Energy Investments Dialogue | Bill Gates | Global Energy Forum

First of all, Bill, since you don't need interruption, I'll still introduce you and introduce you as a Stanford parent, welcome, so first let me tell you that my first meeting with you was when I was in a few months as The First Director of Harp- e and people had set up a meeting with you in your office and I left and you showed up a few minutes late and he came in with a document and I realized that was my testimony before Congress and I said, shoot. I'm going to be cross-examined, which you did, you cross-examined me very well, but then I think I told you that, I think Bill, I think you're the only one who actually read my testimony, but I just want to take this opportunity because at that time I asked you. that I need your help because we were starting ARPA, he and I had never been to Washington and I need all the help I can get and I just want to take advantage of this opportunity first, thank you for your support of RPE whenever our eyes meet.

You used to ask me how you can increase a budget and that was a tough question for me because I have to say it's the President's budget and you did your magic on the hill. I don't know what you did, but RPE survived because of you, thank you. So much so that let me start by saying a few things: you are one of the founding fathers of the computing industry, you democratized computing and touched

bill

ions of people, and for those people you couldn't touch with computing, you and Melinda you have touched with your incredible work on

global

health and for which and I will publish it.

I hope to know that you are not looking for it. I hope you get a Nobel Peace Prize at some point. Thank you, given everything that accompanies you. your work, your legacy, you have touched almost all of humanity, almost so how did you become interested in

energy

? Well, how can you not be interested in

energy

? I am referring to civilization, as Vaclav SMIL, who is the best writer on energy, says, actually in his latest book, I think it is his number 42, it is tired and it is titled energy and civilization and I recommend all 42, but this one, if not you have time to catch up, read this one it covers a lot, you know, stepping up energy use is the way we've done it.

I escaped from a sort of subsistence existence, the Industrial Revolution was about energy, mainly coal at that stage and when I put on my foundation hat and look at, well, what needs to be done for Africa, poor countries in general, but particularly Africa, the amount of electricity per person. has declined in Africa in the last 20 years and there is no way to build. There is an upper limit on what can be done with an economy unless infrastructure, including roads and electricity, is brought up to a certain level, so it is a major concern that all of these development goals that we have are unattainable unless that there is energy available right there and then combine it with the fact that the people who suffer the most from the inherent warming that is inevitable and from the additional warming that is avoidable that we gain.

Don't avoid that those are subsistence farmers in Africa, you know that they are going to go from having 1 in 12 years where their crop fails, they will get to the point where it will be 1 in 4 years and that will lead them to, you know, severe malnutrition and hunger in In a time when population growth, soil quality, many factors are working against, so I not only believe in taking the nine percent of the income that Americans spend on energy and say, "Okay, let's pay a premium to feel clean." people, but this problem must be solved for China, India and Africa without making energy very expensive, so that they know that this restriction makes what is already an almost impossible problem even a little more difficult, given their interest in this when the Paris agreement was being held. to sign in Paris and in 2015 you met with your peers, you know high net worth people around the world, something called an innovative Energy Coalition, what was your goal, what was the long-term goal, in that sense , my general view when people come to me and tell me, hey, the world is going to fall into a state of disaster, this is a huge problem, it has no solution, my view is good, maybe they are underestimating the power of innovation to appear, change and improve things, etc.

In the '90s, you know, I was reading about climate change and then after 2000, when Ken Caldera, David Keith, started having some people on a regular basis to educate me and tell me what to read about climate change, which It ruined me. The thinking was that people would talk about these downstream taxes and subsidies, but there was no discussion about upstream incentives, and no discussion about increasing the U.S. energy R&D budget. energy was reduced by Reagan. Carter had raised it and Reagan had lowered it and it stayed low and all these climate people never talked about the research budget.

I think it's partly a confusion about the nature of the budget. problem, you know what it means electricity is only 25% of the problem and you need reliable electricity and the goal is not to, you know, take a bow because you use natural gas and you have a factor of two, that's nothing that contributes. in fact zero because the forcing function is faster on natural gas, filling in the cold and out graphs right now in the next 50 years and then turning it off, that's a net addition, you're just doing your calculations wrong because you don't understand the Anyway, the way lifetime offsets are done for natural gas, so the idea that Rd wasn't that simple and I remember sitting with Obama, there was a group of us there.

