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Summary:

Bloom Energy, the fuel cell startup backed by close to $400 million from investors including Kleiner Perkins Caufield & Byers, has grabbed the spotlight after emerging from nearly eight years of stealth mode with a media blitz including an exclusive coming out party with CBS’s “60 […]

Bloom Energy, the fuel cell startup backed by close to $400 million from investors including Kleiner Perkins Caufield & Byers, has grabbed the spotlight after emerging from nearly eight years of stealth mode with a media blitz including an exclusive coming out party with CBS’s “60 Minutes” this Sunday. From all the attention, you might think Bloom invented the idea of using fuel cells for stationary power — a market that differentiates the Sunnyvale, Calif.-based startup from those tackling fuel cells to power vehicles or portable electronics, a field that includes startups alongside electronics and automotive giants including Samsung, Sharp, Toyota, Hyundai, Ford, GM and many others.

But in fact, stationary fuel cells — devices that chemically convert hydrogen into electricity and water, or hydrogen-containing fuels into power, water and various byproducts — are already a highly-populated industry. Players such as United Technologies, Ballard Power Systems, Plug Power, FuelCell Energy and Panasonic are churning out stationary fuel cells, mainly to provide backup power, generate electricity for remote applications or meet a company’s low-emissions energy production goals. But making fuel cells that can produce electricity as costs that are competitive with grid power — Bloom Energy’s goal — has remained out of reach so far.

That challenge, of course, is a siren’s song for venture capitalists looking for the next fuel cell startup with technology that can bridge that critical gap. And while Bloom Energy has raised more VC investment than many of these startups combined, it isn’t unique in aiming its sights at the holy grail of grid parity. Here are 10 startups that could be hot on Bloom Energy’s trail:

ClearEdge Power: The Hillsboro, Ore.-based startup has spent 7 years developing a stationary fuel cell that runs on natural gas or propane, aimed at providing both electricity and heat to homes and small businesses. It’s raised about $55 million in venture capital, and most recently landed $11 million in January, with investors including Kohlberg Ventures, Applied Ventures, Big Basin Partners. ClearEdge has reported initial shipments of a $50,000, 5-kilowatt fuel cell unit aimed first at the California market.

Combined heat and power (CHP) generation, or creating both useful heat and electricity from a single source, is the goal of Bloom Energy, as well as many other fuel cell makers. Particularly companies like Bloom that use solid oxide fuel cell technology, are looking at CHP because that technology runs hotter than the polymer electrolyte membrane (PEM) fuel cells, which are more typically aimed at vehicular or portable applications.

Ceres Power: Ceres Power is an Imperial College London spinout based in Redhill, U.K., which has raised about $75 million to develop stationary fuel cells that generate electricity and heat for homes using methane, that is, natural gas. In May, it announced the successful test of a 1-kilowatt unit with British Gas, a milestone that came with a £2 million ($3.10 million) payment from the utility with a promise of more to come. In December Ceres announced the start-up of a manufacturing line it hoped to bring to commercial-scale production through the course of this year.

Neah Power Systems: The Bothell, Wash.-based startup got started with U.S. Navy money, raised investment from backers including Intel Capital, Alta Partners, Novellus Systems, Castile Ventures and Frazier Technology Ventures, and went public as an over-the-counter traded company via a reverse merger in 2006. In  January it announced a $10 million funding commitment from Ebeling Heffernan and First Equity Trust, and also bought lithium-ion battery charger CyVolt Energy Systems. Neah says it has replaced traditional proton exchange membrane (PEM) technology with a more reliable, longer-lived silicon-based design, and while it’s concentrating on portable applications, it has also identified the stationary backup power market as a potential target.

ReliOn: This Spokane, Wash.-based startup was spun out of utility Avista Corp., and makes proton exchange membrane-based fuel cells in the 300-watt to 12-kilowatt range for commercial and industrial backup power. It most recently raised $23 million in a Series C round in April 2008, and its investors include PCG Clean Energy & Technology Fund, Robeco, Oak Investment Partners, Chrysalix Energy Venture Capital, Enterprise Partners Venture Capital and Wall Street Technology Partners. It had shipped more than 1 million watts of devices as of December 2007, and in February 2008 announced a partnership with Emerson.

