Thanks for starting this board, caly. The 60 Minutes piece had me glued to my seat. Fuel cells have been the Holy Grail for the clean tech industry. Wednesday's press conference should be well attended.
Breakthrough or Silicon Valley Hype?
By Rebecca Smith and Jim Carlton
Wall Street Journal Blogs
February 22, 2010, 5:47 PM ET
The blogosphere is abuzz over the disclosure by startup Bloom Energy that it has come up with a fuel cell technology that can replace conventional energy sources.
But can it really? The devil, as they say, is in the details–and few of those were made public in an interview the Silicon Valley company gave on CBS-TV’s “60 Minutes” program Sunday.
The company’s CEO, K.R. Sridhar, showed off a refrigerator-sized “Bloom Box” filled with fuel cells and designed to make electricity through a chemical process. The boxes can make energy anywhere, he said, and do so without giving off any emissions.
Already, a number of high-profile American corporations have begun testing the technology. A “60 Minutes” reporter, for example, visited facilities of eBay, which has installed a number of Bloom Boxes; the e-commerce company put savings from the technology so far at $100,000. Others reported to have installed units include Google and Federal Express.
Since other business journalists weren’t let in on the “60 Minutes” scoop, it wasn’t possible to ask the company some hard questions. Like any rigorous analysis of the cost of the power, which has been a major impediment to the deployment of fuel cells.
A spokeswoman for the Sunnyvale, Calif., firm said no interviews would be conducted until Wednesday, when the company is scheduled to host “a special event” in Silicon Valley featuring presentations by luminaries including John Doerr, partner in the venture firm Kleiner Perkins Caufield & Byers, the key financial backer of Bloom Energy. (Sridar told “60 Minutes” that an estimate that the startup has raised $400 million was “in the ball park.”) Another attendee is scheduled to be former Secretary of State Colin Powell, who said on “60 Minutes” he had joined the company’s board. The company’s Web site is also cryptic, containing a countdown clock to the event, to be conducted in eBay’s town hall.
Fuel cells have been under development for many decades but face challenges common to new technologies aimed at the power sector. It isn’t enough to be able to make electricity, a generation source must demonstrate tremendous reliability and it must compete on price with conventional sources of power generation.
On “60 Minutes,” Bloom Energy said its fuel cells could be purchased for individual homes or located in utility substations or adjacent to companies that want to produce their own power. Bloom Energy said a single one of its units would power about 100 homes and cost $700,000 to $800,000, but did not disclose how much natural gas would be needed.
There are apparent challenges. Utility substations typically do not have natural gas lines and space often is at a premium. Grid electricity, which draws from hundreds or even thousands of sources, certainly would be able to furnish power more reliably than any single source. Most companies want to focus on their own products and may not want to become generators.
Of course, if the boxes could produce electricity cheaply enough, that might change. But notably absent from the show was any rigorous analysis of the cost. When utilities propose to build generating plants or to buy electricity from others, they must prove to utility regulators that they have picked a technology which is cost-competitive with other, proven technologies.
This doesn’t mean there won’t be interest in the fuel cells. The military, for example, is always looking for new power sources that could be airlifted to remote locations and it might be less sensitive to the cost than other buyers. But its emphasis on durability and reliability would be no less than any utility.
Weight is another important factor. Fuel cells, for years, have been eyed as a possible energy source for electric cars. But they have been too heavy and cumbersome. It is not clear what the Bloom units would weigh. (As Greentech Media points out, Bloom appears to have avoided platinum, which adds costs to fuel cells–but exactly what the company is using as a substitute remains a mystery.)
Finally, companies with power sector technology normally give it to utilities to test. That apparently has not happened in this case. A spokesman for the Electric Power Research Institute in Palo Alto said he couldn’t comment on the Bloom Energy fuel cell “because we haven’t had access to it.”
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