I created this coalition and you know I was saying "hello." If only one thing could be done, increase the R&D budget and he said no. I can get the carbon tax and the R&D budget right and we end up getting nothing at all even though the R&D part, which requires a long lead time, is very likely. What was necessary could have been done to which is all part of the Paris Climate Agreement. I went to 30 different countries and said, "they will come and commit to doubling their energy R&D budget" and in fact the only reason Modi came to the event was because he was excited about the fact that we chose his name, which was called Mission Innovation and you know there was a big announcement there and in fact most of the countries that announced it have followed it to the US it's a little bit away from a direct duplication but you know, in total an additional 3

bill

ion has been allocated to R&D since that event, tipping the odds slightly in favor of the breakthrough we need now that we also need the basic research budget to be just one enabling step.

What is necessary is the next step after that, but it is certainly critical and it was not on the agenda, so many people are very optimistic, as you know, with wind energy and sold, the cost of renewables is coming down. , battery costs are going down. enough or do you think it's so disappointing? I really mean Vaslav yesterday said well, here's Tokyo, 27 million people, they have three days of cyclone basically every year, a rate of 22 gigawatts for three days, you know? Tell me what battery solution is going to sit there and provide that power. I mean, let's not joke about your multiple orders of magnitude.

You know, a hundred dollars per kilowatt hour that's nothing that won't solve the reliability problem and remember electricity accounts for 25 percent of greenhouse gas emissions when we came up with it. I think this term clean energy has ruined people's minds because they didn't understand it, now they don't understand it. I was at this conference in New York, I won't name it, and they were saying all these financial guys came up on stage and said oh. We are going to rate companies in terms of their CO2 production. Let's say this company emits a lot of CO2 and the financial markets are magical and all of a sudden the CO2 stops being emitted and I'm like, "Okay, how do you do that?" steel, Wall Street guys, do you have anything on your desks that makes steel?

Where is the fertilizer, cement, plastic, where is it going to come from? You know, airplanes fly through the sky because of a number they put on a spreadsheet? The madness of these so-called finances is the solution that I do not understand. I simply do not understand that there is no substitute for the industrial economy to function today and you know that the paradigmatic country is India. Will India pay a premium price to have it? materials to construct buildings to get rid of slums, will they pay a premium price for air conditioning? Basically, the answer is no, voters won't and they probably shouldn't disown themselves when their greenhouse gas emissions per person are only one-twentieth of what the United States has already admitted to its emissions, so already They know who should go first and reduce emissions per person to offset what is done internally, of course it should be us, so there is not even an argument in justice that says that premium priced ways of doing things all things, not just electricity, that happens, so the idea that we have the current tools and it's just because these utility people are evil people and if we just hit them and you know, put it on our roof, that's a real one that's more of a blockade than climate denial climate is easy to solve the group is our biggest problem so what are the advances that you think we need in terms of technology?

Well, it is quite simple that something like nuclear energy is needed in the electricity sector. fission or fusion that runs 24 hours a day with a high duty cycle or if you are going to rely on intermittent sources, then you need some monstrous miracle that is more than an order of magnitude away from anything other than this network storage being consumer vehicles let them go 300 miles, this is you know, hey Tokyo, don't worry, it was cheap to solve and by the way, you only get value from that battery once a year, so you know, do the math on what it looks like per kilowatt. time anyway, so you have electricity generation, you have the industrial economy, so you have to figure out how to do all those things, a lot of the things act like cheap hydrogen, which actually solves a number of those things in terms of the chemical side of that, but but steel and cement are somewhat special and require particular solutions.

There are transportation problems besides cars, which are much more difficult to energy intensity and 24% of emissions are emissions related to agriculture and meat, and those are very difficult. It funds things like impossible foods, beyond me, a variety of companies to try to completely change the way products that are the litmus test, can you tell if it's artificial meat or not, if you can tell we're in a big deal, so the goal is sometime next time. five years for that product, at least in the ground beef category, to be such that you cannot tell the difference and that is quite large.

I mean cows, if they were a country, would be in the top five emitters in the world, that's just cows and people believe. They have tried to feed them with different things or put a small torch in the bottle, things that do not work but there is also the deforestation that is caused by grazing and things like that, that's how it is, but with meat you know if you reach a Sergey DP per person, there is actually reforestation, so Massachusetts today has more forests than in the last 60 years, but overall there is deforestation, so if we take Indonesia and Brazil, their largest category of emissions, by far, it is the land use part.

