Posts

Generating Innovation

The energy sector is pretty well-known for being resistant to change, risk-averse, conservative.  One segment of the energy technology landscape that especially favors “tried-and-true” over “new-and-better” involves on-site generators, typically for standby or emergency purposes.

Scanning the most recent issue of Powerline — the periodical published by the on-site generator industry’s trade group, the Electrical Generating Systems Association — it looks pretty similar to the issues of the late 1990’s that I used to read regularly.  Indeed, I suspect that it looks like issues from when I was in school in the 1970’s, or even earlier. 

Dominated by industrial titans Caterpillar (NYSE:  CAT), Cummins (NYSE: CMI) and Kohler, the most important competitive factors in the generator marketplace are lowest first price, reliability, and service quality.  After all, the primary reason these products are bought is that they have to work on the rare occasions when they are called upon. 

Accordingly, the sector is biased towards incrementally improving upon the past, as opposed to seeking dramatic innovations.  As a result, most generators still employ diesel engines that, while substantially improved and evolved significantly, clearly show their lineage back to the mid-20th-Century.

Other considerations such as maintenance costs, fuel efficiency, emissions and noise can come into play, they are of secondary concern to most buyers of generators, who accept their limitations and disadvantages as long as they are cheap and dependable.

The other considerations listed above are stronger forces for change, and so it is not surprising that innovation in the generation sector is most often driven by those who pursue the niches that are too small for the big guys to care much about.

One such niche for has been the entertainment industry.  When shooting a movie in a remote location, electrical generating capacity often has to be brought along.  But, the on-site generators can’t be very noisy or smoky without compromising the filming (not to mention upsetting the sensibilities of the talent).

Founded in 1973 in the L.A. Basin, Multiquip has long sought to serve the generation needs of the entertainment industry.  This is not to say that the industrial titans of the Midwest (Caterpillar of Illinois, Cummins of Indiana, Kohler of Wisconsin) aren’t good companies or don’t make good products.  However, they probably didn’t fully appreciate the specific needs of customers in the entertainment business, or didn’t think the market was big enough to justify customized solutions.

Multiquip has long prided itself on extremely quiet on-site generator systems, and thus has spent a lot of time innovating on noise attenuation, insulation and exhaust technologies.  But, you can only put so much lipstick on a pig:  a diesel engine is still a pretty loud technology.

What’s much quieter?  Well, clearly solar is.  However, filming locations need megawatts of power, which would entail a massive array of solar panels.  Moreover, a lot of filming occurs at night, for which solar isn’t particularly well-suited.  (Duh.)  So, solar isn’t a great answer for the quiet on-site power generation needs of the entertainment business.

However, fuel cells might be:  Multiquip recently announced a prototype generator employing fuel cells.  This is an outgrowth of Multiquip’s efforts over the past few years to develop portable light towers operating off of fuel cells.

As those who’ve followed energy technologies for awhile know too well, fuel cells have long been seeking good entry points to penetrate the energy sector, in small bites.  Having an economic disadvantage (at least at present state of maturity), fuel cells need to seize upon the benefits that they can uniquely offer. 

One of the main advantages of fuel cells is their virtually silent operation, not to mention their low emissions profile.  As a result, after having established as solid role in the space market, fuel cell developers have been seeking to target their technologies for military applications. 

Now, it appears that fuel cells may be going Hollywood.

It’s A Nano World

For the uninitiated, “nanotechnology” refers to the science of the very small, engineering particles and their corresponding materials at the nanometer scale.  For a sense of perspective, at one-billionth of a meter, a nanometer is about 1/60,000 of the width of a human hair, so we’re talking engineering not just at the microscopic scale, but the electron-microscopic scale.

Why bother?  Because researchers from across a number of disciplines have discovered that engineering particles at such minute scale can change the fundamental performance characteristics of the material.  You want a material that captures a certain wavelength of light, or transmits a certain frequency of energy?  You just might be able to obtain it by tweaking currently available materials at the nanoscale, to change the “morphology” (think texture) of the particles so that they behave in the desired way.

