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Charging Up Cell Towers With Fuel Cells

P21_logoFuel cell-powered cars may have fallen from favor in the U.S., but that doesn’t mean fuel cell technology is dead. Germany’s P21, which is focused on building fuel cell systems for cell towers, just picked up €10 million ($13.6 million) in funding for its technology, joining a growing list of companies looking to pair phone companies with fuel cells.

Yellow&Blue Investment Management led the round for P21 — which was formed through a management buyout from Vodafone — joining existing investors Target Partners and Conduit Ventures. And P21 already has at least one deal under its belt, setting up seven hydrogen-powered fuel cell systems for cell phone carrier O2 in Germany last year.

Most phone companies depend on batteries and diesel-powered generators as sources of backup power for their towers, as well as for primary power in spots that are off the grid, but fuel cells could offer more power than the battery and diesel options, as well as zero emissions when compared to the diesel generator.

Fuel cells’ relative light weight and low maintenance — the result of having so few moving parts — could also render them more attractive. That could be a major factor in urban locations, where phone companies put a lot of cell towers on top of schools, apartments, and other buildings, and well as remote rural locations that are hard to get to.

Some big-name phone companies in the U.S. are also giving fuel cells a try. Last month, Sprint Nextel (s S) picked up $7.3 million from the Department of Energy to test out new fuel cell systems as backup power for its wireless infrastructure. Sprint already has some fuel cells at some of its towers, but they only provide 15 hours of back-up power, and the company is hoping to boost that up to 72 hours with the DOE funding.

That cash was part of a larger $41.9 million in financing that the DOE handed out for fuel cell technology last month, with most of the money going toward telecom applications, including $8.6 million for fuel cell-maker ReliOn to work on a back-up power system for AT&T.

But while there’s big potential in the telecom market for fuel cell startups, there’s also established players that will offer competition. That includes Plug Power (s PLUG), which has made some moves in the telecom market, and Ballard Power Systems (s BLDP), which has a deal to supply its fuel cells to Acme for telecom applications India.

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