Here come the bite-size fuel cells

Correction: a portable battery pack Horizon is working on with another manufacturer will run on the liquid fuel ethanol.

The personal computer was famously derided as a "toy" when it entered the computing world. Some companies in the hydrogen fuel cell industry are counting on toys to make the much-ballyhooed hydrogen economy a reality, if on a small scale.

Horizon Fuel Cells is one of a handful of companies that make such toys and educational products, including the H-racer, a toy car that runs on a small fuel cell. A fueling station uses a small solar panel or power outlet to convert water to hydrogen gas, which is then put on-board to power the car.

But that's just the beginning of the company's grand plans, said Horizon Fuel Cells Vice President Taras Wankewycz.

In the fall, it will be releasing a portable back-up power supply called the HydroPak which runs on solid fuel cartridges and water. (See CNET blogger Peter Glaskowsky's description and take on it.)

The company also has signed a deal with another manufacturer to make a fuel cell portable power pack under the manufacturer's name, Wankewycz said. It will run on the liquid fuel ethanol. Another company, MTI Micro, is making a methanol-powered fuel cell charger for portable electronics, which are due next year.

In addition, Horizon Fuel Cells has signed a deal with toymaker Corgi, which intends to use fuel cells for remote-controlled toys, a more challenging technical hurdle than the H-racer, which is undergoing an update to a new version, Wankewycz said. From a performance point of view, Corgi's toy power pack needs almost no time to charge.

So why is the business of toys and portable power packs--basically niche markets--important to the overall fuel cell industry? Because people can actually buy them.

Expensive government-funded research projects have been trying to displace the internal combustion engine for years with some technical progress, but hydrogen cars are still many many years away.

General Motors CEO Rick Wagoner went on 60 Minutes years ago to say that fuel cells are the future because GM can make them profitably. In the meantime, Toyota came out with a niche product, the Prius, using hybrid technology that bridges today's fuel reality with better environmental performance.

Here's another good reason Horizon Fuel Cells' business plan is compelling: the toy and educational business is profitable. That allows the company, which expects to be profitable this year, to fund research in more demanding applications, like boats, bikes, forklifts, and other light vehicles.

Along the way, young people get a notion that there are technology alternatives to fossil fuels, even if they have a ways to go before seeing a hydrogen fueling station.

"There's a movement in clean tech education," said Wankewycz, who I saw while he was in Boston for a conference of the National Science Teachers Association. "(Toys) are a way to get connected to future technology rather than through text books."

He also believes that toys can be a disruptive technology, surprising people who have been in the field for years.

"Toys are serious business but nobody took it seriously. It's an industry that's led by scientists, who are serious people," he said. "It's a gradual evolution. We're just creating the industry piece by piece."