Fuel Cells for Stationary Power

Generation
A Comprehensive Analysis of Technology, Plant Construction, and
Marketing Strategy for Small Buildings

The University of Oklahoma

Fuel Cell Corporation

April 29, 2004 7OL

2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
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 The OUFCC Product
The OUFCC offers the following services with the purchase
of at least one stationary 200-250 kW fuel cell:

– All fuel cell “plant” parts (reformer, power conditioner, etc.)

– On-site consultation to suggest infrastructure changes,
determine the best source of fuel, and help customer
choose fuel cell type.
Phosphoric Acid Fuel Cell (PAFC)
Solid Oxide Fuel Cell (SOFC)
Proton Exchange Membrane Fuel Cell (PEMFC)

– Delivery
– Trial-period of one year
– Warranty period of two years 7OL
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 Fuel Cell Advantages
The OUFCC will fill the need of supplying a source
of electricity that has the following advantages:
– High efficiency and cogeneration applications
– Reliable
– Independent of a power grid
– Optionally dependent on fossil fuel
– Few maintenance costs
– Clean

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 The Market
Main customers: Most Probable Location:
– Hospitals – High No. of Businesses
– Banks – High Air Pollution Levels
– Post Offices – High Electricity Price
– Police Stations – Away from markets already
targeted

Our largest market is in the Southwest

(AZ, NM, OK, TX)
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 Technology Competitors
Technology Commercially Cogen Cost ($/kW) NOx Efficiency
Available? Available? Emissions (%)
(ppm)
Fuel Cells Yes Yes 4000-4800 0 60-85%

Microturbines Yes Yes 700-1100 50 20-30%

Combustion Yes Yes 300-1000 150-300 20-45%

Turbines
Reciprocating Yes Yes 300-900 45-200 25-45%
Engines
(Generators)
Stirling No Yes 2000-50,000 Low 12-20%
Engines
Photovoltaic Yes No 6000-10,000 0 5-15%
Systems 7OL
Wind Systems Yes No 1000 0 2<)&&
20-40%
 The OUFCC’s Goals
Current Goals:
Enter the stationary fuel cell market, make a
profit, and establish a name and reputation.

Future Goals:
Develop a niche market. Eventually, as fuel
cell technology becomes more widely
accepted, compete as a leading provider of
stationary fuel cells.
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2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
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 What are fuel cells?
• Electrochemical devices
• Convert chemical energy directly to
electricity and produce heat, with the
help of catalyst
• Similar to batteries in operation
• Difference: batteries store energy while
fuel cells produce electricity

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 History of Fuel Cells

• 1932: First successful fuel cell

device was developed.
• 1959: A practical 5-kW fuel cell
system was demonstrated.
• In more recent decades, fuel cell
energy has been expected to
replace traditional power sources.

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A Fuel Cell System

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 How Fuel Cells Work

Catalyst

•Anode Side 2H2 Catalyst

 → 4H+ + 4e-

•Cathode Side O + 4H+ +4e- Catalyst

 → 2H2O
2

•Net Reaction 2H2 + O2 Æ 2H2O

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Hydrogen Proton
Oxygen
Electron

Heat

Water

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Electrochemical Reactions for Diff. Types of Fuel Cells

Solid Oxide Fuel Cell

Phosphoric Acid and

Proton Exchange
Membrane Fuel Cells

Molten Carbonate
Fuel Cell

Courtesy of National Fuel Cell Research Center 7OL

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Block Diagram of Fuel Cell System

Produces H2-rich Produces DC Converts DC to

gas electricity AC electricity

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Courtesy of DoDFuelCell-Library Resources
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
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Fuel Cells: Stationary Power
Generation
• Phosphoric Acid Fuel Cell (PAFC)

• Solid Oxide Fuel Cell (SOFC)

• Proton Exchange Membrane Fuel Cell (PEMFC)

• Molten Carbonate Fuel Cell (MCFC)

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 Fuel Cell Types
PHOSPHORIC ACID FUEL CELL (PAFC)
• Electrolyte: Concentrated Phosphoric Acid
• Most mature technology and widely diffused
• Supplied stationary power
for 10 yrs
• Dimensions: 5.5m X 3m X 3m
• Manufacturing Cost: $575,000

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 Fuel Cell Types
SOLID OXIDE FUEL CELL (SOFC)
• Electrolyte: solid metal oxide
• Excellent cogeneration capabilities
• Most desirable
• Dimensions: 6m X 3m X 3m
• Mfg. Cost: $524,800

Courtesy of Global Thermoelectric Inc.

