Bloom Energy Server aka "Bloom Box" - creative accounting?

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jdh2550_1
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Bloom Energy Server aka "Bloom Box" - creative accounting?

Did any of you see the CBS 60 minutes exclusive on the Bloom Energy Server? I didn't - but a colleague did and was gushing with praise over this product and it's "stealthy" development strategy. I didn't think much more about it but then it started appearing on my usual news pages so I clicked through to read up on it.

This article caught my eye: http://www.informationweek.com/news/hardware/data_centers/showArticle.jhtml?articleID=223100606 - it says a 100kW unit costs around $700,000 to $800,000.

On the Bloom website it says that you can save money with a Bloom Energy Server (cutely referred to as Bloom boxes) and expect payback in 3 to 5 years: http://www.bloomenergy.com/benefits/save-money-and-the-environment/

Wow, payback of $700K over 5 years would be pretty impressive. So I decided to trying and calculate what they based their numbers on. And I can't figure it out...

According to the EIA electricity in Michigan costs < 10c per kWh for commercial rates: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

So, if you had a 100kW Bloom box working at 100% duty cycle (i.e. always producing 100kW 24x7 for 365 days a year) you'd be generating 100 * 24 * 365 = 876,000 kWh per year. To buy that from the grid would cost $87,600 at 10c per kWh.

According to Bloom the unit consumes natural gas at 0.661 MMBtu /hr to produce 100kW. The EIA says the average price of 1000 cubic feet of natural gas is $8.64 in MI. Doing some googling shows that there are 1.02 MMBtu per 1000 cubic feet of natural gas (ain't the internet awesome?). So, doing the math that's $51,620 in natural gas costs per year.

So, your yearly savings are 87,600 - 51,620 = $35,980. That's a pretty nice chunk of change. However, how does $36K in savings pay for $700K of equipment in 5 years? I realize this is a naive look and doesn't include depreciation and possible tax incentives - does any VifV reader know how to make the sums work to show the pay off?

Also, you'd most likely never be able to run this thing at 100% duty cycle in a real world environment. That makes the savings smaller - and the payback period longer.

BTW - I chose numbers for Michigan because that's where I live. However, MI does not have the highest electricity costs - so that may appear to minimize the yearly savings. But here's the rub - in those places where electricity costs more (like California) also have more expensive natural gas costs.

There are many more pressing reasons to hope that the Bloom Energy Server becomes widely adopted - and I hope they succeed. My "gut feel" tells me that widespread micro generation of power local to it's consumption makes a LOT of sense. However, I'm perplexed by these "payback" numbers.

Can anyone help explain them? It may just be that the original article quoting $700K to $800K is wrong - but I couldn't find any other figures out there.

MikeB
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

Hank Green at EcoGeek.org took at look at their claims, and decided they're just lying in some cases:
http://ecogeek.org/efficiency/3084-why-is-bloom-energy-lying-to-us

So you aren't the only one who can't put the numbers together. (Though the cost per kWh in California is probably a good bit higher than you see in Michigan)

It's neat technology, and might be a great step towards shutting down dirty coal plants, but it's not quite as good as claimed.

My electric vehicle: CuMoCo C130 scooter.

Reid250
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

It is another hydrogen fuel cell. Put a propane tank on your scoot and one little tiny cell where your battery is.

davew
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

I've been reading about this, and I am deeply skeptical. The basic technology has been around for decades and no one has been able to make it cost-competitive. This device is going to live and die by not only it's manufacturing cost, but also its lifetime. This device has not been around for long enough to prove it's longevity. I hope I am wrong, but this feasibility of this device sounds like it is always going to be 10 years in the future.

It is another hydrogen fuel cell.

It's not a hydrogen fuel cell. It uses hydrocarbons as fuel.

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MikeB
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

It's not a hydrogen fuel cell. It uses hydrocarbons as fuel.

It uses a wide variety of hydrocarbon fuel sources:
1) Methane
2) Methane
3) Methane

With tinkering, I'm sure you could expand it to accept others, such as:
4) Methane.

Those are your options. Frankly, we've got a good bit of methane around, and it's a better option than most current electrical power plants. It's more efficient than burning methane in a turbine, which is very common for surge power demands. I don't consider it to be clean energy, just a step cleaner than what we use now.

My electric vehicle: CuMoCo C130 scooter.

jdh2550_1
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

I've been reading about this, and I am deeply skeptical. The basic technology has been around for decades and no one has been able to make it cost-competitive. This device is going to live and die by not only it's manufacturing cost, but also its lifetime. This device has not been around for long enough to prove it's longevity. I hope I am wrong, but this feasibility of this device sounds like it is always going to be 10 years in the future.

It is another hydrogen fuel cell.

It's not a hydrogen fuel cell. It uses hydrocarbons as fuel.

Yup - my understanding of what's special about Bloom is that they've found a way to make it cost competitive. Apparently the founder worked at NASA and that was where he created some form of special paint / treatment that allowed the gains that they're claiming.

I agree with you - I'm skeptical. One of the problems of taking $400M of other people's money is that they want to see progress and that often forces unreasonable claims to be made. I chose to focus on the ROI claims - but it will be interesting to see if the technical claims bear up to scrutiny.

