Fuel cell company Lilliputian Systems today announced an investment and manufacturing deal with Intel, a step toward bringing a handheld fuel cell charger for gadgets to market.

Intel Capital has invested an undisclosed amount in Wilmington, Mass.-based Lilliputian and will produce silicon wafers for its first planned fuel cell. The portable fuel cell, about the size of a deck of cards and powered by butane cartridges, can charge small electronics, such as smartphones, through a USB connection.

A packet of juice. This is a visual product specification of USB Mobile Power System which will be sold by Lilliputian partners.

By the end of this year, Lilliputian plans to announce partners which will distribute the portable fuel cell charger, called the USB Mobile Power System, according to Mouli Ramani, vice president of business development at Lilliputian. Before the Intel Capital investment, the company had raised about $90 million since its first funding in 2002.

The design of end product is not fully worked out, but people can expect a handheld device and replaceable butane-filled cartridges about the size of a lighter, Ramani said. The butane is fed into the solid-oxide fuel cell which makes enough power--in the range of 3 watts--to charge small gadgets, such as iPods and smartphones.

The expected cost is about $99 and individual cartridges, which will be recyclable, will cost a few dollars, Ramani said. The cartridges of butane--also known as lighter fluid--have been approved for travel on airplanes.

The recent history of fuel cell chargers for gadgets has not been very promising. Some companies, including MTI Micro and Medis Technologies, have pursued products but have not successfully brought products to market and sustained sales.

But work in this area continues, as many companies expect strong demand for portable charging products as smartphones become more powerful and power-hungry. Toshiba, for example, last year released a methanol fuel cell for small electronics which is now available in Japan.

Lilliputian, which was spun out of the Massachusetts Institute of Technology, claims that it will break from the industry's spotty track record because it has made significant technical improvements on fuel cell chargers. Those changes mean that a single cartridge will provide energy to charge a smartphone about 20 times, which is a big step up from what's been offered until now, said Ramani.

"This is a compelling value proposition to business travelers, university students, people who need off-grid power, or a family traveling. You can charge multiple devices several times. If you have two cartridges, you don't have to take any cables," he said.

Lilliputian has gotten interest from consumer electronics companies and telecommunications carriers which see power as one of the primary barriers to services such as 4G-based data plans.

"People are wasting time planning for power--they have to plan tomorrow's day around battery life, but they don't want to think that way," Ramani said.

Power plant inside Inside the Mobile Power System is a miniature fuel cell, about the size of a 9-volt battery, which converts the butane to electricity. Lilliputian has developed a method for placing the fuel cell where the chemical reaction occurs on a silicon wafer, explained Ramani.

On the chip is also a reformer which extracts hydrogen and carbon monoxide from the butanol. When that reformed fuel is exposed to oxygen from incoming air inside the fuel cell, it produces a flow of electricity along with water vapor and carbon dioxide as byproducts.

One of the big technical challenges is handling heat since this chemical reaction happens at several hundred degrees. But since it's done in a vacuum and there is an exhaust system, the charger will not feel hotter than a laptop battery, Ramani said.

The primary purpose of the fuel cell is portable power, but Ramani argued that it's a relatively green form of electricity. Compared to generating power at a central power plant and delivering it to an outlet, the system is about six times more efficient, he said. The amount of carbon dioxide given off from the fuel cell is low and the cartridges can be bought in packs and recycled, he said.

Ramani could not say which companies Lilliputian expects to distribute the charger but he indicated that consumers should be able to buy multiple cartridges online.

In a release, Intel said that wafers will be manufactured at its facility in Hudson, Mass.