Exponential Energy | Ramez Naam | SingularityU Portugal Summit Cascais

you Jeff fobb oh god oh thank you everyone it is an honor to be here I have fallen in love with Portugal in the last few days that I've been in your country so today I am going to talk about the disruption of the largest industry on planet Earth you've heard something about health care from Divya today that's a four trillion dollar industry energy is a six trillion dollar a year industry so I'm a software guy who came into energy late in life but now among other things I am the co-chair for energy and environment at singularity and I'm an investor in early-stage energy startups trying to create the next Tesla's and solar cities and so on but energy we're talking about today not just because it's an economic issue or a business opportunity but because it's a moral issue we are in the 21st century we are living in a science fiction world and yet 1.2 billion people on planet Earth don't have access to electricity and those people who live in energy poverty in the darks areas of this map it drains their personal development the quality of life their health longevity and the development of entire societies on the other hand we have this problem of the way that we produce energy has these negative side effects like the warming of the planet the planet has been getting inextricably warmer you see it's a noisy system it bounces up and down but as you zoom out in the large view three of the last four years set records for a new all-time highs nine of the 10 warmest years on record have been in the last 10 years that's what's happening so this is a serious problem and then a third issue which is here in Portugal energy is also an economic issue because Portugal has one of the most expensive electricity costs in all of Europe that this is 2017 in 2018 now Portugal is number two in electricity cost only a second to Germany now the good news on all three of these is that the way that we produce and use energy is being disrupted now we use this word disruption a lot sometimes we mean something sort of trivial uber for cats I don't know but that's that's not what I'm talking about let me show you what disruption looks like in energy this is Peabody Coal Peabody Coal largest private sector coal company in the world or it was in 2011 and then over a four-year period Peabody Coal collapsed it lost ninety-nine point eight percent of its stock price and then went into bankruptcy and it wasn't just Peabody we had eight large global coal companies that all went bankrupt in a six year period the global index of publicly traded coal company stocks dropped by 90% it bounced up of this was only 75 percent down right now and this disruption of this industry didn't happen because we stopped using coal entirely we haven't not yet we will but coal today is still the number one source of energy on planet earth but what happened was that for a hundred and fifty years since James Watt steam engine the use of coal went up and up and up inexorably until 2013 when coal consumption around the world peaked and what happened to these companies like Peabody is they thought demand would keep rising so they took out expensive debt to build new coal mines new railways new ports and then demand stalled and went downs the cost the price of coal they could get went down and they couldn't pay off those debts and they went into a downward spiral that ended in their collapse now many factors led to that decline of coal efficiency was probably the biggest one cheap natural gas was one but now that has been surpassed by what's happened in clean energy so we'll start with wind wind power you know well here in Portugal energy in general is a fungible resource it's one who will buy the cheapest version of it that they can so for wind power to really grow on a global scale it has to be cheaper than coal or natural gas fossil electricity and most places in the world you can build a new coal plant or in your natural gas plant reduce electricity at six US cents a kilowatt hour five euro cents a kilowatt-hour but for the longest time wind energy was ridiculously more expensive than this here's data from inside the US and you see us back in 1980 wind power cost almost 60 cents almost ten times what electricity from coal or natural gas did now in the u.s. we sign wind power contracts at less than two cents a kilowatt hour and that's subsidized remove the subsidies for cents one-third cheaper than new coal or new gas in the u.s. even with no subsidies gone by the way Portugal part of the challenge we have unfortunately most of you know is that Portugal deployed a huge amount of wind power when it was further back on this curve when it was very expensive and that is the hangover of subsidies that you have impacting the country now but that is some cost that has happened already the question now is what we do in the future and now what we see is around the world not just in the u.s. wind power has grown incredibly cheap Morocco last year 2.8 cent wind power half the cost of coal or gas Brazil earlier this year two cent wind power Mexico 2 cent wind power is there unsubsidized prices one-third the cost of coal or gas around the world you see country after country the cost of wind power electricity dropping below that red dashed line which is the competitive price of coal or gas in most parts of the world now of course this price decline depends upon how much wind you have around the world so you see on every continent you have some area with these dark red very fastest winds on earth and if we zoom in a bit we'll see that here in Portugal you have substantial areas of very high-speed winds and so now we are starting to see wind power prices come in at just over 4 Euro cents 5 US cents and the very cheapest deals on the iberian peninsula including here in portugal just the very beginning these are just prices we've hit in the last 12 months so for a long time we've subsidized it now we're able to reap the benefits because those subsidies helped scale the industry what we know about wind solar batteries in fact every exponential technology is they have a learning rate this is what's a first exponential every time you double the scale of these industries you bring down the costs the cost of wind power drops about 20 percent every doubling of scale so you have this virtuous cycle at first a new technology whether it's 3d printing or stem cells or AI is simply too expensive to use in most applications so you find some market that it works in and that lets you scale the industry and unless your prices come down a little bit and when your prices come down a little bit you find another market that will buy it at this new price and that in turn increases demand for your product and when your demand goes up your prices fall again so we've seen carbon fiber has gone through this cycle gene sequencing has gone through this cycle and wind power solar and batteries are all going through the cycle right now as we build these bigger and bigger wind turbines we also gain advantages up high the