Bloom Box Energy:

The Future of Energy By: Rakesh Gakare

Praxis Business School

2

Praxis Business School

Bloom Box Energy: The Future of Energy

A report

submitted to

Prof. Prithwis Mukerjee

In partial fulfillment of the requirements of the course

BIS

On 7th November 2010

By

Rakesh Gakare

3

Contents-

No. Contents Page No.

1 Abstract 4

2 Motivation 4

3 Introduction 4

4 Bloom Energy Server Architecture 5

5 Solid Oxide Fuel Cell 6

6 Cost of Bloom Energy Server 7

7 Usage 7

8 Customers 8

9 Competition 9

10 Why Bloom Energy Has Got So Much Hype? 11

11 Concerns of Bloom Energy 12

12 Opening doors to commercialization of Fuel Cells 12

13 beyond Horizon 13

14 References 14

4

ABSTRACT:

World has been constantly struggling with the

energy problems. Scientists are searching for new

economic, clean, renewable and efficient sources of

energy. Despite of all the expensive and tremendous

research, we are unable to find any reliable energy

resource which will satisfy all our needs.

Now the world has been introduced to Bloom

Energy, a new entry in the fuel cell business which

claims to be ready to revolutionize the energy

economy. Bloom Box has been embraced by big

names such as eBay, Google, Staples, FedEx and

Walmart. Is this a new solution to all mankind energy

problems?

MOTIVATION:

The human demand for energy is enormous

and exponentially increasing. Today, the energy

sector is one of the most potential and profitable

sector. As 80 to 90 percent of the world’s total

energy comes from combustion of fossil fuels which

are limited and create pollution, the need to find

other renewable, non-exhausting and clean energy

resources is increasing. The traditional approach to

energy production has many challenges such as

emission of greenhouse gaseous, transmission

losses, cost inefficiency and dependency on

transmission lines etc. One of the major challenges

is to reach world’s 1.5 billion population living in the

remote areas without electricity.

All these challenges made many organizations to search more reliable, clean and efficient

energy sources. Mr. K. R. Sridhar, an

Indian-American rocket scientist and

co-founder and CEO of Bloom Energy

has now come up with a Bloom Box

which is suppose to meet all these

challenges.

INTRODUCTION:

Bloom Energy Server

(generally called as Bloom Box) is a

small size cubical fuel cell box which

can provide sufficient energy to 100

average U.S. homes or 30,000 sq. feet

K. R. Sridhar- Co-founder and CEO of Bloom Energy

5

office building. Bloom Energy Server with the size of refrigerator is able to produce 100 kW of energy.

Bloom Energy server is basically a solid oxide fuel cell (SOFC) which can use any kind of gaseous or

liquid hydrocarbons such as gasoline, diesel, methane or biogas to produce electricity. It has no

moving parts and produces negligible noise.

Company claims that the Bloom energy Server is build on a patented solid oxide fuel cell

technology and is a new class of distributed power generator running on any type of hydrocarbon fuel

and is responsible for producing clean, reliable, affordable electricity at customer site. It is one of

special kind of battery which will always run and the expected life of one server is 10 years. Further

differentiating factors which make bloom Server unique from other hydrocarbon fuel cells are-

Low cost materials- It is using very low cost sand like material instead of precious metal like

platinum or corrosive material like acids which make it affordable

Fuel flexibility- It can use any type of gaseous or liquid which can be either traditional fossil

fuels or renewable fuels like biogas

High electrical efficiency- It provides highly efficient electricity output which nearly twice the

rate of some legacy technologies

Reversible- This technology is capable of both energy production and storage

BLOOM ENERGY SERVER ARCHITECTURE:

The Bloom Energy Server basically works on Bloom’s patented solid oxide fuel cell

technology. Each server consists of thousands of Bloom’s fuel cells which is a flat solid ceramic

square made from common sand like powder and coated with special patented inks (green for anode

and black for cathode). Each fuel cell is capable of producing 25 W which is enough to light a bulb. To

produce more power these cells are sandwiched and are connected through conducting metal plates

into a stack. Few such Stacks put together are enough to meet energy requirement of an average

6

house producing 1kW of electricity.

Many stacks are assembled and put together to produce one power module which can

produce 25 kW of energy. These power modules are again aggregated to form one system called

Energy Server which is now able produce 100 kW of energy. As this whole system is aggregated from

one basic cell, for more power we can add as much energy servers as we want to meet our power

requirement.

