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Was the Hype Around Bloom Energy Two Years Ago Justified?

Raz Godelnik
| Thursday March 29th, 2012 | 31 Comments

About two years ago Bloom Energy revealed its top secret “Bloom Box” fuel cell system and immediately created an incredible buzz. It was amazing to see how much hype buzzed around what the company described as “a new class of distributed power generator, producing clean, reliable, affordable electricity at the customer site.” For a while, it seemed that there was nothing more exciting than Bloom’s fuel cells that promised to change the world someday. So what happened with Bloom Energy since then?  Was the hype justified?

The good news is that unlike other cleantech super-hyped companies that captured the imagination in 2010 (i.e. Solyndra), Bloom is still with us and is actually doing quite well. The bad news is that it hasn’t changed the world yet and it’s not clear if it can change it. Looking at the journey Bloom has made in the last two years, we can point out three important milestones:

Focusing on data center security – Bloom had a very impressive list of customers in 2010 including eBay, Wal-Mart, FedEx, Staples, and Google, which was one of the reasons the company was receiving so much attention in the first place. Bloom continues to work with corporate America, but has also focused its efforts on the data center market. Bloom indicated the possible reason for this shift when it hired Peter Gross as VP earlier this month, calling him “a widely recognized authority in the design and implementation of advanced mission critical IT solutions, including data centers.” Gross is expected to lead Bloom to “fill a critical need in the data center industry.”

Interestingly, Bloom seems to focus less on its high level of efficiency and the fact that “the electricity produced by a Bloom Energy Server is 50 percent cleaner than that produced by the electrical grid,” than on its ability to make data centers more secure. “Because Bloom Energy Servers are located on-site with the customer, they are not vulnerable to disruptions to the power grid caused by human intervention or natural disaster,” the company explains.

In terms of customers, the company, as GigaOm reports, has already sold fuel cells to power data centers for NTT America, the U.S. division of Japanese telecom giant NTT, as well as AT&T. It might be even that Apple will be joining this list very soon. This focus on data centers makes a lot of sense since data centers seem to be in constant demand and having a clean source of energy becomes increasingly important as we’ve learned lately from Facebook. The cost is probably still an issue as Bloom Boxes still seem to be a more expensive alternative, which is probably why Bloom is focusing on the ‘security’ issue, showing how it provides an added value that can actually save data centers a lot of money.

Raising more money – Although Bloom was, almost from the beginning, a candidate for an IPO, it hasn’t happened yet. The rumors haven’t subsided, however, and Bloom is still considered one of the potential green companies that are expected to file papers for IPOs this year, together with SolarCity and Fisker. In the meantime, the company keeps raising money from investors. In January 2011, reports stated that the company had raised $100 million in equity financing, adding to the more than $400 million it had already received from VCs and other investors. In September that year it had another round of funding of $150 million. According to Fortune’s Term Sheet, the deal was marketed as a “pre-IPO” round at a $2.7 billion pre-money valuation.

Bloom doesn’t discuss its funding, so it’s not clear exactly how much money the company has raised so far, but it seems to be around $550-$650 million. The fact that the company is still able to raise significant amounts of money shows that the level of confidence in the company is still high. No less important is what Bloom actually does with all this money. It’s very likely that the money will be used to find solutions that will keep the cost of boxes down through improvements in the operation and maintenance of the boxes as well as in economies of scale. Eventually – and this is the critical part – Bloom must break even with regular electricity costs to provide a truly viable alternative.

Going to Delaware – Last October Bloom finally received the approval from Delaware regulators for its biggest project yet – building a manufacturing center to produce its fuel cells at the former Chrysler plant in Newark, DE. Bloom will also add 30 megawatts of power to the regional power grid by installing about 300 Bloom Boxes at two Delmarva Power substations.

To help make those initiatives possible, the deal also includes a tariff added to Delmarva customers’ bills, which is expected to be between $1.30 and $1.40 a month. The construction is expected to begin in 2012 (the ground-breaking ceremony was supposed to be on March 1, but it was delayed) and to be up and running in 2013.

The Newark plant will be Bloom’s first facility on the East Coast and has the potential to create up to 1,500 jobs as well as more than triple the current number of Bloom Boxes that are in operation. In other words, this a huge opportunity for Bloom to move on to the next level, achieving better economies of scale, improving its competitiveness and beginning to prove that it is truly a viable energy alternative and not just another promising start-up that can’t deliver the goods. In the meantime, the jury is still out there.

