Speaker 1: Welcome to Zero.
Speaker 2: I am Akshatrati. This week climate tech Hype or note.
Speaker 1: Breakthrough Energy Ventures is one of the biggest funders of
Speaker 1: early stage climate technologies, spending billions of dollars so far
Speaker 1: with investments in more than one hundred and twenty startups.
Speaker 1: Since Zero launched two years ago, we've featured a number
Speaker 1: of companies that break Through Energy has invested in. You
Speaker 1: can find some of those episodes in the show notes.
Speaker 1: But there's a brain trust behind Breakthrough Energy Ventures that
Speaker 1: makes the decisions of what kinds of technologies they invested.
Speaker 1: One of those people is Eric Toon. In his former life,
Speaker 1: he was a professor of chemistry, which, as someone who's
Speaker 1: studied chemistry, is something that always gets my attention. Over
Speaker 1: the years, I've talked to him plenty of times trying
Speaker 1: to understand where exactly he sees the technology landscape going.
Speaker 1: So for this episode, I wanted to bring you into
Speaker 1: some of our chats to get his take on what
Speaker 1: set of climate technologies he's hyped about, and what technologies
Speaker 1: he thinks the world shouldn't be hyped about, and why
Speaker 1: he thinks his set of technologies will not just work
Speaker 1: but also make money, because no longer is he just
Speaker 1: a professor. He doesn't just assess the feasibility of a technology,
Speaker 1: but also the company's potential profitability. We touched on carbon removal,
Speaker 1: grit technologies, nuclear fission, nuclear fusion, and hydrogen. We also
Speaker 1: talked about some of the companies he's most excited about. Eric,
Speaker 1: Welcome to the show.
Speaker 3: It's great to be here. Thanks for having me.
Speaker 2: Now.
Speaker 1: You were a tenured professor of chemistry and biochemistry at
Speaker 1: DECU University. A tenured position is a ticket for life
Speaker 1: to do what you want. But you gave it up
Speaker 1: to join Breakthrough Energy Ventures, and you joined as the
Speaker 1: science lead. So Breakthrough Energy Ventures has been investing for
Speaker 1: seven years. It has one hundred and twenty companies that
Speaker 1: it has invested in so far. A few of them
Speaker 1: have gone public. But you are still very much at
Speaker 1: the frontier of trying to seed ideas that are there
Speaker 1: in labs that need to be commercialized. How has your
Speaker 1: thinking changed as a result of doing this for the
Speaker 1: past seven years.
Speaker 3: So I think that I knew sort of intellectually how
Speaker 3: different this space was than tech investing, how difficult it
Speaker 3: was to scale things. Things in this space don't scale
Speaker 3: the way that apps or computers scale. Right, this is
Speaker 3: steel in the ground stuff, and it's in industries where
Speaker 3: margins are razor thin, where there are existing interests that
Speaker 3: are enormous. I knew all of those sorts of things intellectually,
Speaker 3: but I understand them in a much more visceral way. Now,
Speaker 3: you take an idea that you think could have legs,
Speaker 3: and you spend seven or eight or ten years and
Speaker 3: invest three hundred million, four hundred million dollars and get
Speaker 3: it to the point where it really looks like this
Speaker 3: could scale. And now I have to turn around and
Speaker 3: raise a billion dollars to do a first of a
Speaker 3: kind plant and the marketplace. Of course, since these are commodities, right,
Speaker 3: electrons are the most undifferentiated commodities on the face of
Speaker 3: the earth. And so the reaction is not, oh, that's
Speaker 3: unbelievably cool. The reaction is, we'll see if you can
Speaker 3: make it five percent cheaper than the way we make it. Now,
Speaker 3: give me a call. I knew those things that will
Speaker 3: actually but to be in the middle of it and
Speaker 3: to really feel it viscerally, that changes you.
Speaker 1: Now, over the years, we've talked about a number of
Speaker 1: scientific areas or trying to invest in climate solutions. I
Speaker 1: wanted to pick five areas, and I wanted to play
Speaker 1: a game with you this time. Let's call it hype
Speaker 1: or not, and I'll define it because I think hype
Speaker 1: or not can be very broadly assumed, whether it's in
Speaker 1: conversation or dollars, or in sheer number of startups that exist.
Speaker 1: So let's be specific about whether you think in these
Speaker 1: five areas of technologies, which we will take sequentially, there
Speaker 1: is either too much investment or too little investment going.