This very simple architecture also offers-

Easy and fast deployment

Inherent redundancy for fault tolerance

High availability (as the separate modules are aggregated in a server, one can be serviced

while others continue to operate)

Mobility

SOLID OXIDE FUEL CELL:

SOFC technology is almost a century old technology. This technology has been practically

used in every NASA mission since 1960’s. But this technology is unable to find its wide spread

applications due to its high operating temperature and relatively high price.

A Solid Oxide Fuel Cell is basically an electrochemical

conversion device which uses hydrocarbon based fuels to

produce electricity. The best thing about SOFC is that it has

no moving parts which mean it has very low losses and

negligible noise level. The by-products of SOFC are water

and unused air leading to very less pollution. The main

advantages of this class of fuel cells are fuel flexibility, high

efficiency, long-term stability, low emission and relatively low

costs.

Fuel cells are characterised by their electrolyte

material; SOFC has electrolyte in the form solid oxide or

ceramic. In contrast to technologies like Proton Exchange

Membranes (PEMs), Phosphoric Acid Fuel Cells (PAFCs) and

Molten Carbonate Fuel Cells (MCFCs) which requires all

expensive precious metals, corrosive acids or molten

materials SOFC has very simple and easy to handle solid oxides with much less emission rate.

A SOFC consist of four layers out of which three are ceramics with the width of few millimetres

each. A single cell consists of all the four layers stacked together with metallic conductor plates. This

composition enables the SOFC to form a series to meet larger energy requirements. The operating

temperature of SOFC is typically between 500°C to 1000°C. At these temperatures SOFC does not

need any expensive metal like platinum which brings down the cost significantly. The SOFC

technology has found significant number of applications and is able to produce energy output

between 100 W to 2 MW. The overall efficiency of SOFC can reach up to 60% and with combine heat

and power it can be increased further.

Figure 4: Ref- http://en.wikipedia.org

7

COST OF BLOOM ENERGY SERVER:

INSTALLATION COSTS- The current cost of one Bloom Energy Server with 100 kW of capacity is

$700,000 - $800,000 with three years of cost recovery period. The Bloom Energy believes that in five

years time, Bloom Box necessary to run an average U. S. house will cost only $3000. It the same cost

value ratio is considered then the smallest Bloom Box implemented in house hold will be able to

recover all its initial investment

within the 5-6 years time.

According to NewsWeek

magazine the capital cost for

Bloom Energy Server is $7-8

per Watt.

USAGE:

The Bloom Energy

offers increased electrical

reliability and improved energy

security, providing a clear path

to energy independence. The

Bloom Energy provides

following benefits-

1. Lower Cost Energy Source- The Bloom Energy enables the user to produce their own

energy at much lower cost which they are paying today. To achieve this Bloom Energy is

using widely available, inexpensive materials, leveraging proven manufacturing

techniques, and delivering an extremely efficient system which is twice as efficient as

conventional technologies.

2. Fuel Flexible- Bloom Energy Server is able to run of wide variety of renewable and fossil

fuels. This enables the customer to choose between best suited fuel for their budget and

availability.

3. Sustainability- This technology uses renewable and fossil fuels in such a way that it

produces maximum energy with less emission which will ensure a sustainable future.

4. Increased Reliability and Scalability - Bloom Energy is able to provide 24/7/365 power

supply. It is very reliable, stable and easy to use. It is scalable and can be used as per the

power requirement. To produce more power we can attach as many units as we want.

5. Simple Installation and Maintenance- This system requires no maintenance from user

end. The company handles all the management and maintenance. Its design results into

easy installation and low space requirements.

Company claims that the Bloom Energy Box can produce the electricity for 8-10 cents/kWh

using natural gas which is cheaper than current electricity prices in some parts of United States such

as California. Twenty percent of Bloom Energy Server cost saving depend upon avoiding the

transmission losses that results from energy grid. Bloom Energy is looking forward for Power

Figure5: Ref- Bloom Energy

8

purchase agreements to sell the electricity produced by the boxes, rather than selling the boxes

themselves, in order to address the customers fear about box maintenance, reliability and serving

costs. This approach will make the Bloom Energy technology certainly more competitive to most of

the other technologies.

Bloom Energy can be primarily used for industrial purposes but as company predicts it will

come up with a small version of Bloom Energy server “The Bloom Box” which will cost around $3000

can be used for domestic purpose. But it will take around three to five years to produce such product

on economy of scales.

Bloom Energy is also finding its usage in military and space applications. There is a huge

market waiting for product like Bloom Box if Bloom Energy is able to provide such product then a new

energy era will begin where world will enjoy clean and cheap energy.

