The ElectraGen ME system is an extended run backup power cell. Crucially the system has a fuel reformer that creates its own hydrogen gas by converting methanol and water, and the gas is subsequently used to generate power. ElectraGen ME was initially launched in December.

“This is an exciting and important development for IdaTech as it provides a key foundation in its Path to Profitability Strategy,” the company said. 

“This family of products incorporates substantial cost and performance improvements which can be sold profitably in significantly higher volumes than previous generation products.” 

These improvements offer customers a compelling value proposition, compared to diesel generators, whilst yielding positive margins for the company. 

Idatech also updated investors on its trading performance in 2010.

It sold over 350 systems in 2010. On the face of it sales were down from the previous year, in which it sold 445, however margins are vastly improved. Around 300 units were sold at a loss in 2009 and just 9 units gave a positive gross contribution, whereas in 280 contributed in 2010. 

The firm’s newer products, ElectraGen H2 and ElectraGen ME, accounted for 280 sales and the rest were from discounted earlier generation units.

IdaTech’s sales pipeline looks strong with orders for US$1.6 million, or 84 units. Almost all the order book is for the higher value products.

Sales revenue reached US$4.1 million (US$4.5 million) and importantly margins improved.

IdaTech added: “2010 was, as expected, the transition year from previous generation, loss making systems to new generation, profitable products.

Additionally the group has also improved the cost side of things, with overheads are expected to be lower than last year  and cash usage down to US22 million (FY09: 24.8 million).

Looking to future IdaTech believes that its recent acquisition, of LPG Off Grid in October, can help the group propel itself to access a US$1 billion market to provide telecommunications related power generation in areas where there is no electric grid service.  

It also highlighted: “With the launch of the ElectraGenTM ME, the Company believes demand will increase over the next year.  The rate of this increase will be dictated by the speed with which customers certify the new products, but initial signs remain encouraging. 

“Additionally, with the transition from previous generation products to new, profitable ones, the company expects gross margin to continue to improve.”

"We believe that, when combined with (superior) next generation units, due in Q4 2010, ACME's distributorship agreement could provide a stepping stone to reaching this aim."

IdaTech in November announced the original supply agreement with Indian contract partner ACME Telepower Group has expired and is being replaced with a new distribution agreement, encompassing all versions of the ElectraGen fuel cell unit.

The management does not believe this change has affected strategy, and is targeting breakeven in the 2011 full year, EIR said.

The valuation of fuel cell and related companies hinges on achieving a commercial breakthrough of a scale and cost that generates market acceptance.  To date this has proven elusive globally. Consistent significant volume orders of more than 1,000 units would be a milestone, achievement of which would help validate IdaTech's business model, the research house said.

The company's products combine fuel reforming and fuel cell stacks to create a power generation systems for use in a range of stationary and portable applications.  The focus is now on onsite back-up power; the wireless telecommunications industry with widespread and often remote sites as a natural user.

In the back-up power market, fuel cells compete mainly with lead acid batteries and diesel generators. The key challenge for IdaTech, according to EIR, is to build production to a baseload volume that will reduce currently high production costs and trigger lower selling prices. Having successfully reduced manufacturing costs by around 50 percent as part of the tie-up with ACME, future products are likely to compete on price but also be capable of processing a variety of fuels, opening new markets, it added.

IdaTech's fuel cell products utilize advanced proton exchange membrane (PEM) technology that can be fuelled either by hydrogen directly or by generating hydrogen onsite and on demand from HydroPlus, a methanol and water liquid fuel, using IdaTech's proprietary fuel reformer.

The company offers 250W, 3kW and 5kW fuel cell products that provide solutions for applications requiring 100W to 15kW of back-up power generation.

ACME supplies power equipment to India’s telecommunications market.

The deal was altered after a product acceptance milestone, originally due in October 2009, was missed, and subsequently IdaTech elected not to submit a remediation plan by 15 November 2009. Instead, IdaTech and ACME entered into a new agreement, replacing the original supply agreement with a distribution agreement. 

Under the terms of the new agreement, ACME and IdaTech will work together to develop back up fuel cell systems using natural gas. The natural gas fuel cell system will still incorporate Ballard Power Systems’ (NASDAQ: BLDP) liquid cooled FCgenTM 1300 stack.

" The Distribution Agreement gives both IdaTech and ACME greater flexibility and allows the companies to continue to collaborate on a number of projects,” Hal Koyama, CEO of IdaTech stated. “…As previously announced, in the development of the natural gas product, IdaTech has broken through a significant number of the cost barriers and added significant new technology to the Company's portfolio. Much of this new capability will also be leveraged in IdaTech's next generation methanol/water fueled systems, due for launch in late 2010."