Speaker 1: So let's start with carbon removal. Now, the scientific case
Speaker 1: for carbon removal is strong, and it's strong because we've
Speaker 1: really not acted on climate change. And that means if
Speaker 1: we want to keep to our climate goals as agreed
Speaker 1: in the Paris Agreement or not have a planet as
Speaker 1: hot as it already is, we're going to have to
Speaker 1: draw down some of the greenhouse gas emissions that are
Speaker 1: already sitting in the atmosphere. But we don't need to
Speaker 1: do it now. We just need to have the technologies
Speaker 1: ready to be able to do it over the next
Speaker 1: few decades. This industry has been unlike any other industry.
Speaker 1: Most climate technologies start in labs, they get government support,
Speaker 1: then they are commercialized through government regulations that create a
Speaker 1: market for that technology, and then they produce something that
Speaker 1: people want. Solar panels are a good example. Electric cars
Speaker 1: another good example. Carbon removal was not really supported as
Speaker 1: much by government. It was private industry, mostly the tech industry,
Speaker 1: that was interested in pursuing carbon removal as a path
Speaker 1: to try and meet its climate goals. And yes, now
Speaker 1: it has government support, but at the end of the day,
Speaker 1: what it's producing is not a commodity that people want.
Speaker 1: It's a commodity that the world needs. And we are
Speaker 1: at this moment where there are by one count eight
Speaker 1: hundred undred carbon removal startups in the world. And again,
Speaker 1: if we look at HiPE cycles, there can be HiPE
Speaker 1: cycles where lots and lots of companies exist, hundreds of them.
Speaker 1: Many of them will fail at the end of the day,
Speaker 1: some will survive and scale up the solution. But do
Speaker 1: you think at this moment we're investing too much in
Speaker 1: carbon removal.
Speaker 3: I think that we need to be a lot smarter
Speaker 3: about how we invest in carbon removal. The first thing
Speaker 3: that I would do is to bifurcate the market and
Speaker 3: the way I would bifurcate the market is there is
Speaker 3: certainly going to be a significant amount of carbon capture
Speaker 3: for just sequestration, for simple removal, however you end up
Speaker 3: doing that, But there's also going to be a large
Speaker 3: market for carbon as a reagent as a resource as
Speaker 3: we start to make liquid fuels that are zero carbon,
Speaker 3: as we start to think about making plastics and materials
Speaker 3: that are zero carbon. So I think that the first
Speaker 3: thing you need to do is to kind of bifurcate
Speaker 3: this market into a market for sequest and a market
Speaker 3: for carbon as a reagent. And I think there's very
Speaker 3: different requirements on the material there, and I think that
Speaker 3: there's very different price points, So that that is the
Speaker 3: first thing that I would do if we think about
Speaker 3: the carbon market for sequestration, and you know this is
Speaker 3: narrated that we've invested in. The challenge that I have
Speaker 3: here is there are fundamental questions about what you're doing
Speaker 3: that are questions that society needs to answer, and society
Speaker 3: hasn't really thought about those questions. So let me be
Speaker 3: a little bit. You know, clear, people pay for certainty.
Speaker 3: If you pay me one hundred dollars to capture a
Speaker 3: ton of carbon. And after I do that, you come
Speaker 3: back and say, prove to me that you captured a
Speaker 3: ton of carbon. I paid you for a ton of carbon.
Speaker 3: Proved to me that you actually captured a ton of carbon. Well,
Speaker 3: if I'm running climb works or if I'm running carbon engineering,
Speaker 3: I can show you all the log data. I can
Speaker 3: show you the machine worked. I can show you how
Speaker 3: those machines were qualified. I can show you all those things,
Speaker 3: and I can convince you to a very high degree
Speaker 3: of certainty that I captured a ton of carbon that
Speaker 3: you paid me for. And if you come back to
Speaker 3: me in five years time and you say I paid
Speaker 3: you to keep that carbon, can you tell me where
Speaker 3: that carbon is? Well, I can show you where that
Speaker 3: carbon is. Perhaps I've done underground storage. I can tell
Speaker 3: you what the volume that I've stored it in is.
Speaker 3: I can show you the pressures and I can say
Speaker 3: that it's there, or perhaps I mineralized it, and I
Speaker 3: can show you exactly where I did, and I can
Speaker 3: show you the well logs. I can do all of
Speaker 3: those things. I can convince you to a very high
Speaker 3: degree of certainty. But that costs a lot of money
Speaker 3: right now. That costs somewhere between five hundred and one
Speaker 3: thousand dollars a ton. We hope someday we can get
Speaker 3: it down below that, but that's where we are today.
