For an electric-power generating station, Mohegan-2 cuts a singularly unimpressive figure. There are no cooling towers raking the sky, no forest of transmission towers, no vast turbines, no giant paddles revolving in mighty rivers. Basically, it looks like a very tall dumpster.

But when it is installed as a backup generator at the Connecticut casino Mohegan Sun, after which it is named, the gently humming Mohegan-2 will turn in a performance that any conventional generating plant would be hard pressed to match: it will derive energy from fuel without burning it, turning out 200 kilowatts of electricity, usable heat, and water of a purity that no mountain spring could match while only producing a modest amount of carbon dioxide. Most impressive of all, over time it very well may be able to do all this almost as cheaply as-and more reliably than-conventional power plants.

Mohegan-2, along with a host of similar hydrogen-fueled power stations now jumping from long research and development efforts into the commercial arena, could be ushering in the age of the fuel cell. Fuel cells, which electrochemically wring energy out of hydrogen, are as quiet, clean and mechanically simple as a battery but as easy to refuel as an internal-combustion engine. Long ballyhooed by many as the inevitable successor to gas-guzzling, pollution-spewing car engines, fuel cells have always been hampered by high manufacturing costs. But a growing number of companies are confident they are now on the verge of bringing prices for fuel cells down to levels where they can compete-if not with car engines, then with conventional electric-power generating equipment. If the market for such units takes off, that success could very well trickle down to the manufacture of other mass-market fuel cells for homes and even individual appliances. The resulting “hydrogen economy,” where nature’s most abundant substance replaces fossil fuels as the electricity elixir of choice, would eventually be one of vastly increased efficiencies and dramatically cleaner air.

Not that an upcoming hydrogen dynasty is by any means a sure thing. Besides a host of technical kinks that remain to be ironed out, there are also infrastructure challenges, such as how to make pure hydrogen available to consumers and where to get fuel cells serviced. There are even fundamental questions about the market potential of fuel cells-namely, will the public be willing to dump familiar technologies in favor of fuel cells that are likely to carry a price premium? Many experts believe it will. “After years of really intense research, we don’t see any roadblocks that we don’t know how to get around to converting our energy systems to fuel cells on a large scale,” says Kenneth Stroh, who heads fuel cell research efforts at Los Alamos National Laboratory in New Mexico. “We still have improvements to make, but if we can get them this will be a game-changing event.”

Power to the Protons

The dream of a hydrogen economy is a long-standing one. Fuel cells have been around since 1839, when British physicist William Robert Grove built a device that could reverse electrolysis, which most of us remember from junior high chemistry as the process of splitting water molecules into their constituent hydrogen and oxygen atoms simply by sending a mild electric current through water.

In a fuel cell, hydrogen and oxygen are combined to produce water and electricity. The core component of most fuel cells today is a catalyst-coated electrolyte sandwiched between two conducting plates. Hydrogen enters one of the plates, and oxygen from the air enters the other; the hydrogen then pushes through the electrolyte to get at the oxygen. Along the way, the catalyst induces the hydrogen atoms to give up their lone electrons, which are blocked by the electrolyte, leaving a pool of abandoned electrons in the first plate while the hydrogen ions migrate through to the other plate. Hooking up a wire between the two plates results in an electric current, as the electrons stream through the wire to link back up with the hydrogen ions, at which point the reconstituted hydrogen atoms combine with oxygen atoms to create water. The current will continue as long as fresh hydrogen is ushered into the first plate. To achieve high power outputs, sets of plates can be stacked together.

Cheap oil and the economies of the mass-produced internal-combustion engine conspired for well over a century to keep fuel cells out of sight and mind. But in the 1970s, concerns about air pollution and the reliability of the oil supply inspired renewed interest in the technology. Because fuel cell processes scale up and down without loss in efficiency, product development today ranges all over the map. Motorola, for example, wants to put fuel cells on chips that could power cell phones that take fountain-pen-cartridge-like hydrogen refills (see “A Fuel Cell in Your Phone,” TR November 2001). Others seek to use them to run electric-power generating stations big enough to meet the needs of a small city. The federal government has been spending about $90 million a year on fuel cell research (though funding for all alternative-energy projects is expected to shrink under President Bush).

