Powering the next generation
by Matt Paolucci

What types of energy sources are going to help power our cars, homes, and portable wireless devices into the next generation? We always hear about new ways of harnessing the earth's resources to help us run the machines of today. Batteries and fuel cells are back in the news. Lighter, smaller and more powerful wireless devices are what people are demanding. Environmentalists continuously push for cleaner ways to power the millions of automobiles that pollute our roads. Who are some of the companies that are working on these types technologies, you ask? Some names you may want to look at may include Plug Power (PLUG), Market Technology (MKTY), Ballard Power Systems (BLDP), Valence Technology and SatCon Technology (SATC).

Latham, N.Y.-based Plug Power certainly seems to have caught a large share of the recent attention. Plug designs and develops on-site, electricity generation systems utilizing proton exchange-membrane fuel cells for residential applications. The company is able to produce power by taking hydrocarbon fuel, stripping out the hydrogen through an electrochemical process, and pairing it with oxygen to produce electricity.

Mentioned recently in Businessweek and MSN Money Central, Plug's units are said, according to a Merrill Lynch analyst, to be like personal computers, providing each person the power that they need, when they need it, without reliance on a central source. Plug holds key patents to the main elements of these units, and has a terrific distribution partner in General Electric Co. Plug and GE's Fuel Cell Systems unit plan to start selling them to homeowners in January 2001.

Shares have moved up from $30 to $65 recently, after pulling back from a high of $84. Market Technology (MKTY), which manufactures advanced test and measurement products, holds a 32.5% stake in Plug Power.

Burnaby, Canada-based Ballard Power is another company engaged in the development and commercialization of proton exchange- membrane fuel cells, mainly for use in the automobile industry. Shares have been on a steady downtrend since last May, falling from the high $30s to the mid $20s. But upbeat news from industry competitors have helped rally the shares, now back in the mid-$30s.

Sunday, Ballard unveiled its latest generation of fuel cell technology, a fuel cell "stack" called the Mark 900. The Mark 900 module utilizes a single integrated fuel cell stack, as opposed to its earlier multiple-stack generation of cells. ``The architecture of the Mark 900 fuel cell incorporates low- cost materials, provides high performance, utilizes volume- manufacturing processes, and forms the foundation for fuel cells for transportation, stationary and portable applications,'' said Kip Smith, Ballard President and Chief Operating Officer.

The units are something like a giant battery, fueled typically by clean natural gas. I think the market for Plug's units could be huge over the next 10 years.

Valence Technology, based in Henderson N.Y., is engaged in research and development to produce advanced rechargeable batteries based upon lithium ion and polymer technologies. The growing need for smaller and more powerful batteries for use in wireless devices could prove to be quite lucrative for Valence, though the technology is still very young.

Substantially all of the Company's revenues to date have been derived from a research and development contract with the Delphi Automotive Systems Group of General Motors. Although it has been difficult getting much information from the company, I confirmed that it has received two contracts, one for $2 million with a company called Moltech, a domestic cellular phone reseller. The other contract, for $15 million, was with an undisclosed European cellular phone manufacturer.

An anonymous quote from a chat board stated, "Think of it. A battery, a new kind of battery. That is supposed to last 5 times longer at half the size. Think of the phones, laptops, pagers, not to mention the tools that would work longer because you would not have to charge those stupid battery packs as often. The company inked their second contract at the start of this month. Will it be the start of a new generation? Only time will tell. "

Shares have traded in a tight range of between $5 and $10 per share until last November, surging to a high of $22.75 in early January. On Dec. 23, the company sold $32 million in common stock to a large institutional investor. These shares could provide big gains for investors' speculative portfolios.

CAMBRIDGE, Mass.- based SatCon Technology Corp. manufactures and sells power and energy management products for telecommunications, silicon wafer manufacturing, factory automation, aircraft, satellites and automotive applications.

SatCon shares have traded in a range of $8 to $10 since May of last year, but have also surged in the past few days on renewed interest in the sector, as well as MoneyCentral's positive article on energy technology by Jon Markham last Wednesday.

SatCon's products include microelectronic circuits, flywheel energy storage devices, and power converters for microturbines. The company's shares currently trade just over $15.