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Bloom Energy Could Change the World
Tonight, I need to bring a somewhat untraditional Mapawatt post to the site. It’s not a “how-to” on residential energy efficiency but I think you will see that what is about to be announced next week could change the way you think about and use energy in the very near future. Please bare with me as I set the stage for this potentially ground-breaking technology announcement.
A couple of years ago, I read an interview with John Doerr, a dot-com investor from the nineties that I have always respected for his knowledge and insight into technology investing. He mentioned that he had put a large stake in a Silicon Valley clean energy startup that he believes could “revolutionize the energy industry.” At the time, I assumed it was some type of battery technology but there wasn’t any information on the internet about who this company was and what they were building.
About a year ago, I heard rumblings that Doerr’s investment was in the hundreds of millions of dollars. This peaked my interest. Why would he invest hundreds of millions of dollars in an idea when he made much smaller investments that started companies like Amazon and Google?
He had to be on to something really big.
In 2008, Doerr said this about the energy industry, “The energy market is $6 trillion. I like to say it’s the mother of all markets. Compared to the Internet, which is a big deal, this is much bigger, much more exciting. But the challenge is much larger. Going green–solving that problem will be largest transformation on the planet.”
Most venture capitalists only invest big money in startups when they see a “ten bagger in five years.” This is referring to a ten-fold return on the initial investment in a five-year term. Could Doerr be on to something that could return $4 billion dollars on his $400 million investment? Could it be more since Sridar, the CEO of the startup, told Doerr that it would take ten years to build the company?
Let’s take a look at what Doerr invested in and whether his almost half-billion dollar investment will pay off
The Bloom Box. What is it?
In order to understand the Bloom Box, you need to understand more about the man behind the technology: K.R. Sridhar. While working as the director of the Space Technologies Laboratory at the University of Arizona, the Indian-born co-founder of Bloom Energy, was asked by NASA to come up with a way to make life sustainable on Mars. The result of his initial project was a device that would use solar energy and Martian water to power a reactor that generated oxygen to breathe and hydrogen to power machinery and vehicles.
After reflecting on his research, he realized that by reversing the reaction (i.e. feeding oxygen and hydrogen back into the reactor to generate electricity) he could change the way people generated and consumed energy. Our understanding today is that this reversed reaction is at the heart of the Bloom Box that Sridhar will unveil next week.
Sridhar’s invention appears to provide a way to capture and store energy from any source: clean or fossil-based. One of the biggest challenges for the renewable energy industry is storing power when the energy source isn’t available. For wind power, it’s for when the wind stops blowing; for solar energy, it’s for when it’s cloudy or the Sun goes down at night. The Bloom Box uses energy when it’s available to store it as hydrogen and oxygen. When the energy source is no longer available, the Bloom Box reverses and starts generating electricity from the hydrogen and oxygen.
Update – 2/21/10 – After watching the piece on the Bloom Box on 60 minutes we have a little more insight into the company. When asked what will power the Bloom Box Sridhar basically said natural or renewable gas (as in landfill gas). When asked about solar, he nodded his head, but didn’t really elaborate. The 60 minute post also focused solely on the power generation capabilities of the Bloom Box, and not energy storage. This leads me to believe that the current version of the Bloom Box is only meant to generate power and not store. Greentech Media’s article on Bloom Energy talks a little about whether a reverse reaction will occur and is a good read. Another key point to mention is that the Bloom Box is still going to use some form of gas, and this is usually going to be natural gas. While it will be much more efficient than the current grid, there are still two issues by using natural gas in the fuel cell that you don’t face with traditional renewable energy (wind and solar):
- It is still a fossil fuel which means there is a limited supply
- Natural gas is subject to price fluctuations just like the price of oil is
What is Different about Bloom Energy?
One of the most interesting facts about Bloom is how secretive the company has been about what they are building. Typically, companies that are trying to raise money or capitalize on hype, leak out details about their technology hoping to drive buzz in the Venture Capitalist community. Bloom hasn’t done this.
Sridhar went to Doerr in 2002, pitched his technology, got funding and has been secretive ever since. He has been busy at work building the technology and he says he is also building a new industry for power storage and generation. According to Vinod Khosla, Sun Computer founder and venture capitalist, Bloom has used some of their funding to build a massive facility in Mumbai, India to produce the Bloom Box. They have already produced and installed their devices at some of the largest companies in the world including Google, Walmart and Fedex. According to Sridhar, they are only coming out and announcing their technology now because of pressure from these companies to announce the results of their tests.
