|(E) Fuel cells
|By Nenad N. Bach |
(E) Fuel cells
Does anybody from the CROWN knows more about Fuel Cells? Does Croatia have
any research on the issue? Please let me know.
January 17, 2001
Trend number nine: Energy
Fuel cells will reduce our reliance on oil and allow businesses and
homeowners to produce electricity independently.
By Lee Bruno
From the December 04, 2000 issue
Fuel cells are likely to find their way into several thousand medium-sized
businesses and homes over the course of the next year. This will lead to
greater consumer and business awareness about fuel cell potential and an
increase in fuel cell production for 2002.
Fuel cell companies like Ballard Power Systems (Nasdaq: BLDP), H Power
(Nasdaq: HPOW), Plug Power (Nasdaq: PLUG), Mechanical Technology (Nasdaq:
MKTY) (owns 30 percent of Plug Power and Avista), International Fuel Cells
(formerly ONSI), and automobile makers committed to fuel cell investments and
technology like Ford Motor (NYSE: F) and DaimlerChrysler (NYSE: DCX).
Local power utility companies, oil-burning power plants, and manufacturers of
gasoline-driven power generators.
Think our trends are off base?
Video: Watch Herring editors defend the top ten against George Gilder.
Go to our discussion forum to debate energy issues It's been decades since
fuel cells first were pegged as a savior technology for the energy industry.
But during those years the technology -- which promises to replace
nonrenewable energy sources like oil and also help reduce pollution -- seemed
to be stuck in slow-lane development. Over the past nine months investors
have glimpsed signs that fuel cells might soon have their day, and have begun
plowing money into this promising technology, which Goldman Sachs estimates
could represent a $95 billion market in ten years.
Here's how they work. Fuel cells convert chemical energy into electricity by
breaking apart hydrogen bonds in the water molecule and using that energy to
generate a flow of electrons. The same process can be used to power
everything from cell phones (see "Dead Ringers") and laptops to cars and
buses. Some supporters of the technology have gone so far as to predict that
fuel cells have the potential to transform the energy industry in the same
way the microprocessor transformed the logic industry.
Although the fuel cell concept dates back to the 1830s, it has only recently
developed practical applications as an environmentally friendly and efficient
energy technology (see chart Fuel's Paradise).
One big motivation: costs associated with producing fuel cells have fallen
dramatically, now approaching the 1 to 2 cents per kilowatt hour that it
costs to produce electricity from oil or gas. Fuel cell projects are getting
off the ground just as rising fuel and electricity prices are hitting
consumers and businesses in the United States and Europe -- a situation that
led to President Bill Clinton's September release of strategic oil reserves.
Other factors are contributing to the sudden interest in fuel cells. Around
the globe, governments have been adopting more stringent air pollution
regulations. At the same time, states and nations are in the process of
deregulating their power industries. Meanwhile, utilities are facing
increased demands for reliable power.
Buses powered by fuel cells were tested in California this year. By 2003,
California emission standards will require 10 percent of cars sold in the
state to have zero emissions. Other states have emission standards that will
force large auto companies to produce these fuel cell-powered vehicles.
DaimlerChrysler (NYSE: DCX), Ford Motor (NYSE: F), General Motors (NYSE: GM),
Toyota Motor (NYSE: TM), and American Honda Motor are investing in fuel
cells, either by developing or licensing fuel cell technology. Mercedes-Benz
has announced that in Europe it plans to build 20 to 30 buses powered by fuel
cells, which will go on sale in 2002.
Several states are now in the process of deregulating their utility markets.
Among them, Connecticut, Maine, Texas, Illinois, and California have passed
regulations that require a specific percentage of renewable-energy sources.
The market for fuel cells breaks into three distinct categories: residential,
commercial, and transportation. Among the players in the residential market:
H Power (Nasdaq: HPOW), Plug Power (Nasdaq: PLUG), and Avista (NYSE: AVA),
all of which are now testing fuel cells in the field. Plug Power, in
partnership with General Electric (NYSE: GE), is looking to produce fuel
cells capable of delivering 250 to 300 kW, which is sufficient to supply
power for a small hospital. The two leading companies developing both
transportation and stationary residential and commercial uses are
International Fuel Cells (formerly ONSI), which has been producing fuel cells
for 20 years for the U.S. space program, and Ballard Power Systems (Nasdaq:
Fuel cell technology will give consumers the option of producing electricity
for their own homes using a variety of small, 1 to 3 kW fuel cell generators
being developed by Plug Power, which specializes in fuel cells for powering
individual homes. An added benefit: consumers will be able to resell unused
kilowatts back to the local utilities managing the power grid.
What's both compelling and problematic about fuel cells is that several
different types of fuels, primarily hydrogen, methanol, propane, and
gasoline, can be used to run a fuel cell, thus opening up choices for
consumers. However, there's a downside to this freedom of choice. Without a
single, standardized fuel, it's hard to scale up the distribution network
that would be capable of profitably delivering fuel to the automobiles and
power generators. Not only that, but any new fuel choice will require
conversion of existing gas stations and a host of additional conversion
In addition, critics of the alternative energy technology point out that it
faces a classic supply-and-demand conundrum: will fuel cell manufacturers be
able to increase production capabilities quickly enough to meet the expected
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