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Green chemistry company SiGNa Chemistry has unveiled a new chemical process for generating hydrogen from water, which the company says could solve both of the most vexing hydrogen fuel cell problems: real-time hydrogen generation and storage.

SiGNa Chemistry’s CEO Michael Lefenfeld told me that the new process could make hydrogen fuel cells practical as a power source for consumer electronics like laptops and cell phones. Since the hydrogen is generated from water, this effectively means that you end up with a water-fueled laptop.

A fuel cell transforms the chemical energy of a fuel (hydrogen, methanol, natural gas, gasoline), and an oxidant like the oxygen in air, into electrical energy. Fuel cells have many similarities with batteries, but no electrodes are consumed in the fuel cell process. In a hydrogen fuel cell, hydrogen is produced by splitting water into hydrogen and oxygen. The hydrogen is then used as the fuel.

Generating hydrogen in real-time (as opposed to refueling) can be problematic, and hydrogen normally needs to be stored under high pressure. SiGNa’s new process produces hydrogen in real-time and at pressures less than those found in a soda can. The company claims that this results in a power source that is ten times cheaper than alkaline batteries and six times cheaper than disposable lithium batteries. As an example, the company says it would cost $967 to buy enough alkaline batteries to charge a cell phone 100 times (800 Watts per hour). Lithium batteries cost about $512 for 100 charges. SiGNa’s sodium silicide fuel cell, produced in reasonable volumes, would cost $89 for 100 uses.

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SiGNa’s hydrogen generation process uses sodium silicide, a powder that is formed by combining sodium metal with silicon powder. The resulting powder is stored in disposable canisters and reacts controllably with water to produce hydrogen. Unlike other generation methods, sea water or polluted water can be used. The reaction is easily controlled, resulting in fuel cells with a fast start and stop capability. This is a problem in many current fuel cells, since once the fuel cell has used 30-40 percent of the fuel it cannot be stopped and continues to produce power until all the fuel is consumed.

The target market of sodium silicide fuel cells include consumer electronics and certain transport applications such as electric bikes. Products already exist that use hydrogen fuel cells to charge cell phones. Asia is the big market for electric bikes. A lithium battery barely lasts 20 miles for an electric bike whereas a fuel cell lasts 3-4 times this distance.

I asked CEO Michael Lefenfeld about the main obstacles to using hydrogen fuel cells to power consumer electronics. He explained that the main problem is that you need to produce the fuel cells on a large enough scale to keep the production cost low. Lefenfeld told me that since offering longer battery life on a laptop, for example, is a major selling point, that several manufacturers are looking at using the cells on a large scale. He expects the first products will be fuel cells that recharge the existing lithium battery on a laptop and will be available in mid-2011. Eventually fuel cells could replace the on-board battery .