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Technology Stocks : Ballard Power (BLDPF) - The Holy Grail

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To: Kayaker who wrote (1)3/17/1998 9:32:00 PM
From: Urlman   of 26
 
March 17, 1998: Fuel cells provide grid-free, pollution-free home energy;
SWITCH IS ON / A PRIMER ON DEREGULATION

The Boston Globe

, Tuesday, City Edition

ECONOMY; Pg. F4

895 words

Fuel cells provide grid-free, pollution-free home energy;
SWITCH IS ON / A PRIMER ON DEREGULATION

By David L. Chandler, Globe staff

ÿÿÿ Within the next two years, according to several energy companies, a whole new option in electric service will open up: Consumers will be able to cut loose from the electric power grid altogether, and generate their own power inside their homes. No more storm-induced blackouts, no more peak-load brownouts, no worries about rates and suppliers - and, to top it off, no pollution.

It's already possible to generate your own electricity. Simple "cogeneration" units that take the place of existing oil furnaces can provide both heat and power. But while hundreds of New Englanders are using these units, many energy analysts think the most exciting prospect is in-home fuel cells, whose high prices are expected to become more competitive when the technology goes into mass production in about two years.

Currently, a pilot project funded by the Electric Power Research Institute - a research organization formed by most of the nation's electric utilities - is placing prototype fuel cell units in 25 homes or businesses for testing. The furnace-sized units, which can provide three kilowatts of electricity (and can store off-peak power in batteries to provide greater power during peak demand), now cost $ 90,000 each - hardly a practical investment for a homeowner who spends $ 100 a month on electricity.

But that should change soon as the units go from being individually hand-built to mass production, says Don Prohaska, president of Boston-based American Power Corp., which is providing the units for the pilot project. "We're two years away from having a real commercially available unit," powered by natural gas, says Prohaska. He estimates the units will cost $ 3,000 to $ 4,000, and will produce power for about 8 cents per kilowatt hour - less than what some utilities charge now.

Fuel cells are not a new idea - they were invented more than a century ago. But until recently, their potential for widespread use has been limited by high production costs. Fuel cells have been used to power almost every space mission, from Apollo through the space shuttle. Now, more than 100 companies are scrambling to reduce fuel-cell prices enough to put one in every home, business, car, and truck.

Fuel cells operate on a simple principle: Instead of burning the fuel, the cells extract energy by using a chemical reaction, joining hydrogen from the fuel with oxygen from the air to produce water, and in the process releasing electrical energy.

One tricky part of the process is extracting the hydrogen from an easily-available fuel such as natural gas (other fuel cells have been made to run on oil, gasoline, or methanol). To do this, a separate device called a reformer is needed. It is usually packaged with the fuel cell as a single unit.

Since the only emissions are small amounts of water vapor and carbon dioxide, and the units are quiet, more like batteries than power plants, fuel cells can be placed almost anywhere - home-sized units can go right in the basement, utility-scale units can be sited in the middle of a residential block.

Several companies are developing fuel cells for transportation: Ballard Power Systems of Vancouver, Canada, has been building fuel-cell buses already in service in several cities, and some car firms, including Daimler Benz, Ford, and Toyota, plan to introduce fuel-cell cars.

As the potential for fuel cells continues to heat up, the competition among small start-up companies with clever ideas could be "very much like the computer industry back in the '70s," Prohaska says, when even little companies like Apple and Compaq had a chance to have a big impact.

Some energy specialists have even suggested that fuel-cell cars could be used to help power the home - or the electric grid. At the end of the day, the car and its fuel cell could be plugged into the home electric system supplying power to the home, or the grid, in which case the electric meter would run backwards.

The idea of home- and car-sized fuel cells has been advocated for decades, but the necessary drop in prices finally seems to be just around the corner. "We know we can reach certain price goals," says Prohaska. "We've talked to contract manufacturers," and know what the costs will be when the units are made in quantity. What's unclear, says Prohaska, is what effect deregulation will have on the market for such self-generated power. On the one hand, if electric rates go down and stay down, it could reduce the incentive to produce your own power. On the other hand, some analysts think there is a potential for more "rolling brownouts" during peak use periods, as smaller suppliers enter the competition and the industry goes through a transition.

And some flukes of nature may play a role in determining the demand for fuel cells. This winter's ice storms in Maine and Canada, which left thousands of people without power for days, demonstrated the advantages of "distributed power" - bypassing the electric distribution system with its huge centralized power plants and vulnerable overhead powerlines by substituting smaller local, and even in-home, power sources.

Despite the low prices of electricity in Quebec, Prohaska says, American Power had inquiries from Hydro Quebec after the ice storms hit. "Even though they have cheap power," he says, "they've been awakened to the need for distributed power."
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