Term Assignment

Management & Technology Innovation

BLOOM ENERGY®

(An Alternative Fuel Cell Energy Technology)

Under the Guidance of:

Dr. Piyush Verma (Assistant Professor , LMTSOM)

Submitted By: Submission Date : 6 January 2014

Pranav Sood 400907018

Amit Anand 400907031

Mehul Shukla 400907034

Rachit Sofet 400907036

LM Thapar School of Management

Thapar University, Patiala

2

Abstract

Our term assignment main objective is to bring out an innovative, successful & feasible

technology that aims to make world a better place to live in. The topic of our assignment is

Bloom Energy® . Not many of people have heard of this innovative initiative. Bloom

Energy® makes use of Fuel Cell Technology to create and deliver clean, affordable and

efficient electricity to users.

Use of Fuel Cells to generate electricity is not a breakthrough technology of recent years,

Since 1830, people have been aware and have tested it as an alternative source of power

generation. Not many success stories have come across as an promising alternative to

conventional sources of power. What Bloom Energy® excels in is its affordability, cheaper

raw materials & high efficiency.

The assignment has been divided into four portions namely Need for Alternative power

sources, Technology design, Success stories and Critical View point. The source of the

information and facts covered in this assignment are mainly from the Bloom Energy®

website. They have maintained a high level of secrecy about their work which is evident from

the fact that not enough resource material is available about Bloom Energy® on the internet.

For this assignment, we have searched all possible sources of information we could.

Our assignment team is in favour of this technology being a potent source of alternative

energy that could be powering our homes in near future right in our lawns.

3

Table of Contents Abstract ...................................................................................................................................... 2

Environmental Impact of Conventional Power sources(Thermal Power Plants) ...................... 4

Air Environment .................................................................................................................... 4

Water Environment ................................................................................................................ 4

Critical Issues to be addressed: .............................................................................................. 4

Renewable energy scenario........................................................................................................ 5

Bloom Energy® (The Technology) ........................................................................................... 7

Energy Server Architecture.................................................................................................... 8

Solid Oxide Fuel Cells ........................................................................................................... 9

How does Bloom Energy® Server Fuel Cell Work ? .......................................................... 10

Success Stories of Bloom Energy® ......................................................................................... 10

Bloom Energy Benefits ............................................................................................................ 14

Alternative Energy Incentives.................................................................................................. 14

Cost Analysis: .......................................................................................................................... 15

Bloom Box: .............................................................................................................................. 16

Bloom Box Purchase Price .................................................................................................. 16

Bloom Box Installation Cost ................................................................................................ 16

Natural Gas Fuel Cost .......................................................................................................... 16

Cost of Bloom Box Maintenance ......................................................................................... 17

Bloom Box Salvage Value ................................................................................................... 17

Challenges: ............................................................................................................................... 18

Criticism:.................................................................................................................................. 19

Conclusion: .............................................................................................................................. 20

References: ............................................................................................................................... 21

4

Environmental Impact of Conventional Power sources(Thermal

Power Plants)

Air Environment

Coal based thermal power plants affect the air quality of the surrounding region more than

natural plants. Around the coal based plants the ambient sulphur dioxide concentration,

Nitrous oxide conc were found out to be very high. From the epidemiological data of the

area surrounding the Ramagundam coal based plant, it has been observed that around 6.5% of

population living within a 2 km radius of the plant suffers from respiratory disorders, while

the figure decreases to 3.2% at a distance of 2.5 km and becomes negligible (0.91%) at over 5

km from the plant. Thus it can be inferred that people living within 5 km radius of coal based

power plant suffer from respiratory ailments.

Water Environment

The thermal power plants discharge their effluents usually untreated into the river

thereby making the water toxic.

In the case of hydroelectric plants water environment is affected due to the stagnation

of water in the reservoir. If the reservoir accumulates runoff from agricultural fields,

the water may contain high amounts of fertilizer and pesticide residues, which may

accumulate in the reservoir.

Critical Issues to be addressed:

Is there enough coal available first of all for all these Thermal Power Plants? One

hears of coal shortages and mines shutting down as they are below par in production.

