Date: Jul 09, 2009 Author: Jackie Noblett Source: bizjournals (
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The U.S. Department of Energy's recommendation to slash funding for some fuel cell development projects could be seen as a blow to the industry, but New England fuel cell companies are hoping the cuts are kindest to them.
If the department gets its way, the budget for fuel cell research would be cut by about $101 million to $68.2 million in the 2010 fiscal year. Much of those cuts would affect projects in the transportation arena, which Energy Secretary Steven Chu has said publicly are further away from large-scale deployment. The changes would refocus funding on fuel cells for power generation and storage, as well as transportation, and would not be tied to any particular fuel source such as hydrogen.
Yet the changes may actually provide more funds to non-transportation applications for fuel cells, such as distributed generation and portable power. Those applications are the sweet spot of local fuel cell ventures.
"The overall pot of money is down, but that's a good thing because the dollar value for what we do may be larger," said Scott Pearson, chief executive of Southborough-based Protonex Technology Corp., which is developing portable power systems for the military.
Fuel cells, which generate electricity by forcing a fuel to undergo a chemical reaction, at one time were seen as an answer to emission-free cars. But as hybrid and electric vehicles based on lithium ion batteries have made significant technological gains, the industry suffered from the perception the technology was too costly and technologically challenging.
Yet the opportunities for fuel cells in combined heat and power and other distributed generation systems remain promising. Acumentrics Corp. in Westwood received a $15.6 million energy department grant last year to develop further the company's solid-oxide fuel cells. Bob Tomasetti, vice president for business development, said he believes the technology, which can use a range of fuels from pure hydrogen to ammonia, has a market in combined heat and power energy generation systems for commercial buildings.
Connecticut is using a large portion of its energy stimulus funds to support its growing fuel cell industry. Some $8 million of the $38 million in funds the state is expected to receive for energy projects will go to fuel cell projects, with the goal of completing 14 installations. The fuel cell industry in Connecticut employed 927 people and generated $204 million in revenue in 2006, according to a 2008 report by the Connecticut Center for Advanced Technology.
Another opportunity for fuel cells is in the consumer market. Lilliputian Systems Inc., a Wilmington maker of micro fuel cells for portable electronics, raised $28 million in April from Boston's RockPort Capital Partners, Cambridge's Fairhaven Capital, Waltham's Atlas Venture and Westwood's Stata Venture Partners.
Yet at least one local firm is not giving up on its goal of deploying fuel cells in vehicles. Nuvera Fuel Cells Inc. of Billerica is majority owned by Hess Corp. and moving forward with its efforts to make fuel cells for cars, with or with DOE financial support.
"It does not change our business plans in any shape or form," said Bill Mitchell, Nuvera's vice president of marketing. "That is still part of our long-term plan."
