Dr Dan Arvizu: Global renewable energy trends

well colleagues some welcome here again you today and kid I firstly begin by acknowledging and celebrating the first Australians on whose traditional lands we need and whose cultures are among the oldest continuing cultures in human history I’d like to particularly welcome today the acct Minister Simon Corbell here to the anu within his portfolio mr Corbell is responsible for energy and climate change in that capacity he is responsible for the establishment of policies to drive the development of Canberra as Australia’s solar capital the hdt government has also committed to lower rate reductions in greenhouse gas emissions and the minister i’m sure we’ll say something about that in a few moments i would also particularly like to welcome our speaker today dr. dan Arbor zoo to the University dr. arbiter who is the director of the US National Renewable Energy Laboratory which is the United States primary laboratory for neural energy and energy efficient research and development Henry Allen has been continuously involved at an international forefront of renewable energy R&D and technology commercialization for many decades now dr. bazoo became n roll’s 8 director 2005 prior to nrel he was an executive with ch2m Hill company and sandia national laboratories where he works for more than 20 years he began his career at the aid to Mt Bell Telephone loans customer switching laboratory here at a new we have a 40 year history of solar energy research education and technology transfer to industry at present about a hundred staff and PhD students work in solar energy R&D within the university our national prominence in solar energy is recognized so it’s through our core membership of the australian solar institute there are many research ties between Anu solar researchers and us-based institutions for example I am used sliver solar cell being commercialized by transform solar in Idaho transformers a joint venture between the large Australian utility origin energy and the us-based semiconductor memory manufacturer micron a six million dollar joint research programs underway between Anu and transform this public lecture is timely considering the recent passing of legislation to establish a carbon price for the lower house of the Australian Parliament there has been a rapid fall in the cost of both wind and solar energy in recent years and a rapid rise in inflation rates throughout the nation a transformation of our energy system is undoubtedly underway and a move to renewable energies is at the center of this dr. bazooey will undoubtedly tell us more about this shortly without further ado I’d now like to introduce mr. Simon Corbell to us well thank you vice chancellor and good afternoon ladies and gentlemen I’m also would like to acknowledge the none of all people is traditional custodians of this country and I pay my respects to their elders and the continuing contribution they make up to help community can I also welcome dr. dan arvizu dan welcome to cameras pleasure to have you here today and I’d like to thank the University for the opportunity to briefly speak to you today the ace of the government is proud to be supporting this lecture and also ongoing research on renewable energy through the solar energy endowment fund which the government and university agreed to entering into about a year or so ago last month I was very pleased to release the government’s sustainable energy policy which is an integrated policy framework focused on managing the social economic and environmental challenges faced by the oct in relation to its energy use and production at the heart of the policy is a continued commitment to maintain affordable reliable and increasingly renewable energy supply for our city and it’s a vital part of the suite of policies and programs the government is developing to help us achieve our targets in relation to greenhouse gas emissions and to achieve carbon neutrality for our city by 2060 the policy sets out poor key outcomes renewable and affordable energy smarter use of energy cleaner energy and growth economic growth in the clean economy there’s a whole range of specific measures that the policy is seeking to

promote including implementation of national energy reforms support for measures such as electric vehicle infrastructure rollout adoption of renewable energy targets for our city and importantly I think in the context of today’s discussion the implementation of large-scale renewable energy generation for the city with 40 megawatts of solar generation capacity to be made available for uptake through a nation-leading feed-in tariff option process together with our existing residential feed-in tariff scheme this is part of the government’s commitment supporting up to 210 megawatts of renewable energy generation for our city these are exciting and challenging policy proposals and proposals that will be well informed by the types of discussion that we will hear today the acct is one of the fastest growing areas in Australia for renewable energy currently focused on wind and as a region we have a potential to build on that through the work that the government is focusing on in solar and which we already see significant leadership on through the work of the Australian National University I hope that dr. rbcs discussion and presentation today will focus on how we could continue to work with our community to support the uptake of renewable energy and to demonstrate that it is a sustainable and energy-efficient choice in our day to day lives I look forward to hearing dr. Arvizu thoughts on emerging trends in global renewable energy technologies and welcome you again to the acct thank you very much Thank You mr. Carvel and also president young thank you for the invitation to be here apologize for the delay I’m going to I’m going to speak rather quickly hopefully leave a little bit of time for some questions at the end thank you for the opportunity to be here I think this is one of those times when I think across the globe we share many of challenges that that need are focused attention and this is this is one of those so without further ado let me just something just leap into into our presentation this morning it and and really I want to I want to leave a little type of questions because I think hopefully it will provide some some insights as to kind of certainly through a lens that