 Good morning, good afternoon, and good evening everybody from around the world. I'm your host with Professor Sally Benson for today's Stanford Global Energy Dialogue. Our dialogue today is on the topic of energy resilience against extreme weather. There has been significantly increased frequency of extreme weather events globally in the past two decades. In February of this year, we all know the state of Texas experienced unprecedented extreme cold weather. Energy infrastructure could not handle such extreme cold causing catastrophe situation for the people of Texas. In California, extreme heat waves and massive wildfire that lead to rotating power outages, leaving thousands without power of extended periods of time. Power safety shut off have become commonplace as a means to reduce risk from the heat, wildfires and wind. Energy resilience against extreme weather is an important topic for us to discuss today. As the world works to express extreme climate issues, the world energy infrastructure is expected to undergo rapid transformation over the coming three decades. So today, we are fortunate to have two people with deep expertise building up the national energy infrastructure. They understand the issue of energy resilience well. Both are proudly a Stanford alumni. Both serve as advisory council members to the Stanford political institute for energy. They are both of them are my good friends. Mike Morgan is co-founding partner of Triangle Peak Partners, a venture capital and growth equity firm focused on energy and technology. He is the lead director of Kingdom Morgan, one of the largest energy infrastructure companies in North America. For other guests today, Dow Kimmerman established energy capital partners, the largest independent owner in the United States of electricity generation, renewable power and energy storage assets. In April 2005, Dow served as its senior partners and prior to funding energy capital partners, he spent 22 years with Goldman Sachs in the firm's pipeline and utility department, we did the investment banking division. And I also like to mention both Mike and Doug they served in the board of Sanowa residential solar company. So before we start our conversation, let us have a couple of quizzes to warm up everybody. Question number one. And 2020. How many major notable natural disaster events took place in the United States. So the answer to this question is D. There were nine events in 2020. So our audience is doing pretty well 35% got it right that's the highest. For the historical data, the frequency of extreme weather events has increased dramatically over the past two decades, according to Wiki. Under the lease of a natural disasters in the United States. There were nine major notable disasters events in 2020. Seven were hurricanes, two were wildfires in total causing the death of more than 400 people, loss of about $100 billion. Let's do the quiz number two. How much damage in us dollars did the February 2021 winter storm in Texas cost. So the answer is about 200 billion. As much of March 25 the cost fair in Texas. To 111 deaths and over close to 200 billion and losses for calibration purposes. 2019 GDP and Texas is $1.9 trillion. So Texas lost about 10% of GDP during this one winter storm. We will now turn things over to Sally to start our dialogue with talking Mike. Sally. Okay, thank you very much and welcome Mike and Doug. Thank you for joining us. We're looking forward to a really lively conversation today and over the course of our discussion. Let's talk about infrastructure investment policy and innovation, but let's start with what went wrong in Texas, and what could have been done better. So to kick off this, Doug, you know, can you tell us what happened, you know, help paint a picture of what, what we're not wrong during this period of extreme cold. We're not wrong. So I'll take a little, little time to go through that, but maybe let's just start with maybe unlike the past decades, this time around we were really putting reliability in the hands of an intermittent resource that mostly being wind in the case of Texas and so the redundancy this time around could ensure 100% reliability all of the time, especially in this case, you know, of a large intermittent and not a, a base load resource is generally something that market designers and regulators. They've not been willing to expose customers to maybe stated differently. Honestly, they'd rather see customers have lower or moderate prices 99% of the time than to design and pass on the cost of withstanding perhaps this once in a decade event. So the obvious in Texas it gets very hot in the summer, and that's generally what Texas is designed to protect against. So a prolonged zero degree winter event. It's rare, but it's not unprecedented if you go back in time Mike and I like to say we're not weathermen but we do go go back and look at the data. It's been called before minus 23 I think is the record happened in 1899 and 1933. The greatest snow event was 1923 worse worse than this one. And this year's cold maybe was the third or fourth coldest ever so not unprecedented. And when you're designing power plants a lot of people are saying well winterize we got to design it differently. You design them differently whether you're worried about a summer peak or a winter peak, Texas generally the reliability issues are in the summer. We're going to build a power plant in Texas to withstand a winter extreme event, I may be putting it inside and putting walls around it. Think how expensive that would be to cool it and ventilate it with air conditioning in the summer. So they really weren't built for good reason for for this type of event, but this time really was the longevity of the cold. Now interestingly, yesterday, shockingly and maybe I'm glad in anticipation of our talk here, power prices shot up to about $2,000 megawatt hour that's about 100 fold increase. And it really wasn't an extreme weather event there was a cold front that came through, but at the time when power plants the thermal power plants, many of them are out for scheduled maintenance in preparation for the summer months when society needs them to run practically for an hour for 90 days straight, and you can't do that without getting mechanically prepared so we had a lot of plants down, and we had a little bit of a cold snap, but didn't have the wind and didn't have the solar available the conditions weren't weren't that good yesterday so demand shot up in the cold supply wasn't there because the quick start thermal capacity was was offline, and causes the price to spike up. And this is going to be recurring. When you're relying on heavily a big part of the marketplace being an intermittent renewable resource, unfortunately electricity, the nature of the commodity it doesn't have the capability to allow for large scale storage we're going to talk about that day today to to ways and new technologies to deal with storage but that's really what what we need so very quickly your question was was what happened I can come up with maybe something like 10 different things but but top of the list was in 20,000 megawatts of capacity, and at the peak of the storm maybe 19,500 of it, not functioning. And so that was big problem number one extreme demand for electricity given this prolonged cold weather well beyond system planning forecasts. And beyond available supply. Another big one, ercott anticipated that there was going to be a system crisis of demand exceeding supply and they didn't want the whole system to crash. So they ordered shut in outages and shut in of plants. Some might say that was a little bit of a mistake because many of these plants that were taken offline it just took them a long time to come back. They didn't have schedule outages at this time of year in anticipation of the summer so we had some power offline because we had no electricity no gas, we can't run gas compressors to get the gas to the power plants. That was a problem. Some of the gas system and I'm sure Michael talk about this froze and gas couldn't be delivered in the quantity needed. So no gas no power because gas is the dominant source of power generation in in Texas. So the heating impacted some of the gas and coal plants, not nearly as much as as what we lost from the wind being out, and from the impact of some of the forced outages, but some of the thermal plants, you know, were hit by the weather they came back relatively quickly over to two to three day period. The demand for gas shot up as I mentioned certainly for home heating. So there was less gas available for for power generation. We lost about 1000 megawatts of nuclear is a lot of stuff here isn't it lost 1000 megawatts of nuclear for a few days some of the, the feed water froze and forced and outage, and then maybe lastly is just the reaction to prices power price shut up from like $20 to $9000 megawatt hour cap gas shut up from $2 to 200 and some suppliers found it just too expensive to buy to meet obligations, and some customers just shut off because they couldn't couldn't afford to pay for it so a lot there Sally. Yeah, it's like I guess I should have asked you what went right. Yeah, that would have been brief. That would have been a shorter list but yeah no obviously a lot of things so so so Mike Doug mentioned that you know that you, you all have been looking at the weather and, you know, and, and, and, you know you heard some statistics from back and looked in the last 40 years you know which is sort of recent history. And in there were 1983 1989 2011, you know and similarly cold