Just two years ago, IdaTech of Bend, Oregon was selling its fuel cell systems in ones and twos to telecommunication companies "to destroy and play with in their laboratories," according to CFO James Cooke.
When the company launched its next generation of backup generators, called the ElectraGen family, orders from clients went up into the tens and twenties. And in 2009, IdaTech sold more than 300 backup generators to India's ACME Tele Power Group for that country's burgeoning cell phone networks.
"We're seeing a huge increase in interest in fuel cells," says Cooke.
While hydrogen fuel cell cars aren't expected to enter the market until 2015, certain niche markets are starting to welcome the fuel cell today. "Orders are ramping up from the early test purchases to orders that are more commercial in nature," says John Tak, President and CEO of the Canadian Hydrogen and Fuel Cell Association.
A safe bet for backup
One reason for increasing sales is that companies are going after markets where the fuel cell makes economic sense in its current state of development. "Those are going to be industrial markets, like forklift trucks and backup power systems, where all the characteristics of the fuel cell today — performance, cost, reliability — are acceptable to that buyer," says Tak.
In the case of backup power, fuel cells offer a performance advantage over batteries because they can reliably provide power for days rather than hours. "Customers benefit from a system that guarantees continuous operation when the main power supply, the grid, fails to deliver," says Tak. "On a dollar-for-dollar basis, fuel cells offer a competitive and reliable backup power solution."
Before IdaTech’s generators went to India, the company tested the fuel cell technology in the NRC Institute for Fuel Cell Innovation’s Hydrogen Environmental Chamber (located in Vancouver), which can simulate climate conditions ranging from winter in the Northwest Territories to a tropical rainforest.
The generators were put through temperature, altitude and humidity tests that replicated the conditions they might encounter while operating on a mountainside in India, or during transport from Canada. “One of the more extreme climates in India is the monsoon season, when you’ve got essentially 100 percent humidity, and it can be 40ºC,” says IdaTech CFO James Cooke. “That’s not the climate you get in Vancouver.
” Temperatures ranging from -5ºC to +45ºC were tested, at varying altitudes and humidity levels. NRC’s chamber is flexible in that all three components — altitude, humidity and temperature — can be manipulated simultaneously to a client’s exact requirements. The chamber is the only one of its kind in North America available for public research.
The tests not only allowed IdaTech to make improvements to the fuel cell systems, they were also required by the client in India to certify that the technology would meet their specifications. “It’s a great service to the hydrogen and fuel cell sector because NRC is an independent body that is verifying the claims of the manufacturer,” says John Tak, President and CEO of the Canadian Hydrogen and Fuel Cell Association. “That’s critical in gaining the confidence of customers.”
IdaTech, which focuses on backup power for the telecom industry, now regularly sees tenders going out around the world for hundreds of fuel cells. The company recently signed an agreement with ACME that will allow that company to sell IdaTech's products within India, an arrangement that implies increasing confidence in the technology. "We're able to give them a product with greater efficiency and generally longer life, so that saves them money," says Cooke.
Many sales are happening in emerging economies such as India and China, where electricity supply is unreliable and fuel cells can provide quasi-main power. In India, IdaTech's backup generators will run between five and six hours per day — much longer than backup systems in North America.
Clearing the air
Fuel cells can also help to offset pollution in cities that rely heavily on diesel generators. IdaTech is developing fuel cell generators that can extract hydrogen from natural gas — a good fit for India, which is building a comprehensive natural gas network into its urban areas, and where many cities suffer serious pollution from diesel power. "We're seeing a great value proposition for our product in those emerging economies," says Cooke.
But while the environmental benefits of fuel cells are a huge draw, Cooke says the effect on the bottom line is key to making sales possible. While everyone wants to go green, "ultimately it's the dollars and cents that seem to count."
Related information:
