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Summary:

Bloom Energy, a Valley startup that makes fuel cells, says it’s about half way to reaching profitability, and is doubling its installed units and revenues every six months. How long until the company makes it to break even?

BloomEnergy_dudestouching

Silicon Valley fuel cell maker Bloom Energy is “halfway there” to breaking even and becoming profitable, according to the company’s CFO, Bill Kurtz, in an interview on Friday. In addition, Kurtz says Bloom has a path laid out to get to “profitability soon.”

Ten-year-old Bloom is a prime example of a really capital-intensive cleantech company: it could potentially be a game changer for distributed cleaner power generation, but it has needed lots of capital to scale up manufacturing. If Bloom closes this recently reported round of $150 million, it will have raised at least $800 million over its lifetime.

But Bloom Energy is also growing quickly. Kurtz said the company is doubling the amount of fuel cells that are installed in the field, as well as revenues, every six months. The biggest challenge it face is growing as fast as it can, said Kurtz.

Bloom makes fuel cells that take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity. Customers buy several Bloom Energy servers that can deliver distributed power on site at a building, and can have a lower carbon footprint than grid power.

Data centers have emerged as a very important market for Bloom over the past year. The company launched a data center-focused division earlier this year, and has won over data center customers including Apple and eBay. Kurtz says one of the key reasons data center operators are interested in the fuel cell technology is so that they can be more immune to grid blackouts — eBay is using the grid as backup power and the fuel cells as primary power at its planned facility.

In addition to managing growth, Bloom Energy needs to reduce costs to get to break even. Kurtz, who says he focuses a lot on cost reduction, says “we’ve made a lot of progress in reducing costs.” NEA partner Scott Sandell, who participated in backing Bloom Energy, says the company is reducing its costs on the time schedule and at the rate that they’ve predicted.

The NEA partners, in a sit-down interview on Friday, said that Bloom Energy just recently came off an excellent quarter. The company broke ground on a factory on the east coast and plans to sell 30 MW worth of fuel cells to local utility Delmarva Power & Light. Apple’s fuel cell farm is 4.8 MW (an aerial photo of the start of it here), and eBay’s fuel cell is planned at 6 MW.

Check out this video interview with Bloom Energy about its next-generation fuel cell tech:

  1. Why is this a game changer? I would love to see a technical analysis of why this fuel cell is better than the others that are out there.

    Also – remember Zeno’s paradox. If you keep getting half-way, you never actually get there.

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    1. So correct. Not one article on Bloom ever talks about the actual “greenness” of the technology? Why? Because it’s not especially green. I’m not talking “not especially green” vs. solar panels — where it’s laughably non-competitive — but vs. natural gas power plants. Yes, this is distributed generation, which is nice. Yes, it can run on biogas instead of natural gas, which is theoretically a small plus on “renewability”. But on carbon neutrality, this tech is a loser. On cost per kw/hour, this is the kind of technology that will be very far behind solar if it isn’t already within just a few years.

      It’s really unclear why there is excitement around this.

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      1. Its more efficient than what the grid generates today.. so why not use it??

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      2. A major factor for the excitement around this is due to the amount of capital invested by big VCs in this. They are not going to admit defeat easily, they will take it as far as they can.. Besides, the US is moving towards a natural gas fueled economy, Bloom fits into that, although its cost structure will keep it a niche player, rather than a mainstream one.

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    2. It is a game changer because it creates more electricity directly from a fuel source than any other conversion process known. The principal product is electricity not heat or water as is the other fuel cells.

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  2. Half-way? Over half a billion dollars and only half-way? Who is in charge of R&D at Bloom?

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  3. The boxes emit 884 pounds of carbon dioxide per megawatts hour and this means the boxes are only 45.2% efficient on the HHV of gas. No where close to the greater than 60% Bloom claims. Apple and Google have the Kleiner Perkins connection and KP is the big investor in Bloom. They won those accounts through connection not efficiency or cost. EBay was run by Meg Whitman who for a while was a KP partner. The whole thing is who you know not what you actually do

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  4. I seem to find the comments on Bloom somewhere between sour grapes and an ideological rejection of any technology that uses fossil fuels.

    It appears to me that Bloom has one fundamental innovation that the rest of the fuel cell world is sorely lacking–the ability to present a vision to investors and clients that is meaningful. Bloom translates their value proposition in terms that end-users understand (better efficiency than you have now, on a small footprint, that you can control) or more accurately, a value proposition that they can put a price tag on.

    Maybe it’s a higher price tag than you find reasonable. Maybe they’re using the levers of VC funding and government support in a way you didn’t think of, or you don’t like. Maybe they’re calling the technology they have good enough and letting customers’ feedback drive their technology improvements, rather than consulting the academic community or their competitors, or the government. These are all different ideas than the rest of the field have pursued, and in spite of a lot of sharp comments on websites every time there’s a press-release, they’re still moving ahead.

