January 23, 2007

LIPA Issues A Request For Proposals To Develop A 5 Megawatt Fuel Cell

By: by KeySpan


December 15, 2006 - Hicksville, NY- Long Island Power Authority Chairman, Richard M. Kessel and KeySpan Corporation Chairman & CEO, Robert B. Catell today announced the issuance of a Request for Proposals (RFP) for  the construction and operation of a fuel cell cogeneration project capable of producing 5 megawatts (MW) of electricity, enough to power about 5,000 homes. This project would be the first of its kind in the nation and may, when completed, be the largest commercial fuel cell system in the world. 

As part of LIPA's overall Energy Plan for Long Island, and in conjunction with KeySpan's commitment to renewable energy technologies, the two companies are interested in receiving proposals for a fuel cell cogeneration project that will provide up to a nominal five (5) megawatts of electricity, with the primary objective of increasing the amount of power LIPA obtains from renewable resources. The proposed new fuel cell will open a new phase in improving regional air quality. A fuel cell project of this size will also help Long Island meet the Renewable Portfolio Standard (RPS) goal that has been set by New York State for the utilization of green energy technologies that are environmentally friendly.

"LIPA and KeySpan are taking the next step towards advancing the development of fuel cell technology," said LIPA Chairman Richard M. Kessel. "Utilizing the cogeneration capability of fuel cells for generating large amounts of electricity for distribution through LIPA's power grid in addition to generating economical thermal energy will allow us to harness new power supply resources that are environmentally benign."

The thermal energy produced by the fuel cell will be sold by LIPA to KeySpan Energy Delivery Long Island (KEDLI) and will be used by KEDLI in place of thermal energy provided by standard heaters to warm natural gas as required by its normal gas distribution practices.

"For almost 40 years KeySpan has been working hard to help develop fuel cell technology," said KeySpan Chairman and CEO Robert B. Catell.  "It is very exciting for us that this new partnership may show that the technology is ready to serve our region with very clean energy."

"Fuel cells are such an exciting technology because they can produce electricity with much reduced or even zero greenhouse gas emissions and virtually none of the air pollutants that cause smog and health problems," said Gordian Raacke, Executive Director of Renewable Energy Long Island (RELI), a not-for-profit organization promoting clean, sustainable energy use and generation on the Island.  "With projects like this, Long Island can become an example of how our nation can begin the switch to clean, renewable and climate-friendly power sources."

Much like a battery, fuel cells function through a single electrochemical process. A fuel cell produces electricity, water, and heat using fuel and oxygen in the air. Water is the only byproduct when

hydrogen is the fuel. As hydrogen flows into the fuel cell on the anode side, a catalyst facilitates the separation of the hydrogen gas into electrons and protons (hydrogen ions).  The result is a "battery" that never runs down and a very clean source of electricity.

Highlights of the RFP:

Proposers must commit, in their respective proposals, to develop a fuel cell cogeneration project at the Designated Site rated at between 2 MW and 5 MW net electrical output and sell all products from this facility to LIPA under the terms and conditions of a PPA.  The proposed project shall meet each of the following requirements:

*Designated Site:  The cogeneration facility will be installed and operated on an undeveloped piece of property on Park Place in the City of Long Beach, Nassau County NY. The fuel cell system will deliver energy to the adjacent LIPA substation and will deliver thermal energy to the natural gas gate station owned and operated by KEDLI on the same property.   

*Commercial Operation Date:  Within one (1) year of the effective date of the PPA, which is the date that the PPA is approved by the Comptroller of the State of New York as explained in Section XVI-Contract Approval of the RFP.

*Electric Distribution:  The facility shall be interconnected with LIPA's electric distribution system at 13 kV.

*Permitting:  The project shall be in compliance with all applicable federal, state and local permitting requirements.

Fuel cell technology has been part of LIPA's Clean Energy Initiative (CEI). The CEI is a 10-year, $355-million commitment to promote clean, renewable electric generation technologies, energy conservation and efficiency.

"This is a very exciting and historic project," said Mr. Kessel.  "With each alternative or renewable energy project we advance, we take another step away from our over dependence on fossil fuel burning technologies.  Future generations as well as our environment will be the beneficiaries."

LIPA, a non-profit municipal electric utility, owns the retail electric business on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties, and the Rockaway Peninsula in Queens. LIPA does not own any electric generation assets on Long Island and it does not provide natural gas service.