Bloom Energy is rapidly changing the game for distributed energy with its stationary fuel cells. The difference is remarkable from days when my employer back in the 1990s—the South Coast Air Quality Management District—installed one of the first fuel cells in California to supply its headquarters with power and hot water. That fuel cell relied on old technology that was expensive to build and operate, so it never really caught on. Consequently, fuel cell engineers and scientists dreamed of the day when a new type of low-cost solid oxide fuel cell would become commercially feasible. The old fuel cell we used at SCAQMD worked. It produced power and usable hot water. However, it wasn’t renewable. It was constructed of expensive and rare metals. It needed natural gas as a feedstock. It produced small amounts of hazardous waste. It was subject to chemical imbalances that could cause damage too. The solid oxide fuel cell changes all of that. It’s made of low-cost ceramic material. It produces little or no waste. It recycles water. Finally, Bloom has lined up supplies of biogas produced by landfills, agricultural operations, and other sources to feed into natural gas pipelines. The biogas offsets the use of pipeline gas by Bloom Boxes, effectively allowing them to operate on renewable fuel without greenhouse gas emissions. The combination is propelling the technology to the marketplace success that eluded fuel cell makers in the 1990s. Consequently, since 2008, Bloom has installed 200 of its 100 kW solid oxide fuel cells to generate onsite power for some of the biggest names in California, including Kaiser Permanente, Staples Office Supplies, Coca-Cola, and most recently the California Institute of Technology. Now the company is increasing its market share under a new power purchase agreement strategy that delivers its customers electricity at a cost that beats the price from the grid by as much as 20 percent, even in municipal utility territories. The new marketing strategy comes after the company first sold its fuel cells to customers who would own and operate them, explained Bloom chief executive officer KR Sridhar at the unveiling of its newest installation at Caltech Jan. 20. Those customers—who bought the company’s first hundred Bloom Boxes—calculated it would take three to five years to begin saving money. Taking a cue from the solar industry, the company began offering electricity service through power purchase agreements about a year ago in which institutions and corporations begin saving immediately. It’s doing so under financial arrangements with Credit Suisse and Silicon Valley Bank. This strategy is boosting production of the California-made Bloom Boxes, with the company already installing more than 200 units under long-term service agreements so far, according to Sridhar. At the California Institute of Technology, for instance, Bloom is in the middle of installing 20 of its fuel cells to supply 2 MW of power to the campus, which has a total load of about 30 MW, according to Ed Kutzler, Bloom customer installations director. About half the gas used by the boxes is being offset by biogas, he said. The university gets power from the units for less than its pays its local public power agency, Pasadena Department of Water & Power, which charges about 10 cents/kWh during peak periods. California Institute of Technology has entered a 10-year fixed contract for the power.
