Updates on Alternative Energy Sources, Part 1

Stephen DeAngelis

March 11, 2010

Over the past couple of months, there have been an increasing number of articles about advances in alternative energy research. New breakthroughs, coupled with the passage of stimulus packages around the world that included funds for alternative energy, raised hopes that the face of the energy sector would change quickly and dramatically. In a post entitled Changing Business Models in the Energy Sector, I noted that the energy sector as a whole is changing dramatically, if slowly. Despite all of the talk about renewable and alternative energy sources, fossil fuels will remain America’s principal fuel sources for generating electrical power for decades to come. There are a lot of reasons for this. Among those reasons is the fact that numerous challenges remain in most alternative energy sectors. The Wall Street Journal agrees and states, “Blame it on technology, infrastructure or policy. But it’s going to take many years for new technologies to make much of a dent in our current energy mix.” [“The Long Road to an Alternative-Energy Future,” by Michael Totty, 22 February 2010] This post is the first of eight that will address those challenges as well as some of ongoing activities in each alternative energy sector discussed by Totty. I will use Totty’s article as the jumping off point for each post. Totty writes:

“New energy technologies are coming that will shrink our use of fossil fuels and cut emissions of greenhouse gases. Just don’t expect them anytime soon. Why the delay? After all, the computer revolution has shown how rapidly new innovations can be imagined, developed, brought to market and have an impact. But new energy technologies don’t work that way—they can take years to gain just a toehold in the market, and 20 to 30 years to push aside existing products or techniques. That’s partly because of the sheer size of the energy market. The U.S. utility industry in 2009 produced an estimated 3.7 trillion kilowatt-hours of electricity; nearly half of that was produced by coal. Solar power, which is doubling every couple of years, contributed less than 0.1%. Or consider transportation, which used an estimated 3.3 billion barrels of gasoline. And how much of that consisted of renewables, mainly corn-based ethanol? About 8%.”

Totty correctly asserts that “no single technology needs to replace all that carbon-producing power” and I don’t know of anyone who has ever proposed that one could. Most of the talk surrounding alternative and renewable energy is centered around the electrical power generation sector rather than the transportation sector. But both sectors need to be addressed if concerns about energy security and environmental health are to be addressed successfully. Totty continues:

“Researchers planning for future energy supplies are working on several technologies simultaneously, including carbon capture to produce electricity, and next-generation biofuels and electric-powered cars to move us around. They talk about the need for ‘silver buckshot,’ instead of a silver bullet. Researchers also agree that policy makers can speed or delay these developments—at least up to a point. A price on carbon, either through a tax or a carbon-trading mechanism, would make new technologies competitive with cheap oil and coal more quickly, spurring investment and adoption. Governments can also spend money on research, development and pilot projects, speeding the move from the drawing board to the market. Higher oil prices also make all the energy alternatives more attractive to investors and consumers.”

The stillborn results of the conference on climate change held in Copenhagen earlier this year mean that a globally accepted “price on carbon” is not as likely to emerge in the near-term. The current recession has also depressed oil and natural gas prices. As a result, many alternative and renewable energy technologies are less competitive. Totty next offers “a closer look at a handful of the most-promising clean-energy alternatives, and the reasons they’ll be a long time coming.” Over the next few posts, I’ll look at his analysis of each alternative energy segment and offer additional comments and information. This seemed like a good time revisit the energy sector because the recent unveiling of the Bloom Energy Server (more commonly referred to as the Bloom Box). The Bloom Box has created quite a stir in the media. [“Bloom Energy fuel cell debut has center stage,” San Jose Business Journal, 24 February 2010] The article reports:

“In a rarely seen flood of interest in a previously little-known company, Bloom Energy Corp. is set to officially unveil what it calls a break-through in fuel cell technology. … The Sunnyvale company lifted the veil slightly in a “60 Minutes” episode on Sunday that triggered a wave of inquiries about what it does. The video can be seen by clicking here. … Bloom CEO K. R. Sridhar claimed in the TV story that devices made by his company generate electricity at a cost of 8 to 10 cents a kilowatt hour using natural gas, lower than commercial prices in some parts of the country. The fuel cell boxes are roughly the size of a parking space, cost $700,000 to $800,000 and have been tested by Google Inc., Wal-Mart Stores Inc., Bank of America and other large corporations. Bloom is hardly an overnight success story, however, raising $400 million and taking eight years to develop a new type of solid oxide fuel cell. Despite the claims and the publicity, questions remain on the company’s technology that may begin to be answered with Wednesday’s press conference. Fuel cell adoption to date has been limited by their cost and durability.”

I first discussed Bloom Energy back in October 2008 in a post entitled Green Capitalism and the Map of Grand Challenges. At that time, little was known about the company and the Bloom Box was nowhere in sight. Bloom Energy’s secrecy about what it was doing kept interest in the company keen and increased the hype surrounding the unveiling of the Bloom Box. Nevertheless questions about the technology remain [“Bloom Energy Claims a New Fuel Cell Technology,” by Todd Woody, New York Times, 24 February 2010]. Woody reports:

“While Bloom may well have created one of the most efficient fuel cells, it is unclear how widely the company’s technology will be adopted. Cost and durability have limited the use of other types of fuel cells, and it could be years before the potential of the company’s approach is clear. ‘We have been working with solid oxide for 30 years but are still in the lab,’ said Mike Brown, an executive with UTC Power, a division of the United Technologies Corporation and a leading fuel-cell maker. ‘Nobody has been able to resolve the reliability problem.’ Fuel cells, which convert hydrogen, natural gas or another fuel into electricity through an electrochemical process, have long held out the promise of cheap and plentiful energy while emitting fewer pollutants than conventional power plants. But the need to use expensive precious metals like platinum and rare earth elements in some fuel cells, and corrosive materials in others, has kept costs high and shortened their longevity. Bloom claims it has learned to make the devices from common materials that will last for years. The Bloom fuel cell’s heart is a thin white ceramic wafer made from sand. At Bloom’s offices, Mr. Sridhar, a former NASA scientist, picked up a stack of fuel cells that resembled floppy disks. One side of each was painted with a lime-green ink that acts as the anode while a black ink on the back served as the cathode. Bloom executives would not disclose the composition of the ink.”

One of the reasons that Bloom Box has created such a stir is that Sridhar claims it can be powered by almost any fuel source. That is one reason he sees it playing a significant future role in the developing world as well as being an important part of the energy picture in the developed world. He claims that the company will eventually offer a home-sized version of the Bloom Box that will cost around $3000 and use natural gas as fuel. The natural gas sector would undoubtedly love to see such a technology widely implemented. It will take a number of years for Bloom Energy to prove its claims that its fuel cell is reliable. In the meantime, other breakthroughs will continue to be unveiled. In the next few posts, I’ll discuss some of the recent breakthroughs that are continuing to make the renewable and alternative energy sector an exciting one to watch.