Long-awaited fuel cell park at sub base becomes commercially operational for CMEEC

The Day

By Erica Moser

January 07, 2023


Groton ― After many delays, the fuel cell park at the Naval Submarine Base has become commercially operational at 6 megawatts, and designer-manufacturer FuelCell Energy is working to get the power generation project to its initial plan of 7.4 megawatts by the end of the year.

The natural gas-fired project, on less than an acre, will supply power to members of the Connecticut Municipal Electric Energy Cooperative and create more reliable electric service to the base from CMEEC member Groton Utilities. CMEEC announced last month that the project achieved commercial operations effective Dec. 16.

CEO Dave Meisinger explained that the sub base is leasing the land to CMEEC, which is subleasing it to FuelCell.

Tony Leo, chief technology officer for FuelCell, explained that fuel cells make electricity but without burning fuel, meaning they don’t produce pollutants such as nitrogen oxide or sulfur oxide. They also emit less carbon dioxide per kilowatt hour.

Leo said the term “fuel cell park” has come to be used for projects with more than one fuel cell, and the sub base has two.

CEO Jason Few said FuelCell projects produce more than 220 megawatts at more than 50 sites worldwide, including the Pfizer site in Groton. The 15-megawatt platform in Bridgeport is the largest fuel cell park in the country.

He said there aren’t people on-site at operational fuel cell parks but the company has a team at its Danbury headquarters monitoring platforms 24/7, and if there was an issue, FuelCell would deploy its field services team.

Providing energy security for the Navy

“The Fuel Cell Park supports energy security and resiliency efforts,” sub base spokesperson Chris Zendan said in an email. He said it supports the base’s “ultimate goal of establishing a new cyber-secure, micro-grid” and “ensuring power to mission-critical operations in the event of a community utility grid disruption.”

CMEEC said in its news release that the fuel cells support the base’s ability to “island” its power supply in the event of a broader grid outage. Meisinger explained this means the base could be isolated from the rest of the grid “and then utilize any output that’s available from the fuel cell project.”

Connecticut Office of Military Affairs Executive Director Bob Ross, who helped secure approval for the project, said the fuel cell park “is one part of a much larger, comprehensive energy strategy for the base.”

Ross said there is also work being done on lower base to produce more power. Zendan said the base has also been addressing energy costs through improvements to heating and ventilation systems, lighting and steam systems.

“Cost savings created ashore free up dollars that can be used in the fleet to support operations and improve the tactical performance of forces,” Zendan wrote.

Project cost and estimated savings

FuelCell took on the costs of building the project, and Few said over the course of the company’s 20-year power purchase agreement with CMEEC, FuelCell gets paid for energy produced. He added that FuelCell can take advantage of investment tax credits because its products are considered clean energy.

As of April 2019, the project was estimated to cost $30 million, but Few ― who became CEO of FuelCell later in 2019 ― declined last week to provide an updated cost.

In July 2018, CMEEC Executive Director Drew Rankin estimated the fuel cells would allow CMEEC to save between $1 million and $2.5 million per year for the next 20 years. But Meisinger said last week he wouldn’t use those numbers anymore, that they were “based on a different view of the market and different circumstances.”

Meisinger said in a follow-up email, “For the first five years, we anticipate savings for CMEEC’s member municipal utilities in the neighborhood of $400K to $1.5M per year, again subject to ever-changing market conditions, particularly market pricing for natural gas and wholesale electricity.”

Why the delay(s)?

Ross said in September 2019 that top Navy officials see this as a model that could be replicated across the country. And Ross said last week it is being replicated elsewhere.

Ross said he thinks he first proposed this microgrid project to the Navy in 2010 and commented, “It’s been a long, long haul to get this done, but I’m glad that we are getting it done.”

The 7.4-megawatt project had already been years in the works by 2017, when the Navy and CMEEC signed a 20-year power purchase agreement. Capt. Paul Whitescarver, commanding officer of the sub base at the time, said back then that energy costs were about 25% of the annual operating budget of the base.
Whitescarver challenged FuelCell Chief Financial Officer Mike Bishop to complete the project by the time his tour ended in January 2019, and Bishop said the company was “absolutely up for this challenge.”

In July 2018, people involved in the project held a groundbreaking at the fuel cell park site, adjacent to the power substation on base. At this time, the project was expected to be complete by the end of May 2019.

But as of April 2019, the expected completion date was March 2020, due to FuelCell finding more granite at the site than anticipated and needing to blast. Few commented last week, “Getting a permit and agreement from the Navy, to use dynamite, on a military base, is quite involved.”

Work was then stalled in the summer of 2019 because FuelCell didn’t have money to pay its contractors, due to liquidity issues and lack of access to working capital.

Few also said this week that while FuelCell usually takes about 12 months to build a platform, working on a Navy base means “the project itself is a bit more involved from a project management perspective” because anyone working on base needs clearance.

He said after FuelCell built the platform and started the commissioning process ― to get it operational ― it ran into high-temperature issues.

According to FuelCell’s 10-K filing with the U.S. Securities and Exchange Commission dated Dec. 20, 2022, the company disclosed on Sept. 14, 2021 that the process of commissioning the project “was temporarily suspended due to a needed repair.”

FuelCell completed this repair but then “observed operating parameter data from one of the two fuel cell platforms installed at the project site that indicated a mechanical component was not performing according to engineered specifications.”

On April 7, 2022, FuelCell announced it fixed and reinstalled the component but “encountered performance anomalies” in a piece of equipment that optimizes fuel and air flows. To expedite reaching commercial operations, the company proposed starting at 3 megawatts for each of the two platforms, while optimizing performance of the equipment in question.

On Dec. 16, FuelCell entered into an amended and restated power purchase agreement (PPA) with CMEEC, which involved paying CMEEC an amendment fee of $1.225 million.

The SEC filing says the revised PPA allows FuelCell to operate at 6 megawatts while a Technical Improvement Plan is implemented, with the goal of bringing the platform to 7.4 megawatts by Dec. 31.

The filing said “no assurance can be provided that such work will be successful,” and if the plant doesn’t reach 7.4 megawatts by the end of 2023, FuelCell “will be subject to ongoing performance guarantee fees.”

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