We talk a lot these days about the need to conserve energy, especially in data centers where the electric bill can quickly get out of hand. But imagine if we had a power source so cheap it wouldn’t be worth measuring how much customers consumed.

That’s exactly the story that Mark Gibbs, an independent analyst and writer, has been following for his columns at Network World and Forbes. We last caught up with Gibbs for a podcast on his idea that “all business is now IT because all business is about information.” This time we talked about the Energy Catalyzer, or E-Cat, a device created by an Italian inventor named Andrea Rossi.

“He’s come up with a thing that, if it works, would transform our culture, our society,” Gibbs says. It’s a small device that creates a reaction between hydrogen and nickel powder, as Gibbs explains in his Network World column:

The device is said to work by heating hydrogen to an “ignition temperature” using an external heat source, after which a catalyst, which has yet to be explained, causes the hydrogen atoms to “penetrate” the nickel and transform it into copper, producing energy in the process — essentially a nuclear fusion reaction — that is self-sustaining (i.e. the external heat source can be removed and the device will continue to function).

all business is now IT because all business is about information

Water fed into the reaction chamber comes out as steam with which you could drive a turbine, and voila! You have a generator. Or you could use it for motive power. You could also use the heat to drive a Stirling Engine, but for whatever reason, this option hasn’t been much discussed.

Rossi calls it a “low-level nuclear reaction,” but Gibbs thinks it’s basically the same as cold fusion – a nuclear reaction at relatively low temperatures. Cold fusion has proven to be illusive, at least in terms normally associated with science, such as the ability to repeat experiments and get the same results.

Still, Rossi claims he’ll deliver a 1-megawatt reactor next year for $2 million to a customer he hasn’t named. If he comes through, Gibbs says the device would produce a virtually endless stream of cheap electricity. Gone would be the infrastructure that carries electricity around the world; instead, homeowners and businesses would have their own E-Cats.

However, as Gibbs details, while Rossi demonstrated the E-Cat as recently as October 28, it’s always with an air of mystery. In the latest demo, for example, a generator with a capacity of one-half megawatt was set up right next to the trailer housing the E-Cats, ostensibly to generate the heat required to start the reaction. But, as Gibbs points out, the E-Cats succeeded in generating just about one-half megawatt of power; suspicious, to say the least.

Check out these highlights of our conversation with Mark Gibbs and judge for yourself whether you can soon go off the grid and get an E-Cat.

Mark Gibbs by NTTcomtv