Bloom Box and the Very Disruptive Future of Distributed Energy [Video]

February 23, 2010

‘Holy Grail’ vs ‘Disruptive’
Bloom Energy is helping to shake up the conversation about the future of distributed energy systems.  But let’s be clear…!!!   There is no Holy Grail solution for global energy market!  There is no silver bullet!

The spectrum of energy demands is too wide and varied across applications to have one single solution.  Disruptive energy systems exist for the demands of tiny sensors (ambient capture), smart phones (density), electric vehicles (low cost per weight), data centers (reliability), and grid energy (base load).  So let’s not get distracted looking for one solution!

More importantly, we should not confuse an aspirational industry ‘holy grail‘ for a genuinely applied ‘disruptive‘ energy system that could change the cost structure and business model innovation landscape in a way that avoids direct competition with incumbents.

Disruptive energy platforms are rare (e.g. steam engine, internal combustion engine, electrical grid) but we are likely to see more candidates emerge in the 21st century as we tap the power of energy entrepreneurs and advance our knowledge and engineering prowess in the areas of nanoscale materials design and bio industrial processes.

Energy systems are about the interaction of molecules – and both nano- and bio- give humanity new shapes to manipulate and control the interaction of light, electrons and molecules.  And within the energy sector, it is materials science that enables business model innovation (not the other way around)!  This is a materials science game!

Why Bloom Energy’s Distributed Fuel Cell Vision is Disruptive
Low cost, highly reliable distributed power generation systems are disruptive because they open up a new ecosystem for non-grid based power generation that can bypass the incumbents entrenched business model.

They are green in the sense that electrochemical energy conversion is more efficient and less polluting than combustion conversion.  But let’s be clear.  Being green is less disruptive than being cheap, reliable and distributed.

What makes an energy system disruptive?
Let’s look at two versions of solar.  Traditional solar farms try to compete directly against the grid without a chemical fuel.  Good luck!  Feels good, but it’s not disruptive.  You are at the mercy of grid access, price volatility of chemical fuels, and the regulatory frameworks of the utility sector.
The disruptive version is ‘distributed solar’ (e.g. rooftop via thin film solar) and is not connected to the grid, and creates new market demand rather than trying to replace or repair the old model.

Fuel cells convert chemical fuels (e.g. natural gas, oil, coal, propane, biofuels, hydrogen) into electricity.  They are silent, have no moving parts and can be manufactured using low cost scalable and modular assembly.

Electricity powers the future!  And fuels dominate the electricity power generation market.

Bloom Energy plays into the fuels market, but offers a non-grid solution for energy!

Bloom Energy’s success will of course be based on its ability to continue to apply innovative technology with great business leadership.   As to the skeptic points raised by Greentech Media‘s Michael Kanellos (whom I respect and admire!) here are my notes on issues of:

  • Hype: I hear you!  Of course, we’ve followed this since Ballard’s bubble in the late 1990s.  But you know that all technologies pass through the hype cycle!  Shouldn’t we compare notes on latest developments in labs and Board rooms and talk about an plausible roadmap that has commercialization within 2-10 years for first wave of products?!  Bloom is testing an actual product!
  • Durability:  Fuel cells do not have to last 30 years. Stacks can be broken down, replaced, et al.  And the cost is per unit, not per power plant.  So we don’t need a product that lasts forever!
  • Mass manufacturing: Fuel cells are modular, scalable units and I see no reason why manufacturing cannot be scaled?  Certainly a barrier, but not a show-stopper.
  • Competition: ‘It will be GE, not Bloom Energy!’ — Great!  That is not a criticism.  I expect incumbents will play!  If Siemens, GE, Dow, DuPont, JC, Emerson (et al) get into the game, great news!
  • Cost – Bloom’s CEO stated $3,000 price point – a fine place to start, but really, we need $300! ;-)   But it seems clear that low cost alternatives to precious metals are becoming commercially viable.

Watch: 60 minutes [video]


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Note:
I have followed Bloom Energy since it was formerly Ion America many years ago.  And I have been an evangelist for the disruptive market potential for fuel cells applied to portable and distributed power generation.   And to all the doubters of fuel cells or hydrogen I have responses to the dated and misguided criticisms related to storage, production, energy loss, et al.  Happy to answer questions in Comments section.

