How did Ramez Naam spot the exponential cost trends in renewables? How should we tailor our messaging to convince different audiences we need to act on climate change? Why are forecasters so often wrong?
Ramez Naam, our Ep12 guest talks about all of the above and much more!
Not many people manage to write critically acclaimed science-fiction series and equally appreciated non-fiction books. Even smaller subset happens to also be energy analysts and investors. And there’s only one who, in addition, holds several patents, some co-authored with Bill Gates. Ramez Naam is, by all measures, a rare type of person.
Originally from Cairo, Egypt he moved to the US at the age of 3. He studied computer science nad started his career with Microsoft, where he worked on the company’s flagship projects – including Outlook.
After 13 years, he switched to the energy sector and was one of the first to spot the exponential cost trends in renewables. In his 2011 piece ‘Smaller, Cheaper, Faster’ he noted that solar had the steepest learning curve and would eventually become the cheapest source of power.
Ramez has written five books – the first two about the frontiers of science and how they will impact, for the better, on the human condition: The Infinite Resource: the power of ideas on a finite planet (2013) and More than human (2005). These were followed by three science fiction titles, Nexus, Crux and Apex (2015)
Ramez is also an angel investor, focused on energy and sustainability, a co-chair for energy and the environment at the Singularity University, an advisor to Shell New Energies, as well as a very in-demand public speaker. He covers not only energy, but also issues like transhumanism.
Ramez Naam’s website
Ramez Naam’s author page on Amazon
Smaller Cheaper Faster (2011)
Ramez Naam: capitalism is not the enemy of climate (2015)
Solar’s future is insanely cheap
Scenarios for a solar singularity (Liebreich, December 2018)
Michael Liebreich: Hi, I’m Michael Liebreich and this is ‘Cleaning Up’. My guest this week on the show is Ramez Naam. He was born in Egypt, but moved with his family to the US when he was three, studied computer science and went to work at Microsoft. Not many people have patents that they hold jointly with Bill Gates, but Ramez does. He worked there for 13 years, spotted the trends in energy, switched to energy. He is the specialist now, in seeing the future. He's written five books; two of them about the future of technology and how it will act to improve the human condition, and three award-winning science-fiction books. I met Ramez when we served together on the advisory board of Shell New Energies, he's an extraordinary visionary, he does indeed see the future. Please, welcome Ramez Naam.
Ramez Naam: Michael, it's a pleasure to be here, and thanks for that warm intro. I feel like you were one of the first people to really see the future of clean energy and in many ways I followed in your footsteps. So, it's a pleasure and an honour to be here with you.
ML: Well, thank you very much and you know, there's a risk here – that this is the sort of mutual supporters club, because I think we sort of egged each other on. Because I certainly didn't have revelation and see the future, that's not how this stuff worked. Actually, I'd be interested to hear your process through the years, because I kind of saw a little bit of the future, put a few pieces together, saw a bit further and then you came along. And you're like ‘no, no it's going to be much bigger and better’ and so I was like ‘wait, I can double down’ and I think we've been doing this for some time, haven't we?
RN: We have! That's fantastic to hear. A lot of it for me was spending time working in Microsoft as a tech… In computing everyone talks about Moore's Law constantly, you know, that two years from now computing power and memory and bandwidth are going to cost half of what they do today, and in 10 years they'll be a factor of a hundred, so just plan for it, you build software knowing that you'll have these additional resources, or Google famously tells its engineers what would you do if computing and storage and bandwidth were free. That's the world that I came from, and when I started looking, I really got interested in climate; started looking for solutions when I started my videos…
ML: Let's do this. You were at Microsoft, and you were working on Outlook, but you were hearing about climate. So which kind of year are we talking about?
RN: This is my second stint at Microsoft. I'd quit once and found a start-up, and written my first book and I was back. I was working on what would become Bing, and it was also sort of one of Microsoft's first cloud computing forays, you will, and machine learning and interests… I learned a ton. I heard about climate all the time, but it was really around 2008, 2007 maybe and I made a resolution, it was a very cliche environmental awakening, actually. I was on a beach in Mexico and I was playing in the waves, and it was just gorgeous, you know, this sort of stunning, azure coloured water that you see on Instagram. I was really there. And there was some litter on the beach. Litter is not actually the world's biggest environmental problem, though it is where
plastics in the ocean come from. I just I had the day almost to myself, so I just started thinking, this planet's so beautiful, is there an environmental problem is climate change real? How bad is it? Will innovation just solve it automatically? And what's my responsibility as a human being? That started me down the road of researching everything I possibly could.
ML: Do you remember the piece of litter, what was it?
RN: It was a strip. I mean, basically above the high tide line there was a strip of litter, and above that there was stuff that people, you know, tourists or locals just tossed their trash. There was no trash collection.
ML: Because you and I interact a lot on Twitter and on Twitter I’m doing this kind of… I'd almost call it an artwork, where I post Red Bull cans, because it really upsets me, that Red Bull's advertising, the very first ad, was a guy cracking a can and then throwing the can behind him, and he gets wings and he flies up and wreaks revenge on a bird. That ethos of littering really annoys me and it continues. And you just see these Red Bull cans I take pictures and I post them. So, litter, there's a common theme here.
RN: Yeah, and actually litter is usually the first environmental problem that gets solved as a country gets richer, right? Like it when you're very poor, you just toss your trash forever, but you start to notice it. People go after the environmental problems that are most local and most visible first, and then things that are sort of perceived, that are invisible and perceived as distant in place or time are much, much later and that's part of what climate change has suffered from.
