2008 Clinton Global Initiative Annual Meeting:
Energy and Climate Change Working Group:
Renewables Revolution
Clinton Global Initiative
September 25, 2008
[START RECORDING]
CAROLYN LUKENSMEYER: Good morning, folks. Was that an extraordinary opening session? [Applause] So, now I’m just up here to give you a reminder—I just want to remind all of the members and people at the tables that while the panel is talking, don’t forget to write your questions and comments on cards and give them to your table facilitator and recorder so that we can have them ready for the panel in the second part. Great.
MALE SPEAKER: Carol Browner, Principal, the Albright Group.
CAROL BROWNER: Good morning. Let me start by thanking all of you for joining us at this session on the Renewables Revolution. We have a great panel for you. We’re going to have a great conversation here.
Before we bring our panelists on stage, though, we have a special treat. We have a special guest, the governor of Florida, Governor Charlie Crist. And it’s a real honor for me to get to introduce him, since I am actually a native Floridian. And you’re mostly a native Floridian. You came there when you were very tiny. But Governor Crist has been at the forefront of the whole climate change discussion that is going on in our states, and has provided tremendous leadership, not just in Florida but across the country and around the world. And so we are pleased that you were able to take some time out of your schedule today to be with us. And while we welcome you to the stage, let us also congratulate you on your upcoming December wedding. He is here with his fiancée, Carole Rome. Thank you, Governor. [Applause]
GOV. CHARLIE CRIST: Thanks very much, Carol. I told her, I said, well, from one Carol to another, that was very kind of her to make that acknowledgement. And I am truly blessed.
Let me talk about Carol’s accomplishments and what she has done, not only for Florida but for America very briefly. An extraordinary Floridian and a dear friend, and someone for whom I have enormous respect because of her accomplishments, and maybe even more so because of her drive and her heart. So, Carol Browner, Secretary, thank you very, very much for what you have done. And please give her a round of applause. She deserves it. [Applause]
I just wanted to share a few thoughts, because things went over a little bit downstairs. I’m tightened up, and I’ll try to be efficient. I wanted to share a privilege I had recently in Florida, to be able to bring a message of hope and opportunity to Wall Street, of all places, recently about some innovation that we are offering from the Sunshine State. It was a piece of legislation that offers 2 billion dollars of investment in technology, and what concerns me the most, green technology. And I was very excited to have the opportunity to sign this legislation here in New York and have this kind of cash infusion devoted from my fellow Floridians to a better technology for our country and our world. The legislation also doubles Florida’s alternative investments from $9.2 billion to $18.4 billion, not a small sum of money in anyone’s estimate. And other venture firms will likely invest even more, I hope and believe, as a result of Florida’s increased investment.
I would invite all of you who have an interest in accessing those almost 2 billion dollars to visit a website, either myflorida.com or sbafla.com. It’s a great opportunity to do some very good things.
I also had the honor this summer of signing bipartisan legislation in Florida that created additional economic opportunity for the Sunshine State and increasing our use of renewable energies in Florida. I had a visit early on, about a month after I got sworn in as governor in 2007, from a gentleman named Terry Tamminen, who had been serving Governor Arnold Schwarzenegger in California. And Terry came into my office and he showed me a big map of the United States of America, and he said, “You know, Governor, you’re a new governor, and I wanted to show you what’s happening in California, the accomplishments that we’ve been able to make there. There have been great things that have happened in the other northwestern states in our country and in the northeastern part of America. But when it comes to the southeast of the United States, there hasn’t been a whole lot moving forward as it relates to climate change and the environmental policies.” He goes, “You’re the new governor of Florida.” And he says, “That means that you have an opportunity. You have an opportunity to do something very good and potentially lead in this part of our country.” And so we embarked upon some things, and we’ve had some relative success with wind, solar, other renewable energies, biomass. And I’ve very, very pleased about what we’ve been able to do.
We have sought to remove the barriers to greater investments in renewables in the Sunshine State. That’s why solar is so important to us. But in addition, we also have met metering requirements that relate to power, net metering which would give full retail rate for renewable power as an offset to the traditional sources of power. We’re paving a way for expanding the production and use of renewable energy. We’re encouraging innovative solutions that will expand our capacity for renewable energy. And solar energy is on the forefront of all of that, along with wind and wave and currents.
In addition to ethanol, we in Florida are embarking upon a project that is historic. It is the purchase by the state of about 187,000 acres of land near Lake Okeechobee that is now used for farming sugar. And it would include sugar mills if we get it all right. And one of the things we want to do with those mills is transform them from producing sugar to producing ethanol made from sugar. It’s a much more efficient way to produce it. It doesn’t make food cost more because it’s not born out of corn. And we think it’s the future of energy independence, along with some other very good ideas that we heard about this morning here at the conference.
I want to conclude by explaining how we’ve been able to do this. We’ve been very fortunate, and we’ve done it by bipartisan opportunities. I would really refer to them as non-partisan. The energy bills that we have done, along with other health-care bills, cover Florida, which we believe will offer affordable health care to about the 4 million Floridians who do not have it now for about 150 dollars a month. Right now it costs 600 or 700 dollars a month. We, for the first time in the Sunshine State, now have an autism bill that will cover children who have autism in Florida for the first time in the history of our state. And both in the House and in the Senate, there was not one single no vote. Every Democrat, every Republican voted yes. Same on the energy bill—every Democrat, every Republican voted yes. And the same on the Cover Florida Heath package—every Democrat and every Republican voted yes. It is us working together to try to do what is right for the people who elect us and expect us to serve them—could be a model for America.
