Stanford hosts world leaders to chart our energy future
On Friday, November 2, climate scientist Michael Mann published a pertinent article in the Washington Post titled “It’s not rocket science: Climate change was behind this summer’s extreme weather”. According to Mann, climate scientists have developed sophisticated tools to diagnose the impact climate change is having on extreme weather events. With his colleagues, Mann used one of these tools to show that 2018’s extreme weather events were a consequence of abnormal, climate-driven jet stream behavior. These attribution models are confirming the causes of a disturbing trend in extreme weather which is visible worldwide.
With these conditions as a backdrop, the stage was set for Stanford’s Global Energy Forum (GEF). The conference, organized by the Precourt Institute for Energy, sought to gather “global thought leaders and decision makers... to engage in strategic and balanced dialogue about the future of energy”. And according to participants, it was a resounding success. Perhaps former Secretary of Defense William Perry said it best during the closing panel discussion: “This conference will be the standard by which all Stanford conferences going forward will be judged”.
The Global Energy Forum addressed what Precourt Institute co-director Arun Majumdar called in his opening remarks “a transformation… nothing short of a new industrial revolution”. The original industrial revolution, beginning in the late eighteenth century, exploited fossil fuels and the steam engine to create a comfortable standard of living for a significant fraction of the global population. However, among other negative consequences, fossil fuel combustion has led to undesirable changes in the global climate. In order to avoid the worst effects of climate change, we will need to transform our energy system at an unprecedented pace. Majumdar noted that at our current global CO2 emissions level, a 2°C rise in average global temperatures would occur within 20 years, highlighting out how little time we have left. Later in the conference, Chris Field (Stanford professor of Earth System Science) outlined an even shorter timescale of 13 years for a "66% chance of keeping average global temp rise to 1.5°C", a target highlighted in the recently released Intergovernmental Panel on Climate Change (IPCC) Special Report. Fortunately, as any self-respecting Silicon Valley conference would remind us, we cannot underestimate the power of innovation. In his opening remarks Majumdar specifically highlighted four “game changing” technologies critical in shaping today’s energy landscape.
Far-reaching “game changer” technologies highlighted by Majumdar were “modern renewables”, specifically wind turbines and solar photovoltaics (PV) (other renewables include biomass, geothermal, and hydro power). Though modern renewables only comprise ~2% of current primary energy supply, this statistic does not do justice to the enormous progress that modern renewables have made. Majumdar noted that these have accounted for 70% of all new energy generation added in recent years, and that costs have come down to the point where in many locales, these “modern renewables” are the cheapest form of electricity generation. According to the International Energy Agency’s Clean Energy Progress Tracker, capacity additions of solar PV are already on track to meet 2°C goals. However, the next big step in scaling up modern renewables will be addressing changes to the electricity grid due to the fundamental differences between intermittent renewables and dispatchable thermal power. As Doug Kimmelman explained during the panel on the “Changing US Electricity Landscape”, the key issue for utilities is “reducing carbon footprint while keeping reliability up and costs down”. The variability and uncertainty of wind and solar power challenges grid operators who are used to constant supply from thermal generators. Curtailments of wind and solar power reduce their value and add cost to the electricity. On the other side of the grid, the growth in electric vehicles (EVs) poses its own set of challenges. While there was some disagreement over the future speed of consumer uptake, everyone agreed that when EV penetration reaches a certain level, significant changes to the grid would have to be made.
Fortunately, a second “game changer” - digitization and automation - can help us manage this complexity. In the session titled “Digitization of Energy Dialogue”, Jeff Dean of Google AI spoke with Patricia Poppe of CMS Energy about how machine learning can be used to improve grid flexibility through both supply and demand side management. There was consensus that up to 30%-40% savings (or improvements in efficiency) could be achieved by combining artificial intelligence (AI) with the Internet of Things (IoT) for optimizing the grid. Other GEF participants, such as Lei Zhang of Envision Group, echoed these sentiments and even expanded on them, saying that “AI-IoT” was one of the biggest trends and perhaps the most promising investment sector in the energy space from where he sat in Shanghai. Arun Majumdar also noted in his opening remarks that “the grid is not just about energy, but about synergy”, a sentiment that Mr. Zhang reinforced during the “Global Energy Transformations Dialogue” panel.
Electricity from modern renewables has its limits, given its variable nature, and therefore must be stored in a useful form to power mobility and also for use during dark and windless hours. On this note, Majumdar added another “gamechanger” technology to his list: battery storage. Yi Cui, Professor of Materials Science and Engineering at Stanford, introduced the battery storage problem in his talk titled “How Far Can Batteries Go?”. Cui envisions a world where lithium ion batteries are cheap enough for affordable electric vehicles (~ $50 /kWh vs. todays ~$130 /kWh), with a convenient charge rate and minimized infrastructure costs (<15 min vs. today’s 1-2 hours). Additionally, they would feature double the energy density of today’s batteries, have 5-10 times the calendar and cycle life, and perhaps most importantly, be completely safe. Professor Cui’s team develops novel nanostructural anode and cathode materials for lithium ion batteries, and he concluded his presentation with a introduction to a promising future technology that combines Manganese and Nickel with Hydrogen gas for (potentially) affordable grid-scale storage.
