Blog Post

AT&T doubles down on Bloom Energy fuel cells

AT&T (s T) is now Silicon Valley fuel cell maker Bloom Energy’s largest customer that’s not a utility, according to San Jose Mercury reporter Dana Hull. Hull reports that AT&T more than doubled the size of its deal to buy power from Bloom Energy fuel cells to 17.1 MW.

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. Bloom Energy servers can deliver distributed power on site at a building, and this can have a lower carbon footprint and potentially more electrical reliability than grid power.

AT&T will use the fuel cells to power its operations in California and Connecticut, and AT&T is buying the power from the fuel cells, not buying the fuel cells themselves. Back in January of 2011, Bloom Energy launched its energy-as-a-service product, enabling customers to sign 10-year deals to buy the power from the fuel cells without having to pay the high upfront costs of buying the systems.

AT&T first announced its deal with Bloom back in the Summer of 2011. AT&T told me that it would use the fuel cells to power not just administration offices, but also data centers and facilities that house network equipment. Bloom Energy has begun to bring in a good number of data center customers including Apple (s AAPL), and eBay (s EBAY) (and maybe Microsoft, too), and the company launched a data center focus to appeal to these Internet companies.

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. Bloom CFO Bill Kurtz told me earlier this year that Bloom is about “halfway” to breaking even and becoming profitable.

While AT&T is now Bloom Energy’s largest corporate deal, Delaware utility, Delmarva Power & Light, is Bloom’s official largest customer. Delmarva Power & Light has about 500,000 electricity customers and plans to buy 30 MW worth of fuel cells from Bloom.

10 Responses to “AT&T doubles down on Bloom Energy fuel cells”

  1. lindsay leveen

    AT&T is the Susan Rice of Sustainability. The truth and them are distant relatives. The claim CO2 savings compared with the grid but in actuality the grid in California emits less CO2 per mwh that the bloom boxes. Perhaps AT&T can blame their decision on a video. The ne on with Katies and the Bloom engineer ehere he claims the box is over 60% efficient. He like Susan Rice is telling the party line

  2. On top of that, these charletans work in the U.S., hire a few tacit Americans and then use our invester and government money to hire hoards of Indian workers in India to do the majority of work. Then they go on 20/20 and claim to have the answer to the green energy puzzle. When the world responds and says “show us,” they clam up behind their lies under the ausices of “proprietary and stealth mode.” Even if it were true they’re half way there after 11 years and nearly a billion dollars, that’s a pretty sad track record. Do not trust these liars. John Doerr, you have another Segway. Enjoy…

    • Karl Hegbloom

      Well, it seems to me that just about any kind of power plant is going to require both some kind of input energy as well as constant monitoring. You can’t just build a coal-fired steam-turbine power plant, fill the stove up, light a match to it, then walk away. You have to keep feeding it fuel, and there’s probably a bazillion dial gauges and valves to monkey with keeping it tuned, right?

      No other hydrocarbon energy production system is as efficient as a fuel cell. Anything using heat and expanding gasses to run an engine will lose a lot of the energy available in the fuel to vibration and friction of moving parts, for example. That energy comes from oxidation, aka combustion, of the fuel, so whatever material it’s made of is releasing the energy within it’s chemical bonds through oxidation. That’s essentially the same thing the bloom fuel cell does, only… well, I think it’s more like when you digest a cracker and the carbohydrates release their energy one chemical bond at a time inside the mitochondria; vs lighting the cracker on fire and using the heat to boil soup.

  3. AT&T is signing this lease deal because the subsides available to Bloom allow AT&T to acquire energy at lower cost than purchase through the grid. Without the subsidies no one would buy Bloom’s fuel cells. This means AT&T, one of the largest companies in the world, is transferring their utility expenses to everyone else. This is a wealth transefer from the poor to the rich – Robin Hood in reverse. To quote Governor Romney during the debate, this is “imoral”.