But the real attention in fuel cell research has been focused on cars. Faced with the ever present pressure to lower polluting emissions and the natural limitations of the internal-combustion engine, auto manufacturers have collectively poured over $2 billion into fuel cell research and development-both internally and in support of joint ventures such as DaimlerChrysler’s collaboration with fuel cell manufacturer Ballard Power Systems, of Burnaby, British Columbia (see “Fill ‘er Up with Hydrogen,” TR November/December 2000). But today’s very best fuel cells, though cleaner burning, still don’t come within honking distance of Detroit’s worst-performing engines when it comes to getting good power out of a lightweight, cheap, supportable package. And besides, the internal-combustion engine may be the most entrenched technology in existence-tooled and retooled over a century and a half to reach the limits of performance and reliability, manufactured in enormous quantities, and supported by a ubiquitous refueling and repair infrastructure. Since no one’s going to produce lots of fuel cells without first establishing a large market, and since the automobile industry lacks the immediate incentive to perfect the technology, the quest for automotive fuel cells is faced with a catch-22. “People get all excited about the hydrogen economy,” says Joel Swisher, a consultant with the Rocky Mountain Institute in Snowmass, CO. “But when it comes to figuring out how to get from here to there, the thinking grinds to a halt.”

Over the past two years, fuel cell manufacturers have become convinced they’ve seen a route around this dilemma. Their basic thinking now is that the best way to crack the automotive market is to first build the needed fuel cell production infrastructure and economies of scale by selling the devices in a smaller but less challenger-resistant market. That market, says a growing consensus of experts and businesses, is electrical-power generation: although fuel cells cost about 10 times as much to manufacture as a typical car engine, they are now only about twice as expensive as comparable fossil-fuel power generators. “The R&D and large-scale investment has been on the automobile side,” says Los Alamos’s Stroh. “But it’s probably true that the first products will be on the power generation side.”

Many players in the fuel cell manufacturing business have at least partly shifted their attention from the automobile arena to the power generation market. Among them: Ballard, now working to bring out units for residential and portable applications; H Power in Clifton, NJ, which is preparing a 4.5-kilowatt unit; and Plug Power in Latham, NY, a General Electric-backed company which will begin shipping the GE HomeGen 7000 this year. Even General Motors has announced plans to bring out a fuel-cell power-generation product.

One company that inarguably has a head start in this suddenly glamorous subindustry is International Fuel Cells of South Windsor, CT. Not only has the company long been developing fuel cells aimed at power generation applications, it has actually been selling them for nearly 40 years. Back in the 1960s, the company delivered the three fuel cells used in Apollo spacecraft to generate electricity, and later did the same for the space shuttles. While those fuel cells have never had any commercial application-they rely on costly gold-plated components, for one thing-International Fuel Cells leveraged its experience with them to design a unit called the PC25, a device that generates 200 kilowatts of power, enough to meet the needs of a medium-sized office building. Over the past six years the company has sold more than 220 PC25s in 17 countries to a variety of businesses, schools and government agencies that wanted to replace, supplement or back up electricity from local utilities.

The core component of the PC25 has the sandwichlike design found in most fuel cells. The outside of the sandwich is composed of two conducting plates riddled with channels for ushering gases in and out. In between the plates is an electrolyte efficient at conducting protons; the electrolyte is surrounded by a platinum-based catalyst.

The electricity production process in the PC25 begins when natural gas is piped through a standard gas utility connection into the unit’s fuel reformer, which is essentially a mini chemical plant that enlists a small series of heat-based processes to convert natural gas, methane or even gasoline into hydrogen, with carbon dioxide left over. After conversion, hydrogen gas is pulled through the channels of one of the plates and into contact with the catalyst-coated electrolyte, where the catalyst strips the electrons from the hydrogen atoms.

After the electrons reach the second plate and link back up with the protons, the reconstituted hydrogen atoms combine with oxygen atoms in the air to create water, helped along by the catalyst. Some of the water is absorbed by the electrolyte, which won’t work if it dries out; the rest of the water is channeled to a tank, where it can be drained off. Each sandwich, or cell, in the PC25 puts out less than a kilowatt of power; to achieve its full 200-kilowatt output, a PC25 uses a stack of 272 of these cells.

When employed as a utility-power backup, the PC25 typically remains in constant operation, churning out electrical power that’s directed into the utility’s power grid (for which the PC25’s owner normally receives credit); if the utility power fades or cuts out, an electrical switch redirects the PC25’s output from the grid to the local facility in a fraction of a second, keeping the facility flush with power.

