DOE Secretary Steven Chu has said he&39's skeptical of fuel cells providing a successful energy source for vehicles in the near future, but sees them as a viable energy storage option.

The Department of Energy announced yesterday that it's interested in funding more fuel cell research and development projects, as well as cost analysis studies for fuel cell manufacturing and use.

To that end the federal agency is offering a total of $74 million in funding, with $65 million going toward research and development, and $9 million going toward cost analysis studies. The funds are available to either academic or corporate laboratories with applications for the research and development funding due by March 3, 2011, and those for fuel cell cost analysis studies due by February 18, 2011.

It's an interesting development since the DOE slashed its fuel cell vehicle research budget in 2009.

Fuel cells have been given a lot of attention in connection with pilot projects involving cars, buses, light duty trucks, and even tractors. Recent research reports have predicted that fuel cells will become more standardized over the next 10 years, and experience a surge in popularity as hydrogen fueling stations become more common. Pike Research predicted that 2.8 million fuel-cell vehicles will be on the road worldwide by 2020, due in large part to government interesting and backing.

Fuel cells have also been successful in stationary applications like supplying power used to cool a data center, as chargers for gadgets, or as energy storage units for intermittent energy sources like wind and solar.

DOE Secretary Steven Chu has been quite vocal with his personal skepticism toward fuel cells as a successful transportation option in the near future until certain technological breakthroughs occur. Chu has said he sees fuel cells more as an option for energy storage when it comes to nuclear power, solar, and wind.

"I think that hydrogen could be effectively a 'battery' in the sense that suppose you had a way of using excess electricity--let's say a nuclear plant at night, or solar or wind excess capacity, and there was an efficient electrolysis way of turning that into hydrogen, and then we have stationary fuel cells. It could effectively be a battery of sorts," Chu told MIT's Technology Review in a 2009 interview.

Of course, as always with the federal government, there is a catch to this available fuel cell funding.

"Funding for both programs are subject to congressional appropriations," according to the DOE announcement.