Bloom Energy and Fuel Cells in the Data Center: Evolution or Revolution?

A Bloom Energy Server fuel cell deployed at CalTech. (Image: Bloom Energy)

Bloom says that its on-site fuel cells offer “better electrons” by making more efficient use of fuel than coal-fired power plants, eliminating power loss during distribution, and sharply reducing emissions. The Bloom boxes offer a better carbon profile than most utility power, and can be used with renewable energy to create a carbon-neutral solution.

One of the primary barriers to adoption in data centers has been the cost of the fuel cells, and the scale required to support facilities using many megawatts of electricity.

“Fuel cells have been around forever, but nobody’s been able to achieve a fuel cell system that’s cost-effective,” said Gross.

Bloom Energy Servers offer up to 200kW of capacity. Early Bloom installations took advantage of incentives that reduced the cost of power, which without incentives would operate at between 8 and 13 cents per kilowatt hour, according to various estimates. Bloom says Bloom Energy Server users typically see a 3 to 5 year payback on their investment.

But that varies by geography. Bloom has done best in regions where the cost of electricity is high and the price of natural gas is low.

“In California and the Northeast states the economics work really well,” said Gross, noting that those two regions are major data center markets. “This solution will not be applicable in central Washington state, where the cost of power is low. But gas is cheap everywhere and will be for a long time.”

Why Change is Difficult

So how do you make the economics more compelling? By using Bloom boxes to eliminate other expensive equipment in the data center power chain. When you add Bloom Energy Servers but subtract the expense of UPS units and generators, the cost equation looks very different.

Gross jokes that “everybody wants innovation, as long as it’s been in place for 20 years.”

“In the data center industry, innovation comes at a slow pace, especially on the electrical side,” he said. “It’s moved a little faster on cooling, where the big Internet companies have been innovating. On the electrical side, the basic architecture has been effectively the same for 20 years. Nothing fundamental has changed.

“Historically, there is no real incentive for innovation in this industry because the stakes are so high,” Gross added. “For adoption to improve, a senior person in the company has to push for this. These systems are not inexpensive, and having an executive sponsor is helpful.”

eBay Goes All In

An executive sponsor like Dean Nelson, perhaps. As Vice President for Global Foundation Services at eBay, Nelson runs the data center network for the e-commerce giant. He has made innovation a priority, working with eBay’s vendors to develop cutting-edge solutions that can make its data centers more energy efficient and cost-effective.

In 2012, eBay went all-in with the Bloom solution, installing 30 Bloom boxes to support a new phase of eBay’s “Project Quicksilver” data center in South Jordan, Utah.

In a traditional configuration, data centers use the utility grid for primary power, with UPS units and backup generators providing emergency power in the event of grid outages. At eBay, the Bloom Energy Servers provide primary power, with the utility grid serving as backup. High-density modular data centers are packed with dual-corded servers, with one input from the Bloom systems and the other from the grid.

In this video, Nelson and Gross discuss the Utah project and how eBay is using Bloom to achieve “cleaner commerce.”

Bloom Energy server fuel cells at an AT&T data center in California. (Image: Bloom Energy)

With these projects, the colo companies are dipping a toe in the water. But the upside for Bloom could be substantial. Equinix operates more than 100 data centers around the globe, while CenturyLink has more than 50.

The implementations by Equinix and CenturyLink are typical of how many data centers are adopting fuel cells, integrating them into existing traditional power systems to see how they work. While this is short of Bloom’s larger vision for power architecture, Gross sees this as an important step in the transition to new electrical designs.

“There are a number of interim steps,” said Gross. “We don’t necessarily need to take a radical approach. You can use Bloom to feed a more traditional set of components, especially on upgrades and retrofits. You can still have generators.”

In some cases, Bloom units installed near data centers do not actually provide power to the facility. That’s the case at the Apple data center in Maiden, N.C., which has a 10 MW installation of Bloom fuel cells. The Bloom units run on a combination of natural gas and biogas from a nearby landfill, and send the power to Duke Energy rather than the Apple data center.

Fuel Cells: Beyond Bloom

Bloom isn’t the only player making fuel cells for data center use. Doosan has deployed fuel cells at data centers operated by the First National Bank of Omaha, Cox Communications and Verizon. Microsoft selected FuelCell Energy to provide the fuel cell to support its “Data Plant” proof of concept in Cheyenne, Wyoming, which is using methane gas from a water treatment plant to power a data center module.

Microsoft is also experimenting with a design in which it builds fuel cells into each rack of IT equipment, presenting an even more radical departure from current practice than the Bloom design. In this approach, the fuel lines would replace the traditional power distribution system, eliminating power loss from multiple conversions between AC and DC power.

“We believe the advancement being made in our fuel cell lab will someday change the game in terms of how energy is delivered and managed,” said Sean James, Senior Research Program Manager for Microsoft Global Foundation Services. “Our vision is to bring the power plant directly into the datacenter by integrating fuel cell stacks into every server cabinet, effectively eliminating energy loss that otherwise occurs in the energy supply chain and doubling the efficiency of traditional datacenters.”

Microsoft tested the concept last year at the University of California at Irvine, creating a 12kW rack supported by an off-the-shelf fuel cell. It is participating in a $5 million research project that will test the use of fuel cells from Redox Power Systems in its rack-level design.

A fuel cell “cube” from Redox Power, which is being tested by Microsoft for use in a rack-level fuel cell power design. (Photo: Redox Power)

James believes the simplified power design makes the economics work, offsetting the higher cost of the fuel cells. ‘

“By designing a system that is nearly twice as efficient (uses half the energy) as the traditional model for delivering electricity to a server, we can obviously pay more for electricity coming out of the fuel cell and still have a lower total cost,” James wrote in a blog post summarizing the research. “And that is just the energy cost savings. Once we add in the cost savings from the avoided infrastructure (the outlets, meters, power lines, power plants), we have a design that is more elegant, requires less energy and has the potential to be significantly less expensive than traditional datacenter designs.”

The Road Ahead: Economics & Education Loom Large

Not surprisingly, Gross agrees that the economics on fuel cells are shifting, even within traditional power architectures.

“Economics play a major role,” said Gross. “All these installations had to have a positive economic impact. People don’t spend more than they have to unless there’s a clear benefit.”

But the ultimate win for fuel cell economics will be in new power system designs that eliminate other components and their associated costs.

“Overprovisioning has been rampant in this industry,” said Gross. “There’s all this capacity sitting there idle. The Bloom architecture eliminates the overprovisioning.”

It remains to be seen whether data center operators are ready to embrace new power system designs based around fuel cells. But the push to build greener, more efficient and cost-effective data centers is offering fuel cells a seat at the table, and Gross expects the conversation to continue in earnest.

“I think education is the single most important thing,” said Gross. “The vast majority of people in this industry have very little understanding of Bloom. The reality is, very few people understand the architecture. Things are slowly getting better, and word is getting around.”