we have in the United States regarding those global energy initiatives first and foremost I was always start every top of the fact that we need is a solution for our energy challenges that really do deal with not just energy security not just the environment but also the economy all three of these things need to be dealt with simultaneously so it is a it is an important piece recently had the opportunity to to host secretary-general of the United Nations Hong Ki moon at the laboratory he made a couple of statements that were I think particularly profound and I couldn’t say it better than and he did regarding the use of alternative and in particular renewable energy so putting a priority on renewable energy we address job creation there’s climate change women’s empowerment and food security and it cuts across everything that we do and then we will face it in the future I think it’s indicative of the fact that these are aspirational challenges targets and otherwise a goals and the one to get to and it’s something that i think would share as a go so I’m just let me just jump into this I recently had the opportunity to be part of the intergovernmental panel on climate change the IPCC special report on renewable energy what is the mitigation potential of renewable energy to address issues that relate climate change one of the as you might recall these these IP CC reports are not new are not new of work in terms of the terms of new science they are peer-reviewed summaries of everything that’s occur in the scientific literature so it is kind of what is the matter what is the global and national consensus around energy so first one of the graphics that I want to point out is the one about so renewable energy makes it about twelve point nine percent of our total energy consumption globally of that 10.2 of the 12.9 is what we call traditional biomass that’s biomass that’s not sustainable all right so that piece needs to actually be changed as well so it’s a little bit over prediction of what we actually actually do have but just a data point that I want you to take away the second thing that we did in this report is to look at what is the potential the technical potential of renewable energy resources across the globe and without going into any real detail on this I will draw your attention to the red lines up here this red line here is the global primary energy and and and and specifically this

is what the globe consumes today that’s what we all use as a global community this is the potential based on peer-reviewed literature of what solar provides alone so solar has even quite a bit more opportunity than what the globe consumes today and you’ll see that this is electricity over here this is all primary energy for both global direct solar and biomass all of this to say there’s a tremendous amount of resource and there’s it’s not an issue of do we have enough resource I guess that’s the bottom line there was a there was a whole set of analysis that we did as part of this study and took advantage of I’ll draw your attention again to this side here which looks at 164 different sets or scenarios of what we might expect from renewable energy going into the future these data points are all of the data points of each of the scenarios 106 or scenarios you might recall when this report came out in August or so there was a headline coming out of the the the EU and particularly out of Germany and it focused on the fact that there is one data point right here that says that seventy-seven percent of the global energy essentially usage can come from renewable energy well that’s true in that one scenario they didn’t point out this scenario down here which is five percent that’s a that’s a very conservative or otherwise very negative scenario in terms of the assumptions that one makes but you can see that there are under 162 other scenarios that can be almost any number of the ones all right so the bottom line is you tell me what do you want we can get it for you depending on a set of assumptions all right and this is in fact what the scientific community will tell you now the color codes in here relate to what kind of carbon emissions future you want to have and so some of the ones that are record the left or the ones they’re less carbon in the internet in the environment and the ones that I right or more carbon not surprising in terms of what in search of what we might project going forward all right so all that say is is that we’re just trying to kind of take a snapshot of what the of where we are with our energy picture another picture that that’s pretty important is what is the price or the cost of energy all right so these vertical slices here are what the cost of conventional energy our so-called traditional energy these various bars are what the various renewable energy technologies can provide and you can see some of them are already in the cost effective range or comparative range with traditional fuels and most of them are many of them are not all right so again and this is this is electricity up here is a heat down here this is fuels down here all right so it is a snapshot of where we are with this what this graph tells me and you can draw your own conclusions is that there’s still some cost reductions that are necessary to be fully compare comparable to what we traditionally use in the various types of fossil fuels all right so who’s doing what is another another where are all the where are all the technologies being of being deployed and this graphic here shows you kind of a world map a geothermal you have this set of countries a wind you have this set of countries led by China solar PV you have these set of countries that led by Germany CSP Spain etc so it tells you a little bit about who’s deploying what and it gives you again a snapshot of where the activity is a global if you look at the finance in other words how much money is being spent in this industry it’s about a 268 billion dollar industry depending on what things you count one thing is that up to turn 11 if you take out all the mergers and acquisitions what it’ll tell you is that rough rough numbers where you know what kind of work we’re kind of looking at investments being made and this one is by Europe Middle East America and Asia ionic and oceanic so so you’ve gotten essentially investments being made on a per quarter basis in this arena roughly a third a third a third in terms of regions of the world so that’s one cut at the finance developments I think globally if you look at it by technology what you see is that you have rough numbers most of it being spent on when and then followed by solar efficiency is this piece up here and then and then other things like biofuels in the middle so there’s a lot of activity it is in fact again driven by what I think is the most cost effective technologies in the marketplace but suffice to say it’s a growing industry its global it’s a couple hundred billion and in fact looks like it’s increasing even after the recession that has occurred a frequently get asked so you know where’s the worse the technology going and what what have

