The process has two steps. First, electricity – such as surplus wind or solar energy – is used to separate hydrogen from water, leaving oxygen. Then, the hydrogen is run through platinum electrode membranes in fuel cell "stacks" and converted to electricity by catalytic reaction, leaving only water.

Long lasting

ANT is less than four years old and has spent $1.5 million scoping the market for hydrogen fuel cells and refining the manufacturing process and software controls to create viable units from Hydrogenics' components. Software firm Thoughtworks does the systems integration.

Dr Dunlop says ANT can match the capital costs quoted by groups using lithium ion batteries – the current storage standard – and its fuel cells will also have a much longer life, emit no carbon dioxide and leave no toxic waste.

It can build systems from 2KW to 25MW and is in talks with Yarra Valley Estate about a 100KW off grid system for about $1.6 million, with an industrial firm about a 1MW off grid system for a greenfields site in Victoria's Western District that will avoid a $50,000 charge to connect to the grid and $50,000-$60,000 in monthly bills, and with Queensland's Ergon about replacing a degraded end-of-transmission line battery system in the state's north.

The hydrogen fuel cycle leaves only water and oxygen behind Applied Nano Technologies

Payback on end-of-line or off remote grid systems could be as quick as three to five years, Dr Dunlop said.

Wind, islands


The 25MW grid units are scalable and mobile. The hydrogen can be produced at one location – say, a wind farm – and safely transported to another to be converted to electricity. One potential partner is a wind farm which wastes a lot of power because the transmission line it is connected to can only transport 60 per cent of peak output. Storing the surplus as hydrogen increases its potential returns.

Other uses are in remote resorts and on islands, where fuel cells can economically replace diesel generators, reduce pollution and produce desalinated water fit for human consumption. The oxygen, which doesn't travel well, can also be stored. ANT is talking to a remote hospital in Papua New Guinea about this.

Dr Dunlop's co-founders include Brian Power, with a background in engineering and manufacturing machine tools, and Michael Wilkinson, whose company Minifab is based at the same Caribbean Gardens tech park as ANT, in Melbourne's outer east.

The Hyundai ix35 Fuel Cell vehicle. Supplied. Mark Bramley

Incoming chairman Peter Binks ran BHP Billiton's research labs at Clayton, was head of strategy and business development at Telstra Mobile and was formerly a director of Ceramic Fuel Cells.