Seven power plants will require large tracts of land in a district that is predominantly

agricultural as it is in the highly fertile Kaveri delta region, Doaba & Majha belt of

Punjab

Who benefits from the power generated? The locals? What do they get out of having

to breathe in polluted air and losing their fields and crops to ash and coal dust?

The cumulative impact of so many power plants in terms of ash production as well as

air pollution will be high and has not even been thought of.

5

Renewable energy scenario

In India the potential of renewable energy source is about 81.200 MW out of which only

5594 MW i.e. 6.9% has been harnessed so far. The potential and capacity harnessed so far is

given in Table 1 [1].

India’s need for power is growing at a prodigious rate, annual electricity generation and

consumption in India have both nearly doubled since 1990, and it’s projected 2.6% (low end)

to 4.5 % (high end). Annual rate of increase for electricity consumption (through 2020) is the

highest for any major country. India is currently the seventh greatest electricity consuming

country (accounting for about 3.5% of the world total annual electricity consumption) but

will soon overtake both Germany and Canada in that regard. India now faces an electricity

shortages conservatively estimated at 11% and as high as 18% during peak demand periods.

Many people still think that it will not be long before renewable energy such as solar and

wind becomes outright cheaper than fossil fuels, thereby leading to a rapid expansion of the

thin orange slither in the graph below.

6

So, what does renewable energy have to accomplish before it can compete with fossil fuels in

an open market? Well, in short, we will have to overcome the diffuse and intermittent nature

of renewable energy more efficiently than we can overcome the declining reserve qualities

and unrefined nature of fossil fuels.

In other words, we need to overcome the following two challenges in order to meet the ever

increasing demands:

Solar panels and wind turbines need to become cheaper than raw fossil fuels. This is the

challenge posed by the diffuse nature of renewable. Thus, if renewable are to challenge fossil

fuels in an open market, technology must advance.

7

Bloom Energy® (The Technology)

Bloom Energy® was founded in year 2001 at Sunnyvale, California by Dr. K.R Sridhar. It

traces its roots to work performed by Dr. K.R. Sridhar, Bloom founder and Chief Executive

Officer, in connection with creating a technology to convert Martian atmospheric gases to

oxygen for propulsion and life support. Dr. Sridhar and his team built a fuel cell capable of

producing air and fuel from electricity generated by a solar panel. In 2001, when their project

ended, the team decided to continue their research and start a company. Originally called Ion

America, Bloom Energy®, was founded with the mission to make clean, reliable energy

affordable for everyone on earth.

In 2002, John Doerr, and Kleiner Perkins became the first investors in the company. Kleiner

Perkins was legendary for its early backing of other industry changing companies, like

Google, Amazon.com, Netscape, and Genentech, but Bloom was its first clean tech

investment. In fact, at that time, clean tech was not even really a word.

With financing in place, the team packed three U-hauls and headed to NASA Ames Research

Center in Silicon Valley to set up shop. Over the next few years, the technology quickly

developed from concept, to prototype, to product, as the major technological challenges were

solved and the systems became more powerful, more efficient, more reliable, and more

economical.

Bloom Energy® is making clean, reliable energy affordable. By leveraging breakthrough

advances in materials science, Bloom Energy® systems are among the most efficient energy

generators, providing for significantly reduced operating costs and dramatically lower

greenhouse gas emissions. By generating power where it is consumed, Bloom Energy®

offers increased electrical reliability and improved energy security, providing a clear path to

energy independence.

Bloom Energy® developed what they call “Bloom Box™”. Its an Energy Server™ based on

their patented solid oxide fuel cell technology. “Bloom Box™” is a power generator

producing electricity at consumer site itself.

Now Fuel Cells are devices that convert fuel into electricity through a clean electro-chemical

process rather than dirty combustion. They are like batteries except that they always run.

8

Energy Server Architecture

At the heart of every Energy Server™ is Bloom's patented solid oxide fuel cell technology.

Each Energy Server consists of thousands of Bloom's fuel cells. Each cell is a flat solid

ceramic square made from a common sand-like "powder."

