Bridgeport — There’s little to suggest that the five large, white-painted steel boxes and a collection of pipes near the railroad tracks was one of the most astonishing developments in clean energy in Connecticut in 2013. The only hint are these words lettered on each box: FuelCell Energy –- Ultra-clean, Efficient, Reliable Power.

This is a fuel cell power plant: Five modules with four stacks of fuel cells in each, mixing natural gas with oxygen from the air to produce hydrogen, which then electro-chemically produces power that flows continuously into the electric grid.

When it fired up Dec. 20, the system — manufactured and built by Connecticut-based Fuel Cell Energy and located on a former brownfield -– became the first such plant in North America. And at 15 megawatts — enough to power about 15,000 homes — it is the second largest in the world.

It is only one of many, many additions to the state’s clean- and renewable-energy portfolio last year.

“I think 2013 is going to be seen as a watershed year for the state of Connecticut when it comes to energy broadly and electricity in particular,” said Dan Esty, Connecticut’s commissioner of the Department of Energy and Environmental Protection. “We’ve seen a 10-fold increase in the deployment … of renewable power in 2013 over 2010, the year that Gov. (Dannel P.) Malloy was elected.” 

In addition to the fuel cell power plant, the state’s first grid scale solar farm — that’s power that goes into the electric grid — went on line Dec. 23: five megawatts produced by 23,150 solar panels on 50 acres in Somers. Both have been purchased from their developers by Dominion, owner of Millstone Nuclear Power Station.

Last year also brought a sharp increase in clean and renewable power systems that go directly into buildings and facilities, known as distributed or on-site generation. Nearly 1,500 residential solar projects were added, and some 240 commercial clean energy projects, mainly solar and fuel cells, were approved.

More than sheer numbers, the projects show fundamental changes in what kinds of power the state intends to use and, just as important, how they’re paid for. And with per-kilowatt hour prices approaching those of fossil fuel-generated power, the projects would seem to lend at least some evidence of success to Esty and Malloy’s incessant mantra of developing “cleaner, cheaper, more reliable” energy.

A further indicator of success is that the year’s energy tally has kept grumbling from environmental activists to a minimum, though it has not eliminated it entirely.

“While there have been some setbacks, this year has been, by and large, continuing the process in Connecticut of replacing dirty fossil fuel, with renewables,” said Chris Phelps of Environment Connecticut. “It’s all around a huge success story.”

The Connecticut law known in energy and environment circles as “11-80” almost singlehandedly accounts for that success. 

What’s on the Books

Public Act 11-80 was the monster-sized legislation in 2011 that created DEEP, reconfigured the Clean Energy Fund as a “green bank” called the Clean Energy Finance and Investment Authority (CEFIA) and launched a couple of dozen major policies and programs, whose implementation has taken the better part of the last two-and-a-half years.

“A lot of the policies that were just ideas in 2007 and 2011 have become hardware in the ground producing electricity,” said Roger Smith of Clean Water Action. “That’s exciting.”

But Smith was part of the chorus of outrage from the environmental community over legislation in 2013 that threatened to lower Connecticut’s requirements for renewable energy, known as the Renewable Portfolio Standard, or RPS. The law allows large-scale Canadian hydropower to count toward the goal of 20 percent renewables by 2020.

But the DEEP’s procurement of 250 megawatts of wind power from a project in Maine and another 20 mw from a to-be-built solar installation in Sprague and Lisbon, now under court challenge by a losing bidder, held off the hydro flood. DEEP is looking at proposals for a second round of procurements.

“I think we narrowly averted forgoing the building of more clean energy in our region and replacing it with Canadian hydropower,” Smith said. “The upside -– clean energy in New England has come to be cheaper and more abundant than even advocates thought.”

Clean power for the grid 

“It turns out what is key here is not simply to have a target,” said Esty, referring to the RPS. “But to have a financing structure in place that really allows the project developers to go to the bank and borrow the money necessary to build the projects.”

Enter the power purchase agreement, or PPA in industry jargon, in which a utility contracts to buy the power from an energy source for a period of time. That promise essentially guarantees the plant owners can pay back a loan. Connecticut Light & Power has agreed to buy Bridgeport’s fuel cell power for 15 years and the Somers solar power for 20. CL&P has also agreed to buy the power from another five mw solar farm in East Lyme, slated to come on line shortly.

“Connecticut is known for getting the policy right, but not implementing it.” Smith said. “I think these are two powerful testaments to the contrary.”

The two solar projects are DEEP’s 10 mw portion of a provision in 11-80 to develop 30 mw of renewable grid generation. United Illuminating and CL&P are supposed to develop another 10 mw each, and would be allowed to own it for the first time since deregulation. UI is planning a solar and fuel cell project in Bridgeport and a to-be-determined one in New Haven. CL&P, despite fighting for the right to own generation, has no projects planned for its 10 mw.

“We’re unhappy that we have not gotten all these projects up and running,” Esty said. “The governor and I continue to push CL&P to step up their game.”

The biggest disappointment for Esty and environmentalists alike has been wind. For more than two years, the state has had what amounts to the only ban on wind projects in the nation as it waits for siting regulations. The legislature’s Regulations Review Committee has in effect rejected four submissions.

“Symbolically embarrassing,” Esty called it.

“We need to get out of our own way as a state and implement the bills that we’ve passed,” Smith said.

While all agree wind will never be huge here, Phelps, of Environment Connecticut, spoke for many in saying the state’s renewable grid-energy “future is made up of multiple technologies.”

But he added: “How outrageous that we can build a 700 mw natural gas plant that blows up while we’re building it [referring to the 2010 accident at the Kleen Energy Plant in Middletown], and we can’t build one wind turbine.”