CUSTOMERS:

The Bloom Energy is targeting the potential customers who want to lower their cost, reduce

their carbon footprints, improve their energy security, and want to showcase their commitment

towards a better future. Bloom Energy has successfully gained some big customers which include

Google, Adobe, Staples, eBay, Walmart, FedEx and many more.

Adobe- Adobe is a recognized leader for its green building efforts, having earned distinction

as the world’s first commercial enterprise to achieve four Platinum certifications under the

U.S. Green Building Council’s Leadership in Energy and Environmental Design LEED®

program. The Bloom fuel cell installation is Adobe’s second major renewable energy

installation; in December 2009, Adobe installed 20 Windspire® wind turbines.

Adobe has installed 12 100kW Bloom Energy units producing 1.2 MW of energy at its

head quarters in San Jose. Now, as a Bloom Energy customer, Adobe can efficiently generate

its own electricity on site, further reducing the company’s carbon footprint, lowering energy

costs and mitigating power outage risks. Adobe expects to reduce its carbon footprint by

approximately 121.5 million pounds over 10 years, which is the equivalent to taking 1,810

compact cars off the road annually1.

Google- Google is committed to being a responsible global citizen and takes its energy use

very seriously. To reduce the environmental impact of Google’s operations, it generates on-

site energy with lower carbon intensities and lower cost than the traditional grid. On-site

renewable energy reduces Google carbon emissions and makes good business sense too.

Bloom has worked to help Google achieve both its economic and environmental

goals, assuring that the 400kW installation on Google’s main campus delivers clean and

affordable power. Over the first 18 months the project has had 98% availability and delivered

3.8 million kWh of electricity2.

Staples- Early projects with solar and winds were promising and remain in the Staples

portfolio, but its search continued for a consistently reliable solution that could operate 24/7

like its business operations and significantly add to carbon reduction volumes. That led the

company to Bloom Energy.

Bloom has offered a unique fuel cell technology that Staples identified as a clear

departure from the highly priced legacy fuel cells. Staples first 300 kW installations were at

their Ontario, California Distribution Centre. In the first year alone, the project generated over

2 million kilowatt-hours of affordable power which resulted in a reduction of 2.5 million pounds

9

of carbon dioxide. Availability has been above 99%, and Staples is now considering ways that

Bloom can play a bigger part in providing power to their large facilities and distribution

centers3.

eBay- With more than 90 million active users globally, eBay is the world's largest online

marketplace, where practically anyone can buy and sell practically anything. CEO John

Donahoe is a strong believer that a long-term commitment to sustainability and responsible

energy use is both great for business – and critical for the environment.

In 2009, eBay committed to reduce its corporate greenhouse gas emissions by 15%

by 2012, over a 2008 baseline, an ambitious target for a rapidly growing company. The

500kW eBay installation is a high-profile, showcase project for Bloom Energy, and as of

February 2010, will be Bloom's first 100% renewable biogas project. Beautifully situated

outside the company's LEED gold certified "Mint" building, the Bloom Energy Servers have

delivered 2.2 million-kWh of power and mitigated more than 650,000 pounds of CO2 in just

their first 6 months; with biogas turned on, the amount of carbon mitigated more than triples4.

Walmart- Walmart views sustainability as an important opportunity for both the future of their

business and our world. Accordingly, they have set a vision of supplying their operations with

100 percent renewable energy.

Walmart has completed Bloom Energy Server installation at two stores in southern

California, each at 400kW, generating approximately 3.4 million kWh annually. Each of these

sites has the potential to eliminate 1 million pounds of CO2 annually when powered by

biogas5.

With these big names as customers Bloom Energy is now looking forward to grab market as soon

as possible. Big industries with vision to reduce their carbon footprints are primary target to Bloom

Energy; it is also shifting its focus on domestic as well as military requirements.

Every clean tech company the energy business promise that it can produce clean energy

cheaply, yet not a single can. Now Bloom Energy is making such promises again and it has managed

to tap hype like no other can. Now let’s wait and hope for brighter future where everybody will get

cheap and clean energy.

COMPETITION:

There are many competitors to Bloom Box who are already moving in the market. And suppose

Bloom Box begins to succeed, the other big players will quickly appear and will provide a tough time

to Bloom Energy. SOFC technology is very old and has been used for very long time. It is not very

complicated and very easy to copy. The Bloom Energy has got an outstanding PR department and

VC partners have been able to help Bloom to get very high profile clients for its initial instalments

which created a Bloom boom. There are now around eighty companies who are active in the

development of complete small stationary fuel cell systems worldwide. Some of these have already

begun to sell the units openly while others have announced to launch their products in couple of

years.

