Bloom is feeling the love for alternative energy as stock price surges

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Boom fuel cells at the Red Lion site in New Castle County.
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Good afternoon everyone,

The stock market craziness continues.

Bloom Energy’s stock as of today was trading near just below $40 mark. The price hit $41 at one point yesterday.

It’s quite a contrast from fall 2019 for the Northern California company that operates a Newark manufacturing site.  Short-seller, Hindenburg, had predicted a dire fate for Bloom.

 At the time, Bloom’s stock price was below $4 a share. (Sadly, this writer did not take advantage of that price and owns no shares).

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You can credit the eagerness of investors to plow funds into alternative energy for the surge.  Helping to propel that optimism further is a new administration without the love for fossil fuels we saw previously.

While investors’ emphasis has been on electric vehicles, Bloom – despite never posting a profit – turned some heads.  

The company has made headway in improving the efficiency of its fuel cells. A  column from the Motley Fool site  outlines the improvements the company has reported.

Bloom is tapping into the potentially large market for commercial back-up power systems and the related area of mini grids that can keep emergency management agencies, hospitals, and other essential services up and running during blackouts.

Currently, most back-up power comes from diesel generators that can be noisy pollution super spreaders. 

Still, rapid growth will be difficult due to regulatory requirements that include hospitals saddled with  mandatory diesel back-up.  Prospects are better in California, which is facing blackouts related to wildfires.

What has some investors excited is the potential for Bloom to be part of the hydrogen economy. Bloom has been able to re-engineer its fuel cells to produce hydrogen, which can be stored and later power Bloom’s fuel cells.

Solar and wind power can also enter the mix  as way to produce hydrogen that later generate electricity.

The technology is also being explored to power tankers and other large ships that account for a sizable amount of pollution. 

We don’t yet know how far Bloom Energy can drive down costs of making hydrogen.  As the Motley Fool piece indicated, Bloom has sharply  increased its fuel cells’ efficiency in a decade-long effort.

That brings us to the elephant in the room for Delaware customers of Delmarva Power. We pay $4 to  $5 a month extra to feed Bloom fuel cell power into the grid. The cost is based on the difference between wholesale prices and the fixed-price contract with Bloom.

Efforts to get out of the long-term contract approved by the General Assembly have failed, but it’s an issue worth revisiting as Bloom’s fortunes improve. – Doug Rainey, chief content officer.

 

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