Term Assignment Management & Technology Innovation

BLOOM ENERGY (An Alternative Fuel Cell Energy Technology)

Under the Guidance of: Dr. Piyush Verma (Assistant Professor , LMTSOM)

Submitted By: Pranav Sood 400907018 Amit Anand 400907031

Submission Date : 6 January 2014

Mehul Shukla 400907034 Rachit Sofet 400907036

LM Thapar School of Management Thapar University, Patiala

Abstract
Our term assignment main objective is to bring out an innovative, successful & feasible technology that aims to make world a better place to live in. The topic of our assignment is Bloom Energy . Not many of people have heard of this innovative initiative. Bloom Energy makes use of Fuel Cell Technology to create and deliver clean, affordable and efficient electricity to users. Use of Fuel Cells to generate electricity is not a breakthrough technology of recent years, Since 1830, people have been aware and have tested it as an alternative source of power generation. Not many success stories have come across as an promising alternative to conventional sources of power. What Bloom Energy excels in is its affordability, cheaper raw materials & high efficiency. The assignment has been divided into four portions namely Need for Alternative power sources, Technology design, Success stories and Critical View point. The source of the information and facts covered in this assignment are mainly from the Bloom Energy website. They have maintained a high level of secrecy about their work which is evident from the fact that not enough resource material is available about Bloom Energy on the internet. For this assignment, we have searched all possible sources of information we could. Our assignment team is in favour of this technology being a potent source of alternative energy that could be powering our homes in near future right in our lawns.

Table of Contents
Abstract ...................................................................................................................................... 2 Environmental Impact of Conventional Power sources(Thermal Power Plants) ...................... 4 Air Environment .................................................................................................................... 4 Water Environment ................................................................................................................ 4 Critical Issues to be addressed: .............................................................................................. 4 Renewable energy scenario........................................................................................................ 5 Bloom Energy (The Technology) ........................................................................................... 7 Energy Server Architecture.................................................................................................... 8 Solid Oxide Fuel Cells ........................................................................................................... 9 How does Bloom Energy Server Fuel Cell Work ? .......................................................... 10 Success Stories of Bloom Energy ......................................................................................... 10 Bloom Energy Benefits ............................................................................................................ 14 Alternative Energy Incentives.................................................................................................. 14 Cost Analysis: .......................................................................................................................... 15 Bloom Box: .............................................................................................................................. 16 Bloom Box Purchase Price .................................................................................................. 16 Bloom Box Installation Cost ................................................................................................ 16 Natural Gas Fuel Cost .......................................................................................................... 16 Cost of Bloom Box Maintenance ......................................................................................... 17 Bloom Box Salvage Value ................................................................................................... 17 Challenges: ............................................................................................................................... 18 Criticism:.................................................................................................................................. 19 Conclusion: .............................................................................................................................. 20 References: ............................................................................................................................... 21

Environmental Impact of Conventional Power sources(Thermal Power Plants) Air Environment

Coal based thermal power plants affect the air quality of the surrounding region more than natural plants. Around the coal based plants the ambient sulphur dioxide concentration, Nitrous oxide conc were found out to be very high. From the epidemiological data of the area surrounding the Ramagundam coal based plant, it has been observed that around 6.5% of population living within a 2 km radius of the plant suffers from respiratory disorders, while the figure decreases to 3.2% at a distance of 2.5 km and becomes negligible (0.91%) at over 5 km from the plant. Thus it can be inferred that people living within 5 km radius of coal based power plant suffer from respiratory ailments.

Water Environment
The thermal power plants discharge their effluents usually untreated into the river thereby making the water toxic. In the case of hydroelectric plants water environment is affected due to the stagnation of water in the reservoir. If the reservoir accumulates runoff from agricultural fields, the water may contain high amounts of fertilizer and pesticide residues, which may accumulate in the reservoir.

