In the world of energy, the Holy Grail is a power source that's inexpensive and clean, with no emissions. Well over 100 start-ups in Silicon Valley are working on it, and one of them, Bloom Energy, is about to make public its invention: a little power plant-in-a-box they want to put literally in your backyard.
The Bloom Energy and its Bloom Box is one of many start ups who have jumped into the alternative energy market using fuel cells. The technology has plenty of potential but right now it is very expensive and these start ups like Bloom Energy are not making money.
Bloom lost $85 million in 2008, according to venture capitalists that have seen its business plan, roughly on par with other fuel-cell companies building energy boxes much like Bloom's.
Google told Fortune that it has a 400 kilowatt installation from Bloom at its headquarters in Mountain View, California. But the real test, analysts say, is whether Google feels confident enough to use Bloom boxes to power its vast server farms upon which its business depends
In late February of this year, K.R. Sridhar, a native of India who moved to the United States and eventually became the CEO of Bloom Energy, announced a new piece of technology marketed as the Bloom Box. The Bloom Box is Bloom Energy's claim to fame, and it is the most recent hot news item within a technology that has had a checkered past: fuel cells. Formerly, companies that have posted exciting advances in fuel cell technology have received interest from venture capital companies followed by a boom and then bust cycle as the potential profit from the technology has proven to be significantly less than expected. Ballard Power Systems is one such example. In the 1990's, Ballard received international attention when it revealed its work on fuel cell technology and hinted that a hyper-efficient automobile would soon emerge. As the reality of fuel cell technology manifested itself as a much slower process, however, interest in Ballard's activities declined.
What is Bloom?
The Bloom Box is a stationary fuel cell designed to generate power at any scale desired depending on the number of ceramic plates utilized in the device. Yahoo has purchased a number of the boxes and claims to have saved around $150,000 in power costs since they were installed. According to Sridhar, the fuel cell is not ideally suited to mobile applications such as automobiles, but it does work extremely well for stationary power generation. Sridhar originally was pursuing a technology that would generate oxygen for NASA Mars missions, but when the missions were scrapped, Sridhar reverse-engineered his product to intake oxygen from the atmosphere and generate electricity. The CEO believes his product is unique because it uses a specially-engineered ink on ceramic plates (arranged in a fashion similar to the title picture) to generate power. He thinks that he will be able to manufacture a home-sized Bloom Box for around $2,000-$3,000, and that when he is able to do this, his company will reap extremely large profits. A Bloom Box of approximately the size of a bread loaf is purported to be able to satisfy the energy needs of an average household, and to do so at a level of efficiency that would enable consumers to regain their investment in the device relatively quickly.
A lot of industry experts are skeptical about Sridhar's Bloom Box, however. Many have examined the designs and concluded that there is nothing new or particularly revolutionary to the Bloom Box technology, and they have also evaluated and largely disregarded his belief that he could manufacture the boxes cheaply enough that average citizens would be able to save a good deal of money from the boxes. Sridhar's claims are not all hot air, however. The blooming executive has managed to make fuel cell technology extremely portable, which can be beneficial for remote field operations that require an immediate and simple source of power (and one that does not pollute the landscape). The jury is out about whether or not Sridhar has stumbled upon a revolutionary new form of clean energy in his Bloom Box, but the company's success will depend upon how quickly and effectively they are able to market their product in the recent wash of press coverage they have received.
The Bloom Energy Server (commonly referred to as the Bloom Box) is a solid oxide fuel cell (SOFC) made by Bloom Energy, of Sunnyvale, California, that uses liquid or gaseous hydrocarbons (such as gasoline, diesel or propane produced from fossil or bio sources) to generate electricity on the site where it will be used; Bloom Energy representatives assert that it is at least as efficient as a traditional large-scale coal power station.According to the company, a single cell (one 100 × 100 mm metal alloy plate between two ceramic layers) generates 25 watts.
In October 2001, K.R Sridhar C.E.O had a meeting with John Doerr from the large venture capital firm Kleiner Perkins.Sridhar was asking for more than $100 million to start the company. Bloom Energy has received $400 million of start-up funding from venture capitalists, including Kleiner Perkins and Vinod Khosla.The company, originally called Ion America, was renamed to Bloom Energy in 2006.Sridhar credited his nine-year-old son for the name, saying that his son believed jobs, lives, environment and children would bloom. One of the celebrities appearing at the product launch was Michael R. Bloomberg, who appeared by video link.Bloomberg's business news network covered the event, but was attributed every statement to "Bloom Energy".
