photo: Todd Woody
In my latest Green State column in Grist, I take a look at why, despite the hype, Bloom Energy’s fuel cell breakthrough could change the energy game:
Green tech had its Google moment this week in Silicon Valley when one of the most secretive and well-funded startups around, Bloom Energy, literally lifted the curtain on what it claims is a breakthrough in fuel cell technology: affordable electricity! Fewer greenhouse gas emissions! And that’s all before they throw in the bamboo steamer.
After eight years in stealth mode—until this week, Bloom’s website featured the company’s name and little else—the startup pulled out the stops in a carefully stage-managed media blitz that recalled the high-flying dot-com days of a decade ago. First came a report on “60 Minutes” that got the blogs abuzz along with stories in Fortune and The New York Times.
It all culminated in a star-studded press conference at eBay’s headquarters in San Jose on Wednesday, where California Governor Arnold Schwarzenegger introduced Bloom’s co-founder and chief executive, K.R. Sridhar, and gave him a bear hug before several hundred suits, environmental movement honchos and a bank of television cameras.
Before Colin Powell, the former secretary of state and a Bloom board member, delivered the benediction, testimonials were offered by Google co-founder Larry Page and top executives from Wal-Mart, eBay, Federal Express, Coca-Cola, and other Fortune 500 companies that had quietly purchased 100-kilowatt Bloom Energy Servers over the past year.
New York Mayor Michael Bloomberg and Senator Dianne Feinstein (D-Calif.), meanwhile, beamed in a bipartisan endorsement via video.
“This technology is going to fundamentally change the world,” the California Democrat declared.
But is it?
That’s the $400 million question (what some of Silicon Valley’s most storied venture capitalists have poured into Bloom so far).
With the hype—the apparently brilliant but unassuming Sridhar was compared to Steve Jobs at one point Wednesday—comes the backlash. Almost immediately analysts and competitors began asking hard questions about Bloom’s claims.
And there are some big unknowns. Will the fuel cell stacks last as long as the company anticipates or will frequent replacement undermine the economics of going off the grid, for both Bloom and their customers?
What’s the total cost of ownership for customers? Bloom says the energy servers have a lifespan of 10 years and a payback period of three to five years. That’s based on the current price of natural gas—which is one fuel used by the devices—and state and federal subsidies that halve the cost of the machines that sell for between $700,000 and $800,000. Will Bloom be able to scale up manufacturing and continue to innovate to bring the price of the energy server down? Can they be competitive without subsidies?
All legitimate questions. But it’s important not to lose sight of what looks to be some fundamental breakthroughs, not only in energy technology but in the way some major corporate players are embracing distributed generation-placing electricity production where it is consumed.
You can read the rest of the column here.