ML: I think that's right, I mean in environmental theory you have this thing called the Kuznets curve, where countries get wealthier… that well countries start poor and they mess everything up, and then they get wealthy and they don't want to live in those conditions. So then they start improving it and you get this kind of pollution goes up, pollution goes down. It's a beautiful theory, it's contested by some people who don't want to believe that things will sort of get better. But it kind of doesn't deal with planetary boundaries, things where your local actions actually have implications around the world, so you kind of ended up then at the climate problem. You brought that together with this kind of Moore's Law thinking for out of silicon technology.
RN: Yeah and what happened was I read everything that I could, and I found books mostly in two camps: on climate specifically and resource use, and population growth and in planetary boundaries I found a bunch of books basically saying there is no problem, it's all a hoax or the problem will solve itself automatically, don't worry. Then I found a bunch of books saying: either we're doomed, there's nothing we can do or degrowth is the only answer. That didn't seem very satisfactory and it’s billions of people in poverty. So I said okay, I want to write my own book, that says obviously, there's a real problem and our ability to innovate, if we focus on it, is great. One of the things that I did is I looked at all the solutions and I downloaded some data from NREL
that was just the cost per watt of solar. And this is actually Swanson's Law would get coined a year or two later. I didn't know about who Swanson was, but I just put this in Excel and I charted it, and I found a log linear relationship. I found that over time it was dropping in price at a fairly predictable rate. It turns out that's not the right metric as you did a lot of work, and since then, on your own, it's really a function of scale, it also turns out that Moore's Law actually isn't quite right. And computing costs are also better characterized by Wright's Law or the learning curve, and it's really scale that is the best predictor of computing costs, not time. But even looking at the time based formulation of it, I said this is an exponential technology, this is a technology that looks like computing, and I wrote a piece for Scientific American actually a blog post and I just said: it looks like around this is 2011, when this piece came out it says it looks like around 2015, if these trends continue we'll have the first solar at roughly parity with coal on LCOE, and by 2020 we'll have solar half the price of electricity from coal power plant in sunny parts.
ML: I’ve got two service announcements. Well, one service announcement, which is traditional sadly, when we have guests in the US. They have morning and so they can't share a beer or a beverage with me, but I can, because it's the evening here. That's the first thing, I’m going to crack my beer and I’m going to do the thing that is becoming traditional on this show. The other service announcement is that I have your quote here, from that paper, it says the you wrote in 2011, Scientific American in an article called ‘Smaller, Cheaper, Faster’, and I assume that's the piece you're thinking of, “the cost of solar in the average location in the US will cross the current average retail electricity price, $0.12/kWh in around 2020 or 9 years from now. In fact, given that retail electricity prices are currently rising across earlier, around 2018 and as early as 2015 for the sunniest parts of America”, so you're right 2015, and then you wrote “10 years later in 2030 solar electricity is going to cost half what coal electricity does today”, but you know I said that this episode is about seeing the future, and you're the man, but actually that's a terrible forecast. We were horribly wrong, weren't we?
RN: Yeah, I were wrong, you as well. Every forecast I’ve made about solar has been wrong in the exact same way solar prices have always dropped faster than forecast, so that's a lesson too.
ML: That's right and you know in in our defence, we've been wrong, we've been horribly wrong with the speed of reductions in cost, but we've been less magnificently, horribly, appallingly wrong than the mainstream energy experts, right? I mean how have they been doing?
RN: So there's another blog post I had out earlier this year called ‘Solar's Future is Insanely Cheap’, where I looked at the cost forecasts from the IEA, International Energy Agency, which we both love to hate, I think and…
ML: I don't know, I love to love, I just mock their forecasts occasionally.
RN: Yeah, I would like them to do better, it's tough love and the US’ EIA, and basically so actual solar prices have dropped, they're a quarter now of what the IEA said they would be at this time in 2010. They're about half of what I said they would be, but moreover they're cheaper now, I don't have the post or the spreadsheets in front of me, but actual solar prices now are cheaper than what the IEA thought they'd be decades.
ML: I’ve got the bullet points from that piece, I’ve done my homework here. Seven to ten years ahead of what you forecasted in 2015, 10 to 15 years ahead of what you forecasted in 2011, in that ‘Smaller, Cheaper Faster’ piece, it actually went 10 to 15 years faster. 30 to 40 years ahead of what the IEA forecasted in 2014. 2014, this is 6 years ago, 50 to 100 years and possibly forever ahead of what they forecast in 2010. We're already at solar prices that are probably below what… I mean. And by the way in defence of my friends of the IEA, the EIA has been even worse than the IEA. I mean every year they produce these forecasts, which are essentially of almost like a reversion to costs that they must surely know, we had years ago. I just don't get it,
RN: In fact the EIA does this funny thing the IEA does it somewhat too, the EIA will put out, you know an article about what's the cost of different power generators in the US and they'll look at two or three years hence, if you wanted to start work on one, now get financing and so on. And it's going to come online in 2022. The cost they'll say for solar will be like twice the cost of projects built this year, and so there's something really funny going on there to say the least.
ML: Yes, and I can understand that they want to sort of normalize in case there's some subsidies, these are the things that we're talking about are non-subsidized prices, we kind of a little bit… we give a bit of the benefit of the doubt, was it really subsidized, did they get some money from around the world, maybe the IFC or in the Gulf, the countries maybe give the land free, and you kind of have to adjust for that, but the bottom line is they're just systematically wrong. I mean like I think some years in a row they've been wrong in the same direction forever, and then they'll say things like: oh, it's not a forecast, I don't know what is it then?