Additional Videos for more in depth interviews

{ 10 comments… read them below or add one }

S. Snively February 26, 2010 at 3:16 pm

Hey there Garry. I like the idea of the Bloom box, but it still requires a network, just not a power network. You’ll need either gas lines, a gas plant, or frequent deliveries of natural gas to make it work, so it’s not like you are getting rid of the “grid” all together.

Also, I read that the Bloom box operates at 1000 degrees internally. How can that be “silent”? It must have at the very least a cooling system, right? Have you been next to one of the boxes personally?

Garry Golden February 26, 2010 at 3:40 pm

Steve! :-)

You are right– but I try to make the distinction between ‘grid’ as a stream of electrons -vs fuels that can be connected via pipe or stored locally. Today we are dependent on that electricity line from start to finish. Fuel cells in general open up market to ‘fuel’ and local power generation. Subtle difference but big outcome to system as a whole. Much cheaper to build out capacity via appliances than power plants. And resiliency is greater since you can store fuels locally and never have to worry about system wide grid failure. If your fuel cell breaks– roll in another! So this is a quicker way to bring electricity to any person, anywhere- something that is impossible w/ grid or even solar. (It’s hard to compete against energy locked up in chemical bonds)

So, you are right – still dependent!
We’ll always need access to a chemical fuel of some sort– unless we hit point where a footprint of solar capture could provide for all our demands. This is hard to imagine given photon potential per unit of space)… but some people in right regions can certainly look at solar solutions.

I am a big proponent of creating global markets for clean ‘fuels’ and think the world is better off if put fuels in the hands of people (rather than limit it to central power plants! So we’ll need some sort of chemical bond feedstock – whether its wood, cow dung, propane, nat gas, hydrogen…(obviously less carbon the better) But in the world there is a wide spectrum of options. What fuel cells allow for emerging markets (and us as well) is a low cost (non power plant) solution to electricity. And that’s a big step forward, I think!

Re: sound.
Yes, SOFCs run hot! Most energy is captured but definitely need for fans. When I wrote this post it was assuming the small ‘box’ on 60 minutes, not the Bloom Server that will sit outside which was announced at the press conference! So definitely a large appliance ‘buzz’! But nothing compared to turbines or internal combustion engine!
Thanks for comment.. trust all is well!!

Just found this video -that actually describes their ability to manage heat

Joe February 27, 2010 at 2:16 am

Alright, you got my attention now… This bloom Energy box wich is power by some type or any type of fuel, to which is to produce straight electricity without some other type of residue. Common, if this is suppose to have a chemical reaction to transform fuel to electricity then there is gases and also waste liquid that should be present. This is not a battery that you recharge once drained this is said to be a fuel cell that only creates electricity… ..Something is missing here and sure not going to run and invest yet…

Garry Golden February 27, 2010 at 10:21 am

Joe –
Yes, so think of batteries as pure storage (chemical storage of electricity), and the fuel cell is a power conversion device that is refueled. Small, but significant business world implications! (e.g. size, weight, performance, ease of refueling, et al)

And yes, there is waste in a fuel cell reaction. All reactions are equally balanced and the output of the electrochemical reaction inside a pure hydrogen fuel cell system is electricity, heat and water.

So the H2 goes in – splits into a positive a negative charge via a tin foil like membrane (called an MEA). We capture the negative charge to drive electric motors (et al) – while the positive charge passes through the membrane and then reacts with oxygen (the ‘oxidant’) to complete the reaction producing heat and water. So the hydrogen is losing an electron but then gaining it back from oxygen.

We want that lost negative electron charge for energy!

Now there are many different types of fuel cells (e.g. PEM, SOFC, MOFC) – and some types can use hydrocarbon fuels like natural gas. Essentially the same reaction but because there is carbon present- carbon dioxide is an output. It is less than the CO2 output of an internal combustion engine (because it is electrochemistry). [Problem w/ carbon is that is corrodes catalysts in the fuel cell]

As Bloom’s CEO states- the elegance of fuel cells is that it serves as a ‘bridge’ for hydrogen rich fossil fuels like natgas, and also useful in future clean fuels like hydrogen and biofuels.