Critical Issues to be addressed:

Is there enough coal available first of all for all these Thermal Power Plants? One hears of coal shortages and mines shutting down as they are below par in production. Seven power plants will require large tracts of land in a district that is predominantly agricultural as it is in the highly fertile Kaveri delta region, Doaba & Majha belt of Punjab Who benefits from the power generated? The locals? What do they get out of having to breathe in polluted air and losing their fields and crops to ash and coal dust? The cumulative impact of so many power plants in terms of ash production as well as air pollution will be high and has not even been thought of.

Renewable energy scenario

In India the potential of renewable energy source is about 81.200 MW out of which only 5594 MW i.e. 6.9% has been harnessed so far. The potential and capacity harnessed so far is given in Table 1 [1]. Indias need for power is growing at a prodigious rate, annual electricity generation and consumption in India have both nearly doubled since 1990, and its projected 2.6% (low end) to 4.5 % (high end). Annual rate of increase for electricity consumption (through 2020) is the highest for any major country. India is currently the seventh greatest electricity consuming country (accounting for about 3.5% of the world total annual electricity consumption) but will soon overtake both Germany and Canada in that regard. India now faces an electricity shortages conservatively estimated at 11% and as high as 18% during peak demand periods.

Many people still think that it will not be long before renewable energy such as solar and wind becomes outright cheaper than fossil fuels, thereby leading to a rapid expansion of the thin orange slither in the graph below.

So, what does renewable energy have to accomplish before it can compete with fossil fuels in an open market? Well, in short, we will have to overcome the diffuse and intermittent nature of renewable energy more efficiently than we can overcome the declining reserve qualities and unrefined nature of fossil fuels. In other words, we need to overcome the following two challenges in order to meet the ever increasing demands: Solar panels and wind turbines need to become cheaper than raw fossil fuels. This is the challenge posed by the diffuse nature of renewable. Thus, if renewable are to challenge fossil fuels in an open market, technology must advance.

Bloom Energy (The Technology)

Bloom Energy was founded in year 2001 at Sunnyvale, California by Dr. K.R Sridhar. It traces its roots to work performed by Dr. K.R. Sridhar, Bloom founder and Chief Executive Officer, in connection with creating a technology to convert Martian atmospheric gases to oxygen for propulsion and life support. Dr. Sridhar and his team built a fuel cell capable of producing air and fuel from electricity generated by a solar panel. In 2001, when their project ended, the team decided to continue their research and start a company. Originally called Ion America, Bloom Energy, was founded with the mission to make clean, reliable energy affordable for everyone on earth. In 2002, John Doerr, and Kleiner Perkins became the first investors in the company. Kleiner Perkins was legendary for its early backing of other industry changing companies, like Google, Amazon.com, Netscape, and Genentech, but Bloom was its first clean tech investment. In fact, at that time, clean tech was not even really a word. With financing in place, the team packed three U-hauls and headed to NASA Ames Research Center in Silicon Valley to set up shop. Over the next few years, the technology quickly developed from concept, to prototype, to product, as the major technological challenges were solved and the systems became more powerful, more efficient, more reliable, and more economical. Bloom Energy is making clean, reliable energy affordable. By leveraging breakthrough advances in materials science, Bloom Energy systems are among the most efficient energy generators, providing for significantly reduced operating costs and dramatically lower greenhouse gas emissions. By generating power where it is consumed, Bloom Energy offers increased electrical reliability and improved energy security, providing a clear path to energy independence. Bloom Energy developed what they call Bloom Box. Its an Energy Server based on their patented solid oxide fuel cell technology. Bloom Box is a power generator producing electricity at consumer site itself. Now Fuel Cells are devices that convert fuel into electricity through a clean electro-chemical process rather than dirty combustion. They are like batteries except that they always run.

