Two weeks of power without an outlet

First up was a fuel-cell from Liliputian Systems that provides two weeks of mobile device power. The Nectar, which will be sold exclusively at Brookstone, costs $299, so it isn’t cheap. After 14 days of juice, a small tubular fuel cell is removed and replaced with a new one.

Each refill costs $9.95, so again, this isn’t a device that will save you money over an electric outlet. The benefit, however, is that you won’t need an outlet for your smartphone because each fuel cell provides 55000 mWh of power. According to the company, the “secret power sauce” is a combination of high-energy butane fuel and high-efficiency solid oxide fuel cells (SOFCs).

Getting the health bug

I expect a large number of health gadgets at this year’s CES and already found one in the Fitbug. The tracking system uses an accelerometer to track movement and Bluetooth to send data to the supporting app. The $50 wearable Fitbug Orb is modular, however, so it can be worn in different settings with ease; say in a watchband or on a clip.

The Orb also doubles as a sleep monitor. The company also showed off a companion body scale and blood pressure sleeve, both of which use Bluetooth 4.0 to sync data to a Fitbug account.

You don’t know Jak!

Sharing media from a smartphone isn’t as difficult as it used to be, but it’s still not as seamless as it should be. Bcoda thinks it has a better answer in the Jak multipurpose dongle. The device looks like a small USB flash drive and inside is a small Wi-Fi radio and some custom software. Using a companion mobile app — Android only for now — you can stream music or video from your phone to any media device that has a USB port. Think car stereos, television sets, home stereo systems or a computer.

Bcoda had an unrelated, yet interesting second product as well. We’ve all seen Bluetooth hands-free solutions for cars. I haven’t seen any that actually double as a Bluetooth handset, however. Bcoda’s version connects to a car visor with a removable clip so you can you take it with you. It’s a standard Bluetooth handsfree unit at that point… but with a twist. Press a button on the side and the unit acts like a transitional handset, ensuring some privacy in the conversation.

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“There was a challenge around getting clean power,” says Nelson. Utah has less than 3 percent renewable energy and generates 82 percent of its power from coal, according to data from 2009 from the U.S. Energy Information Administration.

The question of how eBay would find clean power for its Utah data center — which is part of eBay’s global consolidation of its data centers into just three mega data centers in Utah, Arizona and Nevada — opened up another possibility: would it make more sense for the online marketplace to power its Utah data center by generating its own power and use the grid as backup?

The fuel cell finds a home

For the much larger Topaz data center, which is modular and built to scale to 30 megawatts, eBay has issued a 10 megawatt public RFI in the past couple months, seeking proposals to generate renewable energy for the data center. But for the adjacent smaller add on Quicksilver data center, eBay decided to have 6 megawatts of Bloom Energy’s solid oxide fuel cells installed on site, making the installation the country’s largest non-utility fuel cell installation. Bloom’s fuel cells generate power by combining natural gas and oxygen to produce carbon dioxide and water. EBay is operating a microgrid on site that will allow it to divert excess power from the fuel cells not used by the Quicksilver data center directly to the larger Topaz data center.

Nelson liked the design of fuel cells themselves because there are thousands of redundancy points built in. Each fuel cell produces 25 watts, is combined into a stack producing 40 kilowatts, and is part of a brick producing 200 kilowatts. If one or a group of fuel cells fails, the entire fuel cell brick doesn’t go down.

“Fuel cells are primary power for the computers and then the grid is used as backup. We have a higher available data center with this design than we would have with a traditional generator and UPS design. That was a big ah-ha moment for me,” said Nelson.

Aside from the redundancy of the fuel cells, Nelson was much more excited about the capital expense savings eBay’s getting from shifting his backup power source.

“We’re not putting UPS (uninterruptible power supply) or generators at Quicksilver. They’re completely removed,” says Nelson, referring to the Quicksilver data center, the smaller of the two data center projects in South Jordan, Utah. “This required us to completely change how we approach data center design. We’re using the fuel cells as the backup and the primary source.”

