 I think you know if you're sticking around by now that you're in for a treat, I'm not sure where in the world you could go and get sharper insight into the global energy challenge than this room with the six people who are going to be up here over the next 90 minutes. Together they're studying technologies in their labs that have the potential to change the global energy system. They're serving in government positions that are setting policies that are extraordinarily relevant to what gets funded and what gets worked on. They are on boards of companies that are some of the hottest names in this area and they are teaching many of you in this room and the next generation of people who are going to decide how all this turns out. So here's what we're going to try to do today. We're going to try to get beyond a group hug. We're going to try to get beyond kind of gauzy agreement that everyone endorses the nirvana of a low-carbon energy system like they endorse motherhood and apple pie. And we're going to try to get into a sharp discussion of the hard questions about why we're not there yet and how we get there. What would a low-carbon energy system that really is economically possible look like? Why aren't we there yet? Why aren't we moving there faster than we are? And how might we change things? You are going to be a big part of this discussion. Richard told you how to use your app. You're going to use it at various points today. So keep your trigger figure ready. We're going to come back to a couple of questions for you in a moment. I'm going to introduce these folks really quickly and then I'm going to take a couple of minutes to kind of frame these issues and then we'll come back and get into a discussion. So Nate Lewis to my immediate left. By the way, I'm not going to do long bios. You all have these bios I'm assuming in your books but I'm going to give you the relevant portion at least from where I sit. Nate Lewis studies electronic noses. That's kind of all you need to know. Arun Majumdar was the founding director of ARPA-E which many of you I think know in this room but has been an extraordinarily interesting and kind of counterinsurgent government agency in terms of trying to get around certain bureaucracies and getting technologies to market. And more recently was appointed as a science envoy dealing with energy in the environment to Poland and the Baltics. So perhaps more about that later. Nancy Fund is a founder of DBL Partners, a venture capital firm which has been investing in this space for many years and she sits on the boards of companies including Solar City and Tesla. Which I think- I don't sit on the board of Tesla. Oh, you sit on the board of Solar City. I was a board observer and our firm was an early investor in Tesla and I'm just clearing the record just because we have a slightly sensitive- That's a relevant point. Thank you. Okay, so we're going to come back to these three in a second but I want to just do three things really quickly. I want to sort of frame things. The first point I want to make is that we are living all of us in an age of energy abundance. Coal, oil and natural gas are at what by historic standards are lows in terms of prices. In fact, you may have seen this yesterday the federal government came out with the news that gasoline consumption in June reached an all-time high higher than the last high which was in July 2007. I daresay that's probably a result of where oil prices are these days. Renewable energy prices are falling a lot faster than most people expected to. Two firsts according to the International Energy Agency in 2015 more than half of all the electrical generating capacity that was added in the world was renewable capacity. To be clear for the wonks in the room that's capacity not actual generation. And secondly in 2015 the cumulative installed capacity of renewables exceeded the cumulative installed capacity of coal-fired generation around the world. A fairly significant development. And lastly in May across the world in Dubai in the United Arab Emirates there was an auction for a solar project which if built as planned would be perhaps the largest solar project in the world and the bid was three cents per kilowatt hour for that energy which is extraordinarily low. So we are in a new era I think it's fair to say in terms of renewables again which we'll talk about more. All right point number two so this is great lots of energy lots of clean energy how are we doing in terms of reducing carbon emissions. So on one hand there are some encouraging signs China and the United States have both pledged new commitments to reduce their carbon emissions over the next 25 or so years in 2015 for the second straight year global GDP grew 3% and global CO2 emissions were flat. That suggests the possibility of a decoupling of economic growth from CO2 emissions at least to the extent that that has been coupled essentially since the start of the industrial revolution. And that same statistic happened roughly in the United States as well. Okay great but not good enough why not good enough. Couple of points of data. In Germany in 2015 renewable energy accounted for 30% of electricity generation 30% and yet CO2 emissions in Germany still rose 1%. Cumulatively there was something called the Paris Climate Conference last December which I think many of you are aware of and there were a bunch of pledges by a bunch of countries that's the technical term and those pledges according to the International Energy Agency add up to an expectation from the IEA that renewable energy will constitute 28% of electricity by 2021 up 5% of points from where we are today. And yet that's not enough to get the world on track to reduce to keep CO2 emissions from getting to a point in the atmosphere CO2 concentrations in the atmosphere from getting to a point that they push global average temperatures above 2 degrees. So more than ever before and still not enough. Last point I want to make. What does the public think about all this? There's some really interesting to my mind polling done by the Pew Research Center every year. And in fact Pew came out recently with a new set of polling and I'm not going to I recommend the whole set of polls to you if you're interested in global attitudes toward climate change but let me just give you a couple of quick points. This is American adults. This was a poll conducted earlier this year. What percentage of Americans think that human activity is causing climate change? 47%. 31% think that natural causes are causing climate change. Okay. And then there are just two more points I want to tell you which to my mind five days before an election are pretty interesting in terms of the extent of partisan division in this country on views on these issues. So what is the Democrat-Republican's split in terms of the percent of Americans who say that the earth is warming mostly because of human activity? Neither of these are going to surprise you. The Democrats, 69% of Democrats say that it's human activity. 23% of Republicans say it's human activity. I want to just give you one last bit and this is to my mind really interesting. So these are percentages of Americans who believe that the United States should actively ramp up certain forms of energy. So I'm going to give you first the national split and the Democratic-Republican's split for a couple of them. Solar. 89% of Americans say the United States should ramp up more solar. And really interestingly it seems to me there's not a huge partisan split on that point. 83% of conservative Republicans, 97% of liberal Democrats agree that on solar. Now I'm oversimplifying. I'm aligning a lot of the details here. Let's go to nuclear. 43% of Americans think that the United States should push harder in nuclear. 57% of conservative Republicans, 40% of liberal Democrats. Coal mining. 41% of Americans say the United States should push harder. 73% of conservative Republicans, 14% of liberal Democrats. Okay, I'm not trying to prove anything here. I just want you to kind of get a sense of where the landscape is. So let us do this. Let you weigh in. So grab your phones and we're going to go through a couple of quick questions. Do we have them on the screen? The first question is... No, we're not talking about computers and phones and tablets this time. We're going to cue the first question. Let's see. Well, I'll read the question and you guys can vote and then we'll see it on the screen. I have seen with my own eyes what I believe to be the effects of climate change. I have seen with my own eyes... That's going to happen. That's next. Yes, no. A, yes, B, no. I have seen with my own... I'm sorry? Yeah, I have seen with my own eyes what I believe to be effects of climate change. Should we go on to the next one? I'm not sure how long this takes. Wow. Well, perhaps we'll have some questions about that. That's fascinating. Okay, number two. Renewable sources other than hydropower and other than biomass today provide about 1% of global energy. In 2030, they will provide 1%, 5%, 10%, or more than 15%. What do you guys think while we're waiting? You're going to look and see what they think. No, I'm interested to see what they think. Okay. That's not right. Anyway, that's okay. Sorry, last question and then we're going to jump into these folks. Yeah, was it not up there? Yeah, we did. You want to put it back up? I mean, it was 10% was the winner. It was between 10 and 50. Okay, last question before we dig in. The global energy system will be transformed into one that emits no carbon on a net basis. The global energy system will be transformed into one that emits no net carbon in. There's a D here. 2025, 2050, 2075. Do we have a D? D is in your dreams. So I guess I'll tell you, I actually, D is not a joke. If you think it's never going to happen, then don't vote. Well, and then we'll do hands at the end or something. We'll do hands at the end because I don't know how else to do it, but I think it's an important question. So A, B, or C, and if it's neither, and you don't think it's ever going to happen, don't vote and raise your hand at the end and we'll just sort of wing it. Let's go. And who didn't vote? Interesting. Yeah. Okay, so not a lot of expectation that it happens in the next 50 years at least. All right, good. All right. 50 is about right. 50 and 16 is 66. 