Bloom Energy announced a new collaboration with Samsung Heavy Industries, one of the world’s largest shipbuilders, using cargo ships as a testbed for its fuel cells. The maritime applications of Bloom Energy’s solid oxide fuel cell technology may be a win-win for both companies.
Samsung Heavy says it aims to be the first shipbuilder to deliver a large cargo ship for ocean operation powered by fuel cells running on natural gas and applying Bloom Energy’s fuel cell system to its new Aframax. Bloom and Samsung Heavy estimate that replacing oil-based power generation on large cargo ships could cut annual greenhouse gas emissions from shipping by 45%.
Pressure on Bloom’s Performance
Bloom Energy shares performed well shortly after the initial public offering (IPO) in 2018, but they’ve declined 89% in the last year as investors question the sustainability of the business.
Despite the potential benefits of its fuel cell technology, Bloom Energy’s current business model is challenged by the potential phaseout of important subsidies, affecting its operating financials negatively. For example, starting in 2020, Bloom Energy Servers will only qualify for subsidies in California if they operate on 100% renewable biogas.
Cargo Ship Applications of Fuel Cells
Bloom Energy’s collaboration with Samsung Heavy Industries represents several opportunities for both companies.
Maritime shipping faces decarbonization challenges. Responsible for an estimated 2% to 3% of total global carbon emissions, cargo ships require enormous amounts of energy and typically operate on petroleum-based fuels.
Fuel cell-powered cargo ships could achieve a 45% reduction in greenhouse gas emissions compared to those powered by petroleum-based fuels. Moreover, Bloom Energy Servers could be placed in multiple locations on a ship, creating a more optimal use of limited space.
One challenge that remains is that it will be more difficult and more expensive for Bloom Energy to service fuel cells located on a cargo ship. The business only breaks even on land-based service revenue configurations today.
Fuel cell-powered cargo ships may not be a game changer for the stock or company right now, but it’s part of a larger public a strategy to watch.
Your Opinion Matters
Have Something To Say About This Story?