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.

There’s still a bright future for fuel cells, even if the hydrogen economy won’t turn out as many had expected. But fuel cell costs, though they have come down substantially over the years, are still too high for a number of reasons. One is the membrane material in the fuel cells, which today are quite expensive to make and don’t operate efficiently at temperatures under 80 degrees C. Researchers at the University of Ontario Institute of Technology say they’ve developed a new membrane material that is cheap to produce and can function at temperatures ranging from 120 to 150 degrees C, a level that the U.S. Department of Energy is targeting for next-generation fuel cells. Bit by bit, the fuel cell is getting better and cheaper…

Working in the business section of Canada’s largest daily newspaper, I have to say it’s been tough watching the markets. If you think the U.S. has been getting battered, Canada’s commodity-heavy exchanges are getting crushed. So on yet another day that oil sands and potash producers got their teeth knocked out, it was great to see Ballard Power standing out from the crowd with a 4 per cent gain yesterday. The Vancouver-based fuel cell developer, no stranger to tough times, announced it had landed a contract that will see 10,000 5-kilowatt fuel cell units sold to India’s ACME Group and IdaTech, which will form a joint venture aimed at deploying the fuel cells for back-up power in the telecom industry. (more…)