Our friends Wendy Williams and the Northern Sky News gave us permission to re-print this article on how hydrogen could help provide the energy humans need, while making people much more self-sufficient."
— Woodchuck

January 2003
Fuel Cell Capital of the World
Hydrogen Valley Leads Way to Alternative Energy
By Wendy Williams

Photos courtesy of Northern Sky News

In the gambling dens of Mohegan Sun in southeast Connecticut, the bells and lights of the slots work hard 24 hours a day, getting customers to give up their cash. Wizened women spend hours putting in crumpled $10 bills, hoping for a bright-light payback. Lights flash. Bells ring. Music plays. The show goes on day and night, as the casino rakes in what Time Magazine says was $1 billion last year.

A place like this uses lots of electricity—thousands of kilowatt hours a day—but that energy is less polluting than you might expect. Two new hydrogen-powered fuel cells, each producing 200 kilowatts of electricity, help keep the place going full tilt.

In a high school just north of Hartford, a quite different environment, another 200-kilowatt fuel cell generates the electricity needed to keep students learning. Because the fuel cell can generate electricity when the regional grid is down, government agencies paid out nearly $2.5 million for the cell’s purchase, installation and 10-year maintenance. If a winter storm downs electric lines, the high school will do double duty as a regional emergency shelter, keeping the locals warm and well lit. “The potential environmental, economic and educational benefits of this program reach into our entire community, and beyond,” South Windsor Town Manager Matthew Galligan said at an October unveiling ceremony.

It’s no coincidence that South Windsor was the nation’s first high school to be powered by fuel cell. South Windsor is also the home of UTC Fuel Cells, which has been developing and selling fuel cells for more than 40 years.

Under the United Technologies umbrella, the company began developing fuel cells (think of them as large and powerful batteries) decades ago for the space race. What’s different now is that UTC Fuel Cells is actually selling the product on the open market. You, too, can own an off-the-shelf fuel cell to power your home or office—if you have the millions to spare.

The investment apparently makes sense to some people. More than 250 UTC fuel cells have already been sold. Buyers are customers like the U.S. Post Office in Alaska, which loses oodles of money when the lights go out (and they go out a lot). Or New York City, which bought a fuel cell for an isolated Central Park police station rather than pay the high cost of upgrading worn-out service lines running under the park. Or Conde Naste, which—just for fun and prestige—bought a fuel cell for its glamorous new Times Square building.

“Connecticut is the fuel cell capital of the world,” says Arthur H. Diedrick of the Connecticut Clean Energy Fund. His confidence is based primarily on the support UTC Fuel Cells gets from its parent company, United Technology, which has lots of income sources to keep the research and development going.

Diedrick isn’t just spouting a public relations line.
“Connecticut is definitely in the lead right now,” says Rick Masters, a California-based hydrogen journalist and producer of the video Hydrogen Hawaii. “UTC is the only company selling commercial fuel cells with a history of production. They [make] fuel cells that are quite reliable, and have thus put fuel cells on the map.” But, warns Masters, other states and nations may be about to give them a run for their money.

“Michigan is putting forward a tremendous challenge and California thinks it’s leading in transportation,” he says. The European Union just committed $2 billion in research money. Japan has long been interested in making hydrogen the “energy currency” of the world, which is not surprising, since it lacks indigenous oil.

Despite these challenges, Connecticut remains confident. It has already dubbed the Connecticut River valley “The Hydrogen Valley.” But given this sluggish economy and the accompanying caution of venture capitalists stung by the recent dot-com fiasco, it’s unclear how long the state can keep its nose out in front.

Deceptive Simplicity
As any physicist will tell you, there’s plenty of free energy in the universe. Sadly though, harnessing that energy is very expensive.

“On a clear day, you can feel the heat and see the light radiated from the sun,” writes John Charap in Explaining the Universe. The sun’s intensity “is about 1.5 kilowatts on every square meter of Earth’s surface. This prodigious outpouring of energy has lasted for billions of years. Its source, as with all stars, is thermonuclear.”

