DE: Delaware Attracting Bloom Energy for High-Tech Manufacturing Hub
9 Jun, 2011
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Bloom Energy has plans to build its new, high-tech manufacturing hub in Delaware, subject to a final agreement with Delmarva Power, as well as the passage of enabling legislation and regulatory approval. The new investment could create up to 1,500 high-tech jobs between the company and its suppliers at the site of the former Chrysler factory in Newark to manufacture Bloom Energy Servers, which are already helping to power companies like Google, FedEx, Coca-Cola and WalMart.
"Some of the world's largest companies have chosen Bloom Energy to power their growth, and now Bloom has chosen Delaware as the best site for their expansion," said Governor Markell.
The facility would employ 900 people with a potential additional 600 jobs through co-located suppliers. An estimated 350 construction jobs could also be created this year, with production beginning in mid 2012.
Bloom Energy, which is backed by the investors that helped make Google, Genetech and Amazon.com international high-tech powerhouses, would also supply 30 MW power capacity over 21 years at a stable and competitive price, starting with 10 MW in 2012. Bloom energy servers, based on technology used by NASA for its reliability, safety and efficiency, would provide locally manufactured power to Delaware employers and families.
Bloom's Energy Servers convert natural gas, bio gas or liquid bio fuels such as ethanol to electricity through an electro-chemical reaction, rather than combustion. Traditional fossil-fuel energy production may lose 60-70 percent of its energy during the combustion process, and up to 10 percent during transmission, so Bloom's fuel cells are significantly more efficient. Carbon emissions and water use are drastically reduced, while harmful air pollutants are virtually eliminated. Unlike other renewable sources such as solar or wind, Bloom Energy Servers provide reliable base load distributed power generation and can run day and night, regardless of the weather.
"After 10 years of growth in our home state of California, we are ready for expansion to other markets," Bill Kurtz, Chief Commercial Officer & Chief Financial Officer for Bloom Energy. "Delaware complements our California roots and aggressive expansion within California, and strategically positions us to serve customers on the east coast, and expand our business. We are committed to establish our new factory at the University of Delaware site in Newark to address the east coast market. As part of building this new factory, Bloom will also plan to install 30 megawatts of Bloom Energy Servers in the state. Our commitment to building the factory and installing the Bloom Energy Servers is contingent upon approvals from Delmarva Power and Light, the Delaware Legislature and Public Service Commission. The combination of Delaware's visionary political leadership and pro- business policies, an innovative state utility, a world class university, skilled talent pool, great infrastructure and proximity to the Northeast market made Delaware our clear number one choice for our new factory site. This is a powerful combination bringing 21st century innovation and jobs to Delaware." While Bloom's announcement that it would like to build its manufacturing hub and workforce in Delaware is encouraging news, Markell said, several steps still need to happen before Bloom can start building the facility.
Delmarva Power is proposing to partner with Bloom Energy to facilitate a 30 MW fuel cell installation as part of the utility's renewable energy portfolio, pending legislative and regulatory approval. The Governor will be asking the General Assembly to consider legislation that would establish a regulatory framework for fuel cells, a reliable technology that is increasingly cost-competitive for commercial use. The proposed legislation would also enable locally produced, clean energy from Bloom Energy Servers to be counted towards Delmarva Power's renewable portfolio requirements.
If the legislation passes, Delmarva Power would then file a new manufactured-in-Delaware fuel-cell rate tariff with the Delaware Public Service Commission for its review and approval.
"Delmarva Power is excited about this opportunity to support economic development and job growth for Delaware through this innovative way to further meet Delaware's environmental goals, protect air quality and public health, with minimal impact for our customers," said Gary Stockbridge, President, Delmarva Power Region.
Delmarva Power estimates that the 30 MW fuel cell project would have an above market cost to Delaware residential ratepayers of less than $0.70 per month. Local - or "distributed" - generation would have the added benefits of contributing to American energy security, ensuring flexibility to meet changing energy needs and keeping more Delaware money in the local economy.
