Energy Investments Dialogue | Bill Gates | Global Energy Forum

first of all bill since you need no interruption I still am going to introduce you and I'm I'm gonna introduce you as a Stanford dad welcome so let me first say my first encounter with you was when I was in few months as a first director of arpa-e and people had arranged meeting with you in your office and I went out there and you were a few minutes late which he walked in with a document and I realized that was my congressional testimony and I said shoot I'm gonna be grilled which you did you did grill me nicely but then I think I told you that I think bill I think you're the only one who's actually read my testimony but I just want to take this opportunity for at that time I asked you that I need help from you because we were starting off ARPA he and I had never been in Washington and I need all the help I could get and and I just want to take this opportunity first thank you for your support for RPE whenever eyes to meet you used to ask me how can increase a budget and that was a tough question me because I have to say that's the President's budget and you did your magic on the hill I don't know what you did but RPE survived because of you thank you so much so let me start by saying a few things you are one of the founding fathers of the computing industry you democratized computing and you touched billions of people and for those people who you could not touch with computing you and melinda have touched with your incredible work on global health and for which and I'll just put it out there I hope I know you're not looking for it I hope you get a Nobel Peace Prize at some point thank you so given all that you're pretty much with your work your legacy you have touched pretty much all of humanity almost so how did you get interested in energy well how can you not be interested in energy I mean civilization as Vaclav SMIL who's the best writer about energy says actually his latest book I think it's his 42nd is tired titled energy and civilization and I recommend all 42 of them but this one if you don't have time to catch up just read this one that it it covers a lot you know the intensification of energy use is how we've escaped a sort of subsistence type existence the Industrial Revolution is about energy primarily coal at that stage and when I put my foundation hat on and look at ok what needs to be done for Africa poor countries in general but particularly Africa the amount of electricity per person has gone down in Africa over the last 20 years and there's no way you can build there's an upper bound on what you can do with an economy unless you get infrastructure including roads and electricity up to a certain level so it's a huge concern that all these developmental goals we have are unachievable unless you get energy available there and then you combine that with the fact that the people who are the most Dwayne to suffer from the built-in warming that is unavoidable and from the additional warming that is avoidable that we won't avoid those are subsistence farmers in Africa you know they're going from having 1 out of 12 years where their harvest fails they will get to the point where it's 1 out of 4 years and that leads to you know severe malnutrition and starvation at a time when the population growth soil quality many factors are working against you so I'm not just a believer in taking the nine percent of your income that Americans spend on energy and saying ok let's just pay a premium to feel like we're clean people but rather you've got to solve this problem for China India and Africa without making energy super expensive so that you know that constraint makes what's already an almost impossible problem even slightly more difficult so given your interest in this when the Paris agreement was going to be signed in in Paris and 2015 you put together with a with your fellow you know high net worth individuals around the world something called a breakthrough Energy Coalition what was your goal what was the long-term goal in that well my general view when people come to me and say hey the world is going to fall into a state of disaster this is a huge problem it's unsolvable my view is well maybe they're under estimating the power of innovation to come along and and change and improve things and so in the 90s you know and I was reading about climate change and then after the 2000 where ken caldera David Keith a few people I started having them on on a regular basis to educate me and telling me what to read about climate change the thing that blew my mind was that people would about these downstream taxes and subsidies but there was no discussion about upstream incentives no discussion about increasing the energy R&D budget the u.s. energy R&D budget post it was reduced by Reagan Carter had had driven it up and Reagan and drove it down and it stayed down and all these climate people they never talked about the research budget you know I think it's partly a confusion about the nature of the problem you know what it means that electricity is only 25% of the problem and you need reliable electricity and the goal is not to to you know take a bow because you use natural gas and you've got a factor of two that's nothing that contributes zero in fact because the forcing function is sooner on natural gas completing cold and out graphs right now in the next 50 years and then shutting it down that's a net addition it's just so you're doing your math wrong because you don't understand the way the lifetime trade-offs are done for natural gas anyway so the idea that Rd wasn't like the plain thing and I remember sitting with Obama there are a bunch of us there I'd created this coalition and you know I was saying hey if you could only do one thing increase the R&D budget and he said no I can do the