What are the Challenges of the Bloom Box?
Sridhar claims to have found an affordable way to manufacture his technology. Traditional fuel cells require the use of rare-earth metals such as platinum or palladium for the catalyst that helps drive the reaction. In order to make his system affordable and prolific, he must come up with a new type of catalyst that is abundant and affordable.
If Sridhar has found the “holy grail” of energy storage and generation, how will he keep it from being duplicated by anyone and every one in the world? Hopefully, Bloom has patents on the technology. I have to believe that Doerr would not have made such a large investment in the company if he didn’t believe they would be able to capitalize on the technology at least for a long enough period of time to make his investment worthwhile.
In a Nutshell?
I am optimistic. There appears to be a great mind behind the technology and it has been peer-reviewed by great minds in the technology investment industry. Not only was this peer-review positive, one of the greatest technology investors has backed up his review with a gargantuan investment of funds and resources.
Let’s all hope that it’s not too good to be true.
See our post on the unveiling of the Bloom Box to learn more!
Related posts:
What differentiates Bloom Box from all the other energy cells that companies are building and/or selling? Other than the hype, that is?
According to Sridhar, the current Bloom Box powers 100 homes. At 1 kW per home, that’s 100 kW. He also says it costs $700,000 – $800,00. That’s $7 – $8 a watt. Photovoltaic arrays are now selling for $5 a watt retail.
He also says there won’t be a house-sized Bloom Box for 5 to 10 more years. This is a breakthrough?
I smell an IPO. The VCs want to cash out. Turn on the hype machine.
What am I missing?
David
http://energymetricsne.com
energy.shadypixel.com
David,
I think you have a valid point, but I think we’ll have to wait and see what they have in store. See my updated post on the Bloom Box, they’re predicting a residential product in 5-10 years that would cost around $3k. That sounds a little optimistic to me, but we’ll just have to wait and see!
Chris and David,
When you have a name like Doerr backing something like this, there has to be potential. When AOL first came out it costed a ton just to im back and forth. Now the internet and websites are thought of as a standard of living. I think the reason its been so secretive is because it was so obvious that companies like GE could make them right away and because that bloom is still small that once they start building factories and making money from these large companies like google, ebay, walmart, etc. that the price range is not only a reality but it will change the way the world sees it’s standard of living.
I’m with you Kevin. I think there may be a chance that Sridhar has stumbled onto something novel and easy to copy. If so, they’ll need to focus on large commercial installations at first to get their invesment back times ten or a hundred before others start copying it.
If you saw the CBS/60 Minutes segment, eBay has solar and Bloomboxes. The small footprint Bloomboxes are putting out more then the 5 acres of solar cell arrays on their campus roofs.
As with any start up ‘invention’, the cost is high but will drop as demand and production ramps. They already are using sensible materials and not hyper expensive esoteric metals,etc. so he thought a home unit could be around $3,000. (which some enterprising electic co-op will probably sell and install for ten times that… )
I can see somebody like GE taking this on or outright buying the company and doing neighborhood and home installs and making a killing… AND not having to mess with substations, transmission lines, etc. (or weather outages due to trees falling on lines or ice or… mucho cost savings every year.) Plus some ‘add on’ charges for ‘annual upkeep’ — changing out the air filter and poking at a wire which would justify the $20 per home per month fee they would take ‘just because we can’.
Home units make sense instead of monster power units … which, when they fail… leave anything from a city block to an entire state without power. Add in wind and solar on the roofs and you have a trifecta of power means to keep any home happy…. and plenty of work & fees to collect.
Agreed. This has the potential to bring the diversified grid to fruition quickly. I read a military report on the importance of a diversified grid to our national security. This appears to be a huge leap in that direction.
I’m anxious to hear what they reveal at the announcement Wednesday. I’ve found bits and pieces of information that was leaked over the past two years from reliable sources but can’t wait to hear what they reveal over the next few weeks.
can not wait to see “Who Killed the Bloom Box?
any news about producing clean and cost effective is a welcoming news. PC used to cost 10000. Now they are practically given away. if we have to wait 10 years for cheaper cleaner solution we can wait as long as it is on its way..
lol! I hope not! I think there are a few utility executives that probably looked like “a deer in the headlights” if they were watching that 60 minutes interview. Maybe more like “Who Killed the Centralized, Coal-fired Power Plant”
I will line up to test residential units in near term in Colorado Springs
I’ll be right behind you on the list.
