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Fuel-cell maker didn’t choose site by accident

The relationship among the Silicon Valley founder of Bloom Energy, a former colleague – now at the University of Tennessee – and a couple of Tennessee legislators with Chattanooga ties could portend the arrival of another clean energy manufacturer to the state.

Bloom Energy’s notoriously tight-lipped CEO KR Sridhar announced in May with a cryptic single sentence that the company would install in Chattanooga its latest iteration of the fuel cell technology the company has been developing for electricity production.

The 100-kilowatt system will be at the Electric Power Board’s headquarters in Chattanooga and will be close to a final version that Bloom Energy plans to introduce in the broader market later this year, Sridhar said at the Tennessee Valley Corridor Summit, which was held in late May.

The technology, which can burn on a number of different fuels from natural gas to biomass, has been heralded as a breakthrough in power generation that could potentially, as Sridhar puts it, “democratize” the electric grid. The individual units, which burn with no or reduced emissions depending on the fuel, promise to be more efficient than existing generation technology and affordable enough to replace traditional sources of power at a home or business level, he says.

The Chattanooga testing project is getting a plug of federal funding, and Rep. Zach Wamp, R-Tenn said at the summit that he had been cultivating a relationship with Sridhar since the early years of the Summit meetings, which he began coordinating more than a decade ago.

“Wamp and (former Chattanooga mayor, now Tennessee Sen. Bob) Corker were the ones that smelled it out,” says Joe Ferguson, former director and now head of special projects for Chattanooga’s Enterprise Center, an economic development organization.

Ferguson also credits Henry McDonald, a former colleague of Sridhar’s at NASA who now holds a chair of excellence at the University of Tennessee-Chattanooga’s National Center for Computational Engineering or SimCenter, as a crucial connection in drawing Bloom Energy’s attention. Two years ago, Bloom Energy installed a 5-kilowatt test system at the center. And federal funding for the Electric Power Board installation will come through the SimCenter, which will help carry out analysis of the system, according to board spokeswoman Lacie Newton.

“EPB will contribute up to $100,000 to cover installation costs particular to the site, as well as operational costs,” she said. The official testing period is one year, but the equipment may stay in operation up to five years depending on the results.

The demos may be cool, but what city proponents are really hoping for is that Sridhar ultimately will announce plans to set up a manufacturing site in the Southeastern corner of the state.

“Obviously, it’s not this year, it’s not next year, it’s a couple of years away,” Ferguson says.

While the company could potentially be a competitor to traditional power providers, TVA is nonetheless interested in seeing the technology in action and analyzing the data collected from the new system.

“We have to figure out what are the issues you have to get around,” says Joe Hoagland, TVA vice president for environmental science, technology and policy. “Reliability has been a problem (with fuel cells),” along with cost.

Because the EPB system will operate on natural gas, “the other concern is that you don’t get away from the price volatility associated with natural gas,” Hoaglund says. “I think in the long run what you’ll have to end up having is a combination of Bloom Energy technology and other power sources.”

For its part, TVA is investing its capital dollars in nuclear power by revamping one partially-completed plant while eyeing another refurbishment or new construction project.

Time will tell whether the Tennessee Valley will one day be home to both.

Larisa Brass is a contributing writer to the Greater Knoxville Business Journal.

June 15, 2009 - 8:32 PM