Borough, company have hopes for fuel cell project

NAUGATUCK — The borough is hoping green energy will help it see more green in the form of tax revenue.

Mayor N. Warren “Pete” Hess said the borough is working with Advanced Energy Efficiencies, LLC, a Woodbridge-based consulting firm, to ascertain the feasibility of a merchant fuel cell project in Naugatuck.

The proposal would allow Advanced Energy Efficiencies to build a fuel cell project on borough land and sell energy back to an energy provider. Since the project would be on borough land, the company would to lease the property from the borough and pay taxes as well.

“The purpose of the project is to increase revenue to the town in a manner that will reduce the town’s overall carbon footprint,” Hess said.

The exact site of the project hasn’t been finalized. Hess declined to say what areas the borough is looking at for the project.

Although the idea is in place, making the project a reality could take a while.

“If this were a game of baseball we are at the very top of the first inning,” Advanced Energy Efficiencies Managing Partner Gary Hale said.

The state Department of Energy and Environmental Protection is seeking requests for proposals (RFP) for fuel cell projects that produce more than two megawatts but less than 10 megawatts of energy. The proposals are due in April.

Hale said the company is working on a response to the RFP. The proposals chosen will be allowed to move forward and sell the energy it creates to its local energy provider.

“The merchant plant would pump fuel cell energy into the grid through the nearest substation. The company would contract with the merchant to receive that energy and would become part of their portfolio,” Hale said.

If the DEEP selects Advanced Energy Efficiencies’ proposal, the company would then talk with an energy provider about selling the energy before the company begins negotiations with the borough, Hale said.

“The cost of the fuel cells and cost of instillation plus the revenue stream would have a certain number, and then the supply would have to cover those costs,” Hale said.

Both Hale and Hess said the project has “many moving parts” that makes it unsure whether it will become a reality.

The process of choosing proposals alone could take until the end of 2018, Hale said. If the company’s proposal is chosen, it could take another six months to a year to build and install the fuel cells, Hale said.

“I imagine there will be enough paperwork to knock over a horse,” Hale said.

A fuel cell project in the borough is not unprecedented for either Hess or Hale.

In October, Naugatuck unveiled a 12-megawatt fuel cell at the borough’s wastewater treatment plant. The fuel cell was installed by Advanced Energy Efficiencies, and the company sells the energy to the borough for less than it could purchase it from traditional sources.

Hess said the borough did not pay for the equipment or installation and is saving $175,000 a year on energy costs at the plant.

Despite the difficulty and length of the proposed merchant fuel cell project, Hess believes it will ultimately be worth it in the end.

“It would increase revenue and help us decrease the mill rate,” Hess said. “All green energy projects have a very positive overall environmental benefit and it would significantly reduce the borough’s carbon footprint.”