wind is more steady and if you double the length of a wind turbine blade you quadruple the area that it spins to that also makes wind power not just cheaper but more steady we think about the steadiness the reliability of an energy source in terms of its capacity factor 100% is it's on all the time 10% it's only on one tenth of the time we used to deploy wind turbines at a capacity factors of 10 or 15% now in the best sites on land we're getting above 50% capacity factor that's higher than the capacity factor of the coal fleet in China or India now if you really wanted the fastest winds on earth you'd go offshore because the fastest winds are not on land they are offshore but for decades even as recently as three years ago two years ago I thought this would never make economic sense because building offshore is very expensive you have to have an undersea component of this you have to maintain it in salt water you have to run crews out on boats to fix things so I would have told you two years ago it's never going to work economically I was wrong last summer we had three bids from two companies in the German market in the North Sea were they bid zero subsidy they bid they would produce offshore wind power with giant new turbines at wholesale market prices to give you context here's what's happened to the price of offshore wind that blue line is major optimists about clean energy Bloomberg New Energy Finance and what actually happened exceeded even their expectations of four times reduction in price with the first of these projects coming on to production in 2021 and that's in the North Sea in Portugal the winds are not quite as fast as the North Sea offshore the North Sea has category seven winds but there are category six winds here and offshore wind is gonna keep dropping in price and you are gonna see offshore wind in the areas off Portugal be competitive with wholesale electricity and have capacity factors of 60 or 65% so this is a major evolution but what look makes wind look slow and stagnant even more exciting is what's happening in solar power Jeff told you this this morning the price of a watt of solar panel has dropped from 77 cents a watt to 30 cents a lot over the last 40 years this is physical infrastructure this is how we make energy the most important physical resource we have yet we don't see this in the cost of building buildings or building trains or building trucks it's almost like digital in a physical sector right not quite digital as dropped in cost 10 million times since then but this occupies a middle ground and so now we have in the sunniest parts of the world cross over where solar power unsubsidized is just the cheapest energy you can buy period and is dropping and fast dropping in cost the fastest so again six cents for a new gas or a coal plant in most parts of the world India 3.8 cents solar 2.4 rupees multiple times we've hit this price the cost of India has dropped by a factor of four in just the last four years in Tucson Arizona in the u.s. about a month ago Warren Buffett his utility signed a contract for solar at two point three cents per kilowatt-hour less than two Euro cents that was subsidized so really unsubsidized we've got three point three cents solar at half the cost of coal maybe a more than a third down from the cost of gas the price of 20 years solar contracts in the US has dropped by a factor of eight in the last ten years in Mexico this is out of date we're actually getting close to two cents in Mexico and Abu Dhabi this is actually on my favourite photos of all time we have in one of the oil capitals of the world solar being built at 2.4 cents this actually held the world record for cheapest unsubsidized solar for more than a year until Chile beat this it late last year or actually early this year at two point one five cents one-third the cost of coal or gas less than that gas is expensive in in europe and latin america one quarter of the price of gas so everywhere around the world every country you see the price of solar just plunging plunging plunging it started off much higher than the cost of wind actually but it's plunge and is breaking through those lines of coal and gas prices unsubsidized in different parts of the world and so in the sunny banned solar is now basically the cheapest energy almost everywhere and it will expand from there north and south over time now I told you 1.2 billion people don't have electricity where do they live Africa India South Asia a little bit in Latin America so those people live in some of the sunniest parts of planet Earth and they will have in the long term some of the cheapest energy on planet earth and we didn't plan it that way but I think that is a great bit of poetic justice so driven by policy and innovation Solar has exploded this is a log scale 50x growth in the last 10 years it took 25 years for solar to get to 1% of world electricity it took two and a half years which is 2% it's that's where it's at 2% it's still tiny solar is still a tiny tiny miniscule part of energy but it's growing exponentially quite rapidly and it also has this feedback loop right now solo really got a start here in Europe it was really Germany and at some extent Italy and Spain that heavily subsidized solar and if you look at Germany Germany is not where you would naturally decide to put solar panels all right Germany is about as sunny as Canada right but the German people thought it was the right thing to do and now they are suffering the reason that Germany has the most expensive electricity retail in Europe is because they are paying off the cost of deploying a very large amount of solar when it was 10 times as expensive as it is today in a place with a sunshine of Canada but the German people gave a gift to the world in the same way that Portugal didn't win they started that virtuous cycle spinning which brought the costs down and now in Portugal wind has become cheap enough to re-enter without subsidies and now in Germany even they are able to eat the benefit again because now just earlier this year we had solar power bids in the south of Germany at an incredibly low price 4.3 euro cents a kilowatt-hour about five US cents a kilowatt hour that's less than the cost of coal and way less than the cost of gas in Germany not a sunny place and so you see here's what's happened with our German solar auction prices over the last 2 and 1/2 years they've dropped in half now what does that say about Portugal because I will tell you that the least sunny place in Portugal is sunnier than the sunniest part of Germany and so we will see prices come down and in fact just this year we have seen the first unsubsidized solar projects happening in Portugal they're still actually they're about the same price as those German projects maybe even a little bit more but as the industry scales locally you should see below for US cents maybe three and a half US cents for a solar if we can learn from what the Germans have done and this neither of these prices about wind or solar these are not endpoint prices this is the most expensive solar