    They’ve spent a tremendous amount of VC and government tax subsidies to get where they are, but is that because they did a bad job of launching the technology, or is it because the rest of the technology developers are crafting their budgets and messages to fit the dribs and drabs of funding available to them from the federal government and their own resources? How many of the assumptions of that government-sponsored commercialization plan will stand up to reality? What if the reality is that Bloom’s spending is what it costs to get something like this off the ground, and the rest of the field is kidding itself?

    Maybe they’ll succeed. Maybe they’ll fail. But they found a way to break out of the cycle that many other new energy companies seem to be entrapped. They were successful in a developing tremendous funding base that others couldn’t. That’s the first step to commercial success. Whether they can follow it up with products that can stand on their own is up to them and their customers at this point. Sniping on websites won’t change a thing.

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    1. True, it won’t change a thing. But, technological evaluation used to be in my job descriptio.I’ve found one company with a valid, comprehensive vision for replacing liquid transportation fuels as well as a way to include existing feifdoms in their concept for generating “green power”. This company is tiny and seeking capital, not to develop a non-working toy to be “managed”, but wants to prove via independent testing what they say are facts. But, for reasons unknown, what I see to be the technology capable of actually changing the game, sits idle in search of funds for 3rd party certification testing. They say that with such data, they have existing commitments for all the capital they would ever need, but simply need to get there from here and the government is ignoring them on purpose.

      These people claim to be less than $500k from rapid, decentralized commercialization of their technology. What a black-eye on America if the land of opportunity denied these people of the one opportunity that could do so much for so many out of personal or subjective bias? I think so.

      The company is called, Scipio Biofuels. Their website: http://www.scipiobiofuels.com

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      1. You are talking about a company that is trying to make a biofuel. Bloom on the other hand is marketing a fuel cell capable of directly converting hydrogen gases directly into electricity even taking the waste gases that Scipio Biofuels will be producing as they produce a diesal like product.

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    2. The cost of providing and installing a Bloom Energy generator is reported to have less than a four year payback with far less of a carbon footprint.

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    3. Unfortunately, it seems that Bloom is been guided and quietly supported by the energy monopolies that already exist. The big secret is that oil is running out, that is why government subsidizes farming to produce ethanol that substitute 10% of gas at the pump. Even then oil has seen its last day, but the businessmen behind the power business see no problem to just move into another paradigm… Of course! they have the money and smart young people thinking around the clock on how to keep profits up.
      So I tried to contact the company to do business, and made a proposition that would give them money basically guaranteed and “of course” no reply at all. Do you know why?
      Because they are not in the production of units for sale, they are in the business of monopoly!
      They don’t want to sell you something that will make you independent, they want to sell the next huge fossil fuel paradigm of natural gas.
      Also, how many private corporations that are barely starting can afford 24/7 surveillance?
      This was so disappointing… I thought I was going into the energy business, that I was escaping big oil till I hit the ceiling of big oil…

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  5. I have been in the development of fuel cells for over 14 years starting with PEM, then direct methanol, and now solid oxide. When a fuel cell company won’t show third party testing results of its products then there is something wrong. Bloom should have independent third party testing by now to show the electrical efficiency, thermal efficiency, combined efficiency, and complete emissions profile to demonstrate and verify the broad claims that it has made. Bloom has been hiding behind mystery to cover up what it doesn’t want potential investors to know, that is that he technology is not ready for the market. Fuel cell technologies are still in their infancy and are far away from being able to get close to their potental. This is another Kleiner Perkins Pump and Dump VC scam. Remember how the Segway was going to change the world!

    The article by Lindsay Leveen, “Delaware opens Pandora’s Box with Bloom Energy Blackbox”, is a great read and the first analysis of data provided by Bloom for the proposed project in Delaware. This is where the rubber hits the road!

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    1. Agree. This people are not a real private corporation. I’m not sure about their fuel cell potential but I think is good enough to go into business “if and only if” they get government subsidies. But hold on who has subsidies in the power industry?
      Oil companies
      Who can extract the natural gas Bloom boxes run on?
      Oil companies
      Who would suffer from oil pick, and would benefit from using natural gas and Bloom boxes?
      Oil companies.
      So yes sir… this fake company really made me angry.

