Global Economics

A Breakthrough for Hydrogen Storage?

Technology from the Soviet space program adapted by Israeli and German scientists may offer a safe way to deliver the volatile gas to power laptops and cars

Israeli entrepreneur Moshe Stern admits he didn't know much about alternative energy when Russian scientist Evgeny Velikhov first approached him in 2005 about a novel technology for safely storing hydrogen gas. But four years later, the 62-year-old Stern has become an expert—and a believer. He is convinced that the Russian invention could play a major role in helping scientific institutions and industrial giants harness the commercial potential of hydrogen as a green energy source. Now, Stern's conviction has just gotten a big outside boost. The hydrogen storage technology, being developed by Stern's Swiss-based startup, C.En, has been endorsed for its safety by a top German institute—an important vote of confidence, given that hydrogen is highly explosive and that safety has long been a major stumbling block to its commercialization. On Nov. 25, Germany's Federal Institute for Materials Research & Testing (known by its German acronym, BAM) released results of nearly two years of tests on C.En's technology, which involves the storage of compressed hydrogen inside bundles of thin, strong tubes of glass, known as capillary arrays. "The lightweight storage and safety factors give the technology a huge commercial potential for a whole range of industries," says Kai Holtappels, who heads up the working group at BAM that has been testing the technology since February 2008. The timing couldn't me more fitting, as hundreds of delegates, scientists, and world leaders gather in Copenhagen for the U.N.Conference on Climate Change to discuss how to reduce carbon emissions and support eco-friendly technology. Batteries for Electronics

A team of scientists first invented the capillary array technology at Moscow's Kurchatov Institute for use in the Soviet space program. Stern thinks his system can be adopted by the electronics industry to replace conventional batteries in portable devices such as laptops and mobile phones. He and C.En's chief scientist, Dan Eliezer, already have begun meeting with potential corporate customers. "We're planning to license out the technology on a company-by-company basis, with the first agreement during 2010," says Stern. The automotive and aerospace industries could offer even bigger opportunities. Hydrogen-powered vehicles have long been explored as a means to reduce pollution and curb Western dependence on imported oil. Germany's BMW (BMW:GR) and Japan's Honda Motors (HMC) have poured hundreds of millions of dollars in recent years into developing hydrogen-fueled cars. The challenges of using hydrogen, though, have always been the size of containers needed to store the volatile gas and the risk of explosion. C.En claims to have overcome those problems with its leakproof capillary arrays. "Glass has proven to have three times the storage capacity at only a third of the weight of steel containers that are now commonly used for hydrogen storage, and it's far cheaper," says Eliezer. Outside experts are impressed at the potential, but are taking a wait-and-see attitude. "If C.En's capillaries can withstand the external pressure, the technology could be practical in vehicles and electrical devices," says Yoel Sasson, a professor of applied chemistry at the Hebrew University of Jerusalem, who notes that another critical factor will be the cost of producing the capillary arrays. Worldwide Investors

C.En was founded in 2006 by Stern, who serves as its chief executive. The Kurchatov Institute will be paid royalties as the original creator of the technology and Velikhov has been appointed honorary president of the company. Over the last two years, the company has raised $25 million from investors in Israel, the U.S., Russia, South Korea, Japan, and most recently from Italian insurance giant Assicurazioni Generali (G:IM)—all of whom are betting that Stern can turn Velikhov's original idea into a winner. Their optimism is based in part on the conviction of C.En's team. Eliezer—a materials engineering professor at Israel's Ben Gurion University at Beersheba, former adviser to NASA and the U.S. Air Force, and renowned expert on hydrogen storage—confesses that he was skeptical at first. It took a trip to Moscow in 2007, followed by a month of crunching numbers, before he was convinced the Russians were onto something. Eliezer has since gone on sabbatical to work full time on adapting the technology to commercial use. Of course, the issue remains how users will obtain cheap sources of hydrogen, which despite being the most plentiful element in the universe is frustratingly rare as an available gas. Some progress is being made on that score. In March of this year, German engineering and gases giant Linde (LIN:GR) revealed that it had developed a process for sustainable production of hydrogen from glycerin, a by-product of biodiesel refining. And startups such as Silicon Valley-based Bloom Energy are working on fuel cells that can create hydrogen from water and solar energy. Developments like these could boost C.En's prospects. If Stern and Eliezer's technology proves viable in commercial applications, the entrepreneurs would be on their way to transforming the global energy picture—and finally harnessing the potential for hydrogen as a major fuel source.

Sandler is a correspondent for BusinessWeek in Jerusalem.

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