will ever be from now on is today solar should drop in price by another factor two two three over the next 10 to 20 years and wind should drop in price by 30 to 50 percent offshore wind should drop in price by half again so we will keep seeing these prices decline now it's true that we do have some challenges of the solar and wind a fossil asset is dispatchable you can decide when deputies electricity with solar what happens with the Sun isn't shining half today or what happens with wind if the wind isn't shining well it turns out the best thing you can do is actually put them together here's a perfect day in California at noon the sun is shining your your solar output maximum and then statistically the wind blows more at night well he located over the course of months of a year in Germany you see the solar Peaks in summer in June July and the wind peaks in winter and so they're complementary and in fact if we get even more granular you can see in the US day-by-day average out over 36 years the solar compensates in the summer for the low wind and the wind compensates in the winter for the low Sun but the thing about this is the US is the size of a continent more or less and the best way to get this complementarity or even to get reliable wind or reliable solar is to build grids the size of continents so if it's cloudy here on a certain day it might still be sunny somewhere else or if it's winter and you decide to deploy more solar and there's less Sun in Portugal you can get wind from the North Sea or something like that and so the future for electricity in Europe can't be a set of energy islands it needs to be an energy continent that integrates and Europe has started on this there are interconnectors between all of these nations but it's really still a set of islands with very very small bridges from island to island and it needs to become more of a superhighway linking these places and with that you can get to 80% maybe overall electricity produced just by solar and wind and smart balancing of them but to go further to close the loop we need to crack this and this energy storage is now the most exciting area in clean energy we've some clean electricity all right let me show you you all know who this guy is who is he you all said Tony Stark right okay Ilan sometimes acts like he thinks he's Tony Stark but the point I want to make is this he's not and it wasn't some magical creation of the arc reactor that allowed Tesla to start selling this product the tesla powerwall instead it was that lithium-ion batteries are also an exponential technology let's look here's what's happened to the cost of batteries since 2010 they've dropped by a factor of five 80% in fact this year it looks like they're already about a hundred and fifty dollars a kilowatt hour so really they've dropped by a factor of 86% by a factor of six something like that they are just an exponential technology with dozens of companies going after this and here I will say I'll come back to the same a lot forecasters completely missed this exponential trend forecasters think linearly where technology advances exponentially let me show you here's a set of forecasts made for it what the cost of batteries would be as made in 2013 and the yellow line there is the US Department of Energy and if it's gonna be amazing we're gonna see by 2048 35 years the price of batteries will drop by about 35% 1% of your awesome huge innovation here's what actually happened all right we have status quo bias we are humans we evolved in a period where no technology change happened at all and so that's just how we think so we make forecasts that assume technology barely changes when in fact technology changes exponentially now batteries are still expensive actually two round-trip a kilowatt hour of electricity into and out of a battery is maybe 15 cents a kilowatt hour now that's way more expensive than natural gas or coal or a solar or wind but they're still dropping rapidly but that is actually cheap enough to do some powerful things because behind the scenes the price of electricity fluctuates throughout today and in places that have a lot of solar what you see is the price is super low maybe 2 cents in the middle of the day now but then as the Sun starts to set and people are still going home turning on their appliances their air conditioner demand is still high and supply of from solar is dropping so the price shoots up and so now people want to fill those late afternoon early evening hours so in Nevada sorry in Arizona in the US a utility wanted power from that 4:00 p.m. to 8:00 p.m. block that was their new peak load so they put out an auction for this and normally this would be natural gas the US has cheap natural gas there is no doubt natural gas natural gas natural gas is what would have won this but it didn't first solar a u.s. solar company that makes its panels in Malaysia won this bid with solar plus batteries made in China in Arizona right because they are cheap enough to fit the wholesale power price at that time and from here they will just keep growing and keep dropping and cost and in fact we see they drop in cost at the exact same pace as solar more or less and that's just one energy storage technology behind with you my own batteries there's dozens of additional battery technologies I'm an investor in a couple of them here's ones the company I invested in called ESS they make a flow battery it's gigantic it's heavy you would never put it in your car in your pocket because it would just be too bulky but a lithium-ion battery might be good for a thousand charge/discharge cycles that's why your phone battery starts to get really bad after a few years of owning it right this is good for twenty thousand you can deploy this at grid scale for 30 40 years and that makes the cost per usage lower so batteries too will keep dropping in prices and we will see them hit a few cents per kilowatt hour now I want to come back to this notion that forecasters have just missed this trend you saw Jeff yesterday talked about a chart like this that you with we make linear forecasts we see new exponential technologies and at first they're extremely disappointing wind is too expensive Solar is too expensive batteries are too expensive but if they're improving exponentially they hit a crossover point and then they scale in ways we would never have believed and it looks like a surprise right so here's a that most classic version of that is the world's leading spirt on energy is the IEA the International Energy Agency part of the OECD and let me show you how they have forecast solar year every year versus what has actually happened see a black line growing that's what actually happened and the colored lines are the ie as forecasts year over year that they're always not just getting it wrong they're always playing catch-up to what's actually happening right every year what they're actually doing is they're making forecasts of linear growth rather than expedition are who thinks that 2017 for CAF actually looks pretty good right they're starting to get it maybe