What do Bill Gates and Steven Chu have to say? Some notes.
(Please note: spelling and grammatical errors are most likely those of the note-taker. Apologies!)
Bill Gates is asked: Why are you here at this conference? Improvement of the human condition has to do with energy intensification. To improve the livelihoods of the poorest 1 billion, they need affordable energy. Also, the poor will be the victims of the environmental problems caused by negative impact of greenhouse gas emissions.
Steven Chu is asked: Are we creating the technologies that are going to be useful? ARPA-E provides shorter-term funding so companies can prove they have something that deserves private sector funding. If we reach these goals e.g. with battery storage and photovoltaic devices, they'll go viral like cell phones did, leapfrogging past the normal grid, bringing power to these small villages and having a global impact.
Bill Gates is asked: Energy has had a slow innovation cycle over the past century - how do we make it faster? Energy industry is highly regulated, large amounts of capital are needed, there's a large dependence on government policy; people underestimate the difficulty of getting the breakthroughs, and how long it will take. Energy research is greatly underfunded, by a factor of 2: "It's crazy how little we're funding this energy stuff," Mr. Gates said.
Things like efficiency improvements are possible in a shorter time frame, but power that's reliable, available all the time - these are big complex systems, and we're not going to see rapid turnover. Companies working here on energy have to think about how they're going to sell their stuff in China; how is it going to scale to the world market.
Steven Chu: The way you generate and use energy is very complex, but what you can do is anticipate developments. For example in batteries, you can start to work with power distribution companies, i.e. utilities, and ask them how they are going to plan for things. You can accelerate the situation by looking at what's happening and trying to plan together, and this probably makes transition twofold faster. The US was the biggest market for a long time. US companies are beginning to realize the nature of the world market and are starting to look worldwide, but we still have to show tech leadership here at home.
Bill Gates: If we're planning ahead, for example with the grid or transmission, it's hard to notice! (audience laughter)
Steven Chu: DOE and DOI have set up "swat teams," and they know it's an issue and are trying to make it go faster.
Bill Gates is asked: does an R&D only policy make sense? We certainly need a price of carbon to get people to decide as they build energy plants to choose clean sources. In the gridlock environment we live in today, it's not possible to push though things that could be beneficial to future growth, e.g. a 2% tax on energy consumption proposed by American Energy Innovation Council that could be put in a development fund.
Steven Chu: Lowering cost of renewables will also be a main area of focus for DOE so renewables can take off without subsidies.
Bill Gates: People underestimate how hard it is to get the energy from where it's being collected to the people who need it, and this will be effected by lack of sufficient funding. We run a much higher risk of not hitting the breakthroughs because of underfunding. There's no clear mapping on what you spend on R&D and what you get out. It's likely that the underfunding is delaying the pace of progress. It's a very complex set of technologies, we need thousands of companies trying out these technologies to see what's going to get us the right solution The number of pieces that need to fall into place is very large. There's more activity now because of ARPA-E then there was a decade ago - the government gets a 80 for moving into the space, but the magnitude is not at a serious level. Private sector will do what it wants to do, and more private money has come in, but with the right policy framework, you can increase that substantially; carbon tax would change how dollars are spent.
Chu: long term signal is very important; it doesn't have to be a big signal, just that we're firm.
Bill Gates is asked - What about nuclear? In nuclear, over many years, there hasn't been a lot of innovation, only small refinements. Now we can simulate, and there are some ideas (including their technology - Terra Power), and you get nuclear energy that's very cheap. There are nuclear designs that can compete, but getting it all planned out is very difficult. The intellectual power (supercomputers) of what's been done in the nuclear space should allow for some substantial advancements.
Steven Chu: High performance computing allows you to simulate a very difficult process. One of the ARPA-E innovation hubs was in the simulation of nuclear reactors. We can be world leaders in simulation.
Bill Gates on CCS - In a balanced portfolio of innovating, CCS is particularly underfunded, and there is a possible path for reduction of emissions.
Steven Chu: For the next couple of years, even though there is currently no carbon tax, he believes government agencies are still doing things to push the technology forwards.
One last question: on investments in R&D, is this something the government should support? As far as getting the companies through the valley of death, is this still a viable strategy?
Steven Chu: The loan program was set up and the DOE was to invest in innovative companies, and not all of them would work, and the appropriated money was expecting some losses. It was an unfortunate loss (Solyndra) but he would be surprised if we're going to lose a third of that appropriated money. America is the most innovative country in the world and we can lead in these technologies that the world will want: it's our to lose.
Bill: Overall we need to be willing to take risks, and there will be winners and losers, and he is supportive of putting more in the energy space: he's a fan of risk taking.
In summary:
This is an interesting combination of people to be addressign these questions. it's clear how one is from industry one is from government, and they both have very different ideas and ways of talking about how to get things done.
They do agree that there needs to be a focus on "all of the above," i.e. we should be looking at all the energy options on the table at this time, since there is not yet a clear winner.
Bill Gates clearly believes government should play a bigger role by shaping policy, while Steven Chu seems to think that at this point government should not do anything that might be seen to dampen innovation (such as levy a tax). For example the carbon tax: Bill Gates thinks putting in a carbon tax that will take effect years down the road would be an impetus to develop clean energy faster. Steven Chu also thinks it's needed but not in the current recessionary environment.
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