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Looking for Fuel Cell Technology's Future.
Fortnightly Magazine - November 1 2001

of that's generation and half of that's transmission and distribution doesn't matter to them; that's how much they pay, versus me putting a unit on site that ends up, at $4 gas, costing 8 or 9 cents a kilowatt-hour. So you're not competing against that 500-MW combined-cycle gas turbine plant sitting miles away."

There is a reason that Leitman mentioned the Danbury, Conn., hospital. Medical centers are one of the primary marketing targets of the company, partially because hospitals conceivably could use the waste heat from the fuel cells. The kilowatt-hour price certainly won't be competitive anywhere in the country, Leitman says, but in the West and Northeast, at least, FuelCell Energy thinks it has a winner.

Market Help from Overseas

For the near-term, the primary goal of fuel cell companies, other than simply to get their products ready for launch, is to create markets for them and generate revenue streams as soon as possible. That is at least partially why seemingly every fuel cell company has either created an overseas subsidiary or partnered with a foreign company to make inroads into distant markets. H Power in September joined with Matsui & Co., Japan's largest general trading company, to form H Power Japan, which initially will conduct a nine-month feasibility study relating to the sale and distribution of H Power's fuel cell products in Japan and potentially to other countries. The feasibility study will include evaluating marketing strategies and business plans, developing an operating plan, and building a maintenance and monitoring network. Matsui also has purchased an undisclosed number of H Power's shares on the open market.

Plug Power, meanwhile, has signed development, supply and distribution agreements for a combined heat and power system with German company Vaillant, GmbH, and also has a Dutch affiliate, Plug Power Holland, established in February 2000 as the first European presence for the company. FuelCell Energy also has a European partner: DaimlerChrylser's MTU Friedrichshafen unit, which initially made an 81/2 percent investment in the company. In Asia, the company has partnered with Marubeni Corp., one of Japan's leading general trading houses. Marubeni, in addition to signing a strategic alliance agreement with FuelCell Energy, has invested $10 million in the company.

Why all the overseas interest? For one, when company executives look to Europe, they see green-not only in terms of dollar signs, but also in terms of a strong environmental awareness. Because of its green tendencies, some experts say that, for the near-term, Europe is even more of a viable market for fuel cells than is the United States.

"I think there needs to be a distinction between U.S. vs. the world," says Kramer. "We tend to think in niche technologies as it being very parochial in the U.S., but there is a fair amount of interest in this in Europe. I think the worldwide market is going to grow, and I think it's a big number. ... [Europe] is a little bit different in the fact that there you have a huge green push."

As an example of Europe's interest in all things green, Leitman