temperatures. So you think that the Texas would be prepared for it so why wasn't Texas prepared for this. Yeah, I mean, I get a lot of this but it really you know Texas is hardened for heat at hurricanes. And that is most of the thinking and most of the design planning is really focused on those two things. I think one thing we certainly it's gotten cold before. One unique part about this, if you compare it to the storm in 2011 to 10 years earlier was the duration of the cold. And so I plan amateur weather man I grabbed a few statistics but your Dallas Fort Worth was was below freezing 40% longer Houston was about 30% and Austin, you know spent a week below freezing, which was about 130% more than they've spent at those extremely low temperatures so what you get is this kind of cascading effect the longer you stay down there the worse it gets. And I get this but just to put a little bit of numbers around it, and I couldn't get all the way to 2020 but, but from 2011 to 2018, you know, and this is in trillions of BT us but when went from 300 to 690. So more than doubled, that's up about 390 gas went up also about 190 and then all at the expense of coal, which went down about 520 and nuclear was pretty flat really hasn't been much changed there. What you had was an unprecedented duration of a cold event with the different mix that Doug was really talking about. And, and I would say one short answer of why Texas wasn't ready is they didn't practice. I mean one of the simple policy fixes is to do drills and new simulations and try to go through some of this. So I think that's an easy. That's an easy prescriptive element coming out of this. The unfortunate thing was everybody started blaming everybody else. The moment this happened. And you know there are a few facts right gas natural gas fire generation went up 255% and when fell about 32%. And you know you can get into a debate about well where you tripped off accidentally was the freeze up. There's a lot of work to go on how that all worked from the natural gas side. And you saw huge draws on natural gas storage right so you think about electricity storage which Doug says, there's not, there's not much of it right now, but on the gas storage side you had the combination of heating load for you know folks who wanted to keep their houses warm and massive power demand as things tripped off, and really took resilient natural gas storage infrastructure to help help bridge that gap but that's. That's why we're here because we don't have a lot to go through here so. Yeah, okay, all right, thank you, back over to you. Yeah, thank you Sally. Mike, for both of you, giving the existing energy infrastructure, how could Texas to better to avoid such a big damage and loss of so many lives from infrastructure management, supply and demand management, personal energy use behavioral change, or maybe some other things you can add so what protects Texas to better to avoid, avoid this damage. Yes, you want me to start Mike I mean I'll throw out throw out a few more on the on the power side but certainly building more, more capacity. And we need a pricing mechanism, so that it's economic for more capacity to be built. They're cutting it too close to the edge on on reserve margins if these extreme weather events are going to be more, certainly more the norm, and certainly we're going to be more committed renewables part of the part of the mix. Winter eyes I'm sure we'll talk about that but consumers are going to have to pay for that. And, you know, it'll, it'll cost a lot. It's not going to be 100% effective, all of the time but I certainly can think of that 20,000 megawatts of wind shouldn't shouldn't be freezing up, you know a lot of wind developers. There's a lot of leverage situations. There's not a lot of margin in there, and you know who's going to pay for that to do that but I could see some regulatory mandates on the winterization side. Battery storage is probably the most important thing on the, on the horizon to back up the intermittent renewables that's probably the most important need. We still need technological breakthroughs we need prices to come down we need efficiencies to come up. And I think there's a lot of promise out there on this side which can really help turn the intermittent renewables more towards a base load capacity capacity markets themselves. This is a construct that that works in other parts of the country, because you may have a plant that is only called upon the extreme events, a plant that may only run 15 hours a year. Texas is what's called an energy market, you only get paid when you when you produce and sell energy. So who the heck is going to spend 250 million $500 million to build a power plant. We're only going to get paid 15 hours of the year that doesn't work you don't, you know, make enough of a return on energy sales alone. So capacity payment or call it a standby payment is a payment you get to be available for your plant can't be broken in order to make sure that it's available. And you get that standby payment which then makes it economic for you to build that that extra capacity. Again, it's going to cause prices to go up to have that and our consumers willing to pay more to ensure against the every 10 year event, you know, possibly so on the retail side, you know in Texas you can choose your electricity provider, and perhaps some of those providers maybe need to be required to have more financial staying power. And if that's the case, that's going to cost consumers as well. You're getting a lot of risk, trying to boost profitability, maybe the most common practice I call it playing the yield curve, where they were buying power on a spot basis to supply a multi year term contract for a consumer. And you're in a nice margin there and nice spread when markets are normal, but you really get bit when the prices spike, and that happened to a lot of them so consumers benefited by lower prices until the extreme event hit. And, you know, some people are going to have $50,000 power bills for a month that they can't pay them so no, no, no, no free lunch great great prices 360 days a year and then really bad for five days. So maybe we shouldn't be allowing such a risky business model. And the last one I don't know if we'll go about is nuclear, you know, nuclear is green, and nuclear is base load, a lot of the rest of the world is building nuclear. The US is still the world's largest producer of nuclear power at the peak had about 100 nuclear plants, but I'd say we are shutting them down, probably at a pace of one every six months or so they're very old. California, you know, Diablo Canyon the last one will be shut down soon but maybe there needs to be a conversation on nuclear I put that on the list. I would that that's a, that's a great summary by Doug I think, you know, think about how do you avoid the damage and loss. The thing I would add is one is, you have to prioritize rolling outages for many versus these extended outages for you know several million people, and they the human cost of being, you know without power just it's almost an exponential increase the longer you go, especially when you've got below freezing temperatures everywhere. The other thing you can do, like I said, you could you could simulate in practice, which clearly is part of it, but there are some very simple things that don't require, you know bipartisan legislation or or major changes one of those. One of the things we saw is there were critical parts of natural gas infrastructure. So, you know, production, gas processing and treating plants distribution facilities that weren't on the critical load list with the electric utilities. And as, as the electric system began to curtail, they started curtailing, you know some some things on the natural gas side that were absolutely critical to making sure the power kept flowing right so some very simple things that just, you know, take some require a fresh look. The other thing I just talked about is, is, if you can let more market signals to get out there. And, and Doug talked about energy versus capacity market. One example, Kinder Morgan operates oil production in West Texas. And so when the price they can see the price that when the price signal got to, you know, 9,000 mega one hour. So when it was able to shut in production and redirect the power back to the grid, because it was a very clear signal to be able to do that. You know we see other markets like California, where there, there are a little, you know, there are other things you can get into for grid support and so the Rocky Mountain Institute has this great wheel of really 13 different services that are really grid services. You know, and things like frequency regulation and capacity and black start capability, there are things other than energy that are really important to try to optimize so I just sort of double click on what, and what Doug said there. Yeah, thank you back to Sally. Okay, thanks. Yeah, so I want to follow up on this issue about the unregulated market. And if we look across the country, you know, it's very different in different places in the southeast you have regulated utilities, Texas unregulated California, maybe sort of a hybrid of models. And, you know, of course, the idea of unregulated markets was that the customers would have more choice. They get lower prices, which is a big benefit but we've heard from both of you several times that that the prices really spiked and that the up to $9,000 a megawatt hour. So, you know, about 80 times sort of the typical value there. And, and there was a direct follow