Each Bloom Energy® fuel cell is capable of producing about 25W... enough to power a light

bulb. For more power, the cells are sandwiched, along with metal interconnect plates into a

fuel cell "stack". A few stacks, together about the size of a loaf of bread, is enough to power

an average home.

In an Energy Server, multiple stacks are aggregated together into a "power module", and

then multiple power modules, along with a common fuel input and electrical output are

assembled as a complete system.

9

Solid Oxide Fuel Cells

Fuel cells were invented over a century ago and have been used in practically every NASA

mission since the 1960's, but until now, they have not gained widespread adoption because of

their inherently high costs.

Legacy fuel cell technologies like proton exchange membranes (PEMs), phosphoric acid fuel

cells (PAFCs), and molten carbonate fuel cells (MCFCs), have all required expensive

precious metals, corrosive acids, or hard to contain molten materials. Combined with

performance that has been only marginally better than alternatives, they have not been able to

deliver a strong enough economic value proposition to overcome the status quo.

Some makers of legacy fuel cell technologies have tried to overcome these limitations by

offering combined heat and power (CHP) schemes to take advantage of their wasted heat.

While CHP does improve the economic value proposition, it only really does so in

environments with exactly the right ratios of heat and power requirements on a 24/7/365

basis. Everywhere else the cost, complexity, and customization of CHP tends to outweigh the

benefits.

For decades, experts have agreed that solid oxide fuel cells (SOFCs) hold the greatest

potential of any fuel cell technology. With low cost ceramic materials, and extremely high

electrical efficiencies, SOFCs can deliver attractive economics without relying on CHP. But

until now, there were significant technical challenges inhibiting the commercialization of this

promising new technology. SOFCs operate at extremely high temperature (typically above

800°C). This high temperature gives them extremely high electrical efficiencies, and fuel

10

flexibility, both of which contribute to better economics, but it also creates engineering

challenges.

Bloom has solved these engineering challenges. With breakthroughs in materials science, and

revolutionary new design, Bloom's SOFC technology is a cost effective, all-electric solution.

Over a century in the making, fuel cells are finally clean, reliable, and most

importantly, affordable. Bloom Energy® makes use of a raw material in making of fuel cells

that is abundantly available across the globe. Beach Sand is available in plenty in oceans and

beaches. It contains an important ingredient called Zirconium Oxide. It has great chemical

properties that make it useful for electro-chemical power generation. It also reduces the cost

of making fuel cells to a great extent.

How does Bloom Energy® Server Fuel Cell Work ?

Every Fuel Cell is coated with special inks that are patented with Bloom Energy®

Technology. These inks act as a catalyst to electro-chemical reaction. Now a fuel cell requires

to inputs for the electro-chemical process. One is fuel (Natural Gas, Biogas, LPG and even

Solar Power) and other Oxygen derived from Air.

Fuel passes over Anode of the Fuel Cell and Air (oxygen) over the cathode. A solid Oxide

Fuel Cell is a high temperature Fuel Cell. Warmed Air enters cathode, now stem ions react

with fuel in fuel cell to convert fuel into reformed fuel. This reformed fuel crosses over anode

to attract oxygen ions from cathode .Reaction produces electricity plus steam and some

amount of carbon dioxide. Water is recycled to produce reformed fuel. Electricity generated

is then transmitted to the grid for use. A typical chemical reaction equation is as below -:

Ch4 +2O2 --> Co2 +2H2O + e- + Heat

Success Stories of Bloom Energy®

Bloom Energy® is dedicated to making clean, reliable energy affordable for everyone in the

world. We know that our customers are the cornerstone of that vision. Today, our Energy

Server™ technology is deployed by leading companies across a broad range of industry

segments. We help these customers lower their energy costs, reduce their carbon footprints,

improve their energy security, and showcase their commitment to a better future.

11

Some of their Clients include: Walmart, STAPLES, AT&T, eBay, Google, NOKIA,

HONDA, Bank of America, FedEx Express, Kellogg’s, CalTEch, Adobe & Apple.

Recently Bloom Energy® was in news for installing its first fuel cell outside of the U.S, in

Japan. Bloom Energy® has installed its fuel cell at a building in Fukuoka, owned by a

Japanese telecom giant Softbank.

