In little Eatontown, N.J., Millennium Cell (Nasdaq: MCEL [1]), a 50-person fuel cell technology company, just made a deal with Shanghai's Horizon Fuel Cell Technologies, a growing power in the fuel cell market (see Fuel cells coming to more toys [2]).

Last year, Horizon released the $115 H-racer, a fuel cell toy car Time magazine called one of the best inventions of 2006.

Millennium said this week that Horizon acquired a license to its hydrogen storage technology and plans to build and distribute a 50 watt emergency power unit designed to support disaster relief professionals.

Millennium already has working prototypes of a similar system built for the U.S. military by Protonex, another Millennium licensee, so it's confident that it can bring the Horizon unit to market (see Protonex awards Millennium U.S. military fuel cell subcontract [3]).

"This isn't technology development, it's more product development," John Giolli, chief financial officer of Millennium Cell, told the Cleantech Group.

Giving an estimate based on the military-grade product, Giolli said the Horizon fuel cell will probably be about 8 by 6 by 3 inches. Smaller than a bread box.

While the military and the consumer unit will be made to meet different demands, it's possible they'll end up going head to head in the market.

"We generally are agnostic, we don't give exclusive licenses," said Giolli.

"If our licensees ultimately start to compete at some point down the road, they're really going to be competing on the basis of their fuel cell technology, but they'll both be working with very similar fuel storage through Millennium Cell's technology," he said.

That's a plan that's been working well for the small company so far.

"When you have other people willing to use their resources to commercialize your technology, there's really few downsides to it," said Giolli.

Millennium currently has three licensees, Horizon, Protonex and Jadoo Power Systems (see Millennium Cell and Jadoo to power wounded soldiers' life support [4]).

Millennium's technology is based on sodium borohydride.

"Basically a salt, like table salt. When you mix it with water it becomes a cloudy liquid that's non-flammable that stores a lot of energy, and that if presented with the proper catalyst can release the hydrogen immediately and safely," described Giolli.

While the bulk of the company's work is in licensing, and working with licensees on design and debugging their fuel cell systems, Millennium is also getting into the production game.

In January, Millennium grabbed Eatontown neighbor Gecko Energy Technologies in an all-share deal.

"Right now, they have a pilot scale ability to probably do a few hundred cells a week," Giolli said of the fuel cell maker. Their products are effectively an inch by an inch and 4 millimeters thick, aimed at consumer electronics applications.

Prior to the merger, Millennium had invested $1.5 million in cash and services for an initial 34 percent interest in Gecko.

The company is also working on fuel cells for Unmanned Aerial Vehicles for military and commercial uses, but in the short term Giolli is pegging Protonex's P2 battery system as the most likely to hit the market first. It's targeted at replacing the U.S. military's BA-5590 battery.

"It's the most common target of all fuel cell companies, because it's such a bad battery compared to what fuel cells can provide," said Giolli.

The P2 would be used by soldiers to power their radios, laser designators, helmets, night vision goggles, and everything else they carry with them.

"Really it's just a horserace between the alternative technologies, and who ultimately gets robust enough, who ultimately has the best metrics, best safety, and that's yet to shake out," he said.

California's UltraCell is aiming to replace the BA-5990 with methanol technology, and Germany's Smart Fuel Cells is also gunning for it with methanol.

But Millennium isn't too worried about the competition.

"You look at a company like Medis Technologies or Mechanical Technology, they're very focused on a very narrow set of applications. They fail in those applications, they're probably out of business," he said.

"However, Millennium Cell, we have three licensees today, we have a fuel cell company in-house, so we've got at least four applications right there. In some cases, we've got two per licensee at this point."