A Day Late on the Bloom Box

I wasn’t going to write anything on the Bloom Box, but people keep writing to ask what I think. My initial reactions were “What a lot of hype” and “I have seen this all before.” I also wondered why it is that people keep falling for these kinds of stories.

But fuel cells aren’t my specialty, and as such I won’t weigh in on the relative technical merits of this design over another. I know that fuel cells have been very expensive for many years, and the initial projections I have seen over the Bloom Box are that they will be very expensive.

Lots of people with expertise in fuel cells have weighed in on the matter, though. If you want a more technical assessment, see the National Geographic story:

Bloom Box Launch Is “Big Hype”–Invention Nothing New?

The Bloom Box—an as yet unbuilt in-home “power plant” designed to be about the size of a mini-fridge—could provide cheap, environmentally friendly electricity to U.S. households within ten years, according to Bloom Energy. Or not.

But fuel cell experts say that, based on the information the company made public today, the Bloom Box technology is not revolutionary, nor is it the cheapest or most efficient fuel cell system available.

“It’s a big hype. I’m actually pretty pissed off about it, to be quite honest,” said Nigel Sammes, a ceramic engineer and fuel cell expert at the Colorado School of Mines. “It really is nothing new. Go to any [solid oxide fuel cell] Web site and you’ll see the same stuff.”

Those were my initial feelings as well, and here is why I say we have seen this before. The year was about 2001, and I was younger and a bit more subject to being influenced by massive hype. There was a company called Plug Power (still in existence today; stock symbol PLUG, but they are flirting with getting themselves delisted) and they came out with pretty much the same story.

In fact, if you go back into Google’s news archives on Plug Power, you can see a histogram that shows the news stories on Plug Power spiking in 2000, remaining fairly strong until about 2005, and then falling to lower levels in the past few years.

The buzzwords used to describe Plug Power were the same as those used to describe the Bloom Box. The technology was called revolutionary, disruptive, and a real game-changer. There was a prediction made that most people would have Plug Power’s fuel cells in their homes by 2010 and we would all be locally producing and using our electricity in a refrigerator-sized box.

What happened? Plug Power’s stock soared to $2 billion on the hype at a time when investors would bid up companies that had no earnings but incredibly high growth projections. It just so happens that hype can lead to those growth projections (a hard lesson for me that permanently changed my investing style), and what happened was that reality eventually caught up with the hype.

Plug Power, like Range Fuels from my previous essay, could not deliver on the hype. They couldn’t deliver cheap fuel cells, and so they didn’t get the market penetration many had (unreasonably) expected. Their valuation came crashing back down to earth. Today Plug Power is worth about $70 million, or about 96.5% less than it was when I was following the story.

Bloom Energy looks like both Plug Power and Range Fuels to me. It is a company that is attempting to produce energy cheaper than all those who came before using known technology – and using hype to attract investors. And if Bloom Energy fails to deliver, they will learn just like Range Fuels that hype is a two-edged sword.

22 thoughts on “A Day Late on the Bloom Box”

  1. I'd bet a number of the boxes trials and purchases were done as part of a favor to the VC.

    You must say that Bloom Energy has done a great job telling it's story to the market and positioning the company and technology.

    Perhaps that's it's greatest innovation.

  2. Besides all the hype, the challenge ahead is not with generating electricity, and cleanly. We have hydro, wind, solar, nukes for that. We have natural gas, and, if need be, coal. Perhaps coal can be cleaned up.

    Generating power is easy, and we have been running nukes for generations. There is no electricity shortage, and won't be except for really bad planning.

    If there is a problem in the future, it is with what I call the "tyranny of liquid fuels."

    Liquid fuels are really handy, but possibly to become scarce sometime in the future.

    Solutions to the liquid fuel problem is what is needed–not some blooming power-gimmick.

    As a society and nation, we should be focussing on the liquid fuel problem (if it is a problem).

    PHEVs are one solution, CNG and LPG cars-trucks are another. Much higher mpg ordinary ICE cars are another. Scooters, busses, car-pooling, moving closer to work, etc–many solutions. Maybe even methanol.

