Sunday, November 23, 2014
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Delaware 'fuel cell' plant breaks ground

800 jobs promised; taxpayers help pay

Delaware 'fuel cell' plant breaks ground

Delaware gets it, says KR Sridhar, space-engineering professor-turned-Silicon Valley energy missionary, and boss of Bloom Energy (formerly Ion America), which is building its second U.S. factory, to produce what he says are cost-effective electricity-generating fuel cells - a Holy Grail of energy engineering - in Newark, Del., atop the rubble of an old Chrysler auto plant.

With state support, of course: $16 million in grants, a new energy law that allows Delmarva Power to use fuel cells instead of solar or wind power for green-energy credits, and a consumer surcharge that will boost the cost of electricity to Delaware homeowners by more than $1 a month, for up to 21 years, with the money going to Bloom. 

"Gov. (Jack) Markell, really, he's a political entrepreneur," Sridhar told me. "He had a can-do attitude about the whole process." And not just Markell: the state's (all-Democratic) Congressional delegation and leaders of its (Democratic-led) General Assembly rushed to show Sridhar its support for Markell, also a Democrat, after state environment secretary Collin O'Mara scouted Bloom on a visit to the San Jose, Calif., city government, where he used to work. Markell's team even invited Delaware's last Republican governor, Mike Castle, to meet the leaders of Bloom, cofounded by Sridhar in 2001 with backing from Silicon Valley investor John Doerr and free rent from NASA. 

"I wish we could clone (Markell) for a few more states," Sridhar told me. He has "everyone pulling in the same direction." He declined to compare, say, Pennsylvania and New Jersey.

Siridhar spoke before that rarest and most-sought-after public event of 2012: ground-breaking for a new plant that's supposed to create more than 800 manufacutring and technical jobs, plus hundreds more in supply plants that he hopes can be lured to the neighborhood by more state "incentives."

Unlike the delayed Fisker electric car plant that Gov. Markell and Vice President Biden are trying to lure to another ex-auto plant in nearby Stanton, Bloom is already mass-producing its product, a freezer-sized "fuel cell" that, linked with other identical cells, runs natural gas (or biogas) through a battery to produce water, carbon dioxide and electric power.

The Bloom team is heavy with former auto executives, including Gary Convis, retired head of the Toyota-GM joint venture NUMMI and of Toyota's biggest U.S. plant in Georgetown, Kentucky. "We'll need a blend of talent" when production starts in the fall of 2013, he told me. Another auto guy, Ford veteran Barry Sharpe, will head the Delare plant, which will be a tenant of the University of Delaware, whose president, ex-Wharton dean Patrick Harkavy, calls the Chrylser site his "Science, technology and Advanced Research" (STAR) campus. Hill International of Marlton is among the contractors readying the site.

Executives from Delmarva, Washington Gas, AT&T, Owens-Corning, and other "Bloom box" users testified to the crowd about how the cells are more reliable (less weather-dependent) than solar or wind power (Apple, eBay and Wal-Mart are also clients). "We were looking to find a very clean, reliable source of energy," said AT&T 's energy director, John Schinter. "There's very little maintenance associated with it," he added.

Delmarva officials noted they need fewer workers for fuel cells than for equivalent-sized coal plants. Which would seem to reduce the job benefit of bringing in Bloom. But customers want reliability, said president Gary Stockbridge: These are extremely reliable units, which can be located by existing electrical substations in residential, commerical and industrial areas -- anywhere a gas line or gas storage tank can be set up. That reduces the need to extend the national power grid with costly new power lines.

The boxes still don't pay for themsleves. They've been installed mostly in states that punish carbon-burning and give incentives for low-emissions electricity. Sridhar insists the price (now somewhere around $1 million for a unit big enough to power a 100,000 square foot building or 150 homes) will come down as he makes more of them. "Like Moore's Law," he told me. Or maybe not that fast: "We'll figure that out."

What about when natural gas prices rise again? There's always biogas, he said, which keeps getting cheaper. And no, he hasn't looked at waste centers like Wilmington's hulking Cherry Island landfill as a source for that. Not yet.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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