We also learned in the “Future of Mobility Dialogue” that battery innovation is being driven by “a very significant competitive landscape” in electric vehicles, according to Michael Ableson of General Motors. Ableson articulated how this trend has motivated a clear shift in GM’s vision towards a “zero crashes, zero emissions, zero congestion” paradigm. As a result of this paradigm shift, GM plans to unveil 20 new zero emission vehicles between now and 2023. Additional challenges noted at the GEF related to mobility include charging infrastructure and grid reliability concerns related to EV charging. Both Ableson and his co-panelist Cathy Zoi from EVgo described how the confluence of ride sharing, centralized vehicle ownership, and even autonomous vehicles are already starting to shift consumer behavior and force adaptations of charging infrastructure. And all of this is happening at a pace that no one expected even a year ago.
Since 2005, USA power sector emissions have declined significantly. Though increases in generation from wind and solar have played a role, a larger contribution has resulted from coal to gas switching. This trend has been aided by the advent of horizontal drilling and hydraulic fracturing, another “gamechanger” identified by Majumdar. This makes it clear that the oil and gas industry, which currently supplies >80% of primary energy, will have to have a role in the energy transition. The degree of involvement, however, is debatable. Mark Zoback, director of Stanford’s Natural Gas Initiative, stated his opinion that “to reach 2°C [goals] requires committed involvement of the oil and gas industry”. Zoback’s argument is convincing: despite the impressive progress of renewables in the last decade, the contrast between the emissions trajectory we are on and what is required to achieve climate goals is almost comical. But, despite this, models still show feasible pathways. The catch however, as noted in the IPCC’s special report, is that “all pathways that limit global warming to 1.5°C with limited or no overshoot project the use of carbon dioxide removal… and fossil fuels with carbon dioxide capture and storage (CCS) are projected to increase”. The reasons are threefold: some fossil generation will still be required during multi-day winter periods of darkness and quiet wind, thermal generation will likely continue to exist for some time in developing countries, and finally most published scenarios necessitate negative emission technologies . As Zoback notes, for CCS related technologies that involve the underground sequestration of CO2, the oil and gas industry already possesses an “existing knowledge base of the subsurface” and “much [of the] infrastructure is already in place”.
Layered on top of the technical and economic difficulties of the energy transition is the political dimension. As former Secretary of State George Schultz acknowledged, the “significance of the Paris agreement was the acknowledgement of the problem”. The Paris accord was an important step forward, but it was a nonbinding agreement. Since then, the Trump Administration’s decision to withdraw has put a damper on global efforts to address climate change. Truly, as was highlighted throughout the conference, reducing emissions is complicated even in developed countries. Peter MacKay, Canada’s former Attorney General and Minister of Justice, outlined a common complaint in Canada against its upcoming federal carbon tax plan (which will kick off in early 2019): “[Given that] Canada does not have a large carbon impact [relative to the world]... are we willing to hobble our [primary] industry?” (Editor’s Note: Canada was actually seventh in carbon dioxide emissions in 2016, with the highest emissions per capita of the top ten emitters). Outside the developed world, the challenge is very different. In the session “Global Energy Transformations”, Abhijeet Sathe of Softbank Energy India described how California and other parts of the developed world have effectively used policy to get to where they are - however, he noted, people in the developing world do not have the money for carbon credits and other policy measures.. Additionally, he noted that , “laws are in place for large emitters [but] they don’t get followed”. This is why Sathe believe that the only solution eventually is for carbon-free sources to compete on cost only.
It is a frustrating paradox of working in climate and energy that we have made so much progress with new technologies and policy tools, but that progress pales in comparison to our emissions trajectories. The GEF did a remarkable job of highlighting where we still have to go. Indeed, there was plenty of room for optimism. Brian Moynihan, CEO of Bank of America, when asked by Stanford Professor Sally Benson if we have the resources to triple investment in clean energy, strongly asserted that we do have the resources. This reflects Bank of America’s 2016 decision to commit $125 billion in financing for low carbon and sustainable business. Similarly, Alistair Bishop of Black Rock Capital expressed his belief that traditional forecasters underestimate the growth of low carbon technology and asks: “if a technology is superior than the incumbent, why wouldn’t you see fast adoption?” These themes of technology, innovation and optimism were highlighted outside of the conference hall as well. A noteworthy part of the GEF was an Innovation Showcase, where over 30 start-up ventures demonstrated what the cutting edge of energy innovation looks like. From software and AI to help with grid control and optimization, to hardware and creative new solutions in areas such as grid-scale storage and conversion of air-captured CO2 into commercially-useful materials, many exciting new ideas and companies were on display.
Bill Gates, who spoke in the second-to-last session with Arun Majumdar, was slightly more pragmatic in his assessments of the energy transformation and climate change. When asked if he is optimistic about wind and solar, Gates remarked in an exasperated tone that because “electricity is only 25% [of final energy demand] … the ‘climate is easy to solve’ group is our biggest problem… bigger than climate denial”. Gates went on to explain how we need innovation in a surprising number of sectors, from industrial emissions to transportation and even in agriculture and meat production. With his characteristic can-do attitude and faith in technological innovation, Gates has created Breakthrough Energy Ventures, a fund for energy technologies that “have the potential of significantly reducing greenhouse gas emissions”.
Given the scale of the climate problem, it is easy to become disheartened and apathetic. But at the Global Energy Forum, powerful leaders in business, technology, and finance who have dedicated themselves to the challenge spoke convincingly about how there is hope. Just outside stood over 30 practical, real-time and inspirational companies ready to do their part in finding the new solutions the world so desperately needs. Arun Majumdar ended the conference striking the following note: “the challenge and the opportunities are absolutely amazing… and this is just the start, we have a long way to go”.