Pepperidge Farm, Equinix bet big on the power of fuel cells

Over the past 18 months, stationary fuel cell technology hasn’t generated as much digital ink as other emerging commercial power alternatives, particularly energy storage devices that complement on-site renewables. That’s changing.

Better financing options and successful pilot tests have sparked a recent spate of prominent new customer commitments for two of the most visible suppliers, FuelCell Energy (FCE) and Bloom Energy.

Exhibit A: Bloom’s deal in late May with data center operator Equinix, which is placing a one-megawatt capacity, biogas-powered fuel cell at its facility in Silicon Valley. The installation will provide about 8.3 million kilowatt-hours of energy to the site. Currently, Equinix sources about 30 percent of its power from clean, renewable sources. Its ultimate goal is 100 percent. For perspective, the company’s operations consumed 2,200 gigawatt-hours of electricity in 2014.

Just as intriguing, however, is Pepperidge Farm’s new contract for a 1.4 megawatt Direct FuelCell from FCE, one of the few publicly traded companies serving this market. That’s because the food company is a repeat customer: Its first installation with FCE at a bakery in Bloomfield, Conn., has been up and running since 2008.

“The addition of this low-emission fuel cell power plant to complement our existing fuel cell installation further enhances our sustainability profile, reflecting our strong commitment to the environmental welfare of the communities in which Pepperidge Farm and our parent, Campbell Soup, operate,” said Harry Pettit, a Pepperidge Farm manager of systems and infrastructure engineering, in a statement.

The new system will be installed adjacent to the existing one; it is covered by a power purchase agreement (PPA) and is scheduled to commissioned by the end of 2015. Roughly speaking, the two cells will supply enough power to run the commercial bakery off the grid, with solar serving as a peak backup option. Pepperidge Farm discusses the benefits in environmental terms: together, the two power plants will reduce the company’s carbon dioxide (CO2) emissions by about 9,400 tons compared with using grid power.

Friendly investment climate

The new Pepperidge Farm project was eligible for a grant under the Connecticut Low and Zero Emissions Renewable Energy Credit program, which helped offset some of the upfront costs.

Indeed, the state’s friendly environment recently inspired a smaller Bloom project at cable giant Comcast’s headquarters, which went live in late April. The capacity of that system is 400 kilowatts; it will generate 3 million kilowatt-hours of power per year, or about 80 percent of the facility’s load. Aside from environment benefits, resiliency was cited as a motivation for the installation.

FCE CEO Chip Bottone said the recent burst in his company’s activity can be attributed to the successful maturation of pilot projects (such as the one at Pepperidge Farm) that are demonstrating real savings in power costs. In addition, the company is becoming more involved with utilities that are investing in renewable energy operations. “We now have money chasing projects,” he said.

In 2013, revenue attributed to “stationary” fuel cells (as opposed to technologies for cars and other applications) reached $1.4 billion, according to data from Navigant Research. Sales could reach $40 billion by 2022, the firm predicts. 

“Expected to break through the $2 billion mark in annual revenue in 2014, stationary fuel cells are seeing increased financing options for adoption, particularly in the healthy residential combined heat and power segment,” said Navigant analyst Mackinnon Lawrence, in a statement.

The company hasn’t published an update to that figure, and there has been some modicum of shakeup. Another high-profile company, ClearEdge Power, was acquired last year after declaring bankruptcy.

FCE has about 300 megawatts of power generation capacity installed or under contract, according to its corporate backgrounder. In the first quarter, the company closed orders worth 7.4 megawatts. “The bigger the plant, the bigger the impact, the better the value, the more affordable the solution,” Bottone said.

Many of FCE’s projects are at hospitals, universities and manufacturing facilities that have discrete power needs and where space considerations make it difficult to opt for options such as on-site solar or wind. “We have obvious attributes that make us attractive in populated areas with density concerns,” he said.

Bloom doesn’t specifically reveal how many installations it has managed to complete, although the company’s high-profile customers include Apple, Google, eBay, Kaiser Permanente and Walmart. The company, founded in 2001, remains relatively secretive. Still private, it has raised at least $1.2 billion.