The Holy Grail of 21st century technological invention is finding a way to put those 1.5 kilowatts to productive, cheap—and nonpolluting—use. Inventors worldwide yearn for that glory. The team that finds the solution will leave the rest of the energy world in the dust.z

So far, everyone has failed. Dismally.

Solar cells are too expensive. Wind turbines are cumbersome, site-specific and, in some communities, visually unwelcome. Wave power remains nothing more than otherworldly, pie-in-the-sky techno-dreaming.

But there is one idea out there—one hope—that has futurists salivating and scientists sceptical, but interested. Why not get our energy directly from hydrogen? After all, it’s the most common element in the universe.

Once an obsession of a few individuals, this hope has in the past decade become a worldwide passion. Scientists, technologists and technocrats are investing careers, companies and money to turn the dream of a hydrogen-powered world into a reality.

Their hopes are based on an invention so simple that it’s been around for more than a century. A Welshman, Sir William Grove, invented the first voltaic battery in the late 1830s. He also invented the first fuel cell battery, which he called the “gaseous” voltaic battery. Although Grove’s voltaic battery obviously caught on—we all use something similar today—the “gaseous” battery didn’t enjoy a similar popularity.

That’s because the fuel cell’s simplicity is deceptive. Hydrogen-powered fuel cells may be free of pollutants, but they have some major drawbacks: (1) they are cumbersome, (2) they are expensive, and (3) our earth lacks a ready supply of free hydrogen.

Free hydrogen—hydrogen unattached to another element—is so light that the earth’s gravitational field cannot keep it in our atmosphere. Whatever free hydrogen there may once have been has long ago floated out of earth’s reach and into the universe beyond. Although 92 percent of the universe’s atoms are hydrogen, we poor earthlings have only those that are already attached to something else. Water, for example, consists of two hydrogen atoms clinging desperately to the much heavier and more solidly built oxygen atom. The fossil fuels that we burn contain hydrogen atoms clinging to carbon.
Herein lies the drawback of the UTC fuel cell. Its source of hydrogen turns out to be fuels like natural gas. In a reformer attached to the fuel cell, the hydrogen is cracked out of the carbon-based fuels, a process that necessarily creates some pollutants.

“Gasoline consists of carbon and hydrogen chains of different lengths, ranging from C7H16 (seven carbons) through C11H24 (eleven carbons),” writes Devra Davis in When Smoke Ran Like Water. “Because gasoline never does burn completely, lots of other by-products come along.”

Hydrogen “cracked” from these fossil fuels usually has some of those by-products mixed in. The impurities create havoc with the technology. Moreover, those fossil fuels must be extracted somehow from the earth. The tops of mountains come off to get coal. Oceans are mined for oil. Natural gas is distributed via hundreds and thousands of miles of pipelines. So while fuel cells that depend on fossil fuels as a source of hydrogen do pollute less than a coal-burning power plant, the other environmental costs of electricity consumption remain.

We do, however, have one readily available source of pure hydrogen—water, or H2O. The attachment between hydrogen and oxygen is something special. It’s nature’s longest love affair, one that came to fruition soon after the oxygen atom itself was born after the Big Bang.

In this love affair, hydrogen spends a great deal of energy relentlessly pursuing a marriage with oxygen, the offspring of which is water. It is this energy, this affinity, that scientists hope to capture and exploit. To do that, they need free hydrogen.

The dream—the solution to the world’s energy dilemma—is to find a pollution-free way of extracting hydrogen from water itself. The process of electrolysis separates the hydrogen and the oxygen atoms in a molecule of water. Moreover, the hydrogen “cracked” from water itself is blessedly free of pollutants. When this pure hydrogen is sent into a fuel cell, it will strive to bond with other oxygen atoms to make water again. In the process of that bonding, electricity is created. Clever.

But again there’s a drawback: electrolysis requires electricity. To make free hydrogen, an initial source of electricity is needed. Researchers hope the source of that electricity will ultimately be either from wind or solar power, but those are options for the far future.

