GE Power Systems Jumps on Distributed Power Bandwagon
GE Power Systems and Plug Power have signed a memorandum of
understanding to form "GE Fuel Cell Systems," a joint venture that
will sell, install and service Plug Power-designed and manufactured
fuel cell systems. The announcement last week follows Plug Power's
recent demonstration of a prototype residential fuel cell system
that produces more than enough power to meet the energy
requirements of an average-sized home.
Plug Power said that its initial units will operate on natural
gas, propane or methanol and can achieve 40% electrical efficiency
in simple-cycle operation. When excess heat generated by the fuel
cell is captured and re-used, overall efficiency can reach 70-85%.
Under the terms of the understanding, GE Fuel Cell Systems will
distribute Plug Power fuel cells for residential and small
commercial power applications. GE will be Plug Power's exclusive
distributor for fuel cell systems worldwide, except for Michigan,
Indiana, Ohio and Illinois. As part of its fuel cell
commercialization approach, GE plans to partner with a select
number of gas distribution companies, electric utilities, electric
service companies and power marketers. All fuel cell products sold
by GE will carry both the GE and Plug Power brands.
"Commercializing innovative new technologies is part of our
strategy to build the GE brand across a wider range of product and
service solutions for the entire energy industry," said Robert L.
Nardelli, president and chief executive officer of GE Power
Fuel cells offer a clean, quiet and cost-effective alternative
for customers looking to eliminate the cost and inconvenience
associated with unexpected power outages. In many areas, fuel cells
also will provide an attractive alternative to grid-supplied power,
with three- to five-year paybacks possible.
Fuel cells operate by converting fuels such as natural gas or
propane to electricity through an electrochemical process, rather
than combustion. The benefits of fuel cells include high
electrical efficiency and reliability, low operating and
maintenance costs, and near zero emissions of particulate matter
and other pollutants. Fuel cell systems can be sized to match
consumers' specific energy requirements.
"Partnering with GE gives us access to the technical expertise,
market presence, service infrastructure and brand recognition of
the world's leading energy technology and services company," said
Gary Mittleman, Plug Power president and CEO.
In June, Plug Power demonstrated its proprietary Plug Power
7000, a 7-kilowatt (kW) residential power system. The demonstration
marked the first time a fuel cell has been used to meet a home's
complete electricity requirements. The sale of test units is
expected to begin early next year, followed by commercial units in
the year 2000.
To date, fuel cells have not been a desirable option for on-site
power generation, due to their relatively high cost. Prices are
expected to fall dramatically, however, as production volumes
increase and manufacturing efficiencies are achieved. In mass
production, a residential fuel cell system is expected to retail
for $3,000-5,000. At these prices, fuel cells can generate
electricity at 7-10 cents per kilowatt hour, depending on the fuel
costs in a given market. Plug Power (http://www.plugpower.com) is a
joint venture between DTE Energy, the parent of Detroit Edison, and
Mechanical Technology Inc., an early developer of fuel cell