When the U.S. government -- specifically the newly formed NASA -- started looking into the benefits of fuel cells, the Berlin Wall just had been built, the country was in the midst of the Cuban Missile Crisis, and the Beatles were invading America. Since then, fuel cells have generated electricity for U.S. astronauts, but the high cost associated with them precluded mainstream applications. While the fuel-cell market is considered a young one, the technology behind it actually was discovered in 1839 by Sir William Grove. Grove combined hydrogen and oxygen to produce electricity and water, which is still how simple fuel cells work today -- generating electricity from an electrochemical reaction in which oxygen and hydrogen combine to form water. Several different types of modern fuel cells are all based around a central design best described by Fuel Cell Today: "two electrodes, a negative anode and a positive cathode, which are separated by a solid or liquid electrolyte that carries electronically charged particles between the two electrodes." Although the introduction of the internal combustion engine, in addition to lack of practical use, put fuel-cell technology on the back burner after initial development, it is a very different story today. Understanding the need to find energy alternatives, President George W. Bush has launched a $1.7 billion hydrogen initiative, giving new energy to the new energy, and encouraging pioneering companies to place their flags in this future. However, there are still a few obstacles to overcome before fuel-cell-powered vehicles, electronics and back-up generators go mainstream. "The price point, in terms of kilowatt per dollar, has been so far beyond what is acceptable in the market that there was really no application for fuel-cell technology," explains Gregory M. Stoup, acting director at the Cleveland-based Center of Regional Economic Issues, The Weatherhead School of Management, Case Western Reserve University. "Now we're reaching a point this century -- this decade -- where those price points are starting to come down a little bit, and they are getting within striking range of being competitive with other alternative energy sources in terms of power generation, distribution and storage." In general terms, fuel-cell markets are broken down into three categories: portable (electronic devices), stationary (generators) and vehicle propulsion. According to Stoup, stationary power is closest to market penetration, followed by portable power generation, in terms of competitive pricing. Price isn't the only obstacle to overcome. Designing for manufacturability needs to be addressed as well, especially in the case of vehicle propulsion. "It's our observation that the vast majority of research and development expenditures on fuel-cell technology have been devoted to the physics and chemistry of how the fuel cells work and how to make them work better. The issues of manufacturability have been left pretty much unaddressed. Many of them are not designed for manufacturability," says Stan Ream, automotive market leader at the Edison Welding Institute (EWI), a Columbus, Ohio-based nonprofit that offers application of materials-joining technology to benefit industry. While Ream notes that fuel cells are still in their infancy from an industrial standpoint, he does believe that they will get to where they need to be eventually. "Obviously, we don't make a lot of these things [with fuel cells] today, and it's hard to know just how good we're going to get at manufacturability and reducing price," says Ream. Adding to that, "There are big gains to be made," says Stoup. "Particularly [with the] portable [market] because the market is still growing healthfully. You might see some early movers, some agile companies starting to take advantage of that and reap the benefits of being a first mover." Stoup also notes that the fuel-cell industry in general "will rely heavily on industry partnerships because this is a very complex industry in development." Indeed, there are myriad companies that are adding their links into the value chain hoping that their technology will change the face of the future. Here is just an example of what is out there. Movers And Shakers Neah Power Systems Instead of the proverbial garage in Silicon Valley, the founders of Neah Power Systems worked out of a farmhouse in western Washington, explains Dave Dorheim, president and CEO of Neah, a Bothell, Wash.