Energy Server Architecture

At the heart of every Energy Server is Bloom's patented solid oxide fuel cell technology. Each Energy Server consists of thousands of Bloom's fuel cells. Each cell is a flat solid ceramic square made from a common sand-like "powder." Each Bloom Energy fuel cell is capable of producing about 25W... enough to power a light bulb. For more power, the cells are sandwiched, along with metal interconnect plates into a fuel cell "stack". A few stacks, together about the size of a loaf of bread, is enough to power an average home. In an Energy Server, multiple stacks are aggregated together into a "power module", and then multiple power modules, along with a common fuel input and electrical output are assembled as a complete system.

Solid Oxide Fuel Cells

Fuel cells were invented over a century ago and have been used in practically every NASA mission since the 1960's, but until now, they have not gained widespread adoption because of their inherently high costs.

Legacy fuel cell technologies like proton exchange membranes (PEMs), phosphoric acid fuel cells (PAFCs), and molten carbonate fuel cells (MCFCs), have all required expensive precious metals, corrosive acids, or hard to contain molten materials. Combined with performance that has been only marginally better than alternatives, they have not been able to deliver a strong enough economic value proposition to overcome the status quo. Some makers of legacy fuel cell technologies have tried to overcome these limitations by offering combined heat and power (CHP) schemes to take advantage of their wasted heat. While CHP does improve the economic value proposition, it only really does so in environments with exactly the right ratios of heat and power requirements on a 24/7/365 basis. Everywhere else the cost, complexity, and customization of CHP tends to outweigh the benefits. For decades, experts have agreed that solid oxide fuel cells (SOFCs) hold the greatest potential of any fuel cell technology. With low cost ceramic materials, and extremely high electrical efficiencies, SOFCs can deliver attractive economics without relying on CHP. But until now, there were significant technical challenges inhibiting the commercialization of this promising new technology. SOFCs operate at extremely high temperature (typically above 800C). This high temperature gives them extremely high electrical efficiencies, and fuel 9

flexibility, both of which contribute to better economics, but it also creates engineering challenges. Bloom has solved these engineering challenges. With breakthroughs in materials science, and revolutionary new design, Bloom's SOFC technology is a cost effective, all-electric solution. Over a century in the making, fuel cells are finally clean, reliable, and most importantly, affordable. Bloom Energy makes use of a raw material in making of fuel cells that is abundantly available across the globe. Beach Sand is available in plenty in oceans and beaches. It contains an important ingredient called Zirconium Oxide. It has great chemical properties that make it useful for electro-chemical power generation. It also reduces the cost of making fuel cells to a great extent.

How does Bloom Energy Server Fuel Cell Work ?

Every Fuel Cell is coated with special inks that are patented with Bloom Energy Technology. These inks act as a catalyst to electro-chemical reaction. Now a fuel cell requires to inputs for the electro-chemical process. One is fuel (Natural Gas, Biogas, LPG and even Solar Power) and other Oxygen derived from Air. Fuel passes over Anode of the Fuel Cell and Air (oxygen) over the cathode. A solid Oxide Fuel Cell is a high temperature Fuel Cell. Warmed Air enters cathode, now stem ions react with fuel in fuel cell to convert fuel into reformed fuel. This reformed fuel crosses over anode to attract oxygen ions from cathode .Reaction produces electricity plus steam and some amount of carbon dioxide. Water is recycled to produce reformed fuel. Electricity generated is then transmitted to the grid for use. A typical chemical reaction equation is as below -: Ch4 +2O2 --> Co2 +2H2O + e- + Heat

Success Stories of Bloom Energy

Bloom Energy is dedicated to making clean, reliable energy affordable for everyone in the world. We know that our customers are the cornerstone of that vision. Today, our Energy Server technology is deployed by leading companies across a broad range of industry segments. We help these customers lower their energy costs, reduce their carbon footprints, improve their energy security, and showcase their commitment to a better future.

