Al Gore accused of conflict of interest in Apple’s Bloom Energy deal

Conservative think tank calls for investigation of foul play

16 April 2012 by Yevgeniy Sverdlik - DatacenterDynamics

Al Gore accused of conflict of interest in Apple’s Bloom Energy deal
Bloom Energy co-founder and CEO KR Sridhar holding up a Bloom fuel cell. Courtesy of Bloom Energy.

A conservative US think tank is accusing Al Gore, former vice president of the US and a powerful climate activist, of having a conflict of interest in Apple’s purchase of a Bloom Energy fuel-cell system for the consumer-electronics and digital-media company’s new data center in Maiden, North Carolina.

Gore sits on Apple’s board of directors and is also a senior partner at Kleiner Perkins Caufield & Byers (KPCB), a venture-capital firm that provides financial backing to Bloom. John Doerr, one of Gore’s investment partners in KPCB, also sits on Bloom’s board of directors.

The National Center for Public Policy Research (the think tank) distributed a press release to all Apple shareholders in early April, in which it suggested that Gore could have been using his position on Apple’s board to get a return on his investment in Bloom. NCPPR, itself an Apple shareholder, is calling for an investigation.

“Apple buying technology from Bloom Energy, where Gore has a financial stake, is a clear conflict of interest,” Tom Borelli, director of NCPPR’s Free Enterprise Project, said in a statement.

The think tank’s statement does not indicate whether the organization knows how much Gore has disclosed about his involvement with Bloom to the Apple board. Neither does it indicate whether NCPPR knows anything about Gore’s actual involvement (if any) in the fuel-cell deal.

Borelli did not respond to a request for comment in time for publication, and we haven’t heard back from Apple’s and Gore’s respective public-relations teams.

A hot startup with clients to prove it
Provider of the fuel cells, Bloom Energy, is one of Silicon Valley’s hottest startups. One of Doerr’s fellow board members at Bloom is former US secretary of state Colin Powell. The company’s product, Bloom Energy Server, is based on its patented solid-oxide fuel cell technology. Bloom says its product is different from traditional hydrogen fuel cells because it’s made from low-cost materials, has high electrical efficiency and can use a variety of fuels.

Founded in 2001, the company did not launch publicly until 2010, when it came out of stealth mode and announced a series of major deals it had already made with some big-name clients, including Google, Bank of America, Coca-Cola, FedEx, eBay and Walmart, among others.

It announced its first sales for data enter applications in July 2011: NTT America bought Bloom Energy Servers for its San Jose, California, data center, and AT&T bought 7.5MW of fuel-cell capacity to install across 11 of its California sites, including some data centers.

In March 2012, Bloom formed a unit focused exclusively on sales into the data center space. To run its Mission Critical Systems Practice, the company hired Peter Gross, formerly one of the top men at HP’s data center consulting unit.

‘Greening’ data center energy
Apple is installing a 4.8MW fuel-cell facility at the Maiden site. The company plans to sell the electricity it generates to the local utility through the electrical grid. Apple has not disclosed how or whether it is planning to buy that electricity back.

The approach Apple took – generating clean energy onsite, selling it into the grid and buying it back – is one way of getting “renewable-energy credits”. Another way, which has been mastered by Google, is to buy renewable energy from other producers and then sell it into the grid.

The internet giant usually makes a commitment to buy electricity from a producer who is building new renewable-energy generation capacity for a long period of time, usually 20 years. The financial commitment gives the producer assurance the project will make money and helps them make the project a reality.

Google sells the electricity it buys from the producer into the grid while stripping renewable-energy credits from every watt-per-hour. It then applies these credits to the power it buys from the grid to power its data centers. The company has done this for data centers in Iowa (114MW of wind power) and in Oklahoma (100.8MW).

Apple’s hard time with trying to look green
Apple’s recent attempts to paint itself as an environmentally conscious company through things it’s doing with its data centers have been met with skepticism and in some cases with public criticism.

In February, Greenpeace policy analyst Gary Cook jabbed at Apple’s publicity for its green efforts in North Carolina, saying, essentially, that they were worthless if one considered that most of the electricity used at the site would still come from coal. Cook cited the US Environmental Protection Agency’s report that more than 60% of electricity generated in North Carolina comes from coal and more than 30% is nuclear power.

“Apple could use its standing and influence as a major customer to pressure Duke [Energy, the local utility,] to help it clean up the other 90% of its electricity supply, but thus far, Apple is again silent,” Cook wrote in a blog post.

Coincidentally, in its press release, NCPPR is questioning Apple’s choice to pay for fuel cells in a place with so much coal energy. “Shareholders must question why Apple is choosing to pay a premium for alternative energy when there are many sources of cheaper energy available in North Carolina, such as coal,” Borelli said.

Apple’s green publicity took another hit from James Hamilton, a top data center man at Amazon Web Services. After the company announced that it was building a large solar-power array in Maiden, Hamilton wrote in a blog post that Apple’s numbers did not really add up to make a compelling sustainability story, questioning the array’s actual value to the environment.

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