Why would anyone want to switch from conventional electric-power sources to a fuel cell like the PC25? One might assume the greatest virtue of a fuel cell is that it eliminates the need for fossil fuel, currently the source of about two-thirds of U.S. electrical energy. Considering that hydrogen accounts for about two-thirds of all the atoms that constitute our planet, being able to harness it as a source of energy almost sounds too good to be true.

It is. The hitch is simple: hydrogen may be all around us, but it’s chemically locked up in water and other molecules. As it turns out, the only practical source of hydrogen available now is the same one that we’ve long relied on: hydrogen-rich hydrocarbons, which, practically speaking, means fossil fuels. To extract hydrogen, the fuel reformers themselves need to be powered.

Obviously, having to run fuel cells on fossil fuels-and heat and cool them-undercuts some of their advantage over conventional power plants such as those using natural-gas-burning turbines or coal-fired furnaces. But it doesn’t eliminate that advantage. Even when encumbered with natural-gas-fed reformers, fuel cells produce no emissions other than carbon dioxide. To be sure, carbon dioxide is a greenhouse gas; but because fuel cells are more efficient than fuel-burning plants, they produce far less of it.

That efficiency is the key to selling fuel cell power generators. The PC25 operates at an efficiency of about 40 percent, meaning that nearly half the energy it takes in is converted to electricity, with the rest lost as heat. In comparison, the 250-kilowatt gas turbines that organizations normally purchase as alternatives or supplements to utility power operate at about 30 percent efficiency (see “Power to the People,” TR May 2001). The PC25’s efficiency edge translates to a savings of about 30 percent in fuel costs. The edge is widened for customers who can make use of a fuel cell’s waste heat, much of which is easily captured from the clean air and water removed from the cell; the heat from turbines, in comparison, is usually tied up with noxious emissions.

Unfortunately, for most power users this edge is wiped out by fuel cells’ higher purchase price. A typical PC25 setup comprising an 800-kilowatt bank of four units goes for nearly $4 million, compared to less than $2 million for a comparable gas turbine generator. But James Bolch, International Fuel Cells’ manufacturing head, believes he can get the production costs for the company’s next generation of fuel cells to competitive levels. For starters, the company is abandoning its current cell design, with its phosphoric-acid electrolyte, and moving to a cell whose electrolyte is a thin plastic membrane-which is becoming an industry standard because it is less expensive to produce. In addition, the company is exploring new techniques for applying the $20-per-gram platinum-based catalyst in thinner coats without sacrificing performance, as well as plate designs that add efficiency by more effectively ushering hydrogen to the membrane and channeling residue water away.

Of course, International Fuel Cells has to first bring its volume up before it can start taking advantage of these opportunities. To do that, the company has focused on potential customers who may be willing to pay a significant price premium in order to capture the fuel cell’s advantages. Such customers include those that require an especially reliable source of power-or simply more power than can be had from the utility grid-as well as heat, and don’t want to live with the emissions of a gas turbine. “There are applications where paying $4,500 per kilowatt of capacity is a good deal,” insists Guy Hatch, director of residential business at the company.

As it turns out, there are plenty such potential customers. Data centers, for example, require a constant, steady source of electricity and typically use a local generator to either smooth out power from the grid or back it up in case of an outage. First National Bank of Omaha in Nebraska installed a set of PC25s after an outage brought down its credit card verification network, costing just one of its customers-The Gap-$6 million in sales. And it’s not just computers that need reliable power: the U.S. Postal Service’s main facility in Anchorage, AK, decided to go off the grid in favor of PC25s when repeated brownouts lasting as little as a fraction of a second caused its sorting equipment to jam. At the dedication ceremony for the new equipment, a blackout left the surrounding region dark while the facility remained fully operational; the attending dignitaries had to assure observers it wasn’t a planned demonstration. Even sites in the hearts of big cities can find utility power unavailable because existing cables have nearly maxed out on their ability to bring more power in. New York is one such city; power inadequacies prompted the Central Park police station to install a PC25 in lieu of marring the bucolic setting with the whine and fumes of a traditional gas turbine. The Cond Nast building in Times Square operates a PC25 on its fourth floor.

