Bloom Energy: Behind the Big Announcement, Disappointing Reality

Last Updated Feb 25, 2010 3:30 AM EST

Bloom Energy finally had its big day, showing off its "energy source of the future" to crowds of admiring politicians and press. At the eBay campus in San Jose, Calif., Bloom gave up the details on its gas-burning fuel cell early this morning, generating a wave of news reports and public enthusiasm.

But among experts in Bloom's field, the reception is not nearly as joyous. The Bloom Box is getting, in a word, panned.

As I pointed out on Monday, the cost per kilowatt-hour is one of the few details about the Box that's truly important -- much more so than any specifics of how it's made, or what it looks like. Michael Tucker, a fuel cell scientist that Wired quotes, zeroes in on that fact to criticize Bloom: "The cost is about an order of magnitude higher than it needs to be, to be truly competitive," he told Wired.

There's a little more in the Wired article, but the real trash-talking happened at National Geographic, which interviewed both a university researcher and an industry source:

"It's a big hype. I'm actually pretty pissed off about it, to be quite honest," said Nigel Sammes, a ceramic engineer and fuel cell expert at the Colorado School of Mines. "It really is nothing new. Go to any [solid oxide fuel cell] Web site and you'll see the same stuff."


Like Brown, a vice president at fuel cell maker UTC Power--a competitor to Bloom Energy--also wasn't surprised. "I think we had anticipated just about everything that's on their Web site," Brown said. "But it's nice to at least finally see something" after ten years...
So is Bloom Energy really a disappointment? Perhaps. At the moment, a Bloom Box is not much cheaper than solar power and has some distinct disadvantages. Head over to Greentech Media for a detailed comparison, or to Earth2Tech for a quick breakdown of Bloom's costs and other numbers.

The company's initial corporate clients, though, seem fairly happy. That includes not just eBay, but Google, WalMart and Bank of America, which will install several of the $700,000 fuel cells soon. The problem is not that Bloom is a complete flop.

The problem is that industry insiders have spent almost a decade waiting for Bloom to make an earth-shattering announcement -- and there isn't one. Bloom makes a solid-oxide fuel cell that bears many similarities to those made by other startups like Ceres Power or industrial giants like Siemens. It's not a brand-new invention, and it's on the field with many other players.

A hint of the trouble ahead came Sunday during Bloom founder K.R. Sridhar's interview with 60 Minutes, in which he admitted that Bloom would have continued along in stealth mode, not making any big announcements, if it could. But its corporate partners, who were testing out the fuel cells, wanted to talk about their efforts to use green energy, threatening to out the company.

We can speculate about what came next. Bloom has spent years releasing teasers about its technology, never enough to reveal much but just enough to keep up the excitement. So its coming-out party had to live up to the level of previous hype, or else the company's image as an innovator would be shattered.

It helped that Bloom's first big backer was John Doerr, the famed venture capitalist who also helped get Google started, among others companies. Doerr knows that good PR is crucial to the success of a company, and has helped create press buzz on numerous occasions.

But the buzz is often divorced from the real potential of a company. The most notable example of this is Segway, another Doerr investment. Most will recall the massive Segway press blitz that took place around 2002. Today, Segways are still uncommon.

So due to circumstances, Bloom was probably more or less forced into a huge press event, hyping its technology to a crowd mostly ignorant of the fact that very similar tech has been well-known for many years, with dozens of other companies working on it. And because of the influence of its backers, including Doerr and Colin Powell, the PR machine has grown far beyond what it would otherwise have been.

This story is more common than it may seem. Just yesterday, respected energy blogger Robert Rapier wrote about Range Fuels, an early cellulosic ethanol startup that hyped its technology from the start, calling it revolutionary when in fact other companies had been working on similar tech for almost a century.

Doing so brought Range fame and over $300 million in investments and grants, but the company has broken most of its promises and failed to deliver on its promises.

Range's case is more clear cut than Bloom, which still has time to deliver the necessary cost cuts to become a competitively-priced power source. Bloom will have to spend the next few years putting its head back to the grindstone and striving to reduce its costs, dollar by dollar.

And that's exactly the point. Energy is a field in which progress is rarely revolutionary, and far more more often only incremental. The sooner we stop acting as if the companies that make the most noise are also the ones with the most potential to succeed, the better.

[Image credit: Bloom Energy]