let's put that in another context let's show you this is their forecast for a total amount the world live installed throughout history let's make it a forecast of how much will the world install new each year and of course every year they change with that forecast is and what happens is this every year they basically say solar has hit the peak of the amount will ever install and from here on out its linear will just keep in song the same amount henceforth forever but the actual growth is exponential right it's like someone decides that last summer it's like some analyst is looking at their spreadsheet for each year and hitting ctrl-c ctrl-v to move the formula to the next year more or less that's more or less what's happened they guessed linear flat growth zero growth actually when the actualities exponential now that last forecast 2017 this is there a two degrees scenario forecasts they say if the world gets super aggressive on policy maybe we could hit that in fact that's slower than the industry forecast of what will just happen with no changes in policy around the world here's a different sort of a retro cast as a historical look rather than a forecast this is Alliance Bernstein they're a private equity firm and they put out a fork or a report with this chart looking backwards they put this out at 2013 or 2014 and across the bottom they have coal gas and oil basically and then what's that on the upper right that gray line is it someone's kid took a crayon and scrawled on their parents report we don't need that much light anyway is that what happened some of these kids that Oh mom I'm just gonna like no that's the de sóller coming as a 70 year chart it's the cost of wind that's the cost of batteries coming down that is what disruption looks like right and so now we see it last year China scrapped plans for a hundred and fifty planned coal power plants 40 of them the ones in red had already started construction billions of dollars spent and just written off right India and one month last year in June cancelled eight point nine billion dollars in coal investment and the reason they gave was clear as day the cost of solar is in freefall why would he build coal now alright so this starts to look like a Kodak moment for the industry that used to be a good thing I guess but that's though that's not far enough that's comparing the cost of building new solar versus new coal or a new gas but we already have thousands of coal and gas power plants around the world what happens to them alright well earlier this year the CEO of NextEra operates Florida Power & Light a large utility in the US had this to say he said that by the early 2020s building new solar or wind would be cheaper than operating their existing coal fleet that's crazy that's what's actually happening we can see it in analysis here's the cost of coal operating cost not the capitalist what's the OP X and here's the cost of new solar that is a real disruption alright and that will take a little bit longer to come to Europe it's not as sunny here as it is in the south of the US but it will come now because of the times and because of where I'm from I do get asked about this guy right and the good thing about Donald Trump there's a good thing about Donald Trump which is he's only the president knighted States and the president United States can't change the laws of economics and really can't change much about the pace of global innovation so in the first eight weeks of Trump's presidency the u.s. shut down more coal plants than in Barack Obama's first four years and we had a survey done routers did Reuters did just about a week ago of utility CEOs in us but what are their plans on coal and they all said unchanged we are continue to shut down shut down shut down that's what's happening all right all of that was just about electricity but there's this other way that we use trample you we use energy which is to transport us and our goods are out and that overwhelmingly we do with oil and oil is this incredibly important commodity that's also incredibly volatile to trillion-dollar commodity that gyrates from $30 a barrel to a hundred and fifty dollars a barrel over the last 20 years and that's happened because of a 2% swing and supply demand a 2 million barrel a day supply demand imbalance in a hundred million barrel a day market that's crazy but that's how volatility isn't right now it's high but it's basically impossible if it's a short-term price of oil because of this but I think we can predict the long-term price of oil and the long-term price of oil will be low because we will be using less of it coal demand peaked in 2013 oil demand will peak I'm not the first to say this or even the tenth of the hundreds actually the first person in here who said this was the Saudi oil minister during the OPEC crisis Sheikh Ahmed yamani in 2000 said this to his fellow sheiks he said guys the Stone Age didn't end for a lack of stone the oil age is going to end with oil still in the ground saying the world is going to invent better technology we directed bronze we're gonna invent better technology and that's a threat to us to Saudi Arabia all right it's a threat to any well producer and now we see it's not just one technology it's three it's using apps to call rides as a service and pay for rides rather than pay for cars is capital its self-driving and it's electrification and those three together are greater than some other parts let me show you calling rides paying them as a service has changed everything taxis in America peaked at one point four billion rides a year uber and lyft will do 4.2 billion this year that you can just take a market share they grew entirely new markets by being more convenient more reliable and cheaper and that matters because when you pay by the ride electric gets an advantage as we'll see and in fact goober and lyft grew in part because they are typically priced about half of what ataxia the tax is about 350 a mile in the US and uber is about a dollar 50 a mile that helps right okay second autonomous driving autonomous driving is almost here it's very very close now these things will simply be better drivers than us in the same way that AI has beaten us in chess in go is about to beat us and reading x-rays and MRIs it will just beat us in driving and we see that right now two companies way mo which is Google and Cruz which GM bought for a billion dollars are both on the cusp of large-scale autonomous uber like fleets now people say is that really true how do you know well I can quantify it I can quantify how safe these vehicles are we use a metric because called miles between diss engagements how many miles does the vehicle go before it has to ask a human for help and if we can hit about 50,000 miles between diss engagements that's five person years of driving and we think that's good enough so in California we have to get data given to the state for the tests that are done and last year in the second half of 2017 wham-o drove 7500 miles between human dis engagements by November they were up to 30,000 miles between human