out that customers receive very high bills I saw you know I was looking in the newspapers like people with $5,000 bills, you know, and that's a huge amount of money, you know, for most people. You know, the good news is is that the system, you know, a lot of people still did have power but you know how do we, how do we move from where we are so that we can, you know, keep the benefits of an unregulated market but at the same time protect customers and have greater investments in resilience that would make it so that we could ride through these better. Yeah, what's what's a strategy for sort of getting the best of both worlds. You know, it starts out you're right there's different models all over the world we deregulated the power markets in the United States we followed the example of the UK. Back in the, in the late 90s and probably half the country deregulated and half stayed under the regulated monopoly model that the theory was in a utility, you know, roughly 50% of their assets are power generation. And that's the area where we thought competition could bring down prices it didn't make sense in a monopoly model that an electric utility and the other businesses, 35% of the assets are the regional distribution grid 15% or the long line transmission. And those are monopoly things you're not going to have, you know, to transmission lines along the highway to compete with one another, but the utility shouldn't buy from them from themselves. So why would we shop the market for power as in any other industry than banking as insurance as in, you know, airlines that were all deregulated the consumer one. And so why would this industry be any different of course the consumer should should be better. I think that's what we found that the consumer, the prices did go down. Very much so, except, and I'll get to what happened with with bringing renewables into the picture. Unfortunately, California, certainly as I look at at it has the highest electricity prices now in the world, maybe rivaling Germany neck neck and neck. But for many customers you're paying over 50 cents a kilowatt hour. Maybe that's almost three times what you're paying in Texas, you know for 360 days days a year. What is that power prices should have gone down dramatically over the last 10 years because the major input to the price of electricity is the price of natural gas. That's the fuel on the margin that we most use in this country to make electricity and the price of natural gas with the fracking phenomenon has dropped by something like 90% from $12 or $13 to $2. Yet, the price went up. And what else was going on at the time was was adding renewables to the mix. So those that are saying, you know, renew the wind and sun are free. And this is so cheap they're missing out on a whole bunch of things, right they're missing out of all the transmission lines that need to be built to connect the wind and solar which is generally located in very remote areas. They're missing out on all the backup thermal generation that has to be built to back up this highly, you know intermittent resource. So when I go through all these pieces I come back to just price discovery, and maybe the consumer hasn't been, you know, necessarily shown the real price here. And, you know, in Texas, I think you and I talked about where 360 days maybe they show a very low price that on average, maybe the price isn't that bad. We have these five days that, you know, of extreme and we need to fix these five days of extreme prices, right through more storage, through more backup generation, but that's something that the consumers going to need to pay for and I think consumers at the end of the day, don't want this volatility in prices and I'd like to say in California, I don't really hear the outrage, you know power prices are, you know, just about the highest in the world. And I think California they're realizing that there should be a price on carbon, and they're paying for that and I think there's there's more stability in that, in that model but those are some of my thoughts of maybe the historical backdrop on how we got to where we are. Yeah, and I would just just coming at it from the other angle which Doug did a good job of describing what I call utility scale solar and wind and some of the issues around that and Doug and I as he mentioned are both on the board of Sonova, which is a residential solar company that's selling, you know, panels on your roof and and power walls maybe Tesla power walls or other batteries in your garage and a gen set out back. And one of the other, you know, as customers get shocked with either just the absolute cost or the variability of cost or the unpredictability of it, we do see a lot of people choosing independence, right, which is, I'm not going to disconnect from the grid completely but I'm going to control more of my own destiny by generating, you know, getting rid of a lot of transmission and distribution costs by just putting the generation on my roof, having my own backup, whether it's a battery or a gen set or both. And you know as we've seen the cost of batteries come down dramatically, more of these kind of combined systems of distributed generation and storage are making sense now there's a long way to go there. But one of the things that that once you start to construct those kinds of systems, you've got to have a software layer that's looking back at the grid and trying to understand when you should be charging your battery or discharging your battery. You know how to optimize and that's not something someone's going to sit in their home and do so there's a, there's a big role for software over the next decade as as we roll this out. And, you know, so some of the intermittency can be solved by policy and utility scale investments. Some of the customers are just going to take it into their own hands and solve the problem because they're not going to deal with the whiplash anymore. Yeah, and I just say I'm usually not a not a big fan of government subsidies, but you know in the case of solar in the case of batteries. I think the incentives and the tax incentives that made it cheaper for customers to adopt the model of the distributed generation really are helping reliability and helping prices go down and I think it's the threat to the utility model because I think it is a given that battery price will improve the price will come down the reliability will go up. And I think the government is kind of doing the right thing to give their ramp to allow these these these businesses to to come into play, but I do think distributed generation and I'm glad Mike you brought that up. I think that is going to play an increasingly large, large role as we all adopt that if you drive around you don't see too many homes the solar panels penetration is still in the in the low single digits. So we have a long way to go in this country which is very promising you know the model of the home with the solar panel, the electric vehicle, the battery charger. And I think there's a year that is going to be controlling the usage in a more efficient way, how we're building homes, you know more efficiently, a lot of exciting things in those areas. Okay, yeah. When we get to the end of this I might come back and follow up on on that question because you know I think there's also a concern that as more and more people sort of become more independent. So you have those days when you need the full capability of the grid and everybody, you know, even people who have generators and solar panels and batteries they still may need it. But how do you, you know, how do you pay for that when now you've got fewer and fewer people sort of contributing to a shared infrastructure, but we can get back to that question. Back over to you. Yeah, thank you. So the discussion so far has been great and setting up the understanding what went wrong, and what, what were the problems. Well, I want to now take it from here and look into the, the future of infrastructure. So the first question about for you. The electricity reliable kinds of Texas that's a court is the organization operating Texas election grid I look at the report, the major resources. The sources of electricity generation in Texas natural gas about 50% when about 25% cold 13 this 5% nuclear very small solar and and when. If you look at all these resources of electricity. Each of these was most reliable during extreme cold weather. Were they all equally struggling, you know, this would help us to plan for the future infrastructure. Sure. Well, I think natural gas, nuclear and coal performed much better than wind, I think wind at the extreme, something like 97% of it was out. And, you know, if we think about this and I know, you know, there's, there's a lot of hope to get to 100% clean energy, natural gas. Because the generating source is going to be around a very long time in this country, it's going to be around for decades because we as a society, demand reliability, especially as we move into a more digitized economy and electrification becomes more and more of a theme, you know, electrification of the transportation center electrification of big data and just electrification if more what we're doing in buildings and homes, and we demand reliability 100% of the time. And renewables are not there yet to give us that they're not there from a cost perspective but you're just physically not there yet right until we get to these these large scale storage solutions that we're all working on. So, nuclear, right, green and highly reliable maybe the most reliable form of power in our