Thus humanity finds itself in a multilayered vicious circle. Many people think these problems can be solved; they also think that will take a lot of money.

Chasing the Holy Grail
Chip Schroeder enters rooms these days singing 2002’s most popular dirge: Where Has All the Venture Capital Gone? Schroeder heads one of Connecticut’s most promising fuel cell development companies, Proton Energy Systems of Wallingford.

It seems that two major oil companies recently donated several million dollars to academic institutions interested in developing energy technology like fuel cells. Schroeder thinks some of those dollars should be given to companies like his for real-world product development.

“A little company like Proton that’s clearly making headway doesn’t get anything. That’s my frustration,” he says. Schroeder also has a year-end board meeting coming up in mid-December and he’s clearly feeling pressured. It’s been a difficult year for this “little company.”

Proton Energy began in 1996, when a group of four engineers working on fuel cell development at United Technologies decided to go their own way. The men thought they saw a commercial potential for a new kind of fuel cell they’d been working on for years called the Proton Exchange Membrane (PEM). When United Technologies proved reluctant to take the plunge, the men spun themselves off into a fledgling privately held company. They hooked up with venture capitalist Robert Shaw of New Hampshire, who in turn hooked them up with Schroeder, a man with solid business experience.

The company went public in September 2000. On the first day of the offering, the stock was priced at $17 and skyrocketed to $32. That was the high point. Shaken by the uncertainty of the Bush election, investors ran for the hills; like so many companies, Proton suffered. Its stock plummeted to around $6 and has since dropped to about $3.

That’s not the reason for the company’s current problems, though. They say the offering allowed them to bank well over $100 million, and they have plenty of funds to keep going during the coming lean times.

The main obstacle is the difficulty of developing a reliable product—and an interested customer base. While European governments and businesses clamor for environmentally safe products, Americans just don’t seem to care.

To try to build an income stream while working on research and development, Proton has pursued a two-pronged approach. The company began to develop and sell a product called “HOGEN,” an on-site hydrogen generator based on the electrolysis process. Lots of companies use hydrogen in their manufacturing process. Fast-food fries are cooked in hydrogenated oil. Particularly pure hydrogen is used in industrial processes like the manufacture of high-quality lenses. Research laboratories often use small amounts of hydrogen in experimentation.

These organizations currently buy hydrogen from industrial gas companies like Praxair (also based in Connecticut), which often get it from fossil fuel refineries. As Proton Energy sees it, such a system dates from the Dark Ages. Industrial by-product hydrogen is not particularly pure and the mode of delivery is inefficient and time-consuming. “It takes a 125-pound steel container to ship one pound of hydrogen. You couldn’t think of a more inefficient business model than to ship the world’s lightest molecule in steel containers by hand,” says Proton Energy’s John Glidden.

Proton Energy has had some success in selling these hydrogen generators to customers requiring only small amounts of hydrogen, like research laboratories. The National Oceanic and Atmospheric Administration has bought a few to make the hydrogen for their hydrogen-filled weather balloons that are launched from sites like Guam, Palau and Yap—isolated Pacific islands where it’s expensive to ship hydrogen. Although the company intends to pursue this product line, they don’t claim the technology solves the problem of finding a cheap source of hydrogen because of that old vicious circle: HOGEN needs electricity to make the hydrogen.

The company’s real hopes are pinned to a substantially less plebeian product. Proton wants to make a successful “regenerative” fuel cell. “A regenerative fuel cell is something that can make its own fuel, and then use that fuel to create electricity when you need it. You can think of it as a new battery concept,” says Glidden.

One of the first commercial applications for these regenerative fuel cells could be to replace lead-acid batteries at cell-phone towers, and other facilities that periodically require backup power.

And hydrogen proponents often note that, during off-peak periods, excess electricity produced for the regional electric grid is actually sent “into the ground”; in other words, it’s wasted. A regenerative fuel cell could use that excess electricity to manufacture hydrogen, which would then be used later to make electricity when needed.

