Last Sunday, Bloom Energy
was covered by 60 Minutes
for developing a fuel cell technology that can produce cleaner energy more efficiently from a variety of fuels. The Bloom Box promises to deliver reliable electrical power to data centers as well as homes, without transmitting power over long distances, since its "energy servers" can be located where the power is needed. After 8 years of development, Bloom Energy has emerged from its startup stealth-mode with 100kW generators that are already operating at Google and eBay campuses, providing electricity at prices in the $0.08/kWh to $0.10/kWh range
(average retail electricity costs about $0.11/kWh). According to the press releases, five "parking spot"-sized Bloom Boxes power about 15% of one of eBay's campuses, and Google's Larry Page says that he looks forward to being able to power a whole data center.. someday
The 60 Minutes
piece hinted that Bloom Energy could be a flop like the Segway -- since both Segway and Bloom Energy share Kleiner Perkins as a backer
. Beyond that, though, the amount of skeptical analysis for Bloom Energy seems a bit lacking. The story of a secret lab creating a solution to the world's energy problems is a great fiction. But the reality is likely far less inspiring. Plenty of others point out
the reliability and cost issues for using a technology that hasn't yet been around for a decade and takes about 5 years (give or take a couple years) to pay for itself from savings in energy efficiency. A 100kW system costs about $750,000 -- so it's a sizable upfront investment for a company to adopt. Additionally, while the system can
run on a variety of fuels, Bloom Boxes are currently using natural gas
, which is still a fossil fuel with all the associated drawbacks -- even if the power is generated more efficiently.
Ultimately, more competition for generating clean power benefits all energy-intensive businesses. And as some observers note, these Bloom Boxes may help augment other energy technologies -- such as wind or solar -- for more consistent and reliable alternative energy. But there might need to be a much clearer advantage to installing Bloom Energy's off-the-grid generators. Certainly, Bloom Energy has done a great job of getting lots of attention for its technology, but it hasn't proven that fuel cells will revolutionize the economics of energy production. In fact, more efficient use of fossil fuels may actually delay
our move away from non-renewable fuels, meaning Bloom would fall short of the hype in more than one way. Instead of a cost-effective alternative to fossil fuel-based energy, it has so far only delivered a somewhat expensive new way to continue using natural gas.
In the end, though, this demonstrates how true innovation is almost always an ongoing process rather than a "flash of genius."
Time and time again we hear about amazing breakthroughs coming out of some secret proprietary lab -- but when they're actually revealed, the reality is just another marginal improvement. It's what happens next that's really important. Bloom is getting all sorts of hype for doing something revolutionary, but the result appears just kind of ordinary, at this point. The real question is: can it actually continue the process of innovation to become something that lives up to the hype? It's that process that's really important, not the initial concept.