Speaker 3: On the other hand, I can put all of mine
Speaker 3: on beaches and I can watch it disappear. And now
Speaker 3: if you come to me and say I paid you
Speaker 3: for a ton of carbon, can you show me that
Speaker 3: you actually captured a ton of carbon? Well, I can
Speaker 3: show you the certificate of analysis of the olivine that
Speaker 3: I put on the beach, so you know what the
Speaker 3: calcium magnesium concentration was, And I can say, you know,
Speaker 3: it's gone. It's in the ocean. It reacted. So that's
Speaker 3: my proof is I you know, I can tell you
Speaker 3: how much calcium magnesium there was and it's gone. Maybe
Speaker 3: you're good with that, maybe you're not. And when you
Speaker 3: come back to me in five years time and you say, well,
Speaker 3: tell me where that ton of carbon that I paid
Speaker 3: for is, you can say, well, the solubility product of
Speaker 3: calcium carbonate is, you know, And so Licia Telia's principle
Speaker 3: says it must be at the bottom of the ocean.
Speaker 3: And you can decide for yourself whether or not you
Speaker 3: think that that's proof. But that costs ten dollars a ton.
Speaker 3: And now I can do ocean fertilization. I can go
Speaker 3: dump iron in the ocean. And now when you come
Speaker 3: back to me and you say, prove to me you
Speaker 3: captured a ton of carbon, I can say I have
Speaker 3: no idea, but it must have been a lot, because
Speaker 3: you could see the algel bloom from space, right, So
Speaker 3: it must the bit a lot, but I don't really
Speaker 3: know how much. And if you come back to me
Speaker 3: in five years time and say, well, where's that ton
Speaker 3: of carbon that I paid you for, you sort of
Speaker 3: say I don't really have any idea, but that costs
Speaker 3: pennies a ton. And so society has to make decisions
Speaker 3: not about whether or not we have to do carbon capture.
Speaker 3: I don't think there's any real discussion about that, But
Speaker 3: what do you actually mean by carbon capture? What constitutes
Speaker 3: certainty with regards to what I was able to capture
Speaker 3: and with regards to where it is? And does society
Speaker 3: want to pay five hundred dollars a ton to climb
Speaker 3: works to be absolutely certain I captured and to know
Speaker 3: exactly where it is, or does society want to pay
Speaker 3: ten cents a ton and hope for the best, and
Speaker 3: we'll check again in thirty years and see where we are.
Speaker 3: And so I think the problem is without an understanding
Speaker 3: of what that market looks like, there is no evidence
Speaker 3: anywhere at all that society is willing to pay anywhere
Speaker 3: close to even one hundred dollars a ton.
Speaker 1: Right, So there are two dimensions. One is certainty, but
Speaker 1: the other is demand, and on both that is uncertainty.
Speaker 3: Tremendous uncertainty. So how do I invest in a company
Speaker 3: if I don't know what the relevant cost point is? Right?
Speaker 3: You know, I'm pretty sure that if you can do
Speaker 3: carbon capture at one hundred dollars a ton and it
Speaker 3: is pure approximately CO two, there is going to be
Speaker 3: a market for that. And the CO two is a
Speaker 3: reagent game to make electro fuels and things like that.
Speaker 3: So I feel confident about that. But you know, carbon
Speaker 3: capture from the perspective of sequestration and just taking it
Speaker 3: out of the atmosphere, I don't know if the price
Speaker 3: points one hundred dollars a ton or ten cents a ton.
Speaker 3: So how do I build a company? How do I
Speaker 3: invest in a company? It is literally a race to
Speaker 3: the bottom. I mean, if you've got a technology that
Speaker 3: works at eighty dollars a ton, If I look at
Speaker 3: the supply and demand curves and where they cross, there's
Speaker 3: some market at eighty dollars a ton. But if somebody
Speaker 3: comes up with something at fifty dollars a ton, and
Speaker 3: so I think you're just necessarily running down that cost curve.
Speaker 3: This is such a big area. The need is so
Speaker 3: enormous that the idea that there is going to be
Speaker 3: a single, monolithic technology that will rule them all as
Speaker 3: almost certainly not the case.
Speaker 1: Now let's turn to the grid. We know that one
Speaker 1: of the ways in which we are going to decarbonize
Speaker 1: is to electrify as much as possible and make that
Speaker 1: electricity from zero carbon sources, and that's going to require
Speaker 1: a bigger grid. Investments around the world on the grid
Speaker 1: just to build it have not quite got to the
Speaker 1: place where they need to be on trajectory for net zero.
Speaker 1: But within the grid there are technologies that could make
Speaker 1: that job easier. So within the grid, where do you
Speaker 1: think the technologies are hyped and where do you think
Speaker 1: they are under hyped that there is potential for more investments.
Speaker 3: I think there's two areas that at least we at
Speaker 3: Breakthrough are especially interested in, and I think one is
Speaker 3: fairly widely recognized, in the other perhaps not so much.
Speaker 3: The first is reconductoring existing right aways. You mentioned that
Speaker 3: we're going to have to mass electrify everything implies massively
Speaker 3: expanding the grid, so you're just understand what that means.