country running it, you know, 95% capacity rates I like to say, half of society likes it half of society doesn't like it which is like in most topics in the world today. And I think nuclear clearly is on the decline it just will cost an awful lot of money to take a 50 year old facility which many of these are, and, and, you know, give it another 20 30 years of life, when there's a risk that the government or society or just a state will say you're going to be out of it. But in this case, you know, natural gas some of the natural gas was shut down because Urquhart triggered forced, forced outages and shut them down there wasn't that much of it that was down because of mechanical reasons some of it was scheduled outages. So generally wasn't supposed to run this time of year so when the cold it was out some of it, the coal pile really wasn't built up and they didn't have the fuel that they, you know, they needed in the nuclear outage was a, you know, was a was a small one. So, I just, you know, come back to natural gas it's quick start. It takes you a week to turn on a nuclear plant might take you days to turn on a coal plant, but natural gas is the one that can as the as the weather is the wind and the sun intermittent natural gas is the one that can turn on quickly. Natural gas is cheap, because the price of natural gas as I said earlier has dropped so much because of all of the abundant production in this country, and natural gas is so much cleaner than than coal, and you know it's displacing coal as a form of power generation, which is a which is a good thing but I think you're going to see natural gas as the transition fuel for power generation as we move to that clean energy, you know, approaching 100% renewable and it's going to be around for decades, a storage solutions evolved, that'd be my view of it. Thanks. So Mike, any thought on on this along this line you know how could these infrastructure be improved giving these different sources of electricity. Yeah, I think the one I mean I generally agree with everything Doug said, you know, natural gas if you look at it went from about 31% of production from early February in Texas to about 62% during the crisis and so capacity factor changed the way that was favorable for natural gas I think the jury still out a little bit on the wind I mean so one of the questions is, is it just winterization was a poor choices on the way the wind was designed to build. I mean, there may be parts of the wind thing that can be addressed and fixed that aren't in a way endemic to win, but I think clearly Texas was not ready. The wind assets were not ready for what occurred. And so, you know, other smart people to me can kind of dive into that. The only other infrastructure stuff I'd really get to, in addition to what Doug said, and this may get to a little more out there, but, you know, storage, big scale electricity storage is harder to get to near term. There are a lot of companies coming that are developing both front of the meter utility scale projects, as well as behind the meter kind of for commercial industrial customers. But you know there is, there is this opportunity with software to enable the formation of micro grids community distributed generation assets. And that could come in and help with resiliency as well, but then you have other forms of storage so if you really get, you know, leaning in, you know, hydrogen is coming at some point and whether it's whether it's using, you know, renewable energy to create a hydrogen as a storage fuel, and then, and then burn the hydrogen when you need to, you know, or, or new types of gas storage that are on the horizon. You know, there is a more holistic approach to storage and I think we need to plot a course towards. And, look, I will, the way I would frame it is one of the really different things now than in the past is people are mandating solar and wind. And so utility planning cycles are very different than when I started my career 30 years ago, where you do this long term lowest cost of energy and lots of bringing out this is more mandate right we're going to be, you know, hit a carbon reduction target by x year. They're coming. And so given that they're coming how do you design the grid to deal with that how do you do it at the right pace which is part of what Doug's giving to, and make sure that you don't incur this big human cost. You know, to try to hit in a somewhat arbitrary political objective of being carbon neutral or, you know, lower carbon by someday in the future. Well, this is a perfect timing I think Sally has a good question to ask both of you. Yeah, you know, I mean that concerns about climate change, you know, continue to grow and we're starting to see governments around the world, you know, take more and more aggressive action. And, you know, in particular, the current administration the Biden administration has proposed really a very aggressive plan for the electricity sector with for a zero emission grid. With the short term goal in 2030 of getting to 80% clean electricity and 100% clean electricity by by 2035. And maybe I'll sort of frame this from my perspective, you know, clean energy includes, you know, anything where you can get carbon emissions near zero so that would include like natural gas with carbon capture and storage nuclear, you know, all of the above. So anyway, sort of in light of that, you know, is such an aggressive plan possible, you know, can we can we do this, you know, can we mobilize the massive investment that would be needed and, you know, and considering a reliability right we don't want just a system that zero emission, you know, we want that also works all the time in zero emission. So, so I guess, you know, either either one of you maybe if you want to kick off discussion about how do we do this quickly. Well, I don't know, I mean, I think the, you know, there is a real spirit of innovation and anything that's possible. And, and I think these are very tough objectives to try to hit in a politically divisive environment, but I will say, you know, Secretary Schultz is no longer with us, but he was a huge fan of putting a price on carbon and the carbon dividend. And I think the best way to get there is to try to find a reasonable way to put some kind of a cost on carbon and let industry and individuals innovate to figure out how to get there. And I think doing it by mandate and the patchwork system state by state is very hard. We can debate what the price of carbon would be and how fast it should grow and all those kind of things but I think that is a big enabling factor to try to get there from a policy perspective. You know, otherwise I think I worry you're going to have mandate driven objective, which are laudable, but may make it very hard to avoid what we saw in Texas in California. Yeah, and I would say, look, you have to put side by side I know the passion is there there on decarbonization and 100% clean. The dominant passion is, but I like to say we need to solve for four things side by side. Okay, and we'll put decarbonization, you know, right there as a key one, but cost, right, whether it's cost that our economy needs to say competitive on a global basis, whether it's one state or another state has to stay competitive, whether it's just that our we have to make sure our economy grows so that there's jobs, so that you can't throw out cost as a as a goal here that it has to be reasonable. So three all know what that is is reliability, right and we've talked about it and look at this we've had three bad days and it was, you know, was a tragedy in in Texas. And we can have that so that that one, some might argue might go to the top of the list here, because what would society be if we if this this happened every month, because it's it's you know people die from freezing to death and the like and think you know hospitals with with no electricity. So you got to put reliability right there. And the fourth, this is the most capital intensive industry in America. So it takes capital, capital needs a return. You might not like to talk about that, but without an investment return, no one's going to put the money up. And so you have to have economic models that will draw in capital, so that these these asset solutions take hold. You can't just say for the government to do it I don't think the government is going to nationalize the power industry. The best the government can do is to provide short term incentives, generally tax incentives loan guarantees to push things along, but you need to invest or at the end of the day willing to take the risk and put up capital to have the potential to earn a profit. So I put forth for all of you that I you know we feel the passion on decarbonization, but you got to put side by side, cost reliability and investment return whether you like it or not. You can't just solve for one of these. You got to solve for for all four of these. And I think there's a lot of ingenuity maybe later. I'll talk about this world of of SPACs and pipes, because we have this thing that that guys like Dan Riker used to like to talk about the Valley of Death, where's the money going to come from for these carbon capture projects and things like that and start and see signs with the equity market is saying yes, we're going to help on the profitability side to get there. But that's kind of the perspective that I that I put it in and Sally you said, you know natural gas with with with carbon capture. I think we're going to need natural gas to be a component I'm not so sure that 100% target is necessarily the, the right target