Innovation and Clean Energy

December 17, 2018

Ernest J. Moniz
President and CEO, Energy Futures Initiative
and 13th U.S. Secretary of Energy

Innovation and Clean Energy: How 2018’s developments have driven clean energy technology and climate policy.

 

 

Conversation Summary – Ernest Moniz & Andrew Revkin

 

Former Secretary of Energy Ernest Moniz—now President and CEO of the Energy Futures Initiative—gave his perspective on energy innovation and a pragmatic approach to climate change solutions to an audience at The Yale Club of New York on December 17, 2018, as part of the OurEnergyPolicy.org New York Energy Leaders Luncheon Series. Environmental journalist and OEP Topic Director Andrew Revkin joined him as the moderator.

Below are some excerpts from Dr. Moniz’s remarks:

 

On climate targets and the 2018 United Nations Climate Change Conference in Poland:

  • “We can’t lose sight that we’ve made some real progress…but the trouble is, in my view, that…the clock didn’t stop in the last 30 years in terms of the problem. We didn’t stop in terms of doing some innovation, but the two time frames just don’t align very well…. We’re not making much progress, to be honest. We’re nowhere near on a trajectory to achieve the goals that have been viewed as essential.” (13:09)
  • “It’s all a question of time. It’s [decarbonization is] going to happen, but we have a clock ticking.” (21:58)

 

On climate change politics:

  • “Look, we’ve got what is sometimes characterized on the right… [as] ‘[climate change] denial,’ which is frankly, crazy. But, I have to say, I’m also concerned with those who put forward glibly solutions that are just not possible. I think it’s time that we roll up our sleeves and do the real hard work…to be pragmatic and make real progress….” (16:06)
  • “I firmly believe that if we take a much more pragmatic and integrative approach, we will have a much better change of a bipartisan approach. But that is going to take real political leadership and recognizing where these various factors are intertwined….” (33:53)
  • Replying to a question from one of the attendees – “In terms of your statement that I was somewhat successful in reaching across the aisle: I think a large part of that, frankly, was being candid and data driven. I tried, certainly, to just tell the truth and have it be based in sound reality. And I’ve seen that is what we need to do. …Retreat to ideological corners is really bad in all of these dimensions, certainly in the sense of getting something done.” (1:23:45)

 

On global decarbonization:

  • We have no solution right now in my view for how we address the developing world economies, except for the happy talk that somehow wants to project that carbon emissions are the number one priorities for these developing countries. It’s not. So the question is, how are we going to help those countries in their economic development and at least minimize, if not stabilize and eventually reduce, their emissions, as well?” (15:25)

 

On tackling climate change with energy technology innovation:

  • “I certainly want to emphasize how continued innovation—frankly, picking up the pace dramatically and broadening the portfolio dramaticallyis going to be essential. There is no solution, in my view, without that. But let’s not fool ourselves into thinking that it will be not only necessary but sufficient. It is necessary, but it’s not sufficient. We’re going to need a much more integrated approach with innovation not just in technology but in business models and policy.” (14:43)

 

On the role of markets v. the private sector:

  • I think the public sector has an enormous role going forward…. Solar energy is obviously one of those arenas in which there has been tremendous progress. And the federal investments going back to the Carter years were very important in getting these to march from being a cost-is-no object NASA satellite technology to something that has a presence in the energy system…. Now, this is an area where the federal government’s role in the upstream side of the solar R&D [research and development] is diminished by success. There is still plenty of work in the private sector because of competitive edge, increased efficiency, and the like…” When I talked about broader portfolio,… public sector investments should [now] be weighted more stronglyin [the] hard-to-decarbonize sectors…Even after we do that, it’s not enough until we add large-scale carbon management…. That’s the agenda for technology innovation. As I said before, that is necessary but not sufficient….” (17:26)

 

On hard-to-decarbonize sectors:

  • “Almost all of the discussion we hear and much of the state-level policies are fundamentally the electricity sector. Everybody loves to talk about the electricity sector. Rightfully so, in the sense that decarbonization of that sector is, indeed, a necessary requirement to reach deep decarbonization. And it’s the sector in which we have, frankly, the most options present today to move there. That’s in addition to demand-side management, energy efficiency, and the like. But let’s now look at the numbers. The electricity sector in the United States and other countries would typically be in the 25-30% range for emissions. What about the other sectors? Process heat and industry? Heavy-duty transportation?…. It’s time we give a lot more effortand this is where public sector investments should be weighted more stronglyin these hard-to-decarbonize sectorsIn many sectors, the tools aren’t really there, especially in heavy industry, to get to deep decarbonization.” (18:53)

 

On climate adaptation & geoengineering:

  • “There has been an unfortunate tendency in these discussions for years of declaring certain subjects as taboo because somehow it will undermine our will to mitigate sufficiently. I’ve never bought that argument…. Adaptation is one of those subjects…. Another good example is geoengineering…. Now people are getting sufficiently desperate, but we always should have been working on these areas.” (24:13)
  • Florida Power and Light “has already spent $4 billion in adaptation, …where a lot of it is protection against floods at substations… It has had a benefit for them, at least in the modest storms, in dramatically reduced response times for customers. A lot of this kind of stuffit’s not the most productive way of using that capital, but it’s necessary….” (25:38)

 

On the rural/urban political divide & socioeconomic impacts of climate change response:

  • Relating a story that President Obama once told: “You’ve got this working class dad who has to drive 50 miles each way to and from work, he barely makes ends meet for his family, and now, wait a minute—you want me to tell him how bad it’s going to be in 50 years, and he is worried about the price of gasoline tomorrow…. We need to have a progressive way of imposing [carbon] prices and not, for example, [the] proposal in France [or Washington State]—a completely regressive approach…. We’ve got to start talking seriously about not only top-down but bottom up. Because if we don’t address the urban-rural issues, [and] if we don’t address the socioeconomic issues, we will continue to have fierce headwinds politically in getting to where we want to go in terms of addressing climate change.” (30:50)
  • I would argue that there is no fundamental reason for urban-rural being equivalent to the Democratic/Republican divide. And I think just as it is incumbent upon the Democrats to get more creative and reach out and support rural communities – same way for Republicans. It’s about reaching out and understanding better their appeal in urban areas. It’s unhealthy to have the divide in this way.” (1:22:54)

 

On prospects for nuclear industry growth:

  • “We tend to like to think in terms of now and 2030 and 2030 to 2050. We have to remember that every one of those times periods is more and more challenging. And frankly, to 2030, we’ve got to get there with what [the technologies] we see in front of us…. 2030 to 2050 is a time frame when nuclear could be somewhat resurgent…. I don’t think we’ll build another gigawatt plus scale reactor…. But it is conceivable that we will have viable demonstrations of one or a few of those technologies [small modular reactors, molten salt, etc.]….” (40:10)
  • “I think if they succeed in that demonstration, they won’t have difficulty marketing on a large scale. The trouble is the gap in between…. I think private investment maybe can rise to that challenge. But frankly, I think the government has to incentivize this. And I think a key issue is that we can’t forget that a major part of the cost proposition of the modular reactors is to get enough of an order book to set up a production line and get all the benefits of a manufacturing environment….” (42:30)

 

On a solar- and wind-dependent grid and energy storage:

  • “Continued cost reduction in batteries is an example of something certainly is very important. It’s not the solution to everything and some people seem to think.” (40:37)
  • If we are getting to a very substantially increased role for solar and wind and batteries in the electricity system, I still have a hard time thinking of that as the answer in it of itself. Because we’ve got to get real…. Getting real means things like actually looking at data. Looking at data in 2017, for example, hour by hour for the whole year, for actual solar capacity and actual wind capacity—when you look at that, you can see that it’s going to be great to have storage for 6 hours to move things around during the day. But what are you going to do for the 10 days in a row when there is no wind in California? What are you going to do when you realize that both solar and wind have a summer production roughly two and a half times that of winter production? They don’t complement each other. They reinforce each other. What are you going to do about seasonal storage, etc., etc.—besides innovate? One way or another, I believe, one is going to have to have a fuel in the system. Fuel is called storage. But we’re going to have to manage that fuel to be low to no carbon.  So those are the kinds of things that are the real discussions that we have got to have—data driven. And the challenges and the answers are probably going to look very different in different regions.” (1:14:31)

 

On the future of natural gas:

  • “On the LNG [liquefied natural gas] specifically, I think the important thing is that with the continuing construction of liquefaction plants in the United States and what appears to be a probably second round of that in the coming decade, that the United States, along with Qatar and Australia, are going to be huge players in creating a liquid market with gas, that has already had very substantial impacts on the cost structures for Europe and Asia. This is all going to go in the direction of sustaining natural gas as an important contributor for at least a couple of decades in lowering carbon emissions in addition to the economic impacts that it can have.” (1:12:33)
  • But for the longer term, if we start getting towards really deep decarbonization, then clearly, direct natural gas combustion is going to have to give way to something. It could be that natural gas also becomes one of the two major feedstock lines for a hydrogen economy (it still requires carbon capture, but carbon capture becomes relatively inexpensive).” (1:13:48)

 

On 2030 and beyond:

  • “Up to 2030, you can be arrogant. But after 2030, humility is the theme because we have no clue how the system is going to evolve during that time period. Not to mention, by the way, that if we don’t succeed with the mitigation, I remind you, those renewable resources have something to do with the weather, which is going to be changing a lot. So, there are so many uncertainties. This idea that I know the answer with my favorite technology is nonsense. We’re going to need as much optionality, as much flexibility we can muster in terms of the tools to devise regional solutions that are very, very low carbon.” (1:17:19)