Thank you all very much, and God bless you for what you’re doing. [Applause]
MALE SPEAKER: Ladies and gentlemen, please welcome our panelists: Wesley Clark, retired U.S. Army general and director of Emergya Wind Technologies. [Applause] Peggy Liu, founder and chairperson, JUCCCE, Joint U.S. - China Cooperation on Clean Energy. [Applause] Marcel Brenninkmeijer, founder and chairman, Good Energies. [Applause] Lester Brown, president, Earth Policy Institute. [Applause] Carol Browner, principal, the Albright Group. [Applause]
CAROL BROWNER: We have got a great set of panelists here. We’ve got creative thinkers, doers, investors. And what we’re going to be talking about here is the renewables revolution. Thirty percent of new energy in the United States last year came from wind. Iceland, we hear about, is almost all geothermal now. Solar entrepreneurship in China is growing more and more successful.
But if you look around the world, worldwide renewables are still only a fraction of our energy production. And so what I want to do is start very quickly, go down the row here with our experts and ask you to each answer the same question, in a one-word answer, a one-sentence answer, and then we’ll open it up. The question is: What would it take, in your mind, for the world to really scale up on renewables? What’s the one more important thing the world could do? Lester?
LESTER BROWN: I think get the price right for energy, get the market to tell the environmental truth. General Clark and I were talking earlier. One of the problems is that—
CAROL BROWNER: You get one word. Market? We’ll be back to you.
LESTER BROWN: Market with tax restructuring.
CAROL BROWNER: Okay. Marcel.
MARCEL BRENNINKMEIJER: Well, I believe that getting the right framework for people to invest will help.
CAROL BROWNER: So, investment opportunities. Peggy.
PEGGY LIU: So, I won’t repeat, for China we are investing. I think the key is the implementation of smart grids, so that we can allow the renewables onto the grid.
CAROL BROWNER: And General Clark.
WESLEY CLARK: Back to what Lester was saying, it’s the market. You’ve got to pay the full cost, not only the economic cost but the climatological costs, environmental costs, and social costs for carbon. Once you know what the real price that you’re paying is, then renewables will come in.
CAROL BROWNER: Well let me—you all have taken us into the market discussion, so let me ask you a follow-up along those lines. What role do you see a cap-and-trade-program playing? We have several who are active here in the United States, and also from a global perspective. Is that the market mechanism that is most likely to get us the kind of pricing we need? Lester?
LESTER BROWN: If you’re to take a poll of economists, they would probably 95 percent say let’s restructure the tax system. It’s clear, it’s clean, it’s transparent, it’s honest and it works. Industries prefer cap and trade. I think in the end, as Mayor Newsom said this morning, we’re going to have some combination of both. But the tax restructuring, lowering income taxes and offsetting it with a higher carbon tax, is really a fairly simple, straightforward thing that we could phase in over the next dozen years. And once people know it’s happening, then investment decisions begin to change very rapidly.
CAROL BROWNER: Marcel, can you talk a little bit about cap and trade, maybe from a global perspective and as a businessman?
MARCEL BRENNINKMEIJER: What we see is that the real cost of energy is not attributed to energy cost. So, this morning we heard that oil is very expensive. I would say it’s still not expensive enough. And energy prices are going up. We’ve seen in European countries 15 percent power price increases. At the same time—and I don’t want to jump ahead—but if we look at solar costs, they have come down like they will be halved in five years. We have several roadmaps in several of the companies where we’ve invested where we can halve the cost of a panel within five years. So, the one is going up. The other’s coming down. And there will be a crossroad, which we can discuss later on.
CAROL BROWNER: And so, Peggy, from your perspective, you’ve been an entrepreneur, you’ve been in the business world, now you’re leading a large NGO, one of the big debates every time our Congress talks about cap and trade is what’s going to happen in China.
PEGGY LIU: Well, in China, I’d like to sort of shift the debate from cap and trade to something more home-grown, which is our 11th five-year plan. So, in 2006, the central government said we are going to reduce, by 2010, 10 percent of our emissions. We’re going to decrease energy intensity per unit GDP by 20 percent. And so I think the key in China is not necessarily the cap and trade, although it is very interesting. For China, what works is KPIs. It’s the key performance indicators that are tied to the local leaders, the mayors that are responsible for implementing these targets locally. And we’re actually moving towards that.
So this last year, these last 12 months, as JUCCCE has been growing, we have seen phenomenal progress in the central government, the Chinese central government’s intentions. And so look to our KPIs to grow more specific and lead the local leaders towards helping the local cities to implement clean, renewable technologies.
CAROL BROWNER: General Clark, you’re 38 years in the Army, four stars. Can you talk a little bit about the issue of energy and renewables from a defense perspective?
WESLEY CLARK: Well, strictly from the defense perspective, I mean, we’re the largest consumer of petroleum in the country. That’s probably not going to change in the near term, although we’ve been looking for electric drive on tanks and so forth for a long time. The Navy’s gotten away from boilers, as you know, and they’re into nuclear.
But I think that to really understand the national security side of this, you have to go back to the market. If you look at the market—let me just give everybody an example of what the market looks like in a small southern state that I know pretty well. In the 1990s, we thought the future of energy was natural gas. We built a lot of natural gas turbine plants. Natural gas was a dollar per million BTUs, except maybe in the heating season when it went up a little bit. We had some backup. We had the old coal-fired plants. Now it’s 80-percent coal. We get it for 1.80 dollar per million BTUs coming in out of Wyoming on long-term contracts. We don’t use natural gas except during the MAC season. There’s a little bit of hydropower, a little bit of nuclear.
And the way it was explained to me by the people who do this, they said, We’re concerned because we’re selling our power now at five cents a kilowatt hours wholesale. It’s eight cents retail. And if you put a 10-dollar carbon tax on it, that’ll raise it a penny. So, if it’s a 10-dollar carbon tax, it’ll be six cents. For a 20-dollar carbon tax, it’s seven cents. And for a 40-dollar carbon tax, it’s nine cents. So, industry, the utilities, nobody wants this carbon tax. It changes a lot of—it moves a lot of people out of their comfort zone.
