A Silicon Valley startup that's taken more than $400 million in venture funding finally unveiled its product today in a star-studded extravaganza.
In an event held at eBay's headquarters in San Jose, California, Bloom Energy called on California Governor Arnold Schwarzenegger, Google co-founder Larry Page, and retired general Colin Powell to push their solid-oxide fuel-cell box, which converts natural gas or other fuels into electricity. The company says its "energy servers" produce 60 percent less carbon dioxide emissions than a coal-fired power plant, and cost less than electricity produced on the grid.
"This is like the Google IPO," said John Doerr, an investor in both Google and Bloom Energy with the legendary venture-capital firm Kleiner Perkins Caufield & Byers.
"This technology is fundamentally going to change the world," echoed Senator Diane Feinstein (D-California) during a promotional video shown at the press conference.
But is it really going to? Independent experts aren't so sure.
The analyst firm Lux Research posted a note to its blog today noting that Bloom had confirmed their 100-kilowatt boxes are priced between $700,000 and $800,000 without subsidies of any kind.
In fact, a long-term R&D collaboration between the Department of Energy and multiple solid-oxide fuel-cell manufacturers, the Solid State Energy Conversion Alliance, estimates that fuel cells will need to cost $700 per kilowatt of peak capacity to compete unsubsidized with the grid. Bloom's product costs 10 times that.
"The cost is about an order of magnitude higher than it needs to be, to be truly competitive," said Michael Tucker, a fuel cell scientist at Lawrence Berkeley National Laboratory.
When you do the math, the Bloom box's electricity costs substantially more per kilowatt hour than the grid.
"Without incentives, we calculate electricity would cost $0.13/kWh to $0.14/kWh, with about $0.09/kWh from system cost and about $0.05/kWh coming from fuel cost," Lux wrote. "Note that this is high compared to average retail U.S. electricity costs of roughly $0.11/kWh."
Right now, a 30 percent Federal government tax credit and a $2,500-per-kilowatt California subsidy for fuel cells substantially lowers the price of the machine for Bloom's customers. The company claims that with those incentives the life-cycle cost of electricity over 10 years could be as low as $0.08/kWh.
And over the next few years, it's probable that, like many technologies, the unit cost of Bloom's fuel cells will decrease as the scale of production increases, but it's unclear how cheap the Bloom boxes can get.
Tucker, for his part, does not think ceramic-based solid-oxide fuel cells can become competitive with the grid. That's why he's working on a stainless steel version that would be coated with a thin film of ceramic material.
Tucker said that from what he's heard, Bloom's product is similar to fuel cells from UTC, Kyocera and other companies.
"From an outsider's perspective, it sounds like their technology is relatively straightforward and similar to other technologies out there in this arena, but maybe their business approach is relatively unique," Tucker concluded.
This is business after all, and if marketing counts, Bloom Energy certainly has a leg up on its industrial competitors like Siemens.
"They are certainly going to raise visibility for the industry," Tucker said. "They are something of a PR leader in the market. If they can ... ride that wave into an early market-share position, that could be huge. They will be getting experience with real-world customers."
Indeed, they are: The firm's beta testers include Walmart, Coca-Cola, Google and eBay.
Image: AP/Paul Sakuma
See Also:
- Green Fuel-Cell Makeover for Future Power Plants
- This Video will Make You Understand Fuel Cells and Catalysts in 10
- Cheap Catalyst Could Turn Sunlight, Water Into Fuel
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