The CEO gave a media interviewfor the first time in 2010, eight years after founding the company, because of pressure from his customers.A few days later he allowed a journalist (Lesley Stahl of the CBS News program 60 Minutes) to see the factory for the first time.On February 24, 2010, the company held its first press conference.
Installation of bloom box
The current cost of each hand-made 100 kW Bloom Energy Server is $700,000–800,000. In the next stage, which will likely be mass production of home-sized units, Sridhar hopes to more than halve the cost of each home sized Bloom server to under $3000. Bloom estimates the size of a home sized server as 1 kilowatt, although cNet News reports critical estimates recommend 5 kW capacity for a residence.
The capital costs according to NewsWeek magazine is $7–8 per watt.
According to the New York Times (Green Blog), in early 2011 "... Bloom Energy ... unveiled a service to allow customers to buy the electricity generated by its fuel cells without incurring the capital costs of purchasing the six-figure devices.... Under the Bloom Electrons service, customers sign 10-year contracts to purchase the electricity generated by Bloom Energy Servers while the company retains ownership of the fuel cells and responsibility for their maintenance.... 'We're able to tell customers, 'You don't have to put any money up front, you pay only for the electrons you use and it's good for your pocketbook and good for planet,' ' [CEO K.R. Sridhar] said.
Usage bloom box
On 24 February 2010, Sridhar told Todd Woody of The New York Times that his devices are making electricity for 8–10 cents/kWh using natural gas, which is cheaper than today's electricity prices in some parts of the United States, such as California. Twenty percent of the Bloom Energy Server cost savings depend upon avoiding transfer losses that result from energy grid use.
Bloom Energy is developing Power Purchase Agreements to sell the electricity produced by the boxes, rather than sell the boxes themselves, in order to address customers' fears about box maintenance, reliability and servicing costs.
Fifteen percent of the power at eBay is created with Bloom technology; after tax incentives that paid half the cost eBay expects "a three-year payback period" for the remaining half, based on California's $0.14/kWh cost of commercial electricity.
Efficiency bloom box
A Gerson Lehrman Group analyst wrote that GE dismantled its fuel cell group five years ago and Siemens have almost dismantled theirs. United Technologies is the only large conglomerate that has fuel cell technology that could compete with Bloom Energy. Toshiba only has technology to provide energy for a small device, not a neighborhood.
Katie Fehrenbacher of Business Week reports that Sprint Nextel owns 15 patents on hydrogen fuel cells and is using 250 fuel cells to provide backup power for its operations. Sprint has been using fuel cell power since 2005. Last year Sprint's fuel cell program received a grant of over $7 million from the United States Department of Energy. The Sprint program has partnered with ReliOn and Altergy for fuel cell manufacture, and with Air Products as a hydrogen supplier. Business Week reported that a German fuel cell firm called P21, which is based in Munich, has been working on similar projects to supply backup power for cellular operations. United Technologies makes fuel cells costing $4,500 per kilowatt.
In October 2009 the Department of Energy awarded nearly $25 million in grants for research and development of solar fuels, which Michael Kannelos notes in Wired may be similar technology to the solar cells in Sridhar's description of the Bloom Energy Server. Department of Energy grant recipients included a variety of startup companies and universities.
According to an article in NewScientist, there is a claim stating the Bloom Box is "electrolyte-supported" and based on that, there are at least two well-established companies, Topsoe Fuel Cell and Ceres Power, already rolling out products with more advanced non-electrolyte-supported cells. Ceres having a four-year program to install 37,500 units in the homes of customers of the UK's British Gas.
Ballard Power's comparably scaled products are based on proton exchange membrane fuel cells. Ballard's 150 kW units are intended for mobile applications such as municipal buses, while their larger 1 MW stationary systems are configured from banks of 11 kW building blocks.
Another competitor that already has product in-market in Europe and Australia is Ceramic Fuel Cells , with an efficiency of 60% for the power-only units; these fuel cells are based on proven technology spun off from Australia's CSIRO.