Here are some takeaways I have from the 60 minutes interview:
1. It appears to be using some type of solid oxide fuel cell: http://en.wikipedia.org/wiki/Solid_oxide_fuel_cell
2. Have they overcome the high temperature requirements for the sofc reaction to occur?
3. How efficient is the use of fuel vs. energy output? If there isn’t combustion, will it by nature be more efficient?
4. What inexpensive alloy are they using for the catalyst? We know that sofc reactions don’t require exotic metals for a catalyst but traditionally require temperatures of around 1000*C.
5. They are using natural gas and biogas as fuel but Sridhar nodded when Leslie mentioned using solar. We’ll have to wait and see what he means by this.
6. Should I get a loan and buy one of these for my home? I could sell power to my neighbors to recoup the cost…
Apparently the current units are 400 to 500 kW so it’s more like $2.00 a watt. They are are different from hydrogen fuel cells because they use a relatively inexpensive ceramic material rather than a platinum or palladium catalyst. Still that 5 kW residential unit for $3000 within 10 years sounds more like hype than reality.
I’m still wondering about the temperature requirements. If this is a solid oxide fuel cell, you can avoid the expensive catalyst but have to achieve temperatures close to 100*C to get the sofc reaction. (traditionally) I’m hoping Sridhar has figured out a way to get the reaction at low temperatures. Maybe it has something to do with the silicon wafer doped with the two types of ink as the oxide electrolyte? If all of these materials are novel and the reaction occurs at low temperature, the $3k price tag for a residential system could be more realistic. We’ll have to wait and see what is revealed over time.
I will say that I’m also a little skeptic about the $3,000 units in 5 years, but 10 years may be doable. I still wonder how enthusiastic homeowners will be to spend capital on a unit that they are still going to need to buy fuel for each month? Although if tax incentives work out and the fuel costs are lower than the grid electricity cost I guess it will make sense!
a company that has been around for a while is Fuel Cell Energy, they are out of CT, the company has not made money but caught attention in the late 1990 and early 2000′s as a promise to energy consumption, they have been installing DFC in South Korea and especially Ca, Disclosure I am an investor in FCEL, I think the awareness of Fuel Cells and the patented technology they have will be valuable—
I am curious as to what type of techs will be needed to service these devices if the idea takes off?
Does anyone have any idea?
Seems like it would be great to work with a start up company such as this one, not to mention good wages!
It is not clear what happens to the carbon element in the process. where does it go? comes out as coal? will it not clog the system?
This is not a zero emission technology when paired with anything other than hydrogen as a fuel. It is misleading for them to say so, as the typical installation will likely be connected to natural gas – which is also a non-renewable resource.
The use of hydrogen as a fuel source produces no emissions, as it will only create oxygen and water from the reaction. Can someone tell me how natural gas in a fuel cell is emission free? Natural gas is mostly CH4 (methane) – So you’d have carbon, oxygen, & hydrogen combining in the fuel cell – this would lead to some sort of emission involving carbon and oxygen – carbon dioxide or monoxide I would assume.
While it will be a much lower emission per unit of energy, it still emits carbon and runs on a nonrenewable resource. So, I am hopeful but hesitant – I want more information and it is suspect that there is not much information on this “holy grail.” The hopeful part is the claim that it can run on the renewable and non-renewable fuels interchangeably. Of course, we’ll still need to figure out a renewable way to produce/distribute hydrogen in the long run…
Wait ! Natural Gas is a NON-RENEWABLE RESOURCE ? I’d like to know what oil company you have stock in. Oil and natural gas are by their nature renewable because they are both products of subduction and plate techtonics. Talk to a geologist. Inform yourself through education.
Peak Oil !? There is no peak Natural gas OR oil, my friend, unless you’ve
been paid to tell that lie.