    The Bloom boxes are just an oddity in a sideshow.

  3. As far as I understand, the energy source in this case is natural gas (unlike PEM no reformer is needed), and the benefit over other home energy sources is efficiency when using both the heat as well as the power.

    Given the fuel it's not necessarily a green path at all except where it makes the grid more flexible by setting up countless gates between the natural gas and electrical networks.

    The concept itself is definitely nothing new. Plug, Idatech, Panasonic, Dantherm, and UTC (among others) all do similar things with the same or similar fuel cell technologies.

  4. @Anon – No heat with the Boom Box

    With the 100 kW installations the utility has a potentially intermittent power feed that they have no control over.

    Takes time to bring to operating temperature – not an emergency generator at all.

  5. There is no electricity shortage, and won't be except for really bad planning. – Benny

    Planning doesn't seem to be the issue, money does though:

    So utilities have turned to state legislators and regulators to help contain capital costs. In states such as Georgia, Florida and South Carolina, utilities have won permission to charge customers for some of the cost of new reactors while construction is still in progress — a financing technique that would save utilities a couple of billion dollars for each reactor. Previously, utilities had to wait until power plants were in operation before raising rates, as they still do in most states.

    "We tell people it's like paying off the interest on your credit card as you go along, rather than letting it compound," said Suzanne Grant, a spokeswoman for Progress Energy.

    But businesses and other electricity users in those states aren't buying that argument. Instead, they are saying utilities are pawning off much of the projects' liabilities on customers because bank lenders and investors will not take the risks.

    Is there a trend here – the next house or car you buy will require payments from you as it is built ?


  6. RBM-
    No doubt, nukes costs a lot to build, though I wonder if that is because we never developed a replicable "standard" nuke plant, already approved for construction.

    Seems like we should. Lke everyone, I pay electrical bills. They may have to go up to financed some new power plants.

    However, there is also much in the works to suggest not many new power plants will be needed. LEDs, and heat-blocking glass, more efficient a/c and heating and other improvement mean that most buildings will use less and less power in the years ahead.

    I contend the media blurs and conflates an "energy shortage' with a possible liquid fuel shortage (although, my economist training tells me there are no shortages, only supply and demand).

    The good news is that we have plenty of options on the table, even for liquid fuels. Natural gas can be made into methanol, we have PHEVs and BEVs coming to market.
    CNG and LPG cars. A diesel-hybrid ought to be able to get 100 mppg easy.

    Lots of fun in the future.

  7. BTW–
    ASHEVILLE, N.C.–(BUSINESS WIRE)–Altech-Eco Corporation of Asheville, North Carolina announced today that they have obtained a Certificate of Conformity (COC) from the EPA for their DEDICATED 2010 Ford Transit Connect compressed natural gas (CNG) conversion system. The “Dedicated” system means that the vehicle runs entirely on 100% natural gas, and needs absolutely zero gasoline ever. This is the only EPA-certified 2010 CNG system for the 2010 Transit Connect worldwide. Households or companies can now immediately receive a $4,000 Federal Income Tax Credit by purchasing this 100% natural gas Ford Transit Connect through Altech-Eco or its vendors.

    Altech-Eco’s EPA approved Dedicated 2010 CNG Ford Transit Connect conversion system converts the Transit Connect to run exclusively on CNG (a bi-fuel option using both CNG and gasoline is also available for those wishing to run on either fuel, and is also fully EPA-approved) and the system is totally complete and includes manufacturer-rated CNG cylinders with fuel storage capacity starting at of 9.3 GGE (Gas Gallon Equivalent) and an extended option of 14.4 GGE’s, with a natural gas driving range of 240 – 400 miles and an average of 31 mpg on the highway and 25 in the city. The Transit Connect is perfect for many businesses like Taxi Fleets, Fortune 1000 Corporations, Airports and Municipalities, Wine or Flower Merchants, Catering and Delivery Services, Sports Enthusiasts, and also residential consumers. Altech-Eco provides a lifetime warranty on all conversion system emissions components. The CNG conversion system for the 2010 Ford Transit Connect is now available at select participating Ford dealerships and approved aftermarket conversion facilities, or by contacting Altech-Eco.

  8. …though I wonder if that is because we never developed a replicable "standard" nuke plant, already approved for construction.

    Don't the Navy's submarines use a standard nuke plant?

  9. Benny, I think you are bang on with your assessment here – they are producing a solution to a non problem. We are in no danger of running out of electricity, and this system does not even diversify the fuel sources. if we must use NG for electricity, much better to do so in 60% efficient combined cycle plants, at about $500/kW, than 40% efficient fuel cells at $10k+/kW – what a waste of resources.

    Even though you can use the waste heat (for half the year), it would still be better to run an airsource heat pump from the electricity produced by the combined cycle system.

    The "tyranny of liquid fuels" is, of course, all about transport fuels, and there is indeed much that can be done here to diversify, be it to non oil liquids, gas, electric (trains) or even solid fuels.

    Bloom is just a sideshow, and one not worth the price of admission. Even if they can get their product to market, I doubt anyone will buy and let's hope there is no subsidy for this irrelevant product, that doesn't solve any problems

  10. Benny, surprising as it may seem, there are still some ships that run on coal. Many of the ships that transport coal from Australia to China use it as their fuel – it is 1/10th the cost of bunker fuel

    I have read that there are some new cargo ships under construction that will run on coal/biomass (steam) rather than bunker fuel. Interestingly, I had seen a write up about a small cargo ship being built for use in the Baltic that would transport, and run on wood chips/wood pellets by gasification- cleaner than coal/steam and far cheaper than oil.

    Wood gasification powered a lot of vehicles (crudely) in WWII, and modern gasification is much better, and can power modern engines. It works best for stationary or large mobile engines (ships, trains), but can be used for cars. Up until the 70's S. Korea had charcoal powered taxis.

    Some people have done modern wood gas conversions of vehicles, and they are something to see. I am not suggesting, not for a moment, that we should have cars running on gasifiers, but there are niches situations where gasifying coal/biomass can be done with minor inconvenience and major cost savings. A locomotive or ship hauling coal comes to mind as about the most perfect example, but there are many others.

    The beauty of using gasification for diesel engines, is that you can still run them on 100% diesel if you want, but can displace up to 90% with gas (wood/coal gas or NG) .

    What hasn't worked, though has been tried, is using coal/water mixture for large diesels – lots of ash problems in the engines. Gasify it first, and leave the ash behind, and you are good to go. And that engine can use any gas source, be it wood, coal or NG.

    There is one outfit working on a new steam engine for automotive use, that uses supercritical steam (3300psi). (www.cyclonepower.com) Best efficiency to date is about 28%, which is better than any gasoline engine, at it can run on any fuel, clean or dirty, gas, liquid or solid. I don't think they'll displace many automotive engines, but I can see niche there for stationary and maybe trucks and buses.

    If we can make at least some of our transport fuel agnostic, then we have made a major step forward.

    This would be a much better use of resources than spending on money on Bloom systems, that do nothing to improve the diversity, reliability or efficiency of our energy supply.

  11. I'm telling you, none of this stuff is going to work. There are only two sources of energy on Earth: nuclear and solar. Fossil fuels are stored energy, and are fast running out (at least for the good ores). Geothermal is nuclear heat, but is geographically limited. Wind, biofuels, hydro, etc. are ways of harvesting solar. The answers that actually scale will be one of these three:

    Cheap solar (at least 10 times less than current costs) with miracle cheap storage for night and winter and clouds, and the ability cheaply clean hundreds of thousands of square miles of panels after regular desert dust storm. This would require as-yet unknown materials revolutions.

