The blogosphere is very alive with discussion about hydrogen cars. It follows a National Hydrogen Association Convention meeting where a BMW representative said hydrogen-fuelled cars would not be commonplace until 2025.

I would argue that this is far, far too optimistic. Since writing The Hydrogen Economy - what price and when? a couple of years ago, I’ve changed my mind very little. Back then I believed that 2040 would be a more likely date for fuel cell vehicles. Although, making any prediction beyond 10 years is very hard to get right. 2 years ago for example, very few people had heard of plug-in hybrids. Now this is almost off-the shelf technology and I would venture it is going to succeed. This study shows that there is more than enough overnight spare electricity capacity to power 168 million plug-in hybrids in America. So why would you bother with hydrogen fuel cells ?

2 years ago, I did anticipate in the article that mass production of portable fuel cells for electronic devices would have started by now and we would be able to buy them - well it hasn’t and I’m not sure if it ever will. But CHP fuel cells produced by the likes of Ceres Power and Ceramic Fuel Cells look very close to commercialisation and possible success.

London listed ITM Power , a fuel cell company developing materials and patented production methods to produce low cost fuel cells and electrolysers rallied yesterday on the back of a new research update.

What makes ITM different to other fuel cell companies is that it is trying to develop liquid fuel cells - direct methanol fuel cells, which could avoid the inherent priciness of plantinum.

It has filed patent applications both on the invention of a composite membrane of enhanced properties including specifically an acid/alkaline laminate, and on the use of control grids to act directly on and control the electrical activity within a fuel cell.

It closed today at a new high of 139.5.

Millennium Cell has just posted improved Q3 results, although still making a loss.

The company calls itself the "Hydrogen Battery Technology Company" and sees its future markets as military, medical, industrial and consumer.

Of particular recent interest here though is the military market, for which they have developed a 30 watt battery pack together with Protonex Technology Corporation.

The U.S. Army is funding the
development of a portable 30 watt soldier power product (the "P2").

MC CEO H. David Ramm said "We expect the Air Force to begin field
testing early next year and Protonex to begin low volume shipments to
support this effort in early 2006".  Mr. Ramm continued, "While
the military has clearly emerged as our lead market in the near term,
we view the P2 as an attractive replacement for batteries in selected
applications in the medical and industrial markets".

This won’t be the first time that military investment has made possible a product on consumer markets.

Ahead of the AGM yesterday, London AIM listed Voller Energy Plc issued a very upbeat statement. The group, "believes it is on course to be one of the first fuel cell companies in the world to reach profitability."

Voller also announced the resignation of Chief Technical Officer Mark Turpin after joining the group’s technical team in February 2005. 

Hard-headed investors must like Voller’s law :

"Consumers will not pay a premium to be environmentally friendly nor will they accept a performance degradation to be environmentally friendly".

I’m not sure it’s true though.

Take a look at the Toyota Prius - not only are consumers paying a premium, it’s pretty ugly too !

Millennium Cell closed up over 21% on the day to $2.22. As this article shows, MC is one of the leading companies trying to crack the problem of hydrogen storage.

"The most critical barrier to the hydrogen economy" says Steve Chalk of the Department of Energy, is creating a viable hydrogen storage platform. More specifically, weight, volume, cost and refuelling times are the limits right now. The DoE is now sponsoring research to meet these goals.

President Bush gave a speech 2 years ago claiming that any child born now should be learning to drive on a hydrogen vehicle. Right now, that’s looking unlikely.

Nasdaq-listed Medis Technologies has just become the first micro fuel cell company to receive a major order - $50 million - for their disposable portable power packs for consumer electronics. Consumer Electronics are widely considered the holy grail for micro fuel cells with 1.5 billion portable devices in use around the world, forecast to become 2 billion by 2007.

In this very interesting interview in Red Herring, CEO Robert K. Lifton talks about the prospects for his company.

The technology is unusual because instead of using methanol, Medis prefers sodium borohydride as the lower cost fuel of choice. What’s more, all those futuristic programmes and pictures you see of laptops and mobile phones running on internal fuel cells just might never happen.

As Lifton points out, that would require getting 1000s of Original End Manufacturers to change their design around a given fuel cell. "Integration doesn’t make sense as a business proposition". So the Medis Power Pack only plugs in externally, requiring no input from the OEMs which could have lost years in redeveloping, retooling and retesting.

Very practical.

Probably one of the reasons why Medis will be the first to market, ahead of NEC, Sanyo, Sony, Toshiba et al.

The Canadia Fim and Nasdaq listed, Ballard Power Systems, has just posted a slightly reduced Q2 loss, of $29.5 million.

BPS is the world’s leading supplier of fuel cells, fuel cell engines, fuel cell components and electric drive systems to the car industry. Its stock flew high in the late 1990s when fuel cell cars were widely perceived to be just around the corner . . . but they weren’t.

6 years later, BPS is still trying to get out of the laboratory and into the market. Still, it has big clients, including Ford and Mercedes Benz who’s own investment in fuel cells is tied up with companies like BPS.

In transport though, because of the prohibitive cost, it looks more likely that fuel cells will break only into rich world government funded public transport buses and the deep pockets of the US military.

Fuel cells in regular passenger cars are some way off . . .

London Aim-listed Voller Energy  which earlier in June achieved EU wide certification for the first mains strength portable fuel cells, which run on hydrogen, is now struggling to perform as a stock.

At the time of posting, Voller Energy was down 12.5% on the day to 42p, even reaching a new low earlier of 38p. It reached a high of 85p in March 2005, soon after going public in February.

In a very interesting article in Armed Forces International, CEO Stephen Voller, reveals his business philosophy - Voller’s Law;

Consumers will not pay a premium to be environmentally friendly nor will they accept a performance premium to be environmentally friendly.

Yours truly agrees with Mr Voller, that fuel cell companies must be market rather than technology driven.

Right now though, the market is driving Voller Energy in the wrong direction.

Plug Power, a nasdaq listed stock, today announced a big sales contract with Tyco and at the time of writing the stock has jumped over 12%. Plug Power is one of the leading manufacturers of Proton Exchange Membrane Fuel Cells for stationary applications.

Fuel Cells are coming, but not everyone agrees with what they are best for. Some wonder if they make better generators than back-up batteries. Let’s see. The 5 kw fuel cell though seems set for the remote location first, before it comes into our homes.

Interviewed in Wired Magazine yesterday, a leading GM Vice-President, Larry Burns, was quizzed about whether GM had got it right, taking a bet on hydrogen fuel cells over hydbrids.

Was there any point he was asked to a hydrogen economy if it was powered by carbon?

"Quite honestly, being in the car business, I don’t care whether the hydrogen comes from wind, geothermal, nuclear, solar, or ­fossil. What I care about is that each local economy plays to its strength".

That’s fine if consumers are prepared to ignore fuel costs when buying the vehicle. And my guess is they won’t. Hydrogen is not cheap. Its price is a major barrier that GM and others must hurdle. Indeed the cheapest hydrogen - from fossil fuels - is still perhaps 10 or 11 times more expensive than conventional diesel or gasoline and 5 times cheaper than clean, green electrically generated h2.

That’s why the hydrogen future - for now - is more black than green.