dis engagements then in March that had a beta going in Phoenix Arizona in March this beta that has 400 families can use an app to call away mo they took the human safety driver out in May they announced at Google i/o Google's big conference that by the end of this year they would have this commercially available in Arizona now it's October it's getting pretty late in the year they might not make it but even there are six months late or a year late this is happening meanwhile GM crews GM bought this startup for a billion dollars when I was a year old Softbank just put another two and a half billion dollars in hana to another billion dollars in valuated twelve billion dollars and they say by end of next year they'll have a commercial fleet running so how does that intersect with it with the other trend well and Luber is half the price of a taxi about 50 a mile half the cost of an uber is the wages of the driver in 75 cents a mile but then those ubers will all be those autonomous way Mo's and GM cruises that's an electric vehicle it's a Chevy Volt basically they will all be electric unit electric is just cheaper per mile per kilometer we've already seen what's happened electric vehicles have changed this is an Eevee of 12 years ago right who would want to drive this thing nobody but Elon and Tesla disrupted this and most disruption you heard david roberts say most destruction comes in from the low end right but Elon came in from the high end he had a secret plan for how he would disrupt this industry it was so secret so important to him to maintain the secrecy around this that he put it on a Tesla blog in public and it basically says here's what we're gonna do he says basically this diagram he says look we're gonna change the world we're gonna save the planet and we're gonna do it this way we're gonna make a quarter million dollar sports car we're gonna sell a few thousand of those okay that's not very world changing all right but that's gonna get us to an $80,000 luxury car we're gonna sell hundreds of thousands of those okay still not very world-changing that's gonna get us to a $35,000 family cars so a luxury sedan but a low-end luxury sedan we're gonna sell millions of them by the way this is now the best-selling vehicle in its class in the u.s. not against electric but against all vehicles of this category if you will now Tesla you know they're just one company they're having some challenges they might go under and I hope they don't I'm a big fan of tests I want to survive but if Tesla went bankrupt it would not change what's going to happen transportation because now every company in automotive is going after this volkswagen spent twenty five billion dollars earlier this year just as a secured battery supply for their next few million vehicles GM announced earlier this year they had an all-electric future all right Toyota is moving into it Nissan is already there and EVs are still tiny half a percent of all vehicles on the road by the end of this year still very very small but the first million V's took about 20 years the second million TVs took 18 months the third million EVs took eight months the fourth million Eevee's took about five months that's the pace of growth and again the forecasters missed it here's the u.s. run of energy again here's their forecast for how many electric vehicles would be on us roads with a hundred mile range blue line or 200 mile range red line twenty thousand by 2040 how many model threes has Tesla pre-sold half a million one manufacturer in 2019 will deliver 25 times what their forecast was for 2040 for the entire industry and so you see now all of the forecasters out there energy companies analysts IEA are lifting their forecast you see the IEA increased their forecast by a factor of five over the last two years from 2016 to 2018 you have exxon has boosted their forecasts OPEC has lifted their forecast actually one of the more optimistic ones BP is listed their forecast strongly even Bloomberg which is always an optimistic has lifted their forecast to 600 million electric vehicles on the roads by 2040 and if you play these out what it says is that peak sales of gasoline cars will occur by 2023 but even that's missing the point because the way that people will in will experience a much a car for most people is not going to be buying one it's going to be calling a service that comes up with electric because electric vehicles while they're more expensive upfront are already cheaper on a per kilometer basis let's look at that here's a four year cost of ownership of an electric vehicle versus petrol in London from a study earlier this year here's the gasoline vehicle see it's the blue bar is how much it costs to buy it and the orange is the fuel here's electric costs more upfront today but the electricity costs almost nothing also the maintenance costs almost nothing I will tell you so already on a per kilometer basis the electric is cheaper and so if you're paying if you're buying upfront you might say well it's cheaper upfront for the gasoline car but if you're calling an uber are you going to pay for one that's more expensive and also is noisy and and sort of a little stinky or you get the sleek modern futuristic one does very comfortable all right and cheaper now this is the most expensive electric vehicles will ever be what's the most expensive part of an Eevee the battery so what happens as we sell more electric vehicles we sell more batteries what happens to battery costs they go down battery costs go down what happens the cost of whole v's they go down so what happens to the sales of EVs and over and over and over again and ultimately they will be much cheaper even up front than gasoline vehicles and here's why this is the entire engine and drivetrain of an electric vehicle simply it's a Tesla alright here is the engine and drivetrain of an equivalent gasoline vehicle has ten times as many moving parts so maintenance cost is higher and manufacturing cost is higher the only reason this is more expensive than this today is because electric vehicles we made at small scale and batteries are still a bit expensive and electric vehicle scale is growing and batteries are clenching in cost so ultimately they will be cheaper not just operationally but upfront don't just take my word for it let's ask for it here's what Ford says Ford did an analysis and they published this in a press release Ashley last year and they said when we look at how much we have to invest per vehicle we look at here's the factory space we need electric as half as much here's the capital cost to build the factory electric as half as much here's the total labor hours per vehicle electric for the drivetrain is actually one-fifth as much eighty percent cheaper but electric vehicles the seats and the panels and the windows aren't any cheaper so their overall cost 30% lower for labor so when you add that up what you get is this it's not that electric vehicles are going to be 20% cheaper per mile it's that they're going to be less than half as much per mile as internal combustion and so