"Ohio makes sense for this industry," Ohio Department of Development Director Bruce Johnson said Wednesday in an interview after his presentation at the sixth annual Ohio fuel cell symposium at the Kent State University Stark campus conference center.

The industry sees Ohio as "forward thinking" because of the state's $103 million investment in startup programs, which is about to be supplemented with substantial federal grants, he said.

Also, fuel cell companies are looking to locate in Ohio "because of the existing manufacturing base, the location and the strength of the technology and the research and development that already exists here," Johnson said.

"I think fuel cells represent a gazelle industry," he said. "It's an industry about to take off. It's not going to surpass traditional power industries anytime soon, but it's going to grow."

Ohio has worked to secure a foothold in fuel cells that could become crucial in the future if the automotive industry aban dons internal combus tion engines for fuel cell- powered cars.

Some experts have said more than 100,000 jobs could be lost with the end of the old tech nology.

Robert Rose, execu tive director of the U.S. Fuel Cell Council, an industry association dedicated to fostering fuel cell commercialization, outlined the efforts by other states to develop fuel cell and related system technologies.

"I think Ohio has done exceptionally well - so far," Rose said in an interview. "It's a long, slow process. I think staying the course will be well worth it. I think Ohio's progress has given other states the sense of opportunity."

Unlike other sources of power, a fuel cell does not burn its fuel. It combines hydrogen and oxygen in an electrochemical reaction in the presence of a catalyst to produce electricity.

The "exhaust" from a fuel cell is water.

While automakers are trying to develop fuel cell systems to power electric cars, Rolls Royce aims to build stationary power generators that could be placed within existing power grids or work as stand-alone units.

Rolls sent Charles Coltman, chief executive of its fuel cell systems division, to address the conference.

Rolls already has partnered with Alliance-based fuel cell researcher SOFCo-EFS Holdings to perfect a device that can "reform" fuels like diesel into hydrogen.

SOFCo - with Rolls as a partner - is moving into a new research and development facility this summer on the Stark State College campus contiguous to the KSU Stark campus.

Under the terms of the state's Third Frontier technology grants, Rolls and other companies must agree to work with Ohio companies receiving the assistance.

Coltman told the more than 400 attending Wednesday's symposium that Rolls Royce plans to assemble 1-megawatt fuel cells by next year with another state-assisted startup company, OnPower, in Lebanon in southwest Ohio. (A typical coal-fired power plant produces hundreds of megawatts.) After two years of customer testing, the Rolls plan calls for full commercialization by 2010.

A 1-megawatt unit could supply power to a large office building or a neighborhood. Utilities are interested in locating such units throughout their distribution networks rather than building new large power plants.

Coltman said taxpayer assistance is critical in early-stage development of nascent technologies such as fuel cells, but Rolls Royce is not looking for operating subsidies. Ohio's Johnson said Rolls' decision to assemble fuel cells in the state is important because such facilities tend to attract other companies, including component makers.