2070. Well, it's almost there. Okay. All right. So let's jump in. So Nate, talk about low carbon fuels and your sense of the goal here is to have you each kind of frame the extent to which you think a particular approach is actually going to make a difference. So I will tell you that as an outside observer, I used to hear a lot of discussion about hydrogen, for instance, and I don't hear a lot of discussion about hydrogen these days. I hear increasing discussion about the potential to turn, for instance, solar energy into a liquid fuel. Tell us kind of what's going on and where we are. Great. That's exactly the last thing is what I do with my research and in part that was a GSEP started project. But I'm going to divert it a little bit into the broader issue. The broader issue is we've got plenty of ways now to make renewable electricity, solar and wind and solar wind combined with transmission and potentially some small amount of storage. We don't have very many ways to make renewable energy dense liquid fuels, biofuels are the only option right now and they may or may not make it in the end and I wouldn't want to bet our planet solely on that coming through. At the same time, we don't have any other than pumped hydro in the way of massive grid scale storage to compensate for the intermittency of renewables which will be a showstopper against getting to a full clean energy system unless we come up with that technology. We can't do much, I think, as R&D people on lowering the cost of solar panels much now because it's mostly the balance of systems. The active modules are only 30% of the installed cost. Soon it will cost more to ship panels from China than it will be to make the panels in the first place because they're heavy. So that's all going to come from balance of systems and integration. The missing gap that we don't have is the ability to convert clean electrons into clean fuel molecules. That's the key to making this all add up. Now there are three biogeochemical cycles that can sustain energy on our planet. A carbon cycle, a nitrogen cycle, and a water cycle. Once you inject power into any one of those gears you can run all the others. If I make hydrogen, I can make natural gas, I can make ammonia. If I have natural gas, I can make hydrogen, I can make ammonia, that's what we do now. If I had ammonia, I could make the others. So the key isn't to argue about which fuel is your energy carrier. We should be letting the marketplace figure that out. The key is somehow making a fuel to satisfy these two gaps, massive grid scale storage and high energy density transportation fuels that we don't have credible technical options for now. So if you ask what the R&D agenda should be that could have the most impact in perturbing the path that we're on otherwise I would say it's converting clean electrons into clean molecules because the chemical industry knows how to take molecules and make other molecules. We know how to take electricity into electricity but we don't have capability to convert to bridge the stationary and mobility transportation sectors. It also lets you unify your assets much more because instead of curtailing a nuclear power plant you should be making hydrogen by electrolysis during those periods to find a way to store and use it. There are lots of virtues in doing this and it's where R&D can have a huge lever in changing the outcomes from where we are now. So I'm going to resist my inclination to ask you about six questions about what you just said and we'll come back to that in a moment. So talk about the grid and talk a little bit about this program that's going on at Stanford but more broadly I constantly hear people say renewable energy might save the world if there's storage and if there's a smarter grid and so let's go below the buzzwords of storage and a smarter grid and talk about what that means. The only thing I would add to what Nate said is that he's exactly right except that whatever R&D has to scale in volume and cost so that it's competitive in the marketplace compared to fossil fuel and that's the real hard part. That's the real one. Competitive economically. Economically and at scale. The volume that you need is really really high. So on the grid side, the grid has been around for about 120 years and it was designed for integrating lots of loads at one end of the grid and some thermal power plants at different parts of the grid as well and these are large centralized thermal power plants which, and it was centralized because it was cheaper that way and so that's, and it's been around for the last 120 years. Now what is happening is that renewables are getting cheaper. The cost of electricity generation is getting cheaper and you pointed out the numbers three cents a kilowatt hour, unsubsidized power purchase agreements have been signed in many parts of the world which is fantastic. But they also come with volatility and the volatility can be managed at a small amount of penetration which is, you know, California is about 20-25% or so and it can manage. But what is that? The percent of the total electricity generation. That's right. And if you, so if you, the goal is to really decarbonize the grid and you could decarbonize it by increasing nuclear. You could decarbonize by integrating more renewables like solar and wind. You could decarbonize by carbon capture and store that. Or you could sort of reduce the load if you may, right? So there are all these ways. It turns out at least right now solar and wind turns out to be a really cheap way to do it in terms of electricity generation except if you go to high penetration the grid was never designed for it. So you got to adapt the grid. So you got volatility on one side which is utility scale solar and wind. And as I said you can manage that within about 25% where you go beyond 50%, 60%, 70% as was suggested then you got to really change the grid. So how do you do that? Well maybe you can add storage. Well storage costs money. How much storage? It turns out that you're going to have large ramps. When the sun goes down and people go home you will suddenly get a huge ramp of load. So now you need ramping services. What would you do? Well natural gas plants. You could do that. That costs money. That has carbon emissions. Maybe you could curtail the load or control the load. Or maybe the sun is shining somewhere in California and they need the electricity somewhere in East. The point is that you need a much more elegant grid than the grid that we now have today. That's right. So you need high voltage DC transmission. That could help a lot from where the wind is generated which is the Midwest and to where the load centers are which is in the East and the West. US will be very well served if you had a high voltage DC backbone. We don't quite have that. We have some. We don't have enough. China is building that right now. So there are lots of options and what's the most cost-effective options given the jurisdictional boundaries that we have and all within the United States? No one really has the right answer for that. Okay. So we'll come back to that. So Nancy, this is another issue where we could talk for an hour like each of these issues just about clean energy investing but let me try not to put too fine a point on it. It seems to me one of the most striking realities of the area within a 20-mile radius of where we're sitting is what has happened to clean energy investing over the last five years where, or maybe 10 years where I think it's fair to say there was kind of euphoria about the possibility before and a lot of people lost a lot of money. And so what I wonder is what didn't happen that people thought would happen and to what extent aren't people now learning from that lesson and doing something differently because there were a lot of people unlike you who are no longer in the game. Well, yeah. I mean, there are cycles in our business in venture capital and in 2000 everyone lost a whole lot of money in the internet. And a lot of people don't remember that or they're in denial about it but I lived through it. I'm sure many of you did. It wasn't pretty. And in some ways the rush to invest in clean tech was a response to that. That's what a lot of people don't understand is that a lot of people that came into clean tech were refugees from the dot-com bust and no one would invest in the dot-com companies in that post-2000 period for several years and returns were awful. So this notion that clean tech is somehow the only sector that ever had losses is just ridiculous. And let's be rigorous. We're here at Stanford. Let's understand that there are cycles to this business. So what happened is that when everyone and their brother came into clean tech because they couldn't make money in internet at the moment and they needed a new thing and that's another part of our business. There's always a new thing. Food waste is a new thing right now. So what happened is that they realized, wow, this is different. This isn't like investing in the internet. There's this policy and not only is there a policy, it's like 50 times policy because it's all at the state level except for things like the ITC or the PTC. And so while a lot of healthcare investors go through that again clean tech is not the only field that has a regulatory burden on it. We all understand that there's an FDA out there that prohibits us from making money in every single biotech deal we might invest in. So again, clean tech is not different in that sense. However, it's more embryonic. It's earlier and we also have as has been mentioned, we have an industry that it's kind of like the fairy tale. It's been asleep for 120 years and no one has paid attention to it except people that work in that field. We talked about energy at cocktail parties that I ever went to until maybe five or six years ago because of things like Tesla and getting kind of sexy. So basically that there were a lot of tourists in that weren't really schooled in it and there was also a time as Arun well knows that the field became politicized and it became and the hearings on Capitol Hill while kind of people were busy at work in the states. In Washington it became political theater and very damaging and so and then tech became strong again and so faced with the opportunity to get back into something that was familiar and that people had made money on even though they lost their many bill lost their shirts in the 2000 era. A lot of people went back to that because God love them. So now what we have today while it is smaller it's smarter it's experience it's committed it understands that you need