Bloom Energy Server

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Bloom Energy
TypePrivately held
Predecessor(s)Ion America
Founded2002
Founder(s)K. R. Sridhar C.E.O , John Finn, Matthias Gottmann, James McElroy, Dien Nguyen
HeadquartersSunnyvale, California, USA
Key peopleK. R. Sridhar (founder, CEO)
Productsregenerative solid oxide fuel cells
Net income85 Million loss (2008)[11]
Owner(s)Kleiner Perkins (among others)
Websitehttp://www.bloomfullenergy.com/
 
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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 can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from bio sources) to generate electricity on the site where it will be used.[2][3] It is highly efficient, low cost and has low polluting emissions. This type of fuel cell can withstand temperatures of up to 1800°F, which would cause many other types of fuel cells to break down or need maintenance, and is highly advantageous for its smooth operation.[4] According to the company, a single cell (one 100 mm × 100 mm metal alloy plate between two ceramic layers) generates 25 watts.[5]

Bloom stated that two hundred servers have been deployed in California for a number of corporations like eBay, Google, Wal-Mart and many more.[6]

Contents

Technology

The Bloom Energy Server uses thin white ceramic plates (100 × 100 mm)[7] which are claimed to be made from "beach sand" . Each ceramic plate is coated with a green nickel oxide-based ink on one side (anode) and another black (probably Lanthanum strontium manganite) ink on the other side (cathode).[8][9] According to the San Jose Mercury News, "Bloom's secret technology apparently lies in the proprietary green ink that acts as the anode and the black ink that acts as the cathode--" but in fact these materials are widely known in the field of solid oxide fuel cells (SOFCs). Wired reports that the secret ingredient may be yttria-stabilized zirconia based upon a 2006 patent filing (7,572,530) that was granted to Bloom in 2009; but this material is also one of the most common electrolyte materials in the field.[10] US US20080261099 , which is assigned to Bloom Energy Corporation, says that the "electrolyte includes yttria stabilized zirconia and a scandia stabilized zirconia, such as a scandia ceria stabilized zirconia". ScSZ has a higher conductivity than YSZ at lower temperatures which provides greater efficiency and higher reliability when used as an electrolyte in SOFC applications. Scandia is scandium oxide (Sc3O2) which is a transition metal oxide that is sold between US$1400 to US$2000 per kilogram in 99.9% form. Current annual world wide production of scandium is less than 2,000 kilograms. Most of the 5,000 kilograms used annually is sourced from limited former Soviet era stockpiles.

To save money, the Bloom Energy Server uses inexpensive metal alloy plates for electric conductance between the two ceramic fast ion conductor plates. In competing lower temperature fuel cells, platinum is required at the cathode.[8]

Bloom Energy

Bloom Energy
TypePrivately held
Predecessor(s)Ion America
Founded2002
Founder(s)K. R. Sridhar C.E.O , John Finn, Matthias Gottmann, James McElroy, Dien Nguyen
HeadquartersSunnyvale, California, USA
Key peopleK. R. Sridhar (founder, CEO)
Productsregenerative solid oxide fuel cells
Net income85 Million loss (2008)[11]
Owner(s)Kleiner Perkins (among others)
Websitehttp://www.bloomfullenergy.com/

Bloom Energy is the company that develops, builds, and installs Bloom Energy Servers.[11] The company, started in 2002 by CEO K.R. Sridhar,[11] is one of 26 named a 2010 Tech Pioneer by the World Economic Forum.[12]

History

In October 2001, K.R Sridhar C.E.O had a meeting with John Doerr from the large venture capital firm Kleiner Perkins.[13] 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[8] and Vinod Khosla.[14]

The company, originally called Ion America, was renamed to Bloom Energy in 2006.[15]

Sridhar credited his nine-year-old son for the name, saying that his son believed jobs, lives, environment and children would bloom.[16] One of the celebrities appearing at the product launch was Michael R. Bloomberg, who appeared by video link.[17] Bloomberg's business news network covered the event, but was attributing every statement to "Bloom Energy".[18]

The CEO gave a media interview (to Fortune Magazine) for the first time in 2010, eight years after founding the company, because of pressure from his customers.[11] 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.[19] On February 24, 2010, the company held its first press conference.[15]

Costs

Installation

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.[8] 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.[20]

