Friday, October 10, 2008

Fuel cell startup CTP runs out of gas

By Efrain Viscarolasaga

Unable to raise additional funding to help bring the company’s hydrogen reformer technology to market, fuel cell technology developer CTP Hydrogen Inc. has closed its doors.

In August, the Westborough-based company laid off most of its 10-person staff, leaving president Scott Rackey and one other employee to clean up, which includes setting up an auction of the company’s intellectual property, slated for later this month. According to Rackey, some parties have expressed interest in acquiring the technology, but he would not divulge names.

CTP Hydrogen, which had spun off from neighboring CellTech Power LLC in 2005, raised more than $4 million over the course of three years, but over the past year the venture capital community has given the company, and much of the fuel cell industry, the cold shoulder, according to Rackey.

“In the absence of a hydrogen economy, fuel cell companies are grasping at niche markets,” he said. “We visited 75 venture capitalists at last count, and we got a lot of, ‘We like you and we like your technology, but there’s just not enough of a market.’”

CTP Hydrogen’s technology aims to covert “dirty fuels” such as propane or military JP-8 into pure hydrogen for use in fuel cells. The company targeted a variety of applications, including portable and emergency power scenarios. However, while the company had announced several successful tests and had landed a Small Business Innovation Research grant from the U.S. Navy, it never announced any large customers.

Early investors in the company included Massachusetts Green Energy Fund and Commons Capital, both in Brookline, and Japanese conglomerate Sumitomo Corp.

According to independent fuel cell industry analyst Jim Horwitz, the move to more versatile fuels in the fuel cell industry has hurt companies like CTP Hydrogen, which are focused on using or creating the very pure hydrogen on which some fuel cells operate. As a result, he said, the venture community has shied away from all but the most adaptable and promising technologies in the hydrogen sector.