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CEF Announces Fuel Cell Initiative in Joint Legislative Committee Meeting

(Hartford, CT - December 2001) — In 1998, Connecticut’s General Assembly had a vision to develop
a fund to foster the growth of renewable energy in the state to benefit Connecticut ratepayers. From that piece of legislation, the Connecticut Clean Energy Fund (CEF) was created and established in 1999.

This week, in a joint legislative meeting, members of the Energy and the Environment committees heard how the Connecticut Clean Energy Fund has begun making an impact in the state, and in particular, how the fund’s Fuel Cell Initiative is assisting in fuel cell development and commercialization. Over five years ending in 2005, CEF has committed $37.5 million to the Fuel Cell Initiative, which includes investments in technology, demonstration sites, deployment and establishment of a fuel cell educational center.

Subhash Chandra, Ph.D., CEF’s managing director of technology, explained to the legislative body why fuel cells are important to the state, citing the fact that Connecticut is the birthplace of modern fuel cells through UTC Fuel Cells and fuel cells are an attractive renewable energy resource. “We have a vibrant climate for the development of this industry in the state,” said Chandra.

Already, Connecticut is home to three major fuel cell manufacturers (UTC Fuel Cells, FuelCell Energy and Proton Energy Systems), as well as several start-up companies (Allen Engineering and IONOMEM Corp, a spin-off company from the University of Connecticut).

Chandra said fuel cell development and commercialization is particularly important today because of the global need to increase energy security, particularly following September 11; tighter environmental controls; and global concerns with greenhouse gas emissions. Chandra also said there is a significant economic opportunity for fuel cell development here in Connecticut, noting that the initiative has already received support from federal agencies, as well as private investors.

In order to ensure fuel cells success in the state, Chandra told the legislators several factors must be met — long-term financial commitments to the initiative; a strong industry and educational infrastructure; economic incentives in the form of tax incentives and subsidies for commercialization; and market pull derived from government procurement and an increase consumer demand.

Currently, approximately 220 UTC fuel cells are in commercial use across the United States and abroad. Fuel cell are currently being developed to apply to consumer use, including powering automobiles and homes, according to Chandra.

Fuel cells also continue to generate interest among developers throughout the Northeast. Chandra reported that CEF recently issue a fuel cell RFP calling for commercial and demonstration projects. The RFP yielded 31 proposals from 19 companies. Of the proposals received, 17 are commercial application projects; nine demonstration projects — technological improvements; and five demonstration projects — operational performance. The proposals requested total funding of $59 million, of which CEF has dedicated $6 million for the first year.

Overall, there was a positive reaction from the legislative leaders following the presentation.

“I am encouraged that 17 of the proposal are for commercial applications,” said Sen. ** Williams. “The quicker we can move these into the community…that would be terrific, the faster we can decentralize the generation of power.”

“What we are looking at is a long-run issue. There is a huge possibility for trajectories of economic growth…There is a place for government when the market needs to be nudged,” said Rep. ** Urban, citing further lobbying of the federal govenment, tax incentives and additional funds appropriated to research and development.

Senator ** Peters said the committees should further review adding an educational component to the 1998 deregulation bill, which is currently under review. “We will need to begin the education process again. We should create a portion to reach commercial, industrial interests in fuel cells,” she said.
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