S&P Issues Report on Fuel Cell Technology

Technologies viability still 'unfolding.'

Published: 10-Jan-2003

NEW YORK, Jan 9 - The feasibility and viability of fuel cell technology is still unfolding, according to a report published today by Standard & Poor's Ratings Services.

The U.S. Department of Energy has recently launched a major initiative, the "Solid State Energy Conversion Alliance," to bring about dramatic reductions in fuel cell costs. The goal is to cut operating costs to as low as $400 per kilowatt by the end of this decade, which would make fuel cells competitive for virtually every type of power application.

With the growing demand for cleaner, more efficient fuel sources and concerns surrounding the long-term availability of fossil fuels, it is evident that fuel cell use is an energy source whose time has come.

The report, titled "Fuel Cell Technology Is Here to Stay," is available on RatingsDirect, Standard & Poor's Web-based credit research and analysis system. Members of the media may obtain copies of the full report by contacting Gregg Stein at (1) 212-438-1730 or by E-mail at gregg_stein@standardandpoors.com.

Standard & Poor's will be hosting a seminar titled "Determining Corporate Credit Quality in a Volatile Environment," on Feb. 2-4, 2003, at the Grand Floridian Resort & Spa, Orlando, Fla. Standard & Poor's senior analysts and invited industry leaders from the corporate, banking, and investment communities will discuss trends and current issues related to corporate credit quality. For complete seminar details and registration, please call (1) 212-438-2800, or visit www.standardandpoors.com/events/CRS. You may also send an E-mail to seminars@standardandpoors.com

Standard & Poor's is a leader in providing widely recognized financial data, analytical research, and investment and credit opinions to the global capital markets. With more than 5,000 employees located in 18 countries, Standard & Poor's is an integral part of the world's financial architecture. For more information, visit our Web site at www.standardandpoors.com.

One of the star exhibits of the 1939 World's Fair was "Futurama," which promised viewers a glimpse into the brave new world of the 1960s. Cancer would be eradicated, humans would travel in teardrop-shaped cars on accident-free highways, and rockets would replace airplanes for intercontinental travel.

Although it is clear that most of the fair's revolutionary predictions did not come true, the exhibit on fuel cell technology did. Indeed, fuel cells furnished power for the Gemini and Apollo spacecraft, and still provide electricity and water for the space shuttle. With the pace and growth of fuel-cell research moving faster and faster, it is evident that this alternative fuel source is here to stay.

Fuel cells basically operate like batteries, with the notable exception that they do not require recharging. A fuel cell consists of two electrodes wrapped around an electrolyte. Oxygen passes over one electrode and hydrogen over the other, generating electricity, water, and heat. Hydrogen is fed into one opening (the "anode") of the fuel cell, while oxygen enters the fuel cell through another opening (the "cathode"). Through a catalyst, the hydrogen atom splits into a proton and an electron, which take different paths to the cathode. The electrons create a separate current before they return to the cathode, to be reunited with the hydrogen and oxygen in a molecule of water. Since the fuel cell does not use combustion, its emissions are smaller than those of the cleanest fuel combustion processes (see table).



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