Ballard Power saw a nice lift in its otherwise depressed stock price with the announcement today that it will supply at least 3,250 fuel cell stacks over the next 18 months to Plug Power, which will incorporate the stacks into its own fuel cell systems designed for the materials handling industry — i.e. forklifts. “Ballard anticipates that both the scale and cadence of associated product shipments will contribute to increased manufacturing efficiency and reduced fuel cell stack cost,” according to the company’s press release. Plug Power CEO Andy Marsh said the agreement with Ballard “is a reflection of the continuing growth of the sector, including new customers like Kroger Co. and repeat customers such as Sysco, who all feed into our manufacturing pipeline. Whole Foods, BMW, Central Grocers, Coca-Cola, FedEx Freight, Walmart Canada and Wegmans are among the companies now using Plug Power/Ballard fuel cell systems as part of their fleets of forklifts. Neither Ballard nor Plug Power are profitable yet, but they’re getting closer. That day when they get out of the red will be a long time coming and one to celebrate in the industry.

My Clean Break column in the Toronto Star today takes a look at a former darling of the fuel-cell industry, Ballard Power — remember those guys? Ballard was the hot kid on the block back in the late 1990s, when people still bought the idea that a hydrogen economy built around fuel-cell vehicles was just around the corner and Ballard would take us there. The vision was tempting. There are no greenhouse-gas emissions, no pollutants associated with the use of hydrogen to energize a fuel-cell car. Ballard also had — and still has — great technology. Unfortunately, it was really expensive, and the hydrogen infrastructure to support the introduction of fuel-cell vehicles just didn’t exist, nor was there a rush to make it happen. The company had its believers, including yours truly, and investors were also along for the ride. Ten years ago, the money-losing company had a market cap of more than $8 billion. But as we entered the 21st century, as it became clear that the hydrogen economy was a far-off target, and as excitement grew around battery-powered vehicles, Ballard started its downward spiral. In 2007 it sold off its automotive fuel-cell business and decided to focus on less sexy markets: forklifts and backup power. The company is still losing money, but it may actually break even next year, at least on an EBITDA basis. Revenues are growing. Costs are coming down. It turns out that niche markets can pay the bills. And now the company, a sliver of its former self (in terms of market value) is turning its efforts to distributed generation with a 1-megawatt product that makes oodles of sense, particularly in remote markets that are heavily dependent on diesel generators.

I’m delighted that Ballard is finding its way. It has inspired many spinoffs. It anchors the Vancouver cleantech scene. It’s the rock star that hit it big, rose quickly, then crashed into relative obscurity, only to emerge several years later with a more mature album that, while not having mass-market appeal, is critically acclaimed and attracting loyal followers.

Just figured I’d recognize a milestone for Vancouver-based Ballard Power, which recently manufactured its one-millionth membrane electrode assembly (MEA), which is a core component in its proton-exchange membrane fuel cells. Ballard says the high volumes have led to cost reductions that give it an edge over competitors. Still, it’s important to note that each MEA that’s manufactured leads to production of one fuel cell that can only power a light bulb. These fuel cells, however, are stacked together to form larger fuel-cell systems — from kilowatts to megawatts in size.

Anyway, the hydrogen economy may not be here as predicted 10 or 15 years ago, but Ballard is slowly proving there is a role for fuel cells and that costs, with volume, are coming down.

When John Sheridan decided back in February 2006 to stay on as the permanent chief executive of Ballard Power, who would have guessed that one of his biggest concerns would end up being the price of platinum? Back then, platinum was just a bit over $1,000 (U.S.) per ounce. By mid-2007 it had jumped to $1,300 per ounce. Then it really got bad, soaring to more than $2,300 an ounce in the 12 months that followed. (more…)