July 13, 2006

ENrG's Work In Fuel Cells Could Help Curb Oil Use

By: by Fred Williams, Business Writer, Buffalo News


John Olenick twirls a ceramic wafer in his hands as he talks about tomorrow's energy sources.

About the size of a postcard, the wafer is coated with layers of chemicals that generate electricity from natural gas and air.

Stack the wafers together and you have a fuel cell, a generator of clean energy. Proponents hope fuel cells will take a bite out of U.S. oil needs someday - maybe someday soon, as rising crude prices make alternatives look better and better.

"The price of oil has a strong effect on the interest and money going into this," Olenick says, tapping the wafer with his finger.

His four-year-old company, ENrG Inc., will unveil a $1.1 million manufacturing plant on Kenmore Avenue in the Town of Tonawanda on Thursday, what he calls a step toward making fuel cells that are cheap enough to be practical.

Federal fuel cell experts from the National Institute of Standards and Technology are expected at the ribbon cutting, joining local dignitaries.

"We know we don't want to be dependent on oil if we can avoid it," said state Sen. Mary Lou Rath, one of the expected speakers. "This technology is very clean - I think it holds a lot of promise."

ENrG's 4,200-square-foot plant, with a dust-free clean room stuffed with production equipment, will make larger versions of Olenick's ceramic wafer for corporate partners like Corning Inc.

"We're still in early research stages," Corning spokeswoman Kelli Hopp-Michlosky said of her company's fuel cell project with ENrG.

The new plant beside the Niagara Thruway complements ENrG's original plant in a former flour-sack factory in Buffalo's Free Trade Complex on Hertel Avenue.

Small now, with 14 people, ENrG hopes to grow to 80 or 90 jobs in a few years as fuel cells catch on with buyers. For that to happen, ENrG's postcard-sized panels need to get about 10 times bigger, Olenick said. They also need to pump out more power than their present 30-watt output, which is only enough for a dim light bulb.

"We think we can double the power per square centimeter," said Olenick, who worked for Westinghouse and Kodak before launching his own company.

The development work is largely funded by federal and state grants, including $8 million from the National Institute of Standards and Technology that is shared with Corning.

Of the $1.25 million the company took in last year, almost all came from research grants. A few products are starting to support the company. ENrG sells chemical free "setters" - informally known as cookie-sheets - that it developed to solve contamination problems.

ENrG doesn't make the hydrogen-powered fuel cell that automakers hope will run future non-polluting cars. Rather, its components would go into stationary generators intended for homes and buildings - replacing smoky diesel generators and taking pressure off the electric power grid.

In its Buffalo plant, a 30-foot conveyor makes ceramic wafers from a mixture something like thick paint. The wafers go to the Tonawanda plant where they're baked at 2,500 degrees, coated with chemical catalysts and printed with circuit lines for drawing off power.

Development of the technology is already having an impact on Western New York's economy, not just from ENrG. A company called Nanodynamics Inc. is developing coffee maker-sized fuel cells in its plant on Buffalo's waterfront. In suburban Rochester, General Motors researchers develop fuel cells to power future cars.

Some regional plants are getting parts orders from the burgeoning fuel cell business. Conax Buffalo Technologies in Cheektowaga makes temperature sensors for FuelCell Energy in Danbury, Conn., and PlugPower in Latham, near Albany. Sales make up about 4 percent of Conax's $12 million in yearly sales.

"We're hoping to expand on that," Conax sales and marketing director Mike Valachos said. However, "the jury is out on the whole industry - it's costs are so exorbitant."

Indeed, high costs are holding back the technology's adoption, according to the U.S. Energy Department. The government has set a target price of $400 per kilowatt of generating capacity - about one-tenth the present cost - for fuel cells to be commercially viable. For example, that would put the cost of a home-sized power source at about $2,000.

Despite high prices, a few devices are already in use. Some banks and military installations that require foolproof backup power are testing fuel cells, as are some cell phone towers far from power lines.

Federal and state agencies are pumping money into developing the technology because of its promise of a clean energy alternative. Fuel cells are "the cleanest and most efficient technologies for generating electricity from fossil fuels," the energy department says on a Web-published paper.

Since a fuel cell uses a chemical reaction instead of actually burning fuel, it generates less atmosphere-warming carbon than other electric technologies - 60 percent less than coal and 25 percent less than natural gas turbines, according to the energy department. And the heat it gives off can be captured to boost the system's overall power output.

"Fuel cells," the paper says, "are an energy user's dream."