WEBVTT - California Plans to Cut Emissions By 40% By 2030: Edison CEO 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg P and L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg P and L 0:00:20.840 --> 0:00:33.880 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Joining 0:00:33.960 --> 0:00:35.920 us now as the president and the chief executive of 0:00:36.040 --> 0:00:41.360 Edison International, the twenty billion dollar electric utility based in California, 0:00:41.440 --> 0:00:44.400 Pedro Pizzaro, Pedro, thank you very much for being with us. 0:00:45.360 --> 0:00:48.840 You've spoken about what the roads in California are going 0:00:48.920 --> 0:00:52.240 to look like by twenty thirty. I understand somewhere in 0:00:52.280 --> 0:00:55.960 the order of maybe seven million electric vehicles, that includes 0:00:56.040 --> 0:01:00.280 automobiles as well as trucks. Where's the electricity going to 0:01:00.400 --> 0:01:04.959 come from in order to charge the batteries for those vehicles. Well, 0:01:05.160 --> 0:01:07.959 we view this as part of a broader perspective for 0:01:08.160 --> 0:01:12.400 how California gets its greenhouse gas reductions by we see 0:01:12.400 --> 0:01:14.960 the electricity coming from a resource stack that will be 0:01:15.680 --> 0:01:18.440 carbon free, so that means a lot of renewables. Uh. 0:01:18.640 --> 0:01:21.080 We think that will require a lot of storage to 0:01:21.120 --> 0:01:24.080 be able to balance intermittency of renewables. But the key 0:01:24.120 --> 0:01:26.959 thing is that we view that as relying on a 0:01:27.000 --> 0:01:30.440 modern grid that's able to connect those resources, those sources 0:01:30.480 --> 0:01:33.560 that are cleaned with us, as like transportation and space 0:01:33.600 --> 0:01:36.280 and water heating. That will help California achieve its goals 0:01:36.280 --> 0:01:39.039 in the lowest possible, lowest possible cost. So can you 0:01:39.040 --> 0:01:41.280 give us just a sense of your role in this 0:01:41.360 --> 0:01:46.200 goal of reducing emissions in California by by what's your 0:01:46.200 --> 0:01:49.520 what's your role? Sure, actually several roles. Starts with having 0:01:49.640 --> 0:01:52.120 a strong and modern grid. So you know, our main 0:01:52.160 --> 0:01:55.120 business is running our wire system that provides power to 0:01:55.240 --> 0:01:59.280 fifteen million residents across fifty thousand square miles. That's one role. 0:01:59.480 --> 0:02:01.560 We have a role us a procure of energy. We 0:02:01.560 --> 0:02:03.680 we don't make very much of our own energy. We 0:02:03.760 --> 0:02:06.000 buy it from the market, and so as we let 0:02:06.000 --> 0:02:08.480 out contracts, we expect those contracts to go to an 0:02:08.480 --> 0:02:12.000 increasingly clean set of resources. Today we are STACK is 0:02:12.040 --> 0:02:16.519 about renewables and carbon free. We see that again doubling 0:02:16.560 --> 0:02:19.519 to eight carbon free. We still play a role in 0:02:19.600 --> 0:02:22.720 contracts for storage, and we also own some storage ourselves, 0:02:23.080 --> 0:02:25.560 and so the deploying storage. Today we have commitments for 0:02:25.680 --> 0:02:29.800 around five d megawatts of storage. We believe that the 0:02:29.840 --> 0:02:32.760 status a whole will need closer to ten thousand megawatts 0:02:32.760 --> 0:02:36.880 of storage. What big problem is that consumers just aren't 0:02:36.919 --> 0:02:40.440 buying electric vehicles that quickly, and they still love their SUVs. 0:02:40.639 --> 0:02:43.760 I mean, it's like you can't change people's taste. Yeah, 0:02:43.800 --> 0:02:46.160 well this is happening though, and it's it's uh. I 0:02:46.200 --> 0:02:47.960 think we're the early part of the s curve here, 0:02:48.080 --> 0:02:50.400 the growth curve. When you look about four or five 0:02:50.440 --> 0:02:52.760 years ago, I think in California about one percent of 0:02:52.919 --> 0:02:55.600 vehicle new vehicle sales had some sort of plug attached 0:02:55.600 --> 0:02:58.440 ship last year was closed to five percent. We have 0:02:58.560 --> 0:03:01.560 around three hundred and many thousand electric vehicles in the 0:03:01.639 --> 0:03:04.960 state right now. It's early days, but it's early days. 0:03:05.000 --> 0:03:08.440 With the market that's growing, we're seeing more charging infrastructure deployed. 