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Saving Cleantech: Bloom town Silicon Valley?

Just on the eve of the industry headliner San Francisco Cleantech Forum, Bloom Energy finally blooms?

Solid Oxide Fuel Cells (SOFC) like the Bloom Box have been under development for a couple of decades, and many of the major firms both in the US and abroad are still at it. The issues, questions and performance/cost/longevity triangle constraints are well known. So far Bloom Energy has answered none of them. Though we congratulate them on getting into what looks like significant first field trials. That puts them in small company with the maybe twenty or so other companies out of 1,000 plus who have tried. All of those handful took well over $100 mm plus to do it (though $400 mm is rather a lot of money, I must say, that’s taking one for the team). All of them took 5-10 years plus. At one point as an industry we were spending $1.5 Billion per year in annual R&D on fuel cells. Perhaps two companies, Fuel Cell Energy and Smart Fuel Cell, are arguably shipping commercial product today, with UTC, Plug Power and ClearEdge Power other possible contenders for “commercial”.

Of course, none of them have shown as little evidence of what progress has actually been achieved as Bloom. And while it’s a great list of customers, I’m not certain that eBay or Google are necessarily seasoned fuel cell buyers whose judgment I’d trust (especially after reading the rather suspect financial cost effectiveness analysis Google subjected their original solar PV pilot to).  Where’s the Department of Defense and Department of Energy who has bought and/or validated virtually every fuel cell in existence?  But view the quality of the information provided for yourself:

Bloom Energy;
http://www.cbsnews.com/video/watch/?id=6228923n

The major SOFC SECA players’ peer reviewed reports:
http://www.netl.doe.gov/publications/proceedings/09/seca/index.html#core

I’ve been asked numerous times this week what I think of the Bloom unveiling. My answer was simple, I’m excited at the promise, but since they haven’t actually shown anything yet, the skeptic in me says beware the devil who asks for the check before showing the details.

I have sent an inquiry to the “press” button on Bloom’s website. We shall see if I’m one of the privileged reporters who gets a call back. I won’t hold my breath. Because I’m just a blogger who once helped found a fuel cell company, right? Not exactly Lesley Stahl.

And I hope the $800,000 price quoted in this week’s media was for something larger than the 25kW unit the Kanellos reporting machine was crediting as the Bloom Box size last year. I imagine it must be. Somebody check me on my math, but that would be ugly. Perhaps it’s for a 100 kW size (one of the 400 kW total 4 unit installation Google reportedly has), which is a more manageable but still ugly $8,000/kW a bit better (as it should be) than ClearEdge’s 5 kW residential unit of 1/20th the size, or maybe it’s $800,000 for the full 400 kW and then would be close Fuel Cell Energy’s $2,000-$3,000 /kW larger MCFC units (for which they lose 30 cents on every dollar and have stated they need to double to c $150 mm in revenues before the gross margin will be positive)? Have to be careful here, the fuel cell /DG industry makes the solar and hybrid car industries look like choir boys when it comes to economic analysis statistics.

So on the technology itself, any one who has been around fuel cells for long, before answering any question like, “what do you think, is it exciting?”, would hope you’d get the basic questions people ask of all serious fuel cell technologies answered. Questions like these:

On the technology:

What’s the basic design of the cell and stack?

What are the cell/stack/system performance and efficiency curves?

How many cells/stack, stacks/unit, cell and stack size/performance?

How many of the current generation of cells, stacks, systems have they built and when?

What’s the production yield of the cells/stacks? Is it automated?

What’s the metal alloy they use?

How do they do the sealing?

How do they handle the metal to ceramic junction?

What’s the history of cracking?

What do the cell degradation curves look like (in the lab and the field)?

How many hours do they have on cell/stack/system/field trials?

How many thermal cycles?

What are the results of the 1,000 and 5,000 hour tests in the lab, and how do the field trials stack up against the lab results? How many of each is the sample size/distribution of results?

On the system:

What is the operating temperature, normal operating condition specs, fuel/air flow rates, electrical and thermal output?

What are charging, and what’s the installation cost? Is it turnkey?

How long to start up/cool down the system?

Are all the stacks in the field trials the same? Have any of them been replaced?

How does the system move the gas/air/exhaust? What’s the history with that BOP system?

What’s the actual system level field performance across the fleet in the field?

And how much of this is externally validated?

Then we’ll get to the real questions.  First, just the basics please.  The same questions I’ve personally asked executives at dozens of fuel cell companies over the years.

And then let’s hope this week’s launch is because the technology is actually ready, not because the company’s last round came in short and Kleiner Perkins has been after them to try and float it. Fuel cell companies have a long history of doing that, too.

Neal Dikeman is a partner at cleantech merchant bank Jane Capital Partners, LLC, and a long time entrepreneur in cleantech.  And yes, I did my time in fuel cells, too.