Bill Gates: ‘We Need an Energy Miracle’

[GliderGuider]

‘We Need an Energy Miracle’

On why the free market won’t develop new forms of energy fast enough:

Well, there’s no fortune to be made. Even if you have a new energy source that costs the same as today’s and emits no CO2, it will be uncertain compared with what’s tried-and-true and already operating at unbelievable scale and has gotten through all the regulatory problems, like “Okay, what do you do with coal ash?” and “How do you guarantee something is safe?” Without a substantial carbon tax, there’s no incentive for innovators or plant buyers to switch.

And for energy as a whole, the incentive to invest is quite limited, because unlike digital products—where you get very rapid adoption and so, within the period that your trade secret stays secret or your patent gives you a 20-year exclusive, you can reap incredible returns—almost everything that’s been invented in energy was invented more than 20 years before it got scaled usage. So if you go back to various energy innovators, actually, they didn’t do that well financially. The rewards to society of these energy advances—not much of that is captured by the individual innovator, because it’s a very conservative market. So the R&D amount in energy is surprisingly low compared with medicine or digital stuff, where both the government spending and the private-sector spending is huge.

In energy, no government—including the U.S., which is in almost every category the big R&D funder—has really made a dramatic increase. It was increased somewhat under Carter and then cut back under Reagan, and it’s now about $6 billion a year—that’s the U.S. piece, which, compared with the importance to our economy in general, is too low.

Realistically, we may not get more than a doubling in government funding of energy R&D—but I would love to see a tripling, to $18 billion a year from the U.S. government to fund basic research alone. Now, as a percentage of the government budget, that’s not gigantic. But we are at a time when the flexibility—because of health costs and other things, but primarily health costs—of the budget is very, very squeezed. But you could do a few-percent tax on all of energy consumption, or you could use the general revenue. This is not an unachievable amount of money.

Bill talks about a lot of uncomfortable topics in the interview, touching on how the proposed panaceas of solar, wind and nuclear promise far more than they can deliver, why electric cars may not be the answer, on his hopes for government R&D and why without a carbon tax no transition is possible. Something for everyone...

[Warren Stupidity]

1. Bill could kickstart the first year himself.

[jomin41]

2. Maybe he knows software but,

he has a skewed perspective (centralized). The problem is not technology. The problem is changing peoples paradigm. I think most residences in the U.S. could easily pick up a significant improvement in their individual situation by simple improvements in design, siting, insulation, landscaping, and window and skylight placement. I've built several passively-heated homes and lived solar since 1977. I wouldn't live any other way. No nasty furnace-dried air, no expensive a/c. Without those things my electric bill is low. But there's no BIG profit for the BIG thinkers and the BIG corporations like Gates et al.

[friendly_iconoclast]

3. "(T)here's no BIG profit for the BIG thinkers and the BIG corporations like Gates et al."

Therein lies the 'problem'...

[kristopher]

4. Yep

This rebuts Gates perspective pretty well. The numbers Lovins mentioned have continued their trend. Gates, a nuclear lover, is typical of those who make the same flawed arguments.

Sowing Confusion About Renewable Energy
AUG 5, 2014
Amory B. Lovins ,CONTRIBUTOR
Consultant, designer, and Chief Scientist of Rocky Mountain Institute

Readers of The Economist may have been surprised to read in its 26 July 2014 “Free exchange” section on page 63, or in its online version, the “clear” conclu­sion that solar and wind power are “the most expen­sive way of reducing green­house-gas emissions,” while “nuclear plants…are cheaper,” so governments are foolish to boost renewables and mothball nuclear.

In each of the past three years, the world has invested more than a quarter-trillion dollars to add over 80 billion watts of renew­ables (excluding big hydro dams). That growth is accelerating: solar power is scaling faster than cellphones. Big European utilities lost €0.5 trillion in market cap, as an Economist cover story fea­tured, not because renewables couldn’t compete, but because they competed all too well, wiping out old power plants’ profits. The same is happening to some well-running U.S. nuclear plants, now facing closure as uneconomic just to operate.

Shouldn’t the runaway market success of renewables—soon to beat grid power on price, says Bloomberg , in most of the world—have raised a flag at the Eco­no­m­ist article’s conclusion?

That full-page article highlights a May working paper by Charles R. Frank, Jr. (economics Ph.D. 1963), a nonresident fellow at the nonpartisan and notably debate-friendly Brookings Institution. His background is in international development and finance. I daresay most experts on the economics of energy technologies and climate change had never heard of him—but they have now. As soon as The Economist featured his paper, their inboxes and Twitter TWTR +0.00% feeds lit up with incredulity: could his conclusions possibly be true?

They’re not (and yes, I’ve written The Economist a letter saying so). My detailed critique at www.rmi.org/frank_rebuttal explains why, and cites two other reviews and a podcast...

http://www.forbes.com/sites/amorylovins/2014/08/05/sowing-confusion-about-renewable-energy/

[hatrack]

5. "Miracle" - i.e. suspension of natural law?

Bad word choice, Bill.

Though he's entirely correct to emphasize that things like this are, well, complicated.

[GliderGuider]

6. A day late and a dollar short?

Unfortunately, for a root-cause social thermodynamicist like me, Bill comes up very short in his comprehension of what's actually going on in the world, how we got into this mess, and how many interacting system failures are in play in addition to climate change. But then, if he grokked all that he wouldn't be Bill Gates, would he?