Friday, October 28, 2011

Fuel cell factory, 30 MW installation coming to Delaware

The state of Delaware is betting taxpayer money on a California fuel cell company that plans to open a factory on the site of  the old Chrysler assembly plant in Newark, create 900 jobs and pump new electricity into the power grid.

Delaware Approves Bloom Energy Factory, 30MW Project

Delaware utility regulators on October 18 approved a plan to bill customers of utility Delmarva Power to build a factory for Silicon Valley fuel cell startup Bloom Energy.

The company says its natural gas-powered Bloom Box fuel cells will generate 30 megawatts of electricity in the state.

Greentechmedia said the decision was a "coup" for Bloom since Delmarva will be raising more than $100 million over 20 years to help finance the project. That equates to a $1.34-per-month surcharge on customer bills. Delaware is also providing $18 million in state incentives, and the project is seeking a federal cash grant for renewable power projects.

The project reportedly could grow to as much as 50 megawatt--an order of magnitude larger than Bloom’s biggest projects so far, with California customers such as Google, eBay, Adobe and AT&T.

Some critics, however, question how well the tetchnology will compete with the natural gas-fired power plants that presently serve the grid.

Delaware legislators helped Bloom's chances this past summer by re-defining natural-gas fuel cells as a renewable energy source. The change will allow Delmarva to claim the project in meeting its state renewable energy mandates and will help Bloom market the electricity as green power.

Greentechmedia reports:
Bloom hasn’t put a price tag on the project yet, but it has touted the potential economic benefits for Delaware -- up to 900 jobs at its factory and an estimated $300 million in annual economic activity. That’s boosted project backers against critics who worry that Bloom’s projects won’t come off in time or on budget. One conservative critic has testified that the cost to Delmarva ratepayers could reach as high as $3 to $4 a month if Bloom and the utility can’t maximize the value of their “Bloom Electrons” in markets for renewable power. For its part, Bloom has agreed to pay Delaware a fine as high as $41 million if it fails to build the factory.

Governor Jack Markell was ebullient in announcing Bloom's plans back in June.

Wilmington News-Journal editorial gave last week's funding decision this cautious support:
In a perfect world, Bloom Energy would have plopped its factory down on the old Chrysler site, hired its workforce and started manufacturing electricity-producing boxes out of sheer love for Delaware.
But in a perfect world, the Chrysler plant would still be operating and employing thousands of Delawareans in good-paying manufacturing jobs.
Knowing what happened to Chrysler and the overall state of employment in America today, we all recognize the world's not perfect.

So some hard steps have to be taken. And every step to overcome a deficit, such as the loss of those Chrysler jobs, involves risk.

The Bloom deal with the state and Delmarva Power and its customers does involve risk. But it also offers Delaware an opportunity.

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