Nelson added that while the up front costs of fuel cells creates a scenario where the fuel cell power is more expensive than grid power, there were a number of cost avoidance returns from the fuel cells that made the economics work. Namely the elimination of UPS and generators along with the simplification of the building design that included changing the height of the building as well as the structural support needed. He noted that eBay examined the risk of an outage on the gas grid, and found it more reliable than the electrical grid. EBay also looked at large scale battery storage, which Nelson said wasn’t cost effective.

Generators and UPS exist at data centers in the event of a power outage and are used about 1 percent of the year. Generators themselves have been criticized. For example, the environmental impacts of Microsoft’s diesel generators in Santa Clara, California and Quincy, Washington were recently highlighted in a controversial New York Times article on data centers.

In terms of the broad pressure on leading webscale IT companies to move away from non-renewable sources of energy like coal power and diesel generators, fuel cells can be renewable if they use biogas. Biogas is reclaimed methane (CH4) from landfills or water treatment plants, rather than mined natural gas. It’s this reason why Microsoft has discussed the possibility of locating future data centers near water treatment plants, which wind up having to flare excess methane because it’s a 20 times more potent greenhouse gas than CO2.

There is currently no biogas produced in Utah, according to Nelson, and eBay is offsetting its natural gas use in Utah by paying a premium to enable biogas production elsewhere. Nelson said the offset will be “meter in/meter out,” meaning for whatever amount of natural gas eBay uses at its Utah data center it will enable that amount of biogas production elsewhere. EBay didn’t disclose the premium it’ll pay.

When the grid becomes backup power

Generating one’s own power is typically more expensive than grid power, which utilities generate at scale and from inexpensive coal, natural gas and nuclear energy. But there’s a growing amount of discussion from data center operators that being in control of one’s own power generation could lead to better uptime.

The June power outage in Virginia caused service problems for Amazon Web Services, impacting Instagram, Pinterest and Netflix. In places like India where the grid is inherently unreliable, companies have been generating their own power for years. Five of India’s biggest electricity consumers generate 96 percent of their own power, which is why major Indian conglomerates like Reliance Industries and Tata Motors were largely unimpacted by the massive blackout over the summer.

While getting off the grid was not eBay’s primary motivation for the fuel cell installation, Nelson did say, “If there are limitations within the grid, we’d like to not be bound to them. And we got the benefit of having the grid as backup.” Using the grid as backup creates a relatively safe redundancy, and if it enables the elimination of UPS and generators, data center operators can rethink the up front capital costs of installing costly on site power generation.

Bloom Energy

EBay is getting its fuel cells from Bloom Energy, which targets corporate customers interested in generating their own power on site. To address the hefty up front capital costs of buying fuel cells, the fuel cell pioneer now offers energy-as-a-service in which Bloom carries the upfront purchase cost of the fuel cells in exchange for a kilowatt hour power purchase agreement. We’re seeing this financing strategy in solar as well, as IPO hopeful SolarCity is actively pursuing a strategy in which it waives the costs of rooftop solar panels in exchange for a long term power purchase agreement. There’s even talk on Wall Street that bankers want to bundle the contracts and securitize them as debt products, to be known as solar backed securities though the market for fuel cells is likely too small for this type of securitization.

EBay actually opted to pay the upfront capital costs of the fuel cells combined with a 20-year guarantee from Bloom of minimal power generation, including maintenance obligations. The eBay deal is a major win for Bloom, which has dived headlong into the data center market this year, hiring Peter Gross to head up its data center group. Gross led data center design for EYP Mission Critical Facilities, which HP bought in 2007.

According to my colleague Katie Fehrenbacher’s August interview with Bloom Energy CFO Bill Kurtz, Bloom remains “halfway” to breaking even, and is in the process of raising another $150 million at a valuation of $2.7 billion. If successful, the raise would bring the lifetime capital raised for the eleven-year old company to $800 million. And it would also make Bloom number four on the top 10 U.S. venture-backed companies in terms of total equity raised, just ahead of Metro PCS and Facebook, but two slots behind Solyndra, which clocked close to a billion dollars in funding.

