Sunday, February 21, 2010

Bloom Energy Shifts Power via Fuel Cells

Company Website

Here's the link to the "60 Minutes" Segment.

Breakthrough technology from a richly funded Silicon Valley startup could revolutionize the energy business, especially in the developing world

Around 1.5 billion people, or nearly a quarter of the world's population, live without electricity today. That's according to figures from a November U.N. report centering on the plight of people in places like South Asia and sub-Saharan Africa who lack access to modern energy. Many of these "powerless" live as humans did centuries ago, in darkness and cooking over wood fires that damage their health and the environment.
To halve the proportion of people living in poverty by 2015—one of the U.N.'s eight Millennium Development Goals—1.2 billion more people must gain access to electricity and 2 billion more need to obtain other fuels such as natural gas or propane, according to the U.N. But building traditional power grids would take too long, cost too much, and only add to the world's climate change woes.
Enter Bloom Energy, one of 26 companies named on Dec. 3 by the World Economic Forum as 2010 Tech Pioneers offering new technologies or business models that could advance the global economy and have a positive impact on people's lives. Through its cutting-edge work with fuel cell technology, the Sunnyvale (Calif.) company aims to help homes and businesses generate their own electricity and fuel their own vehicles—bringing power and light to remote villages and even reducing dependence on today's electricity grids in the developed world.
The technology at the heart of Bloom Energy's vision to help planet earth was first developed for use in outer space. While working as a director of the Space Technologies Laboratory at the University of Arizona, the company's Indian-born co-founder and chief executive, K.R. Sridhar, was asked by NASA to come up with a way to make life sustainable on Mars. His lab's initial project was a device that would use solar power and Martian water to drive a reactor cell that generated oxygen to breathe and hydrogen to power vehicles.

The Bloom Box
The project set Sridhar thinking. If he reversed the reaction—feeding oxygen and fuel (hydrogen) into the cell to generate electricity—he could change the way people generated and consumed energy. He developed the first of his so-called Bloom boxes to do just that, but took it a step further by making the process reversible. That way, when hooked up to a renewable power source such as a wind turbine or solar panel, the refrigerator-size unit makes and stores hydrogen and oxygen. And at night or when the wind dies down, it changes direction and uses the stored gases to make electricity.
"I quit doing my NASA work because I believe this particular technology can change the world," says Sridhar. "Just like developing nations leapfrogged over fixed telephony to mobile, we think our technology will allow developing nations to do the same thing for electricity."
The Bloom box also has another benefit that could become increasingly important if the world's automakers succeed at developing hydrogen-powered vehicles. Since one of the byproducts of the Bloom fuel cell is hydrogen, the device could be used to create fuel for cars. And even if hydrogen vehicles don't materialize for decades, Bloom boxes could generate electricity for hybrid or electric cars. Either way, the system would allow people to sidestep traditional gas stations.
With his ideas in hand, Sridhar approached venture capitalists Kleiner, Perkins, Caulfield & Byers, and the venerable Silicon Valley firm responded by making its first-ever cleantech investment. Precise funding figures aren't public, but Bloom Energy says it has raised "hundreds of millions" of dollars in financing. The company's valuation has been pegged in press reports at more than $1 billion.
It’s being hailed as the Holy Grail of clean energy: a refrigerator-sized personal power plant that produces energy cheaply and cleanly and may one day replace the traditional power grid. Its inventor wants to put one in every home by 2020.
So what is Bloom Box?
It’s a collection of fuel cells – skinny batteries – that use oxygen and fuel to create electricity with no emissions.
Fuel cells are the building blocks of the Bloom Box. They’re made of sand that is baked into diskette-sized ceramic squares and painted with green and black ink. Each fuel cell has the potential to power one light bulb. The fuel cells are stacked into brick-sized towers sandwiched with metal alloy plates.
The fuel cell stacks are housed in a refrigerator-sized unit – the Bloom Box. Oxygen is drawn into one side of the unit, and fuel (fossil-fuel, bio-fuel, or even solar power can be used) is fed into the other side. The two combine within the cell and produce a chemical reaction that creates energy with no burning, no combustion, and no power lines.
About 64 stacks of fuel cells could power a small business like a Starbucks franchise, according to Sridhar’s 60 Minutes interview.
Working with an investment of around $400 million, aerospace engineer K.R. Sridhar spent close to a decade inventing the Bloom Box. It grew, he explained to 60 Minutes, from a device he originally invented to produce oxygen on Mars. When NASA scrapped the Mars mission, Sridhar reversed his Mars machine, pumping oxygen in, instead of making oxygen, he said.
Sridhar already has some 20 well-known customers, including Google, FedEx, Walmart, Staples, and Ebay. The corporate boxes cost about $700,000 to $800,000.
Ebay installed five Bloom Boxes nine months ago, and they fuel about 15 percent of its San Jose campus, said CEO John Donahoe in the 60 Minutes interview. “It’s been very successful thus far,” Mr. Donahoe says, adding that the company has saved $100,000 in electricity costs already.
Former Secretary of State Colin Powell is also on Bloom Energy’s board of directors.
But the Bloom Box isn’t without skeptics.
Michael Kanellos, editor of Greentech Media, which covers the clean energy market, says Bloom Energy isn’t the first company to claim it has invented a clean energy fuel cell. Cost is always a concern with fuel cells, as is round-the-clock, 24-7 functionality. Bloom Energy still has to figure out how to mass-produce the unit and get its costs down low enough to outfit every home with a Bloom Box, Mr. Kanellos said on 60 Minutes.
Sridhar says he eventually wants to get costs down to $2,000 per box.
Bloom Energy has also been cryptically silent about its new device. As of Monday, its puzzling website has no information about the Bloom Box, and the company has not replied to multiple requests for interviews.
Still, Sridhar has ambitious goals for his Bloom Box, planning not only to place it in every American home in 10 years, but also in homes in Africa, India, and China. He’d like to start, he says, with America’s first family.
“I want a Bloom Box next to the [White House] organic vegetable garden,” he says on 60 Minutes. “It’s about seeing the world as what it can be.”