the carbon tax and the R&D budget well and we ended up getting nothing at all even though the R&D piece which is a long lead time piece which is very necessary probably could have been done so any encases part of the Paris climate Accord I'd gone to 30 different countries and said will you come and commit to double your energy R&D budget and in fact the only reason Modi came to the event was because he was enthused about that we picked his name for it which was called mission innovation and you know there was this big announcement there and in fact most of the countries that announced have followed through the u.s. is slightly off a straight doubling but you know in total an extra 3 billion now has gone into R&D since that event which does tilt the odds slightly in the favor of the break that we need now we also need the basic research budget is only an enabling thing you need the next step after that but it it it is certainly critical and was not on the agenda so a lot of people are very optimistic as you know with wind and sold the renewables cost coming down the battery costs are coming down you think that's enough or do you think that is so disappointing I mean really the Vaslav yesterday he said okay here's tokyo 27 million people you have three days of a cyclone basically every year it's 22 gigawatts rate over three days you know tell me what battery solution is going to sit there and provide that power I mean let's not joke around your multiple orders of magnitude you know a hundred dollars per kilowatt hour that's nothing that doesn't solve the reliability problem and remember electricity is 25 percent of greenhouse gas emissions whenever we came up with this term clean energy I think it's screwed up people's minds because they didn't now they don't understand I was at this conference in New York I won't name it and they were saying all these financial guys got on stage and said oh we're gonna rate companies in terms of their co2 output we're gonna say this company puts out a lot of co2 and financial markets are magical and all of a sudden the co2 will stop being emitted and I was like okay how do you make steel do you do guys on Wall Street do you have something in your desks that make steel what where's the fertilizer cement plastic where's it going to come from you know do planes fly through the sky because of some number you put on a spreadsheet so the the madness of this so-called finance is the solution I don't get I just don't get that there is no substitute for or have the industrial economy runs today and you know the paradigmatic country is India will India pay a premium price to have materials to build buildings to get rid of slums will they pay a premium price for air conditioning basically the answer is no the voters there won't and they probably shouldn't deny themselves when their greenhouse gas emissions per person is only a twentieth what the US has already admit emitted and so you know who should go first and get emissions per person down to make up for what done in-house of course that should be us so there's not even an argument in justice that says that price premium ways of doing all the things not just electricity that that happens so the idea that we have the current tools and it's just because these utility people are evil people and if we would just beat on them and you know put it on our rooftop that is that is a real that's more of a block than climate denial the climate is easy to solve group is our biggest problem so what are the what are the breakthroughs do you think we need in terms of technology well it's pretty straightforward that in the electricity sector either need something like nuclear fission or fusion that runs 24 hours with the high duty cycle or if you're going to rely on intermittent sources then you need some monster miracle that's more than order of magnitude away from anything this grid storage not not consumer vehicles going 300 miles this is you know hey Tokyo don't don't worry about it it was it was cheap to solve and by the way you're only getting value out of that battery once a year so you know do the math on what that looks like per kilowatt hour anyway so you have electricity generation you have the industrial economy so you have to figure out how to make all those things a lot of the things cheap hydrogen act that actually solves several of those things in terms of the chemists chemistry type side of that but but steel and cement are kind of special and require particular solutions you have transport problems other than cars which the energy intensity far more difficult and the the 24% of the emissions are agriculture and meat related emissions and those are very difficult they're you know I fund things like impossible foods beyond me a variety of companies to try and completely change how products that the acid test is can you tell it's artificial meat or not if you can tell we're in big trouble so the goal is sometime in the next five years to have that product at least on the ground beef category be such that you cannot tell the difference and that's pretty big I mean cows if they were a country they would be in the top five emitters in the world that's just cows and people believe me they've tried to feed them different things or put a little torch on their bottle things it doesn't work but it's also the deforestation that is caused by grazing and things like that that's right but the beef you know if you get to a sergey DP per person actually you have reforestation so massachusetts today is more forested than it's been in the in the last 60 years but in general you do get deforestation so if you take Indonesia and Brazil their biggest category of emissions by far is the land use piece if you take Australia New Zealand it's the cows that are there that are the are the biggest so the