Another milestone of Bloom Energy® has been that it has successfully installed Fuel Cells

generating 100MW of power enough to power about 36000 average American Homes. Some

of the success stories of their clientele have been explained below-:

Bloom Installation: San Francisco, California (400 KW), January

2012 & San Jose , California (1.2 MW).

Objective: Adobe expects to reduce its carbon footprint by

approximately 121.5 million pounds over 10 years.

Feedback: In October 2011, Adobe added a second Bloom Energy® site with a 400 kW fuel

cell installation at its downtown San Francisco offices. Along with 1.2 MW at its San Jose

headquarters, Adobe produces over 14,000 MWh of clean electricity annually running on

renewable biogas.

Adobe is a recognized leader for its green building efforts, having earned distinction as the

world's first corporation to achieve four Platinum certifications under the U.S. Green

Building Council's Leadership in Energy and Environmental Design LEED® program. The

Bloom fuel cell installations build on Adobe's prior renewable energy initiatives including 20

Windspire® wind turbines installed in 2009. Now, as a Bloom Energy® customer, Adobe

can efficiently generate 30% of its own electricity on site, further reducing the company's

carbon footprint, lowering energy costs and mitigating power outage risks

12

Bloom Installation: 500kW Installed in 2009 San Jose, CA

MW Installed in 2013Salt Lake City, Utah

Implementation: The first project consists of a 500kW installation, and Bloom Energy®

worked with eBay Inc. to source biogas for the project—making the project 100% renewable.

The Bloom Boxes are a nice complement to the company's LEED Gold-certified building at

its North campus in San Jose, CA.

In September of 2013, eBay Inc. opened its data center in Salk Lake City, Utah—the first in

the world to use Bloom fuel cells as primary, on-site power. The state of the art facility

incorporates 30 Bloom Energy® Servers, 6 MW, into the data center's energy architecture.

The electric utility grid will be used only as backup. By utilizing Bloom Energy® Servers—

which generate on-site power 24 hours a day, 365 days a year—eBay Inc. replaced large and

expensive backup generators and UPS components and will drastically reduce the carbon

footprint of its new facility.

Bloom Installation: 1MW, August 20

12, Torrence, CA

Why Bloom? : Bloom Energy® Servers provide a number of environmental and economic

benefits compared to traditional grid power for Honda. For each MWh of energy the fuel cell

system generates, CO2 emissions will be cut by 18-25%. Over a project life of ten years, the

servers will reduce Honda's carbon dioxide emissions by approximately 16 million pounds.

Fuel cells convert fuel into electricity through an electrochemical process that is much more

efficient than combustion. Bloom's technology delivers water savings as it requires no water

beyond an injection of 240 gallons at start-up. Compared to the average water demands of

California power plants, it is estimated that Honda will save more than 3.25 million gallons

of equivalent water used per year.

Implementation: The Bloom system at Honda's Torrance location consists of five Bloom

Energy® Servers, each producing 200 kilowatts of power, and will provide 25% of Honda's

electricity needs for its 1.13 million square feet of office space, research, design and

development operations, and parts distribution center on the 101-acre campus.

13

Bloom Installation: 300 KW, December 2008, Ontario,

CA

Why Bloom?

Early projects with solar and wind were promising and remain in the Staples portfolio, but its

search continued for a consistently reliable solution that could operate 24/7 like its business

operations and significantly add to carbon reduction volumes. That led the company to

Bloom Energy®. Bloom offered a unique fuel cell technology that Staples identified as a

clear departure from the highly priced legacy fuel cells

Implementation: Staples first 300 kW installation was at their Ontario, California

Distribution Center. In the first year alone, the project generated over 2 million kilowatt-

hours of affordable power that resulted in a reduction of 2.5 million pounds of carbon

dioxide. Availability has been above 99%, and Staples is now considering ways that Bloom

can play a bigger part in providing power to their large facilities and distribution centers.

