Arkansas Electric Energy Law : Arkansas Electric Energy Lawyer & Attorney : Eric Hughes Law Firm : Wind & Solar Power, Distributed Generation : Arkadelphia, Little Rock, Pine Bluff

Bloomenergy unveiled its long-awaited fuel cell technology today.  This is a story we have been following for some time, and have reported on extensively:

Will Bloom Boxes Make Your Electric Utility Obsolete

Bloom Energy to Unveil Bloom Boxes Wednesday

Bloom Boxes Could Promote Economic Development in Arkansas

According to the Bloomenergy data sheet a Bloom Box, which it now calls an Energy Server, uses either natural gas or directed biogas as fuel.  The fuel required at rated power is 0.661 MMBtu/hr of natural gas.  Its rated power is 100kw (the claim is that is enough to power 100 homes for base load -- this may actually be too low).

As for emissions, the data sheet states:

In addition, the fuel cells act not only as an electricity generator, but also as a storage device.  So electric power generated by solar or wind, for example, will be integrated with the "Energy Server" to further reduce the carbon footprint.

Moreover, the benefits of distributed generation are a reduction in the cost and complexity of transmission and distribution, the company asserts.

eBay CEO John Donahoe was quoted by Josh Lowenshon as saying that his company installed 65,000 feet os solar panels and powered 18% of its campus.  Then, it installed five Bloom Boxes and powers 15% of its campus.  Brian Kelly of Coke says the fuel cells are powering 1/3 of ifs Odwall plant; Brian Kelly of Cox indicates that they are powering 70% of its facility in San Francisco; and Bill Simon of Wal Mart says Bloom Boxes are carrying 60-80% of its energy needs at peak in the buildings where they are installed.

Now that we know more details about Bloom Boxes, tell us what you think.

The new fuel cells manufactured by Bloomenergy, called Bloom Boxes, and partially unveiled Sunday night on CBS's news program 60 Minutes, will be further revealed during a  Bloomenergy announcement Wednesday at the headquarters of one of its first customers, Ebay.

For those who have not been following this story, the Bloom Box fuel cells are a stack of ceramic wafers with a proprietery ink on each side separated by a metal alloy.  Fuel (currently natural gas, but it may be operated with other fuels) goes in one side of the ceramic wafer, and oxygen goes in the other.  The resulting chemical reaction -- which does not involve combustion -- produces electricity.

According to the 60 Minutes report, Bloomenergy has installed the devices for 20 commercial customers, including Ebay, Wal-Mart, Google, and Fed Ex.  Reportedly, the fuel cells have reduced the cost of electricity for those customers, Ebay saving as much as $100,000 on its electricity costs.

With a reported $400 million in venture capital backing, principally from Kleiner, Perkins, Caufield & Byers, led by John Doerr, the stakes are obviously high for Bloomenergy.  And the company is not without its critics, as pointed out by Paul Keegan in Fortune Brainstorn Tech:

"I definitely think Bloom is over-hyped," says Jacob Grose, senior analyst at Lux Research, which specializes in emerging technologies . . . .  "what Bloom offers does not seem to be unique -- other fuel-cell companies are doing very similar things.  The real question is whether Bloom has unlocked the secret of how to make thiese things cheap, and I'm very skeptical of that."

One hopeful that Bloomenergy has done just that is the reason K.R. Sridhar and his secretive company has decided to go public.  According to the Keegan article,

Turns out it wasn't his idea -- his customers are forcing him to show his hand.  "They are pushing, he admits.  "They are saying if you're not going to say anything we're going to go out and say we're doing this."

If its customers want to publicize what it is doing, then the company must be doing something right.

DOES THIS BENEFIT ARKANSAS?

Electric energy law and policy are some of the most intriguing issues of our day.  The purpose of this blog is to foster a discussion of the issues and at least imagine some of the policy alternatives and other ideas that might lead to energy independence, economic development, and a healthier environment.  These are some ideas about how technologies like Bloom Boxes can benefit our state (or any other state for that matter):

• Manufacturing.  Arkansas is already becoming a leader in renewable energy manufacturing, with significant facilities for the production of wind turbine component parts, including blades and nacelles.  Let's hope the Arkansas Economic Development Commission, its Arkansas Energy Office, and regional organizations such as the Arkadelphia Regional Economic Development Alliance are working to attract these types of companies utilizing emerging technologies.
• Utilities.  Although we speculated last November whether Bloom Boxes would make your electric utility obselete, that will probably not be the case.  More likely, utilities will install Bloom Boxes at substations, turning the substations into generating facilities.  The real question is will Bloom Boxes make generating facilities like the Turk plant and the White Bluff facility obselete?
• Municipalities.  Municipalities can benefit from Bloom Boxes in a number of ways:
  • Municipal owned utilities.  Arkansas law provides a mechanism for municipal owned utilities.  In the future Bloom Boxes may provide a viable generation alternative for municipalities and, for those municipalities with a large enough landfill, landfill gas may provide at least a portion of the fuel for the Bloom Boxes.
  • Sustainable communities.  Employees and employers both are increasingly concerned with the sustainability of operations, as the Keegan article notes.  A community that can provide cleaner electricity production would be attractive.
  • Community job creation.  Municipal owned utilities create jobs for the local community.
• Commercial and Residential.  The Keegan article notes that Ebay saved $100,000 in electricity costs after installing Bloom Boxes, an example of more efficient energy production being a good business decision.  The possibities for residential implementation are numerous.  Here are two:
  • Residential developers could make a Bloom Box generating station a part of the development, to be operated and maintained by a property owner's association.
  • Individual homeowners could band together and install a Bloom Box serving two or more residences, and make its operation and maintenance a covenant running with the land.  Thereafter, subsequent purchasers of the property would be obligated to continue participating in the operation and maintenance, as well as continue receiving the benefit of the cheaper electricity.

We often hear statements that clean, renewable energy is just too expensive as compared to energy derived from fossil fuel.  In Arkansas, arguments are being made in the Public Service Commission's "Sustainable Energy Resources (SER)" docket (08-144-U), that fossil fuels (coal) is the cheapest form of fuel for electricity production.  However, not all of the costs of producing electricity from coal are included in your monthly utility bill.  There are external costs -- increased health care costs, damage to timber and agricultural production, among many others -- that are real costs we each pay, however they may be hidden in.

In the Wall Street Journal's Environmental Capital Blog, Keith Johnson writes:

For policymakers, these externalities represent an opportunity as much as a headache.  For all the worries that a bigger role for government in the energy business -- from cap-and-trade schemes to solar-powered subsidies -- represents a retreat from free markets, that's hardly the case.  Energy markets aren't "free" today, and the playing field is anything but level.

New energy policies that seek to redress those problems, and unleash rather than further stifle a genuine market for energy, will point the way toward a new energy future that makes sense, both environmentally and economically.  That's because, if new policies set out to tackle those externalities once and for all, the environmental answer will quite often become the economic answer.  Everything has its price -- and its cost.

We agree.  As we have previously said, the Public Service Commission docket on Sustainable Energy Resources represents an opportunity for Arkansans to propose policy alternatives.  Arkansas has a wealth of resources for the production of electricity, and should take advantage of the opportunities for the economic development of the state, especially in its rural areas.