RN: Well, they call it a scenario, but they say it's the no new policy they've changed the name of it, now it's STEPS. It's the scenario of the world doesn't push policy any faster than what's planned, right? But that is not a satisfactory answer, because yes, policy in general has been taking more steps towards, making, deploying solar and wind and storage and so on. But you have situations like in 2019 you had the biggest rollback of solar policy on Earth, when China reduced its solar goals and yet solar prices dropped again. So you look at it and try to decompose the variables and yes so policy and innovation are actually intertwined, more policy drives scale, scale drives prices down, but the changes that are happening are not primarily policy based. The learning rates, the rate at which these technologies get cheaper is something they just don't get. This is also true of batteries, it's true of EVs, and it's true even to a lesser extent in wind, both onshore and offshore, not as markedly as solar, batteries and EVs, where they're
really… I mean, it's hard to even find an EV cost forecast from the past, but look, there's some batteries cost forecasts that you'll get from the IEA or the EIA, they're sporadic, they don't happen every year, but you look at those versus actual pace of cost decline
- it's the same issue as solar and almost the same degree of miss.
ML: It's not just the prices. I mean this translates into the volumes where it's just been And to this point about it being a scenario and well, I really dislike that sort of thinking, because it's almost like victim blaming. Because people out there in the real world use it as a forecast, it's somehow their fault for not realizing that all of this work, all of this taxpayers money at the EIA, out of the department of energy, IEA, don't quite know how it sort of makes its way there, but there's all this huge effort and we're really supposed to ignore it, because all it is a scenario, it's not supposed to actually be an indication of what we might see. So it's kind of like I have a saying, that if it cracks like a forecast then it is a forecast, if people use it like a forecast, it's a forecast. And then, you get things like they'll say: oh, you know our central scenario… well, in what way is it central if it's not meant to be the most likely? If you want to do scenarios, do them like Shell:, sky, mountains, ocean, whatever. And then give them all equal prominence in your literature, you don't say well, here's the central one, oh no, don't assume that we like that one most, we just call it central. And then of course they'll do things like blame the changes in policy, but never actually go back and say: well if we run the same model with what happened to policy… well, they should be able to prove that they nail the price, nail the volume, but they never do that check because of course they don't, because…
RN: Yeah, I’ve asked for that. I’ve asked even just for you know, there's tables of cost estimates that go into the models, which are more detailed than what you see in the PDF reports. I’ve asked for those tables in past years - radio silence, nobody replies, because I’m not sure they want anyone to see that number.
ML: But that's very interesting, because there is something called open mod. Sometimes I'll tweet and I'll use this thing called free the models. I think this is very powerful and I… by the way, I think you and I need to maybe work on this, to increase the profile because in my view, everybody who has a model of a future for an energy system, or a transport system should be publishing their assumptions and the code, open source, let anybody play with it, any student find the mistakes, let anybody say: oh, well, if you used this, I don't know, advanced geothermal or this fuel cell, let them swap out pieces of it and find better scenarios. If we got the creativity of thousands of people working on these models, I guarantee you that the there'd be fewer places for the incumbents to hide. So, open mod - if there are people watching and want to learn about that, I'll put some links in the notes. Open mod and free the models, #freethemodels, and I’m convinced that it would accelerate the decarbonization of the world's energy system.
RN: I think those are both great you know directions to go, I will say the IEA what's going to get used as a default, right? Well, people are going to use the IEA, the EIA, BP
since BP statistical historical data is the best. BP's future forecasts get sort of some of the credibility from that and the challenge with these... So I think the IEA would say this: the reason they do the no new policy scenarios or now STEPS, the Stated Policy Scenarios, is that they believe their audience is policy makers, and they think policymakers will look at this and say oh, we're not doing enough policy, we will have to take this to do more policy. I’ve talked to policymakers, I’ve sat with prime ministers, I’ve never heard them ever say that. I have frequently talked about IPCC reports, somewhat, who does mention IEA numbers to me, executives at oil companies who say well, the IEA says clean energy is very, very far away or that EVs aren't going to grow at anything like a rate that affects oil demand and so we're just going to double down and invest more in oil production, or whatnot, so it's very counterproductive.
ML: I’m gonna defend the IEA. There was a Commission on Urgent Energy Efficiency and I’m delighted to serve on it and I think and I'll defend them on this in two ways. I guess one is that they also produce a Sustainable Development Scenario, in fact they've just produced Technology Perspectives and the Sustainable Development Scenario, which is consistent with one and a half degrees, I think and certainly two degrees, and they are giving it much, much more prominence. If I look at… when I first interacted with the IEA, I was like: you are abdicating your responsibility, this is a self-fulfilling prophecy. Now it's really getting a lot lot better, it's still… I think there's ways to go, but it's a lot better and they do give prominence to the SDS scenario. The other thing that has just been an absolute eye-opener for me in the last two years. There's me, you know, beating on the IEA, and the EIA, and others for being too pessimistic, and then I got under the hood of the scenarios at the IPCC, and it's like my goodness, these things are just ridiculous, and if you look at the solar prices, that are used in those scenarios, and these are the scenarios when you see, you turn on the television, and you see the show that you see, the news story says: oh, the penguins are going to be extinct by 2100. And you think that's terrible and my kids get all depressed, and then I have to go in and I look at the literature, it's always these extreme scenarios RCP 8.5, and when you go into it, and you say well what solar cost is in there? And you're like really, 35 cents, really, or whatever it is? It's insane, and I can't explain how stupid it is, they're just in a little bubble!
RN: Well, I think actually there is change possibly happening. I don't have any insights into the IPCC process, but I think that sometimes people feel personally attacked, and that can be hard on a forum like Twitter.
