Can Bloom Energy Make Money from Fuel Cells?

The Bloom Energy Corporation (NYSE: BE) hopes to cash in on the Climate Crisis with fuel cells.

A fuel cell is a device that generates electricity through a chemical reaction. Thus, a fuel cell can generate electricity while burning no fossil fuels. In fact, the only pollution a hydrogen fuel cell emits is water.

The US Department of Energy claims fuel cells can operate with efficiencies of up to 60%. A fuel cell can produce electricity and heat as long as they supply it with fuel.

Bloom Energy claims Fuel Cells can drive ships

Bloom Energy (BE) is a California company that builds hydrogen fuel cells and electrolyzers for commercial use.

Interestingly, Bloom is developing a fuel cell that could power ships. The company is trying to get its fuel cells certified as a power source for ships. Bloom’s engineers hope to replace diesel and internal combustion engines on ships with non-polluting fuel cells.

Notably, many ships burn heavy fuel oil one of the dirtiest fuels on Earth. Bloom senior advisor Tim Schweikert estimates carbon emissions from shipping account for 3% of the world’s C02 pollution.

The market for a maritime fuel cell could be huge. There are over 90,000 ships in the world’s merchant fleet. Another obvious market is navies, most warships still burn heavy fuel oil or diesel oil.

The plan at Bloom is to adapt its fuel cells for maritime use. One idea is to use Bloom’s fuel cells on ships. Currently, Bloom Energy has engineering and products teams modifying fuel cells for use on ships. In addition, Bloom has partnered with naval architecture and marine engineering Foreship on the seagoing fuel cell project.

Ocean deployment will require rigorous testing of fuel cells. Bloom is conducting those tests now.

Clean Energy 24-Seven with Fuel Cells

Currently, Bloom Energy (NYSE: BE) offers two fuel cell solutions for commercial users.

The Energy Server Platform is a distributed-power generation system that provides an always-on primary power source for stores, factories, office buildings, fulfillment centers, and other large facilities. Bloom can customize the Energy Server for users.

The AlwaysOn Microgrids can provide power 24 hours a day and seven days a week. In addition, the Microgrids provide clean onsite power and backup power in case of grid outages. The AlwaysOn Microgrid could power a hospital even if the grid goes down and generates zero emissions.

In a Microgrid, a Bloom Energy Server works with a traditional generator. That provides more electricity in case of a blackout. A Microgrid could power a large facility such as a university campus. Notably, Bloom designed its Mission Critical Microgrid for data centers.

Interestingly, the City of Hartford, Connecticut, is a Bloom Microgrid to power the Parkville neighborhood. The microgrid powers a library, a senior center, school, a grocery store, and a gas station.

A leader in Fuel Cells

They can power Bloom Energy’s fuel cells with hydrogen, natural gas, and biogas. For instance, Bloom’s Solid Oxide Electrolyzers convert electricity and water into hydrogen and oxygen. The hydrogen can power Bloom’s Solid Oxide Fuel Cells (SOFC).

A Bloom fuel cell can also turn the natural gas that heats a building or biogas into electricity. Biogas is the emissions that landfills, water treatment plants, feedlots, and dairies generate. The biogas is rich in methane which Bloom’s Energy Servers can turn into electricity.

Bloom (BE) began testing its fuel cell technology in 2006 and shipped cells to its first customer Alphabet (GOOG) in 2008. CEO Dr. KR Sridhar founded Bloom in 2001 after realizing he could commercialize the fuel cell he had built for NASA.

Is Bloom Energy Making Money?

Currently, the Bloom Energy Corporation (BE) is making money. Bloom reported a quarterly operating loss of -$14.40 million on 31 March 2021.

The quarterly operating loss shrank from -$46.40 million on 31 March 2020. In contrast, Bloom’s quarterly revenues rose from $156.70 million on 31 March 2020 to $194.01 million on 31 March 2021.

Stockrow estimates Bloom’s revenues grew by 23.81% in the quarter that ended on 31 March 2021. The revenue growth rate rate rose from 6.6% in March 2020.

How Much Cash is Bloom Generating?

Additionally, Bloom’s quarterly gross profit grew from $19.18 million on 31 March 2020 to $54.65 million on 31 March 2021. Thus, Bloom is making more money, but it is still losing money.

In Fact, Bloom reported a quarterly operating cash flow of -$86.56 million on 31 March 2021. In comparison, Bloom reported a quarterly financing cash flow of $48.68 million and a quarterly ending cash flow of $365.66 million on the same day.

Thus, Bloom can generate some cash but it borrows money to survive. For example, Bloom reported a quarterly financing cash flow of $229.19 million on 30 September 2020.

Bloom reported a total debt of $1.052 billion on 31 March 2021. The total debt fell from $1.15 billion on 31 March 2021.

I think these numbers show Bloom has a hard time making money. Yet many people will wonder if Bloom is a value investment?

What Value does Bloom Energy Have?

Bloom Energy (BE) has some value. It reported $236 million in cash and short-term investments and $1.1451 billion in total assets on 31 March 2021. Those numbers grew from $210 million in cash and short-term investments and $1.313 billion in total assets on 31 March 2020.

Hence, Bloom is a growing company with a growing stock. Notably, Bloom Energy’s share price rose from $8.58 on 12 May 2020 to $20.75 on 11 May 2021 and fell to $18.79 on 13 May 2021. I think that price is fair because of the potential value of Bloom’s technology.

On the other hand, I advise most investors to avoid Bloom Energy. Bloom Energy is a purely speculative investment because its technology is far proven. However, if you are seeking a cheap speculative Green Energy investment to ease your conscience, Bloom Energy (NYSE: BE) is worth investigating.