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 Fuel Cell Types
PROTON EXCHANGE MEMBRANE FUEL CELL
(PEMFC)
• Electrolyte: solid perflurosulfonic acid polymer
• Newest technology
• Lower Operating Costs
• Quick Start-Up
• High Sensitivity to Fuel
• Dimensions: 5.4m X 3m X 3m
• Manufacturing Cost: $590,600

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 Fuel Cell Types
MOLTEN CARBONATE FUEL CELL
(MCFC)
• Electrolyte: liquid lithium-potassium
carbonate salt
• Electrode corrodes @ high temp.
• Currently in low demand
• Fuel and catalyst flexibility

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 Fuel Cell Analysis
Criteria Phosphoric Molten Solid Proton
Acid Carbonate Oxide Exchange
Efficiency 37% - 42% 50% - 55% 50% - 60% 50%

Operating Temp. 370 - 410°F 1200°F 1800°F 175°F

Durability/Corrosion Catalyst Electrode No poison Catalyst
Issues poisoned @ corrodes @ or corrosion poisoned @
low temp. high temp. low temp.
Start-Up Time 1 – 4 hr 8 – 10 hr 5 – 10 hr 6 min
Peak Power Density ~ 200 mW/cm2 ~ 160 ~ 200 ~ 700 mW/cm2
mW/cm2 mW/cm2
Availability of Raw Massachusetts limited Ohio Massachusetts
Materials

Cost of Raw $560/kW $780/kW $377/kW $750/kW

Materials 7OL
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Fuel pure H2 flexible flexible pure H2
 Fuel Cell Challenges
• Expensive System

• Conservative Market

• Unproven Market and Technology

• Fuel Supply
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Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Types of Products Manufactured

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model
Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
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Hydrogen Production Fuels

• Gasoline/Diesel
• Coal
• Biogas
• Electrolysis of H2O
• Methanol/Ethanol
• Natural Gas

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 Natural Gas Reforming

• Availability
• Mature Infrastructure
• Low Emissions
Halias Natural Gas Reformer
for 7.5 kW PEMFC,
ChevronTexaco

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Steam Reforming Process
CH 4 + H 2O → CO + 3H 2
CO + H 2O → CO2 + H 2
• Purpose
– Center of reforming process convert CH4
to H2 using steam.
• Method
– High Temperature ~ 800 ºC
– Use H2O to push equilibrium towards
products
– Nickel Oxide 4 hole cylinders
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 The Problem of Carbon
Monoxide
CO + H 2O ↔ CO2 + H 2
• Purpose
– Convert Carbon Monoxide Byproduct of
Steam Reforming
• Method
– Two reactors with different…
• Temperatures (T1 ~ 450 °C, T2 ~ 225 °C)
• Catalysts (chromia promoted iron oxide
pellets, copper-zinc oxide pellets)
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 The Problem of Sulfur
(C2 H 5 )2 S + 2 H 2 → 2C2 H 6 + H 2 S
H 2 S + ZnO → ZnS + H 2O
• Purpose
– Reduce Sulfur content of gas
• Method
– Cobalt-Molybdenum extrudes
– ZnO spheres to remove H2S
– 300-400 °C

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Fuel Cell Design Requirements
• SOFC
– Sulfur reduction to less than 1 ppm
• PAFC
– Sulfur to less than 50 ppm
– CO to less than 0.5 mole %
• PEMF
– Sulfur to less than 1 ppb
– CO to less than 10 ppm
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 To Build or Not to Build
9 Benefits Disadvantages
9 Lower Per Unit Cost Increased Capital
9 Opportunities for Investment
Process Integration Catalyst
9 Increased Design Regeneration and
Flexibility Handling
Diffuse Market
Focus

