Bloom Energy is using fuel cells for stationary power, which is arguably a better application for the technology. For starters, stationary fuel cells can use the natural gas lines already in place for fuel. The Bloom Energy Server can run on different fuel sources, including biogas, a gas made from organic materials. And they can be strung together, much the way servers are clustered to boost processing muscle. An initial customer, eBay, for example, is using a five 100 kilowatt boxes--each about the size of a parking space, to power 15 percent of its headquarters in San Jose, California.
For companies that need on-site power, fuel cells are already in use because they are very reliable. Fuel cells could power data centers, for example, because of their reliability and the potential to supply DC power directly to electronic equipment. Since they are relatively clean sources of power, fuel cells can receive state subsidies, as they do in California.
Bloom is not alone. In getting so much media attention, Bloom Energy certainly benefited from its connections to high-profile investors, such as John Doerr of famed venture capital company Kleiner, Perkins, Caulfied & Byers. Kleiner's connections probably helped line up initial customers for Bloom, including Google, Walmart, Staples, FedEx--all companies which have invested in alternative energy sources for financial and environmental reasons. But Bloom Energy is not the only company making fuel cells for stationary power.
FuelCell Energy, which is based in Danbury, Connecticut, is already selling fuel cell power systems for commercial customers, which fuel cells that can run range from 300 kilowatts to 2.8 megawatts. Another is start-up ClearEdge Power, which recently introduced a smaller fuel cell for homes or small businesses to make electricity and heat. Panasonic is developing fuel cells for homes, which also use natural gas to make both electricity and hot water.
Where Bloom Energy stands out is the design and materials it's using in its fuel cells, which offers the potential to lower costs with higher manufacturing volume. The core of Bloom Energy's technology is a solid oxide fuel cell, which takes fuels and oxygen from the air to make an electrical current.
One technical challenge with this type of fuel cell is that they operate at very high temperatures. That allows for greater efficiency in energy conversion but also requires engineers to deal with high heat. Bloom has designed the system to recycle the heat generated from the energy conversion in the process of mixing incoming natural gas with steam, which is needed with this type of fuel cell. So instead of using the heat to make hot water, for example, the heat is fed back into make electricity, according to the company.
Another significant technical achievement is that Bloom Energy's system doesn't use expensive materials, notably platinum which is used as a catalyst in many types of fuel cells. Bloom Energy is cagey on exactly what it uses but says that the fuel cells use a ceramic made from sand and inks. Researchers have been trying to make fuel cells without platinum for years. Another company trying to make a low-cost fuel cell catalyst is SunCatalytix, a spin-off from the Massachusetts Institute of Technology, although it's a very different technical approach.
Cost. So why all the fuss over a well understood technology? Because Bloom Energy has said that it can deliver its electricity at between 8 cents and 10 cents per kilowatt-hour, including the cost of ongoing maintenance. In many parts of the country, that's cheaper that the grid rate. Because fuel cells are their own source of juice, they also offer back up power in the case that there is a grid outage.
According to Bloom Energy's data, companies which purchase this sort of system can earn back the initial outlay of between $700,000 and $800,000 for a 100 kilowatt system in three to five years. A 100-kilowatt system could be enough to power 10 U.S. homes or a small business, such as a Starbucks, according to the company. But keep in mind, that its stated cost per kilowatt assumes subsidies as high as 50 percent of the initial cost and natural gas prices of $7 per million BTUs, according to an interview. Still, Sridhar claims it can drive down the cost steadily and that it can compete without subsidies in the future.