Page 102 - Forbes - USA (March 2020)

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I As wildfires raged
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E last October, more than a million northern Californians suffered through blackouts, their electricity cut in order
V to reduce the likelihood of high winds sparking new conflagrations. In smoke, KR Sridhar smelled opportunity.
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I His company, publicly traded Bloom Energy, sells fuel cells—steel boxes that generate electricity using natural

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H gas. The boxes, which it calls energy servers, emit a nearly pure stream of carbon dioxide, a major greenhouse
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gas, but they are supposed to make much less of it than traditional power plants and do so without generating
lots of smog ingredients like nitrogen oxide and sulfur oxides.

Even better, Bloom’s units get their fuel via under- raised on the back of false statements. It could soon
ground pipelines unaffected by the Diablo winds that be out of runway as lucrative tax credits phase out and
threatened California’s high-voltage wires and led to financing dries up. Sridhar has already enlisted in-
the power outages that Sridhar considers intolerable vestment bank Jefferies to help restructure over $300
in any modern society, let alone in Silicon Valley. million of debt coming due at the end of this year.
“Every time there is a disaster your power price Shares are down nearly 50% since Bloom raised $282
is going to go up, because somebody has to pay for million in its 2018 IPO. And now regulators and even
the damage,” Sridhar says. “That is the catalyst for local politicians are clashing with the company. Cities
change.” Bloom is capitalizing on the outages by woo- like Berkeley have turned against natural gas for not
ing potential customers in fire-risk zones to protect being green enough. A court recently blocked Santa
against grid failure with Bloom-powered “microgrids,” Clara County, in the heart of Silicon Valley, from essen-
like its 26 so far in California, which carried custom- tially banning new Bloom installations unless they are
ers through last year’s blackouts. fueled, for instance, by exorbitantly expensive “biogas”
Over its 19 years in business, Bloom has installed sev- siphoned from manure ponds or landfills.
eral thousand of its 15-ton boxes worldwide for big tech
companies including Apple, AT&T and Paypal, which decade ago, Sridhar envisioned
are willing to pay up to guarantee 24/7 power for data A that by now his fuel cell technology
centers where the cost of downtime is nearly $9,000 would be in every home, costing
per minute. A lot of its customers are in states with the $3,000 a pop. In reality, not a single
highest power prices and big clean-energy subsidies, home in America has its own Bloom
like New York, where Home Depot has installed them box, not even Sridhar’s $7.6 million house in Woodside,
as backup generators “wherever they make economic California. Instead, his boxes are used mostly for indus-
sense,” says the chain’s U.S. energy chief, Craig D’Arcy. trial and commercial customers, costing approximately
Bloom boxes have been operating nonstop at Caltech $1.2 million each. Without subsidies, they generate
for over a decade, providing nearly 30% of the power power at a cost of roughly 13.5 cents per kilowatt hour
to its Pasadena campus. “Having stable power is very versus 10 cents per kwh for grid power nationally.
important to scientists,” says Caltech facilities director Truly renewable power is now much cheaper than
Jim Cowell. “The grid has been disintermediated.” Bloom’s. Without subsidies, solar and onshore wind
This should be Bloom’s time to shine. “The natural both cost 4 cents per kwh, according to asset manage-
gas, thanks to fracking, is already there,” Sridhar says. ment firm Lazard.
And yet, despite big promises, Sridhar’s boxes are high- Don’t think for a second that Sridhar, 59, is discour-
ly unlikely to transform the grid in California, or any- aged. “This is a pretty amazing pace of progress,” he
where else. The reasons are manifold, but boil down says, especially compared to where he got his start.
to this: Bloom’s technology is too dirty and too costly. He grew up in India, where power outages are com-
Bloom has never generated a profit, despite at least mon, and attended the National Institute of Technol-
$1.7 billion of invested capital, some of which was ogy Trichy, in the southern Indian state of Tamil Nadu,

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