The nano-world is sometimes mind-bending.  For instance, with enough wrinkles, folds or pockets, a particle with the volume of a grain of sand can have a surface area much greater than that of a basketball.  When you’re able to play topological tricks like this, amazing performance improvements in even the most basic stuff can be achieved.

As this capability has been increasingly revealed in the past decade or so, more and more acadmic research and an increasing number of companies are investigating how nano-engineering can improve the performance of all sorts of things.  This is especially true for the cleantech arena. 

Product innovation ranges across the map:  nanomaterials optimized for increased performance of membranes for fuel cells and cathodes for batteries, enhanced thermal insulation for building materials, higher capacity of contaminant capture from water, and on and on and on.

At few weeks ago, as the investment banking firm Livingston Securities convened their 7th Annual Nanotechnology Conference in New York City, Crystal Research Associates released a new report, entitled “Nanotechnology and the Built Environment:  The Transition to Green Infrastructure”.  This document profiles some of the seemingly-mature industrial sectors that are being transformed by nanotechnology, including some of the biggest corporations in the world such as GE (NYSE: GE), BASF (Deutsche:  BAS), Siemens (NYSE:  SIE) and Honeywell (NYSE:  HON) working on some of the smallest scales imaginable.

The report covers many of the sectors you’d expect to be revolutionized by materials enhancements, such as photovoltaics and lighting, but also touches on a couple of real surprises.  For instance, consider NanoSteel – a company that is commercializing metallic coating technology developed at the Idaho National Laboratory to improve the performance of structural metals under challenging environmental conditions, such as high temperature or corrosion.

In addition to NanoSteel, other presenters at Livingston’s nanotech conference that particularly piqued my personal interest included Siluria (developing an approach to convert methane into ethylene, thereby reducing the requirement for petroleum to make plastics) and QM Power (offering a new basic design of motors and generators promising higher-efficiencies).

It’s always interesting to go to events such as this to get exposed to companies working under the radar screen that are aiming to achieve fascinating innovations, sometimes in the most mundane or obscure areas.  Even if not all these companies will ultimately be successful, either in serving customer needs or in generating good returns to investors, it’s heartening to note the degree and scope of creative disruption that continues to seethe in our world of incredible challenges, turbulence and pessimism/cynicism. 

Many players thinking big about the future are moving small, as small as possible.

Who Sells Fuel Cells By The Three Score?

First, let me say that I like fuel cells a lot.  I spent a considerable amount of time following the space in the early 2000’s.  Many colleagues I know and respect are involved in the fuel cell arena.  It’s an electricity generation technology that is uncommonly elegant and promising.

But “promising” is one of the most maddening words to those of us with commercial urgency.  “Promising” is nice, but “successful” is much better.  And, success in the marketplace is dictated by overall cost-effectiveness to a customer:  reliability, performance, maintenance, usability, flexibility, and — most importantly — price.

For certain niches, fuel cells offer distinctive advantages that lead to economic superiority over alternatives.  The problem for the fuel cell industry has been that, to date, these niches generally have been very small, with correspondingly low volumes.  Thus, most fuel cell companies do not generate sizable revenues, and since the cost of fuel cell development programs is typically very high, most fuel cell companies remain unprofitable.

This phenomenon is profiled well in “Year-End Reflections on the Fuel Cell Industry in 2010″, written a few months ago by Eric Wesoff on Greentech Media.  On the whole, it’s not a pretty picture.  As a result, the fuel cell sector — the subject of significant buzz in the early 2000’s in the wake of lucrative IPOs — is now somewhat on the ropes in a defensive posture. 

At last month’s Ohio Fuel Cell Symposium convened annually by the Ohio Fuel Cell Coalition, Ruth Cox of the Fuel Cell and Hydrogen Energy Association noted that Federal funding of fuel cell R&D programs is under attack.  In the wake of this, Senators Sherrod Brown (D-OH) and Lindsay Graham (R-SC) — South Carolina being another state with considerable fuel cell activity — sent a letter to Energy Secretary Steven Chu urging the Department of Energy to maintain support for fuel cell development efforts.