we actually seen actually is a pretty impressive story if you look past excused if you look past of the the past decade which you can see up here is that when has increased from less than gigawatts globally to over 200 gigawatts lovely that’s a factor of 20 there’s been a factor of 30 increase in solar technologies a lot of a lot of new entries in terms of biofuels in terms of building efficiency lots of technologies are already at grid parity in certain regions of the globe not in all but in some and again it’s a big finance thing so a lot of progress one can be can feel good about the fact that we’ve made a lot of progress now I draw your attention to this particular statistic 19 and a half percent of the global electricity came from renewable energy in 1990 in 2008 it was 18 a half percent so where I’ve talked about all the progress we’ve made and all of the technology ramp ups on a double digit kind of kegger basis where the action is in ground and what so the question is what’s going on there well what’s going on is in terms of the use of energy the demand for energy this is in the Americas this is in Europe and this is in Asia and what you see is where there’s been improvement in terms of of low-carbon energy in these two regions of the world in this region of the world we’ve had kind of a major major reduction in a reduction of the overall percent in terms of renewables forty seven percent of all new generation the electricity sector has come from cold and that is in fact a part of the challenge that we have is the globe is that we’re losing ground on a global basis primarily because of the appetite in developing nations in particular is so great for energy and that leads us to I think a new set of perhaps insights regarding what we need to be doing as a global community so in the u.s. we get asked the question frequently so we recognize that we had a problem in energy literally in the 1960s and yet for almost four plus decades would not really made much progress and I have another slide where I’ve got quotes from each one of our presidents since nineteen sixty talking about how important it was and of course are sitting president president Obama has made it yet a high priority in his administration as well these are not challenges that we don’t recognize their challenges we’ve recognized for decades but it is really difficult than they’re real and the question comes back to why is it so difficult well I’ve got a graphic here that kind of describes in the US I would I would expect that there are some similarities in other parts of the world at certainly in Australia in the US energy is not a classic supply and demand sector in fact we expect and we anticipate that innovation is going to drive economic growth and drive progress and yet in this sector in the energy sector if you look at up here in this particular graphic if you look at the percent of sector sales that we invest in R&D it’s literally less than 1% of point 0.3% of sector sales and energy that we invest in R&D contrast that with pharmaceuticals you know a variety of other you know kind of IT and semiconductor related technologies where you’re in the urine certainly in the teens or twenty percent for pharmaceuticals of your sector sales that you invest in R&D all right so it’s a it’s a sector and I would argue is devoid of investment in R&D all right that’s innovation tour another thing that I will point out is it is asked that utilization if you look at in the US again if you look at our domestic generation of energy supply what you will find is that we’ve made about two and a half trillion dollars of investment at roughly any pointless if you take the average load on our electricity system on an annual basis it’s roughly half of the generating capacity that we have so roughly a trillion plus dollars is sitting idle all the time if you look at other sectors within our economy and you say what’s the utilization factor of your asset base it’s a lot more than forty seven percent which is what we haven’t in electricity in our in the US country in the US economy and the reason for that is we put a high premium on reliability we say

you know when we plug our our appliance into the wall socket we want that to work we want the lights to be all the time we don’t want any disruptions all right and so we generate again more energy than we absolutely or capacity that we have then we absolutely have to use in order that we never have lights goal and that’s that asset sitting on the sidelines and that’s not true of many of the other sectors again this is indicative of what kinds of problems you have in the energy sector that you do not have in the other sectors other likewise we have long cycle time this is not AI t this is not your get a new you know a new product every eight to ten months this this is sometimes you make investments these investments last a long time a coal plant will last for 50 years you make it a decision to to to invest in in a coal plant it’s going to take you 50 years in the US in our nuclear fleet we are now licensing our 30-year licensing technology to 60 years and the expectation is that we will go to 90 years part of that is the fact that we want these assets to continue to work for us in our economy it’s not a bad thing it’s just a recognition that if you’re going to make decisions today they last a long time so think about what we do and the last thing I’ll say about about the sector and the uniqueness of it is the fact that it is being driven by public policy and public policy relates to the fact that we have had objectives in our energy sector and those objectives for the law for about in the US for a hundred years have served as well we like the