I got my start in mainstream journalism as a technology and telecommunications reporter for the Globe and Mail, a beat I later took on at the Toronto Star and covered for six years before switching to energy. When I first started we were still using the term “information highway” to describe the coming convergence between the telephone and cable companies. Cable companies in Canada had their own networks, their own turfs, and their own regulated monopolies, while the phone companies had the same. The turfs overlapped, but the products and services stayed largely separate. You got cable from the cable guys, and phone service from the phone guys. The information highway threatened to change that, allowing the phone and cable guys to invade each other’s turf and bust through their respective monopolies.

The commercial Internet was still in its infancy and was considered part of the information highway. It was only in the mid-1990s that the Internet emerged as the dominant disruptive force in this technological vision. Internet Protocol, the communications standard underpinning the Internet, allowed all sorts of information — text, audio, video — to be treated as packets of data that could be shipped at high speed across cable and phone networks, which were privately operated networks that had on-ramps and off-ramps to the public Internet. As networks became faster, as compression of data got better, as computing power and memory grew exponentially, it became technologically possible and economical to deliver phone, broadcast, e-commerce, Web surfing and e-mail over both the cable and phone networks. The result: network convergence. Suddenly technology was creating competition in these regulated monopolies, forcing regulators to adapt and establish rules that permitted regulatory forbearance when competition in a market was deemed acceptable. For the phone and cable companies, the gloves were off. It was game on. 

Why am I telling you this? Because I’m seeing the same thing happening in the energy sector. (more…)

There’s much hype around the 60 Minutes segment Sunday night about Bloom Energy and its miraculous Bloom Box. I’m scratching my head wondering why this is such a big deal, so maybe someone can enlighten me. This to me seems like a fancy solid-oxide fuel cell system. It’s still super expensive, though Bloom claims that it can get the cost down to $3,000 (U.S.) for a residential unit. It still relies on fuel, such as natural gas, meaning it still produces CO2 emissions. Yes, far less emissions than burning that natural gas in a power plant and sending it via transmission lines to your home, but it’s not the emission-free miracle that 60 Minutes is touting. I didn’t hear much talk on the segment about whether the Bloom Box has a dual purpose: that is, electricity generation and heat production. And while it may replace the need for electricity lines coming into your home, you still need a natural gas line. In this sense, I can see tremendous interest from natural gas utilities looking to compete against electric utilities (a good parallel is how cable and phone companies over the years ended up offering the same services as technologies converged).

Perhaps there’s more to this story that wasn’t revealed by 60 Minutes, but there are many companies out there working on this kind of fuel cell so I don’t see what’s particularly special or unique about Bloom Energy. More details are expected to be released on Wednesday, however, so maybe then my questions will be answered.

In the meantime, would someone out there please enlighten me?

Bloom Energy, a semi-stealthy investment of Kleiner Perkins Caufield & Byers, has been making more noise lately about its fuel-cell technology. The company, in a recent BusinessWeek article, claims its system — about the size of a refrigerator and capable of supplying both heat and power to a home — will come down so much in cost over the next three to five years that it will hit grid parity. It’s not like the technology that Bloom’s product is based on is new. Solid-oxide fuel cells have been around for years and several startups have combined heat and power products based on the design. But Bloom, obviously, has figured out a way of making it reliable and cheap enough to deploy widely — or so we’re led to believe. The system would run on natural gas or a selection of renewable feedstocks, such as ethanol, offering a way for natural gas companies to indirectly become power utilities. I compare it to the battle between telephone and cable companies, which have infrastructures based on different technologies but eventually began competing in each other’s market for the same services — phone, cable, Internet. Utilities — gas or electric — will soon just be called energy utilities, capable of providing a package of electrons and BTUs.

Like many secretive Kleiner Perkins investments — EEStor, for example — let’s hope the hype and promise leads to something truly disruptive. Speaking of EEStor, tick, tick, tick… the end of the year fast approaches.