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

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.

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

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?