After quadrupling the size of its Sunnyvale plant last year, Bloom Energy has now broken ground on a 210,000 sq ft. facility in Newark, Delaware that will eventually double its capacity once again. The plant will be located on the 272 acre former Chrysler assembly site, which is now part of the University of Delaware’s new Science, Technology and Advanced Research Campus. At the ground-breaking ceremony last week, CEO KR Sridhar, announced a number of new big-time customers including: Owens Corning, Urban Outfitters, Delmarva Power, and Washington Gas. AT&T, already Bloom’s biggest customer with 7.5 MW of capacity distributed over 11 locations, will be adding more for their East Coast operations.
Existing customers include Walmart with two stores in Southern California utilizing 400kW systems each generating 3.4 million kWh which reduce 1 million pounds of CO2 annually. And Apple’s enormous new 500,000 sq ft. data center in North Carolina will also be powered with 5MW Bloom Boxes powered with biogas as well as 20MW of solar.
Bloom has been quite secretive about the inner workings of their Solid Oxide Fuel Cell (SOFC), which can generate electricity directly from natural gas and oxygen without combustion. There has been little to nothing in the way of technical publications or presentations at the many Fuel Cell Conferences. SOFC fuel cells are not unique to Bloom, who did not originate them, but they are popular because they can work with a variety of fuels other than hydrogen, are relatively compact, and do not require expensive platinum electrodes. Their disadvantages are that they are quite heavy and run at very high temperatures. Because of the high temperatures required, it takes time for them to heat up, which means that they cannot respond instantaneously to changes in electrical demand, making them suitable only for base load applications.
Additional power needed to keep up with rapid changes in demand, generally known as load-following, will most likely be provided by the grid.
The company has evolved their business model away from selling the units to a service that they call Electrons, which is more of a purchase power agreement. The customers commit to a ten-year deal, buying electricity at a fixed price while Bloom installs and maintains the units. They claim that they are looking for customers that currently spend $25,000 per month on electricity or more.
While the cells themselves require time to heat up, that doesn’t seem to be the case for the company’s sales, which seem to be taking off quickly, if their level of fundraising is any indication. The much-hyped company has now raised some $600 million in venture capital and has an estimated valuation of $2.7 billion in what was called a pre-IPO funding round, while IPO rumors remain strong.
But there are questions that remain unanswered. For one thing the Bloom Boxes, which the company calls energy servers, cost upwards of $800,000 for a 100kW system. While the company has not yet disclosed their operating costs, outside estimates project roughly $0.13 per kWh without incentives, which is higher than current market rate. The company claims a carbon footprint that is half of traditional power, but with no price on carbon, that could be a hard sell.
Another issue is product reliability. Bloom’s basic cell produces only 25 watts. That means that each 100kW module will contain 4000 cells requiring two interconnects each, always a trouble spot, especially in a device such as this that experiences big temperature swings.
The proof of the pudding is in the eating, and the fact that Bloom is investing in another large plant suggests that they are swinging for a home run. Either that, or they are hoping that the dollars will just show up, à la Field of Dreams, believing that if they “build it they will come.”
RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
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