Fuel Cell Trials
From the start, the eight-year-old company has been shrouded in secrecy, and its executives remain tight-lipped. But some details are slowly leaking out. Stu Aaron, Bloom Energy's vice-president for marketing and product management, confirms press reports about a University of Tennessee trial in which a Bloom box capable of powering a 5,000-square-foot home proved twice as efficient as a traditional gas-burning system and produced 60% fewer emissions.
The company won't comment on reports that the city of San Jose recently granted online auction giant eBay (EBAY) permission to install five fuel cells from Bloom Energy that will generate up to 500 kilowatts of power, nor that search giant Google (GOOG) is separately testing the system. But Bloom Energy does confirm it's aiming its initial systems at business customers that want to explore whether they can get reliable green energy at the same price or less than they now pay the electric company.
Why all the secrecy? To date, fuel cells have underdelivered on their promise, says Aaron, so Bloom Energy wants to wait until it has solid field experience with real customers to tell its full story.
What is known is that the company's fuel cell technology is different from hydrogen fuel cells, which have been around for decades. For starters, Bloom's system relies primarily on oxygen rather than hydrogen. And instead of requiring expensive precious metals, the fuel cell is built from a cheap ceramic material, sand. That should allow it to be more easily mass-produced, helping cut costs and widen its potential market.

New Industry
The ceramic core acts as an electrode. At high temperatures, a hydrocarbon fuel—ethanol, biodiesel, methane, or natural gas—on one side of the cell attracts oxygen ions from the other. As the ions are pulled through the solid core, the resulting electrochemical reaction creates electricity. Though the technology consumes hydrocarbons, Sridhar says, it doesn't involve carbon-releasing combustion, so it emits only about half the greenhouse gases of conventional energy sources.
If the technology works as envisioned on a commercial scale, Bloom boxes could help cut carbon emissions and energy costs in the developed world, where they're likely to be used as a complement to, rather than a replacement of, traditional power grids. But the biggest impact will be in villages throughout the developing world that are now cut off from power supplies. "Access to electricity is a life-enhancer," Sridhar says. "It means access to information, access to education, to clean water, and to good health because refrigeration will prevent food from spoiling."
Sridhar figures it will take three to five years before Bloom boxes reach "grid parity" for home use, or price competitiveness with traditional residential-scale electric supplies. Replacing gas stations is expected to take longer, and depends on the emergence of new vehicles. "We are really building an industry, not a company," says Sridhar. "We need an entire supply chain around us to scale."
Then again, the company is based in Silicon Valley, where people know how to do that. The flat sand electrodes used in Bloom boxes, for instance, could be manufactured using some of the same processes now used by the Valley's chipmakers. Synergies like that are what lead Bloom Energy executives to hope they can someday create an equally important new industry that will help power the world in whole new ways.