Bloom Energy Box...Revolutionary New Fuel Cell Technology

Capstone’s technology and product is not an issue. The same can be said for the Bloom Box. It is being tested in beta units and it appears to work as advertised.

The question for both Capstone and Bloom is: are they economically viable?

The economics of these things are pretty simple; produce the energy you need for a good bit less than you can buy it from the grid (considering the full life cycle cost of buying the unit, financing the outlay, putting fuel in it and maintaining it). I say a good bit less, because there has to be some economic incentive to put up with the hassle and the risk of owning and maintaining your own unit, as opposed to simply writing a check every month to the electric company.

Capstone has a growing installed base, but I don’t believe right now the economics are there. If they were they would be shipping tens of thousands of units a month, and instead they are looking for money to run the business. Right now Capstone is a in a niche market where the buyer wants to be “green” or more quiet or has a use for the waste heat in an industrial process.

Here is a powerpoint presentation on a Capstone installation at Vineyard 29 in California.

http://www.ornl.gov/sci/de_materials/Day1/McMinn.pdf

The payback appears to be over 8.5 years, and that doesn’t include additional maintenance that is going to be required as the hardware ages. This is with a full-blown CHP (combined heat and power) installation. In short, this is as good as it gets economically for them, and it isn’t a slam-dunk.

The Bloom Box has more potential in that energy conversion efficiency is a lot better, but if they can't get the cost down to where it makes sense it will continue to be a niche market just like Capstone is.

Well, that depends on how you define viable, doesn't it?

The applications for Capstone's turbines are not necessarily for plug and play replacement of grid power for individual consumers. They are best suited for the places they are currently in use, on oil platforms where fuel is for all intents and purposes free, and as standby units to replace diesels or to provide standby power and hotel services in building where diesels may not be an option.

If I had property in the wilds of West Virginia where running a powerline in from East Daylight was going to cost me $100K or more and I could get free natural gas from the company that held the mineral rights under my barn, a Capstone or Box might be very viable.

Unfortunately, to sell the idea to the general public which is the source of the large amounts of capital needed to get products on the market, you need to appeal to the same folks the TV producers are aiming at. The process might not bepretty but that doesn't mean the product (or the concept) is inherently flawed.

How easily we cast the failure of one VC venture, and forget about another.
John also brought funding to a few other companies you may have heard of. Google is one of them. Netscape is another. APC, another. Bay Networks (you may have heard of them as "Cisco") is another. The list continues.

To the tune of how much money they've raised (in the neighborhood of 500MM) they're not looking to strike an IPO out of the gate. They've got capital needed to get enough units production, refinement of the product, control costs, and generate their vertical market. This is typical business for VC's.

I don't know enough about one technology versus the other to debate nuclear versus hydrogen, versus the next, but I do know this:
It's fascinating technology. And it has industry changing potential as we know it today.

The question is, (and always seems to be) its ultimate destiny lies in the consumers hands. Is the real world ready to adopt, embrace, and apply it?

If you consider how long it took solar energy to real world consumer grade application, it's not promising for Bloom. However Bloom clearly beats solar, so it will be interesting to see this play out.

At the end of the day, you've got to get the product in the hands of the consumer. And the consumer is reluctant to change. Challenge one.

I'm in complete agreement.

Capstone originally pitched the idea that every McDonalds in the country would have one of their units humming along on the roof and that the quantities would be high enough for them to get the price down.

Didn't happen, for whatever reason, and to this day, almost 10 years later they are still building small quantities in what remains a niche market. If it was that big a market GE or some other big company would be in there cranking these things out, and they aren't.

Bloom is saying that a stack the size of a coffee can will make enough power for your home, but by the time you put in all the pumps and compressors it is likely to be an expesive machine. Their dream (as stated in the 60 min piece) is to make these things for about $3k for a home unit. If they can do that we'll all have one in our basement. If they can't we won't. The economies of scale are such that they probably first need to be looking at larger CHP applications, like a Wal-Mart or Super Target. If you can make it work there, you are on your way, but remember that these guys are going to look at it thru green eyeshades and the payoff has to be there.

The time and cost of software development is a pittance compared to what it takes to do advanced technology hardware. Other than APC (which was not a significant technical challenge in my book), their big strikes were primarily in software, or selling somebody else's hardware in a hugely expanding market. Easier to tout your success and bury the dead if you don't have a lot in it.

Developing new hardware technology is something that most VC's simply don't have the stomach for. It takes a lot longer, is a lot more risky and costs a heck of a lot more to play in that game. They’d much rather fund a couple of software junkies with a good idea for a year and create a big first day pop on the IPO. Don’t get me wrong, KPC&B are in it to make money, and that’s fine, and they seem to be willing to invest in hardware firms, so more power to them. However, their success rate with hardware companines isn't what it has been in software by any stretch of the imagination.

And for the record, the Segway was a dumb idea from the get-go. Something about a wheelbase of zero and pitch stability under braking. Any person who understands vehicle dynamics would have laughed you out the door if you came into their office with it.

If you took the dishonesty and poor planning of one corporation and applied it to the soap field like you have applied this to the Nuclear field I think you would never bathe.

@Grecko
You and I have vastly different understandings of the VC world. And I've been in it for 15 years. Another topic for a different thread.

Back to Bloom. As you were. Sorry for the side track folks.

Well, they should build at least 4 nuke plants in South Florida, all the local coral is in danger of dying due to Global Warming, and needs warmer water to regenerate...(all the cold weather is killing it) so Nuke plants would warm up the water and help the manatees also....

And now for the unveiling:
http://www.youtube.com/watch?v=rcLq3B8C5sk&feature=player_embedded

http://www.pcworld.com/businesscenter/article/190235/bloom_energy_what_we_know_what_we_dont.html

http://www.businessweek.com/idg/2010-02-24/bloom-fuel-cell-individual-power-plant-in-a-box.html

A technology that is '20 years away' will be 20 years away indefinitely

Edited to add: What's all this business about bloom servers not emitting green house gas, where does the carbon go?

Finally had some time and went out to their web site and looked a bit on the web, a couple of observations....

1. This thing is huge and expensive, it won't be mobile (20,000 pounds for 100kw). We used to price things by the pound, and that still holds true today. Bigger heavier stuff usually costs more. The performance isn't all that great (50% conversion efficiency) and in fact the DOE has awarded a contract to produce similar energy efficiency from conventional means (rankine bottoming cycle on a small turbine) that is within today's technology and won't cost over $500/kw in first cost, so that's a bogey where they have to be.

2. While we are talking about first cost, the first cost now is $7000/kw. That is crazy expensive, somewhere between 15 and 20 times where they are going to need to be to be successful. Not necessarily impossible, but it is going to take automotive production quantities (tens if not hundreds of thousands of units per year) to do it, and I'm not sure that those kind of quantities are in the cards.

3. The "coming out party" was full of hype, a lot of sizzle and not much steak. The bit with the unvieling of the box of sand was particularly trite. I'm not the only one who thinks they are priming the pump for an IPO...

http://brainstormtech.blogs.fortune.cnn.com/2010/02/25/bloom-box-debut-more-ipo-than-co2/

It will be interesting to see what comes from this.

The cost of getting an adequate natural gas supply to someone's house to power this fuel cell would be about $35,000 not to mention the gas distribution system would have to grow to massive proportions if this became a reality.

This is no different then the "Cold Fusion" hype 10 years ago.

This may be true in the warmer climates, but a majority of people, at least in my area, have natural gas in their homes.

As to the cost of getting the gas to a home, please direct us toward your source. I know the government is extremely inefficient, but that seems very high.

Umm, sorry, the Bloom fuel cell is nothing like cold fusion. For one thing it works. Sure they over-hyped it but the technology is real. Whether they can mass produce them or get a basement sized unit in at a price the average consumer can pay is still an open question.

I just had gas piped to a house in Fort Lauderdale for free. The gas company tapped into the main and ran the branch to the house.

Try these guys at ACTA, they seem to be at their best with small cells.

http://www.acta-nanotech.com

Plastimo are also doing a fuel cell gennie but fuelling it is going to be a problem due to shipping volatile fluids.