ML: I’ve been attacking them, because I’ve tried… I’m like okay, what else can I do? Because this thing it discredits the work of you and me, we're trying to say change is possible, change is happening, this is what's going, you should invest, and then you've got these people: no, everything's going to be underwater always in every…
RN: Well it'll be interesting to see what happens in AR6, due end of next year and 2022, but I think actually the article by two climate scientists, by Glenn Peters and Zeke
Hausfather, I think that actually it spoke in the language of people doing these IAMS and it laid out some of the things that are, I don't know if that was in the article or not or Twitter, some of the things that are implausible, like coal consumption going up by a factor of five, when the peak of coal consumption on planet Earth was probably seven years ago in 2013. It's likely to be mostly gone in another two three decades. I think it's things like people aren't going to stop publishing worst case scenarios, unfortunately, but hopefully more attention can be shifted to scenarios that are more plausible - and bad enough that we had to do more to avoid them.
ML: Yeah, so first of all, one person I’m going to mention, because he's been a real hero, he's been really educating me and others, is Justin Ritchie. So much good work on how much coal is actually in those scenarios, and he was really like this lone voice in the wilderness, and when I focused on what he was saying and I thought this can't be right
– it is. I’m still very, very worried because of what that article… I think it was a piece in Nature, wasn't it?
RN: It was.
ML: Hausfather and Peter's and it basically says, we're kind of on track for three degrees, not the five to seven degrees, of the extreme scenarios. And three degrees is perfectly horrible and you and I know we need to bend the curve a lot further and so on. The problem I have with what's going on towards the AR6 is there are thousands of papers, science peer-reviewed papers, that either explicitly say that these extreme scenarios RCP 8.5 is business as usual, or they just use it as business as usual without saying that. And even the US National Climate Assessment right, which is supposed to be gold standard, it actually says that the cost of climate change, or the value of mitigation, it calculates the difference between RCP 8.5 and RCP 4.5, right? Now, one's got a population of 12 billion and one's got a population of 8.7 billion, you cannot take the difference between those two and say: ah this is what happens if we do more solar power. It's just illegitimate and it's deeply, deeply in the literature. So I’m very pessimistic, because I don't need to attack it, I can just shut up and say right, I’m gonna work with you, I’m fine. My worry is that the people who don't want climate action can ignore everything, because they'll find this one extreme scenario buried, or not just buried, just polluting the whole piece of work. I’m really, really worried about that, I'll be honest.
RN: I mean, the question of climate persuasion and what works is a complicated one. I mean, there's a set of people who you're just not going to persuade, period. But I do think that extreme statements about climate change that turn out to not be true, or are just very difficult to believe, or that are made and then predictions that are made for short-term changes that don't occur, are used to discredit client models and can sway the middle. I think there's also… I’m connected to some groups that include children working on climate change, and I do think there's psychological trauma that is done to people, when the message is it's hopeless, you're doomed, as opposed to the message
being we have some real work to do, and there's going to be some real challenges, like the fires that we have going on right now, multiple causes going in, here on the West Coast. There's the coral reefs potentially being devastated at two degrees Celsius or more. There's real issues, but those issues are things that we have to move faster for, we have to do more on both reducing emissions and on adaptation. And maybe doing some things people don’t want to consider right now, but they don't spell the end of the world, that we can come out of this as a civilization that has survived, that has gone through our hard time, but is better, healthier, richer on a cleaner world afterwards. I think people need that message to not be traumatized and to maintain hope and to work towards a better world.
ML: I think that and there's a theme in some of these shows. So we've had Christiana Figueres, who's famously, essentially turned the climate negotiations around, by being optimistic, just assume success, everybody wants to be involved in success and over a period of years she just got everybody back on board, including myself, who was the biggest sceptic about that whole UNFCCC process. We've also had Bertrand Piccard, who's the chap who flew around the world in an electric plane. So there is a thing and of course I’m famously optimistic, I actually think no and so I don't know whether, I guess I’m self-selecting or I’m selecting guests who agree with me maybe, but there is another set of people, who just think you need to be more apocalyptic, you just need to double down, we haven't acted on climate because people aren't scared enough about I don't know extinctions, or they're not scared enough about sea level rise and we need to suppress any news stories, that say we might actually be near peak emissions, we must pretend we've done nothing.
ML: I think suppressing that would be horrible, but I spent a fair bit of time looking at sort of the data on climate persuasion, the various studies that are out there and I think one of the challenges, and this is true for any political phenomena I think which unfortunate climate change is, is that different messages work on different audiences. So if you want to fire up the base, young people, on the far left, and I’m not saying that in a negative way, just on the spectrum like over here, those apocalyptic messages work to get them motivated, get them marching in the streets and so on. If you want to win the middle, different messages work and apocalyptic messages don't test well, and messages about degrowth and having to limit consumption test extremely poorly in the middle, or even for the small fraction of the right, not the far right but the small fraction of the center right, that you could peel off. We know that messages around economic growth, around clean energy being cheaper, saving money, about air pollution, about forests and parts of nature that are not so politicized and about innovation and about new business opportunities… that those are what work the best on the middle and a little bit to the right.
ML: I’m depressed that you said the small section of the right, that's persuadable, because I come from that. I am that section, I’ve been beating the drum for that section,
for literally decade and a half and I don't think it's that small. I mean it may appear small on Twitter and in these very polarized environments, maybe the US is just sort of beyond, maybe there is no centre right in the US anymore. But in the UK that centre right is big. I mean the other kind of right is actually pretty small, and getting smaller, which is very gratifying.
RN: I think it is different, Europe looks different than almost any other place on Earth in that political spectrum and also on how certain messages, like degrowth might be a viable political message in Europe. It's not anywhere else on Earth. It's not in the US for a variety of cultural and particular reasons, and it's definitely not in the developing ones definitely. Not in China, not in India, in places people don't have physical, material abundance, a degrowth message is about as counterproductive as you can get.