don't forget that the United States is less than 15% of the world's, you know, carbon emissions come from the the United States and we've been shrinking. But, you know, for us to get to to zero. We still have to deal with the rest of the world doing this, and that might be quite a burden on our society from cost and, and, you know, reliability perspectives and if we had this quick start cheap natural gas in there as the reliability piece to be not windy and it's not not sunny. And if we can maybe attach some capture to that. You know, maybe there's something in there but those are the pieces and I think we're we're, if we have this conversation with Mike and I 10 years ago we would have been far less optimistic than than we are now I think we're very optimistic, but still a lot work to do. Okay, back over to you. Yeah. Now coming to the resilience again. We know solar and when like this is really now building out growing like crazy really fast as the renewable sources for electricity. This is actually the resilience this is certainly attached to to to my heart of my own research in the past 15 years I've been thinking about what's the best energy storage solution. Natural gas as a backup is great for seasonal particularly talking about seasonal energy storage. So is it natural gas is it a new type of batteries or is it you know for energy storage or some other form thermal storage or palm hydro we should consider what's your thought on on this. Yeah, my particular for you certainly doc if you want to chime in please please do yeah. Yeah, I mean there's a little bit of it all of the above on storage attitude that I have, I will say one, one thing is, one thing is clear and that is that the even even the existing lithium ion battery technology has gotten to a price point. And where it can be very competitive for solving certain kind of problems so if you need a, if you need to catch up peak in about a four hour window. There are now some very attractive economic options to do that, you know batteries made by Tesla and others. And in particular if you can layer software in on that and so we have on the board of a company called step that we're actually merging with here in the next couple weeks, but what they do is they they layer and an artificial intelligence machine learning software on top of batteries that are located distributed batteries all around the system. During the blackouts last summer in California. And again the California market has some unique properties in the way that you can get into these markets, but they basically back in August they were able to create a number of virtual power plants on the fly the software was and bid about 50 megawatts of support into the grid and in Southern California to help alleviate, you know, kind of the rolling blackout threat during all the fighters. And so I do think that, you know, we are seeing innovation on how to have a better utilize software to get more out of what we already have. And then we have some of these emerging storage technologies that I think can make a difference but it's going to take time I mean it's just it's going to take time. And there are, you know, what you're talking more about this than me but you know outside of with lithium ion and the, and the technologies we have now there are more interesting technologies coming down that can deal with, you know, seasonal big storage chefs, big big kind of peak chefs and seasonality. I just add very quickly. The challenge has gotten greater because of where we're headed with the demand for electricity. Electricity demand growth has been pretty much flat the last several decades because energy efficiency has largely offset growth and GDP related electricity growth and by the way, that has been the number one source of decarbonization. We don't talk about it enough. We don't talk about energy efficiency in energy efficiency, but now we're going to electrify the transportation sector, and that is going to be an enormous jump in the demand for electricity. Big data, high speed computing the statistic that I like to talk about is, is, I've read that now 1% of global electricity demand is for cryptocurrency mining. It's a very intensive energy sector that has just cropped up and we're talking about the need for power plants being built in a lot of places to satisfy the, the miners but all what's coming on on AI. Even when we, we talk about how, you know, computing is solving for viruses and vaccines and this is not one person with a test tube and a lab this is high speed computing. It's going to take the voracious demand for for electricity, and then buildings and homes, you know, not not being heated by fuel oil and natural gas that's going to to electricity. So we're going to have to deal with this increase demand at the same time that we want to decarbonize, which is making the challenge greater so it's going to take hundreds of billions of dollars of capital. technological ingenuity. Yes, it's going to have to take some policy shifts. And back to what I said it's going to have to be consumers and society are going to have to say we're willing to pay for this the decarbonization. Maybe this is back George Shultz and his view of carbon tax, we got to put a price on this. And I think it's there's encouraging signs that consumers are willing to pay for this, but there's no free lunch. Doug made a great point on the on the crypto minors. And that is, I mean, if you think about demand side management, they're like one of the greatest opportunities I think out there because they're doing nothing but looking at data and optimizing, you know, for a profit function and if you could give them a price signal they will they will stop mining and and cut that load very very quickly right that's an easy use case on demand side management to help help balance the system. And I think as software and technology helps us deploy more into customers like that and get those easy wins. You know that helps make the system more resilient to speaking of big data. I think Sally won't have a discussion with you. I want to want to chime in in a minute Sally back to you. Yeah, thanks very much. So, I think if you look at the electricity system of the past we had large central generating stations we had transmission, we had fairly simple distribution systems and we were and we had consumers at the, you know, along the barriers and so forth. But now it's going to be much more complex we're going to have, you know, within the distribution center we're going to have generation, you know, PB we're going to have storage, maybe other kinds of generation like field cells and so forth. And not only is the distribution system more complicated but now we are also going to be relying on electricity for our cars right like imagine having a power outage. And if you're unlucky and you aren't charged up, you know, now you can even go to the store to get some food right. So that's not good. And as we saw in Texas, you know, if you're relying on electricity for heating, you know, if the electricity goes out that's dire right you know in the past with a lot of people who had other forms of heating mad natural gas, maybe a lot of wood burning for heating. And, and even industry is starting to think about how getting electrified so it's really really important and, and we always think of energy assets as things like, you know, generating stations and so forth. But, you know, what do you see as the role for big data artificial intelligence automation, you know, so really thinking about the grid much more like you know like an autopilot of a plane for example that is taking in all this data. And, you know, do you see that this can play a big role in helping with reliability and resiliency and, you know, do you see this as sort of a new frontier for our new major class of investments that can be made to support the electrical grid. Want me to go go first. Whatever. For me this is this is year 38, involved with electricity I started in 1983 and I was viewed as I had the most boring job ever I like to laugh my product electricity I still have never seen it, you know, but I, but I stuck with it and all of a sudden. Right. It's all everybody's talking about and we have these these challenges. So here's your spot on Sally, you know how electricity is going to be produced, how electricity is going to be used, and how we're going to prioritize the environmental impact, have all dramatically changed, you know, most of my career we didn't, I think I think Mike said it we did the business and if coal was the cheapest coal is coal is what we, we build. And so very, very changed, you know, dynamic. And so I get to, you know, just let's just take the software management side. And so I get to see big businesses in how our, our home is managed, and how are, you know, buildings if we ever get away from the zoom calls and go back to offices of how that is all going to be managed to optimize because this is not as simple as you just think your thermostat as we integrate the solar panel, maybe the backup generator, certainly the battery, certainly the electric vehicle to optimize this for cost reliability, and lowest use of, of carbon. I think it is more and more going to be moving to a more distributed generation model, less so the, you know, the central station power plant will still be there, but less so. And the wildcars, certainly in terms of an area that I know you focus on Sally is carbon capture, been early and focused on that one. I think we need more focus there, because I think that can change things a lot, because those