capital you need innovation and you need policy and you navigate your way through that. You also have more corporates coming in much more international investing a lot of family offices driven by feeling that they need to do something about the most important challenge of our age. And much larger sums than the average venture capital firm is designed to spend. Many of them are. It's a range and then some of them put money in funds like ours and say this is something that's important to us we want to make money but we also want we don't want to invest in the next dog walking app. So we have 17 minutes left and here's what we're going to do for part of that 17 minutes. So you guys are not in a room sitting around a conference table and you're trying to figure out what deal you're going to do. And that is you're trying to design something that is effective in terms of moving the grid in a way that Arun is describing the grid needs to be moved and that enables electrons to be turned into fuel in a way that Nate is describing needs to be done a way that at least in part is relevant to the redesign of the grid and something that Nancy and her limited partners are not going to laugh out of the room as being pie in the sky something they're going to want to invest with. So go. I already have such an investment. What's your investment? It's advanced microgrid solutions. It's bringing together storage demand response renewables and allowing you to reshape your load by virtue of price signals and grid strength. So just peel that back a second and walk us through what is a microgrid? Well, old style microgrids were just redundant you know, universities had generators in order to keep the power on when the lines went down. Little mini grids. Yeah, but today it's totally different. It can be islanded or it can be connected to the grid but what it does is it says okay, we have a certain load and we're going to define our generation based on that load and based on what's, you know, if it's 100 degrees out and everyone's got their air conditions on, a microgrid implemented in a building or an office park or a university would say okay, don't pull your power from the grid right now. It's expensive, the grid is under stress and take it from your rooftop or take it from your batteries and also, by the way, manage your load down a few notches and do that in real time and get paid for it because price signals are working in your favor. You become sort of a virtual power plant and you are able to really control your own destiny in a much more sophisticated way. You're both shaking your head. So what I'm concerned about is I think the same thing Irene's concerned about. The fact that you can do something by demand management and you might even 25%. Price signals that you shouldn't be used less. People use it at different times, not necessarily less. Just shift when you turn on your conditioner or wash your clothes or turn on your pool pump. That's fine but it's the gigawatt days when the wind doesn't blow in the summer doldrums and the nights when the sun isn't shining and you've got deep penetration of intermittent renewables you can't shut down the U.S. So what do you do to meet reliability in those scenarios that are 20, 75, 80% people thought we'd get to this clean energy system. You can't get there unless you have a way to do massive grid scale storage to compensate for these massive swings that the natural resources have inherent with them. How do you do that? If you think about batteries let's think about batteries and storage. We'll put every 150 million electric vehicles are going to be fully electrified so all the batteries in the world for the next 50 years go into that. We have everybody vehicle to grid plugged in plugged their electric cars in. Everybody does that, all 150 million. That'll power the United States in one of these white out black out days for less than one hour. 150 million fully electric vehicles powers the U.S. for less than an hour. So this shows you the challenge of what it means to really do massive grid scale storage in a full energy system. I think that's the problem that R&D has to capture. That's really it's the molecules from electrons it's disruptive ways of storage it's what do you do for the two weeks and seasons that you have or more when you just don't have enough wind and sun to make up the difference any other way except store that energy somehow that we now store in the bonds of fossil fuels. So we've got to figure out how to do that because we can go around the margins. That's what people are doing. Hawaii has the highest penetration in the country. They're doing exactly that. So Cal Edison has 90 megawatts of micro grid storage and it's wrestling with the closure of San Onofre and the capping of the methane leaks in Eliso Canyon. We are dealing with these problems real time and we're solving them. Arun, I have a question but you were jumping in so you jumped in. I would say in a talk about investment I would invest in Stanford. Just without bias. You can include a few other places. Okay, Cal, thank you. That's what they call psychic return. Forget about those institutions. But on a more serious note look the cheapest way to store storage is going to be important. There's no question if you do deep penetration the cheapest way to store electricity is pumped hydro. There are lots of hydro plants a small fraction have been retrofitted to do pumped. Just so we're all defining terms here you want to explain in 10 seconds what the hydro is. You have a dam you have water flowing down in general electricity you can use that as a pump to push the water back it's not the highest energy density but nevertheless at the end of the day it's cost. I would first look at where the potential pump hydro and see what we could do to retrofit the existing hydropower to do pumped hydro if you can. I think that would be terrific but if you want to do that you also need to look at one of the challenges that the renewables industry is going to have in the future is transmission lines and we need to figure out in this country. And just to be clear that's largely because the parts of the country where the renewable resources are the biggest are not the parts of the country where population is the largest. The best wind resources are in the middle of the country midwest and all people don't quite live there. But you can balance that's why we're talking about moving beyond the Cal ISO to a western ISO. That's right so you could there are domains in Cal ISO then you get midwest ISO. And these are effectively regional grids within the United States. There's a big movement afoot to go to California to include the west so that you solve the problem you just mentioned because there's wind coming in from Wyoming there's sun here and you can make all of that. Is this mostly a political problem or is this mostly a technological problem? I don't think it's technology can get cheaper I don't think it's a technology problem. Here's my thinking that I think we should have as a country just like when you went from telephone lines we created a backbone of optical fiber that's the trunk line so most of the data is flowing we need a in a long term another high voltage DC backbone in this country so that you could then transmit electricity exactly as Nancy was saying where the loads are you can balance things out not to say you don't need storage you do need storage as well you need the options and to minimize that to reduce the cost depends on a lot of things and we cannot sit here and say this is the answer I don't think anyone can say that so we need options for that the challenge with high voltage DC or any transmission line is the whole permitting process is long and that requires so for example if it goes from state A crosses state B to state C we need to figure out how to compensate state B in the middle if the electricity going from state A to state C we don't have a formula for that and this is a question for all of you because I think it's an important question about the political realities here do you think that the forces interested in a change along the lines of what Arun is talking about are more powerful or less powerful than whatever forces are not or is that an improperly construed question is there general agreement that what Arun is talking about is indeed the way forward and we're all one happy family and we want to go forth together this is a tough question because it involves policy and also the interplay between short term profitability and doing the best thing for the most economical and efficient use of resources over continental scales over the long term those are not the same things that we need to do we need to have investments to make optimal micro grids or wind installations where this high peak power and you can get a lot of return on that one site and get the production tax credits but that's not the same thing as saying I really need to take less sites but that are less correlated so I can smooth that out with the high voltage transmission line and have more reliability so what's good for us all in the long term? I think the political sentiment is shifting maybe it's imperceptible to most people but I'm on the board of the Bill Lane Center here and we have western governors come every fall and the Montana and Wyoming and Utah and there's always this tension between those states in California and is it right to send our wind to you guys and how are you going to pay us is it right to send their wind to California? They want to sell but then all of the transmission issues and the compensation they used to just throw up their hands and say we'll dig more coal now that's not an option and so now people are actually getting to the table and we're having some really important discussions and in California there are legislators that are dedicating huge amounts of their time to help try to make this happen will it work now I don't know what the odds are but for the first time you're getting people engaged in this discussion in a serious way Nancy is exactly right you do need leadership in this you do need the leadership of various states to come together and say let's align the incentives and that requires some compromise just to say that if you get cheap wind from somewhere Utah for example some local generators may say oh my god I'm going to go out of business well they're going to push back so there are issues let's just be impolite for a minute let's just