-based micro-fuel-cell development company. Neah, which uses a silicon-based design to provide long-lasting power solutions for portable electronics devices, was formed in 1999 out of what Dorheim describes as a "classic entrepreneurial model." "Two young guys [Leroy Ohlsen and Michael Fabian] interested in a new technology started the business with their own money to do a little research on fuel cells." Realizing that the technology was deeper than their pockets, Ohlsen and Fabian tapped investors. Today there are three investors in the company: Frazier Technology Ventures, Alta Partners and Intel Capital. "Intel is a source of funding obviously," explains Dorheim. "On the other hand, Intel is a leading semiconductor and silicon processing company." He notes that Intel also has a vested interest in determining the impact that fuel cells can have on a strategic basis for notebook computers by extending their run time. Frazier and Alta are mentors as well as a source of funding. Frazier's Dan Rosen worked at AT&T Wireless and Microsoft Corp., and Alta's Peter Schwartz was part of the Clinton administration's Fuel Cell Commission and worked for the Royal Dutch/Shell Group. What sets Neah apart from its competition, according to the company, is its silicon technology. Gregg Makuch, director of marketing, says the silicon substrate, which "absorbs" the catalyst, gives more dimension to the electrode. This 3-D approach to the electrode offers more power density than Proton Exchange Membrane (PEM) fuel cells. For example, think of the PEM as a sheet of paper and the silicon substrate as the same piece of paper folded several times. In the PEM design, only the surface contributes to power density. The silicon design allows for the catalyst to be deposited through the entire 3-D structure -- thus allowing for more power density, according Makuch. "Rather than having a very large surface area, high-volume system, we believe that the silicon technology will allow us to dramatically increase the power density and shrink the devices into small compact forms that look much like a lithium-ion battery," says Dorheim. "The name of the game here is increasing the power density of the system, and silicon is one of the key elements behind doing that." There are, however, growing pains for those who are trying to be first to market. "The challenges that we have are going down a path of a different kind of processing of silicon," says Dorheim. "We've defined how to do that and are in the process of scaling up prototypes to demonstrate the full-scale operation -- that's the 2003 challenge." In 2004 the company will be working with OEMs to integrate the technology into their product lines and identify where the systems can be used, says Dorheim. For now, Neah is looking to power notebook PCs, advanced communications gear for military use and logistical applications to be used in warehouse settings. The company is also addressing cost. "We recognize that if our fuel cell is too expensive, it will compromise the adoption process of the technology in the market," says Dorheim. As for consumer reaction, Dorheim feels that end users are very adaptable if there is a feature that consumers really want. "And if you think about a fuel cell, it's really very similar to a sophisticated disposable battery -- except the run time is much longer." MTI MicroFuel Cells Inc. MTI MicroFuel Cells Inc., an Albany, N.Y.-based subsidiary of Mechanical Technology Inc., recently demonstrated its direct methanol micro-fuel-cell system prototype for President Bush at a White House-sponsored event in Washington, D.C. The President even made a call on a mobile phone powered by the MTI Micro prototype. "Both this event and the President's remarks in his recent State of the Union address show the increasing importance of new energy technologies," says Dale W. Church, chairman of MTI Micro. The company's fuel cell, which reacts to alcohol rather than hydrogen like that in a PEM design, sends methanol (a common alcohol) directly into the fuel cell where it reacts to make electricity. "It's done at relatively low temperatures, so the hottest point of the fuel cell is only a little above room temperature," says William Acker, president and CEO of MTI Micro. The benefit to a methanol-driven fuel cell is increased energy density, according to Acker. "Methanol has an energy density of about 30 times that of a state-of-the-art lithium-ion battery. And energy density translates directly into use time." However, Acker admits that you can't extract all 30 times from the methanol. "We do believe that as this technology matures that we can get five to 10 times the energy density of the best batteries, which means that will be a five to 10 times extension on how long a device could last." As for practical applications, MTI Micro has already launched a deal with Intermec Technologies Corp., Everett, Wash., to supply fuel cells for industrial mobile-computing devices, such as PDAs for warehouse inventorying and scanning. It has also forged a relationship with Harris Corp., which supplies communication equipment for the military. According to Acker, Harris has purchased the MTI Micro prototypes and is working with the company to design fuel cells for its military radios. The relationships fit in with what Acker calls the company's two-phased approach. "We are going to introduce [our fuel cells] in the vertical markets first, then follow right on the heels of that with the start into the horizontal markets," he says. But before the technology can go mainstream into the horizontal markets, MTI Micro realizes the need for a ubiquitous supply of fuel either in the form of a small fuel cartridge or a refill canister. "You need to have fuel cartridges at every 7-11, Wal-Mart and convenience store," says Acker. Additionally, "We recognize that you can have the best technology on earth, but if it's not introduced properly -- in terms of price and usability -- the industry will not come alive."