you need innovation in a surprising number of sectors of the economy and unfortunately the goal is zero actually the way they do the models now because they're trying to make it look like 1.5 degrees isn't the biggest joke ever they show these gigantic negative emissions you know and I'm the biggest funder of various carbon capture things liquid solid you name it but the likelihood of that being economic that is more than two orders of magnitude non-economic right at the moment and as Voskhod reminds us it would have to be ten times the size of the oil industry that is the amount of stuff that you would have to stick underground this is ten times the entire oil industry so let's talk about the agriculture inside because I think that's really important I'm a product of the Green Revolution which was this short strain of wheat I would not be here if it was not for for that do you think given the tools that we have in biology today of CRISPR cast nine and all the gene editing do you think there's another Green Revolution we should have not just for for a food but for carbon as well and maybe a combination of the two and one shot you think that's possible well yeah the the Gates Foundation funds thing called improving photo CITIC photosynthetic efficiency and there is literally a factor of two to be had in terms of changing the basic photosynthetic pathway there's about four different things you have to do but the photosynthetic pathway is not optimized that if there was an evolutionary bottom like when co2 levels were very low and these plants don't have the right Rubisco and the right they turn off they don't like to die and so they're not maximizers in terms of their output and so there's various ways that you can change photosynthesis that would be extremely valuable not just in the plant economy but also she moved that over into trees that are extremely good they sequester carbon extremely well that's a a large standing stock of carbon although it's a one one-time gain unless you do some let's put it down below below the ground eventually it'll rotten and recycle back in so yes and I think it's like improving photosynthetic efficiency not funded you know what could be cooler than improving photosynthetic efficiency but so yes we need a new Green Revolution agriculture productivity in Africa is a quarter of what it is in in the US and Europe it's partly you don't have Extension Service you don't have fertilizer you don't have irrigation but it's also that these seeds are not well adapted to the various environmental conditions in Africa has more variety than any other continent so the variety of types of seeds you need is actually a lot greater it's that whole seed thing is not well invested in but if you care about climate adaptation the thing you would most invest in by far the top of the list would be more productive seeds so if you're only having three or four good years you either maintain buffer stock or you sell it and you have cash that holds you through that year that your harvest isn't working likewise there's a lot we can do to deal with high temperature and deal with drought there are crops like sorghum that teach us how you can deal with tough conditions so switching subject you are a big supporter of nuclear and in fact you invested in Keira power and my question to you is right now it is not cost competitive in the United States Korea has done very well in this and Keira power is going to install I think the first thing in China and so what are your thoughts on how to make nuclear which is a carbon fifth as you said based low power how do you make it competitive today yes so nuclear starts out for reactions with a million times advantage over burning hydrocarbons so you think hey a factor of a million that we must be able to preserve at least some of that and not be absurdly expensive in fact in the u.s. nuclear is not even close to being competitive it's probably a factor of four or five non-competitive the key parameters in a nuclear build are how long it takes to build what your interest rate of your money is and maybe some uncertainty factor whether you get stopped or not and so in China those numbers are basically three to four years and 2% whereas in the u.s. there may be 8 to 9 years 15 percent and maybe 50 percent chance you'll get shut down before you get started so when you're competing with super cheap natural gas there's no way also current designs are although per output it's the safest form of energy ever created more than say natural gas lines that blow up in neighborhoods or coal mines that you know create particulate that's not good for health it because it happens in Chernobyl like events it it's unfortunate those designs that have high pressure and they don't have a good heat pool and they require operators to actually look at lights and do things it's a pathetic design and yet it hasn't been changed it hasn't been redone in the digital age where we can massively simplify it make sure there's no pressure anywhere which forces you to in our case of sodium pool design so it's on paper which is where it exists in this incredible simulation this thing is in phenomenal incredible an end of so-called fourth generation nuclear it's the only well-funded project even so you know it requires the US and China to work together how's that going it requires a lot of patient capital but nuclear in China is cheaper than coal do you need more tariffs by the way well we need comedy we need us and can't a US and China to work together to bring this solution because the us understanding of these issues is phenomenal you know we shut down at the FT F but there was a lot of materials learning there that was quite fantastic and the Chinese are where they're going to build a lot of reactors really build them I mean this they'll show you the