sketch out what are the contradictory policies that sit on the books what are the contradictory policies as they are now so I think the number was last May over 20% of the hours in California the price of electricity was negative well that's obviously a contradictory policy example and the price was negative because there is a production tax credit for instance on wind and so the producers get paid to produce electricity and they can arbitrage half of what they make to sell into a market when other people have to pay them to sell that wind what it does is it disincentivizes the nuclear power people because they don't have that they have to curtail and now they're inefficiently utilizing that asset and this is the reason why a lot of the nuclear power plants are going to be shut down because of these counter incentives that we've got on one form of low carbon energy versus another that in the big picture you could argue are contradictory probably not optimal and may not even make sense so just to be very simple about it I mean policies you're saying are angled perhaps because of a bit of lobbying for some people to make money in a way that's not beneficial to the whole system what a shocker if we're talking about on level playing field again check our website read any paper the level of subsidization of the fossil industry we've done really interesting work on this so this question always comes up in any discussion about energy it's not even controversial anymore when we wrote it it was controversial but now you found what you found what quickly in the early days of energy sources in the early part of the 20th century for oil and gas in the mid 20th century for nuclear the level of government support gas policies through the Price Anderson Act was 5 and 10 times greater than the incentives we applied to the first 15 years of renewables and to be clear the Price Anderson Act is federal law that protects effectively nuclear generators from the obligation to cover the full cost no judgment here they worked and they were great for their time because we got cheap energy we didn't know about global warning but your point is that the comparison of the subsidies is what if you listen to certain politicians talk you'd think that it was the reverse that clean energy was being subsidized at levels way higher than oil and gas and I'll give you one example and Dan Riker knows this very well and we actually pushed that when we were in DOE there's something called in financing project finance there's something called master limited partnerships and this is essentially a tax policy which reduces the tax burden to create an infrastructure and that reduces the cost of capital and cost of capital is a big deal it's heavily used by the oil and gas industry let me explain this law was made in 1982 and by law it can only be used for oil and gas and coal for renewable for infrastructure so now there's an MLP Parity Act to bring parity on all of the above on the hill right now it's been there for a while now that could bring so talk about subsidies this is a form of subsidy and I only think that in that one the Parity Act does not have nuclear and I've been telling the people on the hill that they need to include nuclear because everything should have equal footing when you're talking about energy and let them play or the alternative is just to put a price on carbon and get rid of everyone's subsidies okay so let me just interrupt so we have two minutes left actually I disagree with that we're not going to get through all this but everyone's going to come up at the end and we'll have some more time to talk but I want to focus this on political reality so Nancy you posited that that the ship is turning somewhat heavily in opinion and Nate and Arun gave us examples of what in their view are still unequal realities of policy so what is the likelihood that something fundamental happens that actually gets this country where you all think it should happen in a minute and 30 seconds and really quickly do you think actually that what happens next week in the election really matters to the answer because the two divergent energy paths Hillary Clinton wants us to be clean energy superpower and Donald Trump is saying that it's a plot that the Chinese are creating and I'm just mimicking what I'm hearing okay so what actually happens then in the real world what do you think actually is going to happen well I think the policies and the people that you hire for jobs like Arun had they're completely different elections matter that's important I also think that going on here with the elections even more interesting for our world is looking at Florida, Nevada and Washington for the first time you have ballot initiatives in Washington it's a carbon price in Nevada it's the casinos getting a vote to leave Nevada energy and develop their own policy energy systems and in Florida it's this yes no the utility is saying they're pro-solar and yet when you actually vote for it it's a vote against rooftop solar the fact that in Florida it's the third largest state this is not Nevada where 3 million people live this is like 18 or 19 million people so this is big and Washington is big because it's never happened before when the history is written this will be noted that wow much from being in public utilities commissions and arcane journals and kind of classrooms to being a popular vote really quickly Nate and Arun are you both as Sangwin that to the extent that there's a turning of the ship that ship's going to turn in a way that actually is going to make the kind of environmental difference at economically realistic cost that you presumably hope will happen well I mean first of all I think a carbon price on Capitol Hill will need a lot of work and that requires time it's been a lot of time thus far right so the way it is right now and the way and this election really matters but I think I agree with Nancy look at what's going on in Washington the state of Washington which is I think a revenue neutral carbon tax which is it would be a really good measure to have and to see how that works out I hope it passes but we don't know and there have been strange bedfellows that have paired up in either promoting it or opposing it and I think that's an interesting case study in itself so there are two pretty rosy outlooks Nate are you that rosy I didn't say I was rosy but you're optimistic that things are changing and that things actually have chances that's the change it's hard to say it's hard to say I'm pessimistic and optimistic in different lenses I'm pessimistic given the track record of the ability of governments to respond to have the long-term planning view that is needed to get this transition done by policy I'm optimistic just like I heard Bill Gates be incredibly optimistic about the ability of technology to help us get better options to help us solve this by making clean energy the cheapest energy then we're not going to need policy it's going to be economics and everybody's going to do it and so I think if you turn loose technology and let us invent ways out of the mess we made that's the way we're going to get it done we're not going to get it done by relying on the government long-term policy to get it right okay so that's a fascinating point that we have no time to talk about I would recommend that that would be an interesting thing to throw back at these folks in a question so get off the stage thank you very much we were that bad so next you're going to come back in 30 minutes absolutely thank you that was great so Sally Benson, Burt Richter and Jim Sweeney are going to come up and the notion of dividing the panel this way was that the three folks up here represent sort of disruptive possibilities for the future and what we're going to hear now is a discussion about more and these folks may take issue with what I'm about to say but more iterative changes to sources of energy and uses of energy that have been around for a while you have signed chairs you may sit wherever you'd like wherever you'd like excellent Sal you want to sit here okay and Jim you want to sit next to Burt so we're going to jump right into this so again these folks all are Stanford folks and I suspect we need no introduction to you but I'm going to give just the quickest of introductions Sally wears many hats at Stanford but interestingly to my mind is an expert on carbon capture and storage technology about which much has been said and there are some in the world who argue that nothing that we've talked about is going to really get the world anywhere unless that technology works so we're going to talk about that Burt Richter has been working in the nuclear field for a long long time wrote a book called Beyond Smoke and Mirrors and in my experiences No Shrinking Violet so I think we will have an interesting discussion and Jim Sweeney has been spending a lot of time working on the issue of energy efficiency and has really really interesting a really interesting reality check I think about the relative importance of energy efficiency versus a lot of the things that we've been talking today the importance of the unsexy stuff versus the sexy stuff Jim has a new book out called Energy Efficiency Building an Insecure Economy published by Hoover which you are able to buy so why don't each of you take a couple of minutes and talk about just those things so Sally this is the backdrop of all of the discussion that we've had about renewables and a grid that enables renewables I will spare the statistics but the reality is that our world is overwhelmingly powered by fossil fuel and most people expect that that will continue to be the case so talk about the notion of burning fossil fuel in a way that's less problematic to the environment okay I rarely am part of that more of the same conversation so anyway thanks for characterizing us as that so broadly what I want to speak about is perhaps a controversial idea that the oil and gas industry has a role to play in deep decarbonization of the global energy system and I think that starts with natural gas and substituting natural gas for coal the emissions are significantly reduced 50 to 60% if you switch from a coal plant to a natural gas plant in some cases it can be less expensive and I think very importantly natural gas is also very enabling to the introduction of more and more renewables on the grid so if you look at what's happening in California we actually have a huge amount of solar during the