two maybe can combine reliability. And, and, and, you know, and decarbonization as being, you know, a very big, very big part of this. And, you know, the capital is flowing and maybe I'll let Mike if he if he wants to. I am so excited about what's going on in the equity market that the equity market the public equity market has an appetite for businesses to solve these problems. Before it was stuck in the venture capital community that maybe there would be $10 million and $25 million, which is not going to solve a hundreds of billions of dollars of problems. Maybe just in the last year that the equity market has had an appetite for some of the types of businesses that you're talking about that that are going to really reconstruct a power industry in a very, very different way so I think we're cautiously optimistic that the investor desire is starting to align with the societal desire. I don't know Mike. Yeah, I agree with that completely. I mean, if you go back in history in Silicon Valley, you know, 2004 five six there was a lot of interest in clean energy and where we're going. The whole financial crisis hit and a lot of the venture firms stopped I mean they just it was a hard stop and not much funding going on. And now what you're seeing is you just have massive capital flows into environmental social and governance funds. And a lot of that gets directed towards clean energy and the energy transition. And so, you know, whether that gets expressed in late stage investments or facts or, you know, traditional IPOs. And I will tell you that that Doug's been raising capital around energy his whole career I've been doing it my whole career. I've really never seen traditional hydrocarbons. So hated, and anything new and energy transition so loved and so that is, you know the pendulum, you know you can debate whether it's gone too far one way or the other but the equity markets are definitely willing to fund more of this. So if you look at, again, so Nova takes lots of these long term contracts with residential consumers who have, you know, finance the panels on their house for 25 years, and they, they gather those up and the debt markets are willing to the most recent financing was sub 3% cost of and you can and they'll give you a lot of advance against that pool of assets. And so it's not only the equity markets the debt markets are are very willing to fund, you know things like wind and solar and that's certainly help so it. Again that goes back to the point Doug was making that those are sources of optimism and that's a real difference from the past. But it's still a very heavy left to, you know, to get to some of these goals. Okay, thank you back to you. This discussion is great so both of your touch upon you know how do you finance the clean energy project that that's very exciting. So we have a lot of questions coming in from the audience. So let me take the audience questions. Let me brainstorm with you a little bit on the blue sky ideas just throwing right there for for discussion purpose. And if you look at Texas grid right is basically an isolated grid right there. So what it makes sense to think about a national interconnected super grid. Nowadays there's a 1.2 million watt of DC transmission line technology available, you know can deliver 12 gigawatt of power over long distance, basically 2000 miles which is the same distance from the US West Coast to the East Coast. So one one one thought life just for brainstorming. The second thought is, would it make sense to also consider a national electricity reserve you know having big big energy storage right there, a number of them maybe not just one. And to, you know, reserve to balance the grid to respond to the extreme weather certainly this will come together with many many, you know, distributed small small scale energy storage. So what what these kind of blue sky idea makes sense to to go down to the path to discuss a little bit more. I'm curious to my my first here on the tough, the toughest question of the of the day. So yes we have a highly inefficient grid system in this country that was built on a regional basis and I, I love to talk about history, because it really wasn't that long ago that we identified the nation, you know, 100 years or so ago and it really was Thomas Edison, and kind of his, his, his number two Samuel Insel where the lead and, and I think the book about Samuel Insel if you're really excited about the history of power I think it's called the merchant of power it's just short read you should, you should read it to understand where we are. But you know we had. We first electrified the city of Chicago, it was a utility Commonwealth Edison, and it really was a big conglomerate. And that was it and the stock market crash hit 1929. And that was viewed as a safe investment but it wasn't. And a lot of people lost lost a lot of money. And when we elect started electrifying the country Congress, and its ultimate wisdom came in and something the 1935 act the public utility holding back and said we got to do this on a regional basis it's too risky to have one big conglomerate controlling the transmission grid, every state, every region should control its own destiny. So that's how we got to where where we are, because you say how the heck is Texas an electrical island that's a that's a dumb idea. That's that that's the history I like to say, you know, government stuck their finger in that one and look at look at what we look at what we, what we got. So when we talk about an expensive project to do a national grid if it were me, I would be moving in the other direction, or towards distributed generation and more what Mike had described in terms of the battery technologies on a distributed basis. I think Sally maybe mentioned pump storage I love pump storage. That is a battery that's been around a long time when we started building nuclear in this country, we were very scared what if it, what if nuclear doesn't work. We've been in Boston, without electricity for two years, we know something large and quick start if it goes out. So we have a half dozen big ones in this country, this is water at elevation that can be dropped instantaneously to turn a turbine and create electricity and then at night, we don't need electricity is as much and it's cheaper. We pump it back up and do it again. So I could see a model where we had a bunch of storage we tried to develop one for almost 10 years in California, and permitting is local. And it really is. And building a transmission line is about the hardest thing one can imagine from a permitting point of view, like to say in a power plant, we can see our neighbors of who has to get comfortable. Oh my goodness a transmission line going across the whole country. Anybody in their backyard can raise their hand and get in the courts and, and hold it up. So I don't think it's all that likely also not to get into the controversial issue of forest fires. In California, the utilities are so nervous about getting sued for any fire. If there's even a hint of it they're going to shut the system down. And there goes reliability, you know, out the window, maybe we need some some tort reform but the more transmission lines you build through forests, newsflash, there is lightning and it does get windy and transmission lines go down, and that can spark fires and do we really want more of that. So, I lean a little against all that and very controversial topic. Yeah, and I would just make one other point that alongside Doug there which is there's a real locational advantage to distributed storage and distributed generation and so you could you could put relatively small amounts of capital and you can drop a five megawatt 20 megawatt hour battery pack, you know, in a congested urban area, and that is far easier to say it can give you, you know, nearly all the benefits of a complete redo of a substation or transmission line and so when you take all the back yard stuff and the permitting difficulties, there's just a practical you can get a lot of the resiliency reliability benefit out of, you know, lots of little solutions scattered around the system that one sort of mega answer. You know, the only thing I'd say if you really go blue sky and there are really new forms of hyper efficient storage you can turn that out its head. You know, and so when when when your when your department comes up with the, you know, the blockbuster of all batteries that may change that. Yeah, you know I like to mention that then Michael keep telling me about this I think I really like that we have a lot of palm hydro capacity right here in us we have no utilize yet. Yeah. Well, certainly badly innovation continue going sadly back to you. Okay well I think we're going to actually move to the questions from from the audience now so thank you very much for your questions and and do do keep those coming. So the first question is actually builds right along with what Mike was just saying. It sort of poses a question that since there are no markets for resiliency. How do you establish revenue streams to increase resiliency as opposed to, for example, just capacity payments, you know, because there are other very valuable services that you need for resiliency. So, you know, what would be a specific plan for, you know, getting markets that would do that and how might those work and this is for both my conduct. Yeah, go ahead. You brought it up. You brought it up. It's a tough one. Well, I, it is a tough one. And I think that, you know, the, the, the easy when you split it into kind of three categories right so they're