John H. Founder of Current Motor Company - opinions on this site belong to me; not to my employer
Remember: " 'lectric for local. diesel for distance" - JTH, Amp Bros || "No Gas.

jdh2550_1
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?
It's not a hydrogen fuel cell. It uses hydrocarbons as fuel.

It uses a wide variety of hydrocarbon fuel sources:
1) Methane
2) Methane
3) Methane

With tinkering, I'm sure you could expand it to accept others, such as:
4) Methane.

Those are your options. Frankly, we've got a good bit of methane around, and it's a better option than most current electrical power plants. It's more efficient than burning methane in a turbine, which is very common for surge power demands. I don't consider it to be clean energy, just a step cleaner than what we use now.

Ooh, you cynic you! You're right it's not "clean energy" but "cleaner energy" - and quite a bit cleaner than coal. The other piece of the puzzle here though is the efficiencies that can be gained by having the electricity generated right next to where it's used. I can't remember how much transmission losses account for - but I believe it's significant. Better balancing and less new transmission lines as well. These are all some of the advantages of distributed generation.

I wish there were far more emphasis on distributed generation and alternative generation than on the "smart grid" which really just seems to be a way of load balancing by metering in different ways. I confess I know next to nothing about what is meant when folks talk about "smart grid" and I tend to cynically think this is one of those buzz words like "hydrogen economy" used to part investors from large amounts of cash.

John H. Founder of Current Motor Company - opinions on this site belong to me; not to my employer
Remember: " 'lectric for local. diesel for distance" - JTH, Amp Bros || "No Gas.

davew
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

The other piece of the puzzle here though is the efficiencies that can be gained by having the electricity generated right next to where it's used. I can't remember how much transmission losses account for - but I believe it's significant. Better balancing and less new transmission lines as well. These are all some of the advantages of distributed generation.

Transmission line losses are about 7%, but bear in mind whatever fuel you are using has to get to your magic box too. Nothing is lossless.

A box that makes electricity 24/7 like this one doesn't sound like it has that many practical uses outside of energy-intensive industries. For residential use you want a lot of power during the daytime and almost none at night. This is why residential solar is so useful. It kicks out the most electrons when they are most needed.

"we must be the change we wish to see in the world"

reikiman
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

I did a couple articles recently about methane and power generation ..

first, methane is a very potent greenhouse gas (more so than CO2) .. second, methane is produced naturally any time a biological thing rots... For example the biological material in landfills will eventually rot and turn into methane. But there's plenty of other sources, some of them caused by human activity, others not.

It turns out that simply burning the methane converts it into a less harmful form so that it's no longer a more potent greenhouse gas than CO2. Presumably one side effect of the bloom box would be a similar conversion from dangerous methane to other less harmful gasses. ("less harmful" not "harmless" - it is kind of curious to be working so hard to cause less harm)

The articles in question focused on a project at a landfill near Livermore CA. Waste Management INC owns the landfill and in a JV with some company is installing a machine to mine the methane coming from the landfill and convert it into a synthetic fuel. The fuel will then be burned to drive their truck fleet.

I suppose one of those bloom boxes could be installed next to every landfill, directly capture the methane, and go directly to the power grid.

TechnoSanity #31: A look at Waste Management and landfill gas energy resources

Waste Management Inc plans to produce its own LNG fuel

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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

Transmission line losses are about 7%,

Thought it was worse than that.

but bear in mind whatever fuel you are using has to get to your magic box too. Nothing is lossless.

Good point. One of the advantages of natural gas is that a lot of the delivery infrastructure is in place - but I'm not sure how effective it is.

A box that makes electricity 24/7 like this one doesn't sound like it has that many practical uses outside of energy-intensive industries. For residential use you want a lot of power during the daytime and almost none at night.

Agreed, one of the artificial parts of ROI analysis is assuming 100% duty cycle. At the moment I'm pretty sure it's being pitched at large, energy-intensive businesses. Like Google.

This is why residential solar is so useful. It kicks out the most electrons when they are most needed.

What power density can the best solar provide in whatever the median amount of sunlight is? I'm not disagreeing - just curious about what the practicalities are with a solar installation for a suburban house on a suburban sized lot.

I don't think the Bloom Box is the holy grail - but, like Mike says, it may be one technology that represents a step in the right direction. The solution will consist of many different technologies and strategies.

John H. Founder of Current Motor Company - opinions on this site belong to me; not to my employer
Remember: " 'lectric for local. diesel for distance" - JTH, Amp Bros || "No Gas.

davew
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Re: Bloom Energy Server aka "Bloom Box" - creative accounting?

What power density can the best solar provide in whatever the median amount of sunlight is? I'm not disagreeing - just curious about what the practicalities are with a solar installation for a suburban house on a suburban sized lot.

I don't have the numbers on this and it depends on a number of factors such as average solar load, the type of system, and so forth. I know several people in Colorado who get all their power from the sun with modest-sized arrays. Of course they also have very modest power consumption. The key, however, is that power stations are built to satisfy peak load and in most states this happens on sunny, summer afternoons because of air conditioners. If we can cut this peak power use then we don't have to build as many power plants.

I don't think the Bloom Box is the holy grail - but, like Mike says, it may be one technology that represents a step in the right direction. The solution will consist of many different technologies and strategies.

I certainly hope it does. There is nothing new about a fuel cell that converts hydrocarbons, however. What would be unique is to do it affordably. Until then Bloom is just another fuel cell.

"we must be the change we wish to see in the world"

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