[Image credit: joshlowensohn, Flickr Creative Commons]

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.


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  • Thomasadair

    My company can reduce the manufacturing cost in half.  Plus, the financing can be structured so that my company can make all the financed payments, for the buyer.

    Thomas
    Blue Diamond Procurement
    bluediamondprocurementservices.com

  • MyEnergyMan

    Think about it Bloom Energy Server is 50 percent cleaner than that produced by the electrical grid.

    They save 50% of the cost to product he power yet they are charging the consumers $1.30 to $1.40 per month after they raise over $500,000,000.

    They are no different then other dirty energy producer they just make 50% less pollution.

    Real solutions are out there that produce ZERO emmissions and cost 1000% less to produce the same energy a Bloom Energy Device. http://www.electric-energy-today.com

    • http://www.triplepundit.com Nick Aster

      “They are no different then other dirty energy producer they just make 50% less pollution.”

      Sorry… what are you saying there?   Or are you just a spammer?

      • http://www.electric-energy-today.com/ MyEnergyMan

        My point is..why charge $1.30 to $1.40 per customer per month when they will be saving 50% of the cost to produce the power?
        Will they not reap a 50% gain in profits?
        Is that not enough, why increase someones energy bill to foot the profit center the utility will already have?
        I say if it uses 50% less energy to produce the power then one should see a 50% reduction in thier energy bill not a increase even if it is only $1.30 per month.

        And yes they are no different then other dirty energy providers they just make 50% less pollution with thier device then conventional grid power. 
        Dirty power is dirty power even if you make 50% less.

        • Obamalala

          the article says 50% cleaner (meaning less CO2 produced and like), not 50% less energy used. Not sure how you made that extrapolation but even if that is case, prices are set respectively to market conditions and competition.

          For any product, companies don’t slashes prices because they just reduced the cost of make it. They serve the shareholders, not customers.

        • WOV

          deleting – seems you were right on the emissions…

  • http://www.triplepundit.com Nick Aster

    Leon, great article.  If “security” is the selling point, so be it – that’s always been an advantage of most green technology that gets you less dependent on the grid.

  • Dan Plesse

    Just think CO2 is just .04 of the total green house gases and is required by plants. Yet it is dangerous pollutant. 

  • Will Robinson

    Based on an article in a North Carolina paper on Saturday,
    http://www.news-record.com/content/2012/03/31/article/apple_plans_nations_biggest_private_fuel_cell_energy_project_in_nc
    it appears that Bloom is indeed working with Apple.  If history holds, where Apple goes, others will soon follow.  

  • pwrstorage

    Where are the up-time and reliability numbers for Bloom boxes and FuelCell Energy and Clearedge Power and others?  Efficiency doe not equal reliability. Mfg’s are afraid to discuss this. Fuel Cells breakdown repeatedly and have short lifespans in the first place, which is ironic because they prefer to run consistently – – they just can’t do so yet. This is the reason they haven’t taken off yet and why they can’t begin towards serious cost reduction. I’m hope fuel cells turn the corner, but for now they require a 24/7 pit crew and any “promising” production numbers you’ll find are misleading since those systems were constantly being babysat.

    • Happy Bloom customer!

      I work for a company that owns 5 bloom boxes to power approx. 25% of the energy required to run an office campus of 1,000,000 square feet.  The bloom boxes have been operational for almost 2 years with NO downtime.  They are amazing.

  • http://www.obm-global.com/ Paulcroskrey

    The reason they say its 50% cleaner is that is uses 50% less natural gas to perform its duties.
    Bloom Energy and Clean Edge products are produce 50% less CO2 and they do it right in yourback yard. Products exsist that make these dirty power systems obsolete are availble now and you dont need to have a gas pipeline to feed them. AKA Solar, Windpower or the MAFG

    • crazyloon

      Even the best of those technologies are unreliable.  No wind, no sun, no power.  These boxes don’t rely on varying sources of input, it is constant.  That gives you the ability to reduce emissions, reduce energy costs, and be confident your system will provide constant off grid energy.  That is not to say they down have their problems or down time as well; or that they couldn’t be combined with those technologies to further reduce the use of Natural or biogas but it’s nearly impossible to guarantee power output of many zero emission technologies while with the bloom boxes you can rely on it.

