Fuel Cells for Supermarkets

Supermarkets are turning out to be an important early market for stationary fuel cells. Supermarket companies that are using fuel cells either to power their stores or for forklifts at distribution facilities include Albertsons, Central Grocers, H.E. Butt Grocery Company, Price Chopper, Safeway, Star Market, Stop & Shop, Wal-Mart, Wegmans, and Whole Foods Market.  State clean energy agencies that are interested in helping to bring fuel cell technology into widespread use would be well-served by explicitly supporting fuel cells for supermarkets as a key market niche.

The Appeal of Fuel Cells for Supermarkets

In recent decades, supermarkets have grown larger and some have moved to 24-hour operation, 7 days a week. Stores have added large banks of freezers and refrigerated cases, as well as sections where prepared foods are cooked and kept warm. These changes have not only significantly increased the electrical, heating, and cooling loads of supermarkets, but have made them well-suited to take advantage of the electricity and heat provided by fuel cells.

Fuel cells provide a constant supply of electricity, which is just what these new supermarkets need. The heat produced by the fuel cells can be used for a variety of purposes, from heating water to running absorption chillers for cooling the stores. Using both outputs is key to the economics of a supermarket strategy for fuel cells, and also yields significant greenhouse gas emission reductions and other environmental benefits. The total efficiency of supermarkets’ fuel cell systems can be quite high—often twice or more efficient as getting power from a central utility.

Because supermarket owners need to worry about the risk to the large inventory of cooled and frozen food during an interruption of power from the electric grid, they appreciate a fuel cell’s ability to keep operating during a blackout. With a fuel cell, a supermarket can remain open at a time when the surrounding community is vulnerable and in need of supplies.

Recent trends in fuel cell financing have made them more business friendly. Manufacturers and system integrators increasingly offer lease arrangements that reduce the up-front cost of an installation. Longer initial warranties and the option of purchasing an extended warranty reduce the risk to the supermarket company.

Reasons for State Agencies to Target Supermarkets

Fuel cells clearly have appeal for supermarkets, but why might state agencies want to give special attention to supermarkets? Most importantly, to commercialize a new technology, it makes sense to concentrate on a few niche markets where it can gain traction and become self-sustaining, rather than trying to spread the technology thinly over a small number of random installations in diverse settings.

The early installations among supermarket chains have created growing visibility for fuel cell technology within the industry. This is starting to stimulate other supermarket companies to want to learn about fuel cells and consider emulating the early adopters.

Beyond the essential starting point that fuel cells are a good match for the energy needs of supermarkets, there are other reasons why this is a promising niche:

• Supermarket chains own multiple stores. As in the cases of Price Chopper and Whole Foods Market described below, a company that climbs the steep learning curve for the first installation can then take what it has learned and apply it to additional installations in other stores. Each new installation becomes easier and better adapted to the specific needs of the company.
• Because of their many customers, supermarkets can educate large numbers of people about fuel cells through information panels and educational materials in those stores that have fuel cells.
• Supermarket chains can use fuel-cell-powered forklifts and other materials handling equipment at their distribution centers, as well as stationary fuel cells at their stores.

Grants and other incentives from state agencies have been essential to make the initial fuel cell installations possible. Such support will continue to be important in the coming years. Through it, states can help to advance a promising clean energy technology, while helping important local businesses.

The Clean Energy States Alliance has just released a briefing paper with case studies of four supermarket chains’ use of fuel cells. This report, “Fuel Cells for Supermarkets,” is available at http://www.cesa.org/resource-library/resource/fuel-cells-for-supermarkets.

While fuel cells have had up and down cycles over the years, sellers are now finally focusing on niche markets that benefit from the many attributes of these technologies. This smart market strategy for supermarkets is a promising one, which policy makers should strongly support.