again well a this plus autonomous will boost ubers or way Mo's or cruises because it'll be so cheap and that in turn will boost electric alright and so if you play this out what multiple different analysts include fossil fuel companies have found is that the cost of an autonomous electric vehicle will not be 350 like a taxi or 150 like an uber it'll be 35 cents a mile 20 cents a kilometer and that's basically competitive with buses and with trains and that's for a single occupancy vehicle if you make that a shared vehicle where you have multiple people inside of it like a small bus for instance and every country I go to there's one of these you get to ten or fifteen cents a mile six to ten Euro cents or six to ten US cents a kilometer all right and so again we miss this huge exponential because as you cross those tipping points consumers switch behavior how fast well we don't know but here's one piece of data when uber dropped its price from 360 to 150 fifty-eight percent price reduction their miles driven went up by a factor of eight and so we have this massive potential if you look at forecasts of Eevee growth that's the blue line it's an aggressive forecast but not totally implausible but what's going to happen is that miles driven kilometers driven and EVs will rise faster because the internal-combustion car will sit around as you take these cheap autonomous electric vehicles to work and that looks like 15 million barrels of oil demand destroyed quite rapidly and now council new vehicles two quarter of all oil consumption but as we go through the rest heavy trucks they're getting there they're one of the harder ones light and medium duty trucks they are basically on the verge of crossness as well lubricants half of all lubricants go to cars electric cars basically don't use lubricants whose engine oil at all anyway so you end up with a high risk of disruption for about a third of all oil and a higher medium risk of disruption for more than half of all oil and now oil majors are seeing this too I spend a lot of time with oil companies in Europe more than in the US but both total says peak oil demand 2030 statoil says sometime in the 2020s are equi nor is there a new name shale says sometime between 20 21 and 20 31 the IEA says Ashley oil demand will keep growing forever Bloomberg New Energy Finance says this is what will happen I actually think Bloomberg is being sort of overly optimistic with a short term they're saying 2020 I think I find that hard to believe but they're under estimating the long term we know about Exponential's if they start off slow and a scepter then they get bigger and bigger and bigger so I think the real shape of the curve messing the actual numbers but the shape of the curve looks more like this all right I want to close with how can you take action in a market that is being disrupted so fast well the Chinese character for crisis some people say as danger plus opportunity it's sort of an oversimplification but it's close enough to that and we have massive danger I've barely even talked about climate change but the longer we wait to start decarbonizing in a serious way the steeper we have to decarbonize it gets harder and harder to stay in or two degrees Celsius right and the flipside of the idea is if we want to decarbonize if we want to say under two degrees Celsius of warming about three-quarters of the world's known resources of oil coal and gas can't be burned so that becomes a stranded assets sunk cost how big is that well city those hippies at City say the total cost of unburnable resources plus power plants that are stranded and so on is a hundred trillion US dollars not a hundred billion that's small a hundred trillion US dollars you ever seen a number so big in disruption there are losers but there are also winners so I'm going to give you a few pieces of advice of what you can do to avoid losing and hopefully win in this transition and the first one is very very technical it is this cover-your-ass like hedge your bets because you didn't want to be caught holding coal stocks when that happened to coal and the price of oil is quite high right now but no one wants to catch a falling life number two here in Portugal if you have a factory an office building a mall reduce your costs it is now going to be cheaper for you to put solar on your roof and you'll get more and more rights to do so than it will be to buy or eat eletricity for quite some time number three yet energy-independent despite portal is one of the leaders in clean energy half of Portugal's electricity comes from fossil fuels and Portugal still imports six six levers imports are crude oil in fact in total 75 percent of Portugal's energy is imported and there's no problem with importing samba to be exporting at least the same amount yet at least energy interdependent where your exports and imports are similar or in fact use it as an opportunity which I'll talk about in a second for learn from other nations that have made market reforms the blue dots are an old way of doing business in solar and wind and the red dots are movement to an auction model with these long term contracts called ppas it's a policy change that sweeping the world and portugal is only slowly getting into that and that by itself has a massive impact on prices and five energised your economy and you can do this in two ways you have sunk cost of what's happened to fund wind up until now maybe a we negotiate those contracts I don't know but those subsidies will eventually end and those taxes will go away and your prices electricity will drop but beyond that if you look to the future pour chill is one of the sunniest places in Europe which means in the long term it should have some of the cheapest electricity in Europe and that cheap electricity should attract businesses should attract manufacturers should attract energy hungry companies and what's more than that is you have an opportunity if we're building an energy continent Portugal has an opportunity to be exporting solar to its neighbours France Germany the UK that all badly need it in the summer and finally invest in the future the world is going to spend tens of trillions of dollars deploying clean energy and clean transport solutions there's many ways to invest in that told you I invest in this if you're curious you can look me up there's ways for you to join me in investments and I will end on a philosophical note you heard Jeff talked about the krei in your pocket here's my version Iowa - the University of Illinois urbana-champaign that's iliac second digital computer ever built larger than this auditorium weighed tens of thousands of kilograms drew tens of millions of watts or tens of thousands of watts of power and next to it is an obsolete piece of technology iPhone 6 this phone weighs tens of grams it draws thousandth of a watt of power it is tiny and it is billions of times more powerful in iliac so what I want to ask you is this philosophically how is that possible how can something that is smaller and draws less energy and lighter do so much more isn't that a