Ballard signs distribution deal for AirGen units

VANCOUVER , BC -- - Ballard Power Systems Inc. signed the first distributor for its fuel cell-powered portable generators recently, but is still grappling with how to price the innovative technology.

Ballard, which acquired full control of the AirGen project this year when it bought out development partner Coleman Powermate Inc., said it has reached a nonexclusive distribution agreement with MGE UPS Systems.

MGE, the world's largest manufacturer of large power protection equipment, is expected to aim the 1 kilowatt generators primarily at industrial and small office users that want backup power supplies.

Ballard is best known for its efforts to develop fuel cells for cars, but the generators have symbolic value as the first product using its alternative energy technology that will be widely available to average consumers around the world.

Coleman had priced the units sold to industrial users at just under $6,000, and is believed to have sold about 20 of them since they went on the market late last year.

Ballard Chief Executive Dennis Campbell, talking to reporters at a fuel cell conference in Vancouver, said the price of the units was "an open issue," although he called the level set by Coleman "a stake in the ground."

Asked directly if he felt the price was too high or too low, Campbell would only say: "Maybe it's priced about right. We don't know yet, because we haven't really tested the market."

Fuel cells generate electricity by mixing hydrogen and oxygen. The technology is considered environmentally friendly because, depending on the source of the hydrogen, it can produce only water and heat as by-products.

The units sold by Coleman used hydrogen gas from cylinders and were aimed at industrial customers, but Ballard is set to unveil generators that get hydrogen from a metal hydride canister, which would be easier to use in residential settings.

Delays in getting regulatory approval for the generators' fuel supplies are seen as a major reason the portable power plants were over a year later in coming to market than Ballard had predicted.

Ballard is talking with other possible distributors for the generators and Campbell said he expects those talks will open up new markets for the product.

The financial terms of Ballard's agreement with MGE were not disclosed.