sort of customer resiliency is sort of the customer level you've got utility, you know what is the utility to be resilient and then usually the grid operating right so you have kind of three different constituencies. And they can all monetize it in a different way so the customer might be willing to pay for backup power right locally at their facility and, and you know, let me let me deal with rate design and catch a demand peak and lower my bill. Right. And the utility may be willing to pay in the case of storage to drop storage somewhere because they don't have to invest in, you know, new T and D assets or, or assault some other congestion problem they might have an RFP where they can offer incentives to do that. In the ISO, you know, I think it's getting markets like frequency regulation, you know, spending reserves, kind of voltage support mark and it gets pretty esoteric pretty quickly on how you do that but you know the short answer is I actually don't. I have a sense of what all the services are, I think it's very tricky to figure out how to balance and do the market design well. And, but what you, you know, the more of those kinds of value propositions you can expose and allow the market to bid on the better off I think you are so it's more than just energy and capacity, although just capacity capacity markets can help a lot. I mean just that that one change. I'll just say, I think all of that a little bit easier to do in a regulated market than a deregulated market we can't put the genie back in the bottle here and, and re regulate I don't believe those parts of the country half of the country that was was deregulated. And sometimes, you know, out of those regulated markets, you know, in the south and Southern Company and places places like that, they can kind of put in the model and the example of how this could work for then the deregulated market to say okay we see it, and we'll, you know, we'll move in that that Unfortunately, most of our residential customers don't have the sophistication to figure all of this out, kind of on their, you know, on their own. I'd say the great strides with commercial and industrial customers and deregulated markets have gotten very smart of how to price these things and they think they value reliability now reasonably well they didn't used to. And the residential side seems to work a little bit better in a regulated market to figure out some of these issues. Right. Yeah. No, it seems like a tough question and, and, you know, especially when you, you know, you have your four things decarbonization costs reliability and capital capital intensity. So cost isn't important. Yes, we can imagine layering on all these services but at what point, you know, do you, you know, how do you balance all of these factors, and, and ultimately like sort of who's in charge of ensuring that the customers have, you know, reasonably low cost electricity when you have, you know, so many competing markets so, so I think that's a really good problem that there are students out there who are interested in these that would be very helpful. Yeah, Mike, I want to get one of the audience questions to you. This is about hydrogen. This person is asking should North America consider more investment and renewably source hydrogen infrastructure, especially the underground pipelines. This is a three scale energy storage using hydrogen. This is as the alternative to greater reliance and investment and the electricity grid, particularly in Texas, I guess it's not limited by in Texas, it could be everywhere so the general thinking about hydrogen. I want to get one easy example that, you know, so kind of organs the largest operator of natural gas pipelines, you know, one of the things we're looking at is mixing sort of five to 10% hydrogen in if you get beyond that. You have a very destructive effect on the pipeline so you start hitting the pipeline integrity. You know there can be innovation there can be material science innovation around that that could help and ways to maybe get that percentage higher. And that's blending in so if you had, you know, took an example you had a lot of sun in West Texas, and you were creating, you know, you were using solar power to create hydrogen out of that of water, right you're just basically making h2, and then mixing that into a gas and that's a pretty easy way to transport it today and that's blending it in it's not, you know, sort of a pure answer. I'm also able to get it to a lot of industrial markets on the Gulf Coast that could that can use it pretty quickly I think. You know, getting getting the national infrastructure to really move hydrogen around its scale. It would be like Eisenhower project building a highway so I mean it would there would be, you know, it'd have to be a big national priority initiative to get there. And it's coming I mean it's going to be there in the long run I'm a pretty firm believer that we're going to be able to use hydrogen for a lot of things it just, it's very very early days as an investor. It's, it's hard to find things that are. Yeah, you know, late stage enough on the hydrogen side to have a big scale difference right now other than the traditional industrial uses of hydrogen of which there are, there are many. And even you know we're all excited there's an infrastructure bill coming and I think the scale of what Mike talked about I don't see this one right at the top on the list at all. The building it would be probably be bigger than the entire infrastructure bill itself if we were to go there. So certainly a lot of a lot of promise a lot of benefits but the infrastructure challenge maybe greater than that that national grid. That would be a loose guy idea that you put forth ye. Yeah. So it's just, well, two of you are our advisory council member just report back to you. Hydrogen questions like this is a perfect one for university for academia to study. And Pico Institute we are planning an initiative on hydrogen at this moment. Actually today is our hydrogen workshop engaging industry quite a bit so down the road I will let you know what we find out and from the, you know, low cost generation of hydrogen transportation storage to utilization for particularly decarbonizing the heavy duty industry yeah. Yeah, because you know and Mike and I world we, you know, we hope to look out, you know, 10 years but we have investors and we have returns and there's many in our in our world that look no more than 12 months out, you know, for an investment return. And, you know, funding in the Department of Energy to go through these things necessary hasn't necessarily been there so it's the universities are the ones that can take on the 25 to 40 year projects. And we need you and we need to support you to be there to think through the practicalities of all of all of these things but you can't always just rely on the capital markets and investors to come into things when they're, you know, so so so early stage so we're there to support your efforts he I think it's that's in the right place at Stanford to dig into that. Yeah, this is a good sentence you're right here. Yeah, Stanley back to you. Okay. All right, thanks so well so this is another question from the audience and you've already sort of partially address this but going back to Texas, you know, being an independent grid I mean if you look across the country there's Texas and then there's whack and then you know in the Eastern United States there's no bunch of different system operators, but but Texas really stands out as being in a decoupled. So, you know, I guess number one is sort of how much do you think it would have helped. Have it been able to be connected and and then just sort of by analogy perhaps looking at California we get about 25% of our electricity is actually imported and you know that's actually very helpful and looking to the future in California. You know, unless deep water, you know offshore loading wind turbines, you know get to be cost effective. It's been really hard to get to a completely decarbonized grid because we don't really have a very good onshore wind resource. So if we want wind we're going to really need to connect to Wyoming or you know someplace that's got a well class wind resource. You know, I guess maybe you know so what do you know about so why Texas chose to do what it was doing and, and, you know, and should it consider you know a broader set of connections for for all kinds of benefits both being able to sell more electricity to the rest of the country but also to help in times of shortage. And I know one of you. I'm going to judge the history Bob and so I think he made no more of the history I mean it's always been that way is the short answer but Doug I don't know if you want to apply on historical side of it. So, you brought up I think you said Wyoming there. That's really what they love to do in Idaho, Wyoming. Montana is to sell their cheap electricity to California, I think not. So, that's a child there's a lot of cheap hydropower in the Pacific Northwest and, and, and just as an aside, you know that snowpack isn't always there. And, you know, just when California wants it is maybe when it's not there and they're going to keep it for themselves so there's a lot of territorial issues on that. California, let's just say it doesn't have a lot of great fans and its neighbors to accommodate that California doesn't like to talk about I think they're almost done with coal, but they're a big buyer of coal fire generation for decades from Utah, and Arizona and Nevada, I still think it's a little bit. A