But I do agree with the point that Lester was making, that we’re going to move, I hope, to a cap and trade and some kind of a carbon tax, because that’s the best way to send to the market the signals about what the real cost of energy is and help all of us live with that cost.
CAROL BROWNER: Marcel, you mentioned your work in solar. Can you spend a few minutes just helping us understand just sort of what are the opportunities? And then what are the obstacles, specifically as it relates to solar?
MARCEL BRENNINKMEIJER: When I started in solar in 2000, 2001, the industry had the size of about 200 megawatts. Five years later, it was four gigawatts, which is equivalent to a nuclear power plant with a gigawatt, if you take the sun hours and divide them by the yearly hours we have. And it’s projected to grow by another factor of five to ten within another five or six years. So, solar, for me, was the area to enter because it was small enough to be meaningful in that area, but also because it has probably the greatest propositions of all the renewables.
Now, we do need all the renewables to combat climate change, but solar is the area where I believe, or where we believe—and this is based on studies by Shell. Shell, for instance, put out a study at the end of the last century where solar will take about two thirds of the entire energy provision by 2100.
Now, the way I sold it to my family was that we’re a large family business, six generations now entering. I said, well, it’s only four more generations for us to hit 2100. So, do you want to be in this business, yes or no? Now, given the fundamentals of solar, that you can use it to decentralize, that you can use it on grid. You can have thin film concentrated, crystalline silicone based, you can have thermal solar, CSP, so there are many options.
And the nice thing about solar is it correlates quite well with the peak of the day of the consumption. Now, it’s a little bit on the early side, meaning that by the time that solar has its peak, it’s just before the peak of the consumption. If you take California, where you have 5 o’ clock in the afternoon the highest consumption, solar is about 1 o’ clock. But you could cover the first half of that peak. And there are other means, other storage means, ice energy, things like that, where you can do the second half. So, in order to cut the peak and avoid expensive and CO2-emitting base load, solar is probably one of the best propositions. Besides using it in Third-World countries, where we have projects, for instance, in Ethiopia supported, where access to energy via solar is the cheapest way of doing so.
CAROL BROWNER: Thank you. General, you’re our wind expert on the panel. Maybe you can give us a similar overview of wind and sort of what are the opportunities today and the challenges going forward.
WESLEY CLARK: Well, I think if you were going to think about wind, you think about let’s say maybe a million and a half dollars, maybe 2 million, 2 1/2 million dollars per installed megawatt. The problem is that the wind isn’t where the consumption is. So you have to get it there. To get it there, you’ve got to really work the transmission grid. The transmission grid in the United States is very fragmented. It needs about, according to some studies, 900 billion dollars of investment over the next 30 years as the electricity demand in the United States grows. And that investment has to go into the right high-voltage transmission linkages between the wind corridors and the centers for consumption.
In addition to that, to get wind started now, we need a steady and consistent tax regulatory regime. This year, the production tax credit is expiring. The way it works for wind producers financially is you get six, seven, eight cents a kilowatt hour in a power purchase agreement. If you can sell your facility to a financial investor who can use passive income tax credits, he can take advantage of a production tax credit that adds another three cents of value per kilowatt hour after tax. So this is pretty substantial. This is what’s fueled the explosive growth of the American wind industry over the last four or five years.
But, that production tax credit is expiring on the 31st of December. Today, the Congress is voting and arguing again about whether or not they’ll extend it. The extension is only for another year. The cost of the extension is five billion dollars for the one-year extension. And yet the entire wind industry in the United States, the investors, the manufacturers, the wind park developers, 90 percent of that industry is hinged on this Congressional vote. It’s a terrible stop/go response from the country that should be the leader in renewables, and yet we can’t seem to get our own policy straight.
CAROL BROWNER: I have to agree. It’s been very disappointing that Congress has not been able to get this straight. And the one thing I learned as a regulator, as the administrator of the EPA, is that you’ve got to give the business community certainty and predictability if they’re going to make the investments. And I think this is a fabulous example.
Lester, I want to go to you. You’re the co-author, I think, of 50 books or so. I think nobody in the environmental arena has probably—there’s not a person in the environmental arena who hasn’t gone to your books on more than one occasion when we needed the facts and we needed to understand the nuances of something. And so I have sort of two questions for you. And I know you’ve thought a lot about sort of the scalability and how we manage that, but also maybe some of the other renewables that we haven’t talked about, like geothermal and maybe some thoughts on that.
LESTER BROWN: The book is called Plan B 3.0: Mobilizing to Save Civilization.
CAROL BROWNER: Sorry. But there are 49 others.
LESTER BROWN: The thing that I have found most interesting and pleasantly surprising over the last maybe year or so has been the extraordinary increase in the scale of thinking and planning in the development of renewable energy resources around the world. I mean, we all know about Texas, for example. Texas has over 5,000 megawatts of wind-generating capacity, I think more than Denmark now. It has more than 20,000 under development as Governor Perry’s effort to build these two transmission lines in west Texas and from the Texas panhandle. There are another 20,000 megawatts of wind in the development and planning stages, including two 600-megawatt wind farms near Corpus Christie on the coast.
Developers are now looking at the coastal wind in Texas. This totals 45,000 megawatts. That, when developed, will more than satisfy the residential needs of Texas by a wide margin. Texas, which has been our leading producer of oil, is now our leading producer of wind-generated electricity and will become an exporter of wind as it has been of oil.
When I look at South Dakota, with Clipper Wind and BP in a joint venture, developing 5,000 megawatts of wind-generating capacity, that’s probably three times as much as South Dakota could consume. But they’re going to build a transmission line into Illinois, feed that electricity into Chicago and the Midwestern industrial heartland.