middle of the daytime and what happens at night time the sun goes down and that's just when the demand is really terrific the biggest demand of the day so what happens they ramp up the natural gas plant so I see them as very enabling and it's not just a California story if you look at Ireland for example they have a huge amount of wind power and a lot of it is because they can balance it with natural gas so I think that's what you do in the short term so what do you do next so I think what you do next is you seriously think about CCS CO2 capture and storage and the way I like to think about it just explain really briefly what is that technology so basically that technology is that instead of letting the carbon dioxide just go into the atmosphere after you burn the fossil fuel you capture that you have a chemical scrubbing method you compress that you then pump it deep underground into the kind of formation that you will essentially get for permanent storage so that's basically the idea okay so now we're on to CCS so I actually like using CCS with natural gas I think it was initially introduced as a coal technology but it was actually less expensive to produce electricity if you have natural gas plus CCS as compared to coal plus CCS so the way I see it is you have a pipeline that goes to a power plant well why not have another pipeline bringing the carbon dioxide back until the oil and gas industry could take it back there's nobody better prepared with the technology and capacity to actually become the sequestration industry the other thing that can be done then the fossil fuel industry then the fossil fuel industry absolutely so the next thing is the natural gas you can also gasify and produce hydrogen and then we can use that hydrogen for heavy duty transportation and one day I hope Nate's technology works and there will be more and more renewably sourced hydrogen but it will be way easier to introduce that if we already have a robust hydrogen infrastructure and that can be gradually ramped up you can use hydrogen for these other applications you crack the natural gas into hydrogen and then use the hydrogen those ways use that for transportation for commercial purposes or even for heavy duty industry so that's what you do in the intermediate term and then if you really look to the long term Arun and the number of Tom Haramio yesterday laid out this vision that we could have carbon neutral fuel so we basically take carbon dioxide from the atmosphere we have renewable energy and the energy is less than they basically produce fuels well really what is that it's a gigantic refinery that makes chemicals and fuels just like the oil and gas industry operate today but instead of having a pipeline coming from a well field that contains the hydrocarbons in fact your pipeline is an enormous transmission line coming in together with CO2 and water on that challenge either so my view is that if we have a strong and really well prepared oil and gas industry that they can be enabling at every step on the way I just want to add one more point really it's extraordinary what's happened in the United States we had peak emissions in 2007 we are now down around 10% why is that? well in part renewables but really the big story is a switch from coal to gas we used to get 50% of our electricity now it's something like 35% because we've ramped up the gas so it's really had a measurable how many countries can say they've actually cut their emissions by by 10% and it's really the positive story about natural gas so Jim it'll be interesting to hear you throwing about the effect of efficiency on that as well but thank you so nuclear now is about 11% of electricity generation globally and there are really well publicized efforts around the world to countries to back off from nuclear France or Germany not the numbers just backwards the world is not backing off from nuclear the world is moving toward nuclear so I want to remind people that this is an important week not just because of this meeting but this is the 500th anniversary of Martin Luther's transmission of 95 theses to the Archbishop of Mainz and that changed the whole world now I have 10 theses and I want to change the way people think about nuclear power okay the first is that the international energy agency now projects that nuclear worldwide will expand by between the factor of 2 and 3 between now and 2040 it does not matter what the US does North is going to be in Asia the Middle East Africa and South America the lead in the design of all the next generation nuclear reactors that don't use water is with China India and Russia not with us in the US the states that do what California does are very unlikely to reach their California's 2050 goals are missions of 20% of 1990 by 2050 California asked the California Council of Science and Technology to review the California program and they did and the report is there and it's on their website and it says you cannot do it with California's definition of nuclear alone and remind us what California just has done California let me remind you first with California's definition of renewables it excludes big hydro and it excludes nuclear California has also got a new goal which is called 50% renewables by 2030 and it's not going to reach that goal either I will bet you one of the things somebody said was to talk about the stability of the grid when you get too much nuclear you can look at both Germany and Spain both Germany and Spain went 15% of their electricity came from wind and solar started having trouble with the stability of the grid started having to eliminate some of the subsidies for wind and solar and started having to raise electricity prices which now are almost the highest in Europe if you want to look at the 50 by 30 goal you only need to look at New York because New York reached 50 in 2015 in 2015 New York includes big hydro and nuclear and New York gets well over 50% of its clean energy today and it doesn't have to talk about what we're doing in the future because it includes both big hydro and nuclear on the problems people talk about with nuclear there are no technical problems in disposing of spent fuel there are only problems and the US had better think about the strategic issues having to do with nuclear US has been extremely influential in the world in regulations and in systems to limit the spread of nuclear weapons if we are not playing in the game of nuclear we are not going to have any influence on limiting the spread of weapons ready technology and we ought to think about that as well as the question I'm going to give you 30 more seconds and then we'll come back to nuclear in the greater discussion I don't need 30 more seconds I've given you 10 theses I think I'll go to change the opinion of everybody out there who's anti-nuclear to become pro-nuclear okay thank you and you can catch up too sorry? I'll pass on my 30 seconds excellent Jim seeds his time okay so just to frame this we had a long discussion about renewals we have a long discussion about different sources of energy and now let's talk a bit about the use of it I think the important thing about the use of energy which I'll talk about energy efficient is economically efficient reductions of energy use really different than conversations about wind or solar or nuclear because those are each about one class of technologies energy efficiency is about the whole economy works the whole US economy or the whole world economy okay I won't hit you and about you know I grew up talking with my hands I still do so you gotta just watch out and and what has happened in the US is really we weren't paying any attention to energy efficiency until 1973 when we had the oil crisis it was a shot across the bow and then every consuming sector of the economy started doing things differently finding ways to reduce the use of energy while still producing the outputs that they did or consuming the goods and services that they wanted and households keeping their homes warm and their refrigerator and their beer cold all of those continued happening and it was a combination of not one thing but a very interesting mix of a lot of things working together I make if we have time I may go back to what I mean by that but the net result is that in 1973 there was an inflection point in the growth curve of energy in each one of those sectors so when the aggregate we started before in 1973 energy use was growing along with the economy minus about a half a percent a year once the oil prices increased and we had a lot of policy innovation and the private sector started innovating differently and consumers started recognizing energy was a problem that rate of change was moved from a half of a percent decline a year to 2.7 percent until oil prices dropped in 1973 and then the government backed off from almost any new policy programs but the private sector did it and the private sector kept innovating in throughout the economy in the use of energy so that on that the ratio of energy to the economy has been declining about 1.7 percent a year almost every year since 1985 it's been a very steady maybe boring change but 1.7 percent a year going on steadily has been what has decarbonized the US economy since 1973 carbon per dollar of GDP is declined 61 percent is now 29 at 39 percent of what it was before of that 61 percent about 57 percent is more efficient use of energy about 4 percent is cleaning up the energy system so 57 using less energy per dollar of GDP 4 percent cleaning up the energy system that's the role of wind and solar and geothermal and nuclear and fracking for natural gas and hydropower all put together to birds point half of that that progress has been nuclear power so all the rest is about half of 1 percent you can go decade by decade and it's been true that every decade we've been having recently this 1.7 percent so it's a very slow change it was stated that we have a decoupling from between the economy and the energy use wrong they're completely coupled as you see when the economy goes down energy use goes down when economy goes up energy use goes up about 1.7 percent a year is decarbonizing the economy and it's because it's happening to hundreds of thousands of companies and people making those small changes so what about the future well when you look at how all of those things happen you'll see there's a combination of policies expectations of corporations and individuals regulations that are defined to be cost effective and