The ability to put the fuel-cell-based power generator’s waste heat to work is the factor that makes the numbers work out for some purchasers. In addition to helping to warm buildings in the winter, the heat can in hotter months drive a type of air conditioner called an “absorption chiller.” First National estimates an annual savings of $200,000 in heating costs and even uses the warm water coming out of the fuel cell to melt ice and snow in its headquarters’ plaza. A potential big reduction in home heating and air-conditioning bills is one reason International Fuel Cells, along with Ballard, H Power and other rivals, believes it can get upscale, environmentally conscious homeowners to spring for units that put out about five kilowatts and that might eventually sell for as little as $5,000 or so-though the first units are likely to go for four times that much. “We spoke with one homeowner who had been looking at spending $50,000 for solar panels,” says International Fuel Cells’ Hatch, who thinks $20,000 for a fuel cell doesn’t seem that outrageous in that context.

How far can these mini power plants scale upward? At least one company hopes to turn out fuel cell generators that compete in price not merely with small gas-turbine generators but with the large generators employed by utilities. FuelCell Energy of Danbury, CT, has eschewed the solid electrolytes employed by virtually every other fuel cell manufacturer in favor of a molten carbonate. The material performs roughly the same function-conducting protons from the negatively charged plate to the positively charged one while repelling electrons. But it enables a simpler process for reforming hydrogen, which makes for a big technical advantage when it comes to mass production. As a result, FuelCell believes it can produce units that turn out up to three megawatts of power and operate at almost 80 percent efficiency. That’s better than even the largest central power-generating station can achieve. Plus, the electricity can be produced in the consuming company’s parking lot, instead of traveling across miles of power lines that are costly to install and maintain. “Utilities can produce electricity cheaply,” says Jerry Leitman, CEO of FuelCell Energy. “But most of the cost is in distributing and transmitting it.”

Hydrogen for the Masses

Even as fuel cell generators get more powerful and efficient, most everyone in the field sees their development more as a means of getting at the potentially enormous market for fuel-cell-powered cars than as a basis for the next-generation power grid. In terms of basic technology, the transition would be a fairly simple one: the same plate-sandwiched membranes that power the electric-generator products can be placed in smaller, relatively lightweight stacks capable of putting out the 50 kilowatts or so needed to power an electric-motor-equipped car while fitting in a trunk or under a back seat. Despite its long interest in electrical-power generation, International Fuel Cells, for one, is quite open about using the field as a stepping stone to the lusted-after car market. “Transportation is obviously an attractive target, and power generation applications are part of the path there,” says head of manufacturing Bolch. The company has already worked with BMW to produce a car that operates in part off its fuel cells, and with Hyundai to develop an all fuel-cell-powered car-and it claims to be in talks with at least four other major car manufacturers. It has also struck deals with Thor, a leading manufacturer of shuttle buses in North America, and Irisbus, a major European bus producer.

Commercially viable fuel cell cars remain years away, though, and may be decades off without a breakthrough in the battle to bring costs down. Right now, says Stroh, even mass-production economies wouldn’t allow fuel cells to come close to the price of internal-combustion engines, which sell for about $50 per kilowatt of power-generating capacity-beating fuel cells by a factor of about a hundred. “The cost of materials alone would make them far too expensive,” Stroh says.

Perhaps that’s why some experts believe that the fuel-cell-based power-generation and car markets will ultimately be heavily intertwined, with both generators and cars fueled from the same sources. The Rocky Mountain Institute’s Swisher envisions a scenario in which employees at industrial sites with fuel-cell power generators will fill their fuel cell cars up with hydrogen while at work-and even use their parked cars as supplemental power generators. “The ability to interconnect fuel cell facilities would be a catalyst in the market,” he says, eventually leading to similar applications for homeowners.

The ultimate result? Looking further out, it’s not hard to conjure up images of a full-fledged hydrogen economy, in which fuel cells power everything from laptop computers to airplanes and bicycles; indeed, experimental versions of all three are already under development. What’s more, if every home, business and community operates power-generating fuel cells, then it might make sense to link them all together in a massive national power grid, perhaps controlled via the Internet, so that surplus energy at any location can be spontaneously transferred to those locations suffering shortages.

Of course, as Stroh points out, even if no one obstacle to a hydrogen economy seems technically insurmountable, countless smaller ones still need to be overcome. But given that hydrogen makes up 75 percent of all known matter and is the fuel of stars, maybe the universe is trying to tell us something.