Bloom Energy’s fuel-flexible technology is uniquely positioned to pair with whichever clean fuel will be used to power the shipping industry in the future.
Decarbonizing the Marine Industry – Bloom Energy’s Tim Schweikert at the 2022 Investor Conference
Bloom Energy’s Sr. Managing Director of International Business Development speaks to how Bloom Energy’s fuel-flexible technology is uniquely positioned to pair with whichever clean fuel will be used to power the shipping industry in the future, as well as current collaborations to decarbonize the maritime industry.
- Future of Marine Industry
- The Cruise Market
- International Opportunities
Tim Schweikert: Senior Advisor, Market Development, Marine Solutions, Bloom Energy
Maryam Brown: Maryam Brown is president of Southern California Gas Company (SoCalGas), a Sempra regulated California utility. Previously, Brown was vice president of federal government affairs for Sempra. Prior to joining Sempra in 2016, Brown served as the senior energy and environment counsel for the Office of the Speaker of the U.S. House of Representatives. From 2011 to 2012, she was the energy chief counsel for the U.S. House Committee on Energy and Commerce. From 2010 to 2011, she was policy counsel for the U.S. Senate’s Republican Policy Committee. Before that, she was manager of public policy and strategic planning for ConocoPhillips. Brown serves on the board of directors of the California Chamber of Commerce and the California Business Roundtable. She holds both a bachelor’s degree in mechanical engineering and a law degree (Order of the Coif) from Louisiana State University.
Tim Schweikert: Good morning, everybody. It’s great to see all of you. And I’ve really enjoyed our conversations last night at both the cocktail hour and dinner. So I wanted to start by just talking a little bit about myself and my journey and how I got to Bloom. I joined Bloom at the beginning of last year, and I like to tell people that I was happily retired from GE after working at GE for 33 years and really not looking for work. But I got a call and they said, “Hey, we’re moving into the marine space and we need someone to help lead it.” My last role at GE was leading the GE marine business out of London. And that really intrigued me because having worked in the marine space, it was apparent that the marine industry is facing a huge challenge in terms of weaning itself off of heavy fuel oil.
Future of Marine Industry
Rick alluded to it as waste energy or a waste product. Some of the worst things that you can burn and emit not just CO2, but heavy sulfur content and heavy metals. It’s just really not a sustainable fuel for the marine industry. And everybody now recognizes that. And I thought I’d been following Bloom for a while. And I thought, wow, this is really intriguing because I was very familiar with the incumbents in the marine space, which are the internal combustion engine providers. And what we differentiate in terms of our fuel cell is the fact that we have no NOx SOx, particulate matter, or a negligible methane slip. We are also much more efficient, 20% to 30% more efficient than internal combustion engines. And that’s important because that means you have to load less fuel on a vessel.
And then probably the most important thing is in talking to customers is future-proofing their vessel. There has been a very large and quick update adoption of LNG over the recent years. But there’s a lot of debate and question as to what is the life of LNG as a marine fuel? How long can we continue to use it, given that it still is a fossil fuel? And it’s really uncertain in terms of where the marine industry will ultimately go in terms of net-zero carbon fuels, whether it be green methanol or whether it be ammonia. What I think is probably our biggest differentiator is our platform can run today on LNG and today the amount of power needed for LNG vessels is about four to five gigawatts per year, over this 10-year period that we’re looking at.
But we are also positioned to run on wherever the market goes in terms of net-zero carbon fuels. So whether that be green methanol, ammonia, or some other net-zero carbon fuel, we are going to be positioned and we will make the investment when required so that we can run off of any fuel wherever the market goes. So let me talk a little bit about our progress. So, and many of you that have been following Bloom probably remember that we signed a joint development agreement with Samsung about two years ago, and this was kind of our first foray. This happened before I started, but it was Bloom’s first foray into marine. And we’ve done a tremendous amount of engineering work to basically with SHI develop a fully powered SOFC vessel, which was really interesting work. Carl and his team put a lot of man hours into that.
