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Bloom box

  1. 1. Bloom Box Energy:The Future of EnergyBy: Rakesh GakarePraxis Business School
  2. 2. Praxis Business School Bloom Box Energy: The Future of Energy A report submitted to Prof. Prithwis MukerjeeIn partial fulfillment of the requirements of the course BIS th On 7 November 2010 By Rakesh Gakare 2
  3. 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 3
  4. 4. ABSTRACT: World has been constantly struggling with theenergy problems. Scientists are searching for neweconomic, clean, renewable and efficient sources ofenergy. Despite of all the expensive and tremendousresearch, we are unable to find any reliable energyresource which will satisfy all our needs. Now the world has been introduced to BloomEnergy, a new entry in the fuel cell business whichclaims to be ready to revolutionize the energyeconomy. Bloom Box has been embraced by bignames such as eBay, Google, Staples, FedEx andWalmart. Is this a new solution to all mankind energyproblems?MOTIVATION: The human demand for energy is enormousand exponentially increasing. Today, the energysector is one of the most potential and profitablesector. As 80 to 90 percent of the world’s totalenergy comes from combustion of fossil fuels whichare limited and create pollution, the need to findother renewable, non-exhausting and clean energyresources is increasing. The traditional approach toenergy production has many challenges such asemission of greenhouse gaseous, transmissionlosses, cost inefficiency and dependency ontransmission lines etc. One of the major challenges K. R. Sridhar- Co-founder and CEO of Bloom Energyis to reach world’s 1.5 billion population living in theremote areas without electricity. All these challenges made many organizations to search more reliable, clean and efficientenergy sources. Mr. K. R. Sridhar, anIndian-American rocket scientist andco-founder and CEO of Bloom Energyhas now come up with a Bloom Boxwhich is suppose to meet all thesechallenges.INTRODUCTION: Bloom Energy Server(generally called as Bloom Box) is asmall size cubical fuel cell box whichcan provide sufficient energy to 100average U.S. homes or 30,000 sq. feet 4
  5. 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 orliquid hydrocarbons such as gasoline, diesel, methane or biogas to produce electricity. It has nomoving parts and produces negligible noise. Company claims that the Bloom energy Server is build on a patented solid oxide fuel celltechnology and is a new class of distributed power generator running on any type of hydrocarbon fueland is responsible for producing clean, reliable, affordable electricity at customer site. It is one ofspecial kind of battery which will always run and the expected life of one server is 10 years. Furtherdifferentiating 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 storageBLOOM ENERGY SERVER ARCHITECTURE: The Bloom Energy Server basically works on Bloom’s patented solid oxide fuel celltechnology. Each server consists of thousands of Bloom’s fuel cells which is a flat solid ceramicsquare made from common sand like powder and coated with special patented inks (green for anodeand black for cathode). Each fuel cell is capable of producing 25 W which is enough to light a bulb. Toproduce more power these cells are sandwiched and are connected through conducting metal platesinto a stack. Few such Stacks put together are enough to meet energy requirement of an average 5
  6. 6. house producing 1kW of electricity. Many stacks are assembled and put together to produce one power module which canproduce 25 kW of energy. These power modules are again aggregated to form one system calledEnergy Server which is now able produce 100 kW of energy. As this whole system is aggregated fromone basic cell, for more power we can add as much energy servers as we want to meet our powerrequirement. 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)  MobilitySOLID OXIDE FUEL CELL: SOFC technology is almost a century old technology. This technology has been practicallyused in every NASA mission since 1960’s. But this technology is unable to find its wide spreadapplications due to its high operating temperature and relatively high price. A Solid Oxide Fuel Cell is basically an electrochemicalconversion device which uses hydrocarbon based fuels toproduce electricity. The best thing about SOFC is that it hasno moving parts which mean it has very low losses andnegligible noise level. The by-products of SOFC are waterand unused air leading to very less pollution. The mainadvantages of this class of fuel cells are fuel flexibility, highefficiency, long-term stability, low emission and relatively lowcosts. Fuel cells are characterised by their electrolytematerial; SOFC has electrolyte in the form solid oxide orceramic. In contrast to technologies like Proton ExchangeMembranes (PEMs), Phosphoric Acid Fuel Cells (PAFCs) andMolten Carbonate Fuel Cells (MCFCs) which requires all Figure 4: Ref- http://en.wikipedia.orgexpensive precious metals, corrosive acids or moltenmaterials 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 millimetreseach. A single cell consists of all the four layers stacked together with metallic conductor plates. Thiscomposition enables the SOFC to form a series to meet larger energy requirements. The operatingtemperature of SOFC is typically between 500°C to 1000°C. At these temperatures SOFC does notneed any expensive metal like platinum which brings down the cost significantly. The SOFCtechnology has found significant number of applications and is able to produce energy outputbetween 100 W to 2 MW. The overall efficiency of SOFC can reach up to 60% and with combine heatand power it can be increased further. 6
  7. 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 fiveyears time, Bloom Box necessary to run an average U. S. house will cost only $3000. It the same costvalue ratio is considered then the smallest Bloom Box implemented in house hold will be able torecover all its initial investmentwithin the 5-6 years time.According to NewsWeekmagazine the capital cost forBloom Energy Server is $7-8per Watt.USAGE: The Bloom Energyoffers increased electricalreliability and improved energysecurity, providing a clear pathto energy independence. TheBloom Energy providesfollowing benefits- Figure5: Ref- Bloom Energy 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/kWhusing natural gas which is cheaper than current electricity prices in some parts of United States suchas California. Twenty percent of Bloom Energy Server cost saving depend upon avoiding thetransmission losses that results from energy grid. Bloom Energy is looking forward for Power 7
