“Picture yourself in a BMW car next year. You come up to a stop light, the engine doesn’t have to do anything, because it doesn’t need any power to do anything else – that’s all taken care of by the fuel cell. So your emissions go down, your power consumption goes down and your fuel efficiency goes way up. That’s what they want to do.”
This is the future that cash-strapped motorists, eyeballing the latest gas price hikes, can look forward to, according to Peter Hodson, an analyst with Toronto-based Synergy Asset Management.
By the end of the year, he says, BMW will have a fuel cell vehicle on the road. And the “they” to which Hodson is referring in the above quote is Calgary-based Global Thermoelectric Inc. (GLE) which, in partnership with Delphi Automotive (a partner of BMW), will help put together this new car which will be powered, in part, by emerging fuel cell technology.
With skyrocketing oil and gas prices, investors and drivers alike are looking to profit from alternative energy sources. With the words “fuel cells” buzzing around Bay Street, stocks in companies like Vancouver-based Ballard Power Systems Inc. (BLD) and U.S. based FuelCell Energy Inc. (FCEL) are flying high. Publicity surrounding these electrochemical devices, which combine hydrogen with oxygen to produce electric power, is fast making this new technology an investment sector to watch.
“Basically, anybody that can provide a sort of power that’s off the grid -- or off the oil price -- is starting to get a lot of attention,” says Hodson. “It’s also somewhat like the wireless communication, where it didn’t really matter how long you’d been in business or who your partners are. If you’re in the alternative fuels space, your stock’s going up and people are going to be interested in your company.”
But not all fuel cells are created alike. Detractors of the technology say many companies are still far away from producing a commercially viable product. But therein lies the difference between companies like Ballard and Global Thermoelectric, says Hodson.
“I mean, they’re not at the commercial level yet – I don’t want to give you the wrong indication there – but I think they’re closer than a lot of other companies,” he says.
Canaccord Capital’s Murray McWilliams agrees. While companies like Ballard use proton exchange membrane (PEM) technology in their fuel cells, Global Thermoelectric has something Ballard does not.
“Global Thermoelectric is unique in that it is the only one selling solid oxide fuel cells,” he explains. “The difference between the solid oxide fuel cells (SOFCs) and the proton exchange membrane fuel cells is that SOFCs run at a higher temperature.”
With Global Thermoelectric’s fuel cells running at 800 degrees Celsius, McWilliams sees the company’s potential beyond the automotive market. While somewhat impractical to propel a car, the cells can be used to run lots of other devices– from your home stereo to your central air conditioner.
“Before you see fuel cells propelling cars down the road and replacing the combustion engine – that is years away – if you’re a PEM, like Ballard and any of those others, you have to run on pure hydrogen,” he notes. “Now, you cannot go to a gas station and fill up with pure hydrogen – there’s no infrastructure.”
In addition, the company is working closely with another partner, Calgary-based Enbridge (ENB) – Canada’s largest natural gas distributor – to build a home generator that would heat hot water tanks, floors and even provide air conditioning.
But apart from what they see as the immediate practical uses of Global Thermoelectric’s fuel cell technology, for McWilliams and Hodson, there are also good indications the company is a strong investment.
“As far as a stock price goes and the company goes, it’s pretty much event driven,” says Hodson. “The market has now decided that Global Thermal is a player in the industry and they’ve got tons of money in the bank and you know, it’s got a $1 billion market capitalization. But now it will take something else to drive it from these levels.”
With a 52-week high of $51.25 and a low of $7, McWilliams expects shares to hit $100 before Christmas, along with an announcement about a joint venture project with a major American partner.
“It’s about one-tenth the price of Ballard,” he says of Global Thermoelectric’s stock. “So I’m saying, is their product better than one-tenth the price of Ballard? And I think it’s at least 50 per cent as good as Ballard . . . Fiber optic networking companies are hot right now, but hotter than that are the fuel cells.”
Fuel Cells
Mon, Sep. 18, 2000 18:02
By Maria Babbage, Canada-iNvest.com |