0:03:08.480 --> 0:03:10.239 That's another one of our roles, you know, reading the 0:03:10.280 --> 0:03:14.560 grid for that. And importantly, we see auto manufacturers gearing 0:03:14.639 --> 0:03:17.280 up for this more and more announcements of electric vehicles, 0:03:17.639 --> 0:03:19.960 not just to serve California. I mean, we're we play 0:03:20.000 --> 0:03:22.360 a leading role, but we're only one of a lot 0:03:22.440 --> 0:03:24.320 of leading roles out there in China now has the 0:03:24.400 --> 0:03:27.320 largest leading role along with the EU. So this is 0:03:27.360 --> 0:03:32.119 a global, UH global initiative that's taking place here. And 0:03:32.360 --> 0:03:35.800 from a US perspective, you know, I view support for 0:03:35.920 --> 0:03:39.440 electric vehicles as being critical to our economy and to 0:03:39.600 --> 0:03:43.240 helping us participate in that infrastructure plan. Do you foresee 0:03:43.360 --> 0:03:49.800 edited international purchasing residential energy storage companies? UM, We typically 0:03:49.800 --> 0:03:51.640 don't comment an m n A, but I'd say our 0:03:51.680 --> 0:03:54.720 main focus continues to be on actually investing in that 0:03:54.880 --> 0:03:57.760 core grid. So you never say it never about anything, 0:03:57.760 --> 0:03:59.960 but it's not our focus right now. Our focus is 0:04:00.040 --> 0:04:02.280 been on investing in THEE grad. We have purchased some 0:04:02.400 --> 0:04:05.520 storage for our own use tied to our grade as well. 0:04:06.000 --> 0:04:08.440 And then outside of the utility, we have Edison Energy 0:04:08.760 --> 0:04:11.800 which provides services to large commercial and industrial customers, and 0:04:11.840 --> 0:04:15.760 they were helping helping those customers purchasing own storage as well. 0:04:15.960 --> 0:04:18.839 I'm wondering, you know, as you talk about California's plan 0:04:19.000 --> 0:04:24.240 to reduce emissions by I've struck by President Trump's approach 0:04:24.440 --> 0:04:26.840 to reducing emissions and that there actually has been a 0:04:27.640 --> 0:04:31.599 pretty significant attempt to roll back emission standards from former 0:04:31.640 --> 0:04:35.840 President Obama's era. How does this complicate your goal and 0:04:36.040 --> 0:04:39.240 how does it complicate sort of the overarching UH sort 0:04:39.240 --> 0:04:43.000 of target reducing emissions. I think the bottom line is 0:04:43.080 --> 0:04:47.040 that there is not that much impact that California will feel. 0:04:47.120 --> 0:04:49.120 There's some impact, but there's not that much impact in 0:04:49.160 --> 0:04:51.720 this sense. UM. The rollback of the Clean Power Plan 0:04:51.800 --> 0:04:54.240 at ep A, well, when you look at how California 0:04:54.320 --> 0:04:57.680 was going to fulfill, it's part of that. California is 0:04:57.680 --> 0:05:00.400 doing that already anyway. It's you know, increasing a target 0:05:00.440 --> 0:05:04.159 for renewables, setting the law for the fort greenhouse gas reduction. 0:05:04.480 --> 0:05:06.080 None of that is changing in this state, and I 0:05:06.080 --> 0:05:08.320 think that's similar in other states that are pursuing their 0:05:08.320 --> 0:05:12.240 own greenhouse gas reduction pathways. There are touch points, right 0:05:12.400 --> 0:05:16.560 and UH. One touch point is the fact that e 0:05:16.720 --> 0:05:19.800 p A has allowed the you know, UH waiver for 0:05:19.920 --> 0:05:23.240 California in terms of vehicle emission standards. You've seen you 0:05:23.279 --> 0:05:25.240 know commentary over the last week, and the e p 0:05:25.440 --> 0:05:28.480 A at the federal level UH talking about a potential 0:05:28.560 --> 0:05:31.760 rollback of that or you know, changes to that. UM. 0:05:31.839 --> 0:05:34.159 Barry Nichols is the chair of their Resources board, I 0:05:34.160 --> 0:05:37.040 think is at the conference also She was quoted, you know, 0:05:37.080 --> 0:05:39.280 in the various papers this