P21: The Munich, Germany-based hydrogen-powered fuel cell maker was spun out of Vodafone in 2001, and unsurprisingly is aimed at providing backup power to telecommunications networks — a common target market for fuel cell makers. It raised €10 million ($13.6 million) in May from Yellow&Blue Investment Management, Target Partners and Conduit Ventures, and says it has been testing its fuel cells in the field since 2004. (For more research on fuel cells and other tech to make telecom networks greener, check out GigaOM Pro).

ACAL Energy: This U.K.-based startup makes membrane exchange fuel cells with cathodes that use about one-fifth the platinum of traditional membrane fuel cells — a bonus, given the high cost of that precious metal — and is targeting the stationary power market as well as automotive applications. It raised £3.3 million ($4.8 million) in December 2008 from CT Investment Partners, Rising Stars Growth Fund, NorthStar Equity Investors, Porton Capital and Synergis Technologies. In January it announced plans for its first working model of its FlowCath technology in a stationary power setup at a Warrington, U.K. industrial site, with installation set for the second half of 2010.

CellEra: This Israeli startup is also working on a stationary fuel cell that does away with platinum, with the aim of cutting costs by up to 70 percent compared to platinum-using fuel cells. It has developed proprietary electrode technology and is working with partners to develop its platinum-free catalysts. It raised $2 million from Israel Cleantech Ventures last year, and in February raised another $2 million in part of what CEO Ziv Gottesfeld said was a larger round of funding.

Intelligent Energy: This London-based maker of hydrogen-powered fuel cells has also focused its efforts on automotive applications, with partnerships with Suzuki for fuel cell scooters and with Lotus for fuel cell taxicabs for the 2012 Olympics in London. But the company also says its fuel cells have been used for stationary combined head and power generation since 2003, and in 2008 it launched a CHP joint venture with utility Scottish and Southern Energy. In July it raised $30 million, bringing its total haul to some $130 million from investors including Meditor European Master Fund and F&C.

Electro Power Systems: This Italian startup is making a stationary fuel cell, aimed at the mobile phone backup power market, and raised $6.8 million from 360 Capital Partners and others in the first quarter of 2009, according to Greentech Media. Its innovation is to make the process reversible — the fuel cells would convert hydrogen to electricity when grid power is down, then convert water back to hydrogen via electrolysis using grid power once it’s back on. Electrolysis is often touted compared to the more economical — yet fossil fuel-hungry — method of “cracking” natural gas into hydrogen, which supplies the lion’s share of the world’s hydrogen supply today.

EnStorage: This Israeli startup is aiming its sights on regenerative fuel cells to help the power grid load balance and firm up intermittent solar and wind power generation. It raised $2 million in January 2008 from Greylock Partners, Caanan Partners and Siemens Venture Capital, and says its regenerative fuel cell technology, developed by Tel Aviv University Professor Emanuel Peled, is optimized to provide high efficiency at low cost. (This and other regenerative fuel cell systems share some characteristics with flow batteries, which convert storage chemicals to energy — flow battery startups include Deeya Energy, ZBB Energy Corp, Premium Power and EnerVault.)

  1. [...] with this list of 10 Fuel Cell Startups Hot On Bloom Energy’s Trail, Earth2Tech emphasizes that Bloom isn’t the only company out there trying to master fuel cell [...]

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  2. [...] Sprint has been working with hydrogen fuel cell providers and tank manufactures for the fuel cell backup power project, and specifically has worked with fuel cell makers ReliOn, and Altergy and hydrogen provider Air Products, the company tells us. ReliOn is a Spokane, Wash.-based startup that was spun out of utility Avista Corp., and makes proton exchange membrane-based fuel cells in the 300-watt to 12-kilowatt range for commercial and industrial backup power. ReliOn is backed by PCG Clean Energy & Technology Fund, Robeco, Oak Investment Partners, Chrysalix Energy Venture Capital, Enterprise Partners Venture Capital and Wall Street Technology Partners. (See 10 Startups Hot on Bloom Energy’s Trail). [...]

