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Stuart Garfield
Friday, July 18, 2008
An immature fuel cell industry looks for a power boost
By Efrain Viscarolasaga
NECN: New England techs lead new fuel cell markets
Once billed as a technology that would change the face of alternative energy, fuel cells have failed to live up to the promises and expectations foisted upon them earlier in the decade, and some applications, such as consumer electronics and passenger vehicles, are still years away.
But in some areas, including distributed power generation and portable power applications, fuel cells are starting to stake their claim, and a handful of New England companies are leading the way.
“We in the industry are still suffering from a ‘fuel cell hangover’ from a lot of missed promises from a few years ago,” said William Mitchell, a vice president at Billerica-based portable fuel cell maker Nuvera Fuel Cells Inc. Overcoming those promises, he said, will take some real-world successes, and those are starting to come in some sectors.
The most demonstrable progress over the past six months comes from the stationary power market, where fuel cells can provide megawatts of power to a building or facility while running on a variety of fuel sources, from natural gas to biofuels.
In Danbury, Conn., FuelCell Energy Inc. has been betting on the stationary power market since its inception in 1999, and it is starting to pay off. Last week, the company announced its second quarter sales numbers, which came in three times the sales over the same period last year. The first six months of 2008 have seen $46.6 million in revenue for FuelCell Energy, just shy of last year’s 12-month total.
The growth, said Tony Leo, vice president of OEM and application engineering for FuelCell Energy, stems from a shift in customer demand, from smaller systems providing about 300 kilowatts of power for use as add-ons to a facility’s power system to larger systems, reaching 2.5 megawatts and connected to the grid.
“Now that people have gotten comfortable with the smaller units, they are starting to put units behind the meter and selling power back to the grid,” he said.
FuelCell Energy’s South Windsor neighbor and main competitor UTC Power, a division of United Technologies Corp., has also been making sales. In June and July, the company landed a new order for a 400 kilowatt system with St. Helena Hospital in California, and also landed the coveted Freedom Tower project, through which it will provide 12 fuel cells totaling 4.8 megawatts of power to the new World Trade Center development in New York.
The stationary fuel cell market also includes use in residential combined heat and power applications, in which the technology provides both heat and power for homeowners. Westwood-based Acumentrics Inc., which traditionally has focused on military power applications, has increased its efforts in the residential space and launched several new demonstration products over the past year.
According to a report released last week by New York-based firm Lux Research, the residential combined heat and power and distributed energy fuel cell markets will “drive the fuel cell family to $1.8 billion in 2012, reflecting an 82 percent compound annual growth rate and resurrecting fuel cells from commercial oblivion.”
Portable power
While the high-power applications of stationary applications may have the most immediate impact on bringing fuel cells — finally — to commercialization, the portable power generations markets, including use in off-road vehicles and portable power generators, are making gains as well.
While Nuvera has chased the passenger car market since its inception in 2000 (the company even unveiled a fuel cell-powered concept car with Italian automotive designer Pininfarina s.p.a in March), it has recognized the need to move to other applications and has carved a niche in the industrial power generation and forklift space, as well as offering two products for onsite power generation.
Meanwhile, Southborough-based Protonex Technology Corp., which is moving its military field generator to the consumer market, hopes to provide power to people when they are away from the grid (such as when camping or fishing) or when the grid goes down.
Both acknowledge that while their products are in demonstration use around the country, they are not considered commercialized quite yet. However, the progress could bode well for the future, according to Boston area analyst Jim Horwitz, an independent advisor for the fuel cell industry.
“We have a short time to see if any of these companies can make it,” he said. “But if companies like Nuvera can keep their focus narrow and perfect their particular area, other applications will come along as the industry grows.”
Private investment in fuel cells, however, remains sluggish. While UTC Power is backed by the deep-pocketed United Technologies Corp., publicly-traded FuelCell Energy and Protonex, as well as private companies like Nuvera and Acumentrics, have seen most of their funding come from government sources, such as the Department of Energy and the Department of Defense.
What is a fuel cell?
A fuel cell is an electrochemical device that uses hydrogen and oxygen to generate electricity, and produces water and heat as by-products. Unlike a battery, which will lose its charge over time, fuel cells are designed
to produce a current as long as the reactants — hydrogen and oxygen — are supplied.
The process is meant to be clean, quiet and up to two or three times more efficient than burning fuel.
To create hydrogen, fuel cells can use a number of fuels, including natural gas, biogas, propane and even ammonia. Reforming different fuels has proven to be a challenge because many fuels leave elements such as carbon and sulphur when hydrogen is removed, and those elements can contaminate the fuel cell.
However, cost is still a stumbling block for fuel cells, particularly in areas were the technology competes with well-established systems, such as the internal combustion engine in vehicles and batteries in consumer electronics such as cell phones and laptop computers. Fuels for the cells may be cheaper than fossil fuels, but the materials and mass production methods still make the installation of fuel cells in many applications more expensive.
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