morning as talking about that 0:05:39.400 --> 0:05:41.680 and the fact that California may sue to protect it's 0:05:41.760 --> 0:05:45.240 right to have its standard, but also acknowledging that look, 0:05:45.279 --> 0:05:48.920 you know, folks will negotiate, they'll talk, and ultimately, I 0:05:48.960 --> 0:05:51.480 think you know, we'll get this result in large part 0:05:51.560 --> 0:05:54.919 because electric vehicles are such a big part of the 0:05:54.920 --> 0:05:58.360 strategies for the automakers, and that's an important infrastructure play 0:05:58.440 --> 0:06:01.600 that our economy should not us. You mentioned how you're 0:06:01.600 --> 0:06:05.480 going to need what about ten gigawatts of battery storage 0:06:05.880 --> 0:06:09.920 by in order to meet all of these needs. Do 0:06:10.000 --> 0:06:15.800 you foresee any big changes in battery storage technology by then? Oh? Absolutely, um. 0:06:15.839 --> 0:06:18.960 With lithium ion dominating the market today, we've already seen 0:06:19.080 --> 0:06:22.559 dramatic cost reductions. I think you know, battery soult costs 0:06:22.560 --> 0:06:28.080 went down by about two thirds between Continued improvements are 0:06:28.080 --> 0:06:30.440 expected as remote move ahead, but there will be other 0:06:30.520 --> 0:06:32.960 chemistries to One of the fun things I get to 0:06:33.000 --> 0:06:34.680 do outside of Edison is that I'm on the board 0:06:34.680 --> 0:06:37.720 of ARGON National Lab. Argon has been the hub for 0:06:37.880 --> 0:06:41.440 de DE Department of Energies research on battery storage, and 0:06:41.480 --> 0:06:43.760 so they're pursuing a number of other chemistries there, and 0:06:43.760 --> 0:06:46.320 there's a lot of confidence, uh you know, not only there, 0:06:46.400 --> 0:06:49.960 but across the market that will see more types of chemistry, 0:06:50.040 --> 0:06:55.320 more types of battery that will bring greater capacities, more usability, 0:06:55.560 --> 0:06:58.560 lower issues, and ultimately lower costs for concerners. Which companies 0:06:58.600 --> 0:07:00.440 are at the forefront of this, because I think everyone 0:07:00.480 --> 0:07:02.880 thinks of Elon Musk is being sort of a secret 0:07:03.520 --> 0:07:06.479 battery whiz and that that's really where his power is 0:07:06.520 --> 0:07:08.599 going to come from. But are there other kind of 0:07:08.760 --> 0:07:11.080 people in the industry or companies that really have been 0:07:11.600 --> 0:07:14.000 pioneers here. Well, look, there's a lot of focus across 0:07:14.040 --> 0:07:16.600 our economy and the worldwide economy, and I don't want 0:07:16.680 --> 0:07:19.360 going through a whole litany of names of companies. Was 0:07:19.360 --> 0:07:21.800 certainly a purchased Tesla batteries, but we've done work with 0:07:21.840 --> 0:07:24.800 a number of other companies, both on the manufacturing site 0:07:24.800 --> 0:07:26.960 for the battery sales, as well as folks who are 0:07:27.000 --> 0:07:31.400 deploying storage and for example, companies that are contracting with 0:07:31.520 --> 0:07:34.840 ind use consumers, aggregating those batteries and then presenting that 0:07:34.840 --> 0:07:37.000 as a package to our utility so we can then 0:07:37.040 --> 0:07:39.600 procure the use for that. So You're seeing a lot 0:07:39.640 --> 0:07:43.000 of focus both in the US, in Asia, in Europe, 0:07:43.600 --> 0:07:46.440 across multiple folks investing. So you're not going to answer, 0:07:46.560 --> 0:07:48.760 which comes from a very toughful way. Now to endorse 0:07:48.800 --> 0:07:57.240 any companies well, good logo, producing comissions by in you know, 0:07:57.600 --> 0:08:01.280 fifteen years, twelve years, the todd the clock is ticking. 0:08:01.440 --> 0:08:04.200 Thank you so much for being with us. Bizarro, President, 0:08:04.280 --> 0:08:08.800 chief executive officer of Edison International, which is based in California. 