So no breaking of physics! There is a reaction – and all reactions have equal input outputs though change into new forms of energy (e.g. heat/mechanical losses, et al) But in general the ‘electrochemical’ reactions of fuel cells are our best best for changing the big picture economics of energy conversion via fuels. Thanks for your note.. And, I would also add- not to put too much thought into Bloom as a company – as much as we need to get our heads around the fuel cell industry as a whole. So GE and Siemens should be releasing their own distributed power systems… and chemical fuel providers should find a way to get fuels into the hands of people via pipelines or packets.

Andrei March 18, 2010 at 7:11 pm

Hi Garry, I’m a French student here in the US and the Bloom Box caught my attention, but I have some doubts about its viability.
I totally agree with you about the importance of puting energy production into the hands of people but how much will it cost? The CEO of Bloom Box says one unit could be sold at $3000 within 5 to 10 years, is it realistic? How is the cost structure of such a device, what part is variable costs? How big does the market need to be to absorb these cost reductions?

Garry G March 19, 2010 at 12:44 pm

Andrei,
Glad to see your interest in Bloom and distributed power generation.
I am happy to answer more in depth questions if you want to send an email – my full name at gmail — but quickly:

The lens to understand cost structure spectrum for distributed power generation will include: materials, fuel, service. There are key advantages to the high capital costs and maintenance costs associated with central power plant models- but the post should speak for itself. We can scale faster thru distributed power generation than building large plants and transmission lines. There is less risk associated with managing capacity and throughput, less risk on capital costs, et al. Distributed energy appliances is really a simple, profound idea – whose time will come.

I’m certain you understand challenges of fuel costs. But I would say that volatility aside – natgas is likely to remain low for a few decades – and packets of pure hydrogen will be price at parity.

To focus on the device itself — most of the costs are associated with materials. (Mfg techniques will also drive down costs)
fuel cells are unique energy conversion devices that use principles of electrochemical conversion (two reactions) that release electricity, heat and water. The two reactions are shaped by catalysts and membranes that pull electrons from hydrogen and combine H2 w/ oxygen. There are several types of fuel cells – classified by their electrolyte (Solid Oxide or SOFC) (Bloom), PEM, MOFC)– and each has its own set of positives/negatives. (e.g. carbon fuel tolerance, costs, portability, temperature, et al) . The majority of costs associated with fuel cells rests in the MEA (membrane electrode assembly) — google ‘fuel cell MEA’ and you will see the guts of fuel cells.

Again, this MEA varies based on type of fuel cell. And the catalysts used to speed up reactions (on hydrogen and oxygen side) are often part of high costs. Platinum and other precious metals have great performance- but come at a high price.

The MEA including catalysts is where fuel cells will drop in price. Either through less use of precious metals – or novel use of non-precious metals. Nanostructured design of catalysts and membranes plays an enormous role in dropping costs- and that process is non-linear. Yes, there are ways to incrementally reduce costs — but reality is that one breakthrough and applied engineering advance- and you can cut amount of platinum needed by 1/100th. (e.g. Stanford announcement this month)

Bloom is a solid oxide fuel cell – which is desirable b/c it can tolerate carbon in the fuel (e.g. natural gas/methane) without the tremendous downside of carbon poisoning. The secret sauce catalyst-membrane for Bloom is widely considered to be their competitive advantage. (Happy to talk in detail about what we think it is… _)– and as long as the company continues to innovate in materials science (increasing catalyst longevity; reaction rates, et al) — I am confident in their vision of a cheap ‘Bloom Box’

In fact, I believe the era of nanostructured materials – and advancing in modular manufacturing will lead to low cost fuel cell devices. My vision is a $10 micro fuel cell for powering laptops/TVs, et al — and $100 for homes. I will not put myself out there to say when – b/c the nature of change is so complicated (e.g. technology diffusion, markets, non market mechanisms, et al) But I have been following the science and pace of technical advances in fuel cells for over a decade and remain as confident as ever – in their disruptive potential.

The next five years for micro fuel cells and stationary will be slow going– but I look beyond – from 2015-2025 and expect to see rapid diffusion due to the nature of distribution channels and wide spectrum of applications.

How big is the market? Look at every socket in the world…. that is the fuel cells competition. Unplugging devices from the cord / wall socket model is the goal. A fuel cell embedded in every object is the vision. (And for those who scoff at that image– I remind them of the radical idea of putting a computer chip into cheap objects – when we were using vacuum tubes and not solid state transistors)

Look at every person on the planet who does not have access to a wall socket. That is the market opportunity. It’s like cell phones. You can leapfrog a legacy infrastructure model- and bring distributed power to markets without regulatory hoops or need for high capital costs and construction.

