FEATURE - Company pushes hydrogen power for homes
Date: 15-Jul-02
Country: USA
Author: Richard Valdmanis
For more than a month Bevers and his family have volunteered to power their home in Lynsay, Okla., with a test-stage hydrogen fuel cell, catching a glimpse of what the future of the beleaguered power industry might bring.
So far, it's been a mixed experience, but Bevers is upbeat about it.
"It's currently three times as expensive and not nearly as reliable as the grid, but its improving," said Bevers, who works as a manager of engineering and operations at Rural Electric Cooperative Inc. "My gut feeling tells me that this technology will go."
H Power Inc., which provided the fuel cell, is swimming against a tide of skepticism but says it is still making headway in its aim to power homes with hydrogen.
The experimental effort at the Bevers home illustrates some of the trials and errors the hydrogen fuel technology. The 4.5 kilowatt, four-foot cubed fuel cell has shut down twice in a month due to minor design problems, Bevers said. But that marks a "quantum leap" from some of the earlier stage HPower test units, which broke down every couple of days.
Tests of its residential fuel cells, taking place in homes and facilities in the U.S., Japan, France, and Sweden, are revealing advances that have bolstered the company's confidence in making the futuristic power units competitive on the market as early as 2005, H Power chief executive officer Frank Gibbard said Tuesday.
"The response from our tests is that we've made some truly significant improvements in reliability and cost," Gibbard said. "In 2005 to 2008 we'll hit a marketable price for these units. Eventually this could be mainstream."
The fuel cells convert propane or natural gas into hydrogen and which can serve as an alternative to hooking up to the traditional power grid.
"The fuel cell market is still in its infancy," said analyst Puneet Sanan of New York-based Fano Securities in a recent report. "Fuel Cells will play a significant role in powering the future, perhaps more so than any other emerging distributed energy technology."
The alternative power source has received heightened attention since the California power crisis led to power grid outages and amid heightened concerns over the U.S. reliance on imported oil after the September attacks on New York and Washington.
Still, a wave a pessimism has hit the stocks of alternative fuel suppliers this year, as any shares linked to new or speculative technology are suffering in the current bear market. H Power's stock has dropped more than 90 percent from its year high to roughly 75 cents on the technology-laden Nasdaq, while others like Plug Power and Ballard - leaders in fuel cell development - have not fared much better.
"The sector has suffered, largely because investors want a company with strong earnings that is well established, because confidence has been shaken," Gibbard said. "The trend could continue."
Many fuel cell companies, like New Jersey-based H Power, have yet to turn a profit as their technology remains mostly in the lab. H Power doesn't expect to reach a net profit until 2006.
THE FUTURE IS NOT NOW
But even though the stock market has grown bearish, H Power and others continue to tinker and run active experiments.
"The early units required lots of field service," H Power's Gibbard said. "As far as unplanned outages are concerned, this newer version is several hundred percent better."
H Power expects to complete a new improved test version of the residential fuel cell this year, and begin shipping the units in the first quarter of 2003.
The improvements in reliability make H Power a leader in residential hydrogen power, while companies like United Technologies appear to be making greater strides in reliability of larger fuel cell units designed for larger high-rise buildings, like the Verizon building in Long Island.
H Power this year signed an $81 million deal with energy services cooperative Energy Co-Opportunity Inc. (ECO) to provide residential fu