Taxpayer and ratepayer subsidies, coastal zone permits and crony capitalism spell big trouble
Lindsay Leveen
In November 2011, Bloomenergy applied for permits to build an energy center in a Delaware protected coastal zone area. The center would employ solid oxide fuel cells powered by natural gas and housed in casings that look like huge boxes – Bloom boxes or “energy servers.”
The application raised alarms among Delaware citizens worried that they were being handed a Pandora’s Box of unwelcome rate hikes and other surprises. Because of my energy, chemistry and thermodynamics expertise, they asked me to review it.
Solid oxide fuel cells have been around for more than fifty years. However, Bloom claims it has improved on their performance, through proprietary breakthroughs in materials science. Perhaps so. But my doubts that its servers are capable of performing at the levels hyped by Bloom grew when the company never provided details about how its mysterious fuel cells actually worked.
As I read the 163-page application, instead of revelations, I found techno-speak, questionable calculations and outright misinformation. Bloom’s black box technology remains shrouded in mystery, accompanied by boom boxes boasting energy, CO2 and pollution savings, while the company importunes politicians for taxpayer and ratepayer subsidies. It’s an intriguing situation.
The First State of the Union (Delaware) is examining the first state of matter (solid, as in solid oxide fuel cells) and discussing matters of state with heavyweight “venture” capitalists who have some of the best connections imaginable, from both sides of the political aisle. They seek rubberstamp approvals for special tax treatment, electricity rates and environmental permits, for a “green” technology that is still more mythical than scientific.
As I tried to decipher the black box, on page 6 of the application I found the following statement:
“The Red Lion Fuel Cell Installation will provide up to 47 [megawatts] of electrical power that will be connected to the PJM electrical grid. The project will consist of 235 BloomenergyES-5700 Energy Server fuel cells that will utilize pipeline quality natural gas. The project will be built in phases, the first phase consisting of 27 MW of capacity, and the second phase an additional 20 MW. Each fuel cell has a base load electrical output of 200 [kilowatts], with a maximum natural gas usage of 1.32 [million] Btu/hr (i.e., 1,282 SCFM [standard cubic feet per minute] at 1,030 Btu/SCF heating value).” [The PJM is an East Coast wholesale power market.]
However, at this rate of fuel use, the Bloom Box would be less than 1% efficient – suggesting that Bloom meant each server needs 1,282 SCF per hour – a careless error. Correcting this reveals that each 200-kilowatt server will need 1,467 SCF per hour – significantly higher than the corrected 1,282 SCF/hour.
On page 161, Tables 1 and 2 revealed that each Bloom box emits 884 pounds of carbon dioxide per megawatt hour of electricity (MWHE) generated. Since natural gas yields 117 pounds of carbon dioxide emissions per million BTUs of energy used, each Bloom ES-5700 Server needs 7,555,600 BTUs to generate one MWHE. Because the actual energy in one MWHE is 3,412,141 BTUs, the box’s conversion efficiency is only 45.2% – far lower than the 60% efficiency a Bloom representative recently presented to a NASDAQ reporter.
Bloom’s application also explains in detail how much cleaner Delaware’s air will be with 235 ES-5700 Servers generating 47 megawatts of electricity. However, those 235 Bloom black boxes cost the same as one 350-MW combined cycle natural gas generator, which would be 53.3% efficient, using the same fuel, based on its higher heating value in a CC generator.
That means the same taxpayer/ratepayer investment that Bloom wants for its Red Lion Installation could get Delaware eight times more clean electricity, if the money were spent on a CC gas generator.
Table 2 also says its 235 “clean” ES-5700 Servers would emit 22.56 pounds of volatile organic compounds (VOCs) per day. But even paint booths in Delaware auto body shops are prohibited from emitting more than 15 pounds of VOCs per day. Moreover, if the same amount of power had been generated by combined cycle gas turbines, only 0.249 pounds of VOCs would be emitted daily. That’s 90 times less pollution!
Bloom servers also emit 1.2 times more CO2 per MWHE than a Siemens, GE, Mitsubishi or Alstrom combined cycle gas turbine.
These errors and misleading claims make Bloom’s application seriously flawed, and possibly fraudulent, if not corrected. But perhaps the biggest problem is yet to come.
Because of the Bloom servers’ low efficiency and high capital cost, Delaware citizens will pay Bloom over $200 per megawatt hour of power delivered to their PJM grid. But in January 2012 the US Energy Information Agency said the projected “levelized” cost of electricity over the next 30 years from advanced gas-fired combined cycle power stations is $65.50 per MWH.
In other words, Bloom plans to charge First State citizens three times the $65 rate, for dirtier power.
Talk about a carbon tax! How long will Delaware families, businesses, hospitals, schools and churches be able to survive with those electricity rates? How did Bloom Energy pull off this boondoggle? Well …
One Bloom director had the sitting President of the United States over for dinner, and has an ex-Vice President of the USA as a business partner. Another director was formerly Secretary of State and Chairman of the Joint Chiefs of Staff. The current Vice President hails from Delaware. They are all good friends of Delaware’s “green” Governor and Secretary of Natural Resources and Environmental Control (DNREC).
The Chinese would call it guanxi (connections). Some Americans would say it’s crony-capitalism on steroids. Less charitable types might suggest that Delaware’s new motto should be: “We don’t tolerate corruption. We insist on it.” Whatever you call it, it works.
It proves the right Delaware political connections can get Bloom the electrical connections, subsidies and rates it wants – even when it submits thermodynamic hogwash in a permit application to convert a protected ecological area into a huge, expensive, inefficient, polluting power station that will send electricity prices skyrocketing. Yes – the same DNREC approved Bloom’s permit on May 4, 2012!
But as John Paul Jones said, “We have not yet begun to fight!” And the fat lady has yet to sing.
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Lindsay Leveen is a chemical engineer who studied thermodynamics in graduate school at Iowa State. He blogs at www.GreenExplored.com and explains complex science issues in lay terms.