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Potential Reformer Suppliers
• Ztek Corporation • ChevronTexaco
– East Coast – West Coast
– Flexible Fuel Stocks
• Gasoline
– Fuel Stocks
• Natural Gas • Natural Gas
– 4000 SCF H2 produced • Propane
per hour. – Currently under
– 2 m by 4 m by 2 m scaled
– Estimated cost of • Only 250 SCF H2
$125,000 based upon per hour
Department of Energy • 1.5 m by 1 m by 1 m
study.
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2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
2<)&&
 Fuel Cell Manufacturing
Processes
• PAFC
– Teflon bonded silicon carbide matrix
suspends the phosphoric acid
• PEMFC
– MEA is created through polymer
processes
• SOFC
– Cathode, anode, and electrolyte are all
produced from powder solutions 7OL
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 SOFC Raw Materials
• Electrolyte – ZrO2(Y2O3) powder
• Cathode – doped LaMnO3 powder
• Anode – Ni-ZrO2(Y2O3) powder
• Other Materials
– Solvents
– Binders
– Plastisisers
– Cr Alloy
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 Process Flowchart for SOFC
Binder Solvent ZrO2(Y2O3)

Binder Solvent Doped LaMnO3

Ball Milling

Tape Casting Triple Roll Milling

Binder Solvent Ni-ZrO2(Y2O3)
Drying Solvent Screen Printing
Triple Roll Milling
Sintering Binder Drying Solvent
Screen Printing
Sintering Binder
Drying Solvent
ELECTROLYTE
ELECTROLYTE
AND Sintering Binder
CATHODE Cr Alloy

Metal Forming
ELECTROLYTE,
CATHODE, AND ANODE
INTERCONNECT

TAPE
BALL CASTING
MILLING Brazing
SCREEN PRINTING
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PEN AND
INTERCONNECT
2<)&&
Diagram of the Unit Cell

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 Process Cost Break-Down

Interconnect
15%

Layer
Anode, Assembly
Cathode, 52%
Electrolyte
33%

Factors: Labor, Power, Raw Materials 7OL

2<)&&
 Equipment Cost
Equipment Equipment Cost
Process Description Component
Description
Automated Tape $300,000
Electrolyte Tape Caster
Casting

Screen Printing Anode, Cathode Manual Station $20,000

$300,000
Vacuum Leak Test Fabrication Inspection Machine

$500,000
Continuous Sinter Fabrication Sintering Furnace

IC joining -Heat $400,000

Interconnect Brazing Furnace
Treatment

Anode, Cathode,
Milling Ball Mill, Roll Mills $22,000
Electrolyte
Courtesy of Department of Energy-Federal Energy Technology Center
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Total SOFC Equipment Cost = $2.4 million 2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model with Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
2<)&&
 Plant Location Analysis
• Origin of Raw Materials
MA and OH

• Possible Market Locations

No. of Small Business
Amount of Pollution
Electricity Prices

• Low Tax Rates

Property, Sales, Federal, and State Taxes

• Low Cost of Labor

Median Hourly Wage

• Only the Lower 48 States Were Considered

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Plant Location Analysis

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 Labor & Tax Analysis
Labor
• Number of Employees
• Annual Salaries by Position
• 3 Shifts per Day / 341 Days per year

Taxes
• State Corporate Income Tax
• Federal Corporate Income Tax
• Sales Tax
• Property Tax
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 Transportation Analysis
Two options – American Freight Company or
The OUFCC fleet

If AFC is contracted:
• We will be Packing, Crating and Addressing
the Shipments
• $1.45 for each mile traveled
• Flat Fee - $668 per delivery
• Large City Surcharge of $100
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 Transportation Analysis
If The OUFCC purchases own fleet:

• Trucks - $55,000 each

• Truck Drivers - $40,000/yr
• Diesel
• Licenses, Tires, Insurance and
Maintenance
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2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
2<)&&
 Mathematical Model
• Why use a model?
– Consider multiple design options
simultaneously.
– Prediction of sales and added production
over project lifetime.
• Type: General Algebraic Modeling System
(GAMS)

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Mathematical Model -GAMS
• Goal:
– Determine plant and market locations
– Determine annual production rate of
each type
– Maximize our objective function: NPW
• Types: Deterministic and Stochastic

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 Deterministic Model
• Input • Output
– Raw Materials – Production rate
– Utilities costs – Increase production
– Transportation – Revenue
– Taxes – Cash Flow
– Market demands – FCI,TCI
– Maximum capacity – Objective Function: NPW
– Selling price of fuel
cells