Another oil man—a lot of oil money now going into wind—Phil Anschutz, who started in oil in Colorado, this 2,000-megawatt wind farm in south-central Wyoming, just on the west side of the continental divide, and he has the right-of-way now, has the rights to build a 900-mile transmission line to California. That transmission line is intended to carry eventually tens of thousands of wind-generated electricity from Wyoming to California and other points in the southwest.
An example outside the United States: Scotland. The government of Scotland is negotiating with two investment funds in Dubai to invest 7 billion dollars in an offshore transmission grid off the east coast of Scotland that will link with Europe and enable the Scots to develop 40,000 megawatts of offshore capacity.
Another example, Algeria. Algeria is now planning to develop 6,800 megawatts of solar-thermal generating capacity. They know that they will not much longer be exporting oil, but they want to keep exporting energy in the form of solar-generated electricity to Europe via undersea cable. That has now morphed into a proposed project of a transmission line from Morocco across the top of Africa, up through Syria that would be designed to carry and connect 130,000 megawatts of solar-thermal generating capacity.
I mention this just to give a sense of what’s happening. You asked about geothermal. Indonesia has announced it’s going to develop—and this is just in recent weeks—6,800 megawatts of geothermal-generating capacity. This is a country with 500 volcanoes, 131 of which are active, an enormous amount of energy near the surface. The principal agency responsible for developing geothermal in Indonesia is Pertamina, the state oil company. Oil production’s falling in Indonesia. They’re now a net oil importer. They see their future in geothermal energy, and Pertamina may be the first oil company, state or private, to make a major shift from oil into renewable energy resources.
So the scale of thinking now in this field is just extraordinary. And we’ve not seen anything like it before. And I think it’s partly because of a comment T. Boone Pickens made, when he was asked why he, an oil man for 60 years, now 81 years old, is investing 10 billion dollars in wind. He said very simply, “I’ve gotten tired of oil depletion curves.” And what he’s acknowledging is that when he invests in wind and the infrastructure, he’s investing in an energy system that can last forever. I mean, of course you have to replace the bearings and so forth, but this is the excitement that’s now driving this huge, huge jump in the scale of thinking with renewables.
CAROL BROWNER: Peggy, if you could maybe help us understand sort of what are the mix of renewables that China will be looking towards, and how you see that playing out. You talked a little bit about the government’s plan. But as an entrepreneur, as someone who’s been on the business side of issues, if you can maybe talk a little bit from that perspective.
PEGGY LIU: So, great numbers from Lester. The scale of what’s happening in China is huge. So, if you take a look at what we spent last year, 2007, in renewables alone, it was $10 billion. The government’s plan is to get our energy mix of renewables to 15 percent, which I think compares to Europe’s 2 percent. So that’s very favorable, given the fast amount of time that we’re progressing.
There is tremendous international cooperation opportunities in renewables. China is looking to the west and north and south and east, to have you bring in know-how and technology. I was just on the phone with State Grid yesterday, and they’re like, We really want to invest more in wind generation. Just so you know, in China there are only two utilities. One of them, the State Grid, covers 88 percent of our land mass. So it’s an oligopoly. It’s a very simple sales cycle for any of you out there who are trying to come into China and make money. And they are very eagerly looking to know-how for education, for how do you measure, do assessments, software technology, not just the turbines.
In wind, we are doubling. So, last year I think we had an installed capacity of six gigawatts. This year I think we’re moving to 13 by the end of 2008. I believe that the Chinese Renewables Association just estimated that we’re going to be at at least 30 gigawatts by 2015. So these are really large numbers. It’s very exciting.
Solar. You probably already know that one of the richest men was an entrepreneur in solar panels in China. Everybody knows that. But 90 percent of our panels go outside of China. We’re not deploying them inside. However, again, in the last 12 months, the last 12 months have been really, really crucial for China. And any of you who have been to China in the last five years need to come to China again and see what’s happening. We’re developing large solar farms. So Bading [misspelled?], which has declared itself a solar city, is creating these whole supply chains of different industries. So, solar, there is a huge number, I think 30 to 50 different companies, just focused on different aspects of creating solar panels. You’ve probably heard of Yiling [misspelled?] Bading. That’s from Bading.
Wind: They’ve got, again, a few tens of companies just focused on different parts of the supply chain. And then they’re also building a huge solar farm around the city. A lot of you might be familiar with Rizhao, which is sort of Sunshine City of three million, a very small city in China. Every rooftop has solar thermal.
So, we are really, really trying to do the right thing for China and for the world. We are very interested in international cooperation. What JUCCCE does is try to translate, to convene the right players from international experts and bring them to local leaders so that they can help deploy this clean and efficient energy as fast as possible.
I’ll give you a really interesting example. Again, I was meeting with State Grid last week, and I was showing them some pictures of recent events that JUCCCE has done, including bringing David Sandalow and Ken Lieberthal over to meet with a variety of government leaders. And they looked at this picture and they were like, “Is that David Sandalow?” We had five translators spend weeks translating his book, Freedom From Oil, into Chinese. And we distributed it in digital format to all our leaders. Again, the State Grid is the leading utility in the world. So can you believe how much interest they have in learning from the international community?
Now, they didn’t just translate it. They then said, “Can you put us in touch with David Sandalow? We want to publish it in China.” So, what I’ve done today is—David, can you come up? Are you around? They have asked me to personally give David—come on up—
CAROL BROWNER: What we’re supposed to understand now is that David is now a rock star in China?
PEGGY LIU: At the State Grid, yes. And they’re like, “Would you please, please hand over this written, top-secret translation in Chinese of your book. And we would like to cooperate with David Sandalow to publish this in Chinese, in China for the entire country.” [Applause] So, I’d like to spontaneously create a new commitment with you, David, between JUCCCE and David Sandalow and the State Grid to talk about, to teach the Chinese people about how we can have freedom from oil. And so I’d also like to give you a Beijing Olympic T-shirt, since I know you weren’t able to come.