„The fuel cell market is forecast to reach $598 million in 2010 and then grow to $1.22 billion by

2014, with a compound annual growth rate (CAGR) of 20% that continues the vigorous growth

experienced over the past few years. SBI Energy research estimates that the market grew from $353

million in 2005 to $498 million in 2009. Japan and the United States represented the two largest

financial segments of the market last year.‟9

10

1. Acumentrics (USA)- Acumentrics is a manufacturer of direct natural gas and propane fuelled

Solid Oxide Fuel Cell that generates electricity and heat for small to medium scale distributed

generation and power quality applications. The company’s pre-commercial power units in the

2, 5 and 10 kW size are used for commercial and industrial back-up and micro-scale

distributed power applications.8

2. Ceramic fuel cell- Ceramic fuel cell is concentrating on very basic model of SOFC. It is using

this technology to produce hot water and electricity. Ceramic fuel cell product is called

BlueGen. . “Over the course of a year the BlueGen can produce over 17,000 kilowatt-hours of

electricity. The average house here in Melbourne has a demand of 6,000 to 7,000 kilowatt

hours per year, so you would be able as a household to sell that electricity back to the grid.”6

The targets are very ambitious and if Ceramic Fuel Cell would meet these targets then no

doubt it will grab the whole market.

3. United Technology Corporation- UTC Fuel Cell is a part of UTC Power which is a business

unit of United Business Corporation. UTC has a long and successful presence in the field of

fuel cell technology. Its practical implementation includes Apollo Moon Program, space

shuttles, auxiliary power units, auto/bus propulsion and industrial uninterruptable power and

backup applications. UTC is also facing the same problems of performance, durability and

cost which restrict this fuel cell to specific applications7.

4. Toshiba- Toshiba has come up with Dynario fuel-cell for portable consumer electronics. It is a

Direct Methanol Fuel Cell (DMFC) which uses directly injected concentrated methanol to

produce power. But this technology is limited to small devices like mobile phones. If Toshiba

is able to realize its industrial as well as domestic models then it will change the whole energy

horizon.

5. Sprint Nextel- Sprint Nextel has 15 patents on hydrogen fuel cells and is using 250 fuel cells

to provide backup power to its operations. It is using fuel cells since 2005.

6. Avista Labs- Avista is developing PEMFC (Proton Exchange Membrane Fuel Cell) systems

in the 50W-5kW power range. Its systems are based on a unique modular design which can

be connected to produce more power.

7. Eneos Celltech- Eneos Celltech is producing fuel cells in a compact and easy to use form

which can also produce hot water from the heat it generates. This system is ENE-FARM

household fuel cell system.

8. Ebara Ballard- Ebara Ballard is a jointly held company by Ebara Corporation and Ballard

Generation Systems with a mandate to supply Ballard Generation System’s fuel cell

generators incorporating the Ballard’s fuel cell to Customers in Japan. The company is taking

part in the New Energy Foundation project (NEF) and the Japan Gas Association (JGA)

demonstration project.

There is huge competition for Bloom Energy. More than eighty companies have shown

interest in this fuel cell business and many big players are willing to jump into this technology due to

huge market and enormous opportunities in this field. An intensive research is taking place worldwide

where US and Japan are major players. There are two major projects in Japan, where development is

focused upon the residential market. The Japan Gas Station is coordinating the Millennium Project to

develop fuel cells for residential use. Partners in this project include Ebara Ballard, Fuji Electric,

Japan Gas Appliances Inspection Association, Matsushita Electric Industrial, Matsushita Electric

Works, Mitsubishi Electric, Mitsubishi Heavy Industries, Mitsui, Sanyo Electric, Toshiba International

11

Fuel Cell and Toyota Motor10.

Even conglomerates like Siemens and General Electronics tried their

best in SOFC technology but suspended the further research. In this game, who will produce energy

cheaply will have a lead over others.

Despite of such a huge competition Bloom Energy has been able to grab so much attention of

people and media all over world. Does Bloom have some kind of magical technology?

Why Bloom Energy has got so much hype?

Bloom Energy’s fuel cells are simple, very thin solid

ceramic square plates made from sand like powder

and painted with a special patented inks to create

anode (green) and cathode (black) sides. These

“special patented inks” have very complicated

composition which Bloom Energy executives do not

want to reveal.

Is this the key factor to Bloom Energy’s

success?