ML: I think it only flies in young urban Europeans.
RN: Yeah, that could be.
ML: That is literally the only demographic that thinks that degrowth is a good thing. I look at it and it just blows my mind, how… first of all, just how sort of illiterate, it is illiterate of history. I mean it's essentially just the re-running of revolution versus reform. It's a rerun of the arguments that led to the Great Leap Forward, and Holodomor it's centralized, idealistic, but then backed up by some very nasty sort of totalitarian strains and so on. And to me it's just glaringly obvious, it resonates with urban European young people and nobody else.
RN: I think it is connected to these apocalyptic messages. I will say one other thing about like the right in the US. I wrote an article about climate policy, when the Green New Deal was announced. I don't really love the Green New Deal, I'll be totally honest, I thought among other things it would have too much command and control that wasn't going to work, and to me the most vital thing to do to decarbonize is make clean technologies obviously cheaper than dirty technologies. Then everyone around the world, not just in your country, just out of self-interest, whether they care about climate or not, picks to clean stuff because it makes more sense. And so I thought the Green New Deal missed that, it was focused on you know… in some cases there was a tinge of industrial policy meaning the state taking over stuff and doing it that I don't think would produce that outcome, so I wrote an article about what that would look like and that's it at Techcrunch, it's called ‘How to Decarbonize America and the World’ and one of the things that I put there was the politics of things in the US. One thing that's very clear, is: clean energy is super loved in the US basically on right and left, basically in every congressional district in the US solar is the number one most popular way to get your energy, wind is almost always number two and then it's like a 20-point drop to natural gas, or the entire US supports electric vehicles. But what happens is if you if you just say let's do solar, you can get a good chunk of the right. I have deeply, deeply, deeply conservative friends, family friends who believe that Trump is absolutely the
right guy, they're going to vote for him again and they love solar. They can love solar but if you start talking about solar for climate change - the popularity drops. So to some extent I think that the most effective climate messages for the centre to the right would not be about climate change at all. They're just about how awesome, how affordable, how cheap, how better clean energy and clean transport are and don't even bother mentioning climate. That's the way to win over people for whom climate is like emotional or religious issue, that they're triggered by it when they hear the term.
ML: I agree with you, and the other one that we've not talked about, but you always have to put up there is energy efficiency, because it sounds like ooh sacrifice, but it's not. It's saving money. Have you got better things to do with your money than spending on your utility bill? I do, so I want to do this stuff. And you then scale it up to the city or whatever and that those messages are they resonate universally, I think. You also teach, you're the chair of the program at Singularity University and this is where your kind of gung-ho solar singularity… I actually wrote a piece in 2018, I got there just before you on this potential for a solar singularity and actually to be fair, I actually think you could do the same with the wind and potentially offshore wind. I mean yes, the learning rate is not as high, but it's the same direction. It ends up the same place, very very very very cheap, but variable electricity. I was thinking about well, what happens if solar doesn't… most of the models IEA, EIA but even BNEF, and all of them they all have these renewable resources, sort of saturate, they all get to like 10, 20, 25 percent and then they sort of saturate. Because oh, it's very difficult, it's variable and there's only so far you can go, and we don't want to lose our jobs by saying anything really out there. And I was just looking at it and going well, what happens if this just keeps growing, is it just because you know… I recently published on Twitter my forecast for like five dollars per megawatt hour solar, pretty much anywhere in the world by 2100, and it's a long way into the future, so by 2050. And if it gets that cheap, aren't we just gonna get more solar? I think you called it a pathological, potentially pathological, okay, and what actually happens in terms of… how does that start to move industry around the world or, you know, you're the futurist, right? You tell me what happens when it really goes to a singularity.
RN: I mean singularity is a very big word, but it is the case that the cost is going to be incredibly cheap, it will still vary by geography. What's probably more important than the cost variability by geography is the capacity factor and seasonality variability by geography, right? So even if let's say it's five bucks an hour in Australia, and ten or twelve bucks megawatt hour in the UK, that's still ultra cheap in the UK. The challenge is in the UK you'll have three, four or five times… look at Germany. You get five times as much sun in June, July as you do in December, January.
ML: So the data for this house, where I am right now, is 13x, because it's East West facing sun in the summer to the winter there's a 12-13 x difference. You’re not heating this house with solar in the winter.
RN: Yeah and that and Europe, unlike all other continents today, Europe is a winter peaking energy demand continent, right? At least for electricity basically all the rest of the planet is summer peaking for electricity, so if you add space heating I think many places actually end up being a winter peaking. But I do think with prices that cheap, you end up with geographies like Australia, Mexico, Chile, the US South-West, Texas even Saudi Arabia, the Gulf in general, North Africa… you know the UAE. You're going to put these places where you don't have strong seasonality, because you're close to the Equator, and where you have deserts, you have dust storms to deal with in some cases. But you have very low precipitation, very few cloudy days, and you start to think what can I do with solar that's quite reliable. You may or may not add storage… There's like certain ways
ML: Some of those places you could have wind at and you put the two together without any storage, no interconnections, nothing. You're probably at 60 capacity factor, 50-60 percent, you add a bit of that stuff you could be at 70-80 percent of really cheap electricity.
