Why Bloom Energy Is & Isn't the Google of Greentech

24 Comments

Amidst the slick, several-hour production that was the Bloom Energy launch event, which included a machine gun of celebrity endorsements (Gen. Colin Powell, Sen. Dianne Feinstein, VC Vinod Khosla, Mayor Michael Bloomberg) and a displaying of the refrigerator-sized fuel cell — the Bloom Box, itself — there was one notion that kept emerging: the idea that Bloom could be the Google of greentech. In the way that Google changed the web game and made a lot of its investors money in the process, Bloom could change the energy game and be one of the first greentech firms to bring riches to its backers — at least that’s what many at the event were talking about and hoping for.

Kleiner Perkins Caufield Byers venture capitalist John Doerr, who led an investment in Bloom Energy and also in search engine giant Google, made the comparison as he took the stage during the launch event on the eBay (s EBAY) campus. “This is like the Google IPO,” said Doerr. Presumably, he meant the excitement and anticipation in the room, but also the potential for the type of returns that Bloom could bring to Kleiner.

VC Returns

For Kleiner, of course, Bloom is ultimately about Google-style money-making. Bloom could be Kleiner’s first homerun in its cleantech portfolio — something it sorely needs after making dozens of investments and having little, to no, exits in the space. Doerr has previously said that the eight-year-old Bloom will take “nine years to a successful public offering,” so clearly an IPO is in the minds of the investors. At the Bloom launch event, when a reporter asked Doerr if “Bloom is the next Google,” Doerr replied “I hope so.”

Will Bloom’s investors be able to make the kind of money off of Bloom that they made off of Google? Bloom has clearly taken — and will continue to take — a lot more money than Google to reach scale. Doerr said last year that it took Google $25 million to get to an IPO, and it had already taken Bloom $250 million to get to where it was last November when Doerr made that statement (since then it has raised close to $400 million in total).

But the market for energy is ultimately bigger than the Internet — in the trillions rather than the billions as Doerr likes to say. That’s what Bloom’s investors are betting on. That they might have to put more in, wait a lot longer, and get a smaller slice, but that a smaller piece of a larger pie will be worth it. If there was a “Google of greentech,” equivalent, that’s probably what it would look like.

Industry Game Changer?

If Bloom is able to deliver on some of its claims — and cut its costs — it could possibly make the kind of change in the energy industry that Google has made on the web. Bloom founder KR Sridhar and General Colin Powell (Bloom board member) spoke at length at the launch event, about how they could see Bloom boxes powering homes and businesses throughout the developed and the developing world, from rural Africa to the rapidly growing middle class in China. Distributed power that is cheaper than the grid, and cheaper and easier than other renewables, could be a real game changer.

Like Google has been the platform for the basis of countless businesses and services, Bloom’s distributed power could also work as a platform (perhaps why they went with the Bloom Home Server reference) that could compliment solar systems, and electric vehicles. Business, or homes, that could use the boxes to generate power cheaper than can come off the grid could lead to the creation of new business models, where third parties buy and sell power.

Of course it’s totally unclear at this point if Bloom will even be able to deliver on some of those world domination promises. For example it will be really difficult for Bloom to get the price of the electricity from the Bloom box down, particularly to be competitive without the California and federal subsidies. NEA’s Scott Sandell, who backed Bloom, explained to us how Bloom intends to try to cut some of these costs.

Buzz Factor

To me, Bloom and Google clearly share one thing at this moment: cool factor and attention. Bloom, quite frankly, is the biggest thing to happen to the cleantech industry to date. Any media site that has any back archives of articles on Bloom knows how much mainstream attention Bloom is getting — we’ve had record page views this week. A coworker complained to me this morning that there’s no news, as Bloom has sucked all of the air out of the industry this week. At the Bloom launch event eBay CEO John Donahoe said: “This is a good day for Bloom, but also for cleantech.”

