How Soon is Now?
Internet companies. There are other industries that are clamoring for good, clean power. In addition to your "traditional" high-tech companies, says Kramer, electricity-sensitive electronics have become a part of even the most basic factory production processes.
"There's also a creeping use of programmable logic controllers, sensitive equipment that is very integral to a production facility, such as making concrete, such as making plastic bags, that is utilizing this improved technology for the control systems," he says. "Those systems also have a high, high need for good, clean, reliable power. ... So you may see a market start to emerge for the same need for high quality, high reliability power, but maybe in a different environment than we'd originally thought of, such as an office building with a lot of Internet servers or something of that nature. I think you're going to see a creeping of that need. It's already started to some degree, but I think you're going to see it continue. It's not going to shut down or slow down."
Edward Petrie, program manager for distributed power and renewables at ABB Corporate Research, agrees that it's all about niche markets. In fact, he says, not only will fuel cells as a whole seek out special needs markets, various technologies within the fuel cell arena will have to vie for specific niches. "Even if you look at just fuel cells as a subset of distributed generation, within fuel cells, there are four or five-there's solid oxide, PEM [proton-exchange membrane], phosphoric acid-that are commercially available or nearly commercially available," he says.
"The question is, which one of these is suitable for the particular application." ()
The very reason for all the past bullishness on fuel cell companies, suggests Petrie, partially has to do with this issue of niche vs. huge market opportunity. In the past, investors looked at fuel cells-and all distributed generation, really-as one, single market segment. The assumption was, whoever is able to tap into that one, huge market would stand to make a lot of money. "It's just going to be a lot of niche markets and niche technologies for a while, and I think the expectations over the last year, two years, has been we sort of grouped all those niches together and said, 'This is a giant market for somebody.' I don't think so," he says.
Another area that could be well served by the fuel cell, experts say, is the market that perhaps is not even served by the local utility. H Power is one company that is going after that market segment. The company has allied with Energy Co-Opportunity Inc. (ECO), which represents a collection of rural cooperatives, to penetrate the rural market. "They [ECO] are our sales channel to that particular market sector," says McNeill.
H Power's strategy is in keeping with Petrie's opinion of where fuel cells can work in the immediate future. For the near-term, "I see perhaps remote applications where there is no grid, or where the marginal cost of extending the [transmission and distribution] infrastructure will support the cost of the