RN: That's right. Then if you can have an industrial process, that is able to handle some variability, so you think about things like hydrogen production being one of the ones people are very interested in, there's still questions about what's hydrogen really gonna get used for, but at least there's a 140 billion dollar market for hydrogen, for fertilizer. Refineries may not need that, semiconductor plants. Desalination is another one, but there may be other processes as well. Aluminium smelting is a gigantic electricity driver, now people are talking about using hydrogen for steel manufacturing, but also electrolysis for steel manufacturing. So there might be other tasks where the factory or facility is able to ramp up and down in what it does, or you couple it with a little bit of storage, so that it's not abrupt, so you can make it, you don't have to fill out the entire day, but so it has an easy wrap up and down. These industrial processes have some fraction of cost that is the capex of the facility and some that's the energy cost, but that's with today's designs. Like desalination today in most parts of the world with five or six cent electricity per kilowatt hour, it's about half capex half electricity, right, but if you knew that your electricity was going to get really cheap, you might be able to design a different process, or a different kind of desalination plant, or steel plant or whatever that was maybe cheaper in capex, but a little bit less efficient for electricity. That could use a whole lot of variable electricity and you can tune the economics to what your electricity availability is and I think you'll see people do that. They'll create processes that can use all of this cheap variable electricity.
ML: And then industrial processors migrate to these renewable energy superpowers.
RN: That's right.
ML: That's what going to happen. So, although there might not be much energy demand in Australia or Morocco, or the Gulf, or whatever in the grand scheme of things, but if
industry goes to those places, we could end up really powering a much bigger chunk of the world's economy with renewable electricity than we currently, than any EIA, IEA, IPCC, whatever model and that to me that's the singularity. When the economics of the of the electricity supply starts to override and decide where you do things in the world.
RN: And there are some proof points, right? Iceland has no bauxite ore, but Iceland is one of the larger exporters of aluminium. Because people… they have cheap geothermal, so you will ship bauxite to Iceland for cheap geothermal electricity to be used to turn into aluminium. The UAE. What is that with natural gas today, but they're going to have solar a lot cheaper than gas.
ML: What's your view on high voltage DC interconnections? Because you've got the kind of Buckminster Fuller. The world will all be connected by high voltage DC, because the idea of shipping bauxite to Iceland for processing rather than electricity to wherever the bauxite comes from, seems a little crazy. To me we're going to have more HVDC, but how far is that going to go?
RN: Well, I mean the real barriers for HVDC are political. They're NIMBY, not in my backyard, they're landowners along the way. We see that in Germany trying to move power from North to South, from the offshore wind sites to the industrial heartland, we see it in the US and so the technology is there. The rule of thumb is three percent losses per thousand kilometres. It's also the case that just to get to very, very high penetration renewables. If you just build your HVDC grid over the scale of a continent, without even going intercontinental, that's enough to get to very, very high renewables penetration. The question is: will we have the political will? China does. China has these lines, the longest line I think, it's the Changji-Guquan Line, is 3 400 kilometers long all right? It's just stunning. That would be Sevilla to Copenhagen is the math I did for Europe. You could have lots of solar in Southern Spain, powering good chunks.
ML: It's almost transatlantic!
RN: It's true, it means Sevilla… solar from Spain and Portugal could power the Eastern Seaboard of the US. There is one fascinating thing…
ML: The US has this thing I’ve just discovered about. Do you know about the
<inaudible>? Have you heard of the <inaudible>?
RN: Oh yeah, between the eastern, straight down the middle of the US.
ML: Because the Rockies between the East and the West, so you're not even moving power from Nevada to the Eastern Seaboard. You're not even doing the easy stuff.
RN: We're not even doing Nevada to Illinois. That has to get fixed and that's a political issue. I did read a set of fascinating papers, from a woman who just graduated with her PhD, and I wish I had her name handy right now, because someone should hire her. And she looked at this tech I had never looked at, which was with this idea: taking current AC transmission lines to transmission corridors, and instead of trying to build new
transmission lines, which is very, very hard to convince people of, upgrading the power electronics and converting those existing AC lines to HVDC. Her papers are fantastic, you can quadruple roughly the amount of energy you can transmit on these lines at a price that's actually similar to or lower than building new HVDC lines, and with maybe close to zero NIMBY. I’m suddenly… I’m fascinated by this topic.
ML: If you can find that paper and send the link, we'll put it in the notes. This is going to go on YouTube, but it goes out as a podcast and we can put the notes there, as well. I was going to ask whether you'd heard of things like… SunCable from Australia to Singapore, or there's another one in the UK, X-Links, which is supposed to go from North Africa around to the UK. It feels to me a bit like these are crazy ideas, it's crazy. But you know what? So were motorways in its day if you would have talked about a motorway and you know, 1910, or even probably 1915, 1920, people have said crazy speed but there came a point, when there was a demand and the policy environment responded generally, through the depression or the post war, the New Deal and so on, but these things were built. They were built.
RN: Yes, I don't know about X-Links, but I’ve spoken to SunCable, I know Mike Cannon Brooks, who's the Aussie…
ML: We're gonna get him on the show.
RN: Mike is amazing, and he's a really good human being. I’ve looked at SunCable, I think what makes SunCable really doable in a sense or makes the most of fast is a 20 gigawatt solar deployment and undersea transmission line to Singapore. Now that's shorter than transatlantic, the real driver there is you have someone that wants advantage of the land, because Singapore really cares about hitting their Paris commitments. But Singapore has essentially no land and it's not windy, so Singapore - they're doing floating ocean solar. Every rooftop basically in Singapore has solar, but you do the math. If you covered every inch of Singapore with solar, it's less than 20% of their electricity. So it's really the commitment of the Singaporean government and financiers that they have to find a way to get more clean energy and they don't necessarily have always the best relationships with their neighbours of Malaysia and Indonesia, that makes this a potentially viable project.
