Fuel Cells ‘Bloom’ In Delaware

on June 16, 2011 at 10:00 AM

Plans to open a fuel-cell manufacturing plant in Delaware represent a significant step forward in the development of a technology that is already helping to power companies like Google, Coca-Cola and Wal-Mart.

California-based Bloom Energy said on June 9 that, starting in 2012, it would like to begin manufacturing its fuel-cell servers in a former Chrysler factory site in Newark, creating 900 jobs and supplying 30 MW of electricity to the local utility, Delmarva Power. It plans to do this for 21 years.

The facility, if approved by state lawmakers and power regulators, would be the company’s first on the US East Coast, and would signal that its fuel cells are commercially viable, said Suresh Advani, a professor of mechanical engineering at the University of Delaware, which owns the site where the factory would be built.

The company converts natural gas, bio gas or liquid biofuels, such as ethanol, to electricity using an electro-chemical reaction in a fuel cell. Its processes are significantly more efficient than traditional fossil-fuel generation from combustion, emit much less carbon and water, and avoid the weather-related fluctuations in supply experienced by wind and solar installations.

“They are bringing down the cost of materials and competing with fossil-fuel generation for commercial customers,” said Advani.

He said that unlike some other early-stage fuel-cell companies, Bloom’s proposed plant shows that it has found a successful business model and may be able to further lower costs through economies of scale and collaboration with research and development teams at the University of Delaware.

Bloom’s chief commercial officer Bill Kurtz said the Delaware location would give the company proximity to the East Coast market, access to R&D expertise at the University of Delaware, and opportunities to hire a skilled high-tech work force.

“After 10 years of growth in our home state of California, we are ready for expansion to other markets,” Kurtz said in a statement. “Delaware … strategically positions us to serve customers on the East Coast.”

By using fuel-cell power from Bloom’s servers, customers such as Google are earning potentially valuable carbon credits that could help defray the cost of their investment.

“They are in a position to trade carbon credits” because of the project, Advani said.

Customers are likely motivated by a desire to reduce carbon emissions and by recognition that the servers reduce customers’ dependence on the grid, Advani said.

Independence from the national power supplies is likely to be most attractive to customers doing business in countries like China or India where the grid is less reliable than it is in the US, Advani said.

If approved by the state’s Council on Development Finance, the project would attract an $11.25 million grant from Delaware’s Economic Development Office for the 900 jobs it will create, as well as 3 percent of capital expenditures up to the first $50 million.

The plan is dependent on Delaware lawmakers approving legislation that would establish a regulatory framework for fuel cells, and on the state’s Public Service Commission agreeing to a new fuel-cell rate tariff.

Power produced from the new plant would cost residential consumers 70 cents a month more than the average market rate, according to a Delmarva Power estimate. But they are proving to be much more efficient, even when they burn natural gas.

Bloom’s servers using natural gas emit about a third of the carbon emissions from a conventional coal-fired power plant, and lose significantly less energy than during the combustion process.

Picture: An installation of new Bloom Energy servers called the ‘Bloom Box’ are seen in service at the eBay headquarters February 24, 2010 in San Jose, California.