Bill Gates: The Hurdles for Energy & Backing 5 Battery Startups


Updated with video: For the past six months or so, Bill Gates has been calling for “energy miracles,” and at the Techonomy event in Tahoe, California on Friday, Gates unveiled some of his work, as well as his perspectives on how to encourage innovation in the energy industry. In the case of batteries, Gates said he has invested in five startups, but at the same time, he thinks that battery innovation “may not be solvable in an economic way.”

In terms of nuclear, Gates has backed nuclear startup TerraPower, but he notes that getting nuclear plants approved by regulatory bodies takes such a long time that the people with risk oriented capital lose patience. “Most of us would like to work on things that happen during our lifetime,” said Gates. Here’s a series of quotes from Gates about energy from his talk at the Techonomy event this afternoon (lightly edited, with full video coming later today):

Nuclear Innovation: Where the marketplace doesn’t do a good job to encourage innovation is for energy technology like nuclear. You’re not going to have a lot of people putting down money when the siting delays, the waste problems, the time period to get something done is actually longer than the length of the patent. It’s longer than people are patient for about risk-oriented capital. It’s so unclear, particularly if you have some new design that regulators would have to get used to, if you would be alive when it finally got approved. Most of us would like to work on things that happen during our lifetime. The lack of investment in this space is very understandable.

Energy Investing: I love the energy field. There is a big market, if you can make a real breakthrough. And a few somebodies will get very rich making those breakthroughs. There are market failures. Like how nuclear waste has become so uncertain. Or carbon sequestration, because it’s a trillion times larger in volume than nuclear waste, the government will have to agree to take the liability. There are things that hold [energy innovation] back. Innovation hasn’t done as much as it should have done. We need to pursue a lot of paths. If we new solar PV would be 50 times cheaper for sure or this nuclear thing would work, then we would be done. But, boy are there a lot of problems that have to be solved.

Cheap Clean Energy for the Poor: The importance is cheap energy for the poor. Even if you ignore climate change, the value of cheap energy for the poor is literally about life itself. If you can reduce the price of energy you can save lives, if you save lives you can reduce population growth, and you can create this virtuous cycle that two-thirds of the world has experienced, but about one-third of the world is trapped in at this point.

How to Finance Energy Innovation: There’s many different stages [of financing for energy innovation]. Where do you want to have the government involved? Take basic research on materials — only the government can really do that. So there’s that upstage stuff. Then there’s actually building things, which is engineering. That’s where venture scale things are actually quite good. Then there’s pilot plants, where it’s more money unfortunately than venture can typically provide and the government should somehow leverage that. Then there is deployment, when it’s almost economic and you believe a learning approach can get it down.

Now, the current naivete where tax credits and subsides and RPS things and the amount of money we are effectively spending in this unbelievable inefficient way — because no one wants to label it a tax — is insane. There are very few technologies that are ready for that learning curve piece. For a few things like nuclear energy, the scales are so big that only the government can really step in. Unfortunately, it’s true for carbon sequestration too.

Can Energy Innovate Like IT Has: We’ve all been spoiled and deeply confused by the IT model. Take chips and scaling improvement, that is rare. We see it in hard disc storage, fiber capacity, gene sequencing rates, improvement in modeling software. . . But the more realistic view is with Vaclav Smil writes about energy.

Batteries haven’t improved hardly at all. There are deep physical limits. I’m funding 5 battery startups, there’s probably 50 out there. It may not be solvable in an economic way. We are fooled by this [Moores Law and IT innovation]. There are things that don’t move forward. Nuclear energy stopped in the 1970’s. We have to have a blended model, the optimism of our IT, and the realism of the energy sector.

Here’s the full 45 minute video embedded below. I just shot it from my seat, using the handheld Flip, so bear in mind, it’s a little shaky and off-the-cuff:

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Gates, as with Malaria wants the silver bullet, the death killer app and he wants it asap. Oh, I guess its his way.

I’d like to see him think beyond his few years on this mortal stage…not just a future legacy…but a future like moses who didn’t get to go there, see others there…

I’m not sure where he’s going with the Nuke things. Is he doing a straw man dismissal of nukes? Is he saying “impossible” Or is he saying “Impossible until we get some things changed” and referring to things like long term investment returns and taxes on such investments (my humble opinion: there should be NONE!!), so it makes sense to fund R and R and wait thru permitting years and…..

What can the ‘Gubmint’ do? perhaps try to stand aside and let the markets go at, and try not to be a disincentive at the finish line. Some simple guidlines, a promise not to steal it down the road, then a blessing and a “let us get out of the way” departure from the auditorium.

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