ML: Okay, so, now you've talked about batteries, we've talked about HVDC, and you've said that everybody loves solar, but there is still this issue of you've also talked about - the season. Because I think that kind of day-night stuff that all gets taken care of with batteries, and we could go into a whole thing about EVs. They're all terribly exciting as well. But the real problem is this seasonality, right? What are the things that you're excited about to solve seasonality?
RN: Well, it's especially a problem for Europe, more than any place else. Well it is for the US. Really, if you think about seasonality…
ML: Canada, Japan has also that.
RN: Yeah, also very true.
ML: I think it has to do with it's anywhere north. And also New Zealand – it gets cold in New Zealand, it's a big problem.
RN: Any place the less you can have on solar and even the US North East. If the US has built a national grid, so you have three or four options, right? One is building continent- scale transmission, where you can do that and where the politics allow it. Then if you do that, you can potentially do it with overbuild of solar and wind, and building in solar in the summer, and wind in the winter and so on and having some… even solar in Arizona, Nevada helping the US Eastern Seaboard, solar in Spain, even though it goes down in the winter, as some base load too. Not sort of winter base load to help in these problems. Your second option is just massive, massive overbuild but that's hard to do in a windy place, because wind variability is so much higher than solar. Your third is some sort of what Jesse Jenkins involved firm carbon… low carbon energy.
ML: I don't get this firm thing, but there you go. I love Jesse, but he's got to call it flexible.
RN: Yeah, flexible is another way to do it. Dispatchable the term of art so whether…
ML: That's something like the sort of like 24/7. I think the important thing to get into people's heads is it's got to be flexible, it's got to cut in, when the other things aren't there.
RN: That's right. And you have to have some control over when it cuts in. So that could be advances in geothermal, like low temperature geothermal, like Fervo Energy, maybe nuclear can get its act together and then, finally, you get to what we'd call like real seasonal storage. Hydrogen is probably the leading technology for seasonal storage, but there are at least another dozen start-ups in that sector, including companies like Form Energy, backed by Breakthrough Energy Ventures, they might have a sodium sulphur based chemistry for flow batteries. That's the papers they've published, whether or not that's the actual tech needs to be seen. But where they think they can get sort of the incremental cost per kilowatt hour of storage. The power stack is gonna cost a bunch of money, but the incremental cost per kilowatt hour down into the ballpark of a dollar two per kilowatt hour as opposed to lithium-ion they have floor of
$30 per kWh or something like that. So then you start being able to do more interesting things, but none of them, really none of the seasonal storage technologies really exist yet. Even hydrogen is just kind of just getting to the point. I mean there's like a couple demo projects working on that, so we still have to create market structures, to create incentives for this. There's not really like a separate capacity payment, or something like that, that you can get to have a seasonal storage system that doesn't do anything most of the year and then kicks in the winter. So once we figure out the market, the way to reward these sort of seasonal storage generators, or even the flexible generators I think you'll see more momentum on them, as well.
ML: I mean to be fair, there is biomass and biogas, and there is a certain amount of that. The Danes call these things golden molecules, because you really want to use it to do something you can't do any other way. I’m pretty optimistic about hydrogen, to be honest, because I see the electrolyser costs just doing this thing, that we talked about earlier. And then already most people don't realize how cheap Chinese electrolysers already are, they're all kind of like… let's look at these boutique electrolysers in Europe! No, no, just go and do an alkaline electrolyser in China. it's already really, really cheap. You mentioned Fervo. Fervo has done a fantastic job, getting itself into people's minds as the geothermal answer. But I mean it's fracking, right? Frankly, the chance of it happening in Europe is extremely low. I’m an advisor to Eavor, so I’m going to just jump in and say…
RN: I haven't mentioned Eavor - also.
ML: It could really, really play an exciting role in this. And I’m going to get John Redfern onto the show, to see if he can persuade anybody that Eavor is going to be the thing that complements wind and solar. It's a low temperature, all you need is 150 degrees and you can store, you don't need to run 24/7, but the subsurface loops keep working and then, when you need a burst of power, you can just oversize the generators. I really like that I say…
RN: I think low temperature geothermal could be amazing.
ML: And it would be so good, because you can then… because otherwise we are looking at some very expensive potentially solutions and not that necessarily as a show stopper. But I heard a fantastic explanation, if you can get to 90% with this really low cost stuff, you can do the maths. Supposing you could do very low cost renewables, batteries and whatever you can get there for let's say, let's call it 10% less than conventional, which I think you and I would be like: why 10?! That means that the last 10 you could do it nine times current wholesale prices. It's gonna end up flat and you're like a factor of nine times, I could do that!
RN: I think that shows up in like you see the models from Tom Brown in Germany… that overall system cost doesn't have to rise okay…
ML: So we're just slightly going to run out of time, and I need to ask you about… I mean we didn't even talk about you've got these books, right? And I love it, because how did you come up the titles are so obvious, when you read them you've got Nexus, Crux and the third one is Apex. I mean it's just this brilliant set of titles, are you going to do more of that? Or are you going to keep plugging away on the energy forecasting visionary thing or what are you going to?
RN: I mean, I’ve told people I am going to write more novels, just as soon as the energy transition is done, right? I will eventually write more novels, so right now I have joined a stealth-mode clean energy startup that I think is amazing. So I’ve gone from I was
busy, a full-time speaker, and an investor in cleantech for the last decade, but also things like speaking have slowed down a lot with Covid, and those are about…
ML: Tell me about it!