sights they're quite serious about it so even nuclear has a chance that's probably it so you're talking about the technological side if you can somehow bring down the cost and make it safer but these are all playing in the energy markets and the energy markets are short-term and these are investments that are in a nuclear case 60 years maybe seven years maybe even longer in the future so is there some innovation on the market side that will actually favor the long term investment should there be some innovations out there well unlike software where the customer set for a particular software product is very heterogeneous and a new entrant go in and say okay we'll serve the customers who want the really cheap form or the ones who want the simple one of the ones lots of features when it comes to pumping electrons at people there's like one commodity market that is more than demanding about reliability and so the incentives for utility company in going to their regulator and saying okay we want to make electrons with this new technology what possible reward do they have for taking risk that will either fall on them or fall on the ratepayers it's it's not it's a market whose R&D percentage is the lowest of any large market I'm in that case I'm not calling education a market it has the lowest R&D percentage of any part of the economy but energy of the market market quote Riven areas has extremely laundry and it's partly what you say is anything you do today you're packed by the time it's used in volume that your parents will probably been expired and so it's not like software and people have been spoiled by software and in fact the great venture capitalists here in the valley who supported a lot of green stuff got a lot of negative feedback because they were taking on these much tougher problems and that's why a new sort of wave of that with incredible help from John Doerr Vinod Khosla people who really pioneered the area now this breakthrough energy ventures is trying to step in to that space ok we'll fund things and you know we have a 20-year lifetime which is longer than a typical venture structure you'll put you land money behind that and you have other people putting money into breakthrough energy ventures now that you seeing the the sort of the new technologies and the entrepreneurial spirit coming out what excites you and where are the gaps I'm more excited than I expected to be you know I was calling up those people and saying hey let's put a billion dollars together they were like just they're good stuff out there oh sure absolutely and you know I was hoping that was true you know so we hired an amazing team a high percentage or XR PE people who are fantastic so there's only a little over a year ago when we got the team in place and the the deal flow that they've seen and we have a kind of a ridiculous criteria which is we don't invest in something unless if it works it will avoid a half a percent of greenhouse gas emissions you know so we can do artificial meat we can do new ways making steel you know across the whole range it's not just electricity but we're not going to invest in some other things so like climate Court which the note had in his green phone thank God because that's what made it profitable that wouldn't fit our criteria of what to invest in and even so we are seeing a lot of great stuff in fact if you set aside money for the later stages of these companies that they don't need yet it'll only take us maybe two to three years before all that money is committed to those companies and whatever successful follow-on things we think we mean to be part of and so we'll we'll go back and say hey let's let's do more so the the the deep thinking and these are you know there's no guarantee you know the fact that that you know chips actually work or sending signals through the air actually works you know it's assuming there are great breakthroughs like that which you know only nature knows the answer to those things but it appears that you know making hydrogen cheap making Steel cheap there at least for every crazy thing we need to solve we're finding at least three or four people most of them will end up being wrong who are willing to say hey write us a check and and we'll go work on that terrific any prospects of nuclear fusion yes the breakthrough energy did put money into Commonwealth fusion systems which is sort of an MIT approach where you take the fact that you can do these extremely high Tesla magnets and so you take the design and it's a lot smaller also the plumb with fusion isn't just making it work and nobody's ever gotten real energy breakeven making an economic is hard because you know in our our fission work we have these neutrons and they you know degrade our materials and it's it's the toughest thing about that the so-called traveling wave reactor design of Terra power these fusion guys those neutrons are in a completely different league in terms and so how they replace materials over time is very difficult and there are may be there are actually more fusion companies in the North America several are Canadian today than there are fission companies in a certain sense if you put aside SMR they're really other than terraPower aren't any really big play fusion companies sort of fusion there's quite a few now a lot of them look sketchy to me but you know thank God to try then yes right yeah I mean having a dozen companies is very impressive that that that's going on I think we are seeing not only magnetic confinement fusion but also inertial confinement and actually combinations of those two that are actually you know being tried out now some of them will fail many of them will fail but hoping that some of them may or one of them may actually succeed and that's the breakthrough that so you have assembled an amazing group of billionaires