High-tech hopes at Bloom plant unveiling

KR Sridhar, CEO of Bloom Energy, speaks to officials and employees during Wednesday's ceremony. / JENNIFER CORBETT/THE NEWS JOURNAL

NEWARK — Bloom Energy celebrated the formal opening of its Delaware factory Wednesday, with company and state leaders hailing it as a starting point for the next generation of manufacturing in a state that has lost its share of old-school factories.

Bloom CEO KR Sridhar said traditional manufacturing jobs making cars or steel – perhaps an indirect reference to the impending closure of the Evraz steel mill in Claymont – “those jobs are going away, and they’re not coming back.” In their place will be high-tech jobs like these, he said.

California-based Bloom makes solid-oxide fuel cell servers – electricity generators that run off of natural gas using an electrochemical reaction. Company officials say that makes them more environmentally friendly than traditional combustion technology.

Sridhar, who spoke with a clip-on mic and no tie in the mold of other Silicon Valley leaders, described the factory on the site of the former Chrysler plant as “a nucleus around which an entire ecosystem can be created.”

Gov. Jack Markell aggressively courted Bloom and acknowledged the changing manufacturing landscape, saying Delaware has taken its lumps alongside other states. Bloom, he said, represents “an opportunity to build a new face of manufacturing right here in Delaware.”

During Wednesday’s event, an official with JPMorgan Chase announced that company would place Bloom’s servers at one or more of its Delaware facilities, and Wal-Mart announced it would install Bloom’s servers somewhere along the East Coast.

Until Wednesday, only Delmarva had publicly announced its intention to use Bloom Boxes in Delaware.

JPMorgan Chase reported that initially 500 kilowatts of Bloom energy will be installed at its Morgan Christiana site that will support power to its data centers.

The goal is to eventually expand that to 12 megawatts between its facilities in Wilmington, Bear and Christiana, said Bill McHenry, JPMorgan Chase’s global head of property operation. The company has offices and data centers in Delaware.

That will be a little less than half the size of the Delmarva installation. Delmarva customers are paying a monthly surcharge to place Bloom’s electricity onto the regional grid from two substations in New Castle County, providing the new Delaware factory with some of its first orders.

Joseph Rigby, head of Delmarva Power’s parent company, Pepco Holdings, Inc., mused about the possibility of putting Bloom Boxes in various spots on the regional grid to shore up reliability in the event of natural disasters.

Sridhar, who has appeared on TV’s “60 Minutes” to discuss Bloom, spoke at length about the partnership with the state and University of Delaware, which he said were important elements in making the project work. The factory is on a new UD science and technology campus.

Fuel cell servers made by Bloom Energy in Newark sit outside the manufacturing facility on Wednesday. / JENNIFER CORBETT/THE NEWS JOURNAL

He also talked about how the fuel cell servers, which can run on other, more renewable fuels as well, can be used to help bring electricity to areas of the world far from the electric grid. First, he said, the cost must be driven down. He drew an analogy with cellphones, which he said were once only for the wealthy, but now almost anyone can afford them.

Bloom has been doing business with top corporations like Google, Coca-Cola and eBay in subsidy-rich California, but in building the Delaware factory, they are betting customers in states with fewer incentives will want their products as well. Several projects have been announced in Connecticut, as well as one in North Carolina at an Apple data center.

Bloom officials said slightly more than 80 people were employed at the factory, which has been operating since May, and about a hundred more will be hired in the upcoming months. Some of them were featured in a video at the event, including a former Chrysler worker who marveled at returning to the site for work every day.

The company has said it intends to place 900 jobs at the factory by September 2016, and Sridhar reiterated that the company still has those plans. They are not required to hit that hiring target, but its contract for $16.5 million in direct incentives with the state includes penalties for failing to hit total salary thresholds.

Rather than cutting a ribbon, speakers affixed their signature to a “Bloom Box” awaiting shipment. Visible just behind the podium were rows of Bloom Boxes being tested, which company officials say provide some electricity for the factory.

Bloom’s chief marketing officer, Matthew Ross, said current East Coast orders are good and getting better.

Rep. John Kowalko, D-Newark, in whose district the factory sits, said he was pleased to see it up and running. The product, he said, has “huge potential” to provide environmentally friendly electricity to rural areas.

“I hope the success of this enterprise will outweigh the economic sacrifices,” said Kowalko, who has also been critical of the size of the surcharge, which will be an average of $4.37 on Delmarva residential electric bills in November.

Contact Aaron Nathans at 324-2786 or anathans@delawareonline.com.