DAVID SANDALOW: I’m speechless. My only words are [speaking Chinese].
CAROL BROWNER: Thank you, thank you. Congratulations. [Applause]
I think it would be inappropriate to have this panel discussion today in all the optimism which I think we all share about renewables without spending just a moment putting it into the context of the current economic situation. And particularly Lester and General Clark, I want you to maybe spend—we don’t have much time and I want to hear from both of you about how you think our current economic situation, how renewables are going to play into that. Should we be concerned that there’s going to be a slowdown? I actually think that maybe there’s an opportunity here. But as people who look at this on a daily basis, and General, why don’t I start with you.
WESLEY CLARK: Well, there’s still money in the financial community to invest in renewables. In fact, the hottest sector is the renewable sector. Solar is very hot. Wind will be hot if we can resolve the production tax credit issue. So there’s a lot of interest in that.
Also, if you look at this financial crisis, you cannot get out of this crisis by fixing the banking system. The banking system is part of the supporting network for the American economy. But it’s not the driver of the American economy. You’ve got to do something for homeowners. I think everybody understands that. But the basic thing is you’ve got to create jobs in America. You can’t just invest in homes and consume.
And one of the great things America can do is produce. So our company that I’m representing up here, EWT, for example, is a Dutch company. We’re bringing manufacturing facilities into the United States. And that’s not out of altruistic motives. That’s because it’s cheaper to manufacturer in the United States than it is in Europe for the kind of technology that we’re using.
So I think that when we move into the renewable sector, we can create lots of jobs. They’re good jobs, and they’re part of what we need to keep America growing. I think that’s the ultimate way we move out of the financial crisis.
CAROL BROWNER: To do follow-up, we talked about how—we started with everyone agreeing that the market signal, the market mechanisms that are going to be important to really stimulating the kind of investment and commitments. Do you think, and I’ll ask you to put on your political hat here, do you think we’re going to see a reluctance in Washington to make that kind of political commitment? We saw Mayor Newsom talking about this, others talking about it earlier. Are people going to become reluctant to sort of delve into this energy world with the financial crisis?
WESLEY CLARK: Well, in the near term they certainly are reluctant. There’s a coalition of House Democrats called the Blue Dog Democrats. And they want to go back to the 1990s principle of paying as you go, so you don’t keep running up the national deficit and the national debt. But I think the financial crisis and the extraordinary sense of emergency around this will give the next President, whoever he is, the opportunity to put forward some really bold programs in this area. And so, you just have to take this as an opportunity. And I think it will be an opportunity if we look at it that way, that can go beyond the concerns over narrow affordability in terms of conventional budgeting.
CAROL BROWNER: Lester, I’m going to give you the last—we have a minute. We have a little clock in front of us so we stay on time. And, again, as you looked at these issues over a very, very long time, are you concerned that the financial situation of the moment, which will be with us for some time, is going to slow sort of the political commitment to renewables and alternatives?
LESTER BROWN: It probably is going to obviously affect thinking. But the thing to keep in mind is that during the last century, as the world turned to oil, we saw the globalization of the world energy economy. During this century, we’re going to see the localization of the world energy economy. And that means a lot of local investment. It’s difficult to imagine now the scale of jobs that is going to be created as we develop hundreds of thousands of megawatts of wind-generating capacity, as we build 94 geothermal power plants, projects now underway in the western states, for example.
If we look at solar-thermal power and some of the huge plants now underway, Governor Crist is planning one for Florida, for example. There are some big ones in the Southwest now coming. It’ll dwarf anything we’ve seen before. And then solar cells, of course, which is a very local thing, creates a lot of local employment in every community in the country. So, we’re looking at the job creating potential here in this industry probably exceeding anything since the IT revolution itself and the enormous expansion that came with that during the 1990s.
CAROL BROWNER: Great. What we’re going to do now—someone’s going to explain what we’re going to do now, which is Carolyn. We’re going to take a break, and you’re going—
CAROLYN LUKENSMEYER: Great. How about a round of applause for a fantastic panel? [Applause]
Because we’ve run late this morning in the plenary, we’re only going to have a 20-minute table discussion in this topic. So we want to get you all right into it initially, get as many ideas as you can into your table.
This is a perfect panel to follow with a question that is the core of CGI. Imagine a dream CGI commitment that could help scale up renewable energy dramatically. Imagine a dream CGI commitment that could help scale up renewable energy dramatically. Try to be as specific as you can about what would it look like and who would be involved. Our goal is to get as many good ideas. You don’t have to be able to do it yourself, even, but to get it out there stated so that someone could grab onto it. Have fun.
MALE SPEAKER: Carol Browner, former EPA Administrator.
CAROL M. BROWNER: Okay, we are now moving on. All your good ideas have been captured and recorded and we will be looking at those shortly. If I can get everyone’s attention, so now comes a really fun part of the day and that is when we make the announcements of commitments and joining us to do that is Shirley Ann Jackson. I had the pleasure of serving in the Clinton Administration when Shirley Ann Jackson was chairwoman of the U.S. Nuclear Regulatory Commission. Now, this is so interesting. She is a theoretical physicist. I have no idea what that means, but I am sure it is very, very important but most importantly, she is currently president of Rensselaer Polytec Institute, and we thank you for joining us here today and to announce the commitments. [Applause]
SHIRLEY ANN JACKSON: Thank you. Having sat at my table, I realize how much work people really put into thinking about the commitments. I was told I would be introduced perhaps by the voice of God or by Carol Browner but I said Carol Browner is the voice of God. [Laughter]
I am very delighted to announce a few commitments this morning, but first I would like to invite to the stage Dawn Haig Thomas, who is president, and her fund, The GSMA Development Fund, please. [Applause]
They have a commitment that is entitled Green Power for Mobile and the intent is to promote the use of renewable energy across mobile networks in the developing world, to extend coverage in regions which currently lack connection and to reduce reliance on diesel, and in particular the GSMA Development Fund and its partners, and I will just very quickly read them, Baréty, Dialogue, Digicel, Idea Cellular, MTN, FT Orange, ORISCOM, Reshown, Safaricom, S-Smart, Tel-Nor, VimpleCom, Vodacom and Vodafone, and Zain. And they have made a commitment to take a leadership role, particularly the GSMA Development Fund, in driving the adoption of renewable energy across the mobile industry in developing countries and helping to provide power to base stations that are off the grid, to develop Green Power tool kits for developing world mobile operators and build relationships with renewable energy vendors, to encourage the adoption of renewable energy in the mobile industry through regular action-oriented meetings and summits.