Bloom Installation: 35 Projects in CA ,Total

11.4MW

Objective-: Walmart seeks an energy solution that will help them achieve their renewable

energy targets while contributing to lower costs and providing the potential to supply

continuous power to stores, even during critical grid outages.

Implementation: Walmart installed its first Bloom Energy® Server at its Lancaster, CA

store in 2009 and today has more than 30 Bloom installations at stores and distribution

centers in California. Most of Walmart's Bloom Energy® ® servers are powered by biogas,

resulting in even greater carbon reductions. The electricity provided by Bloom Energy® ®

servers varies by location but can provide up to 60-75% of the facilities' electrical load.

14

Bloom Energy Benefits

In summary the benefits of Bloom Energy® can be summarised as below -:

Lower Cost Energy Source: Our technology offers customers the opportunity to

produce their own electricity for less than they pay today. We accomplish this by

using widely available, inexpensive materials, leveraging proven manufacturing

techniques, and delivering an extremely efficient system nearly twice as efficient as

conventional technologies.

Fuel Flexibility: Bloom Energy® systems are capable of running on a wide variety of

renewable and fossil fuels. This allows customers to choose the best fuel for their

individual costs, availability, and sustainability needs.

Sustainable: By using fossil fuels more efficiently, without combustion, and by

supporting renewable fuels like biogas, our systems produce far fewer emissions than

legacy technologies, thereby providing a sustainable future.

Increased Reliability and Scalability: Bloom Energy® are built around a modular

architecture of simple repeating elements. This architecture delivers a solution that is

extremely reliable and easy to scale. Our technology is able to generate power

24/7/365.

Simple Installation & Maintenance: Bloom Energy® system is ‘plug and play’. It is

designed to easily fit into existing facility infrastructure and requires no end-user

maintenance. Bloom Energy® handles all management and maintenance of the

systems.

Alternative Energy Incentives

Apart from all the ongoing R&D activities to make fuel cells more affordable, the federal

government is also providing tax incentives for fuel cell power plants and to users of these

fuel cell systems.

The Energy Policy Act of 2005 allows the fuel cell power plants to claim tax benefits from

the Federal government. In order to qualify for these tax breaks, the power plants should have

a fuel cell stack assembly to generate electricity using electro-chemical reactions.

Additionally they should have an efficiency of 30% or greater. A number of states are also

providing financial incentives to support fuel cell installation facilities. Fuel cell power

15

consumers are also able avail 1.5 cents per kWh credit for the first 5 years since they started

using this service. Although the above tax and financial incentives do not reduce the cost of

the manufacturing and generating power using fuel cells, they do lower the operating costs

for both the supplier and the electricity users. Indian government also provides incentives to

such efficient energy systems

Cost Analysis:

It is based on current market values for the price of electricity, solar panels, and natural gas.

The Bloom Energy fuel cell is not yet ready for market on the residential level, never the less

cost analysis is formulated including the Bloom Box to show what the cost comparison would

be if it hit the market now on that level. For future release dates, the analysis can be rerun

using future values, simply by updating the inputs.

Reports showed that an average monthly use of electricity for a typical US residential user is

approximately 920 kWh. Estimates for the size of solar panel(s) and fuel cell are based on

this average value. Furthermore, in purchasing electricity from the electric company, we have

based the average monthly cost on this amount as well. It is found that most costs are

estimated based on the size of the equipment, so the total cost would scale linearly with an

increase or decrease of total energy requirements.

16

Bloom Box:

Bloom Box Purchase Price

The purchase price for the Bloom Box fuel cell comes from the design goal that Bloom

Energy has specified for its residential unit. They have set the goal to sell an average

residential fuel cell for $3000. This is the baseline value for our cost comparison. It is

calculated using the federal tax credit of 30%, which reduces this input to $2100. This credit

would be available for purchasing a Bloom Box, and it is a direct saving for customers.

Bloom Box Installation Cost

Although Bloom Energy claims that the Bloom Box is different from other fuel cells in that it

has higher efficiency and a lower purchase price, the technology used to transmit electricity

from the Bloom fuel cell to the building is essentially the same. Therefore, the work required

to install a Bloom Box is expected to be comparable to the installation for other fuel cells,

especially solid oxide fuel cells. From literature review, a comparable fuel cell with a

purchase price of $2850 cost $770 to install. As a fraction of purchase price, the installation is

27% of the purchase price. We use that fraction to estimate our installation cost of $810 or

27% of our $3000 purchase price.