violation of conservation of energy or conservation of mass or something isn't that breaking the laws of the universe in some way and my answer is this this object is not made of matter this is not made of glass or silicon or rare earth metals or plastics this is made of ideas this is made of information scientific discoveries engineering discoveries software advances and knowledge ideas have a radically different economics than matter they have a positive some economics if I throw this phone down I'm not going to but if I do I will no longer have a phone but we will still have all the knowledge necessary to make all the phones we want and in fact it's better than that if I've given you an idea today I am no poorer and if we exchange ideas we both have more of them and our ideas meet and collide and give birth to new ideas that can replace the most scarce matter or labor or land ideas are the ultimate multipliers of the value of all other resources and they are the one natural resource we have that is always growing in number rather than declining and that is what makes me an optimist thank you very much [Applause] all right Thank You Ramez we have some questions for you all right and I think we have a few minutes for them are you ready I'm ready okay excellent we're gonna take a couple off the top here so the first one I like it I'm gonna build on it a little bit you've been asked how much time do you spend with policymakers hmm and I'd like to broaden that and also ask how much time do you spend with some of the big establishment ease and what kind of response do you get yeah so I spend time with policymakers though I'll be honest I spend more time with innovators and startups because they're a little bit easier and more fun to work with but but there are some amazing policymakers out there and I do try to spend time with them and I spend a lot of time with big energy companies we're both big utilities and big oil companies and I'd say the response overall is positive in it it varies between who the person is but people get this their response is different than it was I started talking about this in 2011 and the response that I put in the US was to scoff in Europe who are a bit further ahead now it's happening and it's obvious and the response is really how do we how do we as pivot how do we make new investments in this area another one that I think is good that I'd love to hear a little bit more on here when we're thinking about the energy future it seems like batteries will play a very significant role in that and that we're going to need to have some advances and how we either recycle or manage the waste produced by batteries can you sketch briefly what that might look like yeah up until now we haven't had a battery recycling supply chain because the number of batteries and volumes has been so small but now you see it happening so for instance Tesla pays a company had put it here in Europe for each battery pack that comes off a Tesla to be recycled and as the volume of electric vehicle batteries is going up every auto OEM except Tesla is planning to use batteries that have been depleted maybe ten or twenty percent in a car enough that a car owner would be unhappy but are still good for other uses use them a second time in buildings and then beyond that we'll get more and more recycling advances what about nuclear I know you filled this question off done yeah but it also pops up often so why does that not figure more prominently in the conversation I love nuclear power and in Europe and the US it's dead and the reason is economics that the unlike every other technology in the show that has a learning curve where the price drops over time nuclear has a negative learning curve but that is to say nuclear has gotten more expensive over time the industry has failed to innovate and they failed to even maintain a healthy supply chain they failed to build things in a repeatable way so nuclear might have a future in China or India but even leaving aside sort of the social fear questions which I do think our problem I do wish that Germany other European countries with nuclear would keep it running but building new nuclear is just not going to happen because wind and solar are out competing it given I I think just yesterday there was another UN IPCC report released it looked very very dire and said that we may have a decade really to coordinate global response and radically transform the economy do you believe that the future that you're forecasting here and the technologies that we're talking about will will be adopted at sufficient scale with sufficient support to actually if not revert avert some of the worst of climate crisis or how do you think about mitigation and in conjunction with this future today we are losing ground today if you just looked at sort of terrain on the ground we're losing to climate change carbon emissions are going up concentrations of the atmosphere are going up I don't think we're going to keep it below we're not going to get below 1.5 degrees Celsius we maybe have a small chance of two degrees but ten years ago the business-as-usual model what the IPCC would forecast was six degrees Celsius of warming by 2100 now the business-as-usual forecast is three degrees warming by 2100 that's that's how we've bent the curve through new technology and I think we'll keep bending it down so I would love to say we're going to come in below two degrees I don't think so but I think we'll definitely come in below three degrees and probably low two point five and I think that has some serious problems but I think humanity is also much more adaptable than we give ourselves credit for it would be more beneficial it'll be a net profit if we just invested harder and but even with that some of the shortsightedness I think we will turn the corner and still be better off for the most part in 2100 even with climate change than we are today one more I'd like to close with you know when every time I interview at one of these events I talk about your background as a computer scientist and a programmer and your work as a sci-fi writer and I know you were a great book on future of human augmentation on the theme of adaptability how did you come to the work that you're doing currently I fell in love with the planet on a beach when I was a software engineer I started reading everything I could I'd written one book before and I thought I'm gonna write a book about this and that got me here but the main lesson I would have from that is you can become an expert in anything today and people ask me sometimes what should they teach their kids I say two things keeps them in a code but then keeps them to teach themselves because today almost anything you want to learn is available to you on the Internet and if you take the initiative you can go become an expert I have never taken a class on energy in my life have no degrees in it and yet I have a decent expertise in the field because you can teach yourself anything today on that note Ramez naam thank you very much jack and thank you all you [Applause]

