1 megawatt bloom energy fuel cell system · bloom energy customer economic payback model capacity...
TRANSCRIPT
1 Megawatt Bloom Energy Fuel Cell System
Agenda
Xilinx Inc.
Fuel Cell Basics
Self Generation Economics
Economic Incentives
Financial Analysis
Construction
Gas Purchase
Operation
Economic results
Fuel Cell Basics
Fuel Cell Fed With Natural Gas
Hydrogen derived from natural gas is utilized in a chemical
reaction which produces electricity in the fuel cell
How a Fuel Cell Works
(Basic) Economics for Natural
Gas Fueled Self Generation
Constant Electrical Production
o 24x7 constant operation
o Sized to offset as much load as possible
Minimize Cost of Generating Equipment
Sparkspread
o Best economics when natural gas prices are low
and electrical prices are high
Electrical Use- 24hrs
• Approx cost of utility electricity: $0.14
• Approx cost of fuel cell electricity: $0.11
Economic Incentives
Self Generators Incentive Program ($3.15M)
Federal Incentives
o Investment tax credit ($2.7M)
o Accelerated Depreciation (MACRS)
Natural Gas Resource
Natural gas is plentiful & cheap
Many options for the purchase of natural gas
o Spot market
o Long term purchase contracts
o Hedging options- physical/financial
Contractual arrangements- NAESB
PG&E delivers 3rd party gas
Electricity Future Cost of Electricity
o Electricity costs will rise, in part, driven by California Law mandating
increasing renewable electricity generation and restrictions on
greenhouse gas emissions
o The utilities can’t tell you how much
• 3%-?% annually
• No hedge for future elec costs
Bloom Energy Customer
Economic Payback Model Capacity
Equipment & installation costs
Cost of gas
Cost of electricity
Federal and State taxes
Fed tax credit, incentives & depreciation
Cost of capital
Warranty & service
Project Economics Overview
Cost of Electricity (COE) Using BE’s SOFC
Co
st
pe
r
kW
h
Grid COE
$0.225
$0.075
$0.300
$0.150
$0.000
2022 2016 2014 2012 2020 2018
Bloom
Capital
Purchase
3 - 5 year payback
Financial Model Results
Multiple versions of model with various combos
Simple payback in the fourth year of operation
Positive NPV (net present value)
Approval Hurdles
Bloom Energy as a “going concern”
Confirm conservative case for electrical cost
escalation
Understand the gas market
Confirm “baseload” for 10 year project life
Implementation Proposed Location
Implementation
Demo some fencing & ½ basketball court
Trenching, compaction, below grade utilities
Precast concrete pads
Set down fuel cell modules
Tie into electrical main
Natural gas supply
Communication
Interconnect and start up
Operation
Operating for 13 months
Exceeding the performance guarantee
Monthly gas purchase
Routine maintenance & service
Internal effort to validate the gas hedge and
qualify for “hedge accounting”
Economic Results
First 10 months net savings ~$810k
Projected net savings going forward~$580k/yr
o Net of fuel and warranty & service costs
Performance reflecting amortized cost of system
o $3.15M incentive easy enough to understand
o Tax benefit is baffling
o Depreciation benefits
Appendix
Economics- Future Costs of
Electricity
Monte Carlo simulation
assuming a 3% annual
escalator shows that a
zero NPV event is 11.85
standard deviations from
the mean