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  6. Bloom Scam is correct let Bloom have an independent third party verify their efficiency and emissions. But perhaps the third party consulting engineer that prepared the filing for the Delaware project is the actual impartial third party telling the truth. That they list 884 pounds of CO2 per mwh must mean under penalty of perjury this is in fact the emissions and not the 773 pounds of CO2 per mwh on the Bloom web site. Also if the third party environmental consultant told the truth which I believe they did they said the 47 mw facility will have 5 tons a year of hazardous waste and will emit over 22 pounds per day of VOCs. The Bloom Box is dirty, expensive, and inefficient.. OC commented that Bloom was brilliant at getting funding. No they were brilliant at have Al Gore and Colin Powell on their team. Funding falls in place when straddle both sides of the aisle in a corrupt political system. John Doerr of KP as well as his family members donated to Governor Markell’s campaigns for sate treasurer and governor of Delaware. John Doerr had Obama over for dinner with the late Steve Jobs and sat the pres between the late Steve and Mark the Zukker. OC you are either blind to the corruption going on or you are really Old Colin and that is why you are obsessive compulsive

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  7. Thank you for the good information, including that of the other comments. Perhaps we can learn something from you experts here. We represent a Chinese state-owned company that looks for an opportunity in the US. Specifically, the company is seeking for a US partner in any form that makes sense (buyout, equity investment, licensing, or joint venture). We would appreciate it if some of you point to a few directions. Related commentaries are welcome. But, please, don’t get into politics or something that’s even worse. Of course, if you wish to just point out a regulatory barrier, please do by all means.

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    1. Sorry I wasn’t very clear. The company we represent isn’t interested in providing a cheap labor opportunity in China, nor just a marketing opportunity in China. They are interested in the best technology.

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      1. Gaoson

        The Chinese are already buying A 123 as it goes bankrupt. Wait for six months you will be able to buy Tesla Motors as well as Fisker Motors. Wait nine months and Bloom Energy will follow. Then you can buy Amyris that will be bust in a year. Then Kior, then GEVO, and then Codexys. Actually no need to buy anything they will all collapse on their own and nobody will be around to defend their patents that are actually worthless. So Gaoson be my guest and just copy whatever you like make the stuff in China. The fools who bought all these stocks from Kleiner Perkins and Vinod Khosla will never come after you and the bigger fools in the US Department of Energy will all be gone and retired with good retirement and health benefits and wondering why the Chinese own America. Tell the Chinese company they will soon have it all for free and that China will pretend to be green and pretend to woory about the atmosphere and the earth. Actually the one thing you can give to you Chinese client right now is a million copies of the book the Convenient Untruth and I am sure Alfonso the great will come for a book signing in Shanghai. Alfonso the great can certainly help the Chinese client with best technology as he invented the chemical called ether that is the essence of ether space

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    2. JV? If the facility(s) are all US located. The technology patents will never be part of the deal, and until the Chinese government figures out that nobody wants to work with IP criminals (govt officials or not), and directly emulates the changes in the UAE foreign IP protection policies, and backs it up with arrests and harsh sentencing that virtually eliminates IP theft, we could deliver the most productive biomass technology there is today. But still can’t until the Chinese system of bribe 100 to build 1 is eliminated only because this too is a thinly veiled technology grab.

      We know what China is up to. If only it were honest, ethical, and fair to both parties could we sit across a negotiation table. Your reputation preceds you.

      All apologies, but I call ‘em as I see ‘em and am always direct. The language barrier is bad enough to cope with.

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  8. WILL THIS FUEL CELL EVER BE AVAILABLE TO THE SMALL BUSINESS AND HOMEOWNER?

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  9. Bloom energy should try for hydrogen as fuel which can be generated by solar energy systems and can be stored for later uses which will have a potential market in India.
    Prof. John Jacob

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    1. Best comment on the thread so far. No one gets the fact that fuel cells can run on hydrogen-same science/technology (maybe a few different calibrations). All we really need is a cost effective electrolyzer run off solar panels and we have grid-less carbon-less energy. Plus a potable water by-product.

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    2. Check out AFC Energy they are working on a fuel cell which will use Hydrogen as a feedstock and will be hugely less expensive than the Bloom cell with greater efficiency (over 60%) they are aiming to compete with gas turbines in large scale static power generation.

      5 years and they will be shipping the largest MW worth of FC’s in the world – I would/have bet my pension on it!

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  10. Jacob Millerson Tuesday, October 9, 2012

    SEC hits Advanced Equities on Bloom deals
    By Dan Primack September 24, 2012: 11:11 AM ET

    http://finance.fortune.cnn.com/2012/09/24/sec-hits-advanced-equities-on-bloom-deals/

    In my opinion … people need to see Bloom’s financials???

    also

    Also buried on page 161 of the permit application is a Table 2 notation that says these 235 “clean” servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But Delaware, like other states, regulates VOC emissions at far lower levels (Maryland, for instance, regulates boat repair shops that emit more than 15 pounds per day). Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!
    To top it off, because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their electricity transmission grid. But in January 2012, the U.S. Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.

    http://www.breitbart.com/Big-Government/2012/06/21/884-May-Be-Bloom-Energys-Fatal-Number-Fuel-Cell-Efficiency-Federal-State-Tax-Credits

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