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Some of their Clients include: Walmart, STAPLES, AT&T, eBay, Google, NOKIA, HONDA, Bank of America, FedEx Express, Kelloggs, CalTEch, Adobe & Apple. Recently Bloom Energy was in news for installing its first fuel cell outside of the U.S, in Japan. Bloom Energy has installed its fuel cell at a building in Fukuoka, owned by a Japanese telecom giant Softbank. Another milestone of Bloom Energy has been that it has successfully installed Fuel Cells generating 100MW of power enough to power about 36000 average American Homes. Some of the success stories of their clientele have been explained below-:

Bloom Installation: San Francisco, California (400 KW), January 2012 & San Jose , California (1.2 MW). Objective: Adobe expects to reduce its carbon footprint by approximately 121.5 million pounds over 10 years. Feedback: In October 2011, Adobe added a second Bloom Energy site with a 400 kW fuel cell installation at its downtown San Francisco offices. Along with 1.2 MW at its San Jose headquarters, Adobe produces over 14,000 MWh of clean electricity annually running on renewable biogas. Adobe is a recognized leader for its green building efforts, having earned distinction as the world's first corporation to achieve four Platinum certifications under the U.S. Green Building Council's Leadership in Energy and Environmental Design LEED program. The Bloom fuel cell installations build on Adobe's prior renewable energy initiatives including 20 Windspire wind turbines installed in 2009. Now, as a Bloom Energy customer, Adobe can efficiently generate 30% of its own electricity on site, further reducing the company's carbon footprint, lowering energy costs and mitigating power outage risks

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Bloom Installation: 500kW Installed in 2009 San Jose, CA MW Installed in 2013Salt Lake City, Utah Implementation: The first project consists of a 500kW installation, and Bloom Energy worked with eBay Inc. to source biogas for the projectmaking the project 100% renewable. The Bloom Boxes are a nice complement to the company's LEED Gold-certified building at its North campus in San Jose, CA. In September of 2013, eBay Inc. opened its data center in Salk Lake City, Utah the first in the world to use Bloom fuel cells as primary, on-site power. The state of the art facility incorporates 30 Bloom Energy Servers, 6 MW, into the data center's energy architecture. The electric utility grid will be used only as backup. By utilizing Bloom Energy Servers which generate on-site power 24 hours a day, 365 days a yeareBay Inc. replaced large and expensive backup generators and UPS components and will drastically reduce the carbon footprint of its new facility. Bloom Installation: 1MW, August 20 12, Torrence, CA

Why Bloom? : Bloom Energy Servers provide a number of environmental and economic benefits compared to traditional grid power for Honda. For each MWh of energy the fuel cell system generates, CO2 emissions will be cut by 18-25%. Over a project life of ten years, the servers will reduce Honda's carbon dioxide emissions by approximately 16 million pounds. Fuel cells convert fuel into electricity through an electrochemical process that is much more efficient than combustion. Bloom's technology delivers water savings as it requires no water beyond an injection of 240 gallons at start-up. Compared to the average water demands of California power plants, it is estimated that Honda will save more than 3.25 million gallons of equivalent water used per year. Implementation: The Bloom system at Honda's Torrance location consists of five Bloom Energy Servers, each producing 200 kilowatts of power, and will provide 25% of Honda's electricity needs for its 1.13 million square feet of office space, research, design and development operations, and parts distribution center on the 101-acre campus. 12

Bloom Installation: 300 KW, December 2008, Ontario, CA

Why Bloom? Early projects with solar and wind were promising and remain in the Staples portfolio, but its search continued for a consistently reliable solution that could operate 24/7 like its business operations and significantly add to carbon reduction volumes. That led the company to Bloom Energy. Bloom offered a unique fuel cell technology that Staples identified as a clear departure from the highly priced legacy fuel cells Implementation: Staples first 300 kW installation was at their Ontario, California Distribution Center. In the first year alone, the project generated over 2 million kilowatthours of affordable power that resulted in a reduction of 2.5 million pounds of carbon dioxide. Availability has been above 99%, and Staples is now considering ways that Bloom can play a bigger part in providing power to their large facilities and distribution centers. Bloom Installation: 35 Projects in CA ,Total 11.4MW

Objective-: Walmart seeks an energy solution that will help them achieve their renewable energy targets while contributing to lower costs and providing the potential to supply continuous power to stores, even during critical grid outages. Implementation: Walmart installed its first Bloom Energy Server at its Lancaster, CA store in 2009 and today has more than 30 Bloom installations at stores and distribution centers in California. Most of Walmart's Bloom Energy servers are powered by biogas, resulting in even greater carbon reductions. The electricity provided by Bloom Energy servers varies by location but can provide up to 60-75% of the facilities' electrical load.