Green Bank provides more green

Politics aside, none of these projects would happen without money, and CEFIA’s new configuration as a green bank was able in fiscal year 2013 to use $40 million from fees paid by electric ratepayers to attract $180 million in private capital for clean energy. In the old days, those ratepayer funds would have been given away until they simply ran out -– which they always did. 

Bryan Garcia, CEFIA’s president, admitted, however, that it’s been a slow run-up from CEFIA’s start date in July 2011. “One of our board members constantly tells me, ‘Bryan, the polar ice caps aren’t gonna stop melting to wait for Connecticut to figure this out and tell the world,’” said Garcia, who gave himself a C for fiscal year 2012. “We were rebuilding the organization from rebate-driven organization to a financial institution, so we had very limited results.

“As we look at fiscal year 2013, I’d give us a complete A.”

And the primary evidence of that is the residential solar program.

More than 1,450 new residential solar systems were approved in calendar year 2013 — totaling more than 10 megawatts. That’s nearly twice as many systems and twice as much power as in 2012, which was about twice the previous best year since the solar incentive program began in 2004.

In its first 21 months, the program is more than halfway to its 10-year legislative mandate to install 30 megawatts of residential solar. It created about 600 direct and indirect jobs and will avoid more than 100,000 tons of carbon dioxide emissions over the lifetime of the solar systems.

Equally important to the state -– which has made it very clear that it wants to get all renewable and clean energy projects off their reliance on incentives — the percentage of system costs that comes from Connecticut-based incentives has dropped by more than 20 percentage points to about 30 percent. 

The residential program’s popularity has been bolstered by the influx of large national companies that lease solar systems to homeowners, which means they don’t have to pay for equipment. It’s also benefited from a pair of CEFIA-invented low-interest loans: the Smart-E Loan and the Solar Loan. And it’s been helped by a program called Solarize Connecticut, which uses a community approach in which neighbors essentially challenge each other to switch to solar.

And then there are the special cases. The Bridgeport fuel cell plant, for instance, was a stalled nearly 10-year-old project through the old Clean Energy Fund. CEFIA was able to structure a loan to get it over its last hurdle.

“What they really nailed is smart program design,” said Clean Water Action’s Smith. ”It provides comfort for the customer and also for the lender.”

ZRECs and LRECs

The solar incentive program for commercial projects, once run by CEFIA, is now part of two competitive renewable energy credit (REC) programs often described as reverse auctions in which the low bid wins. One is for zero emission projects such as solar or wind -– hence its nickname, ZREC. And the other is tailored for fuel cell projects, which are low-emission, or LREC.

They are administered by the utilities, which buy the power generated by the various projects under 15-year contracts (there’s that PPA again) using ratepayer funds. Over the current six-year life of the project plus the contract terms, this is a $1 billion program.

There were 368 applicants in the first round with 87 ZRECs, all solar, and 14 LRECs, all fuel cells, chosen. Most of the winning bids were from out-of-state companies. Bloom Energy, the one major fuel cell manufacturer with no Connecticut-based operation, won nearly all the LRECs.

“The fact that out-of-state fuel cell companies in particular are winning a number of these contracts is a signal to the in-state guys that they need to innovate,” Esty said. “They need to bring down their costs and frankly sharpen their pencils when it comes time to bid.”

Joel Rinebold, director of energy initiatives at the Connecticut Center for Advanced Technology, said he was less worried that Bloom had won the contracts since the many hundreds of companies in the state’s fuel cell supply chain sell to all fuel cell and hydrogen companies, including Bloom.

“I think it was a good year,” he said. “It wasn’t a year that surprised me in that progress wasn’t greater than I thought, but it wasn’t less than I thought either.”

Short term, he said, progress has been “not totally to my satisfaction.

“I’ve not been to too many ribbon cuttings,” he said.

The most recent round had 300 applicants with 117 ZRECs awarded (all were solar except four small hydro projects). There were 22 LRECs awarded -– all fuel cells. The winning companies have not been revealed yet, though Middletown, Conn.-based Greenskies Renewable Energy announced it had won 32 of the 36 solar projects it submitted.

“It might have been the best year solar PV [photovoltaic, or electricity] has had,” said Mike Trahan, executive director of the trade group Solar Connecticut. He attributed that to the new system, even though members of his group were leery. “It made business comfortable about purchasing assets, bringing on employees and it raised the level of confidence in our business sector tremendously.” 

Etc.

A program called C-PACE also arrived in 2013 from legislation passed in 2012. It stands for Commercial Property Assessed Clean Energy. Run through CEFIA, it allows commercial properties to borrow money to finance clean energy and/or efficiency projects and then pay it back through an assessment on their property tax bills.

Part of the requirement is that the project has to save more money than the cost of installing and financing it. That’s the easy part. The hard part -– or at least what everyone figured would be the hard part -– was getting communities to pass legislation to allow their property tax bills to be used for it.

The result was a stunner. Some 70 municipalities, not generally known for warp-speed action, have passed the needed resolutions. They represent about 80 percent of the state’s commercial building stock. Already there are 16 closed projects worth a little over $12 million. Five more worth about $3 million have been approved, and there are more than 100 projects worth in excess of $50 million in the pipeline.

2013 was also the year the state got its microgrid pilot project off the ground with nine projects selected for funding. As power systems that can operate even when the grid is down, they are a tip of the hat to electricity resiliency in a post Irene and Sandy world, with even more funding planned for a new round.

“Other states and frankly the federal government in Washington remain mired in controversy and unable to get things done,” said Esty. “We are getting things done on the ground and making a difference.”