Over the span of five years, this commitment will reduce the carbon load by 3.4 million tons. It also will ensure that 40 million people in developing countries are connected to mobile networks, enhancing their access to modern technologies and markets and thereby boosting economic development. This represents a commitment of 1.5 million U.S. dollars over five years. [Applause]
Next I would like to call Achille Colombo, chief executive officer of Grupo Falck. [Applause] Grupo Falck is committing to develop wind energy through the use of technical solutions that will help reduce future generations’ dependence on fossil fuels. Through the development of wind farms, the commitment will help to construct 1,000 megawatts of wind-generating capacity by 2012.
Moreover, as wind farms produce and provide a clean and sustainable form of energy that does not emit any greenhouse gases, it will help address the climate change challenges of the 21st century. It will, in fact, support the European Counsel’s goal of having 20 percent of total energy consumed from renewable resources by 2020.
Over the course of five years, it will help reduce the carbon load by 1.3 million tons. The value of this commitment is worth 400 to 500 billion U.S. dollars in equity over five years with a total project value of two billion dollars. It involves France, India, Italy, Poland, Spain, Turkey, and the U.K. Thank you very much. [Applause]
Next, I would invite Robert Bannick, vice president of Dundee Capitol Markets and founder of Enhanced Geothermal Systems Company, AltaRock Energy. [Applause] Robert Bannick, along with his partners is committing on behalf of IGDC to assemble a team of geothermal development experts to identify and develop the abundant but yet untapped geothermal potential of emerging and developing countries. For instance, the African Rift Valley, which intersects six countries including Kenya and Ethiopia is estimated to have 7,000 megawatts of potential geothermal energy. Developing this resource could make a meaningful impact on rural electrification challenges and help to reduce poverty.
This commitment seeks to bring clean, new geothermal power infrastructure to such countries by developing electricity-generating facilities or district heating programs having the potential to have a positive impact on thousands of lives, and let me just say that having visited not so long ago a township in South Africa and looking at some of the electrification challenges there, all of these sorts of decentralized energy generation opportunities are very important, and to actually have these kinds of commitments is critical. This has a value of 300 million U.S. dollars over a three- to five-year period. Thank you very much. [Applause]
In case any of you want to change your thoughts about the answer to the question that was posed, I would like to invite Dr. Dan Nocera to come forward. Dr. Nocera is professor of energy and professor of chemistry at the Massachusetts Institute of Technology, MIT. He holds a Ph.D. from Cal-Tech, the California Institute of Technology, and a Bachelor’s degree from Rutgers University, and I have known him and about him for a number of years, and he has an extensive and very distinguished background in research and education, and he is currently focused on basic mechanisms of energy conversion and biology and chemistry, and he is here to give us a progress report. Dr. Nocera. [Applause]
DANIEL G. NOCERA: So, with the title professor of energy at MIT you would think I would be the most knowledgeable person at this conference in energy. And I was disappointed to find out this morning that I’m the second-most knowledgeable person, since Governor Palin was attending the conference. [Laughter] It was a big blow to my ego [laughter].
But there is something that is good about being an energy expert is one thing you should do and it is really good I think for the CGI to do this is to make sure they have all the numbers right. Because it is really hard to solve problems when you don’t have the right numbers and there is a lot of money to be made in energy. And that’s good and it is bad, what's good is market will drive things. What's bad is sometimes you don’t really want to know what the right answer is or people don’t want you to know the right answer because they could lose a lot of money, and so that is where CGI could be really important and in this commitment the one I’m here for that really drives the heart of the matter.
You’ve heard a lot of big numbers, gigawatts and terawatts, no you haven’t heard terawatts, gigawatts, megawatts, what you should know is in the next 45 years you need 15 terawatts, which is 15,000 times a gigawatt, which is 15 million times a megawatt. That is what the world needs.
And so the commitment that I am here to tell you a progress report on is the Solar Revolutions Project. And it came out of the goodness of the heart of a single family foundation, The Chesonis Family Foundation. And they gave MIT 10 million dollars and that in terms of the big scale of things and money wise isn’t very much, but what it did is it has energized MIT so if you go on the Web, I do not want to tell you about all the accomplishments, just look on the Web in the last year, or look in Technology Review. But what it has done is it has collected around 15 to 30, 20 faculty, 30 to 45 students, totally committed to moving. There is a magic number people use, it is always ten years.
I saw General Clark is here. Everybody always says ten years when you are a talking head, so when I was on CNN I’ve gone to 8.215 years, but what we are really committed to is under five years to try to actually come up with important innovation so we were talking about why solar hasn’t penetrated a market or wind.
