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GE Power Systems Jumps on Distributed Power Bandwagon

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 Systems.

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 technologies.

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