  • http://www.thegreenjobbank.com/ Bernard the green jobs guru

    Energy Management software companies might help more than Bloom by helping large companies understand how they spend energy, and find solutions to reduce consumption.  Take a look at Ecova and Locus Technologies.

  • Elmer Stenger

    Savings of 50% is nothing to sneer about. Of course no emission is preferable, but when will it happen?  the planet needs something NOW.  Perhaps it will be better for the planet, if the human population was gone.  Put it off, and it could just happen.  Look at Mars and think, was it habitable at one time or not.  We don’t know the answer, but science is getting closer.

      Present 0 emission costs, are much higher, but when air quality, and other problems with fossil energy are considered ,including the wars fought over it, and the possibility of more in the offing, solar and wind energy begin to look like a bargain.  Why do we subsidize  corporations that produce fossil fuels and make a big  deal out of Solyndra,  they didn’t pollute the gulf of Mexico, or the water and air pollution that fracking is accused of.

      One thing about it,  If we rely on our religious beliefs, to solve the problems of our planet,  there’s a good chance,  that won’t happen either.  After all we haven’t taken religious beliefs very seriously either  

  • RandyB

    I don’t understand why some people are just so skeptical they can’t ‘get it’.  Bloom is not 50% less emmissions.  It is closer to 95% cleaner emissions.  Why is that so hard for people.  Additionally, as they create more factories to build the Bloom-Boxes, they price will come down A LOT!  Just as a solar panel used to cost over $4,000 and now can built in a persons garage as a do-it-yourself project for less than $400 (see you-tube vids),  As of July 2012, Bloom just opened another manufacturing plant.  THEY ARE THE FUTURE!!!!!!  Bloom-Boxes are clean, very renewable, virtually no maintenance, can be built practically anywhere in the world and can be built very cheaply.  IT’S THE FUTURE PEOPLE!  You’re house will be on a Bloom-Box like it or not. 

  • Mike Morris

    Federal Lawsuit regarding Bloom Energy:

    “Buried deep in the permit application, in Table 1 on page 161 of a 163-page application, was the number 884. On that page, under penalty of perjury, Bloom officially told the world that its energy servers emit 884 pounds of carbon dioxide per megawatt hour.”
    http://www.breitbart.com/Big-Government/2012/06/21/884-May-Be-Bloom-Energys-Fatal-Number-Fuel-Cell-Efficiency-Federal-State-Tax-Credits

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But Delaware, like other states, regulates VOC emissions at far lower levels (Maryland, for instance, regulates boat repair shops that emit more than 15 pounds per day). Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!To top it off, because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their electricity transmission grid. But in January 2012, the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.

  • http://www.obm-global.com/ Paulcroskrey

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day.
    Or
    THEY ARE THE FUTURE!!!!!! Bloom-Boxes are clean, very renewable, virtually no maintenance, can be built practically anywhere in the world and can be built very cheaply. IT’S THE FUTURE PEOPLE! You’re house will be on a Bloom-Box like it or not.

    the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH…. that is not a savings, the true cost of power on a Bloom box does take in consideration the environmental cost. 

    The Future is not Bloom energy, 22.56 pound of volite organic componds (VOC)per day and the environmental costs that are astronomical. To power Bloom energy you must be fracking to get natural gas. Being a “Natural” Gas does not mean its environmentaly friendly. Fracking ruins the ground water, destroys countrysides, farming communities and lives. 

    Products exsist like the MAFG a alternative carbon free product whose projected “levelized” cost of energy over the next 30 years from advanced space age technologies 5 megawatt power stations is only $0.10 per MWH    10 cents per megawatt hour VS $65.50 per MWH. 

    What will be the future polluting creating products costing $65.50 per MWH or pollution FREE power production costing a fraction of the cost of Bloom Energy. 

    • David Austin

      Bwaahaahahaha! I checked out your “MAFG” … it’s a freakin’ perpetual motion device! Dude … time to learn about the 2nd law of thermodynamics. Some laws just can’t be broken. You can’t get something out of nothing my friend. Like Entropy says … everything is going to hell. Deal with it. You’re MAFG is a joke. Now … onto real solutions. Like Bloom boxes.