The deliveries are for the US Army’s Infrastructure Modernization (IMOD) program which supports the force’s upgrade and modernisation of enterprise enabled voice and data networks worldwide.

The first ten ElectraGen systems were successfully installed last month at the US Army-run multinational training centre in Grafenwoehr, Germany, and the additional 12 systems have been scheduled for deployment to US military sites throughout Germany before the end of 2009.

IdaTech's ElectraGen fuel cell system was developed specifically to provide critical backup power to the telecom market when loss of grid occurs.  ElectraGen products can be powered by hydrogen gas or by IdaTech's proprietary fuel reformer system which converts liquid fuel into high-purity hydrogen onsite as needed.

IdaTech chief executive Hal Koyama said: "The 22 unit installation is the largest fuel cell installation by b+w in Germany. This is an exciting milestone for IdaTech and demonstrates our growth in the German fuel cell market."
IdaTech is headquartered in Bend, Oregon, and designs, develops, and manufactures extended run backup power fuel cell products for Telecom applications requiring 100 Watt to 15 KiloWatts of backup power.

IdaTech, which designs and manufactures extended run backup power fuel cell products for telecommunications and other critical applications, was founded in 1996. IdaTech’s clean, reliable fuel cell solutions provide critical backup power to grid-connected and remote sites.

IdaTech operates in partnership with supply chain partner Ballard Power Systems and has a key client in ACME Tele Power who placed a significant order for IdaTech’s ElectrGen H2 fuel cell for the Indian telecommunications market.

During the six month period Idatech made substantial progress on product development with its natural gas fuelled fuel cell system reaching ‘significant milestones’. Similarly IdaTech began development of a methanol-water fuelled fuel cell system.
IdaTech also expanded the company’s international reach, by establishing an office in the Asia-Pacific region - in March IdaTech announced it had opened a regional sales office in Kuala Lumpur, Malaysia, it also signed two partnership agreements for marketing and distribution in the area and completed a successful two-month installation trial in Malaysia with TIME dotCom.

IdaTech also progressed its Latin America operations, achieving an additional distribution partner in region. IdaTech won an order for 14 systems from the Latin American region for delivery by end of 2009. Production developments were achieved in Latin America as well, the successful completion of the first high rate production run at IdaTech's Mexican facility, validated its capability estimates.

The company reported an operating loss of $13 million (USD) during the period, which fell in-line with previous guidance. IdaTech stated that they had made considerable progress in reducing component and product costs
IdaTech CEO, Hal Koyama commented on the group’s progress, which is set to position IdaTech’s emerging technology in-line with large scale diesel generators;

“IdaTech continues to focus on developing and deploying systems for critical power applications as the entry point for mass commercialisation and profitable growth... the Company has made significant strides improving product performance, reducing product costs and preparing the market for our products.”

The initial batch of  310 ElectraGen H2 units will be installed by ACME ahead of the deployment of the natural gas fueled fuel cell systems, due to commence in 2010.

As previously announced, significant advancements in its proprietary technologies will allow IdaTech to produce more robust and significantly more cost effective integrated fuel cell systems by 2010. The first of these products to be launched will be the natural gas fuelled system for deployment in early 2010 under the ACME contract, 9,690 systems in all, taking the number of generator units sold to ACME to the agreed number of 10,000. 

IdaTech and ACME signed a fuel cell generator supply agreement in 2008.

IdaTech CEO Hal Koyama said: “Passing this (the tests) and securing the purchase order for the first 310  ElectraGen H2 validates the robustness of the product and ACME's commitment to the program.  Our system integration skills and real world field experience, gained from the 150 systems we have already deployed (elsewhere), have proved invaluable to ensuring the success of the ElectraGen H2.”

As previously announced, significant advancements in its proprietary technologies will allow IdaTech to produce more robust and significantly more cost effective integrated fuel cell systems by 2010. The first of these products to be launched will be the natural gas fuelled system for deployment in early 2010 under the ACME contract, 9,690 systems in all, preceded by the abovementioned batch of 310 hydrogen powered cells which will be delivered this year.

The hydrogen cells for ACME will be built at IdaTech's manufacturing facility in Tijuana, Mexico, and the other units at the Indian facility which will be fully operational by the end of 2009.

While IdaTech will develop its new natural gas fuel cell capability for the ACME contract, it will continue to sell its core ElectraGen back-up power product family, which typically uses a methanol-water mix as a fuel, to its key telecommunications customers.  IdaTech will also continue to sell and develop iGen, which is currently in a number of field trials in a variety of applications.

IdaTech will redirect its existing resources away from development of the iGen Consumer product which will now not be launched for the foreseeable future, and it will also suspend development of a product suitable for the materials handling market.