in this breakthrough Energy Coalition and you are now investing in technology but that platform that you have is obviously more than just technology what else do you want to accomplish with this group of people that you assemble worldwide well obviously we want to be a voice to encourage these research budgets to go up and stay up and to be spent properly you know we just did a deal with the European Union where they put money in to fund startups literally European Union money and it's because they're worried that if they raise the research money there won't be investors coming to Europe and finding the really good work there and and so it was a sort of pretty cool quid pro quo we never could have gotten that mission innovation R&D increase if we haven't said that there will be a venture fund that will take the best work and and carry it forward ideally in all the way into a product so being a voice of okay what are the regulatory barriers to these startup companies what type what types of tax credits and approach are very helpful you know today it's mostly the learning curve for solar wind which you know is that really compared to other technologies that have this weird thing of working 24 hours a day you know should you really be funding the intermittent stuff with all the money and putting no money in the stuff that works all the time and so the tax policies you know you got to think Japan or Germany in the US for bootstrapping the solar panel in which is today largely a Chinese industry bill Yura you got these people from all over the world and they're very influential you are a global citizen do you think we have a shot at some point at a global carbon price well the globe is a big place you have a hundred ninety four countries you know I'm involved in eradicating polio and you know so I deal with northern Nigeria Somalia South Sudan Afghanistan you know I know we're in Kandahar we still have polio so if you say global that brings up an image to me that okay you're not gonna get every country in this thing and it is interesting that of all the tough problems stopping pandemics solving climate change they are cooperation problems that no one country alone can do that I'm hopeful that you can get most the rich countries involved in that I think it's a a very helpful thing to send that price signal it's not to go being in the sense that it substitutes for the damage it's not at all it's simply a price signal that incent some risk-taking behavior but not the classic pigouvian hey pay the price okay that's what the burden to society was it's not within a factor of 100 of what that is issue project out into the future certainly for things like carbon capture and sequestration because that will that there's not a view that that will ever be positive economics you've got to have that and that probably is a necessary thing and I've got the sense that it'll be there over a long period of time I do think you know some things that are I think will come back you know I think the US will reenter the Paris climate Accord but you know take Germany who's very well-meaning they managed to make their consumers pay the highest electricity prices in the world their net carbon reduction is less than than 10% you so the world is not had a year where we make less co2 and you know that will be an interesting year if it's not because of a massive recession what is that that year but yes the attacks would make sense but when you map it into India you know are you really taxing those poor people or just getting air conditioning for the first time you know wow I want to meet that politician figured that out well talk we started the discussion with some substance subsistence farmers in Africa and others and you know they are many of them as you have seen are still in the 19th century so do you think they they should get the infrastructure that we have in the 20th or is there a possibility of leapfrogging that they did in telephony and if so what would be that infrastructure what would be the system that will you know empower them and get them out of poverty for the energy yeah one thing that really as irritating to me is when people think oh let's just get Africa to use clean energy you know that get them they are rounding there of emissions if they need to build hydro dams let them build those those dams and yes the the reservoir causes methane emissions it's fairly big numbers but Africa should not be constrained they should do whatever it takes to reduce malnutrition and starvation and and so [Applause] and people get confused they think oh let's let them have little lights at night well you don't create any jobs the amount of electricity required to create a job that is not intermittent electricity that is electricity that's there all the time so just you know cheap solar panels which is great that is no solution they need grids they need you know rather large amounts of power yes I hope that we have some breakthrough that their relative lack of installed base makes them a good candidate but if you really say who's going to add energy capacity in the next 25 years that's India and China you know China still has one doubling left if India is on a reasonable economic growth post they have a factor of 4 that's right still to increase you know sub-saharan Africa is the eventual problem but this problem should first be solved in China and India with examples from the the richer countries and then we can map it on to Africa so I'm not seeing many things that that are like southla homes where they completely obviate the need for a grid for for example now if somebody has that invention hallelujah terrific on that hallelujah note thank you so much for being here and you have a standing room you know only out here let's thank Bill for being here and sharing his top [Music]