Channel: Singularity University

Views: 17,828

Rating: 4.9423633 out of 5

Keywords: Singularity University, Singularity Hub, Education, Science, leadership, technology, learning, designing thinking, future forecasting, Peter Diamandis, 3D printing, AI, artificial intelligence, AR, augmented reality, VR, virtual reality, automation, biotechnology, blockchain, computing, CRISPR, entrepreneurship, future, futurist, futurism, future of work, future of learning, genetics, health, healthtech, medtech, fintech, nanotechnology, robotics, Exponential Energy, Energy, Natural Resources

Id: ssfbq7PVktA

Length: 52min 25sec (3145 seconds)

Published: Wed Feb 06 2019

Reddit Comments

[u/Mitchhumanist]

Nice Interesting comments. Raam would land solidly in the optimist camp, and would say that 'it's because the facts have led him there.' For me, the roulette wheel is still in spin.

[u/interbeing]

I'm just going to leave this here.

https://mediasite.engr.wisc.edu/Mediasite/Play/f77cfe80cdea45079cee72ac7e04469f1d

Analysis by Jesse Jenkins, a fellow at the Harvard University Center for the Environment seems to indicate otherwise. Due to storage or long distance energy transfer needs for renewables you hit a level of diminishing returns where costs increase for pure renewables starts to outpace the cost for nuclear. This is because you have to keep installing over capacity to offset the transient nature of wind and solar.

This tipping point occurs at a much much higher renewable energy production penetration than where we are currently, but as we add capacity we will get closer and closer to this threshold. Since our end goal is 100% carbon free energy production, those last few percent are important.

I think it's shortsighted to ignore this and the best approach is to put all carbon free energy production methods on the table, including nuclear.

[u/ItsAConspiracy]

Great video. He's right that the nuclear learning curve has been negative, because the nuclear industry has mostly failed to innovate, at least in the West.

However, that's mainly the legacy industry. There are a bunch of startups working on entirely new nuclear technologies, which would be inherently cheaper and likely have a positive learning curve because they could be built in factories or shipyards. For molten salt reactors alone, there's Terrestrial Energy, Moltex, Terrapower, Elysium, Flibe, Seaborg, and Thorcon.

In the U.S. their biggest impediment is the NRC, which requires several hundred million dollars of design work before they'll even take a look, and then they can flat refuse to let you go forward. It's difficult to get investors that way. But Canada for example is more rational about it, and companies there are making better progress.

Then there's fusion, which actually has had exponential improvement. Magnetic confinement fusion is measured by the "triple product," which advanced exponentially from 1970 to 2000. Then we couldn't move forward without building the giant ITER reactor, and it's still under construction. But now we have better superconductors, and can get ITER-level results from a reactor the size of JET, which was built in four years.

Fusion is also helped by better supercomputers, also obviously exponential. Another possible enabler is powerful fast lasers, which have been getting ten times better every three years. Now we're just a factor of three away from an attempt to use a petawatt laser to get net power by fusing boron.

This is not to say we couldn't do it all with wind/solar/battery but maybe we can do it cheaper. And there's at least one difficulty in Raam's plan: to build a continent-size grid you need lots of long-distance transmission, and building that can be at least as politically difficult as building nuclear. Some projects in the U.S. have been stalled for decades.