For the time being, Bloom will have to sell more data centers VPs on the idea that the extra expense of fuel cells has secondary benefits not evident in the initial cost of power. Like a decreased need for UPS and generators, and maybe even a data center less vulnerable to grid outages. And if the possibility of using reclaimed biogas ensures that the fuel source is renewable, all the better. For now all eyes will be on eBay, as well as Apple which is deploying a smaller fuel cell facility in North Carolina, to see how the fuel cells perform and whether they could be part of a rethinking of how to provide backup power for the modern data center.

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Seeing someone from the American Gas Association on a panel at the Renewable Energy Finance Forum was surprising. The worlds of fossil fuels and renewable energy typically don’t mix — at least not at a clean power conference.

“The takeaway here is that the AGA is doing an outreach effort,” said Nancy Floyd, managing director of Nth Power and the moderator of the panel that included the AGA rep, after the panel discussion. “You can’t ignore what’s happening with natural gas.”

In recent years, the natural gas industry has successfully positioned itself as the more environmentally friendly form of fossil fuel, mostly because using natural gas to generate electricity produces less greenhouse gas emissions than burning coal. Coupled that with Obama’s energy policy to embrace oil and gas development – energy independence and job creation are two powerful election-year slogans – and there has been a surge of natural gas exploration that includes the controversial use of fracking to extract it.

Renewable energy proponents generally aren’t too pleased with this new love affair with natural gas because they worry that this abundance of natural gas and its cheap price will make renewable energy less attractive. Cheap fossil fuels means there won’t be price pressures to help promote the development of alternative energy sources, from biofuels to solar tehnology.

Natural gas developers and distributors are expecting a significant growth in their market for years to come. Even though prices are low for natural gas now, they should go up along with an increase in production, said Paula Gant, vice president of policy with the American Gas Association, on the panel. The association represents utilities, distributors, pipeline owners and marketers.

Where might the growth come from? In addition to using natural gas at conventional power plants, the fuel can power cars and generate electricity through fuel cells. The Obama administration is funding research and development on compressed natural gas passenger cars. Fuel cell developers such as Bloom Energy are seeing a strong interest from businesses, such as Microsoft and Apple, that want reliable, onsite backup power generation for their data centers (some companies want to use biogas but will need natural gas pipelines to get it).

Apple’s massive solar farm in North Carolina

“In our view, we don’t think abundant and affordable natural gas precludes the development of renewable energy in this country,” Gant said.

She listed natural gas, renewable energy and energy efficiency as three “domestic resources” that will create jobs, deliver cleaner forms of energy and address climate change. Gant also pointed out that natural gas power plants complement solar and wind farms and help utilities manage the health of the electric grid. Solar and wind energy production is intermittent, but the grid can run along smoothly only when there is a balance of supply and demand (or else there will be blackouts). Utilities can crank up production at natural gas power plants when solar or wind energy production slows down.

Gant said natural gas and renewable energy companies should work together on issues such as renovating and building new natural gas pipelines. The natural gas industry expects a tough fight against environmental groups over pipeline construction, and it wants an ally to woo state and local policy makers.

Paul Detering, CEO of Tioga Energy, which develops solar power projects located at businesses and government agencies, said working with the natural gas industry is a practical approach, particularly since energy storage technology has yet to become cost effective enough to help deal with the intermittent issue of and solar energy generation.

“We can’t take the approach of ‘if I win then you lose’,” Detering said after speaking on the same panel as Gant. “In the next 20 years, there won’t be enough renewable energy to become the main base-load power. I think natural gas is a lot better than other brown fuels.”