At the recent Michigan Growth Capital Symposium, Reidar Langmo of the cleantech venture capital firm Novus Energy Partners explicitly identified fuel cell technologies as off-limits for investment consideration.  After funding a number of companies a decade ago, only to see their valuations wither away due to recurrent shortfalls in technical progress and commercial sales, most venture capitalists are strongly averse to fuel cells these days.

In a recent private conversation, an executive at one of the major automotive manufacturers admitted that they had pretty much ceased its work on fuel cells, focusing now instead on vehicle electrification.  With some exceptions, such as United Technologies (NYSE: UTX) or Rolls-Royce (LSE: RR), I think most big corporations have significantly reduced or entirely shut down their fuel cell initiatives.

The challenge for fuel cell technologies is achieving economies of scale, which goes hand-in-hand with mass production, which goes hand-in-hand with large markets enabling standardization and consequent low-cost supply chains and manufacturing processes.  Unfortunately, the various niches that fuel cells have begun to penetrate don’t offer that kind of scale-up potential, which means that fuel cells are by-and-large still in the “valley-of-death” phase of technology innovation, as originally coined by Geoffrey Moore in his seminal Crossing the Chasm.

Bloom Energy has made a lot of press by selling 200 of its fuel cell systems to various customers, but for fuel cell economics to make a serious move down the cost curve eanbling the technology to really fulfill on its promise in the real-world, order volumes will need to be at least one and preferably two orders of magnitude greater.

This doesn’t mean all hope is lost for fuel cells in ever becoming the revolutionary disruptive technology for the electric power sector that has long been touted.  It could simply mean that the stories of success-in-the-wings are off the radar screens of most observers. 

For instance, Technology Management Inc. (TMI) has quietly been working with Lockheed Martin (NYSE: LMT) to commercialize a solid oxide fuel cell system for small-scale distributed generation using a wide-variety of fuels with a standard product package applicable for large global markets.  TMI is often overlooked among the universe of fuel cell companies, in large part because it’s been operating primarily in stealth mode.  A lot of steps remain on the path to profitability, but if TMI can navigate them successfully, it is the kind of venture that can not only hit it big, but play a key role in redeeming the place of fuel cells in the hearts of investors.

Only time will tell.  Alas, for many companies in the fuel cell arena, time is a luxury that is expensive.  The clock is ticking and the dollars are dwindling.  There are three sources of cash for any company — grants, investments (equity or debt), or revenues — and with the spigots tightening for the first two, the third source becomes all the more important.

What If…?

…someone invents an economically-competitive energy storage technology that could be deployed at any electricity substation at megawatt-hour scale?

…the power grid were brought up to 21st Century standards to match the true power quality needs of our increasingly digital society?

…high-speed rail was not the exclusive province of Europe and Asia?

…customers had real choice about electricity supplies, via ubiquitously cost-effective on-site generation options?

…cities and industries pursued viable cogeneration options with real vigor, and companies like Echogen revolutionize the capture of waste heat?

…the use of fracking was reliably paired with other technologies and solid oversight to assure that local water quality is not harmed when shale gas is produced?

…recovering coal and tar sands was undertaken only via mining approaches that don’t leave huge gouges in the earth’s crust?

…all companies involved in the mining and burning of coal would honestly acknowledge and deal responsibly with the environmental challenges associated with coal?

carbon sequestration technologies are more than just a pipe dream and can be widely applied with confidence that no leakage will occur?

…environmentally-responsible technologies were commercialized to produce oil from shale in the Piceance Basin, making the U.S. self-sufficient for years to come?

Joule is really onto something and can produce liquid fuels for transportation directly from the sun?

…fuel cells expand beyond niche markets via continuing improvements in technology and economics to penetrate mass-market applications?

nuclear fusion could ever become viable as a technology for generating electricity?

