Building Fuel Cells for Submairnes in Connecticut

United Technologies Corp. was awarded a contract today to build fuel cells for submarines, for Spanish submarines.

UTC Power, a United Technologies Corp. (NYSE:UTX) company, today announced it has signed a contract for the development phase of a program with Spanish shipbuilder Navantia, S.A., to supply a 300kW proton exchange membrane (PEM) fuel cell power module for use in the Spanish Navy’s S-80 submarine.

Terms of the agreement with Navantia were not disclosed, but UTC Power said this contract is one of the largest single contracts it has ever received.

The companies announced in July of 2006 that UTC Power would design a fuel cell to operate on reformed ethanol and pure oxygen. The design phase has been successfully completed, and the program will now move on to actual hardware development, which also includes the first operational fuel cell. Following successful completion of the development phase, Navantia and the Spanish Navy are expected to determine whether additional units will be produced.

Note it is ethanol based. I have to admit, I'm a bit confused here. Although it is great UTC is able to produce fuel cells that use ethanol, I fail to see the advantage of ethanol over hydrogen.

Spain has a huge ethanol production capability, however that means very little for a submarine. The problem with ethanol is that the fuel isn't widely used at sea, so who is going to supply a forward deployed S-80 with ethanol? Greenpeace?

Apparently, the S-80 isn't going to be forward deployed very often, at least not without a tanker with an ethanol supply in the region. Am I missing something here? If so, edumacate me. I also do not see the export prospect for ethanol based fuel cells for submarines in the future.

I absolutely see the value though. It is noteworthy the sales potential of ethanol based fuel cells for commercial use is probably very high. It could be that UTC found a way for the Spanish military to pay for some the development costs of a technology that can be widely utilized commercially in the future.