Speaker 3: That means something like four x the existing grid. It's extraordinary,
Speaker 3: and that energy has to be moved. And you know
Speaker 3: in the United States today it takes on the order
Speaker 3: of sixteen years to permit a new transmission right away,
Speaker 3: and so that really means that reconductoring existing right aways
Speaker 3: is going to be a big, big deal. Right that'll
Speaker 3: allow them to carry more power on those existing right away.
Speaker 3: So new technologies that allow you to move much more
Speaker 3: power down existing right aways are very interesting. DC transmission
Speaker 3: and lines that can be placed along other public right aways,
Speaker 3: rail lines and things like that. That's also an area
Speaker 3: of interest, although as you know, there's challenges to ACDC
Speaker 3: inter conversion and things like that. But I think there's
Speaker 3: fairly broad recognition that as we electrify everything and the
Speaker 3: grid grows, that we're going to have to find better
Speaker 3: ways of moving more energy down existing right aways. The
Speaker 3: one that I think think there's perhaps less recognition of
Speaker 3: are the challenges of operating the grid. If you think
Speaker 3: about how we operate the grid today, we model the
Speaker 3: grid supply and demand typically a day in advance, and
Speaker 3: in the old way that we did things that was
Speaker 3: relatively straightforward. Right supply was mostly dispatchable and it could
Speaker 3: be scheduled. There's not very much storage in the grid.
Speaker 3: I could model the distribution grid just as a load.
Speaker 3: There's no two way flows of energy. Variation in demand
Speaker 3: from day to day is relatively modest, and it's related
Speaker 3: to things that are easy to model, the weather, the season,
Speaker 3: things like that. As you simultaneously grow and decarbonize the grid,
Speaker 3: all of that stuff goes out the window. As you
Speaker 3: start using more intermittent wind and solar and not using
Speaker 3: rotating machinery for the generation of electricity, inertia and the
Speaker 3: grid goes down. It makes it hard to keep it stable.
Speaker 3: Generation resources are play where the resource is not necessarily
Speaker 3: where the load is, and transmission pathways change from day
Speaker 3: to day depending on the weather. There's a lot more storage.
Speaker 3: There's people doing distributed generations, so there's two way flows
Speaker 3: of electricity. I can't think about the distribution grid just
Speaker 3: as all of that stuff goes out the window. And
Speaker 3: we saw in the LA one hundred study, the study
Speaker 3: where Enrail partnered with the city of Los Angeles to
Speaker 3: think about how we could decarbonize the Los Angeles grid,
Speaker 3: just how hard that is to do. People, I think
Speaker 3: sometimes think about the grid as an afterthought. Its wires
Speaker 3: hung on poles and so, yeah, sure we got to
Speaker 3: build that, but it's really more appropriate to think of
Speaker 3: the grid as a machine. It's the largest and most
Speaker 3: complex machine that humankind has ever built. And so before
Speaker 3: we can expand the grid, really at the outset, we
Speaker 3: have to think about not only how are we going
Speaker 3: to build a grid, but how are we going to
Speaker 3: operate the grid? And so this is a new area
Speaker 3: of interest and emphasis for us. A significant part of
Speaker 3: that is going to be done on the philanthropic side,
Speaker 3: a pretty grid modeling effort that we're standing up now.
Speaker 3: But this is an area that I think has received
Speaker 3: not nearly enough investment, not nearly enough attention, and it's
Speaker 3: really treated more as an afterthought. So that's an area
Speaker 3: of the grid that I think needs an enormous amount
Speaker 3: of attention and effort.
Speaker 1: The biggest machine that humans have ever built, but also
Speaker 1: the oldest machine in that sense. The grid has been
Speaker 1: continuously being built since the late nineteenth century, and many
Speaker 1: of the things that it uses even today are things
Speaker 1: that were set up back then. Of course there have
Speaker 1: been changes, but fundamentally it's doing the same thing that
Speaker 1: I was doing four hundred years ago. So now trying
Speaker 1: to power the grid with clean energy, we don't want
Speaker 1: to talk about renewables. They're sort of on their own
Speaker 1: doing their thing, but because of their variability, there is
Speaker 1: desire to have more dispatchable clean energy on the grid.
Speaker 1: You could do that in a few ways. You could
Speaker 1: have hydropower, but there are physical limitations on the hoimuch
Speaker 1: hydropower there will be. You can do geothermal, and previously
Speaker 1: it was thought there are limits to geothermal because of
Speaker 1: the geography of where geothermal is found. But newer technologies
Speaker 1: are opening up more areas. But there's an old technology
Speaker 1: that keeps coming back up into the conversation, and that's nuclear.