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Bloom Energy Benefits

In summary the benefits of Bloom Energy can be summarised as below -: Lower Cost Energy Source: Our technology offers customers the opportunity to produce their own electricity for less than they pay today. We accomplish this by using widely available, inexpensive materials, leveraging proven manufacturing techniques, and delivering an extremely efficient system nearly twice as efficient as conventional technologies. Fuel Flexibility: Bloom Energy systems are capable of running on a wide variety of renewable and fossil fuels. This allows customers to choose the best fuel for their individual costs, availability, and sustainability needs. Sustainable: By using fossil fuels more efficiently, without combustion, and by supporting renewable fuels like biogas, our systems produce far fewer emissions than legacy technologies, thereby providing a sustainable future. Increased Reliability and Scalability: Bloom Energy are built around a modular architecture of simple repeating elements. This architecture delivers a solution that is extremely reliable and easy to scale. Our technology is able to generate power 24/7/365. Simple Installation & Maintenance: Bloom Energy system is plug and play. It is designed to easily fit into existing facility infrastructure and requires no end-user maintenance. Bloom Energy handles all management and maintenance of the systems.

Alternative Energy Incentives

Apart from all the ongoing R&D activities to make fuel cells more affordable, the federal government is also providing tax incentives for fuel cell power plants and to users of these fuel cell systems. The Energy Policy Act of 2005 allows the fuel cell power plants to claim tax benefits from the Federal government. In order to qualify for these tax breaks, the power plants should have a fuel cell stack assembly to generate electricity using electro-chemical reactions. Additionally they should have an efficiency of 30% or greater. A number of states are also providing financial incentives to support fuel cell installation facilities. Fuel cell power 14

consumers are also able avail 1.5 cents per kWh credit for the first 5 years since they started using this service. Although the above tax and financial incentives do not reduce the cost of the manufacturing and generating power using fuel cells, they do lower the operating costs for both the supplier and the electricity users. Indian government also provides incentives to such efficient energy systems

Cost Analysis:
It is based on current market values for the price of electricity, solar panels, and natural gas. The Bloom Energy fuel cell is not yet ready for market on the residential level, never the less cost analysis is formulated including the Bloom Box to show what the cost comparison would be if it hit the market now on that level. For future release dates, the analysis can be rerun using future values, simply by updating the inputs. Reports showed that an average monthly use of electricity for a typical US residential user is approximately 920 kWh. Estimates for the size of solar panel(s) and fuel cell are based on this average value. Furthermore, in purchasing electricity from the electric company, we have based the average monthly cost on this amount as well. It is found that most costs are estimated based on the size of the equipment, so the total cost would scale linearly with an increase or decrease of total energy requirements. 15

Bloom Box: Bloom Box Purchase Price

The purchase price for the Bloom Box fuel cell comes from the design goal that Bloom Energy has specified for its residential unit. They have set the goal to sell an average residential fuel cell for $3000. This is the baseline value for our cost comparison. It is calculated using the federal tax credit of 30%, which reduces this input to $2100. This credit would be available for purchasing a Bloom Box, and it is a direct saving for customers.

Bloom Box Installation Cost

Although Bloom Energy claims that the Bloom Box is different from other fuel cells in that it has higher efficiency and a lower purchase price, the technology used to transmit electricity from the Bloom fuel cell to the building is essentially the same. Therefore, the work required to install a Bloom Box is expected to be comparable to the installation for other fuel cells, especially solid oxide fuel cells. From literature review, a comparable fuel cell with a purchase price of $2850 cost $770 to install. As a fraction of purchase price, the installation is 27% of the purchase price. We use that fraction to estimate our installation cost of $810 or 27% of our $3000 purchase price.