change attitudes I'm very concerned about this election if we move to a point in which we had a leadership that says we don't care about climate change or energy and everybody's expectations change you're going to start seeing changes throughout the whole economy now what the government does it's what everybody through the economy does and if we have this bully pulpit leadership that says energy and environment is important and we're going to continue to doing things like adding a revenue neutral carbon tax which we really need to get to have a view to have an incentive across the whole economy changing the use of energy then we're going to see the continuing process that we're seeing right now of companies developing more energy efficient motors better insulation on the refrigerators transition towards electric vehicles and others yield management in airlines getting even better which has been a major reason why we reduce the use of energy there now politically it matters what we do into the energy future partly because what the government does but mostly because of what the expectations will be set up for the whole rest of the economy okay so Jim I want to ask you a quick thing and then Bert and Sally I want to ask you something about what you said so Jim are you there was this statistic from the federal government as I said before that gasoline use reached new levels earlier in June as gas prices decline and at the same time vehicles have gotten more efficient as you say partially at least partially due to federal rules so if as the steady march of energy efficiency continues given where prices are does how how far does energy efficiency get us towards actually reducing emissions well we've been doing that 1.7% a year almost every year about 15 years ago when I was thinking about this I said you know we've gone out of all of the options all the elasticity is just all gone from this system it's just not going to happen yet it keeps happening on and on and it keeps happening with technology innovations most of which neither I know my friends who deal with energy efficiency saw coming I think that's going to keep happening with new technologies over and over and I expect that 1.7% give it take a couple percentage points to continue unless we have a political leadership that says it's not important and then it's going to reduce okay thanks so Bert and Sally we just heard for a half an hour before the three of you came up here a discussion about a new architecture of the energy system at least of the electricity system a redesigned grid to allow distributed resources in a big way that would essentially revolutionize the system now both of you I don't want to be so simplistic as to cast this as an either or but both of you are talking about the need for a continuation of effectively centralized sources of electricity so I just talk through how you view this notion of a new grid to facilitate a kind of flowering of distributed sources how big a deal or is that not given what you just said about fossil fuels and about nuclear if we really look at the enormous progress the California story of having 10 and a half gigawatts of solar that's utility scale solar that is not distributed generation those are large they're basically gigantic power plants out in the desert and from many perspectives they're not really any different than having a gas plant rather than solar panels on your house yeah so I think that you know putting solar panels on your house I think there's some places where the electric grid is quite weak and that the distribution system is robust enough and you really need to do that it has huge benefits even putting storage in the distribution system may make a tremendous amount of sense on the other hand it's fairly well known that utility scale solar is cheaper than distributed solar so you need to look at the full system and decide where are those regions where it really makes sense to put the distributed generation and where is it more economically sensible to put you know a larger scale facilities but you know people are going to choose and I think that people want the option to choose and if they choose to put you know PV and storage on their house and if they want to go off the grid I think you know hallelujah to be clear even if utility scale solar continues to expand that itself requires a changing in the grid right it's not just rooftop solar that would require that because of the intermittency of solar right which you know sort of so I think I mean the way I see it is that the developed world has a fossil fuel backbone initially we started adding renewables there was you know fear and uncertainty could we accommodate that I think that we've learned to accommodate more and more renewables I think that's really been extraordinary that progress and like I said I think natural gas has been really enabling to that hydro is also enabling to that you know large-scale hydro pumped hydro is hugely enabling to that so I don't really see them as incompatible but you know I'm not sure when we can wean ourselves of a fossil fuel backbone you know I think until you know Nate's technology and these zero carbon fossil fuels come along or zero carbon hydrocarbon fuels come along it's going to be hard to we're not going to tolerate a day without power you know we're just not going to do it so I don't know when that transition will come and if we are going to be using fossil fuels we sure as HEC shouldn't allow us to admit CO2 into the atmosphere when we do it which is you know why CC carbon capture and storage is an important part of a portfolio so I want to come back to that in a second but Burt Sally just talked about the world's ability to deal with large-scale renewables and you just said that countries are facing problems at 15% penetration so yes they are and the reason is that there's no decent storage a room wants to fix this problem by putting in transmission from regions where there's strong wind to our region for example when the wind stops broken so that says I need to bring it from the great plains or the great lakes that's where the big strong winds are now if I'm going to get 50% of my electricity from things like wind I've got to bring 30 gigawatts of wind generated electricity here when the wind stops blowing that is not distributed generation that is centralized but it's the whole center of the country if you talk to Mark Jacobson and pin him down he will tell you that wind is very correlated over large areas if it's not blowing at Tahachapi it's not blowing at Altamont if it's not blowing one place in the great plains it's not blowing most of the place in the great plains so the scale of things that we're talking about I think people are misleading themselves when they're talking about distributed the nuclear guys are talking about small modular reactors let's go down from the gigawatt ones to the 100 megawatt ones yeah I can plant 100 megawatt ones but if I look at the latest big solar thermal plant the Avonpa plant and they did that to try and make it cheap capacity not actual production to be clear but they did it to try and make it cheap and in fact if you look at the power purchase agreement they're buying the power for about three or four times as much as the cost of electricity from Diablo Canyon the system in California is irrational the system in other parts of the country is not quite so irrational the thing is to get clean electricity and I want to make one more comment about the world one of our big problems is the world and it's growing population and if you ask me what the biggest contribution to decarbonization is it's to make free long-term contraceptives available to every woman who wants it without any questions asked and without her husband having to give permission you got IUDs which are essentially as long as you want you got implants which are three or four years we are expecting 10 billion people in 2050 we had 7 billion in 2000 we're expecting 7 and a half billion in 2100 and all of these developing countries are trying to see their GDPs per capita go up and that requires more energy or it may require less capita and so I wish people would take a look at the real story around the world we in California are setting a horrible example for the rest of the world New York is setting a much better example I've told you they have already passed California's 2030 goal to say California is a horrible example I agree it's not perfect we have a patchwork quilt of a strategy but if you talk to the people who have made those policies this is what we could do at that moment in time and we prioritize decarbonization over having a perfectly elegant policy I think the California story is extraordinary I agree that shutting down our nuclear plants is going to probably cause our emissions to be higher than they otherwise would have been going forward and we're going to have to work extra hard to deal with that but I think it's really unfair to say that California is a horrible example you want to weigh on this too? It's useful sometimes to have numbers I actually think California is a pretty good example but they passed themselves on the back too hard for example if you look since AB32 has passed which said we're going to do a lot of innovative things and some of those have passed on the rest of the country the percentage by which we've reduced carbon emissions between then and 2014 when we had the last final inventory it's slightly slower than the average of the United States the rate at which it was reduced now the difference is that California economy grows faster than the US and that compensates for it but there's broad padding on the back because we're the ones that are reducing carbon dioxide sometimes it's useful to look at the numbers to see that we're actually reducing carbon dioxide a little slower than the US to the United States and what is it for any of you what is a politically realistic antidote to that fact in California? Look, New York had a politically realized realistic antidote by including nuclear in the subsidy system nobody here has said one word about the real cost of renewables not that there are subsidies are hidden the subsidies on when the production tax credit is roughly two and a half cents a kilowatt hour the cost of the grid people of integrating this variable thing is another two and a half to three cents a kilowatt hour that three cent figure in Dubai did not include the cost of transmission that was the cost