Speaker 1: And let's split that conversation into two. One that exists,
Speaker 1: which is nuclear fission, and one that could exist, which
Speaker 1: is nuclear fusion. So let's start with splitting the atoms
Speaker 1: within nuclear fission. We've gone from having first generation, second generation,
Speaker 1: and third generation nuclear reactors that all use water as
Speaker 1: a coolant, that all became safer and safer as a
Speaker 1: result of accidents but also public desire for more safety
Speaker 1: around nuclear fission. But as a result, they became more
Speaker 1: and more expensive and they are no longer able to
Speaker 1: compete with the way the grid prices electricity, and thus
Speaker 1: outside of China, no is really building nuclear fission reactors
Speaker 1: at scale anymore. And yet there are a number of
Speaker 1: ideas being floated. Do you think those ideas have any legs?
Speaker 3: I really do. First of all, I think you have
Speaker 3: to compare apples to apples. You're one hundred percent right.
Speaker 3: Electrons are the most undifferentiated product on the face of
Speaker 3: the earth. People are not going to pay extra for
Speaker 3: them as we think about the developing an emerging world,
Speaker 3: and that is absolutely the most important part of this thing.
Speaker 3: You know, I'm sure your listeners know, but it's always
Speaker 3: worth remembering per dollar of GDP energy consumption in the
Speaker 3: West is going down through efficiency. If you just left
Speaker 3: the Western world, if that was all we were talking
Speaker 3: about this isn't that big a problem. Where this really
Speaker 3: blows up is when the non OECD world seeks OECD
Speaker 3: prosperity and the demand for energy that comes with it.
Speaker 3: People are just not going to pay a green premium.
Speaker 3: So you do have to offer whatever zero carbon technology
Speaker 3: you want to use without a green premium. But it's
Speaker 3: important to compare apples to apples, intermittent wind and solar
Speaker 3: and even hydro, which is also just you know, remember
Speaker 3: hydro is just solar energy with some storage. That's all
Speaker 3: it is. And if you look at the challenges that
Speaker 3: Brazil is having with hydro today even Canada, even Canada,
Speaker 3: for God's sake, is rethinking it's commitment to hydro because
Speaker 3: so much of the country is in drought. So you
Speaker 3: can't compare intermittent resources to baseload power. So if you're
Speaker 3: gonna say, what is the cost that I have to
Speaker 3: offer nuclear at, you really need to compare it to
Speaker 3: things like coal. Coal is sort of the ultimate base
Speaker 3: load electricity. Coal is broadly distributed around the world, it's
Speaker 3: easy to move around, and coal is about one hundred
Speaker 3: dollars a megawa hour, so that's definitely got to be
Speaker 3: your cost target if you're going to do that. After
Speaker 3: Three Mile Island in nineteen seventy nine, the cost of
Speaker 3: nuclear rose roughly fivefold, and that has to do with
Speaker 3: concerns around safety broadly, which is waste safety and proliferation.
Speaker 3: There are certainly third and now fourth generation reactors that
Speaker 3: address many of those issues, but those haven't been built
Speaker 3: at scale and enough of them to really understand what
Speaker 3: their ultimate cost entitlement is. And so one thing that
Speaker 3: we need to do is to drive those costs down,
Speaker 3: get those things on a learning curve, and figure out
Speaker 3: what their ultimate cost entitlement is. The other very real
Speaker 3: issue that we have is we stopped building nuclear reactors
Speaker 3: in this country and so we've lost that muscle memory.
Speaker 3: We don't know how to do it now. If you
Speaker 3: look at the Votel plant in Georgia and the number
Speaker 3: of problems that there were with that, so many of
Speaker 3: those problems were just because we forgot how to build reactors.
Speaker 3: They were mistakes that were made in the planning and construction.
Speaker 3: And so we need to learn how to make reactors again,
Speaker 3: and we need to build these new generation reactors that
Speaker 3: needs to get built out so that we can understand
Speaker 3: what the ultimate cost entitlement is. If I'm going to say, okay,
Speaker 3: col's our baseline hundred dollars a bay, where can we
Speaker 3: get to can we get to one hundred and thirty dollars?
Speaker 3: We need to understand that, and so I think that's
Speaker 3: something that absolutely has to be done. There's about sixty
Speaker 3: reactors nuclear reactors globally under construction now, largely in China,
Speaker 3: but not only in China, right, and so there are
Speaker 3: about sixty and then about another one hundred that are
Speaker 3: in various stages of planning. But I think that the
Speaker 3: number of sources that we have for base load power
Speaker 3: are so small that it's really hard to see how
Speaker 3: we do this without at least some amount of fission.
Speaker 3: So there's an enormous demand for new electricity here in
Speaker 3: the United States, and it would be great to see
Speaker 3: some of that met with new nuclear.