idea of low-cost energy we have very very low energy in the US at my house my first 500 kilowatt hours of electricity I pay five cents a kilowatt hour for the next anything above that I paid nine and a half since kilowatt out that’s what I pay retail you know that’s a lot less than that if you pay it wholesale all right we like our cheap energy in Europe they have a different set of conditions or energies much higher in Asia much higher I understand their high it was higher here but in the u.s. we have a serious issue regarding the cost of energy and that cost of energy is in my opinion artificially low it does not take into account of all of the other things that we expect out of our energy system so what is it that we need what we need is a transformation and that’s the part that’s most difficult to perhaps all of the community to fully acknowledge a transformation from a set of attributes which are not sustainable by everyone’s definition to a set of attributes that are sustainable by everyone’s estimation now expectations here are important so you know what first fundamental question is is this the future we want and if so what are we willing to do to get there those are the questions that are in front of us and i would offer and i frequently say you know if you don’t care i think eventually we’ll get here personally as a intellectual manner i think will personally get there to lead to this outcome it may take centuries can we afford to wait centuries and in my body of my response to that is absolutely not there’s a sense of urgency we need to move quickly unless you would decide that you need to move quickly you really don’t need government intervention at all because you will eventually get there because you have to there’s no question in my mind you have to get to this set of set of outcomes but can you wait centuries to get there that’s the real question and the short answer to that in my estimation is a scientists and engineers we have a sense of virtue we need to move more quickly oh so that’s what that’s the question what we do in our program is to start to look at this than these sectors there are sectors that liberal 82 electricity generation and end-use and then transport fuels and end-use and ultimately all of these things coalesce into an integrated sustainable energy system and when you be thinking about it holistically as an energy system all right so let’s talk about technology for a moment so there’s technologies that are out there and many of these technologies are already cost competitive based on what I mentioned earlier in terms of our in terms of our IPCC report this is the state of Technology in the u.s. a decade ago and this is the state of Technology today recognized the Texas 10,000 megawatts 10,000 10 gigawatts of wind energy primarily is that the state with the most amount of energy in the US the most amount of renewable energy in the US that’s that’s not the something that most people recognize and this as you may know even though that state is green on this map it’s kind of reading about the political so that said there’s a lot of things that we can talk about in

terms of progress there is in fact quite a bit of renewable energy in the country and it’s moving fairly quickly okay and we’re very excited about it we have a national program that focuses on a variety of goals one of which is eighty percent reduction of essentially I’m sorry eighty percent of art of our energy technologies would come from clean sources now you have to define clean here a little bit differently than we normally defined clean but this is what the administration has as sad as part of the part of the national goals if you look at the definitions of clean in this particular metric were forty percent now and we want to get to eighty percent by the year twenty thirty five are lots of things I won’t go through all these in the interest of saving time but lots of activity there’s there’s rd to be had there’s innovation to be occur to occur and there’s a lot of things that still left to be done in terms of proving the technology and were about that there’s a lot of new interest in offshore wind technology where there’s a tremendous amount of resource because most of the population of the earth lives within literally two hundred or so kilometers of a coast all right all thats a great opportunity for land great opportunity for solar and i will add that in the summer and I was the lead coordinating lead author for the solar chapter in the IPCC report one of the things that we focused on was the fact that there’s a lot of unaccounted for solar resource that we don’t really capturing the literature I tried to find for instance how much lighting had occurs that you can offset energy usage through the use of solar energy and you’d be hard-pressed to find any peer-reviewed literature on lighting technology but essentially it ought to be counted as part of this solar research we still intend to spend most of our time down here it says the elegant stuff this is the conversion of solar to electricity directly it helps us think about how do we fit into the present energy system and so we spent a lot of time both in our national program and otherwise on these technology a lot of what I would call the significant progress being made roughly 3 gigawatts 3,000 megawatts of solar energy now included in our in our grid in the US there’s a there’s roughly 30,000 plus forty thousand gigawatts in on the globe a lot of that is in Germany in Germany of course as you know doesn’t have as nearly the solar resources that we have in the US or that you have here house value one of the big issues that we’re working on is to get to the cost of these technologies so they are at grid area in the u.s. we have a thing who called the sunshot initiative and the sunshot initiative is really about getting the cost of solar in certain pv in particular down to a dollar a lot okay that’s fifty cents of watch for module 50 since the walk for the balance of system those are incredibly ambitious targets can they be done what is interesting to me is as I talk to the various developers of the various oh jeez there’s a lot of folks who believe we can get to these goals maybe not as quick as we would like in the administration today but but certainly their goals that that are worthy of pursuing and if you can do that you get down to six dollars I’m sorry six cents a kilowatt