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Apple calls the 20 MW solar project “the nation’s largest end user–owned, onsite solar array.” There’s other much larger solar PV projects being built in the U.S. by solar developers, which sell the solar power to utilities, like the 500 MW Blythe solar PV project, the 550 MW Topaz solar project and the 230 MW Antelope Valley solar project. But in terms of corporate user-owned solar projects, Apple’s is a big one.

Apple also says it plans to build a massive fuel cell farm at its data center that will use biogas (gas captured from decomposing biomass), which is an even more rare move for an Internet company. Apple’s planned fuel cell farm will be 5 MW when it goes online later in 2012, and Apple calls the project “the largest non-utility fuel cell installation operating anywhere in the country.” Apple notes that it already has a small 500 kilowatt biogas-powered fuel cell at its Cupertino facility.

These fuel cells are likely from either FuelCell Energy or Bloom Energy, though Apple didn’t disclose the supplier. I’ve reached out to these firms to learn more. Given the solar project is 20 MW, it probably will be developed by a well known supplier, so previous reports that the solar project will come from a company called Leaf Solar are probably wrong. If I had to guess who the solar suppliers could be, I’d say potentially SunPower or First Solar.

North Carolina has one of the dirtiest electrical grids in the country, with 61 percent of the power coming from coal, and 31 percent from nuclear. It also has some of the cheapest power, which is likely why Apple decided to build its data center there.

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The article about the hog waste project, which was published in the Los Angeles Times, says Google invested part of the $1.2 million it cost to build the project that uses bacteria to digest hog poop, burn methane to produce electricity and convert ammonia into nitrogen for fertilizer. Duke University and the farmer Loyd Bryant were the other financiers of the system.

The article notes Google has a data center nearby, and Google will earn carbon offset credits from the system. Like some of Google’s other clean power micro investments, the project could be a way for Google to investigate ways to tap into distributed power in local regions, for either its data centers or offices. (There’s no indication this one in North Carolina will be powering anything Google related).

Remember Google was the first customer for Bloom Energy’s fuel cell, which can use biofuel, as well as natural gas and biogas, to produce electricity. Google used the Bloom Energy fuel cells to provide power in a data center test lab. Distributed energy production could be a way for Google to manage and control power costs.

Back when Google invested in CoolPlanetBiofuels, Google Ventures’ Managing Partner, Bill Maris, told me this:

As a company, Google is interested in reducing all aspects of its environmental footprint. As a firm, Google Ventures is interested in contributing to this effort both on Google’s behalf and for the benefit of positive global impact. While petroleum does not constitute a large percentage of Google’s emission profile, we are enthusiastic about supporting technologies that can help us economically reduce our carbon footprint while simultaneously contributing to our domestic energy security.

How do you think Google could use biomass and biofuel projects for its business?

Image courtesy of eutrofication&hypoxia.

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Fuel cells create power and heat through a chemical reaction, and it’s uncommon for utilities in the U.S. to invest in such large centralized fuel cell plants. However, FuelCell Energy has been selling fuel cell projects to utilities in countries like Korea.

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Greentech startups

• Fuel cell maker Bloom Energy is reportedly valued at almost $3 billion — a fourth of what Groupon is worth. (Fun tip: The NEA is a major investor in both.) Bloom Energy is trying to sell distributed cleaner power to companies and utilities.
• Electric car maker Fisker is reportedly valued at $2.2 billion, and Tesla Motors has a current market cap of $3.38 billion. So they have almost a sixth of the valuation and close to a fourth of the valuation, respectively, of Groupon.
• Public biofuel company Kior has a market cap of $1.63 billion, almost an eighth of the valuation of Groupon. Kior is making a biocrude from plant waste and energy crops using a technique from the oil industry.
• Algae oil company Solazyme has a market cap of about $550 million. I’m not even going to do this math comparing it to Groupon because it makes me sad.