The Cruise Market
But the concern or the problem is that the marine industry is very conservative and they are very much a show me industry. And the likelihood of launching in the near term, a fully powered SOFC vessel, particularly on something the size of an LNG carrier is probably pretty small. So we made a pivot beginning of last year, and we said, hey, let’s explore the cruise market. And we started to get tremendous feedback from our discussions, with the cruise market and saying, hey, what we really like about fuel cells is we could potentially run our hotel loads when we’re in port to avoid having any sort of particulate matter or emissions when they go to some of these more pristine destinations. And we think that’s a terrific application for fuel cells. So we have made really fast progress since the beginning of last year.
We completed the design of the marine power module, which you saw today. We have completed the testing, including the tilt test, that you saw at the technology showcased today. We signed a contract with Chantiers de l’Atlantique in June of last year, and that’s 150-kilowatt system that will go on a World Europa MSC vessel. That equipment is already in France. It’ll be installed in July, August of this year. And it will be on the water in the third quarter of this year. So really moving fast and rapidly. And we think that project with Chantiers is going to be a huge catalyst in terms of gaining recognition in the marine industry, that fuel cells are a very viable power source as an alternative to the incumbents. The other thing we’re doing is we’re working with Chantiers and a number of other cruise operators on doing what I’ll call the next-generation design, which would be a one-megawatt design.
Our intent is to have that completed and ready for shipment in 2023. And then the follow-on in terms of a product plan would get to 10 megawatts. So if you see a large cruise ship, typically their hotel loads in terms of the power requirement is at that sort of power level, 10 megawatts. We’re not abandoning the other segments in terms of freight-carrying vessels. I had a meeting earlier this week with one of the oil majors. They are very interested in replacing a one to five-megawatt generator on some of their tanker ships. And we’re also working with a number of LNG carrier operators to do something similar, to replace generators. So we think on the freight-carrying vessel side, similar to the cruise side, it’s going to be a partial power application.
Could we do something like a fully powered vessel in the future? Yeah, it’s possible, but it would probably require a hybrid type approach, potentially marrying our system with either a battery or potentially a reciprocating solution as well. So really good progress moving fast on the marine side.
Let me switch hats here. Now I’m going to talk a little bit about my second role, which is the international job. I got a call from KR, I guess it was probably November of last year and he said, “Hey, I’d like you to do the international role in your spare time.” I said, “Sure. Why not? That sounds great.” And actually, I’m really excited about this because when you look at what we’ve accomplished in 20 years, a lot of good penetration in the United States, five years of great success in terms of building up South Korea.
But when you look beyond that, it’s a white space, right? And we don’t think that South Korea was a unique opportunity. We think there’s many more South Koreas out there. And as KR said, we are laser-focused on Europe right now. And why is that? Europe, when it comes to energy security, decarbonization, and potential, a need for resilient alternate power, there is no other market that has a greater need. With the Ukrainian crisis, the whole energy equation and supply chain has been completely disrupted. The way governments are thinking about policy has changed dramatically. As an example, Germany, as you know, has had decided some time back to wean itself from nuclear and coal power. So heavily relying on gas. It is impossible for them to not have an economy that runs on gas, about 50% of their households, 50% of their CNI run on gas.
What they’re going to have to do, and I’m sure you’re aware of this through the news is they’re going to have to find alternative suppliers of gas. What does that mean? Prices are likely going to be higher. What does that require? It requires more efficient technologies, like Bloom fuel cells, particularly in a combined heat and power sort of system. The second thing is reliability and resiliency. Even a few months ago before the Ukrainian crisis, you go talk to people in Europe about fuel cells, and we’d say, hey, we’re a resilient, reliable power. Your grid goes down, we’re always on and we’re there for you. And they would say, we don’t really have that problem in Europe. But now with the Ukrainian crisis there, all of the solar and wind projects are being accelerated. And really customers are starting to say, we don’t really know if the future is going to be the same as the past because the grid now, in terms of where the generation is happening, the scope of that is changing dramatically and is starting to put a question mark, will we have resilient power off the grid going forward?