If you take Australia and New Zealand, the cows there are the biggest, so innovation is needed in a surprising number of sectors of the economy and, unfortunately, the goal is zero, the way the models are made now, because they're trying to make it look like 1.5 degrees is not the biggest joke ever, they show these gigantic negative emissions, you know, and I'm the biggest funder of various carbon capture things, liquid, solid, whatever, but the probability of it being economical is more than two orders of magnitude, they are not economical at the moment and, as Voskhod reminds us, it would have to be ten times the size of the oil industry, that is the amount of things that would have to be hidden underground, this is ten times all the oil. industry, so let's talk about domestic farming because I think that's really important.

I'm a product of the Green Revolution, which was this short strain of wheat. I wouldn't be here if it weren't for that, do you think given the tools we have? Today in biology we have nine CRISPRs and all gene editing. Do you think there is another Green Revolution that we should have not only for a food but also for carbon and maybe a combination of the two and one? You think that's possible, well, yes. The Gates Foundation funds are called CITIC Photo Improving Photosynthetic Efficiency and there is literally a factor of two in terms of changing the basic photosynthetic pathway.

There are about fourdifferent things you should do, but the photosynthetic pathway is not optimized. There was an evolutionary background like when the CO2 levels were very low and these plants don't have the right Rubisco and they turn off the right, they don't like to die and so they are not maximizers in terms of their production, so there are various ways in which you can change photosynthesis that would be extremely valuable not only in the plant economy, but you also moved them into trees that are extremely good, they sequester carbon extremely well, it's a large permanent store of carbon, although it's a one-time gain unless you do a little bit let's put it under the ground it will eventually rot and be recycled again so yeah and I think it's like improving photosynthetic efficiency unfunded you know what could be cooler than improving photosynthetic efficiency but yeah we need a new green .

Revolutionary agricultural productivity in Africa is a quarter of that of the United States and Europe; In part, you don't have ExtensionService, you don't have fertilizer, you don't have irrigation, but in addition, these seeds are not well adapted to the various environmental conditions. Africa has more variety than any other continent, so the variety of types of seeds you need is really great. The best thing is that the whole seed thing is not well spent, but if you care about climate adaptation, by far the thing you would invest in the most, the first on the list would be more productive seeds, so if you are just having three or four good years, you either keep reserve stock or you sell it and have cash to sustain you until the year when your crop is not working.

Likewise, there is much we can do to deal with high temperatures and drought. There are crops like sorghum that teach us how to do it. you can deal with difficult conditions so change the subject, you are a big supporter of nuclear energy and in fact you invested in Keira energy and my question to you is that right now it is not cost competitive in the United States . Korea has done very well in this and Keira. I think the first thing that is going to be installed is China, so what are your thoughts on how to do nuclear energy, which is a fifth carbon, as you said, based on low power, how can you make it competitive today?

Yeah, so nuclear power starts reacting with a million-fold advantage over burning hydrocarbons, so you think, hey, a million-fold advantage that we should be able to preserve at least some of that and not be absurdly expensive, in fact, in the US. Nuclear power is not even close to being competitive, probably a factor of four or five uncompetitive. The key parameters in a nuclear build are how long it takes to build, what the interest rate is on your money, and perhaps some uncertainty factor about whether you will be stopped. or not, so in China those numbers are basically three to four years and 2%, whereas in the US there may be between 8 and 9 years, 15 percent and maybe 50 percent chance that They shut it down before it starts, so when it competes with super cheap natural gas there is no way the current designs are too, although by production it is the safest way to Energy has ever created more than natural gas lines that They explode in neighborhoods or coal mines that create particles that are not good for health, because it happens in events similar to Chernobyl.

It's unfortunate that those designs are high pressure and don't have a good heat pool and require operators to look at lights and do things. It's a pathetic design and yet it hasn't been changed. It hasn't been redone in the digital age, where we can simplify it enormously and make sure there's no pressure anywhere. which forces you to do it, in our case of the design of the sodium pool, so it is on paper, which is where it exists in this incredible simulation, this is phenomenal, incredible, the end of the so-called fourth nuclear generation, it is the only well-funded project, still, you know. requires the US and China to work together, how is that going? requires a lot of patient capital but nuclear energy in China is cheaper than coal, more tariffs needed by the way?

