Bloom Energy may capture the lion’s share of buzz among fuel cell startups, but ClearEdge Power — working on a $50,000 fuel cell device for producing heat and power — has been generating a fair amount of business. The company, based in Hillsboro, Ore. announced on Tuesday that it has secured an exclusive 3-year distribution deal with Korean industrial giant LS Industrial Systems, or LSIS, which was spun out of LG Group. Valued at $40 million, according to ClearEdge, the deal encompasses sale, distribution and service for more than 800 units of the startup’s ClearEdge5 fuel cell device in Korea.
The device can run on natural gas or “directed biogas” (biogas pumped into pipelines), ultimately producing electricity and heat for a large home (more than 4,000 square feet) or small business — at only half the cost of typical utility rates, says ClearEdge. Smaller than a refrigerator, the 5-kilowatt system is designed to connect with existing gas lines.
Rather than burning gas, the ClearEdge5 chemically converts it into hydrogen, which then goes through a fuel cell stack to create direct current power and heat. That electricity goes through another component to produce alternating current for the building. Heat resulting from the chemical conversion can be used for water or space heating.
ClearEdge has been focusing mainly on the California market, where customers can qualify for a rebate of $2.50 per watt on fuel cell equipment — or $12,500 for a ClearEdge5 unit. According to Jong-Woong Choe, Senior Executive Vice President for the LSIS Electric Power Group, the device is “well-sized” for the Korean market and will be able to take advantage of recent legislation encouraging low-carbon power sources for new buildings in the country.
As South Korea’s JongAng Daily newspaper explains (h/t Cleantech Group), the government laid out plans last year to subsidize up to 80 percent of the cost for purchasing and installing hydrogen fuel cells for heating and powering homes between 2010 and 2012, gradually decreasing the subsidy to 30 percent for the years 2017-2020.
Creating both useful heat and electricity from a single source (combined heat and power, or CHP, generation), is also the goal of Bloom Energy, as well as many other fuel cell makers. In particular, companies that use solid oxide fuel cell technology (like Bloom), are looking at CHP because that technology runs hotter than the polymer electrolyte membrane (PEM) fuel cells, which are more typically aimed at automotive or portable applications.
ClearEdge has been showing signs of a serious ramp-up over the last year, more than tripling in size to 150 employees at the end of 2009, from just 40 in May 2009. By the end of this year, CEO Russell Ford (brought on last spring) said in December 2009 that he aims to double the staff again by the end of 2010. The company sold its first six devices during the second half of 2009, now has 25 fuel cell systems installed and is aiming for a total of 350-500 installations by year’s end, reports the Portland Business Journal.
As of late last year, ClearEdge had raised $55 million in venture capital, and in January 2010 the company added on another $11 million in equity financing. Investors include Kohlberg Ventures, Applied Ventures and Big Basin Partners.
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