The last thing I would say is that there is a number of places in Europe where Sharelynn talked about time-to-power where if you want to go put a data center in, as an example, Ireland, you might have a three to seven-year wait. And so we’re having a number of those discussions throughout Europe, or either because of lack of power generation or because of distribution shortfalls a Bloom solution looks extremely attractive.
Let me tell you specifically what we are doing. So we got our first win in Italy in April this year. It’s a one-megawatt system. That system is actually already in Italy and being set up and we’re going to go through a trial period of 12 months with an opportunity to expand that to a 15-megawatt system, which would be a combined heat and power or a CHP system. That’s our first in Europe, we think there’s a lot to follow. We’re working with a partner in Italy that we think that like this customer is very interested in future-proofing their system as Snam looks to bring hydrogen into the region, in this part of Italy.
Let me talk a little bit about UK. So we are working with Conrad Energy. We had an announcement, probably end of last year, where we’re working with Conrad, who’s interested in doing behind-the-meter resilient energy solutions in the UK. We are working on a number of deals, including Teledata that I think was mentioned in that announcement. Conrad has a broad portfolio of energy projects and their interest is in also including Bloom fuel cell platforms for future-proofing needs.
Let me go back to Germany for a second. We’ve got a lot of activity going on in Germany. We’ve got an 18-megawatt project that we’re working on. It’s a data center project, CHP. Again, this is a grid access issue. It’s really driving the value proposition, but our cost of electric is very competitive with the grid. And then we are working also with a partner in Germany. We’re working on a number of smaller systems and similar to the system in Italy, these first phase systems, once we prove our performance in terms of efficiency and electricity output, we’re going to be really well-positioned for another 30 megawatts of power, just for those four opportunities. And all of these markets, we are developing significant pipelines. And all of that that I’ve talked about so far is SOFCs. As you’re probably aware that hydrogen is also top of mind in European countries, Spain is looking to be a hydrogen leader in Europe.
We have our discussion underway with a partner to position ourselves in Spain policies like in the UK. They just announced two months ago that they’re upping their investment in hydrogen from five gigawatts to 10 gigawatts by 2030. So we’re in discussions with potential partners in the UK. Same goes in France and Germany. So a lot of activity I’m extremely bullish on Europe. As KR said, I’m going to be moving there with my family. I can’t wait to be back in the marketplace and be on the ground. Because I think it’s really going to be a tremendous opportunity for us. So listen, thanks for listening. I think we’re going to turn it over to Greg and the capacity and cost panel. Thanks again.
Maryam Brown: We have a long working history with Bloom. Our distributed energy team has been working with Bloom for many years and have installed over 100 fuel cells in our operations as part of the working relationship with Bloom. In 2020, we installed two major installations of Bloom energy servers at our Pico Rivero and Monterey Park facilities. These help to take these two major operational facilities of SoCalGas’s, essentially off-grid and ensuring resiliency for the 22 million customers that SoCalGas serves in Southern California. And most recently SoCalGas was working with Bloom on blending hydrogen into the natural gas stream at Cal Tech. And the purpose of this is really to look at ways to leverage the existing gas system to support our clean energy transition.
Bloom Energy is a partner of choice for the Southern California Gas Company. SoCalGas has set a mission to build the cleanest, safest, and most innovative energy company in America. And Bloom energy servers are cutting edge technology, providing resiliency and clean and safe energy to our facilities. Resiliency is really important for SoCalGas and we are using Bloom energy servers at our two largest facilities to put them, essentially, off-grid. And I think the third reason that bloom is a partner of choice for SoCalGas is the people. KR and the team he has surrounding them, are very focused on shaping the future. And we enjoy that working relationship with KR and his team.
We are very excited to be working with Bloom on the Angeles Link. Angeles Link is SoCalGas’s proposal to build a green hydrogen pipeline system to support the Los Angeles basin. Angeles Link has the potential to be transformative for energy and a cornerstone for the hydrogen economy here in California, and in particular in Southern California. We have worked with Bloom for many years and the opportunity of continuing to work with Bloom in the context of Angeles Link with their technologies around electrolyzers as well as fuel cells, makes it very exciting, both for SoCalGas and Bloom and for what this can mean for our clean energy future.