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  3. Awesome list Jeff.. thanks for keeping conversation evolving on distributed power generation…

    I’ve listed a few at the end of this post:
    http://www.garrygolden.net/2010/02/21/future-of-portable-personal-power-via-micro-fuel-cells/

    I’d add smaller devices makers like MyFC to the list – even though they use more disposable platforms- they are developing market awareness and demand

    And some extra thoughts on Bloom here:
    http://www.garrygolden.net/2010/02/23/bloom-energy-box-disruptive-future-of-distributed-energy/

    Garry G
    Brooklyn, NY

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  4. Interesting article Jeff but not sure why you do not mention Ceramic Fuel Cells? We are launching a commercial product in Q2 2010 called BlueGen aimed at the domestic market. We are also AIM listed so there is plenty of information available about us. Please see our website on http://www.cfcl.com.au.

    Paddy

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  5. We reported on one the other day that should probably be included in your list of runners up: http://pesn.com/2010/02/05/9501609_TMI_1kW_Fuel_Cell_Module/

    TMI’s 1 kW fuel cell module for 3rd world deployment runs on wide range of fuels – A modular fuel cell technology can convert just about any fuel into clean electricity using a chemical process. Technology Management, Inc., of Cleveland, plans to market this distributed energy solution within the developing world where they don’t have power, enabling them to grow their own. (PESN; Feb. 5, 2010)

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  6. The Company Limnia, located at http://www.limnia.com, has already shown this, has the issued patents on it, prior to Bloom, and has a smaller system for a far lower cost. Bloom’s lawyers better make a licensing deal quick before Limnia owns them…

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  7. [...] week of Bloom: 10 Things to Know About Bloom Energy, The Bloom Box: What All the Fuss Is About, 10 Fuel Cell Startups Hot on Bloom Energy’s Trail. The event starts at 8:30AM – stay tuned. [...]

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  8. Advantages of BloomBox…(1) Cost Effective – Half the cost of electricity from the grid – derived from natural gas turbines running on the same fuel that BloomBox ran on. Gas turbines BURN the fuel. Fuel Cells use a chemical reaction – cleaner and more efficient, 70-80%. This also cuts CO2 emissions in Half, using conventional natural gas…(2) Cheap, plentiful materials – Sand used for the substrate – no silcon wafers, and cheap metal alloys used between cells – no expensive catalysts, such as platinum or rhodium…(3) Most fuel cells require PURE hydrogen, which is more expensive, compared to cheaper unpurified raw gases that can power the BloomBox. E-Bay is using Biogas to power their BloomBox. This demonstrates that BloomBox can be configured with a biomass digester and use raw, UNpurified methane-rich biogas. This is carbon neutral. There is a big potential for exploiting agricultural / industrial / forestry / municipal organic waste – for localized power generation…(4) There is typically a loss of electrical energy when power is sent long distances through transmission lines. Not with distributed energy, such as onsite or neighborhood fuel cells – no expensive and unsightly transmission lines needed and no loss of long distance current, when power is produced and consumed onsite or locally…(5) Multi-fuel Capability – BloomBox is Not just limited to natural gas. That was the simplest / easiest way, during its introduction, to double the cost effectiveness of natural gas and cut the carbon footprint in half. The BloomBox will also be powered with renewables (E-Bay). This can run on numerous sources of “synthgas” – derived from a variety of biomass waste feedstocks, or algae, duckweed, and biofuels, etc… BloomBox can run on domestic renewable fuel, such as 50-50 ethanol-water. We have inexpensive fuel reformers that strip all the hydrogen out of ethanol, Plus HALF the hydrogen out of the water, simultaneously…(6) Bottom line is – Bloom Raised the Bar. To be hot on Bloom’s energy trail – Competing equipment must BOTH replace expensive catalysts with cheap catalysts, and add the capability to use multiple, unpurified raw gases. Then it’s a matter of who can make the unit cheaper, configure it better, give the best customer service, be well managed, provide the best terms and financing, and establish themselves in the market, etc.

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  9. Interesting subject. I didn’t know there were so many companies.

    Thanks

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  10. [...] 10 Fuel Cell Startups Hot on Bloom Energy’s Trail Bloom Energy, the fuel cell startup backed by close to $400 million from investors including Kleiner Perkins Caufield & [...] [...]

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