Norsk Hydro Technology Ventures' capital investment in zinc/air fuel cells developed by Southern California based company Metallic Power, Inc. appreciated this spring with the signing of a contract with UK telecommunications equipment giant Marconi, to market the regenerative fuel cells as a back-up power supply in small telecom installations.
"The deal is the first significant order in the world for a large-scale fuel cell that generates power by combining oxygen with zinc rather than with hydrogen," the New York Times reported in May. Spent hydrogen makes water. The zinc/air alternative uses zinc pellets, which turn into environmentally benign zinc oxide paste that is automatically regenerated into reusable fuel.
Options open
"In addition to developing hydrogen as an alternative energy carrier, Norsk Hydro Technology Ventures (a unit of Norsk Hydro Renewables and Hydrogen) is on the look-out for other hydrogen-compatible projects as well as emerging competitive technologies to give us a broader insight," says Renewables and Hydrogen director, Jørgen Rostrup. "We are in the very early stages of seeing alternative energy become viable and we need to be very open regarding all developments."
"There's room for a number of alternative technologies, depending on the applications," says Metallic Power chief financial officer, Michael Russell. "All fuel cells face a common challenge – how to get the price down to compete with conventional technologies."
Russell touts two good reasons for Hydro's investment in the zinc/air solution: "purely financial – the opportunity to realize significant return on initial investment" and "the opportunity for commerce – where our products could be sold into Norsk Hydro applications."
Maximizing return
After extensive market research, Metallic Power identified back-up power as the most profitable niche for its zinc/air fuel cell through 2007.
"There are a myriad of opportunities for zinc/air fuel cells but we had to focus on the one area maximizing investment return," Russell remarks. "If there's one watch word for a small company to hang over the door, it's focus."
Back-up power delivers the "best value per kilowatt hour" – potentially generating returns 100 times higher than the automobile fuel cell sector. "I think it will be a long time before fuel cells replace combustionable fuels" in the transport sector, he comments.
Hitting the beach
"Our beachhead product is a long-term back-up – 24 hours – for 1-5 kW (kilowatt) sites where generators are problematic," says sales director Fred Lewis. "The time frame can be expanded with a larger fuel tank... it's scaleable, just like a car."
Zinc pellets are contained in a holding tank where they interact with potassium hydroxide to generate electricity. A regeneration pump recycles the zinc oxide paste into reusable fuel. Potassium hydroxide is highly corrosive, but controlled by a three-level containment system.
Tests have proven Metallic's zinc/air solution as a safe, profitable alternative to the lead-acid batteries presently used (in the absence of generators) for back-up power (during electricity grid failures) at telecom base stations. Lead-acid batteries are susceptible to temperature extremes and deep cycling, explains Lewis. Installation costs of zinc/air fuel cells compare with lead-acid batteries up front, but boast two-thirds the five-year lifecycle cost and potentially under half the 10-year lifecycle cost. Zinc is also plentiful and a relatively inexpensive metal to mine and produce.
No outdoor noise
Lead-acid units are often backed with noisy auxiliary fossil fuel burning generators and require placement inside a shed, creating a safety hazard due to the slow emission of potentially explosive hydrogen gas. Metallic Power's zinc/air units are outdoor compatible and as quiet as personal computers. They also require little maintenance.
"We were looking at hydrogen fuel cells for remote telecom sites and one issue was hunters taking shots at the sheds," Lewis remarks. "Hydrogen is a potentially higher cost fuel because of the pressure required for storage. Materials must be more rigid and there's more platinum use. The zinc process operates in normal atmospheric pressure and more easily meets fire codes."
Metallic Power's fuel cell is "different in that zinc is more economically regenerative," he reiterates. The zinc cells automatically regenerate when power from the electricity grid is restored.
Prospective customers within the back-up power niche include wireless and wireline carriers, cable TV companies, city, state and/or federal governments and agencies.
Aiming high
Founded by MIT graduate Dr. Jeffrey Colborn in 1995, "Metallic Power is on a faster track than other fuel cell companies," claims Russell. The company is shipping its first trial units with Marconi in June and has established field trials with US wireless communications giant Nextel and two utilities.
Metallic Power, which currently employs 58 people (75 percent in R&D work), crossed a major threshold in 2002 – delivering its first zinc/air fuel cell product. Production units will be commercially available in early 2004
"Jeff has surrounded himself people with formidable experience regarding what to do and not to do," says Russell, who has relevant financial management experience as well as an electrical engineering background. Lewis counts more than 20 years experience selling telecom, telecom power and high technology products. "Our challenge has been to refine the process of developing the product and finding a market application."
Now with a viable market application targeted, Metallic Power expects a positive gross margin in 2003 and "rapidly growing customer demand." It also plans on becoming the world's first profitable fuel cell company.
See also:
| Norsk Hydro Technology Ventures | |
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| www.metallicpower.com | |
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