Renewablesbiz: Fuel Cells Breaking Down Barriers

The Booming Bloom Box

Ken Silverstein | Mar 23, 2011

When it comes to business innovation, all the experts say to ‘think outside the box.’ Well, at least one fuel cell maker says that such creativity is now encapsulated in the so-called Bloom Box.
Bloom Energy has made a big splash with its solid oxide fuel cells that generate around 100 kilowatts and it says that it can convert any fuel source into electricity. Running on a fossil fuel, it says that its systems are approximately 67 percent cleaner than a typical coal-fired plant. Those powered by green energy, meanwhile, can be 100 percent cleaner.
“We are growing at a fast clip,” says Josh Richman, vice president of business development for the Sunnyvale, Calif.-based fuel cell maker, at the EnergyBiz Leadership Forum in Washington, D.C. “This moment and time is what existed in the computing and telephony sectors in the 1990s.” Businesses installing such technology can expect to get a return on investment in three to five years, the company adds, noting that Ebay, Staples and WalMart are among its clients.
To the extent that businesses derive their power from such onsite generators, the wear and tear on the electric grid is diminished and reliability for customers is enhanced. In some cases, fuel cells used for onsite power are the primary generators and in other cases, they are used to back up power delivered by the utility’s central generation.

According to Frost & Sullivan, fuel cells, generally, have efficiency rates of 40-49 percent compared to other competing technologies that are 30-35 percent efficient. If cogeneration is used — the ability to recycle the steam that is produced — then the efficiency rate jumps to 80-85 percent. Higher efficiencies, steadfast reliability and environmental concerns will work to expand fuel cell markets, it adds.

“To maximize success in today’s environmentally conscious society, it is absolutely imperative to adopt sustainable solutions,” says Frost & Sullivan Energy Senior Research Analyst Vikas Ravindran.

To get past the cost and technological issues, however, the fuel cell makers must achieve economies of scale. A 2008 law aims to do just that by providing a federal investment tax credit that will last until 2016: $3,000 per kilowatt or 30 percent of the capital cost, whichever is less. Utilities can also get a tax credit.
As for Bloom, its refrigerator-sized fuel cells cost between $700,000 and $800,000 apiece. Obviously, its not suitable for the residential market. But the manufacturer says that its target — for now — is the national enterprises that are concerned with environmental issues.

Take Ebay: It installed about five such boxes on its main campus almost a year ago and says that it is now using 15 percent less electricity. That’s saved it almost $100,000. “eBay believes in the power of our business model to make a real difference in the world, and that includes how we embrace innovation to reduce our carbon footprint,” says Chief Executive John Donahoe.

Fuel cells work by converting hydrogen and oxygen into water, producing electricity in the process. They are quiet, efficient and pollution-free. Right now, hydrogen is produced mainly from natural gas using steam reformation. That method does nothing to limit the reliance on fossil fuels or the infrastructure that must carry them. Green energy could create the electricity to produce hydrogen but it may not be as reliable or as cost effective.
Those technical and fuel supply issues along with hard times have deterred investors and prevented widespread deployment. In a previous interview with this writer, David Redstone, a fuel cell expert, says that the technology needs to reach economies of scale to achieve cost reductions.
“A large fuel cell project is still considered risky when compared to traditional natural gas cogeneration,” says Redstone, editor of Hydrogen and Fuel Cell Investor.
For its part, the fuel cell industry remains hopeful, saying that the ability to deliver electricity in cleaner and more efficient ways exist today. It just needs to be nurtured, mass-produced and commercialized.
WalMart’s goal of becoming fully powered with green energy is one that fits right into a fuel cell maker’s dream. The retailer has installed two Bloom Boxes that generate a total of 400 kilowatts at two of its Southern California locations. It says that more such deployments are on the way. “Walmart’s first two Bloom Energy installations are helping reduce our carbon footprint and overall impact on the environment while providing reliable, renewable energy at competitive prices,” says Kim Saylors-Laster, vice president of energy.
Fuel cell makers say that their technologies will prove to be a reasonable alternative for those eco-minded businesses that have a need for continuous power. As they gear up, others may follow and give the technology a chance to eventually break through.
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