Well, we need comedy, we need each other and we can't between the US and China work together to achieve this solution because America's understanding of these problems is phenomenal. You know we closed on the FTF, but there was a lot of learning materials there that were pretty fantastic and the Chinese are where they're going to build a lot of reactors they actually build them, I mean, they'll show you the sights, they take it very seriously, so that even nuclear power has a chance that's probably it so you're talking about the technology side if you can somehow reduce the cost and make it safer but all of these are playing in the energy markets and the energy markets are short term and these are

investments

that in a nuclear case are 60 years maybe seven years maybe even more in the future, so is there any innovation on the market side? that will actually favor long-term investment in case there are some innovations, unlike software where the established customer for a particular software product is very heterogeneous and a new entrant comes in and says, "Okay, we'll cater to the customers." customers who want what's really cheap. form or those who want a simple one with many features when it comes to pumping electrons into people, there is like a commodity market that is more than demanding when it comes to reliability and therefore the incentives for the utility companies go to their regulator and say yes.

We want to make electrons with this new technology, what possible reward do they have for taking risks that will fall on them or on taxpayers? It is not like this. It is a market whose R&D percentage is the lowest of any large market I am in. In this case, I'm not calling education a market—it has the lowest R&D percentage of any part of the economy—but the energy of the market. Quote from the market The divided areas have a lot of laundry and part of it is what you say that whatever you do today will fill you up the time it is used in volume, its parents will probably have expired so it's not like the software and people they would have screwed up on the software and in fact the big venture capitalists here in the valley that supported a lot of green things got a lot of negative feedback because they were taking on these much harder problems and that's why a new kind of wave of that with the incredible help of John Doerr Vinod Khosla, people who really pioneered the area, now these innovative energy companies are trying to get into that space, ok, we will finance things and you know we have a 20 year lifespan, which is longer than a typical venture structure, you'll put your land money behind it and you'll have other people investing money in innovative energy projects now that you're looking at the kind of new technologies. and the entrepreneurial spirit that emerges, what excites you and where the gaps are.

I'm more excited than I expected. You know, I was calling these people and saying, "Hey, let's raise a billion dollars," and they told me it was just good stuff. Oh right, absolutely and you know, I expected that to be true, so we hired an amazing team, a high percentage of XR PE people who are fantastic, so it was a little over a year ago when we got the team and the flow. of agreements that you've seen and we have a kind of ridiculous criterion which is that we don't invest in something unless, if it works, it prevents half a percent of greenhouse gas emissions, you know, then we can produce artificial meat. we can create new ways of making steel, you know, across the whole range, it's not just electricity, but we're not going to invest in other things, like the Climate Court that the note had on his green phone, thank God because that's what made it profitable.

It doesn't fit our criteria for what to invest in, and yet we're seeing a lot of great things. In fact, if we set aside money for the later stages of these companies that we don't need yet, it will only take us maybe two. to three years before all that money is committed to those companies and any successful follow-on activities that we think we want to be a part of, then we'll go back and say, hey, let's do more to think deeply. and these are, you know there's no guarantee, you know the fact that you know that chips really work or that sending signals through the air really works, you know it's assuming that there are big breakthroughs like that, and you know only nature knows the answer to those things, but it looks like you know how to make hydrogen cheap, make steel cheap there, at least for every crazy thing we need to solve, we're finding at least three or four people, most of them will end up wrong and They're willing to say, "Write us a check," and we'll work on that fantastic prospect of nuclear fusion.

Yeah, revolutionary energy put money into Commonwealth fusion systems, which is kind of an MIT approach where you take the fact that you can make these extremely tall Tesla magnets and therefore you take . design and is much smaller, plus the fusion plumb does not just make it work and no one has achieved real energy balance. Doing an economy is difficult because you know that in our fission work we have these neutrons and they degrade our materials. and the most difficult thing is that Terra's so-called traveling wave reactor design powers these types of fusion, those neutrons are in a completely different league in terms and therefore how they replace materials over time is very difficult and In fact, there are more fusion companies in North America today (several of them are Canadian) than fission companies, in a sense, if you leave out SMR, they are actually different from terraPower, They're not really big merger companies, kind of mergers, there are quite a few now.