There is one word I can use. I can use a word storage, so if you have storage and took out intermittency, that would solve a lot of problems and then cheap, so that is what this solar revolution project has done, and it has done it at the right way. Guess where it has put the money? It is in the brightest, youngest minds in this country, and these kids are super energized. And just to give you a feeling, just out of the one year of discovery, there are three or four start-ups. And the amount of money behind these start-ups is almost incomprehensible because they are involving the top corporations in India and the top corporations in Africa to move this stuff forward as quickly as possible with the goal of making your place where you live a gas station and power station, and you don’t need anybody else’s energy, right, so that’s what we are doing. That is what the Solar Revolutions Project has done. Like I said, only 30 to 45 students, MIT has become the solar hub, as I learned the other day on the Web. There is a lot of innovation coming out of it and it came out of this one single act of kindness, The Chesonis Family Foundation for 10 million. But if you want the progress report, just look on the Web and see what we are up to. So, thanks a lot. [Applause]
MALE SPEAKER: Ladies and gentlemen, please welcome back to the platform, Carol Browner and our panel.
CAROL M. BROWNER: We had lots of great questions, thank you all for doing that and what we are going to do, we had to pare them down in the interest of time. We have agreed on one question for each panelist, and they are going to have to give, unfortunately, a very, very brief answer. But I know they have been working on being concise. So let me go ahead, and Lester, I am going to start with you. The question for you is: Given that wind and solar are intermittent technologies, what technologies do we need to meet base load needs?
LESTER BROWN: Among the major renewable sources, geothermal is by far the best for base load. But keep in mind in much of this country we need peak power and that is solar energy. And California, for example, is moving quickly to develop solar to satisfy its peak power needs. Solar fits very well with rising air-conditioning needs.
The third thing is wind, and here this question of wind intermittency has been answered by a Stanford team that assumed that we build the Eisenhower equivalent of the interstate highway system in a national grid and develop wind resources on a huge scale and what happens is that because no two wind farms have identical wind profiles, the larger of the grid and the more wind farms you get, then eventually wind becomes base load and that is what we have to work for in this country.
CAROL M. BROWNER: Thank you. Marcel, we have a question for you about Europe, and I think in sort of what are the good things that are going on in the renewable world and what are sort of the challenges?
MARCEL BRENNINKMEIJER: If you take Europe and it’s difficult to kind of generalize it so much, but cost is still the issue and there’s, I think, no energy farm that has not had subsidies in the beginning, so what is important is to have like Germany has, a good ground system so that investments you get half your equity in form of grounds but you get job creation requirements and things like that linked to it. That is working very well for Germany.
We have [inaudible] tariffs in some of the countries which support the higher cost of the power. Now that is needed also for a few more years, and about five to ten years, if we look to grid parity and that is necessary also to be expanded in other countries.
Now the big challenge that we see is that if you look at buildings, buildings emit about 40 percent or are responsible for 40 percent of the CO2, so working on energy efficiency is probably the most efficient way of saving CO2, and doing something good for the environment but not selling energy is not in the interest of the utility, so that is one of the challenges that we have to deal with.
CAROL M. BROWNER: And Peggy, the question we got for you is what advice would you give to investors interested in China? What should they know, what should they be thinking about?
PEGGY LIU: So China is ready to go green. We are spending billions of dollars; just to give you an example, last year alone in new power grid construction we spent 35 billion dollars. The State Grid, since proposing ultra-high voltage transmission lines in December 2004, we have built 645 kilometers by end of 2008 for AC and we are building 2,000 kilometers for DC. These are incredible amount of money and another good example is sweet sorghum for bio fuel. We are using sweet sorghum on marginal land. They are building not one pilot plant but four pilot plants in four provinces that are 400,000, 400,000, 200,000, 200,000 tons of ethanol each year. These are huge pilots.
So my one advice to people who want to come to China and take advantage of this huge economic opportunity is not to come as individual companies but to band together so that you can provide turnkey solutions to a country that doesn’t speak English. Right, so what we need to do is go to cold-fire power plants. We need to go to mayors. We need to go to the top 1,000 SOEs, band together as a coalition of smart grid companies, a coalition of coal plant abatement technology companies and give people, the local decision-makers, a vision of the ecosystem that will help them leapfrog. And in that way, you can make impact happen much, much more quickly, so this is part of the work that we’re doing at Joint U.S. China Cooperation on Clean Energy is really to be a convener of light guards used trying a smart grid cooperative that we’re announcing this afternoon. It is to be a convener and a translator so it’s a tremendous economic opportunity. I really welcome you guys to come to China and take a look at it firsthand, especially since we are having our international forum November 10th and 11th. Come to Beijing. Come to Shanghai. See what revolution is happening on the ground in China.
CAROL M. BROWNER: Great and General Clark, for you, who should pay for facilitating the transmission of renewable energy across the country? Who gets the bill?
WESLEY CLARK: Well, that’s easy. The consumer! That’s the standard answer in every economics course, but it gets washed through the financial community. It is in the form of bonds. It may be in the form of bonds underwritten by local or federal guarantees, and what we need to do to facilitate this is we have got to pass, Harry Reid has a great piece of legislation in front of the senate called Senate Bill 2076, which creates seven energy superhighways to take solar and wind out of the western energy production areas and take them to the energy consumption areas. And so it paves a way for 765 kilovolt transmission lines with expedited approval, and these will be financed by bonds.
I would say this, though, when you say who pays, it sounds as though somebody is going to pay more for this. But the truth is we are going to pay less if we do this because energy congestion is so bad now on the East and West Coast that during the peak loading periods, people can’t get electric power at all. And, for example, in the San Diego area, you may get if you’re selling power into the grid, you may get ten cents a kilowatt hour on a 24-hour basis, but if you could sell it at peak power prices, they will pay you 30 cents a kilowatt hour. People are desperate for this power so and ultimately the consumer pays everything, so we are talking about lowering consumer costs by proper investments in the U.S. grid.
CAROL M. BROWNER: Let me ask you just a quick follow-up question: What would it cost, say, a fully integrated smart grid across the United States, what would that cost?
