Bloom Energy Sharpens Focus on Data Centers

Two years after unveiling its fuel cell technology, Bloom Energy is focusing on the data center sector, and has hired industry veteran Peter Gross to head its new Mission Critical Practice.

Rich Miller

March 19, 2012

4 Min Read
Bloom Energy Sharpens Focus on Data Centers
A Bloom Energy server installed at CalTech (Source: Bloom Energy).



A Bloom Energy server installed at CalTech (Source: Bloom Energy).

Peter Gross envisions a future with a Bloom box in your data center. Two years after unveiling its fuel cell technology, Bloom Energy is focusing on the data center sector, and last week hired industry veteran Gross to head its new Mission Critical Practice.

"I think Bloom has the potential to have a transformational impact in the mission-critical space," said Gross. "I see these as the next frontier."

Gross has decades of experience designing advanced data centers, first as a co-founder and CEO of EYP Mission Critical Facilities, and then at HP. He is joining Bloom because he believe the company's fuel cell technology will have growing appeal in an environment in which data center users are focused on innovation and cost reduction.

The Bloom Energy Server is based on solid oxide fuel cell technology that converts fuel to electricity through an electro-chemical reaction, without any combustion. Because they are housed at the customer premises, the Bloom box can continue operating during grid outages. Early adopters of Bloom cells include blue-chip companies like Google, Bank of America, Coca-Cola, eBay, FedEx, Staples and Wal-Mart.

Lightly Adopted in Data Centers - So Far

But traction has been limited in the data center industry, which is known for its focus on reliability and the economics of power - two areas where many in the industry believe the jury is still out on the Bloom. Early Bloom installations took advantage of incentives that reduced the cost of power, which without incentives would between 8 and 13 cents per kilowatt hour, according to various estimates. Last year Bloom offered customers the option of leasing the equipment, reducing the up-front capital requirements.

In 2011 both AT&T and NTT announced purchases of Bloom units to support their data centers in California.

"By providing a reliable, clean and stable energy source that is immune to disruptions to the grid, Bloom will help its customers reduce their security risks considerably, while at the same time improving efficiency and cutting greenhouse gas emissions," said Gross.

Gross says that as Bloom establishes a track record in data center operations, end users can consider new configurations in which the Bloom boxes play a more central role in the power infrastructure.

"Right now it's primarily used as a utility grid displacement device, and supplements the utility," said Gross. "When the utility goes away, the Bloom does as well."

Potential to Eliminate Components, Cost

In the future, Gross sees Bloom boxes powered by natural gas serving as the primary form of power, with the utility grid used as a backup service. This configuration envisions dual-corded servers, with one input from the Bloom and the other from the grid. This approach would allow data center operators to reduce their reliance on diesel backup generators.

"The Bloom can reduce energy consumption and eliminate a significant number of high-cost components," said Gross. "It's highly unlikely that both power sources (the Bloom and the utility) would go away." One scenario that might test that assertion is a major earthquake, which is a consideration for data centers in California. Whether Bloom units and natural gas supplies would fare better in an earthquake then a diesel generator will likely be a topic of discussion as Bloom positions its fuel cells for broader usage.

Gross says Bloom's approach to the market will focus on education and establishing a comfort level with the performance and reliability of its product. "We're not going to rely only on the Bloom box at first," he said. "What I envision is an architecture that will show that the reliability of the system is very high."

NatGas Prices As An Opportunity?

One trend that may help Bloom is the price of natural gas, which last week fell to its lowest point since 2002. Natural gas prices have declined more than 80 percent since 2005.

"The ideal place for Bloom to do business is California and in the Northeast - somewhere where the cost of electricity is high," said Gross. "Fortunately, a lot of data centers are in New York and California."

Gross jokes that in the data center industry, "everybody wants innovation, as long as it's been in place for 20 years." But he believes that the corporate focus on cost cutting has made end users more willing to consider new approaches.

"The data center industry is going through a radical transformation," said Gross, citing the growth of cloud computing and modular design. "I think the economics are driving this. I've seen more change in the last two years than in a long time. Fundamentally, the whole industry is really maturing rapidly.

"You have to find ways to build faster and be more flexible and economical.The whole industry is commoditizing," he added. "The world is changing, and Bloom fits very well in terms of simplifying the whole architecture. A lot of people are intrigued and willing to use it. I was very comfortable in HP. I wouldn't have done it if I didn't believe this had fantastic potential."

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