0:08:08.880 --> 0:08:11.560 But he is here at the Bloomberg Future of Energy 0:08:11.680 --> 0:08:14.679 Global Summit. He has a tall task and many roles 0:08:14.720 --> 0:08:34.800 playing with respect to this Californian goal. There's sort of 0:08:34.800 --> 0:08:38.800 a philosophical conundrum in investing today. On one hand, investment 0:08:38.840 --> 0:08:41.600 manators need to make money for their clients. On the 0:08:41.600 --> 0:08:44.360 other hand, there's a growing movement to feel good about 0:08:44.360 --> 0:08:46.600 where people are putting their money. Here to talk about 0:08:47.040 --> 0:08:50.520 how one major organization is dealing with that is in Finucan, 0:08:50.840 --> 0:08:54.839 vice chairman of the Bank of America organization which we 0:08:54.880 --> 0:08:57.600 all know. Uh so and thanks so much for being here. 0:08:57.640 --> 0:08:59.520 I want to start with that sort of how do 0:08:59.559 --> 0:09:03.360 you make sure that you are getting good returns and 0:09:03.440 --> 0:09:07.760 investing responsibly for the bank while also supporting initiatives that 0:09:07.840 --> 0:09:11.320 you think lead to a more sustainable, sustainable future from 0:09:11.320 --> 0:09:16.240 an energy perspective, Thanks Lisa. So it's uh, it's evolved 0:09:16.280 --> 0:09:18.520 over time. That doesn't just begin on day one. As 0:09:18.559 --> 0:09:21.840 you know, a good idea becomes a viable idea when 0:09:21.880 --> 0:09:24.559 you can get the returns. So what we've been able 0:09:24.600 --> 0:09:28.520 to do is to approach uh, new products, create new 0:09:28.559 --> 0:09:33.559 products that are similar to the products that are clients 0:09:33.600 --> 0:09:37.000 would have known from the past. So municipal bonds, green bonds, 0:09:37.480 --> 0:09:39.400 a green bond. You can underwrite a green bond, our 0:09:39.440 --> 0:09:41.200 issue a green bond. The kind of return you're going 0:09:41.240 --> 0:09:44.080 to get on it is probably north of what you 0:09:44.160 --> 0:09:46.319 get on a municipal but not much better. But if 0:09:46.320 --> 0:09:48.000 that's what you were going to invest in the in 0:09:48.040 --> 0:09:51.120 the first place, you can also get the return of 0:09:51.880 --> 0:09:54.280 environmental hit that you would not have been able to 0:09:54.280 --> 0:09:59.200 get otherwise. So you're talking about reducing greenhouse gas emissions, 0:09:59.320 --> 0:10:04.160 energy effici and see water storage or whatever. Likewise, we've 0:10:04.160 --> 0:10:06.160 been able to do the same thing with tax equity, 0:10:06.200 --> 0:10:08.440 which actually came out of some of the work we 0:10:08.480 --> 0:10:12.400 did early on years ago with community development. But applying 0:10:12.440 --> 0:10:16.600 tax equity where you can UM through tax credits and 0:10:16.720 --> 0:10:20.680 investments make a better return than say the municipals and 0:10:20.720 --> 0:10:24.000 so on and so on. So UM we've seen more 0:10:24.080 --> 0:10:30.000 recently a UM interest in UH the private capital markets, 0:10:30.000 --> 0:10:33.200 and that's that's where, of course you're gonna make bigger money. 0:10:33.480 --> 0:10:36.920 So when private equity gets involved and they are focused 0:10:36.960 --> 0:10:39.920 on the sustainable development goals and then they're looking to 0:10:39.960 --> 0:10:43.760 get their kinds of returns, that usually takes different tranches 0:10:44.040 --> 0:10:48.240 of UH financing. It's not just one thing, but on 0:10:48.280 --> 0:10:50.920 a blended basis, you can get good return, you can 0:10:51.080 --> 0:10:54.560 de risk, and you can do some good. Just to 0:10:54.600 --> 0:10:57.920 mention that your native of Newton UM, you know UH 0:10:58.120 --> 0:11:01.400 Bloomberg Radio Home is one of those six one Boston 0:11:01.720 --> 0:11:05.200 Report and thirty Metro West and the South Shore. So 0:11:05.280 --> 0:11:07.360 I want to give you the opportunity to maybe draw 0:11:07.480 --> 0:11:14.360 some connections between the demand for technology of the future 0:11:15.400 --> 0:11:20.280 Boston in the Boston area known for biotechnology that no 0:11:20.320 --> 0:11:22.480 one really knew was going to exist in the future, 0:11:23.120 --> 0:11:26.800 but that public private partnership and the money that came 0:11:26.840 --> 0:11:30.480 from the private sector is something that helped build it 0:11:30.520 --> 0:11:33.199 into a world class industry. Do you think that this 0:11:33.280 --> 0:11:36.960 is what's happening now with these commitments to sustainable and 0:11:37.000 --> 0:11:40.880 renewable energy. I do I think this is an evolution. 