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Technology Stocks : Fuel Cell Investments

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To: Stephen O who wrote (131)4/11/2001 8:03:19 AM
From: Jim Oravetz   of 280
 
First wave of fuel cells are in electronic devices
By David L. Chandler, Globe Staff, 4/10/2001

uel cells, long touted as potentially the next great advance for everything from powering cars to generating electricity for the nation's power grid, have finally arrived on the consumer marketplace.
But not in the place analysts had predicted. The first serious marketing of fuel cells to consumers is not as a new, clean and renewable way to power cars (although Ford has a $6 million prototype car). Nor does it provide power for a home or small business (though such devices may reach the market this year at prices of $10,000 and up).
No, the first fuel cells most people will ever see provide juice for the ubiquitous cell phone. For the last few weeks, they have been hanging on a rack at the local Circuit City or Wal-Mart store, called Instant Power and priced at $19.95.
In fact, the entire first wave of fuel cells will center on consumer electronics, providing reliable backup power for the devices that 21st-century people increasingly rely on. Another new fuel-cell product from Electric Fuel, makers of the Instant Power packs, will power a pocket digital assistant (Palm devices and their growing legion of imitators). Soon to follow are models for video camcorders and digital cameras. Devices to provide power for soldiers in the field are also in the works.
''Our original development of the technology was for an electric vehicle,'' said Jonathan Wurtman, vice president of Electric Fuel.
But developing fuel cells with enough power and low enough weight to power ordinary passenger cars proved too daunting, as did the lack of a refueling infrastructure for the new vehicles, so the company switched to the smaller units for portable electronics. They are, however, still working on prototypes for powering buses, where size and weight limitations are not so severe and where fueling depots solve the infrastructure issue.
''People have been saying fuel cells will be available in 10 years,'' Wurtman said, and for many applications, ''that statement will be true for another 10 years.''
Fuel cells are not a new idea - they were first considered a century and a half ago and the first practical fuel cell was built in the early 1900s. They are like batteries, except that rather than just releasing stored energy, they are powered by a fuel (such as hydrogen) combined with oxygen pulled from the air. Their appeal is based on the fact that they combine the advantages of batteries (quiet operation, no harmful emissions) with the advantages of ordinary internal-combustion engines (easy refueling, rather than the hours of recharging required by pure electric cars).
The fuel cells that Electric Fuel has developed for cell phones and other electronic devices - and even for their prototype buses - run on powdered zinc, rather than the more common hydrogen. Hydrogen-powered fuel cells have long been the primary power source for spacecraft, from the Apollo moon landings on through the US space shuttles.
But the zinc-powered Instant Power portable power packs may be the breakthrough device to bring the reality of fuel cells into consumers' homes and cars - even though the packaging doesn't refer to them as fuel cells.
Moreover, hydrogen-based fuel cells, after years of failing to live up to their advance billing, may not be far behind.
Ballard Power Systems, a Canadian company that has been a leader in developing hydrogen-based fuel cells for both transportation and electricity generation, has provided units for prototype development to many of the world's leading car companies, including Ford, DaimlerChrysler, GM, Nissan, and Honda. All have plans in the works for limited car or bus production within the next few years.
Jim Kirsch, vice president of Ballard, said last week that the technology has been developed to the point where the cost of the units is closing in on competing with ordinary internal-combustion engines.
''This is all about scale,'' Kirsch said. A typical engine plant produces about 300,000 units a year, he said. ''If I had a contract for 300,000 units, we believe our Mark 900 fuel cell would be competitive'' with conventional car engines.
The company also has a deal with Coleman Powermate, which expects to begin selling fuel-cell units later this year for backup power for computer systems.
Last month, one company, H Power Corp. of New Jersey, signed a contract to deliver more than 12,000 units big enough to provide a household's energy needs, to be installed starting later this year. The air-conditioner-sized units will provide all the power needed by a typical home - 10 kilowatts - and are intended initially for homes and businesses that are so far from existing powerlines that the price of $10,000 each (a slight loss for the company) will actually be a bargain.
In addition, just two weeks ago a Connecticut company called Select Energy signed a deal to install what they say will be the largest US fuel-cell powerplant so far: A 1.2-megawatt system to power the Connecticut Juvenile Training School in Middletown.
And many of the world's leading car manufacturers have built prototype fuel-cell cars with plans to bring them to market - on a limited scale, and aimed at fleet vehicle operators - as early as 2003. DaimlerChrysler, one of the first auto companies to start working with fuel cells seriously, just announced a contract for 30 fuel-cell-powered city buses, to begin service in European cities next year.
In short, boom times for fuel cells may really emerge in the coming decade. One analysis, carried out by the technology research firm, Allied Business Intelligence, states that the worldwide installations of fuel cells for electricity generation will jump 200-fold over the next decade, from a total of 75 megawatts today to more than 15,000 megawatts by 2011.
In part, the energy crisis in California and looming shortages elsewhere will fuel the growth, partly because fuel-cell plants can be easily installed incrementally, with additional units added as demand grows, and because some companies have established a track record of delivering the units quickly for new installations.
''The pressure on the fuel-cell companies will be greater than ever before due to Wall Street's attention to fuel cells and the fuel-cell industry's ability to deliver stationary fuel-cell units on time,'' said Allied's director of energy research, Atakan Ozbek.
After years of enthusiastic reports about the prospects for fuel cells, said Ballard's Kirsch, ''What seems to surprise people is the nearness of our ability to deliver a commercial product. We're pretty excited about the path we're on.''
David Chandler can be reached by e-mail at chandler@globe.com.
This story ran on page 8 of the Boston Globe on 4/10/2001.
© Copyright 2001 Globe Newspaper Company.

Jim
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