are met and the potential payback period, and capital cost needs are acceptable to the project participants and
decision makers, then it may be recommended that a Level II analysis be conducted.
Level II Analysis (Conceptual Design and Preliminary Financial Analysis)
The purpose of the Level II analysis is to ascertain with a much higher degree of confidence that a technology
system is technically and financially viable. This level of analysis is performed using a detailed engineering and
financial model that uses, at least monthly (but preferably projected hourly) energy load profiles. The results of
this level of analysis are estimates of annual cost savings based on the profiles generated by the model. A few
software tools are available for performing some of the Level II modeling, systems simulation, and analysis. The
scope of this level of effort also includes developing one-line drawings for the conceptual design (including
equipment sizes). The cost accuracy of Level II estimates is typically about 20 percent.
The results of Level II analysis should be discussed in detail with project participants and decision makers. If the
results of the analysis are still attractive and do not reveal any "show-stoppers," even after another site walk-
through for a more detailed site evaluation, and the end user continues to be interested and has the financial
capability to move forward, a contract should be considered to have an experienced A&E firm conduct the next
level (Level III) analysis.
Level III (Detailed Engineering Design and Analysis)
The purpose of this level of effort is to perform a detailed engineering analysis and develop firm cost estimates for
the project. In this level of effort, detailed procurement specifications are developed for all system components,
cost bids are obtained for those components, and all costs relating to environmental and other permits are also
developed.
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Based on the estimates of firm costs, revised estimates are developed for a payback period and return on
investment. Many (if not most) projects that reach this stage are ultimately implemented.
Based on the results of this study and analysis, it is recommended that Brighter BioEnergy Partners and its
associated enterprises and agencies, after due consideration of the present study and analysis, undertake a Level II
Design and Analysis as its project planning proceeds.
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12.0 APPENDIX
12.1 REFERENCES AND IDENTIFICATION OF SOURCE MATERIALS
Energy Information Administration, U.S. Department of Energy, Electric Power Annual with Data for 2006, 2007;
http://www.eia.doe.gov/cneaf/electricity/epa/epa.pdf
Henning, Bruce, Michael Sloan, and Maria de Leon, Natural Gas and Energy Price Volatility , American Gas
Foundation for the Oak Ridge National Laboratory, 2001;
http://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdf
Lovekin, Jim, Geothermal Inventory: New Study Highlights Geothermal Resources Available for Development in
California and Nevada, November-December 2004 GRC Bulletin, California Energy Commission, pp. 242-244;
www.geothermal.org/articles/Lovekin.pdf
National Energy Technology Laboratory, U.S. Department of Energy, Fuel Cell Handbook, University Press of the
Pacific, 2005; ISBN-13: 978-1410219602
Fuel cells are an important technology for a potentially wide variety of applications including micropower,auxiliary power, transportation power, stationary power for buildings and other distributed generation
applications, and central power. These applications will be in a large number of industries worldwide.
This edition of the Fuel Cell Handbook is more comprehensive than previous versions in that it includes
several changes. First, calculation examples for fuel cells are included for the wide variety of possible
applications. This includes transportation and auxiliary power applications for the first time. In addition,
the handbook includes a separate section on alkaline fuel cells. The intermediate temperature solid-state
fuel cell section is being developed. In this edition, hybrids are also included as a separate section for the
first time. Hybrids are some of the most efficient power plants ever conceived and are actually being
demonstrated. Finally, an updated list of fuel cell URLs is included in the Appendix, and an updated index
assists the reader in locating specific information quickly.
Sammes, Nigel, Fuel Cell Technology: Reaching Towards Commercialization (Engineering Materials and
Processes), Springer, 1st edition, 2006; ISBN-13: 978-1852339746 (Fuel Cell Technology is a one-volume survey of
the state-of-the art research in fuel cells.)
Singhal, S. C. and K. Kendall (eds.), High-temperature Solid Oxide Fuel Cells: Fundamentals, Design and
Applications, Elsevier Science, 1st edition, 2004; ISBN-13: 978-1856173872
The growing interest in fuel cells as a sustainable source of energy is pulling with it the need for new
books to provide comprehensive and practical information on specific types of fuel cell and their
application. This landmark volume on solid oxide fuel cells contains contributions from experts of
international repute and provides a single source of the latest knowledge on this topic. (Amazon Review).
Trisko, Eugene M., America Needs New Power Plants!, 2006;
http://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdf
http://www.eia.doe.gov/cneaf/electricity/epa/epa.pdfhttp://www.eia.doe.gov/cneaf/electricity/epa/epa.pdfhttp://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdfhttp://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.ceednet.org/docs/America%20Needs%20New%20Power%20Plants%20-%20Trisko.pdfhttp://www.geothermal.org/articles/Lovekin.pdfhttp://files.harc.edu/Sites/GulfCoastCHP/Publications/NaturalGasEnergyPriceVolatility.pdfhttp://www.eia.doe.gov/cneaf/electricity/epa/epa.pdf -
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12.2 EXCLUSIONS,CONTACT INFORMATION, AND DISCLAIMERS
Exclusions
The information provided to Brighter BioEnergy Partners in this Study and Analysis does not provide or nor does it
include:
Detailed engineering design;
Business planning or strategic market analysis or planning;
Comprehensive development plan evaluation or validation other than as it provides the context for
technology identification and potential for future deployment; nor
Comprehensive determination of potential patent(s) infringement.
Contact Information
FuelCell Energy, Inc.
Global Headquarters
3 Great Pasture RoadDanbury, CT 06813
203-825-6000
Manufacturing Facility
539 Technology Park Drive
Torrington, CT 06790
860-496-1111
Contacts providing information for this Report:
Andy Skok (Canada)
Technical Product & Marketing203.825.6068
John Franceschina (New York)
Technical & Business Development631.574.4458
Disclaimer
This report is for an initial study and analysis of alternatives in electrical power generation technologies to
specifically complement Brighter BioEnergy Partners waste-to-energy conversion system including certain
elements of an assessment of technologies. It does not constitute or provide a level of information adequate to
stand alone in consequential business decision making, nor should it be considered to be a substitute for an
analysis of the proponents business plan as would be done in full investor due diligence.
12.3 ASSUMPTIONS AND LIMITING CONDITIONS
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CONFIDENTIAL & PROPRIETARY 25
This study will be based upon information obtained from sources that, with exceptions, if any, as noted herein, the
consultants believe to be reliable. However, the consultants will not make a specific effort to confirm the validity
of any of the information, and accordingly, its accuracy or completeness cannot be guaranteed.
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12.4 ATTACHMENTS
FuelCell Energy, Inc. Contact Information Sheet
FuelCell Energy, Inc. SEC 8-K form, December 11, 2007 (most recent financials filing)
DFC300MA Product Specifications
DFC1500MA Product Specifications
(NOTE: These attachments are not included in this sample reported as accessed via the EquityNet research
services webpages.)