H2FC Investors' Newsletter: H2FC Visits Astris, Hydrogenics

H2FC Visits Astris & Hydrogenics: Preliminary Reports
[Original publication date: 2/22/04]

H2FC visited both Astris Energi and Hydrogenics at their respective headquarters in Mississauga, Ontario (just outside Toronto) on Wednesday, February 18, 2004.

Astris:

Elegant technology based on non-noble catalysts (no platinum), a liquid electrolyte (KOH) that costs pennies per liter (compared to hundreds of dollars a square meter for the Nafion type membranes used in PEM fuel cells) and can be replaced as part of regular servicing (compared to PEM stacks which must be completely rebuilt once the electrolyte membranes go bad);
Prototypes that still have quite a bit of "dead space" in them that could probably made considerably more compact with a well financed engineering effort;
A fuel cell powered golf cart that started up from cold in seconds and ran very quietly;
A tiny facility with little apparent R&D activity and no apparent prototype assembly activity, a total headcount for the company of under 15 (Canada and Czech Republic combined), a marketing/corporate development staff consisting of two people, both relatively young and presumably inexperienced.;
Little apparent sense of urgency with respect to driving the technology the rest of the way to real commercialization: Astris CEO Jiri Nor struck H2FC as much more of a scientist/engineer than a businessman.
Photos: two views of Astris's latest AFC generator, the 2.4 kW model E8. The white cylinder in the second photo is the CO2 filter.

Hydrogenics:

An area of the building set up as sort of a museum, showing the tremendous progress that HYGS has made with its systems over the past few years;
A growing emphasis on electrolyzers (PEM): HYGS has recognized that fueling solutions are not progressing as quickly as fuel cells and has taken the bull by the horns (if you want something done right you do it yourself);
Engineers whose deep commitment to and passion for the work is readily apparent;
A very high level of activity in the plant, with row after row of test stations either performing accelerated testing on the HYGS's latest generation stack components or doing contract testing for other companies, test stations under assembly (overflow from subsidiary Greenlight Power in Vancouver), a separate area devoted to circuit board fabrication; etc.
A palpable urgency to complete the path to full commercialization of the company's power products: an urgency that one could almost cut with a knife. Huge intensity. Deep conviction that the company will succeed in the power market.
Photo: Part of the Hydrogenics "museum". The man is the chief stack engineer at the company. H2FC has some photos of the test stands in operation but hasn't had a chance to have the company review them yet. Hopefully they can be included in a future issue.

H2FC fantasy: Go back in time five years and let Hydrogenics apply the same amount (man hours) of engineering and market development talent to Astris's alkaline technology that it has to PEM-FCs during that time. H2FC would bet that if we could do this, alkaline fuel cells would be commercially available and attractive today, and we would see AFCs being sold today in significant volumes at under (maybe well under) $1,000/kW capital cost in appropriate markets. H2FC continues to be of the view that the entire foray into PEM technology was a giant wrong turn (especially for stationary applications), that the alkaline technology which has been around all along would have been the better (faster, easier, cheaper) way to get to real commercial production, and that the turn to PEM was made for political and "cultural" reasons, not technical ones.

This said, H2FC (regrettably) expects AFCs to remain on the sidelines, unless and until Astris is infused with a lot of capital and additional talent - especially business talent - and/or until there is a major change in the culture/politics alluded to above.

Potential Astris/Hydrogenics synergy: Astris has a hydrogen fueled FC golf cart, and Hydrogenics is working with John Deere on FC powered commercial lawn care equipment for golf courses (HYGS personnel make a compelling argument that this really is a viable early market). A single H2 fueling station could serve both types of equipment, thereby reducing the cost of fueling capability for each. (H2FC may have to take up golf.)