“Or,” says Glidden, “speaking sustainably, we could make hydrogen from wind or solar, when Mother Nature cooperates, store it and use it later.”

While this concept sounds tantalizingly like the Holy Grail, Proton Energy is the first to explain that a marketable product is many—perhaps 10—years away.

One major advantage to such a product would be its scalability. UTC’s fuel cell weighs 40,000 pounds and requires major investments in money, building space and maintenance. If UTC’s current fuel cell is something like UNIVAC, then Proton Energy hopes their regenerative fuel cell will be akin to the small computer on your desk.
But for that, the industry needs the do-re-mi. And that is where Connecticut stands the possibility of losing its edge. Many people are doing the best they can to give Glidden and other hopeful companies the money they need. A year ago, the Connecticut Clean Energy Fund gave Proton a $1.5 million research grant. The Department of Energy has awarded them contracts. Connecticut Senator Chris Dodd has tried to pass legislation to provide federal support to fuel cells.

But Schroeder says it’s not enough. “The reality is, the U.S. probably puts out 25 movies a year with a bigger budget than the DOE’s [Department of Environmental Protection] hydrogen budget.”

And while Connecticut companies like Proton Energy plead for more research money, companies elsewhere seem to be rolling in it. A Michigan-based company, for example—ECD Ovonics—has announced partnerships with deep-pocketed multinationals like ChevronTexaco and GE.

Like Proton Energy, Ovonics has hitched its star to regenerative fuel cells. And it may be inevitable that Ovonics gets there first, given its location in Michigan, where the race against Japan to develop fuel-cell-powered cars can sometimes seem like a life-and-death battle. Patience Before Payouts

During the days of the dot-com hype, hydrogen boosters had taken to telling us the Green Nirvana was just around the corner. Sadly for the whole world, these dreams of glory have yet to manifest themselves into everyday products.

“Patience,” says Schroeder. Perfecting a new technology takes time. “Technology risk is a horrible thing. It will disappoint every time. We’re not where we told our people we would be.”

One law firm that’s gambling that Connecticut will continue to lead is the Hartford-based Updike, Kelly & Spellacy. In February 2002, the firm announced the formation of a “Fuel Cell and Alternative Energy Practice Group.” This group says it intends to help ease the legal and regulatory process for creative entrepreneurs with new energy products to introduce into the mainstream.

One of the worst things that ever happened to the fuel cell industry was the dot-com stock bubble, believes firm attorney Brad Mondschein. “The biggest problem that’s happening with the fuel cell industry and capital markets is that people are equating the fuel cell technology with the telecom industry,” he says. “The problems that have happened there are affecting the fuel cell market.”
Consequently, execs involved in hydrogen development nearly all counsel caution to those looking for places to invest. The payouts, salesmen say, are unlikely to come for years.

Nevertheless, Mondschein and his law firm say they have complete faith in the long-term future of the industry. “It comes down to ‘what is the fuel cell market?’ It’s portable fuel cells, transportation and fuel cells for generation of electricity.” Eventually, he says, anything that runs on batteries or gasoline will run on a hydrogen-based fuel cell. “Look at how many people have cell phones, lap tops, computers….”

In that spirit, Mondschein and company have put together yet another deal between UTC Fuel Cells with its ultra-expensive product and a public-service business. Sometime in 2003, Hartford’s St. Francis Hospital will get its very own 200-kilowatt fuel cell. State funds will pay for the cell itself up front, says Mondschein, but the hospital will save enough by using the nonpolluting energy source that it feels it can pitch in the maintenance fee — another $1 million over the next 10 years or so. But perhaps that’s only the spirit of better things to come.

If the hydrogen economy is to take off, its power base will be right here in the hydrogen valley, near the casino, the high school, the law firm and the engineers who believe in the power of the most common element in the universe.

Wendy Williams, of Mashpee, Massachusetts, is working on a book about hydrogen.

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