of generation this is what you're talking about so I think there's a lot we can do in the United States I agree with whoever said a carbon tax is very important and the revenue neutral carbon tax may in fact be sellable to the Republicans on the grounds of revenue neutrality you'll never sell it to the Republicans on the grounds that we're going to take the money and we're going to spend it on something but you might sell it on that and besides the nuclear world I'm actually working on that with a Hoover institution people I'm quite broad in my political position one quick question and in less than a minute and then we're going to bring the other three up and we're going to have you get involved and ask some questions so perhaps this is an inaccurate perception but my impression is that there is a lot less momentum behind carbon capture and storage than there was five or ten years ago and the data points on that very quickly are that there have been a couple of very high profile plants that have gone south what's going on is this is it realistic right yeah so if you look back to the late 90's there was a rush of enthusiasm for carbon capture and storage four projects came online relatively quickly with one exception they were actually great successes and have gone very well expectations were right had risen that that was just going to continue in fact it didn't for a whole number of reasons including uncertainty whether there would actually ever be a price on carbon I would say the real doldrums were in the period of like 2010 to 2013 or so but actually I'm seeing a lot of interest picking up again and in fact if you look between 2015 and 2020 we are doubling the total amount of CCS that's happening through large scale projects happening around the world bigger projects than ever before in fact the latest one that came online was the quest project where there it's a gasification facility and they're taking the CO2 from the gasification and pumping that underground is that because of a political change that is an increasing expectation of a price on carbon that makes this economic or is that because the technology advance to a point where the economic demand the sort of the bar is more the projects we've seen have been kind of the patchwork quilt so if you look at the Gorgon project in Australia which is a very large CO2 captured storage project basically the government said you can't develop this offshore gas lease unless you use CCS in the case of the quest project the hydrogen is actually used for upgrading oil sands we have a low carbon fuel standard in California which would make it to buy or very expensive to buy crude from Canada for example so having this CO2 storage helped offset the emission intensity of that. So this is policy right yeah they're all then policy driven but not a blanket policy such as could be achieved through a carbon tax. Okay can I ask or something about CCS? One of the things I've found very interesting is the notion of using natural gas for natural gas fuel cells because that uses the hydrogen in the natural gas and the only products are CO2 and water vapor and the most expensive part of CCS is separating and capturing the CO2 so is it possible that by going to the methane fuel cell you're going to reduce the cost of CCS so much as to make it more attractive? That what you said is absolutely true if you have pure oxygen in the fuel cell but if you're using air in the fuel cell you still have CO2 and nitrogen. There are new technologies where you can use different types of fuel cells that will actually allow you to separate the CO2 and generate power in the process of doing that. So there's lots of exciting things coming on. Pull out your phones while Jim's talking real quick. Think of a company like a little local company Blue Energy they do a steam reforming of the natural gas in the facility and then use the hydrogen. They have almost a pure stream of carbon dioxide and water. That's almost free to capture nothing really actually free but that's almost free. You're going to need a pipeline to bring the natural gas in but you also need a pipe to bring the carbon dioxide out to a gathering station so I don't see why you couldn't have carbon capture and storage through fuel cells like Bloom with a central use of natural gas in a way that greatly reduces the carbon dioxide emissions not to zero but greatly. So I would suggest an interesting question for someone in the audience to ask might be would Nancy invest in what's just been articulated but we will not ask that question right now. So pull out your phones pull out your phones and here's the first question and then we're going to let you guys weigh in with your questions so I guess the slides going to come up if you had 10 billion dollars to invest over the next decade in moving the energy system toward one that emits again carbon that is at the end of the day any carbon that it emits is offset entirely by carbon that it sucks in in a sink. Would you invest in panel A or panel B would you invest in the disruptors or in the evolutionists as we might call them or would you split the difference so this is basically who wins do we have an answer we're still getting results we're still getting results but I don't think the results are going to change well we'll see interesting are people changing their votes only within the noise so this is a disruptive audience but interesting equally in both next question anyone want to say anything about that no? it's head it depends who you are you didn't say who are you acting as when you're an investor if you're a government you might have a different answer in your risk profile than if you're a utility than if you're a BC I think that's kind of an unfair question because it wasn't framed as to what risk profile and who are you I get that a lot it's an unfair question it's not rigged excellent last one following this discussion confidence that we can transform our global energy system into one that emits no net carbon increased or decreased or not changed do you walk out of here happier or sadder or about the same and then the first tee up a couple of questions while we're thinking someone raise your hand who wants to ask a question gentlemen right here in the front go ahead and ask your question and then we'll wait for this to tally well you've all been fairly unpersuasive I'm sorry to say that's right no 40% changed but 20% effectively in either way 20% changed alright most people haven't changed at all sir please so there was a couple of people that said the sun does not shine I did a little history and I recall there was a guy in 1543 that published a document said that the sun is always up just depends on where you are so there was also a woman in the early 1800s named Elizabeth Heyrick and she lived in England published a little pamphlet that said that we got to get off of slavery there's no time to wait and it must be done while all the time people were arguing that we just had to start let's just stop exporting or transferring people from Africa over to the new world so forth so my question is given that we understand how serious our problem is how is it that we can possibly consider continuing to use fossil fuels is there a plan for drastic immediate getting rid of this crazy way we're living okay Sally you want to take that one on first no no plan or what's the two word answer I don't think there's something we can do tomorrow that 10 years from now would have us I don't think we could say well we're going to ban fossil fuels tomorrow and 10 years from now it would be accomplished maybe we could do it in Palo Alto or maybe California but there are many places around the world where getting more access to energy is the most important thing they can do to improve their economies and improve the lives of the people who live in those countries so that's good news because when you look at Africa and the developing world they skipped the landline generation with phones and many of those regions will skip the centralized grid in terms of investment trends is a move directly from zero electricity or worse, kerosene to solar and storage and efficient appliances give us just one example of where that's happening I want to say that I mean I agree that that's happening but that is not building the industrial foundations of those countries this is distributed it's a start and the grid in Nigeria have you ever seen it it's a completely dysfunctional grid so there's even where there is a grid in many parts of Africa you don't get power many many hours a day so to say that it's not industrial there is no industry there it's the start it's a path it will be joined with distributed clean grids and the people that are putting the money in are not little VCs like myself these are the major European energy companies development banks private equity firms this is not marginal this is what we're doing and it will lift people out of poverty it will be better I have a big research project exactly on those issues but I don't think it's going to be enough I simply don't think it's enough why don't we all just go home this is the most negative panel I've been on in a long time I'm a Stanford graduate and I'm kind of embarrassed this we can do this to compare 100 year old technology to new renewables and to say Ivan Paugh isn't as effective as a nuclear plant well I think there's been 60 or 70 years of nuclear have there ever been any accidents in nuclear plants I don't know is there a history major in the room you need to compare apples and apples it's really un-rigorous to compare 100 year old technology with renewables which have been around for about a decade that's not where you get an A on when you're at Stanford Eisha you may make one comment I want to say that I agree with a great deal of what you said the fact that the developing world doesn't have to repeat our efforts our errors and that sort of thing is absolutely terrific I was talking about what's going on in the developed world I completely agree with you about the developing world the small solar things that will charge cell phones and run a TV set in the schools are doing remarkable things for agriculture in Africa for education all over the world we have a system in this country which is different from a lot of others we are not centrally directed the only thing we do centrally is we can dangle incentives in front of the private sector and one of the most important questions is what incentives