Fuel Cell Firm Intelligent Energy Raises $90M in IPO

Intelligent Energy revealed its financials in its initial public offering on the London Stock Exchange last week -- and it turns out that for a brief shining moment in 2012, a profitable fuel cell company did in fact exist. Intelligent Energy had revenue of $75 million in 2012 and $13.4 million in profit, based in part on licensing fees from an agreement with automaker Suzuki.

The London-based fuel cell firm, which uses proton exchange membrane (PEM) technology, went public last week and raised $94.1 million. The company was valued at $811 million, making it the most highly valued publicly held fuel cell company in the world.

Of course, this doesn't include privately held Bloom Energy, which has threatened profitability and an IPO for some time. Bloom Energy has raised more than $1 billion in venture capital over the course of a decade from investors including GSV Capital, Apex Venture Partners, DAG Ventures, Kleiner Perkins Caufield & Byers, Mobius Venture Capital, Madrone Capital, New Enterprise Associates, SunBridge Partners, Advanced Equities, and Goldman Sachs. Bloom builds fuel cells of the solid-oxide variety, with natural gas as the fuel. Bloom boasts an all-star list of customers, including Adobe, FedEx, Staples, Google, Coca-Cola, and Wal-Mart.

Despite its performance in 2012, Intelligent Energy's revenue fell to $35.6 million in 2013 with losses of $36 million, and so the list of profitable, publicly held fuel cell firms returns to:

1.
2.
3.

Intelligent Energy builds proton exchange membrane fuel cells for automotive, consumer, and stationary applications. The firm has raised more than $150 million from investors including Meditor European Master Fund. The company aims to:

• Develop and license its core technology for use in automotive powertrains manufactured by its customers
• Develop compact energy solutions for mobile devices
• Develop distributed and stationary power management solutions for its fuel cell technology

This business plan parallels the story of Ballard Power, a fuel cell firm with decades' worth of losing quarters. Although Intelligent Energy is reportedly working with Apple on consumer devices, according to The Daily Mail.

Fuel cells can be distributed, and natural gas is currently cheap. But for fuel cells dependent on the natural gas grid, there's the downside of volatile prices and the sometimes less-than-green processes used to extract natural gas.

Fuel cells have benefited from state and federal subsidies (or in the case of Bloom, questionable Delaware ratepayer bill subsidies). The justification for renewable energy subsidies is often debated in these pages. But in the case of fuel cells, even after incentives, the fuel cell is expensive compared to the traditional grid or to a diesel gen-set.

Although Toyota and other automakers are speaking of fuel cell vehicles (as they have for decades), Tesla's Elon Musk offered his opinion of fuel cell electric vehicles in a recent edition of Autocar:

“They’re mind-bogglingly stupid.  You can’t even have a sensible debate," said Musk, adding, “Consider the whole fuel-cell system against a Model S. It’s far worse in volume and mass terms, and far, far worse in cost. And I haven’t even talked about hydrogen being so hard to handle.”

He added, “Manufacturers do it [FCEVs] because they’re under pressure to show they’re doing something ‘constructive’ about sustainability. They feel it’s better to be working on a solution a generation away rather than something just around the corner.”

The Tesla CEO concluded, “Hydrogen is always labeled the fuel of the future -- and always will be."