Friday, March 12, 2010

How Bloom Energy beats the competition

download_image_Bloom_001.jpgAnalysts were left scratching their heads on 24 February after the Sunnyvale, California company Bloom Energy unveiled its “Bloom Boxes” to great media fanfare at Ebay’s headquarters, and revealed a list of beta-testing clients that includes Google, Wal-Mart and Coca Cola.

The puzzle is that there are numerous existing companies making similar high-performance solid oxide fuel cells (SOFCs), which cleanly convert methane and oxygen into carbon dioxide, water, and electricity. They include Ceramic Fuel Cells, Ceres Power, CellTechPower, Panasonic, ClearEdge Power, Kyocera, United Technologies and Acumentrics. Some of them already sell their units to utilities around the world.

So, what technology has Bloom Energy got that other SOFC makers don’t?

After 8 years of development, its cells don’t seem to be significantly cheaper than competitors. Bloom provides a 100kW box for $800,000 – that is, $8,000 per kW. And that is on a par with the other players, Lux Research analyst John Kluza tells me. Fuel cell scientist Michael Tucker, of Lawrence Berkeley National Laboratory, tells Wired reporter Alexis Madrigal that this cost “is about an order of magnitude higher than it needs to be, to be truly competitive [with the US electricity grid].”

The claimed technical difference between Bloom and other players is reliability: its fuel cells are supposed to last longer before they break down and have to be replaced. Kluza says that the company claims its units have a lifetime of 10 years – whereas Ceramic Fuel Cells, for example, puts their product lifetime at some 2.5 years.

How do they do it? “They are being really evasive about any sort of technical detail,” says Kluza – but the secret probably lies in the proprietary green and black inks (pictured), which coat the cathode and anode that surround the ceramic core (yttrium-stabilized zirconia, a standard in the field).

Even with that longer life, Bloom’s SOFC does not provide particularly cheap electricity. “Without incentives, we calculate electricity would cost $0.13/kWh to $0.14/kWh,” write Lux; average retail US electricity costs are $0.11/kWh. (A generous US federal tax credit, and a California-specific rebate allow Bloom’s California customers to knock $0.05/kWh off the unsubsidized price).

Kluza can’t see how Bloom have a roadmap for knocking the cost of a 1kW unit down to $3,000, for use in homes in a decade, as the company claims. He thinks that excitement is being generated now in preparation for an IPO, so that venture-capital investors who have put $400 million into the company can start to see some money back.

But as Tucker adds to Wired: “They are certainly going to raise visibility for the industry. “They are something of a PR leader in the market. If they can … ride that wave into an early market-share position, that could be huge. They will be getting experience with real-world customers.”

Image: Bloom Energy


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