Bloom is even cool enough for Google to want to align itself with the fuel cell maker. Google was Bloom’s first customer and is using some of the Bloom boxes to power part of its campus. Google Co-founder Larry Page, who spoke on stage at the Bloom launch event, said: “Distributed power is a big deal. I’m a big supporter of this. I’d love to see us having an entire datacenter running on this some day.”

However, it’s unclear to me whether or not Bloom will be able to keep the type of attention going that Google has been able to maintain over the years. Bloom might be the cool kid this week, but that buzz will die down pretty fast unless Bloom is able to rapidly innovate, sign up new customers, and make high-profile moves. For a manufacturing company, that’s making power components and working on margins and cost cutting (like chip makers) that’s going to be really difficult. As Bloom founder KR Srindhar said at the Bloom launch event, “this is not software, it’s manufacturing, similar to building a car, and that takes time.”

Bloom’s device also won’t be consumer-facing any time soon, which handicaps it from all of the attention that consumer customers generate. While some publications have been concentrating heavily on Bloom offering a less than $3,000 Bloom Home Server to power residential homes, make no mistake such a power device is more than a decade away and still very much an “if.”

At the end of the day it will only be the months and years ahead that will be able to determine if Bloom will truly be as revolutionary as it’s claiming. And to be able to claim the title the Google of greentech — or to make the same kind of impact on the web, and generate the same kind of wealth that Google has delivered — are very large shoes to fill.

24 Comments

DeepPurple

Just what we need more CO2.

Yes. But no more grid-lines. No more defacing the landscape.

You cannot own the fuel cell so you will need to have a maintenance contract.

Has Bloom made this claim? And why is it bad? Is it any worse than being held to ransom by a bunch of guys in the Middle-East?

The reliability after 5 years is questionable.

Yes, I am sure things many things are questionable. The car, when it was first manufactured, was largely useless. Even today, after ONE CENTURY of improvements, Toyota has shown that this technology is unreliable. But it gives us a warm feeling of comfort and we stick to it.

One thing that is definitely questionable is our collective wisdom.

When the units go bad ..

Nothing can be more toxic than an invention that kills EVERY YEAR, 55,000 people (in the US alone).

Uses Natural Gas like current power plants producing electricity for pennies on the dollar ?

Even so, it will be worth it. There will be no more grids. And we will be independent of foreign-oil.

holoman

Hi All,

I guess some of you have been reading the VC world wide press avalanche push to get their investment in front of the public. It took over NINE YEARS IN DEVELOPMENT AND $ 400 MILLION FOR DEVELOPMENT of the Bloom technology !

  1. It uses precious O2 ( Oxygen) for its energy.
  2. It generates CO2 as a by product as well as hydrogen.
  3. Just what we need more CO2. Steam how much energy ?
  4. You cannot own the fuel cell so you will need to have a maintenance contract.
  5. It is limited by the type and purity of the fuel used.
  6. The reliability after 5 years is questionable. Replacement cells will have light bulbs efficiency.
  7. $ 800,000 thousand per unit with 100 kW possible = $ 8 kW !!!!!!
  8. When the units go bad,and they will, land fills will experience toxic waste increases the likes no one has seen before.
  9. Cannot operate in extreme environments.
  10. Uses Natural Gas like current power plants producting electricity for pennies on the dollar ?

This technology doesn’t change the energy landscape but sure puts it on
an equal footing with Venture Capital “Fantasy Energy”.

Jim

A 60 kW Capstone turbine costs about $56,000 ($930/kW) versus 100 kW Bloom box for $700,000 ($7000/kW). True, the efficiency of the Bloom box is better (maybe 2X), but you’d have to run a LOT of methane through it to make up the cost difference.

Didn’t some exec say they saved $100K using the boxes? If the equivalent power output could be had for about $100K using turbines (instead of $700K) then they’d need about 6 more years of that before it paid off. (I think he might have been referring to savings from electricity purchases, in which case the payoff would be even worse).

Large combined cycle gas turbine (CCGT) plants, which have the same efficiency as the Bloom box, can be built for about $550/kW.