0:11:41.080 --> 0:11:43.440 It seems to happen in many industries. I mean that 0:11:43.520 --> 0:11:46.679 you could say the same of tech in Silicon Valley, 0:11:46.720 --> 0:11:49.440 you could say it a biotech in in the Boston area. 0:11:49.600 --> 0:11:51.800 You could say it more generally. In terms of UM 0:11:52.880 --> 0:11:55.959 environmental efforts, you have to have the early money. That's 0:11:56.400 --> 0:12:00.680 kind of UM first loss money, if you will, and 0:12:00.679 --> 0:12:03.560 and that the willingness to dig in. So in the 0:12:03.600 --> 0:12:07.040 early days, much of what we were doing environmentally was philanthropic, 0:12:07.679 --> 0:12:10.240 but there was clearly a business there. I mean, a 0:12:10.360 --> 0:12:13.840 very practical business is energy efficiency in the real estate space. 0:12:14.679 --> 0:12:17.800 What what developer doesn't want to be able to have, uh, 0:12:17.920 --> 0:12:21.080 spend less money on energy use. But if you can 0:12:21.120 --> 0:12:23.680 think about that upfront rather than doing it on a 0:12:23.720 --> 0:12:26.880 retroactive basis, is going to help. So it's you know, 0:12:27.040 --> 0:12:29.080 first you walk, then you run, and then you start 0:12:29.120 --> 0:12:31.920 making money. I'm wondering, you know, when you were talking 0:12:31.960 --> 0:12:35.720 about the tax credits being somehow embedded into some of 0:12:35.760 --> 0:12:39.280 these financial instruments to get people into sustainable investing, how 0:12:39.360 --> 0:12:43.040 much UH does the lack of interest by the current 0:12:43.080 --> 0:12:47.640 presidential administration kind of impact sort of the sort of 0:12:47.640 --> 0:12:50.880 investing landscape here, because there has been a pullback from 0:12:50.960 --> 0:12:54.360 underwriting sort of mason efforts to get the grid to 0:12:54.360 --> 0:12:58.360 be more sustainable. Well, the pullback is actually in the 0:12:58.559 --> 0:13:01.880 tax reform, so UM, I think we can work our 0:13:01.920 --> 0:13:04.800 way through that. I think we've gotten sophisticated enough about that. 0:13:05.160 --> 0:13:07.719 On the other hand, the business community hasn't pulled back 0:13:07.720 --> 0:13:09.720 at all. We haven't and I can't think of any 0:13:09.760 --> 0:13:13.280 big company that committed in two thousand and fifty, in 0:13:13.280 --> 0:13:16.160 December of two thousand and fifteen to the COP twenty 0:13:16.160 --> 0:13:20.120 one that's actually pulled back. Because for us, we see business. 0:13:20.600 --> 0:13:24.560 We also have UM an employee base that expects us 0:13:24.600 --> 0:13:26.880 to do that, and frankly, we have an investor base 0:13:26.960 --> 0:13:28.880 that expects us to do that. I can't tell you 0:13:28.920 --> 0:13:32.239 how many conversations we have. And I have these conversations. 0:13:32.280 --> 0:13:36.840 I meet with about fifty institutional investors a year and uh, 0:13:37.000 --> 0:13:39.000 three years ago, no one asked about E s G 0:13:39.160 --> 0:13:41.520 and now everybody does. And and when I say E 0:13:41.679 --> 0:13:44.200 s G, they're mostly focused on E. So how do 0:13:44.240 --> 0:13:47.680 you make sure that you're measuring the E accurately, because 0:13:47.679 --> 0:13:49.360 when you talk about green bonds, I know that some 0:13:49.400 --> 0:13:51.160 people have complained that there are a lot of arbitrary 0:13:51.200 --> 0:13:53.880 standards for what counts as green. So how do you 0:13:53.880 --> 0:13:55.920 how do you evaluate that and how do you judge 0:13:56.120 --> 0:13:59.439 what's getting less and less arbitrary begin there. Uh, you 0:13:59.520 --> 0:14:03.040 need to have results, so you need to reduce something, 0:14:03.400 --> 0:14:06.520 so you need to reduce the greenhouse gas emissions or 0:14:06.679 --> 0:14:13.080 improve your water storage, so you have to have definable outcomes. 