WESLEY CLARK: I don’t know, different figures, because it depends on how you define it and how much of the existing grid you can use and what your time frame is. We are anticipating a 30-percent rise in U.S. electricity consumption over the next 20 years. That translates into all of this rolled together between 700 and 900 billion dollars worth of investment, which sounds like a lot of money. But there is a lot of people who would love to make those investments because they have really high returns, if you can make them. The problem is the regulatory approval. We are in a semi-deregulated chaotic environment with hundreds of different authorities all passing judgments on every proposal for change.
CAROL M. BROWNER: I know a little bit about that regulatory environment, it can get a little complicated. We are now going to go to David Sandalow, who is going to tell us what you told us.
DAVID SANDALOW: Hi everyone, we had dozens and dozens of fantastic ideas coming back to the theme team, and I just want to start by asking everyone to give a big round of applause to the theme team back there. [Applause] Incredible job tolling all this out. It was hard to choose from all these great ideas but just to cite a few, large property owners buy renewable energy, a lot of stuff along that line. CEOs of top 50 companies choose suppliers based on the level of renewable energy use. Somebody suggested the American Bar Association should analyze legal, regulatory and financing aspects of renewable energy development and someone suggested a genius award for renewable energy innovations.
We had a lot of great specific ideas, a clean energy core for national service. This might have been the theme team’s favorite, students submit renewable energy ideas, CGI members vote on the best ideas and fund 100,000 dollars each for them. Somebody suggested the U.S. military commit to 50-percent renewable energy use by 2015; interesting idea. A competition between U.S. cities to reach 80-percent renewables first. A lot of discussion of transmission, someone suggested a consortium to create transmission solutions, but there is a lot of recognition that transmission is a big part of the issue here. Demonstration projects for energy storage, also a lot of discussion of energy storage and recognition, in order to move forward on renewables, we need to address energy storage issues, and then a coalition of universities and energy companies to educate consumers.
Two of our favorite glib suggestions were a trillion bucks from the government [Laughter], somebody thought $700 billion dollars sounded like a better number and Donald Trump sponsors an Apprentice on renewable energy [Laughter]. Thanks very much. [Applause]
CAROL M. BROWNER: Thank you, David. So panelists this is what we are going to do now. This is like the game snow portion, CGI’s version of American Idol, and we didn’t have to sit through a lot of really bad performances and singers. We are going to pick our favorite. Each person gets to pick, maybe we will all pick the same, and go down the row and then spend a moment talking about how we would recommend making whatever commitments we pick, if it’s the same one, making that one happen or the individual ones, Lester what is your favorite?
LESTER BROWN: This reminds me. Someone once asked me who my hero was, and I said Donald Trump, and they were disappointed I think.
CAROL M. BROWNER: So you pick the Donald Trump answer and commitment?
LESTER BROWN: The one I like is the competition between cities to see who can reach 80-percent renewables first. I think that would really set in motion a lot of activity, a lot of innovation, a lot of investment and an enormous obviously reduction in carbon emissions.
CAROL M. BROWNER: Marcel?
MARCEL BRENNINKMEIJER: I agree but I have two others, being the genius award and the [break in audio 00:24:33-00:24:38] is probably the most innovative area in the solar space so encouraging that even more to get the cost down faster, to get better products, that is what we need.
PEGGY LIU: I’ll choose something different. The first one, large property owners buy renewable energy. In China over the next 20 years, McKenzie says that we are going to be building 50,000 new skyscrapers, the equivalent of ten Manhattans in the next 20 years.
Okay, every year we are building two New York Cities in new floor space alone. The property managers in China are building not blocks but they are building cities at a time, at least the equivalence of American cities, so, for example, one of our partners, Shran Land in China, they are committed to every single one of their future developments to be sustainable, so I think this is a great customer base. They are interested in looking at geothermal for Thimpel and Beijing, the MOMA Building, right in the heart of Beijing is already using geothermal. They are looking at cities like Hammersby to talk about waste collection and all these great renewable ideas, Bio gas, etc, so in China at least there is certainly a huge opportunity, economic opportunity to take the top ten developers who are literally building cities at a time and sell them renewable energy, so again I invite you to come over [Laughter] to our forum and meet some of these developers who are there.
CAROL M. BROWNER: General Clark?
WESLEY CLARK: I like all these ideas but I’d like to see us do some demonstration projects for energy storage. This is pretty tough for the private sector to get a grip on and I think if you look at the renewable sector, it’s probably the one area, we all understand the transmission problems, we need more consortia, there are a bunch of them in operation, they are never as effective and as easy as we want. The demonstration projects we talk a lot about, but actually they do require a lot of scale, and they are probably not cost-effective right now, so if we got a little help on that, that would be good.
As far as the Defense Department is concerned, I love these things, the Defense Department is trying to put wind and solar on its facilities. We’ve got some old air bases and other facilities that could be really great for that but mostly we want the Defense Department to do its job. I want to see it succeed in Iraq and Afghanistan, however we define it and get those troops home and the less we can do burdening them with other things, the better.
CAROL M. BROWNER: Okay, since I am the moderator, I get the final voice here, I’m kind of inclined towards the trillion bucks from the government. If we are going to spend 700 billion dollars on bailing out the financial, why not a trillion into energy and renewables? Actually my favorite is CEOs of top 50 companies choose suppliers and I think that is like a perfect CGI commitment, bringing together sort of the power of, their purchasing power to really stimulate opportunities for smaller businesses to scale up and start producing these clean energy technologies.
Please join me in thanking our great panelists and all of the good ideas and thank you all for being here. [Applause]
MALE SPEAKER: Ladies and gentlemen, the workshop session is now concluded. Please move directly to the plenary. The luncheon plenary is about to begin. Please move directly to the Metropolitan Ballroom for the luncheon.
[END RECORDING]
Transcript provided by kaisernetwork.org, a free service of the Kaiser Family Foundation.
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