BP to install $6.5 million fuel cell in Nikiski

Posted: Friday, August 17, 2001

BP has announced plans to test more than its process for converting natural gas to synthetic crude oil at the experimental plant under construction in Nikiski.

With help from the federal government and the National Rural Electric Cooperative Association, BP is buying a $6.5 million, 250 kilowatt fuel cell to power the plant's administration building and warehouse, spokesperson Paul Laird said during a Thursday meeting at the Challenger Learning Center of Alaska in Kenai.

"With the addition of this fuel cell technology, our facility at Nikiski is really becoming a very important test facility for BP... and one in which I think we will continue to add new technology -- things that are currently in the lab we see being developed further," said Shane O'Leary, BP gas-to-liquids program manager. "... This is our test center for gas-to-liquids worldwide, and this is also our first solid-oxide fuel cell."

Jeff Rinker, BP hydrogen fuels program manager, said fuel cell technology fits BP's goal of meeting growing world demand for energy without increasing impacts to the environment. BP has committed to reducing its own emissions of greenhouse gases by 10 percent by 2010 and to eliminating the flaring and venting of gases, he said.

"How do we grow the company without growing the amount of carbon we're putting into the environment? One of the ways we do that is going to be technology," he said. "Solid-oxide fuel cell technology gives you the promise of ... local power generation with virtually no local pollutants and a dramatic reduction in even the greenhouse gas production."

The prototype fuel cell BP is buying from Siemens Westinghouse has a 45 percent efficiency. In other words, it releases 45 percent of the energy produced by oxidizing its fuel as electricity. That is a big improvement over the 30 percent efficiency of diesel generators.

The fuel cell produces a third less carbon dioxide per kilowatt hour than diesel generators, and it virtually eliminates release of pollutants such as carbon monoxide, nitrous and sulfur oxides, particulates and unburned fuel.

Rinker said BP generates its own power at offshore platforms and remote facilities, including many in Alaska. Finding a way to generate power more efficiently while reducing emissions of greenhouse gases and local pollutants is exciting, he said.

BP will not be the only beneficiary of the prototype project in Nikiski. Villages and industry across Alaska have big needs for local power generation.

O'Leary said BP is paying $4 million of the fuel cell's cost. The U.S. Department of Energy is contributing $2 million, and Chugach Electric Association has secured a $450,000 grant from the Cooperative Research Network of the National Rural Electric Cooperative Association, whose membership includes the Chugach and Homer electric associations.

Chris Forbes, manager of stationary fuel cell sales and acquisitions for Siemens Westinghouse, said BP's fuel cell will be roughly 36-feet long, 10-feet tall and 8 1/2-feet wide and fueled with Cook Inlet natural gas.

The process has three main steps. First, the natural gas reacts with steam to produce hydrogen gas and carbon monoxide. Those gases pass through bundles of inch-wide tubes. There, they react with oxygen, producing carbon dioxide, water vapor and energy. Forbes said about half the energy is released as direct current electricity, about a third as usable heat and about a fifth as unusable heat lost with the exhaust.

Finally, an inverter converts the DC power to alternating current.

Siemens Westinghouse already is testing two 25 kilowatt and 220 kilowatt prototype fuel cells at the University of California Irvine and a 100 kilowatt prototype in Essen, Germany. It is installing 250 kilowatt prototypes at BP's Nikiski plant and also in Toronto and Norway.

The solid oxide technology is not economically viable at present, Forbes said. Diesel powered generators cost about $1,000 per kilowatt hour, and a 250-kilowatt-hour model would cost around $250,000 -- far less than the BP's $6.5 million fuel cell.

However, Siemens Westing-house is refining its design and manufacturing methods and expects to begin taking commercial orders in about a year. Its first commercial fuel cells will cost around $4,000 per kilowatt hour, Forbes said. He expects the cost to fall to about $1,000 per kilowatt hour by 2010.

However, because fuel cells are cleaner and more efficient than diesel generators, they probably can compete before the price reaches $1,000 per kilowatt hour.

Other fuels -- diesel, jet fuel, methanol, ethanol and naptha -- could fire fuel cells. The main problem with diesel is its sulfur content, which the solid-oxide fuel cell cannot handle, Forbes said. Siemens Westinghouse is working with other companies to reduce the size and cost of equipment used to remove the sulfur. He said he does not know when the company will be able to offer diesel-powered fuel cells.

His company also is developing fuel cells with turbines to convert waste heat to electricity. That could boost their efficiency to 60 or 70 percent, he said.

BP's fuel cell should begin running in mid-2003. BP expects to use about 150 kilowatts of its output and will feed the other 100 kilowatts into the Homer Electric grid.

Don Stead, the utility's engineering manager, said that any power BP feeds back will be deducted from the bill for the 4 megawatts BP expects to buy from HEA.

Utility managers said fuel cells could be placed anywhere in the power grid to increase reliability. HEA could use them not just in remote communities such as Nanwalek and Seldovia, but also in Kenai, Nikiski or Homer, Stead said.

"Anywhere we have a line, we could use fuel cells," he said.

Sandra Ghormley, HEA manager of marketing and member relations, said the utility soon may offer residential fuel cells to customers who cannot connect to HEA distribution lines at a reasonable cost. The average home consumes 2-5 kilowatts. HEA soon will begin testing a 4.5 kilowatt fuel cell at its Kenai office. Stead said that will cost $25,000, but he expects HEA will be able to supply similar fuel cells to customers for much less.

"You can see why we're very excited about BP, because we'll learn from what they're doing," Ghormley said.

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