Silicon Valley city seeks to ban future use of Bloom fuel cells

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Bloom Energy has beenrebuffed by a municipal utility in its Silicon Valley backyard.

The Santa Clara City Council went along with a rrecommendation fromits municipally-owned utility Silicon Valley to ban future installations of Bloom’s fuel cells after complaining that installations were cutting into their revenue.

Bloom is based in nearby San Jose and has a production site in Newark, DE.

The city-owned utility claims Bloom fuel cells use fossil fuels and do not qualify as alternative energy sources. Bloom fuel cells are powered by natural gas. The city’s claim comes even though Silicon Valley Power generates much of its own power through natural-gas fired generation.

Bloom has faced similar criticism in Delaware over a deal that feeds electricity from its fuel cells into the state’s grid. The electricity is now designated as coming from alternative energy sources. The agreement was part of the effort that brought the Bloom plant to Delaware.

A Santa Clara utility representative said that “from a load growth perspective, Silicon Valley Power has been doing great for a number of years, but we do have to acknowledge that our sales did go down this year. There’sa number of reasons associated with that. What’s causing the impact on the actual versus forecasted load? Fuel cell installations are a part of that.”

Santa Clara is the home of a large number of data centers that use alternative power services that include Bloom fuel cells. Unlike most back-up power systems, Bloom fuel cells operate continuously and need to be connected to the grid.

The City of Santa Clara issued a press release on the topic and claimed talk of a ban on Bloom Fuel Cells was not accurate.

“Although the Council action has been referred to as a ban on Bloom Energy fuel cells, that is not accurate and, unfortunately, is promoting confusion on the actual action that the City took. Bloom Energy could continue to install their fuels cell in Santa Clara if they choose to use renewable fuels, serve as backup generation, or disconnect from the city utility. Bloom has previously told the city it does not prefer these alternatives as it will affect their profit margin.”

Bloom claimed the resolution is an overreach of the city’s power and issued the following statement.

“This resolution will have the exact opposite outcome to its stated goal. Every fuel cell deployment in the city of Santa Clara decreases the city’s dependence on 20-year-old combustion-based power plants, reduces CO2 emissions and improves air quality. The City Council has failed to consult third-party experts, ignored testimony from experts from Stanford University, Santa Clara University and the Rocky Mountain Institute. and failed to properly assess the negative environmental impact of the resolution. Its decision to pass the resolution is not only bad public policy, it is illegal.”

The Bloom statement continued, “It has been the policy of the state of California for more than 40 years to encourage private electricity generation. This resolution contradicts state policy and the city has exceeded its authority in passing it . More importantly, this effective ban on fuel cells is anticompetitive monopolization by the city.”

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