After decades of looking at new energy technologies, few have looked better to me--at least from this distance--than Bloom Energy's new fuel cells. It's being touted as a real game-changer. And it may be, in more ways than one.
Why? Because Bloom might fill a huge need for new power sources, and I trust the people who are backing it. John Doerr, perhaps the most respected American venture capitalist, is the lead investor in Bloom. Vinod Khosla, another gold-standard VC, is also in on the deal.
These guys have seen everything, and if this is what gets them to invest and put their reputations on the line, it's an excellent endorsement. Meanwhile, Bloom's technology suggests there may be other ways, perhaps better ones, yet to be discovered.
I expect Bloom to be just the first of a number of energy technology companies I'll get excited about in the next few years, with the economy changing as a result of them. The opportunity Bloom--and its future competitors--present is at least as big as the Internet and in many ways more important. After all, there aren't many businesses out there that wouldn't benefit from more energy options.
Because it could take businesses and homes effectively off the power grid, Bloom also could improve national security by lessening the ability of cybercriminals to turn off our power or extort money from us. This also makes disasters and terrorism just a tad less frightening from a "what happens once the lights go out?" perspective.
While past performance is no guarantee of future success, Doerr and Khosla have made lots of investors very rich. Still, both VCs have also made loser deals in the past, and this could be turn out to be another one. Nevertheless, I'd put this way ahead of such losers as the Segway transporter and CrunchPad/JooJoo tablet, two media darlings that have yet to make their mark.
Today's $800,000 Bloom fuel cell is a far cry from someday's $3,000 home unit. And right now, Bloom can reportedly only build one unit per day, not nearly enough to justify the excitement, even at today's prices.
The units themselves still require some sort of fuel--such as natural gas, oxygen, or solar energy--and that could be a limiting factor in many installations. And, I've yet to see a breakeven analysis as to what other energy sources must cost for the Bloom energy cell technology to make sense.
While Bloom's first "customers," companies like Google and eBay, are happy, that doesn't mean your company or mine would be likewise thrilled. Nor, do we know what might happen if many such units were installed. What might they do to the price of natural gas or oxygen? As with ethanol, sudden demand might have a negative impact on pricing and make Bloom's technology less attractive.
So, while I have gotten excited about new companies and technologies and been let down before--haven't we all?--Bloom Energy is a reason to get excited. And to believe that the Silicon Valley/venture capital model of innovation may contribute as well in the future as it has done in the past.
Bloom is proof that real technology opportunities still exist and that American companies may again be able to capitalize upon them for the benefit of all. I haven't always felt that way lately, but it's a great feeling to have and I'm glad it's back.