0:14:13.600 --> 0:14:15.840 The um issue with green bonds is it takes a 0:14:15.840 --> 0:14:18.280 little more to do because you have to calibrate all 0:14:18.280 --> 0:14:19.880 of that, you have to have a report at the 0:14:20.040 --> 0:14:22.320 end of it. So I think that's really the complaint, 0:14:22.360 --> 0:14:24.400 not so much that it's not definable, but that it 0:14:24.400 --> 0:14:26.640 takes a little work to do to do the work. 0:14:27.320 --> 0:14:31.000 Um and I would say so going back to the government, 0:14:31.320 --> 0:14:35.720 uh uh, regardless of what this administration is is saying, 0:14:35.960 --> 0:14:39.640 the reality is is that we're not living administration to administration. 0:14:39.880 --> 0:14:41.800 We're trying to look at this in the long term. 0:14:41.800 --> 0:14:44.000 We're talking about this to the end of this century 0:14:44.360 --> 0:14:47.239 and how much money is needed, and we're seeing opportunity. 0:14:47.280 --> 0:14:50.320 I mean, we committed a hundred and twenty billion dollars 0:14:50.320 --> 0:14:52.600 in two thousand and thirteen. We thought that we would 0:14:52.600 --> 0:14:55.560 make that goal in two thousand and five, and five 0:14:55.640 --> 0:14:59.760 years in we're well, we're beyond halfway mark and and 0:15:00.120 --> 0:15:04.040 with momentum, so the first few year was much slower 0:15:04.080 --> 0:15:07.040 than this past year. This past year we did just 0:15:07.440 --> 0:15:10.880 like I think, six billion dollars in UM green bonds alone, 0:15:11.280 --> 0:15:13.880 so underwriting them, underwriting them and with the number one 0:15:13.920 --> 0:15:17.560 underwriter of green bonds, number one on UM tax equity 0:15:17.880 --> 0:15:21.960 UM financial firm. And we're very focused on this, I 0:15:22.000 --> 0:15:26.480 mean energy efficiencies probably first, to my surprise, wind is 0:15:26.560 --> 0:15:32.640 next than solar. So catalytic finance initiative part of this. 0:15:32.800 --> 0:15:35.000 Just give us the low down on on what it 0:15:35.080 --> 0:15:37.600 is and what you look for the future. Yeah, I 0:15:37.600 --> 0:15:39.240 think we have to come up with a better name 0:15:39.320 --> 0:15:41.760 for that. That's sort of a mouthful, but we have it. 0:15:41.760 --> 0:15:44.520 We're gonna have a contest after right, Okay, But what 0:15:44.640 --> 0:15:47.720 it is is UM. When there are projects that are 0:15:47.760 --> 0:15:51.200 harder to finance by one company or one one client 0:15:51.320 --> 0:15:53.880 or one bank, it is a way of getting other 0:15:53.960 --> 0:15:57.720 financial institutions involved. So we made a billion dollar commitment 0:15:57.920 --> 0:16:02.560 rather whether to d risk or invest wouldn't either way. Uh. 0:16:02.640 --> 0:16:06.480 And we've got seven other financial firms of different types 0:16:06.600 --> 0:16:12.280 and also nonprofits, and together various tranches of financing have 0:16:12.360 --> 0:16:16.240 been able to do a wind farm in the North Sea, 0:16:16.680 --> 0:16:22.040 solar panels homes in Spain, and conservation land in Africa. 0:16:22.400 --> 0:16:26.200 Thank you very much, Thinking is a vice chair of 0:16:26.520 --> 0:16:45.160 Bank of America. Nuclear Fusion. We're going to be focusing 0:16:45.320 --> 0:16:47.760 on this now. We're not gonna be talking about the sun. 0:16:47.960 --> 0:16:51.520 We're gonna be talking about how perhaps we can create uh, 0:16:51.720 --> 0:16:56.080 fossil fuel free energy in a cheap, efficient way here 0:16:56.120 --> 0:16:58.960 on Earth. Joining us now, Chris Maori, chief executive officer 0:16:59.000 --> 0:17:02.400 of General Fusion, which is based in Vancouver, but is 0:17:02.680 --> 0:17:07.159 joining us here at the Bloomberg New Energy Finance Future 0:17:07.160 --> 0:17:09.680 of Energy Global Summit. Chris, Before we get into the 0:17:09.720 --> 0:17:13.399 nitty gritty of the financing and the potential, what is 0:17:13.720 --> 0:17:17.080 nuclear fusion? At least it's great to be here this morning. UH. 0:17:17.359 --> 0:17:20.680 Fusion is the opposite of nuclear power. In nuclear power, 0:17:20.720 --> 0:17:24.240 you think about splitting heavy atoms like uranium. Fusion is 0:17:24.280 --> 0:17:27.760 all about putting together the lightest atoms. And for us, 0:17:27.840 --> 0:17:31.520 we put together to hydrogen atoms and make helium and 0:17:31.680 --> 0:17:35.360 that is an incredibly powerful reaction. It's the most powerful 0:17:35.359 --> 0:17:39.240 reaction that we know of, and it's also incredibly clean. 