…new technologies for the production and use of energy in a more environmentally-sustainable matter were responsible for a major share of new jobs and economic growth in the U.S.?

…we stopped sending hundreds of billions of dollars overseas every year to fight both sides of the war on terrorism?

…we stopped subsidizing mature and profitable forms of energy?

…we determined that climate change was simply too big of a risk to keep ignoring and decided to tackle the issue out of concern for the future?

…Americans were willing to pay at least a little bit more for energy to help defray the costs of pursuing much — and achieving at least some — of the above?

…we later found out that we didn’t spend that much more money and also found ourselves living on a healthier planet and in a more fiscally-solvent country with a viable industrial future?

…certain fossil fuel and other corporate interests would cease misinforming the public on many economic and environmental issues related to energy consumption?

…Democrats and Republicans could come together and do what’s best for the country rather than what’s best to strengthen or preserve their party’s political power?

…more Americans cared about the above than who wins American Idol, Survivor or Dancing With the Stars?

Seven cleantech companies Silicon Valley just learned about

As a reporter and analyst, I wrote about hundreds of cleantech companies. As a managing director of the Cleantech Group, I spent years listening to hundreds of pitches, coached companies on presenting to institutional investors and helped facilitate cleantech deals around the world. Just last month, I served on a committee at the request of the Canadian consulate in San Francisco to evaluate companies to present at a cleantech investor event.

So I’ve seen a lot of cleantech companies pitch well, and some not so well.

Last week, I had the privilege to help present seven strong cleantech companies actively seeking capital to investors in Palo Alto. And the two-dozen institutional cleantech investment firms in the room liked what they saw.

Read more

Funny Papers

Life is too difficult, and cleantech is too challenging, for one not to maintain a sense of humor as a necessary survival or coping mechanism.  And so I really need to start spending more time reading posts by Eric Wesoff on Greentech Media, a web portal for cleantech news.

Consider this gem summarizing the state of the fuel cell sector, with the classic passage:

“Here’s an updated list of the top three profitable publicly-held fuel cell firms:

“1.

“2.

“3.

“The non-profitable list is a bit longer and includes…” …just about every company involved in the fuel cell business.

Or, Wesoff’s most recent contribution about the massive energy use associated with the growing of marijuana, which contains among other most excellent passages the following knee-slapper:

“One percent of national electricity consumption, or the output of seven large power plants, is devoted to make Pink Floyd sound interesting and keep the Denny’s graveyard shift in business.”

Maybe it’s because I like to crack jokes, even in tough situations, but I find that those who can make you laugh also make you think.  So, I heartily recommend the works of Wesoff, as we need more people thinking better in the cleantech realm.

A New Cleantech Taxonomy

Classic definitions of cleantech, and the industries under its umbrella, have gotten long in the tooth. The sector has changed, and taxonomies haven’t kept up.

Why is a clean technology taxonomy important? As a list of nested categories, it shows where a clean technology “fits”. It helps vendors understand their competitive sets. It defines and helps investors understand the breadth of the sector and its sub-categories, and helps research and data organizations report consistently.

So if it’s so important, why haven’t leading cleantech taxonomies kept pace with the sector’s evolution? Because it’s hard. Especially for cleantech data companies like Dow Jones, Bloomberg New Energy Finance, GTM Research, PwC/NVCA MoneyTree, or Cleantech Group. Any edit could mean having to re-tag years of data in difficult-to-change back end systems. And, truth be told, there are usually more profitable things for a data company to do than pay people to sit around and think about what cleantech is, what it’s not and how the industries it spans should be organized.

Ah, but it’s a different story for a fledgling new cleantech research and advisory shop. At our firm, the taxonomy of cleantech is something many of us have been itching to dig into for years. We’ve seen the limitations in today’s taxonomies. And so, the last few months, I and the high profile consulting, analyst and writer colleagues I’ve been lucky to work with in the cleantech research and consulting team at Kachan & Co. have been quietly working on our own take, which I now get to share with you for your feedback.

