The best fuel cell company you've never seen
Discussion of fuel cell company Smart Fuel Cells
It has been nearly five years since I last had the chance to speak with Smart Fuel Cell founder and then CEO Dr. Manfred Stefener, and a lot has changed. That is to say, unlike almost every other fuel cell company I know of, they have actually done what they said they would five years ago.
The technology is direct methanol, where methanol mixed with water is fed directly into the fuel cell. Their products are medium power range systems, mainly for APU type applications. An interesting tidbit on the technology, the classic problem in DMFC has always been the crossover problem, where methanol seeps through the membrane, reducing efficiency and performance, among other things. SFC uses a patented water management and active control system that has permitted them to deliver commercial products using membranes from a range of suppliers, including Johnson Matthey, DuPont and Cabot Industries, apparently relatively indiscriminant of the membrane itself.
These results (the combination of good performance, long life, and a range of membranes) are certainly interesting enough that I asked them after the interview to comment in more detail on what they mean by active crossover control, and share what they can about how it works:
"SFC has patented a method of converting energy using fuel cells that allows for miniaturization by focusing on simplified fuel intake, sealing and electrical configuration. We have also used low-cost materials and mass production techniques to lower the cost of manufacturing fuel cells. "Active Crossover Control" by SFC permits active monitoring and minimization of the negative methanol crossover effect, thus upping the fuel cell's performance. The result is an extremely short startup time and highly efficient fuel cells by SFC. A mixture of methanol and water is introduced to the anode side by a patented internal water-management system. This enables us to employ 100% pure methanol in our fuel cartridges."
Our technology is an "active" style DMFC with water and air management by pumps and crossover control permitting the use of various types of membranes. The fuel cell uses 100% methanol supplied in convenient, safety-tested and certified cartridges and dilutes it to the mix ratio required for power production.
Is there a simple summary on how the water management & active crossover control works? Active crossover control means advanced algorithms that manage fuel crossover and adapt it to the particular situation's needs. When fuel crossover is not desired, it is reduced to about 2 per cent. In situations when fuel crossover is beneficial to the product, it is deliberately increased. - SFC's water management submodule regulates the water balance of the product by matching water emissions and water recirculation. This process and the device performing the functions work reliably in a very wide window of operating conditions and are protected by several patents."
They have over 7,500 fuel cell units sold. The products range from 600 to 1,600 watt hours per day in size (25 to 65 watt nominal power), with prices ranging from 2,000 to 4,000 euros. The system efficiencies are rate at 30%. A bit over 40% of revenues are from the recreational market, predominantly including APUs for RVs, including major manufacturer names like Hymer and Concorde, and 40% of the total revenues are into the US and European military customers for remote power systems and mobile power packs. Among the other intriguing applications they have developed include solar / battery / fuel cell hybrid power systems for off grid power solutions. They have also begun making initial inroads into the EV and hybrid vehicle market for light vehicles as well. SFC warranties a 3,000 hour life of the system (they estimate roughly 6 year life expectancy in a typical recreational vehicle application), though they cautioned me that many of the systems see several times that in practice.
SFC's private equity backers included leading European private equity group 3i, strategic investor DuPont, and institutional backing from Deutsche Bank. SFC is publicly traded now, and after a fairly fast run up from 37 euros to north of 50 euros when it first went public in 2006, the stock has dipped back into the low to mid teens. That gives it a current market capitalization of around 100 mm euros, with around 50 mm euros of cash and 14 mm euros in revenues (including 70% from product sales) with a loss in 2007 of less than 5 mm euros. Possibly even more impressive, according to Dr. Podessor they have given guidance that they expect to break even in 2008. Aside from the technology, at an enterprise value to trailing revenues of 3.5x, plenty of cash, and projecting a near term breakeven, it is hard to see how SFC is not one of the cheapest fuel cell stocks out there, as well as with 7,500 units sold, one of the most mature. For someone who has been a long time skeptic of fuel cell companies, Smart Fuel Cell is a refreshing story.
Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is founding contributor of Cleantech Blog, a Contributing Editor to Alt Energy Stocks, Chairman of Cleantech.org, and a blogger for CNET's Greentech blog.