Good morning,
Last week Bloom Energy responded to our recent story on a newly installed system in Brooklyn, NY.
The California company reported employment in Newark has risen to 335, after a previous report indicated the figure had fallen below 300.
The updated headcount means that 37 percent of the anticipated 900-job figure has been attained by Bloom.
The job targets were used in justifying the financial package that brought Bloom to the state.
The number is well above our incorrect figure of 25 percent of goal. The gap is further reduced when higher-than-expected pay is factored.
Regardless, the job total is well short of the number that was used in justifying the financial package that brought Bloom to the state. Bloom is now moving toward a long-rumored stock offering.
A number of factors conspired in getting Bloom to this place. Overly ambitious projections, a temporary end to incentives for fuel cells, production changes and falling electricity rates all played a part.
A lingering issue in Delaware is the cost to ratepayers of feeding energy from Bloom fuel cells into the grid, another part of the deal with the state.
Delaware pays a higher price for mandates that call for a quarter of all electric power to come from renewables, with or without Bloom. The question remains how much. The calculations are on the bill, but remain hard to follow.
The good news has been that overall power charges (minus the cost of the people and equipment that bring the power to your home or business) have dropped. The state remains an expensive location for commercial electric customers but has fallen to the middle of the pack for residential users.
Despite these challenges, Bloom could fill a sizable market niche.
It comes from providing mission-critical power to data centers, hospitals, emergency services and other areas through a mini-grid during outages and catastrophic events such as Hurricane Sandy.
One such grid is now operating in Hartford, CT and the recent announcement of a fuel cell installation in Brooklyn shows the potential.
The grids could also be further extended. Walmarts and even Wawas that offer essential services after hurricanes or other events could use a fuel cell. Even Christiana Mall might be a good place for a Bloom Box, although its frequent power outages have ceased.
The question is whether Bloom, which has burned an estimated $2 billion in private equity, has enough left in the tank to navigate utility, regulatory and government hurdles required in building such systems.
As announced earlier, Bloom is planning a stock offering.
Take care as we work though this heat wave. The newsletter returns tomorrow. – Doug Rainey, publisher.