Speaker 1: Would there be a point at which you would say
Speaker 1: that other clean electricity, dispatchable electricity technologies have come to
Speaker 1: a place where we don't really need to pursue nuclear fission.
Speaker 3: It's a very very very interesting question. So you mentioned geothermal.
Speaker 3: You know, historically to do geothermal you've needed three things
Speaker 3: need heat, permeability, and water, and so that's why places
Speaker 3: like Iceland look so good. And in the Western United
Speaker 3: States around Geyser's new technologies like that developed by one
Speaker 3: of our portfolio companies have relieved the limitation for permeability
Speaker 3: and water. Taking advantage of advances in drilling technology that
Speaker 3: came from the conventional oil and gas business. There have
Speaker 3: been tremendous opportunities to expand geothermal. So there is definitely
Speaker 3: new technology, new learning that needs to happen, but there's
Speaker 3: nothing inherent that limits the scalability of geothermal, and I
Speaker 3: think it can with new technologies, it can be very
Speaker 3: widely distributed. You know another one that's very very interesting
Speaker 3: and you have to promise not to laugh at me
Speaker 3: here now? Actually is is space based solar?
Speaker 2: Right?
Speaker 3: I told Look, I just said no laugh at me.
Speaker 3: You're laughing at.
Speaker 1: Look it is. It is not to say it is
Speaker 1: a laughable idea in that it couldn't work, and I'm
Speaker 1: sure there are ways to make it work. But do
Speaker 1: we need to make it work is the laughable question.
Speaker 1: It's not so much the feasibility.
Speaker 3: Of it space based solar. You're absolutely right, even year
Speaker 3: thirty years ago, space based solar was tinfoil hat level lunacy.
Speaker 3: But what has changed, and what's changed a lot of things,
Speaker 3: is the incredibly rapidly dropping cost of space launch. If
Speaker 3: we go back to the mid nineteen eighties and the
Speaker 3: Space Shuttle days, it costs fifty thousand dollars to put
Speaker 3: a kilogram something in space. That number now is five
Speaker 3: hundred down two orders of magnitude, and it's headed towards
Speaker 3: one hundred dollars a kilogram. When it costs you one
Speaker 3: hundred dollars a kilogram to put something into space, then
Speaker 3: all sorts of stuff that was crazy is not crazy anymore.
Speaker 3: And both the European Space Agency and NASA are working
Speaker 3: on space based solar. There's a large effort at Caltech
Speaker 3: to do power beaming, so you know, yeah, it's no
Speaker 3: longer tinfoil hat lunacy.
Speaker 1: Well, talking of tinfoil hat lunacy, the next one is
Speaker 1: nuclear fusion, which you know is not tinfoil hat in
Speaker 1: the sense that we know it works because we've been
Speaker 1: able to turn fusion reactions and create energy even those
Speaker 1: small amounts from it. However, it's one thing to know
Speaker 1: you can do it and another to commercialize it. And
Speaker 1: nuclear fusion for the longest time has been a government
Speaker 1: supported enterprise, rightly so, because of the risk in actually
Speaker 1: commercializing it. That's changed over the past ten years. BB
Speaker 1: is invested in five nuclear fusion companies. There are something
Speaker 1: like twenty fusion companies out there. Why do you think
Speaker 1: investors are interested at this moment in time for fusion.
Speaker 3: There's been a lot of advances in fusion and a
Speaker 3: lot of advances in the technologies that are necessary to
Speaker 3: enable fusion that I think makes this a different moment
Speaker 3: in time if we think about just magnetic confinement fusion
Speaker 3: and plasma based fusions. The big change there has been
Speaker 3: in the development of high temperature superconducting materials REVCO and others.
Speaker 3: That's really what changed everything, right, and so now all
Speaker 3: of a sudden, you don't need tokemax the size of eater.
Speaker 3: Now you can build tokemacs that are even smaller than
Speaker 3: what a commercial nuclear reactor would look like. So there
Speaker 3: have been technical advances that enable fusion. Fundamentally, always the
Speaker 3: attraction of fusion has been you know, we talked a
Speaker 3: little bit ago about the fundamental challenges of waste safety
Speaker 3: and proliferation with nuclear fission. None of those things are
Speaker 3: true with nuclear fusion. The products of the reaction are
Speaker 3: radioactive for decades rather than millennia, they're not fissile and
Speaker 3: can't be weaponized, and it's not a chain reaction, so
Speaker 3: runaway reactions they are so called walk away safe. That
Speaker 3: doesn't mean fusion will be cheap, but it does mean
Speaker 3: you're not stuck in a box where there's no way
Speaker 3: to get away from those fundamental safety constraints. And so
Speaker 3: I think that's always been the sort of carrot that
Speaker 3: was hanging out there with the fusion, and I think that,
Speaker 3: coupled with recent advances in things like high TC superconducting
Speaker 3: magnetic materials, make this perhaps a very interesting time for fusion.
