Bloom Energy secrecy fuels ongoing criticism

Even with a recent partnership announcement between Exelon; Bloom Energy continues to keep proactive publicity to a minimum. Doug Rainey has some thoughts.

Here is Doug Rainey’s commentary:

Last week, Bloom Energy and Exelon announced an agreement to develop 40 megawatts of fuel cell capacity. The project will include an impressive 170 installations in California and the East Coast.

Exelon will own a majority stake in the projects, with customers paying for the power under a long-term deal.

You might remember Exelon as the company that is planning to complete the merger with Delmarva Power owner, Pepco Holdings.

The agreement is with Constellation Energy, part of the non-utility side of Exelon, the owner of the nation’s largest fleet of nuclear power plants and a growing number of utilities in the Mid-Atlantic and Illinois.

The deal appears to double the current number of about 140 fuel cell installations in the U.S., according to information on Bloom’s help wanted posts. Exelon had earlier signed a far more modest deal with Bloom.

Customers include Walmart, which already has about 40 Bloom installations and the city of Hartford, Conn. Hartford will build a “micro-grid” that allows key buildings to remain open in the event of an extended outage.

In terms of generating capacity, 40 megawatts is not a big deal. It amounts to about one-sixth of the capacity of the Calpine natural gas-fired power plant that is nearing completion in Dover.

Still, it’s good news for the Bloom assembly site in Newark. So far, the plant has been a disappointment on the job front with a workforce of slightly more than 200, at last report, well below projected 900 workers.

For some reason, the Exelon agreement received little mention locally, perhaps a reflection of Bloom’s baffling penchant for secrecy.

To say Bloom keeps things close to the vest would be an understatement. The privately held company, based in California’s Silicon Valley, remains mum in detailing technology and many other things, even when a little less secrecy would be in its own self-interest.

The reluctance to be more forthcoming may be understandable in one respect. Bloom has been in the crosshairs of critics who questioned a deal approved by the Delaware General Assembly and signed by the governor in the depths of the economic downturn that brought the Bloom plant to Delaware in the first place.

Similar criticism has been coming from California blogger Lindsay Leveen, who is harshly critical of all things Bloom.

The Delaware deal installed Bloom fuel cells that fed electricity into the grid. Delmarva Power customers pick up the added cost under the state’s alternative energy mandate.

There has been a steady drumbeat of criticism of the added monthly charge for Delmarva customers and whether it was appropriate to consider the natural gas-fueled Bloom boxes as an alternative energy source.

Even some legislators who voted for the Bloom bill have criticized the charges, which have not run appreciably ahead estimates.

Critics have claimed the newest generation of natural gas-fired power plants may actually be friendlier to the environment than Bloom fuel cells.

A monthly report, filed with the Delaware Public Service Commission, puts the added cost at about $1.70 a month this summer for the average customer – that amount varies based on electricity demand and pricing.

The thinking behind the added charge was that the economic impact of Bloom jobs would offset the impact on consumers’ pocketbooks.

It can’t be disputed that buying from alternative energy sources is more expensive in the first place. Critics of the state’s energy policy say those added costs from the mandate are hampering Delaware’s economic recovery.

Then we have the latest puzzling development. Not too long ago, Bloom held an exclusive briefing with the News Journal, claiming that a new version of Bloom fuel cells would pack more power and consume less energy than the previous models.

It was the News Journal that had been running monthly updates on the costs of Bloom fuel cell power for Delmarva customers, along with critical comments from some quarters.

There was nothing wrong about giving the local paper the first crack at the news.

But then, in a head-scratching move, Bloom did not offer further details beyond those in the article, nor did it make a formal announcement on the new generation of fuel cells. And, according to an email response, has no plans to do so right away.

In turn, green energy blogs and websites seemed to take little notice of a move that may have played into the Exelon deal.

Bloom, meanwhile, is fighting back criticism in California that the state’s alternative energy policies favor natural gas-fired solutions like Bloom fuel cells.

Bloom is the recipient of a large chunk of money from California’s generous alternative energy program. Connecticut, home of a fuel cell rival of Bloom, also has an array of incentives.

A tapped out Delaware does not offer many incentives for Bloom, aside from the utility installations in Delaware. So far, it appears that JPMorgan Chase is the only Bloom customer in the state.

Bloom and supporters point out that focusing on the company’s green credentials misses one key point. In most cases, new Bloom cells replace far dirtier sources of back-up and peak use power that can include diesel engines.

The Exelon deal and news of the upgraded fuel cells does ease fears that Bloom could be headed to a Fisker-like fate that some detractors have predicted.

Fisker, like Bloom, received a heavy dose of venture capital from the Silicon Valley. A Chinese company ended up purchasing the remains of Fisker and its battery suppliers.

Current plans call for a small auto plant in California for the luxury Fisker Karma as weeds grow in the parking lot of the former GM plant here in Delaware that had been slated as the production site for a cheaper Fisker model. In the meantime, Delaware won’t get back most of the $20 million that went to Fisker.

Despite investors pouring in more than $1 billion, there are no signs that Bloom is near an initial public offering of stock. That’s unusual among Silicon Valley-funded ventures and keeps the rumor mill running full tilt.

Still, the Exelon deal holds promise, especially if a company like Walmart ramps up its commitment. There are sound reasons to use Bloom boxes as back-up power sources at malls, data centers, government buildings and large stores in areas prone to hurricanes, ice storms or other weather events.

In the meantime, it would be nice to see Bloom lift its veil of secrecy and tell its story to friend and foe alike. Based on its recent moves, don’t hold your breath.

 

 

Doug Rainey is the editor of the Delaware Business Daily. He has reported on Delaware business for 25 years. Email Doug at drainey@delawarebusinessdaily.com Follow Doug on twitter: https://twitter.com/DougRaineyDE