After almost a decade of development and hundreds of millions in investment, Bloom Energy is coming out.
Until now, all we've been able to garner were "no comments" from their marketing people. But this weekend, there's a Bloom piece airing on 60 Minutes that will feature none other than Greentech Media editor-in-chief Michael Kanellos. And next week is the official press conference and unveiling.
Over the years, we've heard news and rumors on Bloom that included:
- Bloom customers include eBay, Google, Lockheed, Wal-Mart, Staples and the CIA. Backlog and sales are in the $2 billion range.
- There are rumors of an enormous government contract and a multi-million dollar order backlog from Coca-Cola and FedEx.
- eBay ordered four of the company's 100-kilowatt units.
- Adobe may have purchased some Bloom boxes.
- The San Francisco Airport has Bloom fuel cells in their possession (not a rumor -- SFO told me this).
- The Google fuel cell installation is 400 kilowatts. (We've reported it before, but in case you missed it, here it is.) Their first 100-kilowatt unit went to Google.
- The solid oxide fuel cell firm is focusing on a new business model by engaging customers in a power purchase agreement (PPA). With this approach, Bloom might keep the fuel cell themselves (or own it in a joint venture with a utility) and sell the power. PPAs have been effective financing tools for solar, wind and some biomass/manure firms. PPAs also eliminate any fears about maintenance and upkeep.
- They are due for a verdict on their DOE stimulus funds shortly.
- East Tennessee will be the location of a 100-kilowatt demonstration fuel cell developed by Bloom that could be a precursor to the potential siting of a manufacturing facility in Tennessee. The system will be at the Electric Power Board HQ in Chattanooga. The project is funded through a federal appropriation as well as support from the Electric Power Board's research and development organization. The system is a 25-kilowatt unit and they put four together for a 100-kilowatt system.
- The units run on natural gas, propane, biofuels or diesel which gives them about 48 percent overall efficiency.
- Their revenue is significant; their profit, not so significant.
- Board members and observers include John Doerr of KPCB, Vinod Khosla of Khosla Ventures, and T.J. Rodgers, the CEO of Cypress Semiconductor.
- Advisors include Colin Powell and Floyd Kvamme
- The CEO, K.R. Sridhar, has used his investors' considerable clout to shake every questionable politician's hand available, including President George W. Bush, Senator Ted Stevens, Senator John Ensign, and Senator Joe Lieberman.
- Those crop circles in the late nineties? That was Bloom's doing.
That customer list is certainly impressive, as is the alleged backlog. And the PPA model really could impact their business model with the firm becoming an electricity supplier as well as a fuel cell supplier.
According to the CBS News article:
Stahl is the first journalist to be allowed into the Bloom Energy lab and factory where currently one box a day is built. The boxes create electricity by a chemical process that utilizes oxygen and fuel, but involves no combustion. Bloom's founder and CEO, K.R. Sridhar, insists all the materials in the box are cheap and available in abundance. Bloom says each large box - which can power about 100 homes - currently sells for $700-800,000. They hope within five to 10 years to roll out a smaller home version for about $3,000 a unit.
John Doerr, the Kleiner Perkins partner who invested in Bloom, has high hopes. "The Bloom Box is intended to replace the [electric power] grid for its customer," says Doerr. He thinks existing utility companies should not be threatened or have a problem with Bloom Energy. "The utility companies will see this as a solution. All they need to do is buy Bloom Boxes, put them in the substation for the neighborhood and sell that electricity," he says.
But there is another hurdle says Michael Kanellos, editor-in-chief of Greentech Media. Even if Sridhar can mass produce his boxes and sell them cheaply enough, "The problem is then G.E. and Siemens and other conglomerates that can probably do the same thing. They have fuel cell patents," he tells Stahl.
A little patent searching by Mr. Kanellos yielded:
In the fuel cell mode, the methane fuel is delivered to the SORFC anode where it is reformed into hydrogen and carbon monoxide, while oxygen or air containing oxygen is delivered to the SORFC cathode. In the fuel cell mode reaction, the hydrogen and carbon monoxide are converted to water and carbon dioxide which are discharged from the SORFC and preferably stored. Because the reformation of methane during the discharge cycle is highly endothermic, only about half of the heat is generated in the overall system as would have been produced using a hydrogen fuel input. The SORFC generates power during the fuel cell mode.
And:
The present inventors have also realized that the electrochemical system produces valuable byproducts in addition to electricity and hydrogen. The byproducts can include production, consumption, and/or temporary storage of heat, methane, carbon dioxide, oxygen, and water. Carbon dioxide and/or other carbon containing gases emitted in a fuel side exhaust of a SORFC system of a second preferred embodiment operating in the fuel cell mode may be captured and stored rather than vented into the atmosphere. This improves the environmental friendliness of the SORFC system.
Lots more information in the patent disclosures links.
Fuel cells have a 150-year history and the science is well understood. Solid Oxide Fuel Cell technology, Bloom's focus, is also not a new concept.
What has always been vexing, though, is understanding how to make money from a commercial fuel cell business. Very few firms, if any, have done that consistently. If Bloom has figured that out, then their take on distributed energy generation gets very interesting. And the wait just might have been worth it.