we should be dangling before the private sector to get them to choose the best technology to solve the problem and that I'm sorry to say I may disagree with you here hiding the subsidies doesn't give the signal to the private sector I feel much more comfortable if the subsidies were written down you don't have to cancel them what are they what are we doing why did we want to cut down a working nuclear power plant which is only going to run our emissions up and we have now the county that it's in saying what's going to happen to us we're losing all these jobs who's going to compensate us they want PG&E to compensate them it seems to me it seems to me we're talking in one-dimensional thinking carbon dioxide to think about the energy there's two other dimensions it's going to be the economy will the economy work do we have security of all the things we want if we were to give up on the fossil fuels we would give up on both the economy and security very quickly maybe in overtime yes we're going to make adjustments as we go greater and greater fraction it's cleaner energy but if we want to focus on just one dimension I think conversations go off the rails that way but maybe we should have a meeting about it and I hope people don't have to drive a fly to that meeting since four of you would weigh in you two weigh in really quickly and then other people should get to ask a question Nate you were shaking your head harder two points one let's look at Rwanda it's really great that they're leapfrogging fossil energy and we're putting in through the World Bank wind and solar and microgrids it's probably not really great that we're charging the poorest people in the planet over 20 cents a kilowatt hour to get that electricity because that's what it costs them in real dollars boots on the ground to install these very expensive installations even that it's unreliable now that doesn't mean that we shouldn't do it more and that we have to learn down the lines to this issue the second one is that it's one thing to talk about the price of on the margin power it's another thing to talk the price of power that's 99.99% reliable and I think we need to be really clear about how much we value reliability about how much we value energy services it's one thing to make an investment on the margin that you can make money in one scenario it's another thing to do it in a way that sees you through to a high reliability that we all value so our data centers so our aircraft so our lights stay on whenever we want them and I think we just need to be clear about how much we value the energy services that we get so that we can actually go toward a system that is what people expect when they expect to get it let me just back up I was just listening to this with interest I think we have the problem of developing economies and the problem of the developed world are very different and I think we need to and there are multiple factors that come in economic growth is a key factor when you're talking about developing economies affordable energy is absolutely key and luckily the decarbonized solution happens to be the way to go as per just pointed out you can leapfrog you don't have to go to the coal oil gas sort of route that the rest of the world that we in the developed world have taken we on the electricity side frankly at some point address Sally's question that the notion of effectively leapfrogging and the world in a massive way going quickly off fossil fuels is simply unrealistic how are they going to drive around in India and Pakistan and Africa how are they going to drive around so we haven't talked about transportation right and for the electricity sector let's say you put a carbon price let's say you put 20-30 dollars it makes very little difference on the transportation side and we talk about transportation and I think what we are underestimating is the cost curve that is coming down in the batteries that E was talking about and the impact that we'll have on the electrification of transportation and this is we love to have Tesla it's a beautiful product it has changed the way people think about it it has raised the bar for the transportation industry but I'm talking about transportation growth mostly in developing economies and there I think that's where the big impact could be in electrifying transportation as long as you decarbonize the grid which as we just talked about we have more options for the transportation side right now if you don't have oil you're done you're stuck so getting our fossil fuel right away is a very bad idea and so we have to be careful about how we pose this unless the price of electric vehicles comes down to about $15,000 car, I hope you guys make that in Tesla, that can drive 300-400 miles well that'll be great but we're not there yet and there really isn't the first ten years and there are other car manufacturers that are now getting involved and innovation doesn't happen with one company it happens when one company influences the incumbent sector so it takes time the question was can we get our fossil fuel right away, I don't think so I think we'll be stuck we'll come to a halt if we get our fossil fuel right away I don't know if that's what you asked actually there are students in the room and I'm going to use executive privilege and a student gets the next question and you're Stanford students so you better ask the question come on, no one wants to raise your hand, give me a break really? there are students there, back over there excellent well done, thanks brave students I know what Dornie lives in, go ahead I'm interested in knowing what the most what carbon storage solutions have the highest potential in terms of, I heard hydro plant pumps mentioned but what can be created that will have highest potential in terms of high density storage to get us over the hump so that we can have renewable energy across the system you're seeing a lot of developments in those that you just mentioned I mean, I and lithium has improvements flow batteries are now coming onto the scene for longer discharge charge cycles a lot of utilities like those better than having to replace I and lithium packs all the time but I think there's going to be a proliferation of approaches and that's all good because that'll drive the cost down to be affordable physics, I'm kind of going to be the physicist engineer here 55,000 gallons of water pumped up Hoover Dam is the energy in one gallon of gasoline energy density matters flow batteries 20 watt hours in a liter lithium ion batteries 200 watt hours in a liter gasoline 12,000 watt hours in a liter energy density matters so I'll say in the end the best way to store energy is the nucleus of an atom and then in chemical bonds ultimately that's where our energy is stored now it's stored in the energy of chemical bonds and I think that our planet in 100 years is going to run on stored energy in chemical bonds and we just got to figure out a way to get there soon let me just add that that is true if you're only doing physics and but there's in the energy world there's an economics no one listens to you unless you got that the economics are very important cost and scale is everything in energy and I think in this in the storage world lithium ion batteries is the elephant in the room and other battery technologies that are going to be developed will have to compete with that and that is going down in a cost curve that Yish talked about and that's what is the dominant it's like silicon in semiconductor devices a lot of other semiconductors are there faster better you got to beat that silicon and it's very hard to do that but the reality is the big storage we do today is pumped hydro we can deliver a thousand gigawatts getting a thousand gigawatts okay you can finish that that was my first comment the cheapest way to store is pumped hydro you take today's hydroelectric dams a small fraction of them are retrofitted to do pumped hydro we should be retrofitting all of them whichever once we can that's the cheapest way after that you got to have storage right and it's not enough and it will never be enough because we don't have enough places to do pumped hydro so right now that's very helpful for integration of renewables but it won't take us there we need other choices and for transportation I don't think any other that's the 800 pound gorilla in the room is that lithium ion battery in your conference last week the former president of PJM he said I want some lithium ion but I don't like it all the time I want flow batteries I want this I want that he's the one that's fine not us on this podium so that's where you need to look at where are people actually spending money so that you can derive the economies of scale and drive down the cost he also believes that you don't need very much storage based on the kind of grid they have in a grid where you don't have much hydro like the California grid we're going to need a lot of storage unless we can have a really tremendous wide area integration which we may or may not do we have mostly talked about the electricity sector I think we will be kidding ourselves about decarbonizing the world economy the most difficult thing is to decarbonize the industry process heat is one of the most difficult things to decarbonize transportation is difficult to decarbonize and I think it's easy we have at least have options of nuclear renewables on the electricity side if you only do that and not worry about the others we will not solve the climate change problem I don't think anyone is abandoning I mean we have in Palo Alto we have Tesla motors that has pioneered electric cars and is driving down the cost and is inspiring a whole new generation of students probably in this room to make it better so I don't think anyone is ignoring transportation I think we all realize and combined with autonomous drive and driving owning cars as a service instead of as an asset that is all incredibly rich in terms of not just the quality of life and the offerings to consumers but the impact on climate and we had GM here yesterday describing a very exciting vision and they have a bolt that for $30,000 you can get an electric car that drives 240 miles that is amazing that's so exciting okay I know we all have a violent agreement not that violent this has been a pretty fun discussion it seems to me so the red light is blinking which means we are way over time thank you all very very much thank you for not just being here but for really being real