Using distributed fuel cells to compete with established utilities under rules permitting retail wheeling

Retail wheeling is the principle of opening up to competition the sale of electricity to retail consumers. It is an entirely new paradigm for the marketing, transmission, distribution, and consumption of electricity. Competing utilities will be selling power to consumers far from their home territories. To avoid the transmission and distribution tariffs of intermediaries, which could drive up costs, power providers will prefer technologies, such as fuel cells, that offer distributed generation options. Fuel cells are highly modular. A power provider entering a new area can start with a small fuel cell unit and stack additional capacity at the same site as its customer base grows. The fuel cell's relatively small environmental burden and prefabricated nature also make it comparatively easy to site and quick to construct. Finally, fuel cells require less of a manpower commitment because they can be operated remotely and have a high degree of reliability. This paper discusses the use of distributed fuel cells to compete with established utilities in areas where retail wheeling has been instituted. It covers in detail the unique advantages of the technology under this industry configuration. The paper pays particular attention to the operational and design characteristics of fuel cells that will provide companies the flexibility they require to compete successfully. Finally, the paper discusses the implications for the use of distributed fuel cells of alternative retail wheeling implementation schemes.