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Microcap & Penny Stocks : MECHANICAL TECHNOLOGY (MKTY) -- Ignore unavailable to you. Want to Upgrade?

To: Bread Upon The Water who wrote (266)	7/12/1999 12:46:00 PM
From: Sid Turtlman	Read Replies (1) \| Respond to of 542

Bill: Let me try to distinguish between two different issues relative to cost and efficiency. One is size - Plug Power, Avista, and a few others want to make and sell small units, typically 7 kW, big enough to handle one house at a time. Other fc companies - UTX, BLDP, ERC, Siemens, etc., have been focusing on larger units - at least 250 kW, aimed at utilities to provide power for the grid, or for larger users, such as a community of houses that would be wired to a grid. The second, totally separate issue is type of fc. Plug Power, BLDP, AVA and many others have been working on PEM type cells. UTX has focused mainly on phosphoric acid fc's, but is also doing a lot of work on PEM. Those types are "low temperature" fuel cells. ERC has focused on carbonate fc's, and Siemens and Global Thermoelectric have been working on solid oxide fc's. These are called "high temperature" fc's. My skepticism about Plug Power's prospects relates mainly to the size issue. I believe that there are some excellent reasons to believe that it will not even come close to its cost objectives, because there are a lot of costs in both the fc and the "balance of plant" that have an economy of size about them, i.e., they aren't much cheaper for 7 kW than they would be for 250 kW or above. That means that the cost per kW should be a lot higher for 7 kW than for a larger unit. And yet Plug is claiming that it will be able to deliver small units at a much lower cost per kW than the makers of large PEM cells believe is possible with their own products. That does not seem credible to me. To put it another way, if Ballard doesn't believe that it can get the cost of a 250 kW unit down below $1000 per kW any time soon, why does Plug think it can deliver and install them for $500 per kW? Anything is possible, but it doesn't seem likely. Efficiency is not related to size in fc's. A small one can be just as efficient as a large one. It is related to type of fc, though. The high temperature ones are substantially more efficient - 50+% versus 40% at best, and that doesn't even count the value of the waste heat, which is much more with the higher temperature cells. There are a variety of reasons why they are more efficient, but one of the main ones is that the high temp cells can use natural gas or other hydrocarbons as a fuel directly, without having to run it through a reformer to create hydrogen first. Hope that helps.