      • dudeyou2

        YOU checked out the MAFG!
        What are some sort of alternative energy expert?
        I have pesonally seen the MAFG in action and its not a perpetual motion device but if it was…so what..
        The law of thermaldynamics was created observing steam engines. Thats why its called Thermaldynamics. It has to do with heat. The MAFG uses no steam engine or any other combustion engine. So tell me if there is no heat, no combusiton how does the laws of thermadynamics apply.
        “You cant get something out of nothing” WOW what a understatement!
        Its easy to sit back and say I checked that MAFG thing out but if you did not go see it how is it that YOU checked it out. You got some kinda crystal ball?
        Bloom Boxes are not the solution as a matter of fact the MAFG has made it obsolete. In less then 6 months from now testing will be completed on a 250 kw MAFG unit, when the results are made public companies like Bloom Energy will fold like a house of cards…….and thats no joke.

        • davea0511

          Every great physicist looked at an ice skater pull in her arms and go faster and as children thought it amazing. At that point they could have attributed it to magic (free energy) or science … so they went to school to see if science could explain it … and guess what? Science did explain it! “Free energy” is magic. It’s not real. Do you actually think Allan Caggiano is the first person to build a device like this? It’s been built in various forms 1000’s of times in the last 2000 years, but only a con-artist, a scammer, a fraud then produces false measurements to show a net positive (over unity) production of energy. Learn about his “vaporizers” from which he tried to scam people $500 a piece, and now he’s doing it with a perpetual motion device, asking donations for $10 up to $1000. Ask yourself … where is the pedigreed scientist who has verified his results (he’s apparently been looking for such a person for years now). Why is it that his production units are still vaporware 12 months after scheduled delivery when the machine is so absurdly simple that any welder can make one in about a week? See, that’s the thing about suckers … they’re born every minute.

        • Theramin

          Dis-informants rant on political topics to save their asses from financial collapse. Your company “Bloom Enterprises” is sufficiently cornering the market without the need for supervised doctor visits. You need to start collecting on your insurance premiums and consider the advantages of a clean planet, NOT A clean conscious. After all we grow old and eventually either inhabit robot bodies or reincarnate as electric slugs, practically speaking, if we are fortunate we do NOT have to be surrounded by people who love us when we pass on to the great stock market in the sky. If there are no atheists on the death bed you might win a prize.. A NEW CAR!!! ROWL!

        • davea0511

          Another thing … if you want any scientist to give you the time of day, you won’t spell it “thermaldynamics”, and you’ll also know that it has to do with every process in life. Not just steam engines. All energy eventually converts to molecular vibrations … also known as heat – this process is called entropy, which is in fact an irreversible process. Go to school, take a couple physics classes, then we’ll talk. Until then, no offense intended, but you’re just making noise.

        • dudeyou2

          Well Davey, your a smart fella. Why is it you just blow air instead of going to see the equipment yourself like I did?
          You believe that it does not work so you will not even take the time to visit and see for yourself. Like I said its easy to sit back and blurt out retorick that has no merit, I would say to you if you cant go see it work then do not make comments about something you have no clue.
          You stated “where is the pedigreed scientist who has verified his results”
          Right here…I am that person. You might ask me who are you but with your wit and remarkable ability to disinform I refuse to allow you to smerk my name as you did Allens.
          How is it that you say that people have been making stuff like this for thousands of years…why is it no one has filed for patents except Allen?
          Davey, third party testing for certification is going on right now in a facility in California, a 250 KW unit is being tested, so far everything that has been tested performs better then imagined.
          I wonder what people like you will say when that testing is done and the product is certified. I know what the investors at Bloom Energy are thinking…game over….

        • davea0511

          >”where is the pedigreed scientist who has verified his results”
          Right here…I am that person.
          Good one. A pedigreed scientist who spells thermodynamics as “thermaldynamics”. Tell me … what is your pedigree and from where? I’m guessing it was this: http://www.chemteam.info/Humor/Bob-School-Quantum-Mech.html
          Yes?
          The only person who is going to champion something like this is the founder so I’m just going to tell it like it is: Caggiano, you are apparently happy to deprive others of their wealth to fund something that is extremely suspect that you’ve never proven under reliable and reproducible test conditions. That’s all the proof I need to know what you’re really about. Anyone should demand verification from someone with real pedigree before they throw their money away.
          My only satisfaction lies in the fact that a fool and his money are soon departed … those investing in your tech were then bound to loose their investments anyway in some other scheme. I suppose that’s what you tell yourself too so you can sleep well at night, yes?

