That has largely been due to rising speculation that fuel cells, developed at vast expense for the US space programme, might at last be nearing commercialisation. Stubbornly high conventional energy prices have not hurt as investors look for an alternative to fossil fuels.

Tom Frost, analyst at Numis Securities, warns that valuation of what are essentially concept stocks is very difficult and investors should treat the share price movements with caution.

"Fuel cell developers have been promising commercially viable products for years and they are potentially massive," he says. "They could replace all the batteries and all the combustion engines in the world. The trouble is that nobody has yet delivered."

Recent developments suggest that, commercialisation might not be too far off. Analysts see potential in companies that have strong intellectual property, a commercial focus and good positioning in the right markets. Polyfuel, a US company whose shares have risen 89.4 per cent in London this year, estimates that the market for portable fuel cells for the consumer electronics industry will be commercially viable by 2007 or 2008.

Jim Balcom, chief executive, says that a significant research and development effort from consumer electronics groups has been sparked by the transition to wireless internet, which requires ever more powerful batteries, and demands from mobile phone companies, which need to produce handsets with more power and battery time to be able to offer customers ever more sophisticated content.

Polyfuel, which makes membranes used in fuel cells, says NEC, Japan's largest handset maker, is testing its product, along with 11 other electronics companies including Hitachi, Fujitsu and Sanyo.

Polyfuel has used the recent upswing in interest to raise an extra £10m on the Alternative Investment Market in London, saying it found a strong appetite among investors for the sector.

Ceres Power, whose shares have risen 49.1 per cent this year, has also attracted interest from institutional investors, with blue-chip fund manager Fidelity raised its stake from from 1.3 per cent to 6.2 per cent this month.

The company is developing fuel cells that could power domestic boilers and has tie-ups with BG Group and industrial gas group BOC in the UK. Although Ceres declines to put a timeframe on the commercialisation of its products, these joint ventures have given investors confidence that the groups will eventually find their way to market.

Other companies in the sector have benefited from the clamour for shares. Italy's Acta is up 17.8 per cent and the UK's CMR Fuel Cells and Voller Energy are up 39.9 per cent and 37.5 per cent respectively this year. ITM Power, the fuel cell developer of the UK, has climbed more than 40 per cent since it announced this month that it had achieved the three remaining technical milestones set out in its prospectus prior to its flotation in June 2004 on Aim.

Mark Davis, an analyst at Panmure Gordon, has urged clients to buy the shares, although he does not expect the company to produce commercial revenues until 2009.

"While commercial revenues remain elusive, the milestones extend the level of know-how within ITM and reinforce its credibility," he says.

Peter Hargreaves, a director at ITM, believes the current debate in the UK concerning nuclear power has focused interest in the sector. He believes the UK will eventually have to move to an energy policy that relies on a combination of nuclear and renewable energy.

The problem with this approach, with current technology, is the inability to store energy from renewable resources to cope with surges in power demand.

However, ITM, along with other fuel cell companies, are developing electrolysers that can store renewable energy as hydrogen, thereby giving a power network the flexibility it needs to cope with sudden demand. "If ITM shares were rated as an electrolyser stock and not a fuel cell stock, they would be much higher," he says.