Speaker 1: More from my conversation with ericton after the break and
Speaker 1: if you've been enjoying this episode, please take a moment
Speaker 1: to rate and review the show on Apple Podcasts and Spotify.
Speaker 1: It helps other listeners find the show. I'm a big
Speaker 1: fan of science fiction, and I feel like nuclear fusion
Speaker 1: is a technology if you were to give it to
Speaker 1: a civilization to advance quickly, you would want to give
Speaker 1: them nuclear fusion. And so as much as we care
Speaker 1: about the climate problem and we need to address it,
Speaker 1: it's nice to be able to dream big and think
Speaker 1: about not just the century, but the centuries to come.
Speaker 1: But we also have to come back to earth and
Speaker 1: talk about technologies that do exist. But I have certainly
Speaker 1: got too much hype, and one of them is hydrogen. Now,
Speaker 1: hydrogen as a molecule is very useful. We know we
Speaker 1: use it today. We use it for refining oil, making
Speaker 1: fuel actually usable in a car. But despite there being
Speaker 1: so much support from governments in the US in Europe
Speaker 1: to try and build an industry to produce green hydrogen,
Speaker 1: which is splitting water using renewable power, there still has
Speaker 1: not been enough actual commercialization of green hydrogen production. Why
Speaker 1: is that the case?
Speaker 3: So? Look, hydrogen is the Swiss Army knife of energy, right.
Speaker 3: Hydrogen is pure reactive chemical energy. If you have enough
Speaker 3: hydrogen and it's cheap enough, you can do anything, and
Speaker 3: that's literally anything. You can make materials, you can make steel,
Speaker 3: you can make liquid fuels, you can make food. You
Speaker 3: could make starch learning with hydrogen and CO two and
Speaker 3: you could make it cost competitive, you know, if the
Speaker 3: hydrogen is cheap enough. Okay, So As you come down
Speaker 3: the cost curve and what hydrogen is going to cost,
Speaker 3: you enter a new sort of realm of what you
Speaker 3: can do with it. If we talk about electrolytic hydrogen,
Speaker 3: what has really changed is the availability of very large
Speaker 3: quantities of very low cost electricity. Remember it takes on
Speaker 3: the order of fifty kilowod hours to make a kilogram
Speaker 3: of hydrogen. Depends a little bit on exactly how you
Speaker 3: make it. If you're paying ten cents a kilowot hour
Speaker 3: for your electricity, then it costs you five dollars a
Speaker 3: kilogram for hydrogen just in the cost of electricity, which
Speaker 3: means inevitably you're using it for specialty application, super high value,
Speaker 3: and so there's no real motivation to do things like
Speaker 3: beat Capex out of the electrolyzer because you don't really
Speaker 3: care if you're hydrogen's ten dollars a kilogram or fifteen
Speaker 3: dollars a kilogram, because it's a special application. What changed
Speaker 3: the game was, all of a sudden, I can have
Speaker 3: purpose built solar energy for less than two cents of
Speaker 3: kilo what hour, for probably less than one and a
Speaker 3: half cent a kilo loot hour. If I can have
Speaker 3: electricity for a penny a kilo whatot hour. Well, now
Speaker 3: all of a sudden, I'm at fifty cents a kilogram
Speaker 3: for my hydrogen. And now all of a sudden, I say, okay, Well,
Speaker 3: the long poll in the tenth is the thousand or
Speaker 3: fifteen hundred dollars a kill a WoT I'm paying for
Speaker 3: my electrilyizer. If I could cut that number down to
Speaker 3: two hundred or two hundred and fifty dollars a kill
Speaker 3: a WoT, that would allow me to make hydrogen at
Speaker 3: two dollars and fifty cents a kilogram or three dollars
Speaker 3: a kilogram or something like that. Now that's still too
Speaker 3: expensive to do a lot of different things. But now
Speaker 3: it's cheap enough to do a lot of things. And
Speaker 3: so all of a sudden there was a very powerful
Speaker 3: motivation to work on electrilizers and all manner of electrilizers.