Natural Gas Fuel Cost

The current commercial Bloom Box uses 0.661 MMBtu/hr of natural gas to generate 100 kW of electricity. The amount of natural gas used by a residential unit will scale linearly with the size of the unit and amount of electricity generated, so it is estimated that the amount of natural gas required by scaling linearly from the 100 kW usage. The monthly electricity use estimate is 920 kWh, based on average household electricity use. Since fuel cells can generate electricity continuously and store electricity, it is assumed that the fuel cell will run for 24 hours a day. Based on the average monthly electricity demand and a fulltime generation schedule, 1.26 kW are needed for an average residential Bloom Box.

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For a residential Bloom Box, 6.08 MMBtu of natural gas are required monthly. The current price of natural gas is $10.63 per MMBtu, so the estimated annual cost of natural gas to run the Bloom Box is $775.

Cost of Bloom Box Maintenance

In our literature review, we found that the expected maintenance costs for fuel cell can be estimated based on amount of electricity generated. The value quoted is approximately 2.4 cents per kWh, so the monthly maintenance cost in our analysis is expected to be around $22. This gives an annual maintenance cost of $264.

Bloom Box Salvage Value

Well maintained fuel cells can last for more than ten years, so there is a salvage value for the Bloom Box. We are assuming, in our maintenance calculations, that preventative maintenance is used to keep the fuel cell running optimally and that the Bloom Box is designed to last for 20 years. Since we are assuming the fuel cell will provide a constant amount of electricity throughout its lifetime and it will not actually be sold at the end of 10 years, it is most representative to spread its value out evenly over the 20 year lifetime. This is best described using Straight line depreciation. Using this depreciation method and the initial purchase price of $3000, the salvage value at the end of 10 year analysis period is $1500.

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Cost Components Summary

Challenges:
Break down

Over time, as the fuel and oxygen are constantly being pumped in and run over the catalyst in the stacks, the chemicals start to degrade and the system starts to wear down. Fuel cells are similar to a battery in their degrading process, and fuel cell stacks, like a battery, have an anode and cathode portions. Fuel cells also run at high temperatures, 18

which is another reason these systems degrade quickly. The short life span of the hot box is a key problem for the capital costs of fuel cell makers. Cost

Many engineers are still working on ways to reduce the costs associated with the adoption of bloom energy. Providing dynamic fuel cells

Criticism:
The cogen process involves natural gas to power an engine coupled to an electrical generator to supply some or all of the facilitys power while capturing the thermal energy from the engine and using it to preheat the facility's hot water boiler. This reduces natural gas consumed in the facilitys boiler and reduces operating cost and CO2 emissions. The cogen process results in overall thermal efficiencies of over 80 percent; most utility power plants are around 35 percent efficient, according to the author. The cost of cogen systems is estimated to be $3,000 per installed kilowatt versus Bloom at more than $8,000 before subsidies.

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Conclusion:
Our team is of Viewpoint that given the current scenario of power sector in India, Bloom Energy proves to be an attractive alternative. Many states of India are still heavily dependent upon the Conventional Power generation sources to meet their demands. For the power sector to keep up the pace with growing economy and growing energy demands , alternative sources of energy must play a significant role in power generation in near future. Similar to the lines of USA & some of the European countries, India should also heavily promote use and installation of alternative power generation sources like Bloom Energy. Though the technology is still in its growth stage with low overall technology maturity, future seems to be bright with initiatives being taken by the Bloom Energy. States like Punjab who have initiated and commissioned a stream of Thermal Power Projects, Bloom Energy seems to be a viable alternative.

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References:
1) Bloom Energy Website (www.bloomenergy.com) 2) Forbes Magazine (www.forbes.com) 3) National Environmental Engineering Research Institute Research paper by

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