0:17:39.680 --> 0:17:43.800 The fuel for fusion, for our version of fusion, comes 0:17:43.800 --> 0:17:45.960 from water. It comes from the hydrogen out of water. 0:17:46.080 --> 0:17:49.560 So there's basically an unlimited supply of this fuel that's 0:17:49.600 --> 0:17:54.600 available to everybody everywhere. If if Lisa were to go 0:17:54.840 --> 0:17:58.960 to UH British Columbia to Vancouver and you were to 0:17:59.000 --> 0:18:02.919 show her your plan sima injector, can you describe what 0:18:03.000 --> 0:18:07.959 would it look like and what does it do? So plasma, 0:18:08.520 --> 0:18:10.600 let me start by just saying that that plasma. You 0:18:10.640 --> 0:18:13.280 can think of plasma as lightning. When when you look 0:18:13.320 --> 0:18:15.760 up in the sky during a thunderstorm you see a 0:18:15.760 --> 0:18:19.119 flash of light, that light is actually plasma. It is 0:18:19.119 --> 0:18:22.679 electricity UH that has gone through the air in the 0:18:22.680 --> 0:18:25.719 atmosphere and heated that up so much that it stripped 0:18:25.720 --> 0:18:28.879 all the electrons off the protons of those atoms and 0:18:29.000 --> 0:18:32.080 made it glow. And that is that's really what plasma is. 0:18:32.080 --> 0:18:33.800 And when you look at the sun, that's what you 0:18:33.840 --> 0:18:36.640 see that the sun is a burning ball of high 0:18:36.720 --> 0:18:40.840 temperature plasma. And so our plasma injector, which is is 0:18:40.920 --> 0:18:43.879 like the fuel injector of a diesel engine. Uh, it 0:18:44.000 --> 0:18:49.240 basically creates the starting point for fusion process. It creates 0:18:49.280 --> 0:18:52.760 this plasma. So it's a it's a machine that's uh 0:18:53.080 --> 0:18:55.960 six or seven feet in diameter, about fifteen feet long, 0:18:56.520 --> 0:18:59.840 where we put an incredible amount of electricity through just 0:19:00.040 --> 0:19:02.480 us a very very little bit of hydrogen gas a 0:19:02.520 --> 0:19:05.480 couple of grams and heat that up to about five 0:19:05.560 --> 0:19:08.480 million degrees and that's kind of the starting point of 0:19:08.560 --> 0:19:11.920 view will to creating fusion here on Earth. Okay, So 0:19:12.000 --> 0:19:14.840 to heat something up to five million degrees sounds like 0:19:14.880 --> 0:19:16.879 it takes a bit of energy itself. How do you 0:19:17.160 --> 0:19:20.560 how do you source that energy to create this energy? Well, 0:19:20.640 --> 0:19:25.119 in the fusion plant, you have recirculating energy, right, So, uh, 0:19:25.240 --> 0:19:28.080 the good news about fusion, it just makes an incredible 0:19:28.119 --> 0:19:31.719 When the fusion reaction happens, it makes an incredible amount 0:19:31.760 --> 0:19:34.440 of energy, and so you recirculate some of that back 0:19:34.800 --> 0:19:39.520 to start the next reaction. Again. Our machine is really 0:19:39.560 --> 0:19:42.719 analogous to a diesel engine. It's a pulse process that 0:19:42.800 --> 0:19:45.640 in the power plant will happen once a second. So 0:19:46.000 --> 0:19:49.879 basically you'll create a plasma injected into our machine and 0:19:49.960 --> 0:19:52.679 compress it actually pretty much just the way a diesel 0:19:52.720 --> 0:19:56.120 engine works too. You reach fusion conditions, which is when 0:19:56.160 --> 0:19:59.800 you heat up this plasma to over fifty million degrees 0:20:00.200 --> 0:20:04.320 and at that pressure and temperature, the helium, the hydrogen 0:20:04.440 --> 0:20:08.840 atoms actually burn and fuse together into helium and release 0:20:08.880 --> 0:20:12.239 an unbelievable amount of energy. And uh so you just 0:20:12.320 --> 0:20:16.000 recirculate some of that to create new new plasma, but 0:20:16.040 --> 0:20:18.560 there's plenty of left over to make clean electricity. Point 0:20:19.760 --> 0:20:25.320 you're looking