[Click here to view this post with embedded taxonomy graphics view]

As a new firm, it was an important exercise for us:

  • It gave us a brand new framework for tagging and scheduling current and future research and analysis
  • We were able to rethink what many organizations have been holding up as 11 hallowed categories of cleantech (we think there are only 8 that deserve to be high-level categories. See our detailed classification, below.)
  • We were able to use our collective dozens of years in this sector to make some logical changes that we’d all been wanting to make, e.g. categorizing smart grid as a subset initiative within the larger phenomenon of energy efficiency. Or collecting green building-related materials under a category we call clean industry, recognizing that these materials are used more widely than just in structures for green building.
  • We adopted terms the market has settled on, and did away with outdated terminology
  • We chose not to categorize projects financed. Therefore wind, solar, even aquaculture farms don’t appear here as categories. We intentionally framed this as a taxonomy of technology and business model innovation.
  • It required discipline to remember the exercise was a classification for technologies, i.e. when hardware/software or other systems are involved. It was not a categorization of larger climate change initiatives, for instance… just where tech that’s supposed to get commercialized is involved, and where entrepreneurs and investors hope to make a return.
  • It forced the internal discussion of whether nuclear is a clean technology. While some argue nuclear has no place in cleantech, we opted to include it, as we’ve recently been made aware of nuclear-related innovations being pursued to derive power from non-weaponizable fuels, and other new R&D aimed at cracking that other historical nut of nuclear power: waste. But those are other stories.
  • It forced a focus on cleantech-related innovation. For instance, just because recycling is a category doesn’t mean that everything in the recycling industry is cleantech. Likewise semiconductors. Or hydro. But these areas are ripe for clean technology innovation, and there are new cleantech breakthroughs happening in each there today. Hence their inclusion.

[Click here to download the taxonomy as PowerPoint slides from the Kachan & Co. website]

After years of writing thousands of clean technology articles and reports, our team proposes this categorization as a cleantech category taxonomy. But consider this a ‘crowdsourced’ first draft. We’re interested in industry feedback before calling this done. Weigh in with comments on this same taxonomy posting on OUR site, and we’ll incorporate your best thinking in a final version we’ll publish on our website here a few weeks from this writing. We’ll then start using the final as a framework for other forthcoming cleantech information products, and invite you to use it, too.

(Credit: dozens of others’ frameworks were reviewed in this process, but special acknolwedgement to taxonomies from Cleantech Group, China Greentech Initiative, StrategyEye, Greentech Media, Skipso and Wikipedia, all of which informed our final structure below.)

In outline form, Kachan & Co’s taxonomy of what fits where in cleantech:

  • Renewable energy generation
    • Wind
      • Turbines
      • Components, incl. gearboxes, blades, towers
    • Solar
      • Crystalline silicon
      • Thin film
      • Thermal
      • CSP
        • Thermal
        • PV
      • Organic
      • Nanotech
      • PPA providers
      • Systems
    • Renewable fuels
      • Grain Ethanol
      • Cellulosic Ethanol
      • Biodiesel
      • Biogas
      • Algal-based
      • Biobutanol
      • Hydrogen [when produced from non-fossil sources]
    • Marine
      • Tidal
      • Wave
      • Run-of-river and other new hydro innovations
      • Ocean thermal
    • Biomass
      • Wood
      • Grasses (e.g. miscanthus, switchgrass)
      • Algae, non-fuel
    • Geothermal
      • Hardware & systems
    • Waste-to-energy
      • Waste heat recovery
      • Anaerobic digestion
      • Landfill methane
      • Gasification
      • Plasma torching
    • Nuclear
      • New designs
      • Non-uranium fuels
      • Waste disposal
    • Emerging
      • Osmotic power
      • Kinetic power
      • Others
    • Measurement & analysis
      • Software systems
      • Sensor and other hardware
  • Energy storage
    • Batteries
      • Wet cells (e.g. flow, lead-acid, nickel-cadmium, sodium -sulfur)
      • Dry cells (e.g. zinc-carbon, lithium iron phosphate)
      • Reserve batteries
      • Charging & management
    • Fuel cells
      • PEM
      • DMFC
      • SOFC
      • MCFC
      • Zinc air
    • Thermal storage
      • Molten salt
      • Ice
      • Chilled water
      • Eutectic
    • Flywheels
    • Compressed air
    • Super/ultra capacitors
    • Hydrogen storage
  • Energy efficiency
    • Smart grid
      • Transmission
        • Sensors & quality measurement
        • Distribution automation
        • High voltage DC
        • Superconductors
      • Demand management/response
      • Management
        • Advanced metering infrastructure (AMI) & smart meters
        • Monitoring & metering
        • Networking equipment
        • Quality & testing
        • Self repairing technologies
        • Power conservation
        • Power protection
        • Software & data analysis
    • Green building
      • Design
        • Green roofs
      • Building automation
        • Software & data analysis
        • Monitoring, sensors and controllers
        • Metering
        • Networking & communication
      • Lighting
        • Ballasts & controllers
        • Solid state lighting
        • CFLs
      • Systems
        • HVAC
        • Refrigeration
        • Water heating
      • Consulting/facilities management
        • ESCOs
    • Cogeneration
      • Combined heat and power (CHPDH)
    • Electronics & appliances
      • Efficient power supplies
      • Data center virtualization
      • Smart appliances
    • Semiconductors
  • Transportation
    • Vehicles
      • Improved internal combustion
      • Hybrid ICE/electric
      • All electric
      • Rail transport innovation
      • Water transport innovation
      • Components
    • Logistics
      • Fleet management
      • Traffic & route management
      • Lighting & signals
      • Car, bike, equipment sharing systems
      • Parking management systems
    • Fueling/charging infrastructure
      • Vehicle-to-grid (V2G)
      • Plug in hybrids
      • Induction
    • CNG
      • Engine conversion
      • Storage improvement
  • Air & environment
    • Carbon sequestration
      • Carbon capture & storage
        • Geological
        • Ocean
        • Mineral
        • Bio capture, incl. algae
        • Co2 re-use
      • Geoengineering
      • Biochar
      • Forestry/agriculture
    • Carbon trading/offsets
      • Software systems
    • Emissions control
      • Sorbents & scrubbers
      • Biofiltration
      • Cartridge/electronic
      • Catalytic converters
    • Bioremediation
    • Recycling & waste
      • Materials reclamation
      • New sorting technologies
      • Waste treatment
      • Waste management & other services
    • Monitoring & compliance
      • Toxin detection
      • Software systems
      • Sensors & other measurement/testing hardware
  • Clean industry
    • Advanced packaging
      • Packing
      • Containers
    • Design innovation
      • Biomimicry
      • Software
    • Materials innovation
      • Nano
        • Gels
        • Powders
        • Coatings
        • Membranes
      • Bio
        • Biopolymers
        • Biodegradables
        • Catalysts
        • Timber reclamation
      • Glass
        • Chemical
        • Electronic
        • PV
      • Chemical
        • Composites
        • Foils
        • Coatings
      • Structural building material
        • Cement
        • Drywall
        • Windows
      • Ceramics
      • Adhesives
    • Equipment efficiency
      • Efficient motors
      • Heat pumps & exchangers
      • Controls
    • Production
      • Construction/fabrication
      • Resource utilization
      • Process efficiency
      • Toxin/waste minimization
    • Monitoring & compliance
      • Software systems
      • Automation
      • Sensors & other measurement/testing hardware
  • Water
    • Generation
      • Desalination
      • Air-to-water
    • Treatment
      • Filtration
      • Purification
      • Contaminate detection
      • Waste treatment
    • Transmission
      • Mains repair/improvement
    • Efficiency
      • Recycling
      • Smart irrigation
      • Aeroponics/hydroponics
      • Water saving appliances
    • Monitoring & compliance
      • Software systems
      • Sensors & other measurement/testing hardware
  • Agriculture
    • Crop treatment
      • Natural fertilizers
      • Natural pesticides/fungicides
    • Land management
      • Erosion control
      • Sustainable forestry
      • Precision agriculture
      • Soil products/composting
    • Aquaculture
      • Health & yield
      • Waste management
      • Containment

Thoughts on how to improve? Please leave a comment on the official comment thread for this discussion on our site.