Things that have bigger market caps than Groupon: oil companies, conglomerates, big auto, big Internet

• Oil behemoth Exxon Mobile has a market cap of $377.98 billion, 30 times the size of Groupon’s market cap.
• Google has a market cap of $193.52 billion, 15 times the size of Groupon’s.
• GE has a market cap of $176.37 billion, about 14 times Groupon’s.
• General Motors has a market cap of $37.53 billion, just three times the size of Groupon’s.
• Building automation giant Honeywell has a market cap of $41.72 billion, or three times the size of Groupon’s.
• Chemical giant Dow Chemical has a market cap of $32.98 billion, about two and half times larger than Groupon’s.

Big energy, utility

• Power company Duke Energy has a market cap of $27.71 billion, about double the size of Groupon’s.
• NRG Energy, which has invested a lot in clean power, has a market cap of $5.23 billion. Groupon’s market cap is over double that (getting disturbing).
• Itron is one of the largest smart meter makers in the U.S. It has a market cap of $1.56 billion, or an eighth of Groupon’s (ouch).

Image courtesy of Futurilla

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We used our cell phones to check on the safety of relatives and friends, to stay in contact with work, to get the latest news in our communities, look at photos and video of storm damage, order takeout food and even to network socially. In fact, status updates on Facebook and tweets about the frustrations of losing power were made possible by using smartphones that maintained their Internet and cell connections, technology that didn’t exist in the past with hurricanes such as Hurricane Gloria in 1985.

Despite widespread power outages, wireless networks stood up well to Irene. According to a New York Times report, the Federal Communications Commission said thousands of wirelines went down during the storm while 1,400 cell sites along the coast were down, and several hundred were running on backup power.

Backup power for extended periods of time to cell phone sites is critical in times of natural disaster like Irene. We’ve heard of generators and use them in our homes and businesses. But the problem I see with diesel generators for cell sites that we might not be aware of is that they are noisy, produce noxious emissions and require a lot of maintenance and repair because they have moving parts. Diesel also is commonly stolen in some countries, with around 15-30 percent of generator fuel being siphoned off in some developing regions — and as soon as the site runs out of diesel, it goes down.

A better way

A cleaner alternative is emerging. Wireless service providers increasingly are investing in fuel cell systems for backup power. Fuel cells use hydrogen and oxygen, the molecules that create water, to produce electricity with no pollution. We see it as a green alternative that is on the rise. Clean and energy efficient fuel cells can help reduce CO2 emissions by 50 percent as well as decrease other toxic emissions and deliver additional environmental and efficiency benefits.  They also are very quiet, less costly to maintain and are not targets for theft.

When there is a loss of power for the electric grid, an attached fuel cell system senses the drop in the direct current voltage and automatically starts up, and begins reforming fuel. The liquid fuel is heated to the vapor point, and steam is reformed, and at the same time hydrogen starts flowing to the fuel cell module. Electricity is generated in the fuel cell stack by the chemical reaction between hydrogen from the fuel processer and oxygen in ambient air. The fuel cell can deliver power in about one minute and reach full power in 3.5 minutes, providing 5 KW of power to the telecom site.

When Irene was in full force with high winds that knocked out electrical grid power in one tropical location, a customer of our ElectraGen ME backup power fuel cell system reported the system automatically turned on, providing power to the telecom base station for hours. And members of this resort community never lost cell service.

Around the globe in times of severe weather, emergencies and in countries with limited or unreliable grids, backup fuel cells provide this essential service countless times – without cell phone users ever knowing it, but keeping them happy that they always have service.

With consumers’ growing reliance on cell phones, we expect wireless carriers around the world will continue to recognize the need for backup power. And with today’s energy-consciousness and sustainability efforts, we expect they’ll increasingly turn to a greener and sustainable solution: advanced fuel cell systems.

Just think — the next time you’re in the dark texting friends during a storm, it may be thanks to a fuel cell system.

Kathy Fosberg is marketing communications manager at IdaTech, a leading global supplier of fuel cell systems for backup power to the telecom industry based in Bend, Oregon.  

 Image courtesy of Flickr user Undertow851.

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