perhaps to build an even bigger plasma injector. Correct, Well, 0:20:25.320 --> 0:20:28.080 what we're doing a plasma injector again going back to 0:20:28.160 --> 0:20:30.679 my analogy of a diesel engine, and plasma injector is 0:20:30.760 --> 0:20:33.320 just one part of the overall engine. And so what 0:20:33.440 --> 0:20:36.399 General Fusion has done for the last fifteen years is 0:20:36.440 --> 0:20:40.240 really develop all the systems of our fusion engine, if 0:20:40.240 --> 0:20:42.520 you will. And what we're getting ready to do now, 0:20:42.560 --> 0:20:46.760 which is really exciting, is to really build a demonstration 0:20:46.880 --> 0:20:50.639 fusion plant, okay, and the purpose of this is to 0:20:50.880 --> 0:20:55.720 actually prove that we have the capability to make electricity 0:20:55.760 --> 0:20:57.880 out of fusion energy. It's not going to be a 0:20:57.960 --> 0:21:02.040 functioning power plant in the sense of putting megawatts on 0:21:02.080 --> 0:21:04.639 the grid because actually the back end of our power 0:21:04.680 --> 0:21:07.560 plant is something that's completely conventional. We don't need to 0:21:07.600 --> 0:21:10.360 prove that. We're really kind of proving out on an 0:21:10.359 --> 0:21:14.440 integrated basis the fusion island, which is that the set 0:21:14.480 --> 0:21:17.760 of equipment that makes this plasma, compresses it, burns it, 0:21:17.840 --> 0:21:20.879 and turns it into electricity. That's the goal, and this 0:21:20.920 --> 0:21:24.679 will be done at scale. So, uh, Jeff Bezos, the 0:21:24.720 --> 0:21:29.160 founder of Amazon is an investor, is backing general fusion. 0:21:29.600 --> 0:21:32.000 Can you walk us through what has to happen for 0:21:32.040 --> 0:21:35.280 this to be adopted on some kind of mass scale 0:21:35.520 --> 0:21:39.040 and also how does it compare and cost to other 0:21:39.080 --> 0:21:43.280 types of energy generators. So one of the exciting things 0:21:43.320 --> 0:21:47.360 about fusion, at least I can certainly speak to General Fusion, 0:21:47.560 --> 0:21:51.440 is that when you evaluate the projected cost of electricity, 0:21:51.720 --> 0:21:56.399 it's extremely competitive, uh, competitive with the future forecast of 0:21:56.520 --> 0:21:59.960 wind and solar. And of course it's available twenty seven. 0:22:00.359 --> 0:22:02.240 You know what we talked about it as on demand 0:22:02.320 --> 0:22:06.000 or flexible energy, right, and so whereas renewable, you need 0:22:06.040 --> 0:22:09.159 to complement it with something, whether it's energy storage or 0:22:09.240 --> 0:22:13.119 some form of flexible on demand energy. UM in this case, 0:22:13.200 --> 0:22:17.680 it's something that in itself is very economically competitive and 0:22:17.960 --> 0:22:20.560 that that's a key piece of this thing. So for us, 0:22:20.880 --> 0:22:25.560 we are at the last stage of commercialization, so building 0:22:25.640 --> 0:22:29.199 this demonstration plant. When it's up and running in the 0:22:29.200 --> 0:22:32.199 next several years um, and it works the way we 0:22:32.240 --> 0:22:36.199 hope it works, we'll be ready for commercial deploy at 0:22:36.200 --> 0:22:38.399 the next step will be a commercial reference plant that 0:22:38.359 --> 0:22:42.119 will actually put clean electrons on the grid. Thank you 0:22:42.240 --> 0:22:44.760 very much for joining us and sharing this a new 0:22:44.800 --> 0:22:48.480 technology with us. Chris Malory is the chief executive of 0:22:48.680 --> 0:22:52.560 a General Fusion talking about the private sector bet on 0:22:53.040 --> 0:23:12.360 using fusion technology to create electrics. Much appreciative this time 0:23:12.400 --> 0:23:15.439 to take a look at small and MidCap shares, and 0:23:15.480 --> 0:23:18.480 of course Dave Wilson Bluebirk, Sex editor, columnist and blogger 0:23:18.480 --> 0:23:20.680 at M Live go On at the Bluebird joins us. 0:23:20.720 --> 0:23:24.280 Now risk on in small caps give us the details please, 0:23:24.480 --> 0:23:27.240 Well it sure looks that way, Lisa. I mean you 0:23:27.320 --> 0:23:30.880 see the Russell two thousand at the moment higher by 0:23:30.920 --> 0:23:33.920