Natural Gas Fuel Cost

The current commercial Bloom Box uses 0.661 MMBtu/hr of natural gas to generate 100 kW

of electricity. The amount of natural gas used by a residential unit will scale linearly with the

size of the unit and amount of electricity generated, so it is estimated that the amount of

natural gas required by scaling linearly from the 100 kW usage. The monthly electricity use

estimate is 920 kWh, based on average household electricity use. Since fuel cells can

generate electricity continuously and store electricity, it is assumed that the fuel cell will run

for 24 hours a day. Based on the average monthly electricity demand and a fulltime

generation schedule, 1.26 kW are needed for an average residential Bloom Box.

17

For a residential Bloom Box, 6.08 MMBtu of natural gas are required monthly. The current

price of natural gas is $10.63 per MMBtu, so the estimated annual cost of natural gas to run

the Bloom Box is $775.

Cost of Bloom Box Maintenance

In our literature review, we found that the expected maintenance costs for fuel cell can be

estimated based on amount of electricity generated. The value quoted is approximately 2.4

cents per kWh, so the monthly maintenance cost in our analysis is expected to be around $22.

This gives an annual maintenance cost of $264.

Bloom Box Salvage Value

Well maintained fuel cells can last for more than ten years, so there is a salvage value for the

Bloom Box. We are assuming, in our maintenance calculations, that preventative

maintenance is used to keep the fuel cell running optimally and that the Bloom Box is

designed to last for 20 years. Since we are assuming the fuel cell will provide a constant

amount of electricity throughout its lifetime and it will not actually be sold at the end of 10

years, it is most representative to spread its value out evenly over the 20 year lifetime. This is

best described using Straight line depreciation. Using this depreciation method and the initial

purchase price of $3000, the salvage value at the end of 10 year analysis period is $1500.

18

Cost Components Summary

Challenges:

Break down

Over time, as the fuel and oxygen are constantly being pumped in and run over the

catalyst in the stacks, the chemicals start to degrade and the system starts to wear down.

Fuel cells are similar to a battery in their degrading process, and fuel cell stacks, like a

battery, have an anode and cathode portions. Fuel cells also run at high temperatures,

19

which is another reason these systems degrade quickly. The short life span of the hot box

is a key problem for the capital costs of fuel cell makers.

Cost

Many engineers are still working on ways to reduce the costs associated with the adoption

of bloom energy.

Providing dynamic fuel cells

Criticism:

The cogen process involves natural gas to power an engine coupled to an electrical generator

to supply some or all of the facility’s power while capturing the thermal energy from the

engine and using it to preheat the facility's hot water boiler. This reduces natural gas

consumed in the facility’s boiler and reduces operating cost and CO2 emissions.

The cogen process results in overall thermal efficiencies of over 80 percent; most utility

power plants are around 35 percent efficient, according to the author. The cost of cogen

systems is estimated to be $3,000 per installed kilowatt versus Bloom at more than $8,000

before subsidies.

20

Conclusion:

Our team is of Viewpoint that given the current scenario of power sector in India, Bloom

Energy proves to be an attractive alternative. Many states of India are still heavily dependent

upon the Conventional Power generation sources to meet their demands. For the power sector

to keep up the pace with growing economy and growing energy demands , alternative sources

of energy must play a significant role in power generation in near future. Similar to the lines

of USA & some of the European countries, India should also heavily promote use and

installation of alternative power generation sources like Bloom Energy.

Though the technology is still in its growth stage with low overall technology maturity, future

seems to be bright with initiatives being taken by the Bloom Energy. States like Punjab who

have initiated and commissioned a stream of Thermal Power Projects, Bloom Energy seems

to be a viable alternative.

21

References:

1) Bloom Energy Website (www.bloomenergy.com)

2) Forbes Magazine (www.forbes.com)

3) National Environmental Engineering Research Institute Research paper by