The global market for distributed power and micro power is larger than anything we can possibly imagine today. I believe it is the most disruptive market concept of the next century. It can simultaneously expand the value of chemical fuels (as packets) and bring power to every person on the planet – anytime, anywhere.

Imagine cheap solid state power plants in every size– sold over retail shelves. That is the end game. Walk into a retail store- and buy a power plant and/or packet of fuel.

Of course the road passes through large megawatt energy servers (that Bloom is building) for buildings.
Fuel cells for scooters will happen before vehicles…
Micro fuel cells for recharging phones/laptops will happen before they are embedded inside phones/laptops.

So, step by step… it will take time! I am happy to talk details on science..technology…and low end disruptive business strategy via email…

Best,
Garry

Dannielle January 4, 2011 at 8:04 pm

Hi garry!
Im an electrical engineering student whose very keen on the idea of
fuel cells. I am particularly interested in the idea that this could be a global
solution to communities that do not (and for a long time probably will not)
have access to electricity or the grid.

Do you think this could be a step towards raising the standard of living
in places such as India, Bangladesh, parts of Africa and Asia where many people
struggle with load shedding, grid unreliability and perhaps have no grid at all?!

Would be keen to hear you’re thoughts on this subject as I am very interested in
global welfare and using my degree to make a lasting contribution to society.
You sound very clued in regarding the energy scene,

Dannielle

Garry Golden January 4, 2011 at 8:37 pm

Dannielle,

I think you are right and definitely see this has having disruptive potential for emerging markets. (I lived in Nepal/India for nearly two years in 90s so have experienced the poor reliability of the grid – where it existed). Energy is often seen as the great enabler of improving quality of life whether it relates to reducing human labor needed to do certain tasks, brings more gender equality into communities where woman are expected to do energy intensive tasks, or brings clean cooking energy to kitchens where smoke might otherwise pollute the home for cooking, or light to someone who wants to read at night.

There are hurdles ahead w/ fuel cells (and no shortage of non-believers) but I believe there is a strong case to be made that they will all be overcome and that the implications for portable power/distributed power are as revolutionary to life in 21st century as the Grid was in the last century.

As an engineering student I suspect you have explored the various types of fuel cells and their particular challenges. But in general the way we bring these ideas to market is via materials science innovation that leverages nanoscale science and engineering. It is nanostructured catalysts, membranes, gas storage and control systems that make all this feasible.

So that is how we get there – nanoscale material science innovation.

As to ‘why’ fuel cells – the disruptive change is decoupling fuels and electricity access from the grid. Fuel cells can be designed to be as small as a quarter or large as a small room. But they need fuels. And that is a critical shift in strategy. If we choose to bring molecule fuels (e.g. natgas, hydrogen, biofuels, gasoline, et al) to the personal level – it changes the game. Imagine a person in rural India being able to walk to their small local retail store buy a 10 rupee ‘packet’ of energy and use it in a fuel cell to bring electricity wherever they wish. No contracts. Pay as they use. Retail-based access to fuels and small portable power conversion devices (fuel cell) is a potent combination. It’s like the billions of people who ‘leap frogged’ fixed phone lines into the age of mobile phones. Why not leap frog the central grid – and put fuels into the hands of individuals.

You might read another piece that explore personal energy here:
http://www.garrygolden.net/2010/02/21/future-of-portable-personal-power-via-micro-fuel-cells/

Happy to answer any other questions you might have. And would like to hear more about other energy technologies you think have potential!
Here or directly via email: garrygolden at gmail

I keep social bookmark tags on energy at: http://delicious.com/garrygolden/energy
I also have notes on fuel cells from a course I teach on the future of energy and the environment as well… just let me know how much you know about the subject so I can give you the right level of information.

mike martiin November 4, 2011 at 8:58 pm

Garry, very interested in getting a quote on a unit for my business. thanks mike

Garry Golden November 7, 2011 at 10:50 am

Mike, Glad you are interested in fuel-based distributed power. I would recommend reaching out to two companies– Bloom Energy (though they seem targeted on high volume users for now)– and Clear Edge Power – more aligned w/ size/scale of your business. Overall I’d say we are still 3-5 years away from price point and retail distribution channels for SOFC based power generation.
Best
Garry

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