A lot of them seem incomplete to me, but you know, thank God for trying, so yeah, sure, yeah. I mean, having a dozen companies is very impressive. That's happening. I think we are seeing not only the fusion of magnetic confinement but also inertial confinement and, indeed, combinations. Of those two that are actually being tested now, some of them will fail, many of them will fail, but with the hope that some of them or one of them will actually succeed and that is the breakthrough that has brought together an incredible group of billionaires. in this innovative Energy Coalition and now they are investing in technology, but that platform that they have is obviously more than just technology, what else do they want to achieve with this group of people that they bring together around the world?

Well, obviously we want to be a voice of encouragement. that these research budgets increase and stay high and are spent appropriately, you know, we just made a deal with the European Union where they put money in to fund new companies, literally European Union money and it's because they're worried that if If they increase research money, there won't be investors coming to Europe and finding really good jobs there, so it was kind of a pretty interesting quid pro quo. We would never have been able to get that mission innovation R&D increase if we hadn't said there would be a venture fund that will take the best work and take it forward ideally into a product, so being a voice of agreement, what are the regulatory barriers for these startups, what kind of tax credits and approach are very helpful for you.

I know today it's mostly the learning curve of solar wind, what you know is that compared to other technologies that have this weird thing of running 24 hours a day, you know, should you really fund the intermittent stuff? with all the money and not putting any money in? the things that work all the time and therefore the tax policies, you know, you have to think about Japan or Germany in the US to start the solar panel in what today is largely a bill of the Chinese industry Yura, you have these people from all over the world and they are very influential you are a

global

citizen do you think we have a chance at some point to set a global carbon price?

Well, the world is a big place, you have a hundred and ninety-four countries, you know I'm involved in polio eradication and you know so I deal with northern Nigeria, Somalia, South Sudan, Afghanistan, you know, I know we're in Kandahar, we still have polio, so if you say global, that brings to me a picture that okay, you're not going to include every country in this and It's interesting that of all the difficult problems to stop pandemics and solve change climate, are cooperation problems that no country alone can solve. I hope that most of the rich countries can be involved.

I think it's very helpful to send that. the price signal is not to go in the sense that it substitutes for harm, it is not at all, it is simply a price signal that incentivizes some risk-taking behavior, but not the classic pigouvian: "hey, pay the price , okay, that's theburden on society." not within a factor of 100 of what the project in question is going forward, certainly for things like carbon capture and sequestration, because that means there is no vision of that ever be a positive economy, you have to have that and that is probably a necessary thing and I have a feeling that it will be there for a long period of time.

I think you know some things that I think will come back. I think the United States will re-enter the Paris climate agreement, but you know, for example, Germany, which means very well, they managed to get their consumers to pay the highest electricity prices in the world, their net carbon reduction is less than 10%, so the world doesn't has had a year where we produce less CO2 and you know. It will be an interesting year if not for a massive recession, what is that year? But yes, the attacks would make sense, but when you map it in India, you know, Are you really taxing those poor people or just getting air conditioning for the first time?

You know, I want to meet that politician, I realized, well, we started the discussion with some substance subsistence farmers in Africa and others, and you know a lot of them, as you've seen, are still in the 19th century, do you think Should they get the infrastructure that we have on the 20th or is there the possibility of taking a leap like they did in telephony and, if so, what would that infrastructure be? What would be the system that would empower them and lift them out of poverty for the future? energy yeah one thing that really irritates me is when people think oh let's just make Africa use clean energy you know they're rounding up emissions if they need to build hydroelectric dams let them build those dams and yeah the dam causes emissions of methane, those are pretty big numbers, but Africa shouldn't be limited, they should do whatever it takes to reduce malnutrition and hunger, and people get confused and they think, oh, let's let them have little lights at night, well, don't you think . any job the amount of electricity needed to create a job that is not intermittent electricity that is electricity that is there all the time, so you know, cheap solar panels, which is great, it is not a solution, they need grids, they need, You know, pretty large amounts of energy.

Yes, I hope we make some progress and that their relative lack of installed base makes them a good candidate. but if you really say who is going to add energy capacity in the next 25 years, that's India and China, you know China still has a doubling left, if India has reasonable economic growth, they have a factor of 4, that's right, It still needs to increase, you know? Sub-Saharan Africa is the final problem, but this problem should be solved first in China and India with examples from the richest countries and then we can map it in Africa, so I don't see many things that are like homes in the south, where they completely ignore the need for a grid, for example now, if anyone has that invention, hallelujah fantastic on that hallelujah note, thank you so much for being here and you have a standing space that you only know here, let's thank Bill for being here and sharing its up