‘Holy Grail’ vs ‘Disruptive’
Bloom Energy is helping to shake up the conversation about the future of distributed energy systems. But let’s be clear…!!! There is no Holy Grail solution for global energy market! There is no silver bullet!
The spectrum of energy demands is too wide and varied across applications to have one single solution. Disruptive energy systems exist for the demands of tiny sensors (ambient capture), smart phones (density), electric vehicles (low cost per weight), data centers (reliability), and grid energy (base load). So let’s not get distracted looking for one solution!
More importantly, we should not confuse an aspirational industry ‘holy grail‘ for a genuinely applied ‘disruptive‘ energy system that could change the cost structure and business model innovation landscape in a way that avoids direct competition with incumbents.
Disruptive energy platforms are rare (e.g. steam engine, internal combustion engine, electrical grid) but we are likely to see more candidates emerge in the 21st century as we tap the power of energy entrepreneurs and advance our knowledge and engineering prowess in the areas of nanoscale materials design and bio industrial processes.
Energy systems are about the interaction of molecules – and both nano- and bio- give humanity new shapes to manipulate and control the interaction of light, electrons and molecules. And within the energy sector, it is materials science that enables business model innovation (not the other way around)! This is a materials science game!
Why Bloom Energy’s Distributed Fuel Cell Vision is Disruptive
Low cost, highly reliable distributed power generation systems are disruptive because they open up a new ecosystem for non-grid based power generation that can bypass the incumbents entrenched business model.
They are green in the sense that electrochemical energy conversion is more efficient and less polluting than combustion conversion. But let’s be clear. Being green is less disruptive than being cheap, reliable and distributed.
What makes an energy system disruptive?
Let’s look at two versions of solar. Traditional solar farms try to compete directly against the grid without a chemical fuel. Good luck! Feels good, but it’s not disruptive. You are at the mercy of grid access, price volatility of chemical fuels, and the regulatory frameworks of the utility sector.
The disruptive version is ‘distributed solar’ (e.g. rooftop via thin film solar) and is not connected to the grid, and creates new market demand rather than trying to replace or repair the old model.
Fuel cells convert chemical fuels (e.g. natural gas, oil, coal, propane, biofuels, hydrogen) into electricity. They are silent, have no moving parts and can be manufactured using low cost scalable and modular assembly.
Electricity powers the future! And fuels dominate the electricity power generation market.
Bloom Energy plays into the fuels market, but offers a non-grid solution for energy!
Bloom Energy’s success will of course be based on its ability to continue to apply innovative technology with great business leadership. As to the skeptic points raised by Greentech Media‘s Michael Kanellos (whom I respect and admire!) here are my notes on issues of:
- Hype: I hear you! Of course, we’ve followed this since Ballard’s bubble in the late 1990s. But you know that all technologies pass through the hype cycle! Shouldn’t we compare notes on latest developments in labs and Board rooms and talk about an plausible roadmap that has commercialization within 2-10 years for first wave of products?! Bloom is testing an actual product!
- Durability: Fuel cells do not have to last 30 years. Stacks can be broken down, replaced, et al. And the cost is per unit, not per power plant. So we don’t need a product that lasts forever!
- Mass manufacturing: Fuel cells are modular, scalable units and I see no reason why manufacturing cannot be scaled? Certainly a barrier, but not a show-stopper.
- Competition: ‘It will be GE, not Bloom Energy!’ — Great! That is not a criticism. I expect incumbents will play! If Siemens, GE, Dow, DuPont, JC, Emerson (et al) get into the game, great news!
- Cost – Bloom’s CEO stated $3,000 price point – a fine place to start, but really, we need $300! But it seems clear that low cost alternatives to precious metals are becoming commercially viable.
Watch: 60 minutes [video]
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I have followed Bloom Energy since it was formerly Ion America many years ago. And I have been an evangelist for the disruptive market potential for fuel cells applied to portable and distributed power generation. And to all the doubters of fuel cells or hydrogen I have responses to the dated and misguided criticisms related to storage, production, energy loss, et al. Happy to answer questions in Comments section.
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