Via Clean Break, an interesting article on Bloom Energy’s recent announcement that it wants to sell electricity as a service. While we are skeptical about the potential success of this venture, it is yet another indication that consumers (individuals or companies) want a transactive smart grid able to support exchanges in both directions. As the report notes:
“…The idea is that Bloom, as part of a service called Bloom Electrons, would sign 10-year power purchase agreements with the customer — i.e. the customer would agree to pay a certain amount per kilowatt-hour over 10 years in exchange for having Bloom plunk its fuel cells into their facilities and produce electricity on-site using natural gas. Bloom would presumably earn back its initial capital investment after a few years and the customer would be guaranteed a stable power rate that, in some jurisdictions anyway, is lower than what they pay today. That is certainly the case in California, where high electricity prices and generous subsidies make this approach a good fit. Bloom also handles all maintenance, another bonus for the customer.
Bloom is obviously betting that low-cost natural gas, thanks to the shale-gas boom, is going to be around for awhile. And the model is not unlike what we see today with many solar projects — a developer such as SunEdison, for example, will sign long-term projects at no upfront cost to the customer, which pays for the electricity it receives, not the equipment on its rooftop. The difference is that Bloom has to factor in the future cost of natural gas.
It will be interesting to see the uptake, and wouldn’t it to be nice to see this tested out in Ontario? Companies such as Enbridge should be kicking the tires on this, not sitting back and waiting to see what happens. Bloom says it eventually expects the Bloom Electrons service to represent half of its revenues, and that doesn’t surprise me.
Now, one question: is this a green energy offering? Kind of. Burning natural gas onsite for electricity production (if you capture the waste heat) is more efficient than burning it in a power station and transmitting long distances via wires. Burning natural gas in a Bloom Box instead of a standard microgeneration system is even more efficient and eliminates nearly all smog-forming emissions. But having a Bloom Box in a community or a large building, such as a data centre, opens up the possibility of using biogas instead of natural gas. There are other benefits as well, if not green in nature. The Bloom Box can sell surplus electricity to the grid, creating a kind of distributed backup system that makes the grid more stable.
Bloom still has a lot of work ahead of it, and it’s not the only fuel-cell maker heading in this direction, but it’s at least trying to be creative and its high profile is getting people thinking how we can do things differently, and that’s a good thing.”
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