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 Deterministic Model

• Constraints
–Decision variable for plant
location
–Maximum Capacity
–Market demand

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 Parameters
• Locations: 13
– AZ, CA,FL,MA,MO,NE,NV,NY,OH,OK,TX,WA, WY
• Labor: 71 workers
• Operating Period: 341 days/yr; 24 hrs/day
• Project Life:10 years
• Selling Price: Varies over time
– $1.0 million for PAFC
– $1.1 million for SOFC
– $1.2 million for PEMFC
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 Selling Price
1,400,000
Selling Price ($)

1,200,000

1,000,000

800,000 PAFC
SOFC
600,000 PEMFC

400,000

200,000

0
09

11
06

07

08

10

12

13

14

15
20

20
20

20

20

20

20

20

20

20
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Project Lifetime 2<)&&
 Mathematical Equations
• FCI
FCI i = FxCost i ,t + ∑ α *AddProd i ,k ,t
k
• Revenue
Re vi ,t = ∑ ( Sell ( k ) * x (i, j , k , t ) − TOC i ,t )
j

• Cashflow
CFi ,t = [Re vi ,t − (Re vi ,t − Dep * FCIi ) * Taxi ] − TOCi ,t

• Net Present Worth

NPW = ∑ ∑ i ,t
i
( CF −
t
TCI i ) /(1 + int Time t
)
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 Market Demand
350
Number of Fuel Cells

300

250

200 PEMFC
SOFC
PAFC
150

100

50

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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Project Lifetime 2<)&&
 Projected Sales
200
Number of Fuel Cells

180
160
140
120
PEMFC
100 SOFC
PAFC
80
60
40
20
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Project Lifetime 7OL

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 Cash Flow Predictions
30.00
Cashflow (million $)

20.00

10.00

0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
-10.00

-20.00

-30.00

-40.00 TCI

-50.00

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Project Lifetime 2<)&&
 Breakeven Chart
160
Cumulative Cashflow (million $)

140

120

100

80

60

40

20

0
TCI Breakeven Point
-20

-40

-60
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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Time
2<)&&
 Deterministic Model Results
• Plant Location: Wyoming
• Plan to increase production other year
• FCI: $35,789,500
• TCI: $41,157,930
• NPW: $83,154,900
• ROI: 23%

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2<)&&
Presentation Outline
Business Overview and Market Analysis
Kristen Martinez

Technology Overview
Thu Nguyen

Fuel Cell Analysis

Caroline Ihejiawu

Fuels and Gas Reforming

Justice Diven

Process Flowsheet and Equipment Costs

Eric Daugherty

Tax, Labor, and Transportation Analysis

Jennifer Treece

Mathematical Model and Economic Analysis

Lola Soyebo

Uncertainty and Risk Analysis

Caroline Ihejiawu 7OL
2<)&&
 Risk and Uncertainty
Uncertain Parameters
• Raw Material Costs
• Equipment Cost
• Selling Price

Examined 3 Scenarios

Deviated 20% around the mean values

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 Risk Analysis
1
0.9
0.8
0.7
Probability

0.6
High
0.5 Medium
Low
0.4
0.3
0.2
0.1
0
-2.E+08 -1.E+08 0.E+00 1.E+08 2.E+08 3.E+08 4.E+08 5.E+08 6.E+08

NPW ($) 7OL

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 Stochastic Modeling
MAXIMIZE
Net Present Value considering all possible
scenarios of the uncertain parameters

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 Stochastic Analysis
100.00%

90.00%

80.00%

70.00%
Probability

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

.00%
-24807863.3 273573.48 121063714 139592458 184526327 201564245 342581655 357054225 389039274 483837044

NPW ($) 7OL

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Thank you.
Any
Questions?
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Extra Slides

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Process Equipment

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Courtesy of Global Thermoelectric Inc.
Manufacturing
Process for
PEMFC

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Raw Materials for PEMFC

Component Cost ($)

Hardware 187,500

Electrode 17,400

Catalyst 2,700

Total manufacturing cost = $576,600

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 Revenue Predictions
250
Revenue (million $)

200

150

100

50

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Project Lifetime 7OL

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Still more
questions?
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