The capital costs according to NewsWeek magazine is $7–8 per watt. [3]

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 [4], 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."[21]

Usage

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.[22][23] Twenty percent of the Bloom Energy Server cost savings depend upon avoiding transfer losses that result from energy grid use.[20]

Bloom Energy is developing Power Purchase Agreements to sell the electricity produced by the boxes, rather than selling the boxes themselves, in order to address customers' fears about box maintenance, reliability and servicing costs.[19]

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.[24]

Installations

The company says that its first 100 kW Bloom Energy Servers were shipped to Google in July 2008.[25] Four such servers were installed at Google's headquarters in Mountain View, California, which was Bloom Energy's first customer.[19] Another installation is for five boxes[1] to make up to 500 kW at eBay headquarters in San Jose, California.[19] Bloom Energy states that their customers include Staples (300 kW - December 2008),[26] Walmart (800 kW - January 2010),[27] FedEx (500 kW),[28] The Coca-Cola Company (500 kW)[29] and Bank of America (500 kW).[30][31] Each of these installations (current or planned) are located in California.

Portable units

Writing for a Wall Street Journal blog, Rebecca Smith and Jim Carlton speculated that portable Bloom Energy Servers could be used instead of traditional generators by the armed forces.[32] Sridhar plans to install Bloom Energy Servers in third world nations.[17] Ex-Chairman of the Joint Chiefs of Staff, Colin Powell, now a Bloom Energy board member, said the Bloom Energy generators could be useful to the military because they are lighter, more efficient, and generate less heat than what the military uses now.[33]

Feasibility

CH_4 + 2O_2 \rightarrow CO_2 + 2H_2O + electricity + heat

The chemical reaction used to create energy in Bloom Energy products

According to BBC tech blogger Maggie Shiels, Bloom Energy is "being very coy and playful about what it will reveal to the press."[34] She quotes Michael Kanellos of Greentech Media regarding the general scope and feasibility of Bloom Energy's plans: fuel cells are not new technology and in order to succeed in the marketplace the Bloom Energy Server would need to be cheaper than solar and wind.[34] If Bloom Energy can develop such a technology, Kanellos predicts that established energy firms such as General Electric would derive most of the profits due to greater ability to manufacture and market a product.[34] Jacob Grose, senior analyst at Lux Research, told Fortune Magazine that he doubts Dr. Sridhar has come up with a way of making these ceramic fuel cells cheaply enough to be truly revolutionary.[11]

Bloom Energy Server technology is based upon stacking small fuel cells which operate in concert.[7][15] USA Today claims that Bloom Energy has made a technological advance by developing stacked fuel cells where individual plates expand and contract at the same rate at high temperatures;[7] however, many other solid oxide fuel cell producers have solved the problem of different expansion rates of cells in the past.[9] Scott Samuelsen of the University of California, Irvine National Fuel Cell Research Center questions how long the reliable operational life of Bloom Servers will be. "At this point, Bloom has excellent potential, but they have yet to demonstrate that they've met the bars of reliability."[15] Lawrence Berkeley National Laboratory expert Michael Tucker told the San Jose Mercury News, "Because they operate at high temperatures, they can accept other fuels like natural gas and methane, and that's an enormous advantage... The disadvantage is that they can shatter as they are heating or cooling."[15]

John Doerr, a venture capitalist, who has a large investment in the company, asserts that the Bloom Energy Server is cheaper and cleaner than the grid.[1][35] An expert at Gerson Lehrman Group wrote that, given today's electricity transmission losses of about 7% and utility-size gas-fired power stations efficiency of 33-48%, the Bloom Energy Server is up to twice as efficient as a gas-fired power station.[2] In a followup story entitled "Bloom Box: Segway or savior?" Fortune noted on 24 February 2010 that "Bloom has still not released numbers about how much the Bloom Box costs to operate per kilowatt hour" and estimates that natural gas rather than bio-gas will be the primary source of fuel for Bloom Energy Servers.[36] Jonathan Fahey of Forbes wrote:

Are we really falling for this again? Every clean tech company on the planet says it can produce clean energy cheaply, yet not a single one can. Government subsidies or mandates keep the entire worldwide industry afloat... Hand it to Bloom, the company has managed to tap into the hype machine like no other clean tech company in memory."[37]