  8. 8. purchase agreements to sell the electricity produced by the boxes, rather than selling the boxesthemselves, in order to address the customers fear about box maintenance, reliability and servingcosts. This approach will make the Bloom Energy technology certainly more competitive to most ofthe other technologies. Bloom Energy can be primarily used for industrial purposes but as company predicts it willcome up with a small version of Bloom Energy server “The Bloom Box” which will cost around $3000can be used for domestic purpose. But it will take around three to five years to produce such producton economy of scales. Bloom Energy is also finding its usage in military and space applications. There is a hugemarket waiting for product like Bloom Box if Bloom Energy is able to provide such product then a newenergy 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, reducetheir carbon footprints, improve their energy security, and want to showcase their commitmenttowards a better future. Bloom Energy has successfully gained some big customers which includeGoogle, 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 1 compact cars off the road annually .  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 2 3.8 million kWh of electricity .  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 8
  9. 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 3 centers .  eBay- With more than 90 million active users globally, eBay is the worlds 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 Blooms first 100% renewable biogas project. Beautifully situated outside the companys 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 4 their first 6 months; with biogas turned on, the amount of carbon mitigated more than triples .  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 5 biogas . With these big names as customers Bloom Energy is now looking forward to grab market as soonas possible. Big industries with vision to reduce their carbon footprints are primary target to BloomEnergy; 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 energycheaply, yet not a single can. Now Bloom Energy is making such promises again and it has managedto tap hype like no other can. Now let’s wait and hope for brighter future where everybody will getcheap and clean energy.COMPETITION: There are many competitors to Bloom Box who are already moving in the market. And supposeBloom Box begins to succeed, the other big players will quickly appear and will provide a tough timeto Bloom Energy. SOFC technology is very old and has been used for very long time. It is not verycomplicated and very easy to copy. The Bloom Energy has got an outstanding PR department andVC partners have been able to help Bloom to get very high profile clients for its initial instalmentswhich created a Bloom boom. There are now around eighty companies who are active in thedevelopment of complete small stationary fuel cell systems worldwide. Some of these have alreadybegun to sell the units openly while others have announced to launch their products in couple ofyears. „The fuel cell market is forecast to reach $598 million in 2010 and then grow to $1.22 billion by2014, with a compound annual growth rate (CAGR) of 20% that continues the vigorous growthexperienced over the past few years. SBI Energy research estimates that the market grew from $353million in 2005 to $498 million in 2009. Japan and the United States represented the two largest 9financial segments of the market last year.‟ 9
  10. 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 8 distributed power applications. 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 6 hours per year, so you would be able as a household to sell that electricity back to the grid.” 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 7 cost which restrict this fuel cell to specific applications . 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 showninterest in this fuel cell business and many big players are willing to jump into this technology due tohuge market and enormous opportunities in this field. An intensive research is taking place worldwidewhere US and Japan are major players. There are two major projects in Japan, where development isfocused upon the residential market. The Japan Gas Station is coordinating the Millennium Project todevelop fuel cells for residential use. Partners in this project include Ebara Ballard, Fuji Electric,Japan Gas Appliances Inspection Association, Matsushita Electric Industrial, Matsushita ElectricWorks, Mitsubishi Electric, Mitsubishi Heavy Industries, Mitsui, Sanyo Electric, Toshiba International 10
  11. 11. 10.Fuel Cell and Toyota Motor Even conglomerates like Siemens and General Electronics tried theirbest in SOFC technology but suspended the further research. In this game, who will produce energycheaply will have a lead over others. Despite of such a huge competition Bloom Energy has been able to grab so much attention ofpeople 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 K. R. Sridhar holding Bloom Energy Fuel Cell11 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 companys site in the company of Gov. Arnold Schwarzenegger and former Secretary of State Colin Powell. 13 K.R. Sridhar with Gov. Arnold Schwarzenegger 11
  12. 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 12 much the Bloom Box costs to operate per kilowatt hour"  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. Italso helps to grab thebusiness opportunities. For the lastexhibition there were397 exhibitors, from 66countries and regions,80,045 visitors, 7,900conference participantsand 759 journalistswhich show theimportance of fuel celltechnology. Now we canunderstand why there isso much hype for fuelcell technologies. It hasa tremendous scope and opportunities. There is huge business opportunity waiting for an innovationwhich has ability to change the whole energy concept and take the world to another horizon whereenergy will not be a problem anymore. 12
  13. 13. Beyond Horizon- Putting business aspects, aside world is still waiting for affordable, clean and reliable sourcesof energy. There are two billion people in the world who are constantly struggling for theirdevelopment and needs power to achieve it. Companies like Bloom Energy are trying hard to findproduct which will provide us reliable, efficient and clean energy. This type of technology will decreasethe importance of crude oil and its dependency. It will make the world a cleaner place. But this dreamwill 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, energycrises, dependency on grid lines, inefficient use of limited resources and global warming. So let‟s useavailable energy efficiently and smartly so that our next generations can enjoy the real beauty ofmother Earth.” 13
  14. 14. References: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. %20return%20Energy/fuel%20cell%20market%20trend/Fuel%20Cell%20Market%20Survey% 20-%20Small%20stationary%20Applications.pdf 11. fuel-cell-technology.html 12. 13. fuel-cell-technology.html 14. 15. 14