KR sells off-grid to Arnie

In a feature on companies that will disrupt existing businesses, Business 2.0 cites power company Bloom Energy

THE DISRUPTION: Energy generators in homes and businesses

THE DISRUPTED: Electric utilities

Making electricity in central power plants is so 20th century,says the report. K.R. Sridhar has a better idea: Create energy on the spot, right where it’s consumed. His startup, Bloom Energy (formerly known as Ion America), is developing a fuel cell that could kick-start the distributed-energy industry.

The problem with today’s centralized approach is its vast inefficiency. In coal-and gas-fired power plants, almost two-thirds of the energy produced by converting fuel into kilowatts escapes as heat. Another 8 percent, on average, dissipates as the electricity travels over transmission lines to get to your home.

Sridhar, a former aerospace engineering professor who developed a device for NASA to turn carbon dioxide into oxygen on Mars, is undaunted by big challenges. His plan for generating energy locally is to use solid-oxide fuel cells–a concept that has been kicking around since the 19th century but is now becoming practical with advances in the ceramics needed to build the things.

Here’s his testimony to US Congress last year:

QUOTE

Government needs to take a different approach– an approach more about vision and leadership than about new tax policies, or research grants. The federal government’s key role in our generation’s “energy-independence mission” is to ensure two critical things:
(1) a level playing field between new energy technologies and legacy petroleum-based solutions, and
(2) an early adopter marketplace that can help take new products to their economical volumes.
The federal government is the single largest consumer of energy in the country, consuming almost 1 Quadrillion BTUs of energy annually and spending over $200B on products and services. That fact gives it a lot of power and a lot of influence over the energy sector. A lot more influence perhaps than legislation ever could. The power of the single largest customer to shape a market should not be underestimated.
Given the market size and opportunity, private capital will be readily deployed to develop innovative energy technologies. Venture Capital investment dollars can usher new technologies up through the product development and testing stages, but the US government needs to commit to help American clean tech companies cross the proverbial chasm and become commercially viable.
The federal government needs to be an early adopter and leading consumer for viable innovative alternative energy technologies.
Congress should consider putting an alternative energy consumption quota in the federal budget. If the government mandated that each year 25 or 50% of its energy spend will go to alternative energy sources that meet a minimum set of criteria, it would signal a real commitment towards achieving a lasting energy solution. This isn’t a mandate on the private sector. Rather it is a way for the federal government to lead by example, thereby taking significant steps to commercialize emerging energy technologies. Once the public sector takes the lead helping technologies achieve scale, the private sector will follow and we will be on the path towards energy security and independence.
In order to foster innovation, to enable new energy technologies that address the country’s power needs, and to ensure the success of our energy-independence mission, the federal government must take the lead. If the United States Government would exercise its buying power when buying power it would be a monumental step towards supporting innovation and ending our addiction to foreign oil.

END QUOTE

Bloom’s cells, still in development, are constructed around a ceramic core that acts as an electrode. At high temperatures, fuel on one side attracts oxygen ions on the other. As these ions are pulled through the solid core, the resulting electrochemical reaction creates electricity.

Such a fuel cell can run happily on almost any hydrocarbon fuel–ethanol, biodiesel, methane, natural gas. Though it consumes hydrocarbons, Bloom Energy’s fuel cell does not require combustion and therefore produces half the greenhouse gas emissions of more conventional energy sources. One of its by-products, in fact, is hydrogen that could be used in a different type of fuel cell, the hydrogen-powered version imagined for propelling cars.

Bloom Energy’s biggest hurdle is cost. The company needs to get the price of the machines below $10,000 apiece. At that level, they could pay for themselves in five years. (Solar panels take twice as long to recoup their capital expense.) “For it to reach mass-scale adoption, that has to be the goal,” Sridhar says. “Otherwise, you are playing in a niche market.”

Ultimately, Sridhar sees his fuel cells as a leapfrog technology that could find a market in developing countries that haven’t yet built an electrical grid. He imagines local entrepreneurs, armed with one or two of his machines, renting out electricity to a whole village. Lighting up the world one village at a time–there’s nothing niche about that ambition.

HOW TO GET OFF THE GRID

TODAY’S ELECTRIC SYSTEM

1 Most power plants burn gas or coal, losing about two-thirds of their energy as heat and filling the air with 1 ton of combustion-product pollutants for every 4,000 or so kilowatt-hours they produce.

2 As the juice is transmitted to homes through an extensive grid of wires, 8 percent more energy is lost.

3 In times of peak demand, the system is subject to periodic brownouts–and even blackouts–that can affect everyone on the grid.

BLOOM ENERGY’S APPROACH

1 Each home has its own fuel cell, which uses–but does not burn–hydrocarbon fuel. Because there is no combustion, the cells produce half as much CO2 as today’s power plants.

2 A solid-oxide fuel cell could generate more than enough electricity to power a house, creating heat, steam, H2, and some CO2 as by-products.

3 Any excess electricity may be sold back to the grid. Through cost savings and direct payments from the electric company, the fuel cell should pay for itself in five years.

THE NEXT DISRUPTORS:

Want more? There’s no shortage of eco-startups out there with industry-shaking potential. Here are three more ventures that could prove just as disruptive.

DISRUPTOR: A123 SYSTEMS

WHY: The leading battery technology–lithium-ion–has not changed in a decade. A123 holds patents for smaller, lighter lithium-ions with significantly longer lives. A123 batteries are installed in hybrid buses worldwide and will enter consumer hybrids in 2010

DISRUPTOR: RENEWABLE ENERGY GROUP

WHY: Biodiesel delivers around 50 percent more miles per gallon than ethanol. REG, an offshoot of an Iowa farm co-op, makes biodiesel from soybeans. It has 40 percent of the market and a distribution deal with Safeway.
DISRUPTOR: CREE

WHY: Sure, compact fluorescent lightbulbs are energy savers, but they also contain mercury. Cree is the leading maker of light-emitting diodes, which are less hazardous and even more energy-efficient. Toronto and Raleigh, N.C., are already installing Cree LEDs in streetlamps and parking garages.