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A manufacturer of clean energy complains about climate change laws



(Bloomberg) – It's not every day a clean energy company complains about climate change laws. And yet, that's exactly what fuel cell manufacturer Bloom Energy Corp does when stocks plummet at the lowest times.

Bloom's executives, under second-quarter earnings late Monday, projected flat revenues in 2020 and shed at least part of the blame for California and New York's clean energy laws, two of the company's stronger markets. The laws – committing states to 100% carbon-free electricity by 2045 and 2040 respectively – have confused Bloom customers and caused them to postpone orders, says CEO K.R. Sridhar.

"Such goals are well-meaning but ill-informed," he told analysts at the call. "There is no credible way to achieve a goal of 100% renewable energy without compromising public safety, reliability, resilience and affordability."

The laws can be a problem for Bloom because the cells usually run on natural gas, although they can be configured to run on hydrogen or biogas. When using natural gas, Bloom's fuel cells produce emissions from global warming, but emissions are lower than emissions from gas combustion turbines in standard power plants, according to the company.

Sridhar also shot a burgeoning interest among cities – such as Berkeley, California – in banning natural gas from new buildings.

"It's wishful thinking," he said.

The confusion surrounding the laws and the impact on Bloom should still be temporary, Sridhar said.

The disappointing 2020 guide prompted half a dozen analysts to reduce their price targets. The stock plunged as much as 41% Tuesday, the most since the company's first offer in 2018.

(Adds details of Bloom's fuel cell greenhouse gas emissions in the fourth paragraph.)

To contact the reporter about this story: David R. Baker in San Francisco at dbaker116@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Millie Munshi, Steven Frank

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