Tuesday August 7 3:01 PM ET

GM Touts Fuel Cell for Homes, Business

By Tom Brown

TRAVERSE CITY, Mich. (Reuters) - General Motors Corp., the world's largest automaker, on Tuesday unveiled a hydrogen fuel cell it said could be the answer to burgeoning demand for electricity in homes and businesses worldwide.

GM described the fuel cell as a clean, quiet, ultra-efficient power generator that could serve as a reliable backup for housing developments, businesses and hospitals at risk of losing power because of blackouts.

``This is evidence of our continued commitment to this great technology,'' said Larry Burns, GM's vice president for research and development and planning.

He said the fuel cell, which runs on natural gas, could also make many U.S. homes or small businesses virtually independent of the electricity grid. Fuel cells, already seen as the most likely successor to the gas-guzzling internal combustion engine, produce electric power from hydrogen and oxygen without combustion.

GM said it had not yet made any business decisions based on the development of its stationary fuel cell, which Burns said was likely to become cost effective and commercially available by around 2005. But several companies have already offered to cooperate in commercial applications of the technology, GM officials said.

``Because most homes are heated with natural gas, we have devised a way to extract hydrogen from natural gas for home and business applications, Burns said.

``We think this will be the predominant fuel for home and business applications, and would be an easy transition for consumers,'' said Burns, speaking on the sidelines of the auto industry's annual Management Briefing Seminars in this pine-fringed northwest Michigan resort.

GM, which along with other automakers hopes to begin mass production of fuel cells for the auto industry by around 2008, has set a goal of becoming the first automaker to sell 1 million fuel-cell vehicles.

Underscoring that commitment, GM rolled out a prototype of the Chevrolet S-10 pickup truck at its news conference here that it said was the world's first ever gasoline-fed fuel cell vehicle.

Burns said the pickup, which gets about 50 percent better fuel economy than an S-10 powered by a conventional internal combustion engine, was one of several gasoline-based, experimental fuel cell vehicles GM was working on.

``It allows us to use the existing infrastructure of filling stations around the country,'' he said.

STATIONARY POWER FIRST

There are still obstacles to practical use of fuel cell technology by the automotive sector, however, including high costs and the handling and storage of hydrogen, which is far more volatile than gasoline. In the meantime, Burns said, production of fuel cells in smaller volumes, for use outside the auto business, could help pave the way toward wider public acceptance, while building industrial expertise about issues such as durability and manufacturing.

``Certainly we could see the stationary unit coming to market sooner than we would automobiles,'' Burns said.

Ford Motor Co. and DaimlerChrysler AG are among other automakers, partnering in their case with Vancouver-based Ballard Power Systems, that are gearing up to produce fuel cell products for uses outside the auto industry.

And General Electric has an agreement to distribute fuel cell generating units for home or small business applications with Plug Power, a Latham, New York-based manufacturer.

In remarks to Reuters, Burns said he could envision the day when environmentally friendly hydrogen, once reserved for exclusive uses like generating power aboard spacecrafts, will become a common global energy source.

He also said GM felt it had a leading edge in current fuel cell technology -- essentially because it has packed the most power into the smallest existing fuel cell ``stacks'' or units -- and that it may not take long for that ``to turn into significant revenue streams.''

More importantly, he said the technology promised to make hydrogen a clean, dependable and ultimately renewable energy source.

``The challenge is how do we get from that world we're living in today to that one in the future,'' Burns said. ''Transitions of this type are major undertakings that require a great deal of collaboration between automobile companies, governments, suppliers and fuel companies. I think that working together we're going to get there.''

ALL GREEN?

``It's important to be pursuing new technologies and clean energy technologies,'' Ann Mesinkoff, a Washington representative of the Sierra Club (news - web sites), a leading U.S. environmental group, said. She stressed, however, that environmentalists would be pressing for information about how the device stacked up against other comparative sources of electricity in terms of pollutants.

Natural gas is a nonrenewable energy source. And some atmosphere-warming carbon dioxide is released in the process used to covert it into its constituent hydrogen and carbon molecules.

Jason Mark of the Union of Concerned Scientists, another U.S. environmental group, hailed GM's declared interest in stationary fuel cells as an important step forward, meanwhile.

``I see this as a vote of confidence in fuel cells' future,'' Mark said. ``It can be a nice bridge to the hydrogen future that many people now describe.''