Verizon has just pledged $100 million to the premise that solar power and fuel cells can pay for themselves over time. On Tuesday, the telecommunications giant said it would invest $100 million in a combination of solar PV projects from Total’s SunPower, and natural gas-fueled fuel cells from ClearEdge’s UTC, at nineteen sites in seven states.
The deployment puts Verizon in the company of corporate giants such as Apple, Google,Microsoft, AT&T and others that are adding renewable power and on-site generation assets to their mix of energy resources. In Verizon’s case, the investment is also a test bed for proving that clean energy investments make business sense across a range of environments, from corporate offices to data centers and network switching hubs.
“We look at this as a ten-year ROI, with a net present value that had to be positive,” James Gowen, Verizon’s chief sustainability officer, said in a Tuesday interview. Verizon and its partners chose their nineteen locations from a starting list of hundreds, and actually inspected 60 finalists all the way down to permitting and right-of-way issues, he said.
Gowen also stressed that Verizon owns the systems it’s installing here, rather than setting up power purchase agreements (PPAs) to buy green power from someone else. “We’ve been evaluating SRECs, all the other ways you can get into renewables, and made a conscious decision not to do any of those,” he said. Both ClearEdge and SunPower are providing ongoing device operations and maintenance, and Verizon, true to its core business, is helping to network all the disparate units to feed back to the vendors’ network operations centers for monitoring and control, he said.
As for payback, it’s expected to come via reduced utility bills, improved reliability and carbon reductions. The new projects are part of Verizon’s commitment to reduce its carbon intensity metrics by 50 percent by 2020, Gowen said. But they’re also designed to provide Verizon’s always-on IT infrastructure the power it needs, both to reduce its daily reliance on utility power and to keep the network running during emergencies.
“Onsite generation of energy, no matter what kind it is, is key,” he said. For example, during Hurricane Sandy, Verizon was able to keep its network up and running, in part through its UTC fuel cell unit at its Garden City, N.Y. center in Long Island (PDF). At the same time, the $15.7 million, 1.4-megawatt project pays for itself on its own rights, boosting the building’s cogeneration system efficiency from 30 percent to 70 percent, and saving about $500,000 a year in the ten years it’s been operating.
All told, Verizon is planning to deploy fuel cells in California, New Jersey and New York, which will generate more than 60 million kilowatt-hours of electricity and reduce carbon emissions by about 60,000 tons per year. While UTC’s fuel cells still run on natural gas and still convert it to carbon dioxide, they emit less CO2 than the grid-scale, gas-fired power they replace, and also cut down on all other pollutants that come from burning the stuff.
While Verizon hasn’t released financial details on its fuel cell order, it’s by far the biggest one yet for ClearEdge Power, the Hillsboro, Ore.-based startup that bought fuel cell industry veteran UTC late last year. Right now, Verizon is just buying UTC’s large-scale phosphoric acid fuel cells (PAFCs), which match the units that have proven themselves in Verizon’s Long Island center.
In 2014, Verizon intends to test out ClearEdge’s smaller, proton exchange membrane (PEM)-based fuel cell units, Gowen said. ClearEdge recently laid off roughly one-third of its workforce, and raised a $36 million venture capital round in January. No doubt the Verizon deal is good news for the company, both on the strength of its commitment to UTC’s technology and the potential for ClearEdge’s PEM units, which generate power and heat, to get into deployment.
On the solar power front, Verizon and SunPower are planning projects in California, Maryland, Massachusetts, New Jersey, Arizona and North Carolina, with a combined annual output of 8 million kilowatt-hours once they’re up and running by year’s end. Some of those are being deployed in combination with fuel cells, while others are solar-only, he said.
Verizon isn’t planning to combine fuel cells and solar panels in its first wave of projects -- “our first deployments will be blocking and tackling,” Gowen said. At the same time, at least for now, all the projects are “grid parallel to everything -- we’re not taking any of our facilities 100 percent off the grid,” he said.
Still, in the future, Verizon is interested in seeing how fuel cells could help balance out the intermittent nature of on-site solar PV, or allow for grid-balancing operations inside buildings, he said. Verizon is also networking and managing building energy use in several of its own facilities, though it hasn’t yet looked at integrating those in-house and partner-provided software platforms into what it’s doing with fuel cells and solar panels, he said.
As for what’s next on Verizon’s green energy plans, Gowen said that it’s far too early to say how many other of its facilities could pay themselves off on equivalent types of deployments. Much depends on the state-by-state incentive structures for green power and onsite energy, as well as the site-by-site needs for constant backup power, he said. While markets like California, New Jersey and New York are naturals for solar power in particular, states with low power prices and few green energy or efficiency incentives are not likely targets.