January 22, 2006
From "THE ENERGY BLOG"
See author's notes at the bottom, some very interesting, positive and negative, points.
See this comment at the bottom of the page.
"These fuel cells would be the "gold standard" of distributed power if they live up to their claims."
Hydra Fuel Cell Corporation
Hydra Fuel Corporation, a fuel cell company that is a (the only) wholly owned subsidiary of American Security Resources Corporation (OTCBB: ARSC.OB), an "acquisition vehicle" in Houston, TX, announced in December that it plans to ship beta units of its proprietary hydrogen fuel cells to select customers in January, 2006. On January 19 ARSC announced:
Hydra fuel will demonstrate beta units of its proprietary hydrogen fuel cells to a select group of potential customers which includes the Department of Defense -- Army Corps of Engineers, Qwest Communications, Verizon Communications, Foxconn, the Oregon Institute of Technology and a major regional utility, among others. The demonstration took place at Hydra's facilities in Beaverton, Oregon, on Friday, January 20, 2006.
Ed Davis, Chairman of Hydra, explained, "The HydraStax® hydrogen fuel cell is designed to be the first commercially mass producible hydrogen fuel cell. Our beta units are performing much better than expected. The applications for this type of fixed power with the military and commercial customers number in the hundreds of thousands."
The ARSC website gives this description, in part, of Hydra:
The emerging need for stationary Fuel Cell technology for the industrial/ commercial sector for standby and remote power, and for high-end residential users, is evident. The Freedonia Group projects that the Fuel Cell Opportunity is currently a $5 billion segment of a Trillion dollar industry for reliable power and distributed generation for the digital economy.
Hydra Fuel Cell Corporation is uniquely positioned to provide a viable product for these sectors on a “large scale basis” in a relatively short period of time.
Management projects that a less than 2% penetration of the fixed power market will yield sales of over $100 million in two years. It is expected that within 8 years the company could be generating in excess of a billion dollars a year. ....
The Hydra Fuel Cell is the “first” mass producible fuel cell system which can provide the efficiency to rival traditional generated power from public utilities. The cost of this unit is one third that of competitive fuel cell units.
The BTU consumption to usable power efficiency of the Hydra unit is double that of conventional oil burning generators. This product has the unique capability to allow an owner to generate power during off-hours at a cost of around $0.06/KW/hr to $0.08/KW/hr and to sell it back to the grid for $0.12 to $0.16/KW/hr, while supplying the owner’s normal power needs during the day. In effect this unit becomes a cash generator for the owner, selling electricity for up to a 100% gross profit.
The inventor of the Fuel Cell technology, Ed Davis is a member of ARSC’s Board of Directors and serves as Chairman of Hydra Fuel Cell Corp. Mr. Davis is currently the founder and Director of Business Development for the Consumer Electronics Group at Intel Corporation. ....
The current product is in the final stages of development and will be called the HydraStax™ fuel cell. It is intended to be the first modular, mass producible, fuel cell. The Unit is housed in a computer-like housing or HVAC unit, which will support 10 individual fuel cells, each generating 1KW. The fuel cell is designed to be completely interchangeable and each module will be hot-swappable. Included in the package will be bi-directional, remote monitoring, command and control software and a comprehensive set of monitors which will be supervised by the software.
Management projects that in volume production a 6KW system will sell in the $4500-$5000 range which will result in a cost/KW of roughly $650. This cost is expected to come down into the $400/ KW range with mass production efficiencies. ....
All of the components in the initial fuel cell manufacturing process are currently available from existing suppliers in the market. This allows an assembly operation to be conducted in a way that can rapidly ramp up production. Extensive use will be made of existing volume manufacturing techniques from manufacturers with whom we have long standing working relationships from other ventures.
Based on these factors ARSC is expecting 2006 sales to be around 15 million dollars, annualized on fourth quarter revenue.
The black italics in the above are mine. "high-end residential users" would imply that the units are relatively expensive. "within 8 years the company could be generating in excess of a billion dollars a year" is an awfully optimistic number for a company that is just entering beta production--possible but very unlikely. "efficiency...double that of conventional oil burning generators." This is a very high number, at first glance on the order of 70% by my reckoning, although if they are comparing it to generators of comparable size it could be considerably less, more like 55% to 60% which is not too far off for a fuel cell, but still very good. They make no mention of what type of fuel cell it is. They imply that it might be use oil, in that they compare it to oil burning generators. Since they make no mention of heat recovery my first guess is that it is a PEM fuel cell, although that would mean that a source of hyrdrogen would be required, so we will have to wait and see. "cost/KW of roughly $650. This cost is expected to come down into the $400/KW range" This statement somewhat contradicts my first comment regarding high-end residential users. This certainly would be a high cost for the average home owner to pay, The pay off period should be under ten years which is very good. The cost is a bargain when compared to the cost of electric power plants that are north of $1000/KW. These fuel cells would be the "gold standard" of distributed power if they live up to their claims. Although these press releases are highly promotional, I left much of that out of my excerpts, they are of a much higher quality than many I have seen and the officers and founders seem to have good credentials. ARSC's stock is selling for $0.225 per share today, which isn't the best reccomendation. I wish the company luck and hope that their claims all come true. The only competition I see is from solid oxide fuel cells that generate heat as well as electricity. Their costs are still much too high to compete at the present time. If things go as usual, as soon as one company introduces a sucessful product, within a short time someone else comes out with a competing product--This is the great thing about a free capitalistic society.
Resource: Hydra Fuel Cell Corporation, Beaverton, Oregon, A wholly owned subsidiary of American Security Resources Corporation, Houston,TX
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