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URL:  https://boards.fool.com/how-do-you-see-fuel-cells-affecting-the-market-12699698.aspx

Subject:  Re: Fuel Cells & AMSC Date:  6/7/2000  8:39 PM
Author:  doodleysquat Number:  299 of 2169

How do you see fuel cells affecting the market for HTS wire? Some people have said that, down the road, everyone will have a fuel cell at their residence (or workplace), thus freeing them from the power grid. Do any of you see this as a threat to power grid improvements, namely AMSC's current and future products?

Moneyhoche, I'll answer your questions in a roundabout way, from my unscientific perspective only. Disclosure: long AMSC, wannabe long BLDP.

I think the combination of

1) expanding demand for personal/commercial/industrial electric power,

2) the limitations on infrastructure expansion imposed on electric utilities operating in major metro areas,

3) the gradually increasing temperatures on the planet's surface, and

4) the upcoming 11-year cycle of increased sunspot activity (starting about now) which tends to wreak havoc on electric grids,

all of these things will create very great demand for AMSC's power conditioning products (D-SMES and PQ-SMES). These will be the cash flow generators, short term, I think. I believe they will subsidize the losses that will have to be absorbed on HTS transmission cable in order to hit the pricing point that utilities will require before buying it.

This could be a good thing, though. The pricing will hopefully be a barrier to competition in the cable business. With increased cable sales comes increased production and subsequent economies of scale. Eventually the pricing point that had been generating losses will become a point of profitability.

I don't know where HTS motors fit into all of this, but probably somewhere in the middle. While my SMES/cable scenario plays out, fuel cells will undoubtedly become a technology that changes our world. I believe you will have a choice of standard production FC cars at reasonable prices in ten years, maybe five. I also think many businesses and homes will be powered by fuel cells, although I am not as sure about the commercialization timeframe or market acceptance. But, I do not think the net increase in power generated by fuel cells will match the increased demand for power. That will leave a huge market for SMES, transmission cable, HTS motors, and other applications yet to be developed.

My opinion, and it's worth what you paid for it... I hope I'm right.

--doodleysquat
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