Efficiency

Current gas fired power stations convert chemical energy to thermal energy to mechanical energy to electrical energy. A modern combined cycle gas turbine power plant (CCGT) can reach 60% overall efficiency. Sridhar says Bloom Boxes convert chemical energy to electrical energy in one step, and are more fuel efficient than current gas-fired power stations and also reduce transmission/distribution losses by producing power where it is used.[38]

Each Bloom Energy Server provides 100 kW of power, enough to meet the baseload needs of 100 average homes or a small office building.[39]

Sridhar also said the boxes will have a 10 year life span,[23] although that could include replacing the cells within the boxes during that time period. The CEO of eBay says Bloom Energy Servers have saved the company $100,000 in electricity bills since they were installed in mid-2009,[8] yet Paul Keegan of Fortune calls that figure "meaningless without the details to see how he got there."[36]

Long term business case

Assuming a 50% cost reduction in the future, one could argue that the best case scenario for the 200 KW unit would be a capital (installed) cost comparable to today's 100 KW units, i.e., around $800,000. Using average Electricity ($0.1/KWh) and Natural Gas ($3/MMBtu) prices and assuming a 6% per year maintenance / operating cost apart from the fuel, the break even period for the Bloom Energy Server comes to over 8 years, based on published performance numbers. [40]

Parameter NameValueUnit / description
Fuel (Natural Gas) flow rate for 200 KW Bloom Energy Server1.32MMBtu/hr
Fuel energy in rate in KW (1 MMBTU/hr CH4 = 293 KW)386.76KW
Fuel cost$3.96per hour
Electric output rate200KW
System efficiency Natural Gas -> Electricity52%percent conversion of Natural Gas energy to electrical energy
Electricity cost$0.10per KWh
Electricity produced revenue$20.00per hour
CO2 produced773lb/MWh
Run cost savings per bloom box (electricity revenue less fuel cost)$16.04per hour
Cost savings per year assuming 24X7 full load operation$140,510.40per year
Capital cost (estimated minimum cost after projected reductions)$800,000.00for each 200 KW unit
Annual maintenance / operation cost6%as a fraction of capital cost, per year
Cost savings after maintenance costs$92,510.40per year
Break even period8.6years

These numbers mean that the total lifetime of these systems would need to exceed 15 - 20 years to make an argument for a viable long-term business case without federal / state / local incentives and subsidies. The analysis might be somewhat different if the systems are used mainly for peak (power) shaving when electricity costs can exceed $0.15/KWh, however the intermittent nature of such peak periods would likely reduce the overall impact on the estimated break-even period using average cost figures for electricity and natural gas. A reliable bio-derived source of fuel (bio-gas) would also tip the argument in a favorable direction, however such sources are not typically located near customer sites.

Competition

A Gerson Lehrman Group analyst wrote that GE dismantled its fuel cell group five years ago and Siemens have almost dismantled theirs.[2] United Technologies is the only large conglomerate that has fuel cell technology that could compete with Bloom Energy.[2] Toshiba only has technology to provide energy for a small device, not a neighborhood.[2]

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.[41] Sprint has been using fuel cell power since 2005.[41] Last year Sprint's fuel cell program received a grant of over $7 million from the United States Department of Energy.[41] The Sprint program has partnered with ReliOn and Altergy for fuel cell manufacture, and with Air Products as a hydrogen supplier.[41] 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.[41] 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.[10][42] Department of Energy grant recipients included a variety of startup companies and universities.[42]

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[5] and Ceres Power, already rolling out products with more advanced non-electrolyte-supported cells. Ceres has a four-year program to install 37,500 units in the homes of customers of the UK's British Gas. [43]

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,[44] while their larger 1 MW stationary systems are configured from banks of 11 kW building blocks.[45]

Another competitor that already has product in-market in Europe and Australia is Ceramic Fuel Cells,[46] with an efficiency of 60% for the power-only units; these fuel cells are based on proven technology spun off from Australia's CSIRO.

See also

References

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  2. ^ a b c d e "GLG Expert Contributor" (22 February 2010). "Answering the Unanswered Questions". Gerson Lehrman Group. http://www.glgroup.com/News/The-Bloom-Energy-Bloom-Box---Answering-the-Unanswered-Questions-46756.html. 
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  33. ^ [1]
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  38. ^ Fresh Dialogs
  39. ^ [2]
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External links