  • D2mowzee

    dudeyou2> Basic mechanical engineering 101: F=M*R*omega squared/G….conservation of momentum. Higher speed when retracted = same torque. Problem 2: Efficiency…I saw the video & each mechanical & electrical subsytem has its own inefficiency. Pulleys, motors, bearings, even the friction from the air mass. This contraption does not operate in a vacuum. Add up the ineffeicincies of the moving components and the electrical/thermal and you will end up with less energy out than you put in. A clever design, maybe 99% efficent but you still lose. I would not accept gettting 0.99 cents back for each dollar I invested.

    • MyEnergyMan

      Its interesting these experts who never seen a MAFG in operation have so many cool things to say like, this contraption does not operate in a vacuum, or heres a good one its breaking the laws of thermodynamics. Thats guy is a fringin genius. Facts are facts no matter what you think or say it does not change the facts.1800% more power made then consumed. You can’t change that with what you might call you words of wisdom.
      I assume these so called experts would rather invest in this Bloom Energy thingy and have to deal with investment implosion. Dudes they spent over 400 million in R&D and their stuff still wont power your home. Well you can but at 700 thousand dollars for a unit that spews CO2 like a Model T. Our product has been producing power now for three years without making one ounce of CO2….Our product has been called by the Nuclear Commission too disruptive a technology and if commercialized will be the end of nuclear, coal and natural gas power production and stopped the government from investing in our project…
      they did not say that about Bloom Energy products since it uses natural gas.

      If it uses Natural Gas the government and VC will support it even if it pollutes just watch GasLand Two and learn why people will do most anything to make a buck using natural gas….they will tell you lies like fracking does not pollute underground water just to keep the monopoly or tell you you will have lower energy costs yet their whole goal is to sell our natural gas reserves to the Chinese which will raise our cost two to three times ….soon very soon the MAFG will be commercialized and all without government support. You will see sparks fly when that happens…

  • http://pulse.yahoo.com/_P5BS5ZE6HPMN2SE2RPOFUU3SQQ Jeff

    SEC hits Advanced Equities on Bloom deals
    By Dan Primack September 24, 2012: 11:11 AM ET

    http://finance.fortune.cnn.com/2012/09/24/sec-hits-advanced-equities-on-bloom-deals/

    In my opinion … people need to see Bloom’s financials???

    also

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But Delaware, like other states, regulates VOC emissions at far lower levels (Maryland, for instance, regulates boat repair shops that emit more than 15 pounds per day). Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!
    To top it off, because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their electricity transmission grid. But in January 2012, the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.

    http://www.breitbart.com/Big-Government/2012/06/21/884-May-Be-Bloom-Energys-Fatal-Number-Fuel-Cell-Efficiency-Federal-State-Tax-Credits

    Share

  • Jacob

    Microsoft Backs Away From Grid
    http://blogs.wsj.com/cio/2012/11/20/microsoft-backs-away-slowly-from-the-grid/

    2.8MW fuel cell using biogas now operating; Largest PPA of its kind in North America
    http://www.fuelcelltoday.com/news-events/news-archive/2012/october/28-mw-fuel-cell-using-biogas-now-operating-largest-ppa-of-its-kind-in-north-america

    “New fuel cell sewage gas station in Orange County, CA may be world’s first”
    http://abclocal.go.com/kabc/story?section=news/local/orange_county&id=8310315

    “It is here today and it is deployable today,” said Tom Mutchler of Air Products and Chemicals Inc., a sponsor and developer of the project.

    “Completely off the grid in New Jersey”

    http://energy.aol.com/2011/08/13/completely-off-the-grid/

  • Mike Morris

    I don’t trust Bloom Energy and their VC buddies!

    Federal Lawsuit Regarding Bloom Energy

    http://www.breitbart.com/Big-Government/2012/06/21/884-May-Be-Bloom-Energys-Fatal-Number-Fuel-Cell-Efficiency-Federal-State-Tax-Credits

    “Buried deep in the permit application, in Table 1 on page 161 of a 163-page application, was the number 884. On that page, under penalty of perjury, Bloom officially told the world that its energy servers emit 884 pounds of carbon dioxide per megawatt hour.”

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But Delaware, like other states, regulates VOC emissions at far lower levels (Maryland, for instance, regulates boat repair shops that emit more than 15 pounds per day). Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!

    To top it off, because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their electricity transmission grid. But in January 2012, the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.

  • iraqvet2004usmc

    Unless I’m mistaken, it’s just a thermal-electric generator that runs of methane.