Up to 50 acres from the old Chrysler site would be dedicated to the new Bloom facility and its supply chain. The car company shuttered the plant in 2008 and the University of Delaware acquired the property in November 2009 for its new Science and Technology Campus. Subject to the approval of the Council on Development Finance (CDF), the Delaware Economic Development Office (DEDO) is recommending the University receive a $7,000,000 grant to create infrastructure improvements throughout the entire site.
"The announcement of Bloom Energy's choice of the University of Delaware's Science and Technology Campus to create a manufacturing hub fits with our plans for building out the property to align with the University's strengths and strategic focus," says UD President Patrick Harker. "It is what we call our 3+1 strategy. The '3' represents R&D priorities - energy and the environment, life and health sciences, and national security and defense. The '1' is the enabling infrastructure that ties it all together - extensive on-site transit oriented development."
Subject to approval from the Council on Development Finance (CDF), DEDO would also offer Bloom Energy a conditional grant from the state's strategic fund of $11,250,000 for the 900 direct jobs the Bloom manufacturing hub would employ, and a conditional incentive of $6,250 for each job (up to 600) co-located to the site by suppliers. In addition, DEDO has offered 3% of Bloom's total capital expenditures up to the first $50 million of Bloom's CAPEX. This conditional grant provides the state the authority to recapture its investment if job targets are not met or if Bloom does not maintain the jobs at its Delaware facility for up to seven years, with recovery equal to the percentage of the employment target unmet.
Delaware's Congressional delegation, led by senior Senator Tom Carper, also played a key role in discussions with Bloom.
"I am delighted that Bloom Energy will bring a facility to Delaware," said Sen. Carper. "In addition to providing Delawareans with reliable clean energy, Bloom Energy will provide important new jobs. I've been working with Governor Markell to bring this innovative company that CNN once named among the '15 companies that will change the world' to Delaware, and we're proud that the hard work paid off. This is another great example of the state and federal government working together to push for further economic growth and make great things happen in Delaware."
"After working for eight years at one of the nation's most innovative science companies, I know that Delaware is the ideal place for advanced science and clean-energy technology companies to invest. Bloom Energy's decision to put down roots in the First State shows that they, too, are confident that Delaware is an outstanding place to find talent and do business," said Senator Chris Coons, who serves on the Senate Energy Committee. "Not only will Bloom Energy be putting our neighbors to work right here in Delaware, but they are also taking innovative, clean energy technology from the research lab to manufacturing and distribution, all in Delaware. Bloom Energy is a terrific example of how we're turning 'Made in America, Manufactured in Delaware' into more than just words, but into reality. I offer my sincerest congratulations to Governor Markell, Secretary O'Mara, Secretary Levin and their teams, all of whom worked tirelessly to make this happen."
"Bringing good jobs to Delaware is everyone's highest priority and Governor Markell and his administration should be congratulated for their work on bringing Bloom Energy to Delaware," said Representative John Carney. "This is a great example of using new energy technologies to create opportunities to start making things here in America again. This is also the kind of opportunity many of us envisioned as the Chrysler site transitions into a center for science, technology and innovation here in Delaware."
"Delaware is committed to becoming one of the best places in the country to build a business and raise a family, something hundreds of new Bloom Energy employees will learn first-hand as they build on our state's reputation for innovation," said Governor Markell. "While there are still steps to take to make these jobs a reality, we are excited that Bloom made clear it wants those steps to be here, in Delaware."
About the Delaware Economic Development Office
The Delaware Economic Development Office is an executive state agency responsible for attracting new investors and businesses to the state, promoting the expansion of existing industry, assisting small and minority-owned businesses, promoting and developing tourism and creating new and improved employment opportunities for all citizens of the state. dedo.delaware.gov. Like us on Facebook or follow us on Twitter @DEDOgov.