Silicon Valley startup Bloom Energy came out of “stealth mode” this morning, finally going public with the solid oxide fuel cells that CEO K.R. Sridhar hopes will change the world. The idea is incredible – grapefruit-sized modular boxes that produce clean, affordable electricity. One will power a European home, two power an American home, and a box the size of a small refrigerator will power a small office building. It sounds too good to be true, and it may be.
Fuel cell technology has been around for about a century, and it’s used almost exclusively on NASA missions. It’s complicated stuff, but the end result is that you put fuel and oxygen in, and electricity comes out; no combustion is required (you can see a video explaining the process here). The problem with using en masse is its prohibitive cost, and the difficulties associated with mass production. Bloom Energy is attempting to drive this cost down by using more common materials, simpler processes, and research into technology refinements.
In an interview with Fresh Dialogue, Sidhar describes the problem with conventional electricity generation:
“A fuel is simply a substance that has in it chemical energy. You burn that in air, that’s combustion, and when you burn that you see the flame, that’s creates heat. So you’ve converted chemical energy to heat energy. That raises steam, the steam then goes into a big turbine that spins, so you’ve converted the heat energy to mechanical energy. Now, around that is a copper coil, called an alternator, converts the mechanical energy to electrical energy. So the way you convert this fuel to electrons on the other end, which is what you need, is going from chemical energy to thermal energy to mechanical energy to electrical energy.”
The problem with this approach is that at every step of the process, every transition from one form of energy to another, you lose a portion of your total energy. Fuel cells bypass the intermediate steps in this process, turning the chemical energy in the fuel directly into electrical energy.
This isn’t a perfect process. One of the byproducts of the chemical reaction is CO2, but the boxes Bloom Energy is turning out produce 60% less per megawatt hour than coal plants do. This isn’t as impressive as some zero emissions alternative energy like wind and solar, but solid oxide fuel cells have one huge advantage. While wind and solar work great when they’re working, and the price is falling rapidly, they only produce energy in cycles. Solar panels won’t get you energy at night. Fuel cells on the other hand, can churn out energy 24/7/365, making them far more useful than these other technologies, even if they aren’t quite as clean.
But best part of Bloom Energy is their focus on flexibility and adaptability – and here I have to admit that I’ve been leaving something out. The Bloom boxes (or “servers” as Sridhar prefers to call them) can run on fossil fuels, but they can also run on renewable biofuel, producing zero emissions. The solid oxide fuel cells are meant to facilitate the transition to alternative, clean energy, but they make it a gradual (read: more politically and socially feasible) transition by incorporating more efficient use of conventional fuel. The future is zero emissions energy generation, but getting there will be a more gradual process. According to Sridhar, Bloom Energy is “building the bridge as well as the future destination.”
As if that wasn’t enough, the servers also produce hydrogen as a by product. Sridhar and the Bloom team are poised to capitalize on this aspect of their technology as well: “Transportation can potentially go in two directions in the future: one is a hydrogen infrastructure for the car, the other one is an electrical infrastructure. Our device can either produce the electricity that will charge the car or provide you hydrogen if the transportation becomes hydrogen based. So we’ve sort of become the gas station for the transportation industry.”
So Bloom Energy stands ready to revolutionize the energy industry and facilitate the revolution of the transportation industry. The multi-million dollar question then, is can they do it? Can they reduce the cost enough to make solid oxide fuel cells a viable energy alternative, and can they manage to mass produce them in an effective way? While there are certainly no guarantees, they certainly have a lot of support.
Bloom Energy has raised over $400 million dollars in investor money, and has the backing of some of the biggest companies in the world. Coca-Cola, Staples, Google, Bank of America, Wal-Mart, eBay, Cox, and FedEx are all behind the project, and their CEOs took the stage at Bloom Energy’s press conference this morning to emphasize their support. Other notable supporters include Arnold Swartzenegger, who spoke this morning, several US Senators, billionaire and current mayor of New York City, Michael Bloomberg, and former Secretary of State, Colin Powell, who joined the Bloom Energy board in 2009 and was the keynote speaker at the conference this morning.
And several of these companies are already testing Bloom Energy servers. eBay had five of them installed on their campus nine months ago. They cost a whopping $800,000 dollars, but State and Federal rebates cut the cost in half. According to John Donaho, the CEO of eBay, in the short time they’ve been operational, the Bloom servers have saved the company over $100,000 dollars, and they expect they will pay for themselves in the next three years.
Initial successes like this are promising, but the technology is still being tested, and isn’t currently capable of mass production. There are also many skeptics, and many questions that still remained unanswered. Will utility companies try to crush Bloom Energy, or will they get on board and try to incorporate Bloom’s technology into their own business model? Can Sridhar really drive the price of his units down to $3000 as he claims? Unfortunately, we won’t know for quite a while. Bloom has gone public, but they’re still predicting 10 years before their boxes are available to consumers at reasonable prices.
I’m tremendously excited about this project and this company though, because they way I see it, they can’t fail. Listening to Sridhar speak, and reading transcripts of the interviews he’s given, you can’t help but recognize that he isn’t in it for the money – he really wants to change the world. It’s possible the company fails, but with the kind of drive they have and the political and commercial endorsements they’ve required, they won’t fail quietly. At the very least, Bloom Energy will spur a green technology boom, both through their own research and the efforts of would be competitors.
One of the biggest problems the green technology movement has faced over the years is kickback from the conventional technology industries they’re trying to supplant. Remember how GM killed the electric car? But Bloom Energy has an advantage that most of these other companies haven’t had: the support of commercial giants. You’d be hard pressed to find a group of heavier-hitters than the support group Bloom has rallied. Hopefully this will give their technology a leg up in the political sphere, and shield them from the economic attacks of any hostile companies.
This may not be the technology of the future, but it is a refreshing change in approach. Great ideas almost always come from competition, and that’s exactly what we need in the race for clean energy – not just intra-technology competition, but competition between clean technologies. Introducing fuel cells as a potentially viable alternative to coal and nuclear power broadens the market and drives innovation both within the fuel cell industry and competing industries.
I can’t wait to see what Bloom Energy manages to achieve, but win or lose, they’ve already made enormous progress.