Actually for all intensive purposes it can be considered non-renewable due to consumption vs time of production. Granted it is constantly being made but once we have exhausted all the “ready” supplies few of us are willing to wait around the several million years for a usable stockpile to be produced. Hence why oil sands that were once not really considered profitable are being seen as another source for crude oil now. Likewise, subduction and plate tectonics have nothing to do with the creation of hydrocarbons as they are created by pressure and heated caused by sedimentary processes. Furthermore, any hydrocarbons contained in a plate will be burned as it is forced back into the mantel beyond the subduction zone anyway. Now there are CH4 reclamation systems being used at landfills but I do not see that being a viable source once the current natural gas supply is exhausted. There is a new promising technology that will make algae profitable as a bio-fuel (if memory serves me the estimates are 3 – 4k per acre production vs 300 gal production of corn, I may be wrong though) however I feel that this will only be a patch as it still does not address emissions, but back to my point, no petroleum and natural gas are not renewable. ~ From a geologist.
Yes Mike, Natural Gas (the fossil fuel) is a Non-Renewable Resource and do you know why it is considered a non-renewable resource? It is because it takes hundreds of millions of years for it to be renewed. Are you going to be around to harvest the next batch? How about your children or your children’s, children’s, children’s children…you get the point. The natural gas we are currently burning likely came from the Devonian period of around 300 million years ago. Theoretically, natural gas may form in as little as 50 million years but since humans haven’t even been been around for a measly 1 million years…it is considered non-renewable. Now there is also natural gas in the form of methane which is produced naturally from decomposing landfill matter, human and animal feces, as well as cows belching. Perhaps you could get a jar and catch cow burps all day and call it renewable. So Mike, which form were you referring to in your attempt to belittle everyone here with you sarcastic charm?
I wonder why nobody commented the possible use of the BloomBox in ELECTRIC CARS.
They would allow viable electric cars very quickly, since it addresses the critical issue of energy storage.
A 10 kW BloomBox plus a small battery (2-10 kWh probably) could power, say, an eVolt at a much smaller cost than the expected $30k+ price tag, replacing the heavier & less efficient internal combustion engine for good. At last.
* R.I.P. *
In the 60Min video Sridar hints that the BloomBox generates electricity at twice the efficiency of present technology. I suppose this means the Bloombox would be 50-60% efficient (a quite reasonable expectation). Couple that to a 90% efficient electric auto drive, you’d get 45-55% efficient cars – a 3 to 4x improvement over regular cars.
Rubin, I have a few questions about the ability of Bloom Box to work in Electric cars. Right now I’m guessing is operates on natural gas from the pipeline. To use it in the car you would have to have a pressurized natural gas (methane) tank and I dont know if this would change the dynamics of how the fuel cell operates. I also wonder how small of a package the fuel cell could fit in. There are many challenges from taking an object that is meant to be standing still on the ground to putting it in a vehicle that can go over all kinds of terrain at all kinds of speeds.
Chris, I live in Rio de Janeiro; here, as well as in Argentina and many other places, taxis run on CNG (Compressed Natural Gas) – methane – so, there are no issues regarding storage and distribution of CNG. As for the BloomBox, still don’t know their “secret” – they probably devoloped a novel catalyst to ‘reform’ the methane into pure hydrogen. Yes, fuel cells can only operate on pure H2, thus methane (CH4) must be broken into CO2 and H2 before the fuel cell core can come into action.
The BloomBox seem too large for a car, of course, but remember that size holds a generator capable of supporting a whole building. From the 60Min movie, 5 boxes are enough for a huge campus like Google’s or Ebay.
So, a suitable BloomBox for a car should be proportionally smaller, probably a little larger than a domestic box – 5KW is ok for most homes, but a car may need at least 20kw continuous, with the additional help of some battery for instantaneous overloads such as accelerating.
That small cube seems to be just the very heart of the whole box… who knows what else there is inside the large cabinet (even to justify the $700k price tag!).
As for the box being able to operate with methane, no problem, since they made sure it works with BIOGAS, a much dirtier fuel, since it contains a lot of CO2 and other contaminants from the biodigesting process. If it can deal with this, natural gas – mostly pure methane – is a piece of cake.
If Bloom Box work well? This maybe New Energy Revolution for America’s, and the World in future.Hope for the best.
Does anyone have a schematic for the bloom box?
Has anyone seen the 60 minutes piece?
Bull-Chip, I linked to the 60 minute piece here: http://blog.mapawatt.com/2010/02/21/bloom-box-an-unveiling-of-the-fuel-cell-future/
Thanks !
Good one