Speaker 3: And so that, I think is where that big push
Speaker 3: came from. So drop hydrogen from ten or fifteen dollars
Speaker 3: at kilogram down to three dollars a kilogram. That opens
Speaker 3: a whole new array of things that I can do
Speaker 3: with it. It's still too expensive to make fuels and
Speaker 3: do things like that, and so there's where we come
Speaker 3: to the next big opportunity. There is hydrogen coming out
Speaker 3: of the ground at the bottom of the ocean. There's
Speaker 3: millions of tons of hydrogen that are released, especially along
Speaker 3: the mid Atlantic rift in the ocean, and in lots
Speaker 3: of places on dry land too, Mount Olympus and Turkey,
Speaker 3: in Las Fuegos, Eturnos in the Philippines. But what really
Speaker 3: started the current sort of excitement I think around natural
Speaker 3: hydrogen happened in Mali, in southwestern Africa. There people drilling
Speaker 3: for water in nineteen eighty three drilled the well. It
Speaker 3: was about one hundred meters deep. Well exploded. They assumed
Speaker 3: they drilled into natural gas. They plugged the well and
Speaker 3: went back in twenty fourteen opened the well and discovered
Speaker 3: that it was in fact pure hydrogen, pure hydrogen.
Speaker 1: Since that time at one hundred meters depth.
Speaker 3: At one hundred meters depth, at one hundred and ten meters,
Speaker 3: well blew up to two hundred and ten meters. And
Speaker 3: so they have drilled now about twenty five additional wells
Speaker 3: in the region, and a number of them are producing
Speaker 3: hydrogen and they're actually generating electricity. And so you know,
Speaker 3: we have known for a long time that there is
Speaker 3: a lot of hydrogen that comes out of the ground naturally,
Speaker 3: but it was this event in Mollie that really spurred
Speaker 3: the current excitement. And so now, as you know, Coloma
Speaker 3: is one of our companies and we believe that they're
Speaker 3: the leader in the field, but there are a very
Speaker 3: large number of companies that are now starting to work
Speaker 3: in this space.
Speaker 1: But in both cases, even if we say figure out
Speaker 1: really cheap electricity and really cheap electoralizers, or we discover
Speaker 1: all this natural hydrogen and we can easily tap it,
Speaker 1: there still is a big, big problem around transport and storage.
Speaker 1: And at that level, hydrogen is just a fundamentally different
Speaker 1: gas than any other gas that large gas companies know
Speaker 1: how to handle. It's so small that it enters the
Speaker 1: seams of the cracks of steel pipes and embrittles them.
Speaker 1: That is not to say technologically you can't find a
Speaker 1: storage and transport solution, but it's just going to be
Speaker 1: inherently a lot more expensive than we transport gas today.
Speaker 3: Right, No, I don't think so. What it does probably
Speaker 3: mean is building out a new infrastructure. So you're one
Speaker 3: hundred percent right, So there's about seventeen hundred miles of
Speaker 3: hydrogen pipeline in the United States right now. That is
Speaker 3: just steel pipe. The way that other oil and gas
Speaker 3: pipe is they just don't operate it at high pressure.
Speaker 3: So you can put hydrogen through steel pipe, but not
Speaker 3: at high pressure. You can transport hydrogen at high pressure
Speaker 3: through fiber reinforced polymer and things like that, and fiber
Speaker 3: reinforced polymer is actually cheaper lay than steel. But there's
Speaker 3: two and a half million miles of oil and gas
Speaker 3: pipeline in the United States right and so either somebody's
Speaker 3: going to have to come up with some very clever
Speaker 3: approach to coating existing pipelines to make resistant to embriddlement
Speaker 3: and failure. And there are companies that are absolutely working
Speaker 3: on that. But I think the opportunity is so huge,
Speaker 3: right Remember, Jeff Ellis and the people at the United
Speaker 3: States Geological Survey have estimated that the extractable resource may
Speaker 3: be as large as a trillion tons, and that is
Speaker 3: enough to power all of humanity for thousands of years.
Speaker 3: I tell people all the time, this will be the
Speaker 3: most important discovery in energy in our lifetimes and may
Speaker 3: be in our children's lifetime. This is a complete and
Speaker 3: total game changer.
Speaker 1: This was such a fun chat, Eric, Thank you, Yeah, no,
Speaker 1: I've enjoyed it. Actually, thank you for listening to Zero.
Speaker 1: And now for the sound of the week. That's the
Speaker 1: sound of hydrogen powering a rocket, one place where hydrogen
Speaker 1: continues to be an important fuel. If you liked this episode,
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Speaker 1: touch at Zero pod at Bloomberg dot net. Zero's producer
Speaker 1: is might Lee Rau. Bloomberg's head of podcast is Sage Bauman,
Speaker 1: and head of Talk is Brendan nunu Ar. Theme music
Speaker 1: is composed by Wonderly Special. Thanks to break Through Energy
Speaker 1: Ventures for the space to record this episode, and to
Speaker 1: Shavone Wagner, Ethan Steinberg, Black Maples, and Jessica beck I
Speaker 1: am Akshatrati Back soon.