San Diego Project Taps New England Fuel Cell Company to Generate Energy From Waste Methane Gas

11/24/10Follow @bvbigelow

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generate renewable energy,” Washom says. “The key is this CPUC ruling. It was visionary on their part. By providing this ATM accounting, you can put a supplier with a buyer anywhere in the Western U.S.”

The additional power generating capacity means that the San Diego UC campus, which has about 28,000 students and another 28,000 faculty and staff, will be generating about 92 percent of its own power needs, Washom says.

The arrangement apparently is promising enough that San Diego Gas & Electric and its sister utility, the Southern California Gas Co. have asked the CPUC for authorization to develop, own, operate and maintain bioenergy production and gas conditioning facilities. The utilities, which are both owned and operated by San Diego-based Sempra Energy (NYSE: SRE) are seeking regulatory permission to process gas from organic waste at water treatment plants, farms, and other operations into gas suitable for power production or injection into utility pipelines.

The Point Loma treatment plant is the city’s largest, and treats roughly 175 million gallons of wastewater per day generated in a 450-square mile area by more than 2.2 million residents. By stopping the gas flaring and instead generating electricity from the waste, city officials estimate the project will eliminate more than 68,000 pounds of nitrogen oxides, sulfur oxides, and other pollutants annually.

The project, which is scheduled for completion by next summer, is expected to be the largest combination of fuel cells in a single project in the U.S., according to FuelCell Energy. In addition to UCSD’s 2.8 megawatt facility, which will generate 8 percent of the university’s energy needs, the company will install a 300 kilowatt fuel cell at the Point Loma treatment plant and a 1.4 megawatt plant at the South Bay plant.

“It’s a very exciting project,” according to Jacques Chirazi, cleantech program manager for the City of San Diego. The municipality estimates the project will generate $2.6 million in new revenue over the next decade, and the city expects to save an additional $780,000 in reduced electricity cost. “It looks like it has a better economic payback period than most renewable projects,” Chirazi says.

The project financing includes bonds issued by the California Pollution Control Authority, equity investments and debt from New Energy Capital and North Sky Capital CleanTech Alliance, grants from the California Self-Generation Incentive Program, and U.S. Treasury investment tax credits. U.S. Bancorp provided tax credit financing.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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  • Dr. No

    So, there are $23.5 million capex in order to generate 2.8 MW in a fuel cell from existing (free) biogas (sewage plant) that merely needs to be upgraded to grid quality and then converted to electricity. The CapEx is $8.5/W installed. This is more expensive by a healthy margin than unsubsidized solar panels. Further, SEMPRA could have merely gotten two 1.5 MW biogas engines from GE/Jenbacher or MWM for $0.5 to $3 per MW or 15-30% of the cost. Considering the revenues or even worse net income one is looking at a 10-30 year payback time. This is 3 to 10 times more what it should be.
    In sum this is one of the great examples how bad selection of expensive “green” technology will backfire when it comes to simple economics giving cleantech a bad reputation.

    • Peter Thomas

      This project will SAVE money… and its clean! “Grid Quality”? Our grid is anything but quality…. Where have you been man??? Grid quality??? This is DISTRIBUTED POWER at the point of use… whatever… read the above posted links… get educated on THE GRID!

      BTW … NUCLEAR IS NOT GOOD EITHER!

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