BOARD MEETING DATE: June 4, 2004
AGENDA NO. 7
Amend Contract to Fund Hydrogen Internal Combustion Engine Generator
SYNOPSIS:
On June 6, 2003, the Board approved a contract with Stuart Energy to install an electrolyzer to produce hydrogen for vehicle fueling and demonstrate a hydrogen internal combustion engine (ICE) generator. As part of that award, the California Energy Commission (CEC) agreed to co-fund $100,000 for the ICE generator. The CEC currently cannot fulfill this obligation. This action is to fund the ICE generator through the Clean Fuels Fund in an amount not to exceed $100,000.
COMMITTEE:
Technology, April 23, 2004, Recommended for Approval
RECOMMENDED ACTION:
Authorize the Executive Officer to amend AQMD’s existing contract with Stuart Energy to install and demonstrate a hydrogen ICE generator in an amount not to exceed $100,000 from the Clean Fuels Fund, as part of the overall "hydrogen energy park" demonstration project.
Barry R. Wallerstein, D.Env.
Executive Officer
Background
On June 6, 2003, the Board awarded Stuart Energy with a contract to install and demonstrate an electroylzer-based hydrogen refueling station at the AQMD headquarters as part of the hydrogen research and demonstration program. Included as part of this demonstration is a hydrogen internal combustion engine (ICE) generator set (genset) to produce electricity for backup or peak-power applications. The genset is intended to demonstrate the additional functionality of co-locating hydrogen power production with refueling stations to help offset the initial capital costs of hydrogen stations while vehicle numbers increase. A schematic of the hydrogen energy park concept is shown in the figure that follows.
The California Energy Commission initially had agreed to fund the hydrogen genset portion of the project due to its connection to energy production. During the last ten months, staff has had numerous discussions with the CEC and even met in Sacramento in November 2003 in an effort to secure the funding. The delays had been attributed to the change in the state’s administration and the desire to develop a larger-scale partnership between the two agencies as opposed to a single contract. On March 11, 2004, however, CEC staff indicated there was no available funding for this fiscal year and the project may not fit into their scope of programs.
Hydrogen Energy Park Concept
Despite the delays in securing the ICE genset funding, the project has progressed with the installation of the refueling station portions of the Stuart Hydrogen Energy Station (HES) in April 2004. In order to prevent subsequent delays, staff believes the ICE genset should be ordered and installed while Stuart is on-site completing the refueling station.
Proposal
Based on the CEC response, staff recommends the AQMD amend the contract with Stuart Energy to fund the hydrogen ICE genset through the Clean Fuels Fund in an amount not to exceed $100,000. Staff also recommends continued efforts to establish a joint program with the CEC in the areas of hydrogen and fuel cells.
Benefits to AQMD
The proposed project is included in the Technology Advancement 2004 Plan Update under "Demonstrate Integrated Hydrogen Production and Power Facility." This project will demonstrate renewable hydrogen production for both vehicle fueling and power production. Co-locating hydrogen electricity generation with vehicle fueling will enable greater hydrogen usage while hydrogen vehicles gain more widespread deployment. Further, demonstrating hydrogen in both mobile and stationary applications will accelerate the development of clean air technologies such as fuel cells and hydrogen ICEs.
Sole Source Justification
Section VIII.B.2. of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is made under provisions B.2.c.(2) the project involves the use of proprietary technology, and B.2.d.(1) projects involving cost-sharing by multiple sponsors. Stuart Energy is providing a hydrogen ICE genset that is fully integrated as part of their Hydrogen Energy Station (HESfp) which combines hydrogen production for vehicle fueling ("f") and power generation ("p"). Stuart Energy’s design and integration of the total HESfp package are proprietary. Furthermore, Stuart Energy is cost-sharing the project with $100,000 of their own funding.
Resource Impact
The total amended contract will include the following costs:
AQMD Original Funding $542,000 Stuart Energy (project management, equip. & support) $100,000 California Energy Commission (distrib. Power equip.)$100,000AQMD Supplemental Funding $100,000 Total funding $742,000
Sufficient funds are available from the Clean Fuels Fund, established as a special revenue fund resulting from the state-mandated Clean Fuels Program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, establishes mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels and the development of advanced enabling technologies.
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