little bit there so those those Teslas in Los Angeles if you're using LA department of water and power. I'm sorry you're still burning some some coal fire generation in there but obviously from a system optimization. You would want these power grids to be more regional, and you'd want to have more diversity of fuel. So it's not a great thing that you have the Pacific Northwest hydro hydro hydro California renewables renewables. There's a lot of, you know, nuclear, there's other places that were you know very heavily concentrated and, and colon really, if you went to my four things and that reliability and cost, you know, with those two you would have a much more all of the above type strategy and you can't do that just state by state. Citing transmission lines are probably the hardest thing in the power world to get built Mike I don't know if it's harder than a pipeline. Sometimes you can't see the pipeline. Yeah, usually. I've been doing so well on permitting these days, but transmission lines are are right there so I like to say there's no just in our in our world of heavy infrastructures just do this or just do that so on paper. Yeah, we would have more system efficiencies, better reliability and lower cost, if we had more interconnection, but I like to say good luck on getting a lot of that accomplished. Yeah, I'd say the same thing. Look, it or more interconnection is good, generically, you know with respect to winter storm jury and what happened in February in Texas, it was very cold in Louisiana and some of the neighboring states to so it's not clear. It would have had some incremental benefit it's not clear how big that is, and you know Texas is a huge power economy on its own. And so I think what that more interconnection is great I don't know what scale. The real dimension returns exist. But Doug made the right practical point which is it's just very hard if it's, you know, again if there if there are cheaper fixes to get more integration that that massive do transmission lines, you know that those are easy wins. And you're right it's not when we're there's a there's a weather crisis that weather doesn't look at the state lines. That's the point in time that places like Oklahoma and Louisiana are going to want to part with their very precious power to help out their very large neighbors so practical issues. Okay, thanks, back to you. Yeah, this one person asking in the audience about Norway. Norway's electricity. I just look it up is 98% renewable. We can learn from Norway of course if I look at the, the composition of the renewable electricity, mostly is hydropower. So I, well, whether this is something we can learn and United States right here what's what's your thought yeah. Since I've been to Norway Mike I don't know if you've been to been been to Norway. I do say they have an incredible amount of wealth in Norway from oil. You can't forget that. In terms of a lot of their wealth came from which was what was able to fund a push to renewables, but there's a difference between base load renewables and highly intermittent renewables were, I think the nation nations and my firm largest owner of geothermal. So, geothermal is wonderful steam out of the earth that runs all the time. And you can't just talk about geothermal the same way that you're going to talk about wind and and solar. So the pecking order of reliable renewables starts with geothermal, then goes to hydro. And then you probably get to solar because solar for the most part is peak coincident. It's sunny when demand is the highest and then you kind of get to, you know, get to wind and offshore wind, being better than onshore wind and they were able to do a fair amount of offshore wind which has been a very, very difficult thing to permit in the United States and there's more talk that we're going to be trying to do, do more of that but yeah they had a, they had the capital availability they have one of the sovereign wealth funds in the world because of their, their, their oil wealth so they had the ability to divert public monies to do these things. They have the offshore wind they have the hydro so that gave them a big advantage so a lot of this is where are you located, and what are the tools that you have to deal with and California does not bear a lot of resemblance to Norway just in terms of the physical nature of it. Okay, Sally back to you. Okay, alright, another question from the audience. So, you know, you mentioned that nuclear plant was, you know, shutting down every six months or so. What we used to have 100 now what maybe we're down at 96 or something like that and more to go. And I'm part of the trouble for nuclear power plants is they're having a difficult time competing in the markets and in part because of these zero marginal cost renewable generation resources, also low cost gas but anyway with that background. So here it's actually quite a specific question. If there were a $40 per ton tax, for example, on all fossil based generation. Would that be enough to sort of tilt the tides and so that at least the nuclear would be economically viable and competitive compared to fossil fuel generation in the US. Or is there some other, you know, number notes $60 a ton or whatever. Yeah, would it change the game for nuclear if there was a carbon tax for power generation. Let's talk about nuclear a little bit. Mike and I are not that quick to come up with the calculation on if it's 42 and a half or what the numbers will let's just talk about nuclear for a second so we'll start with the trend of shutting down and Sally you were you were spot on low, you know, low marginal cost renewables but this this natural gas thing that has dropped in price by by 90%. So the, the fuel on the margin that drives electricity prices is natural gas in most regions of the of the country. And so nuclear makes electricity. So it's not getting that much of a margin for its product to increase its life for another 1020 30 years it's going to have to invest several billion dollars. It's old rusty pipes and all that kind of stuff to put the money in there. Is it a good investment. Is it a good return on capital to put that money in a nuclear plant when your product electricity right now is not earning a very high margin. And then there's this other problem society doesn't half of society doesn't like you. Okay, so you're going to have to put a very big discount rate and risk factor. So I'm going to put a billion dollars am I going to be allowed to operate for the next 20 years to get a return on that capital. When we have, you know, elections for governors every four years and we have New York they want to shut down Indian Point in California shutting down their plants now we're finally starting to hear the word maybe a little bit out of the new administration of this nuclear maybe that it's green. Maybe there's no greenhouse gases. Maybe it's, it's, it's reliable. And maybe in the United States from a safety point of view the safety record has been pretty much perfection in in in the United States and I know there's Chernobyl and I know there's, there's Fukushima. But then you take the other side said well why don't you build a new nuclear plant. The problem is is remember the last go round of building nuclear plants in this country. It took decades. So we have an NRC today nuclear regulatory commission that has not permitted a new nuclear plant. And that would be a very daunting task to go in with a new design that has never been approved. It's going to take years and years and years and iterations and iterations. So, I really don't know any financial investors that would say yeah what I want to do is build a nuclear plant that's going to take me 10 years to get it permitted that the design is going to be changed 20 times, and that the society may who knows in 10 years decide that I need to be shut down. I think that's sad. I happen to be, you know, a proponent of nuclear of solving my, my four that I came up with there, but it's out of favor in this country. And I think it's going to have to be really a big political mindset shift. So people like Bill Gates are behind it and there's module modular nuclear that are potentially solutions, but I hope we can have a sea change. I think it may be too late to save our existing nuclear plants just because of their age but it would be sure nice if there's a sea change and I almost put it back to Stanford as you spend time on carbon capture and battery storage at the, I hope there's time spent on the next generation of nuclear as well. Thank you. This discussion has been very exciting both of you Mike and Doug. I want to report back to both of you. You know the planning for the next generation of energy system. It's so important. In prequel right here we will be announcing soon in about a week time of our first set of prequel pioneering project using big data AI for energy and climate and also integrating the environmental justice into the consideration. You know, taking technology piece the policy piece economic piece right there will be announcing to winning project Sally is involved in one of them. It will be very exciting to get your feedback your insight on those project. So with that, let me conclude today's event. And thank you everybody for joining us around the world, and we hope you found today's global energy dialogue very informative and relevant during these unprecedented times. So through now our broadcast of today's program on behalf of the entire Stanford prequel Institute for energy. We would like to thank you for joining us. We'll see you next time. Bye now.