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Feb 24, 2010 2:39 PM by Bea Karnes, News First 5

Secretive startup unveils fuel cell server

A secretive Silicon Valley startup on Wednesday took the wraps off its cleaner energy product: a fuel cell "server" the size of a parking space that it hopes will allow homes and businesses to generate their own electricity.

Bloom Energy introduced its devices at eBay Inc. headquarters in San Jose, Calif., joined by Gov. Arnold Schwarzenegger and several of its early customers.

"We believe that we can have the same kind of impact on energy that the mobile phone had on communications," CEO K.R. Sridhar, a former NASA scientist, said in a statement. "Just as cell phones circumvented landlines to proliferate telephony, Bloom Energy will enable the adoption of distributed power as a smarter, localized energy source.

"Our customers are the cornerstone of that vision," he added, "and we are thrilled to be working with industry leading companies to lower their energy costs, reduce their carbon footprint, improve their energy security, and showcase their commitment to a better future."

EBay as well as Google, Inc., have been testing the server at their corporate campuses, and other customers announced Wednesday include Bank of America, Coca-Cola, FedEx Express, Staples and Walmart.

The technology had been the subject of intense anticipation because it promises to produce more power - with less environmental damage - than other fuel cells on the market.

"Each system generates enough power to meet the needs of approximately 100 average U.S. homes or a small office building," Bloom Energy stated. "For more power, customers simply deploy multiple Energy Servers side by side."

The company said its patented technology "is fundamentally different from the legacy 'hydrogen' fuel cells most people are familiar with" in four primary ways:

*it uses lower cost materials;
*is more efficient in converting fuel to electricity;
*can run on a wide range of renewable or traditional fuels; and
*is more easily set up and maintained.

Customers "can expect a 3-5 year payback on their capital investment from the energy cost savings." Bloom Energy stated. "Depending on whether they are using a fossil or renewable fuel, they can also achieve a 40-100 percent reduction in their carbon footprint as compared with the U.S. grid."

"Even running on a fossil fuel," it added, "the systems are approximately 67 percent cleaner than a typical coal-fired power plant. When powered by a renewable fuel, they can be 100 percent cleaner."

Yet analysts warn that the technology has yet to be widely proven.

"Fuel cells have always held the promise that they're going to be this huge thing, but so far it hasn't really materialized," said Shu Sun, an energy technologies analyst with Bloomberg New Energy Finance. "What we are seeing is some of these fuel cell companies are making inroads into niche industries."

A 2008 study by his firm found that the fuel cell market would reach $1.5 billion by 2015, primarily in wireless telecommunications, recreational vehicles and midsize "distributed generation," which refers to fuel cells that would power, say, a block of apartments rather than individual homes.

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