Recently there has been a lot of hype about Bloom Energy's announcement for their "energy server"  - a fuel cell that converts fuel into electricity.

The coverage in the media is designed to leave most people thinking that it's a small magic box that produces electricity like a battery. Barely is there mention that fuel is required to produce electricity with it. The 60 minutes pieces was probably the nastiest example of misinformation, which is to be expected from mainstream TV.

But even on slashdot, an engineering geek community, someone asked how long the product will power a home - someone else quickly responded and explained it, but the question was still a good indication that most people don't get this aspect of what the confusingly named "energy server" actually is.

Bloom Energy pitches their product as an alternative to getting electricity from the power grid. As this article in Forbes points out, the product is only economically viable because of subsidies, and only where gas is cheap and electricity is not.

They are very excited that the product can be installed right where the power is used. Why is this a good thing? For the few of us who noticed that we are just replacing a power line with a gas line, two reasons are given, both if which I think are flawed:

(1) The heat produced as a side product can be used for something on-site. That makes sense for a brewery, or for a heated pool,but not for a data center.

(2) Transporting gas instead of electricity reduces transmission losses. However, only 7-8% of US electricity is lost in power lines, So even if gas lines are lossless (which they are, I suppose, until there is an earthquake or other accident), and if the gas line is already there and the capacity is sufficient, we can AT MOST save 7-8 % by having the decide on site. Against that stands the problem of having to install and maintain lots of small units. So this argument is weak too.

Now, you might ask why I get worked up about a company that burnt only $400M to build an undoubtedly useful technology and a product that is, right now, only viable because of subsidies. After all, the entire solar industry was kickstarted by subsidies, and even today, solar panels on roofs are only viable because of subsidies, and I still think this was a good decision.

What bothers me is that there is no honest discussion about this. With solar, everyone talked about it, and the consensus was that it's ok to subsidize solar panels, because creating a huge market for them will bring the price down, and that way they will eventually become viable.

Perhaps the same is true for bloom energy's fuel cell - but we should have an open discussion about this.

The management and investors at bloom aren't stupid. They have carefully designed the PR campaign that we are witnessing, not bothering the public with all the details and tradeoffs, probably with the following rationale:

The obvious, reasonable application for their product is to replace gas generators that currently run with the same kind of fuels (natural gas, diesel). After all, a fuel cell is exactly like a generator, except it's quiet and more efficient. (I want one for Panama, and I wish my neighbors had them too. There are even better applications in places where the natural gas is almost free - for example, I lived in a house in West Virginia that had its own gas well, and the gas was literally free.)

But this straightforward doesn't work for them. The problem with going for the rational application for this is that it's too small of a market for a company with a valuation of $1B.

So they needed to find a bigger market - and decided to created public excitement for this. Their strategy seems to be to produce pressure to further subsidize their technology, and create the same kind of situation that was created for solar panels. Get lots of people excited about the great new technology, get them to want to install it, and to push politicians for susidies.

I think there is no doubt that this is a great useful technology. But do we need to finance its further development indirectly by encouraging its use in inappropriate places, just to create more demand? We did for solar (sun-poor Germany being a leader), and that's fine.

That may or may not be a good idea. We need to figure this out, and we should have an open discussion about this, before the decision is made through public opinion and the media instead of common sense.

And if we do decide it's worth it, can we please use it where it makes sense from an economical and ecological perspective, rather than only because of subsidies?