Channel: Stanford ENERGY

Views: 227,000

Rating: 4.7653904 out of 5

Keywords: bill gates, renewables, natural gas, dual challenge, solar, wind, carbon tax, energy equity, climate, decarbonization, industry, steel, cement, airplanes, fertilizer, plastic, grid-scale energy storage, grid-scale storage, innovation, nuclear power, fusion, modular reactors, mission innovation

Id: d1EB1zsxW0k

Length: 36min 12sec (2172 seconds)

Published: Sun Dec 02 2018

Reddit Comments

[u/dmdbqn]

Helpful timestamp from the comments

9:00 Gates restates Vaclav Smil observations on Tokyo energy requirements. "Tell me what battery solution is going to sit there and provide that power?" That's nothing that doesn't solve the reliability problem.

9:37 "Clean Energy" and the narrow perspective of recent clean energy conference. What about manufacturing of steel? What about flying planes in the sky?

11:23 The idea "we have all the tools" and utility people are blocking climate progress because they're evil people are more of a block on climate progress than climate denialism.

11:50 You need nuclear fission or fusion running 24/7. If renewable then need a monster miracle in grid storage. A battery you only need once-per-year but is cheap (for rest of year).

13:00 Transport problems other than cars. 24% of emissions are agricultural and meat. Very difficult. Is why Gates funds "Beyond Meat" type products.

15:00 Magnitude of problem if people think biz-as-usual and carbon can be captured and stored (on top of biz-as-usual).

16:11 Improving photosynthetic efficiency. Factor of 2 to be had.

18:40 Nuclear. Cost competitiveness.

20:10 Nuclear safest form of energy per output. Today's designs pathetic, needs to be redone for digital age. So no pressure anywhere. 4th Gen Nuclear, TerraPower is ONLY well-funded project. "Nuclear in China is cheaper than coal."

21:45 We shut down FFTF, and China is building needed test facilities (nuclear).

23:00 What possible reward do utilities have for taking risk on new energy technologies?

23:38 Anything you do in energy today won't scale up until your patents expire.

24:00 Fusion economics is hard. Fission has neutrons that degrade material is toughest part of Travelling Wave Reactor (TWR). Fusions neutrons far more energetic.

28:10 No big play fission companies, but in fusion quite a few. Some look sketchy but thank God they're trying.

[u/lesslucid]

So many interesting things here, but I think the thing that stuck out to me was what he said about a carbon price in the rich countries: most rich countries can probably be persuaded to pay one, but no figure that anyone is talking about is "within a factor of 100" of being a true Pigouvian price mechanism. That's... not encouraging.

[u/hippydipster]

I can tolerate maybe 1 in 10 videos, given how slowly they provide real information. This was one of them, thanks.

Also, all I can see is Woody Allen when I watch Bill.

[u/hippydipster]

"The climate is easy to solve group is our biggest problem". Shades of The Three Body Problem, where the biggest problem to humanities future was undue optimism.

[u/BluddyCurry]

I'm in awe of this man. He's gone from being just a tech billionaire to being the most generous and important person in the world. If anyone nowadays has a chance of being in the history books 1000 years out (as Sam recently mentioned in his ama), it's Bill Gates.

[u/SomeRandomScientist]

I remember in November there was an insane amount of private security on the Stanford campus - way more than I had ever seen. Now I understand why.

[u/bigfasts]

Yeah, Gates is 100% correct. If you think solar/wind/other feel-good "green tech" is going to save us then you're effectively a climate denier. Even "clean coal" makes more sense mathematically than trying to run the grid on sun and solar.

[u/BatemaninAccounting]

16:11 Improving photosynthetic efficiency. Factor of 2 to be had.

Like... we're gonna eventually get there as long as it is physically possible in the realm of universal physics. The only reason we're not there yet is we haven't spent the money and brain power on it.

[u/Tylanner]

Strawmanning everything in the first ten minutes.... modern solar/wind/battery technologies and infrastructure are the result of financially incentivized innovation which he denounces as backwards.

Is there a groundbreaking technology on the horizon (SMRs or fusion) that could be a game changer? Absolutely....but we cannot afford not to have layers and layers of insurance policies in the case that we don’t get there. Nuclear is hard to do right and will never get easier without cutting edge design enhancements, regulatory reform and massive capital injection.

He doesn’t seem willing to accept that changing how we live might be a part of this...that someday Tokyo might need to shutdown during a typhoon....geniuses innovating is exactly how we got where we are today....