Wall Street Eyes Fuel Cell Developments with Interest
As the dot.com stocks begin to lose a "little bit of their
luster," Wall Street investors quickly are setting their sights on
companies that are involved in the development of fuel-cell
technology for the energy market, as well as the individual
utilities that are "embracing" the new technology.
Investors who made a killing during the telecom revolution are
the "same people today [who] are looking at this opportunity," said
Sam Brothwell, a utility analyst with Merrill Lynch, at the annual
meeting of the Energy Bar Association in Washington D.C. last week.
"The idea of energy technology, fuel cells and distributed
generation has captured [their interest], and I believe [it] will
remain a compelling theme on the Street" for awhile, Brothwell
noted. In fact, at Merrill Lynch "we have created a separate
research group and a separate banking group to deal with this going
forward. So we definitely believe in it."
The residential market alone for fuel cells and distributed
generation is "somewhere in the 90 some-odd-billion-dollars-a-year
range. So it is a very big market," he estimated. Initially, the
market for fuel cells will be "niche" in size, and will take off
later in the decade. "John Q. Public customer in most places in the
U.S. is not going to realize [at the outset] the benefits of this
despite the hype.....out there.
GE, which is at the forefront of the new technology for the
energy market, already has begun testing 50 fuel-cell units for the
residential market. If successful, it plans to commercially offer a
7 kW unit for residential use beginning in the third quarter of
2001, said Barry Glickman, president of GE Fuel Cell Systems. It
will carry a price-tag of $8,000, and installation costs will vary
from region to region. "Where natural gas is available, that [will
be] the fuel of choice" for fuel cells, he noted.
Who will be the rising utility stars in this new market? "Nobody
heard of Quest.....or [MCI's] Worldcom as recently as five to 10
years ago. We don't know who the Quests and Worldcoms are going to
be in the power sector, but we do know that they're out there,"
Brothwell told the gathering of energy lawyers.
Some of the most "forward-looking" utilities include DTE Energy,
NiSource, Keyspan and Public Service Electric and Gas in New
Jersey. They are "embracing distributed power and see it as not a
threat [to traditional markets], but [as] an opportunity," he said.
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