Sridhar’s invention has its roots in NASA Mars

Space Program. It is also embraced by many big

companies like Adobe, Google, eBay, Walmart etc.

Bloom Box can run in reverse to produce hydrogen

which will enable us to power hydrogen vehicles if

we have any!

Bloom Energy has got an excellent PR department

and VC partners which has helped Bloom Energy to

get very high profile partners with high requirements.

As “Big players” were involved, the launching of

Bloom Energy has created much hype and has

succeed to grab the attention worldwide.

The fuel cells, which EBay called "skinny

batteries," were officially introduced at the

company's site in the company of Gov.

Arnold Schwarzenegger and former

Secretary of State Colin Powell.

K. R. Sridhar holding Bloom Energy Fuel Cell11

K.R. Sridhar with Gov. Arnold Schwarzenegger13

12

Concerns of Bloom Energy-

Fuel Cell technology is a very old technology, in order to succeed in the market; Bloom

Energy Server would need to be cheaper than the existing types of renewable energy.

Bloom Energy can develop such technology; the other big players will jump into the market

and derive most of the profit due to established customer base and greater ability to

manufacture.

The predicted life of Bloom Energy Server is about ten years but there is question how long

the reliable life of Bloom Energy Server will be?

Bloom Energy is a SOFC featured with high operating temperature which can affect the

feasibility of the Bloom Box for domestic usage.

Fortune noted on 24 February 2010 that "Bloom has still not released numbers about how

much the Bloom Box costs to operate per kilowatt hour"12

As Bloom Energy new to market, the main limitation is to build a rigid supply chain to feed it.

The cost of Bloom Energy is not economic yet, to bring it down Bloom must concentrate on

mass production which will surely take some time.

Opening Doors to Commercialization of Fuel Cells-

FC Expo 2011: FC Expo is the world’s largest hydrogen and fuel cell event for industry professionals,

gathering all kinds of products/technologies related to latest development of hydrogen and fuel cells. It

also helps to grab the

business opportunities.

For the last

exhibition there were

397 exhibitors, from 66

countries and regions,

80,045 visitors, 7,900

conference participants

and 759 journalists

which show the

importance of fuel cell

technology.

Now we can

understand why there is

so much hype for fuel

cell technologies. It has

a tremendous scope and opportunities. There is huge business opportunity waiting for an innovation

which has ability to change the whole energy concept and take the world to another horizon where

energy will not be a problem anymore.

13

Beyond Horizon-

Putting business aspects, aside world is still waiting for affordable, clean and reliable sources

of energy. There are two billion people in the world who are constantly struggling for their

development and needs power to achieve it. Companies like Bloom Energy are trying hard to find

product which will provide us reliable, efficient and clean energy. This type of technology will decrease

the importance of crude oil and its dependency. It will make the world a cleaner place. But this dream

will take some time to become reality so let’s wait and hope for the best.

“We always imagine the world free from energy related problems such as pollution, energy

crises, dependency on grid lines, inefficient use of limited resources and global warming. So let‟s use

available energy efficiently and smartly so that our next generations can enjoy the real beauty of

mother Earth.”

14

References:

1. http://www.bloomenergy.com/customers/customer-story-adobe/

2. http://www.bloomenergy.com/customers/customer-story-google/

3. http://www.bloomenergy.com/customers/customer-story-staples/

4. http://www.bloomenergy.com/customers/customer-story-ebay/

5. http://www.bloomenergy.com/customers/customer-story-walmart/

6. http://www.youtube.com/watch?v=thYZEpdMt_s&feature=player_embedded

7. http://www.batteriesdigest.com/fuel_cell_pem_utc.htm

8. http://www.kmitl.ac.th/

9. http://www.sbireports.com/about/release.asp?id=1719

10. http://www.kmitl.ac.th/emc/web%20trm/Energy%20%20in%20project%20group/2/Global/2.2.2

%20return%20Energy/fuel%20cell%20market%20trend/Fuel%20Cell%20Market%20Survey%

20-%20Small%20stationary%20Applications.pdf

11. http://latimesblogs.latimes.com/technology/2010/02/bloom-energy-reveals-new-bloom-box-

fuel-cell-technology.html

12. http://en.wikipedia.org/wiki/Bloom_Energy

13. http://latimesblogs.latimes.com/technology/2010/02/bloom-energy-reveals-new-bloom-box-

fuel-cell-technology.html

14. http://en.wikipedia.org/wiki/Bloom_Energy#Bloom_Energy

15. http://www.featurepics.com/PhotoReports/Conceptual-Image.aspx