RN: I’m sure you know, but there was a company I was advising, that at first I thought this is crazy, but looks entertaining. And then I thought, well, this might just work and then I thought I really think this has a very good chance of working and being a very big deal. So, I’ve gone from a part-time advisor to a part-time sort of more hands-on consultant to joining full-time. I wish I could tell you more about the company, but I think it can displace a gigaton of carbon a year, or something in that order. Hopefully you'll hear more from us in the coming months.
ML: Can I probe and can I say is it a generating technology?
RN: Yeah, it's a generating technology.
ML: Oh gosh, and I’m going to keep pushing you for the remaining time we've got! Is it solar, it's 20 questions until I find out what it is. It sounds great…
RN: That's as far as I can go today, but you know at least on air.
ML: Yeah, to get the great Ramez to go full time on anything, it better be damn good.
RN: I think it is, it is damn good, it's very exciting. It's an amazing team and that's half the joy, you like working with good people.
ML: That's extraordinary. And this would be… I mean it's not your first start-up, so you know the process, right?
RN: It's definitely the most ambitious start-up. I mean, I founded one start-up, it didn't really go that far. This is only my second, there's a number that I’ve invested in and advised, but this is my first time in more than a decade to get this hands-on and it definitely has pretty high aspirations.
ML: So, what is your role there, what role are you playing?
RN: I’m the chief energy strategist, actually. There will be a lot more details I can reveal in the comings,
ML: I can't wait! We haven't talked about where we met on the Shell advisory, but we probably shouldn't anyway. But there is one other topic before we close off. I’m going to ask you about November, right? By the time this interview and this show airs, we're going to be in, I’m guessing, about the end of September, beginning of October maybe. A month to go before the elections. What's going to happen, tell us, oh seer of the future.
RN: Well, 2020 has shown us that anything can happen, this year can do anything to us. And 2016 also showed us a lot of surprise. Right now just for all of that, I would say
the data really, really support that the most likely outcome is that Biden wins, and the Democrats have better than even chances of taking the Senate. And that data is fixed, those models have been improved upon substantially from 2016, in fact if you use the 2016 models, fivethirtyeight.com published a few weeks ago, if you use the current models say it's like a seventy five percent chance for Biden. If you use their 2016 model, they'd say it's more like a 98 chance for Biden to win, so even after factoring in lots of new ways to hedge the model, things they missed, properly scaling who the samples for who the electorate is, dealing with people that don't have mobile phones, that don't answer looking at undecided voters, and is doing more than break… for Trump all that sort of stuff it still looks like Biden's gonna win. His lead in the polls throughout the year has averaged about twice Hillary Clinton's lead in the polls, if the polling error was the same size as that in 2016, Biden would still win handily. That's what the data says right now, so none of that is to say that Trump can't win. My view is hope, like my view is my sober assessment is the best odds are Biden, but absolutely fight as if Trump's about to win, because we really can't afford that.
ML: Well, look in a way. I’m lucky, that I don't have a say in this, I don't have a vote in it. I am probably much more sceptical about the polls and I do sometimes put my through myself through the ordeal of watching one of his rallies, and I can see the… I don't say I agree with the appeal, but I can just see him connecting with his audiences, and it's scary stuff. I say that as an international, who has watched the US absent itself from the global fight against Covid-19, in a shocking way, and I’m scared, I’m going to be honest, I’m scared.
RN: Trump has a base that will just never ever desert him, and that are see him as almost a slightly messianic figure. The good news is that base is less than 40 percent of the US electorate, and so what matters, I know it's it should be like 2%, but what matters is what happens in middle and on the left and voter turnout. And the best proof point is really the 2018 election. Because there was a referendum on Trump, and the reason the Republicans lost 53 House seats wasn't because the Democratic candidates were stronger than their Republican opponents. It was because people, that normally… it was the highest election turnout in a non-presidential year in the US in more than 50 years. Those people were not voting for the Democratic Congress personally in their district, they showed up to vote against Trump, right? And this is what we call negative partisanship, and this year, modulo all this stuff happening, with Covid, which throws more variation to it, 2020 is going to be the highest election turnout in the US since World War II.
ML: So to the point about the 40% that will vote for him, his core and his base. There's some real insight in episode two, which was with Rachel Kyte. She was the climate supremo at the World Bank, she now runs the Fletcher School of Government. And one of the things that Rachel and I have talked about in that episode, is how do you prepare future leaders to operate in this hyper-partisan, hyperpolarized environment? And
hopefully we can reduce that level of devoted followers of one personality. It won't be in the future, it won't be Trump, in 10 years, 20 years, but reduce that partisanship. Because it's not healthy if there are 40% who vote for him whatever he does, and 40% will vote against him whatever he does. Then that is not a healthy place for democracy to be. And that's where we are so hopefully, we can fix that as well as all these other things, and as well as you delivering that gigaton a year and hopefully more of carbon emissions reductions. I’m afraid we're gonna have to leave it there, Ramez it's a huge pleasure to have you on ‘Cleaning Up’. Thank you very, very, very much.
RN: Michael, a great pleasure for me as well. Best of luck and I'll come back when the startup is out of stealth mode and tell you more about it.
ML: So that's my good friend Ramez Naam. He is a true visionary, one of the first people to truly understand the implications of learning rates in solar and other forms of clean Energy. He's an angel investor, he's an author of books - not just books about the future of technology, but science fiction. Truly, he is the man who sees the future. My guest on ‘Cleaning Up’ next week doesn't just see the future, he tries to help people build it. He's an academic and a thought leader, I first came across him when he was advising the Minister of Energy and Telecommunications in Ireland, I worked with him very closely on Sustainable Energy for All, energy access in the developing world. He now runs the Payne Institute at the Colorado School of Mines. Please, join me next week for ‘Cleaning Up’ with Morgan Bazilian.