    Nuclear fusion, what creates solar: Only deuterium/tritium fusion is possible on Earth, which requires using lithium as fuel. A method must be found, either using magnetism or lasers, to heat fuel up to 200 million degrees using little energy. Since energy is released in the form or fast neutrons, a material must be found that can withstand neutron bombardments that currently destroy $10 billion facilities in a matter of months, even when fusion is only done for a few pulses of less than a second.

    Nuclear fission, the source of geothermal: uranium is finite unless fast reactors are used to reprocess fuel. Clinton cancelled the Integral Fast Reactor in `94, two short years before completion. This cost the tax payers a lot of money, since dismantling the prototype fast reactor was expensive, and the Japanese wanted to chip in the $60 million necessary to finish the project. How many billions will now die due to Clinton's idiocy, and is it too late to avoid a complete societal collapse?

  12. Anon said "Since energy is released in the form or fast neutrons, a material must be found that can withstand neutron bombardments that currently destroy $10 billion facilities in a matter of months, even when fusion is only done for a few pulses of less than a second."

    There are aneutronic fusion reactions — hydrogen-boron being the prime example: 1H + 11B -> 3(4He). Ok, the energies required are ten times higher than for D-T, which sounds crazy when you are talking about temperatures in the billions K, but since fusion using thermalised plasmas is probably a lost cause anyway we might as well consider only those approaches attempting to use more mono-energetic ions. If it can be pulled off, there is a prospect of extracting energy directly as electricity, through the deceleration of the three energetic alpha particles. A long shot, sure, but here's hoping.

  13. Robert,

    I think you are spot on in your analysis of Bloom and I say that as someone who has been working in SOFC's for nearly 20 years. The stacks shown are not really anything new and are quite similar to those made by a number of other companies (CFCL). Their cells are called electrolyte supported cells since the cathode and anode are supported by the electrolyte (It's not beach sand it's YSZ, Man that pissed me off). The problem with electrolyte supported cells is that you have to run at higher temperatures (near 1000°C) to keep the thick electrolyte from being too resistive. At 1000°C there are a whole host of the materials related problems that will effect lifetime. I see nothing in their design that will give them a cost advantage over any other SOFC manufacture. Nearly everyone in the field that I know feels about the same way Nigel Sammes does in the article that you linked.

    Oh, Chris Nelder, their electrolyte is not a "proton exchange membrane" it is an oxygen ion conductor. I stop reading your blog post after I saw you got that wrong.

  14. Purely personal opinion (and I work on the fringes of the industry).

    SOFCs will get there but Bloom hasn't managed it yet. Another two or three iterations of the technology needed…again, purely a personal opinion.

  15. A reader sent this link this morning:

    An Open Letter to John Doerr Regarding Bloom Energy

    It is always interesting to see the comments to these sorts of essays. Here you have an energy professional who knows the business pretty well, and the Bloom fans want to paint him as a washed up man who lacks the vision of the Silicon Valley VCs.
    Of course when these things don't pan out, those guys never hang around to say "I guess you were right."


  16. What a crock of sand this whole things is. They have put all their effort into some very slick marketing, to sell people something for $800,000, that you can buy elsewhere for less than $100,000.

    They get 64% efficiency of hydrogen to electriicty, but have the throw away the carbon in natural gas to do so. so the overall energy efficiency is 41%.

    You can buy, today, specialised natural gas engines (such as GE Jenbacher) that will give you 40% gas to electricity efficiency, fit in the same size box, and cost about $1000/kW instead of Bloom's $8000. Yes they are a little noisier, and yes you have to change the oil, but for an 86% discount, I'll take that.

    WalMart and Google have money to waste on things like this, to keep their profile green, but for any real business this would put them out of business. Just to make it worse, there is a 30% subsidy. This represents a transfer of wealth from the people to Wal Mart and Google, the two companies on earth that are least in need of it. If they are truly doing this for the principle of being green, they would reject the subsidy.

    It is another case of so called "clean tech business" extracting money from the gov, and taxpayers, rather than finding ways to make their business sustainable.

    Wal Mart and Google, who have made their money by providing goods/service that people actually need, should reject this product, and this business model out of hand.

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