US congressman and senator to promote fuel cells and hydrogen in proposed legislation

Connecticut Congressman John B. Larson and US Senator Richard Blumenthal are to introduce legislation intended to expand federal incentives for the use of fuel cell technology and hydrogen in certain applications.

Larson, the US Representative for Connecticut’s 1st congressional district, will introduce ‘The Fuel Cell and Hydrogen Infrastructure for America Act of 2012’ (the Act) when Congress returns in September, while Senator Blumenthal will introduce a companion bill in the US Senate.

The legislation is designed to accelerate the adoption of stationary fuel cell power generation and hydrogen infrastructure, as well as supporting domestic manufacturing and helping the US fuel cell industry to grow. Underlying this is the USA’s desire to reduce dependence on foreign oil. FuelCell Energy, which is based in Danbury, CT, has urged support for the Act.

Congressman Larson said, “The kind of work being done here at Fuel Cell Energy is exactly the kind of work we should be seeing more of to help move us to a stronger future. So I look forward to continuing my work with the delegation to improve federal incentives for this sustainable, American technology. It’s good for our economy here in Connecticut and for energy security for the nation.”

The Act creates a tiered investment tax credit (ITC) to reward efficient stationary fuel cell power plants running in combined heat and power (CHP) configuration. The structure of the credit is comparable to other federal efficiency incentives such as for biomass and hybrid vehicles, and adds two tiers to the current ITC tax credit:

Tier I: A tax credit of 50% limited to $5,000/kWh of capacity for fuel cell systems achieving an efficiency rating of at least 70%.
Tier II: A tax credit of 40% limited to $4,000/kWh of capacity for fuel cell systems achieving efficiency of at least 60%.
Tier III (current law): A tax credit of 30% limited to $3,000/kWh of capacity for any other fuel cell system as long as they achieve 30% efficiency.

In support of this, the Act quotes carbon dioxide emissions reduction data from NREL, summarised below.

The Act also addresses fuel cells in transportation applications, by increasing the tax credit for hydrogen refuelling stations from 30% to 50% and removing the dollar limit. Additionally, it allows for the credit to be extended to hydrogen refuelling stations for fuel cell material handling vehicles, which currently do not qualify. This is particularly significant in light of the fact that fuel cell forklift trucks are rapidly becoming a successful commercial application for the technology in the USA and will provide a useful early market for hydrogen.

The tax credit is intended to facilitate the introduction of fuel cell electric vehicles (FCEV) from 2015 by providing a bridge while infrastructure is not yet being utilised to full capacity. Assumptions are that the payback with a 50% infrastructure/installation credit ranges from four to seven years, depending on the size and use of the station.

The Act cites the public benefits to be gained from FCEV: the fact that hydrogen can be derived from domestic fuel sources, that FCEV have zero carbon dioxide tailpipe emissions, and with the high efficiency of fuel cells they can achieve the equivalent of 80 mpg of gasoline.