I’m not sure I see the value proposition here, except for some niche applications.

Tom

Everyone seems to forget about that small solar company in OH named First Solar. They grew from <50 MW of capacity to over 1 GW in a matter of three years and are now a 10+ Billion company making its investors and employees millions in the process. It’s also important to note that they did not take a single dime from silicon valley VCs and are by far the most successful exit in cleantech.

If Bloom can match the success of FSLR, I’d consider that a success.

DeepPurple

“As Bloom founder KR Srindhar said at …”.

“Srindhar” ?? Can we at least get his name right?

Serrrr

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Skeptical

Clearedgepower already has a unit that is smaller. It also reuses its heat, so it’s more efficient than the Bloom box.

anotherone

The bloom server operates at a very high temperature (> 800 degrees celcius). So there is no point talking about machines that reuse the waste heat. In fact, the company suggests this new machine generates very little heat.

Ed Khatcherian

Bloom is not a novel idea.
The Australian company “Ceramic Fuel Cells Limited” http://www.cfcl.com.au/BlueGen/
has had units in pilot projects, and working on commercial production , they are better in the fact that they do not waste the heat but use it for “heating”, BlueGenâ„¢ is fitted with an integrated heat exchanger to recover the heat from the fuel cell module. A separate water tank (not supplied) can be connected to the unit to increase the total system efficiency.
Ed

DeepPurple

“Bloom is not a novel idea.”.

Neither was flying. Afterall, had not 2 Greeks shown us how to fly?

Paul

Hype hype hype… KPCB just want a shot at getting their $400m back.

Where do they get off saying it’s renewable AT ALL? The thing is plugged into the gas main and emits CO2 just like any gas powered generator. Fuel cells aren’t that much more energy efficient than a turbine plant either, both are around 50% energy efficient without using the waste heat for co-generation.

It’s all spin! Watched the 60 mins report and they took ages to get to and then glossed over the ‘fuel’ side of the equation. They lead the story with “Oh we’re going to replace the grid” with what? the gas grid? Why bother?

Does a 100kw micro-turbine generator costs much more than $700,000? About the only ‘green’ angle they have is running these fuel cells in reverse for local energy storage, but that’s another decade away!

DeepPurple

“Hype, Hype, Hype”.

For a moment there, I thought, you were talking about a politician or the latest model of some car. Hey, the motor car has been here, using a technology that is a CENTURY old. It kills over 55,000 Americans annually. That technology is well accepted, because we feel “comfortable” with it.

This new technology is far superior. It is new and will not kill millions. Lets us learn to accept a change for the better.

Garry G

Agreed that Bloom might be Friendster and not Facebook! This is not a scalable industry niche with the same margins as web tech–
… but what is relevant is that they’ve created a mainstream buzz around distributed power generation.

They are not the first to bring FCs to the market, but as far as the public goes– this is a brand new concept! And I’m just thrilled to see non grid power systems enter the mainstream consciousness. (Been waiting for this product launch since following their ‘Ion’ company days)

Just to add to thread! Recent posts where I highlight disruptive market elements of chemical fuels and distributed power generation:

Bloom Box and the Very Disruptive Future of Distributed Energy [Video]
http://www.garrygolden.net/2010/02/23/bloom-energy-box-disruptive-future-of-distributed-energy/

Why Personal Power Systems Might be the Biggest Story in the Future of Energy
http://www.garrygolden.net/2010/02/21/future-of-portable-personal-power-via-micro-fuel-cells/

Bloom Energy CEO Interview explains 101 of Fuel cells as Bridge and Destination
http://www.garrygolden.net/2010/02/25/bloom-energy-ceo-future-of-fuel-cell-energy-101-interview/

Garry G
Brooklyn, NY

Venkatesh

Katie,

Curious about the energy source for Bloom Servers at eBay. Where they supplied via a gas line or is the energy stored in tanks underneath ?

How much gas does it need say weekly ? Does this mean that remote places would require a gas line to be drawn to them for bloom to work ?

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