A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from offices in San Francisco, Toronto, Vancouver and London. Its staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success. Details at www.kachan.com.

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.

H2O to H2 w/o C

by Richard T. Stuebi

Although much of the ink these days about innovative vehicles relates to plug-in hybrids, work continues to explore the potential for hydrogen-based fuel cells to play a key role in the transportation sector — particularly in light of the recent decision by Congress to reauthorize funding for hydrogen autos.

Admittedly, as hydrogen critics and skeptics are quick to point out, the vision for personal automobiles running on hydrogen is very long-term and thus quite murky due to a number of factors, perhaps most notably the lack of a ubiquitous hydrogen refueling infrastructure. The challenges facing hydrogen vehicles are real, but for fleet vehicles with limited service radii, the lack of refueling infrastructure is less of a problem, as one dedicated refueling system can fit the bill. As a result, fleet vehicles – especially inner-city buses – are the primary focus of current testing activities for hydrogen fuel cells in transportation.

Of course, to achieve the full environmental benefits of the hydrogen economy vision the hydrogen will need to be derived by electrolyzing water via renewably-sourced electricity (e.g., from the sun or the wind) to power the electrolyzer.

Although conceptually straightforward, renewably powering electrolyzers turns out to be a non-trivial challenge. This is mainly because solar and wind electricity voltage and current are highly variable, and the electronics of the control systems in electrolyzers tend not to like fluctuations in input power.

To address this challenge, a team here in Cleveland is spearheading a project to install a solar/wind-powered electrolyzer to generate hydrogen from Lake Erie water, with the hydrogen to supply a refueling station that will power a fuel cell bus serving Cleveland-area riders.

With seed funding from the Cleveland Foundation, the project is being managed by the Ohio Aerospace Institute, and the team includes NASA’s Glenn Research Center in Cleveland, Cleveland’s Regional Transit Authority (RTA), the Great Lakes Science Center in Cleveland, Cleveland-based Parker Hannifin (NYSE: PH), and United Technologies (NYSE: UTX). The Great Lakes Science Center is already home to a 225 kw wind turbine and a 32 kw photovoltaics installation, and will be home to the electrolyzer-fed fueling station. RTA will run the fuel cell bus on the recently-renovated Euclid Corridor. United Technologies will be providing the fuel cell bus, and Parker Hannifin is providing key control systems for the fueling station. If all goes well – meaning, primarily, raising an additional $1 million or so to fully complete the project – the hydrogen fueling station and fuel cell bus will operate on a demonstration basis in a couple of years.

Of particular note, NASA is providing the intellectual expertise in developing the algorithms for controlling the electrolyzer to match the variable input power from the solar and wind generating systems. This expertise comes from considerable mission experience, in which photovoltaics systems generate electricity from the sun to power the spacecraft, and energy storage and charge control systems must accommodate power supply interruptions as planetary bodies transit in front of the sun.

To the team’s knowledge, because managing the intermittency of electricity supply in electrolyzer operation is non-trivial, there is only very limited experience with renewable electrolysis for hydrogen production, and virtually none involving more than a little bit of hydrogen production daily. So, this Cleveland project could be an important step along the path to developing truly carbon-free hydrogen-fueled transportation solutions.

As the Fellow for Energy and Environmental Advancement at the Cleveland Foundation, Richard T. Stuebi is on loan to NorTech as a founding Principal in its advanced energy initiative. He is also a Managing Director at Early Stage Partners, and is the founder of NextWave Energy.