hour six dollars a megawatt-hour six cents a kilowatt hour of for that life cycle cost of that technology it’s hugely important this is the map of today’s technology in terms of grid parity only the yellow piece here are those states are the ones that today are within twenty five percent of grid parity meaning twenty-five percent of being competitive with the traditional fossil fuels if we get to a dollar walk the map changes to this which is essentially everyone in the u.s. to a large degree can have some some contribution from a solar resource competitive with fossil fuels lots of technologies that work that we’re working on i think the verdict is still out on which one will ultimately be the technology of choice because i think there’s still great promise in all of them one of the things that we’ve done is to continue to look at innovation with the private sector and we’re working with working aggressive with the private sector at our laboratory we have over a hundred and thirty new cooperative research to develop agreements over 400 partnerships that are active at any one time with with the private sector and we’re working on a number of things these are d100 awards are kind of the best hundred inventions of the year that have found their way into the marketplace and i highlight some of those that and talk to the solar group here a little while ago regarding some of the technologies that are essentially attended in there what’s interesting to me is the level of innovation in the laboratory is as robust as it has ever been and it’s something that i think we can take full advantage of there’s there’s great opportunity i think in the solar technology i’m bullish on solar primarily because of that first map that

I showed you Solar has more more resource potential than all of the other renewable energy technologies combine and it would be essentially you know essentially short-sighted of us to not try to exploit that to the maximum degree possible now get back to that very minute but there’s some exciting things that are going on in the laboratory and they’re there now we’re looking at first generation second generation now third generation technology which is a weight off but one of the things that we’re focused on is nanostructured materials there’s a great little promise and nanostructured materials and specifically we’re now looking at technologies that you can begin to in very low-cost ways kind of paint onto services and get essentially the electricity production out of those via via some very inexpensive process biofuels a lot of work is certainly in the US have been focused on ethanol we recognize that Hepton all is not the fuel of tomorrow in fact ethanol really could be quite frank about it is is is the way in which we help with agricultural policy in our country it’s to help corn farmers let’s just talk about it all the way it is because that’s really what it is really what we’re about is kind of next generation so it’s not about kind of putting fuel in competition with food it’s really about taking your biomass resource and using it in a very judicious or a way and that can be cellulosic research which is the stuff that we’re doing in a variety of other technologies that allow you to think about technology and and new sources of fuels that can be compatible with our infrastructure in a new and different way so we’ve made a lot of progress on cellulosic this is not this is not the food part of the corn plant this is the other looks left over the corn stover so to speak and we’ve made great progress in terms of getting the cost down but again it’s not about ethanol it’s beyond ethanol there are a variety of technologies that I can that you can use to drop in to use for both aviation fuel and for using also for for diesel and other molecules that look like hydrocarbons and so we’ve got a number of start-up technology in a whole new set of pathways for taking fuel I’m sorry for taking carbohydrates and turning them into hydrocarbons and so we’re talking about biomass is the fuel but all ultimately getting to a liquid transportation fuel that’s compatible with our infrastructure and a tremendous amount of progress being made in this arena and that’s gotten a lot of resurgence over the course of the last five or so years it would be IRISA fighting come by transport and vehicles there is a whole I think huge challenge in our transport sector it is probably the more difficult part of our energy system to transform primarily we have so many few we have so few options we like our liquid transportation fuels we really don’t have many other alternatives for that other than electrification electrification only works if you’re generating your electricity from a clean source because otherwise you really have just transferred the the carbon emissions from one sector to another anyway lots of lots of so-called the technology options the one thing that I can say has been one of the major developments in our country over the past couple of years is the the administration’s ability to get essentially a new what we call cap a standard but the corporate average fuel efficiency standard increased from this this flat plateau we’ve been on for the last you know almost decade on to a new plateau where we’re going from something you know north of 25 miles a gallon to up to 54 miles a gallon as a target to get the automakers to agree that that is in fact a target the fleet’s need to need to accommodate it was a major change in terms of policy and in terms of business value propositions going forward there’s a number of things that have to be done one thing that’s not clear to us in this in the in the policy arena is what will the consumer demand because in fact there that’s probably the biggest unknown in terms of making a transfer our transport sector what what will this consumer behavior be towards some of these new technologies one one thing that I like to point out this is up this is something that Google sponsored by Mackenzie’s a consulting the evaluation form looking at what would the cost of the battery need to be in order to really begin to take off in terms of electrification of our transport system and and then the cold hard facts are that it’s going to be really really difficult to do this and where we want to go to electrification I think one of the things that we need to spend time energy on is battery constant lithium-ion batteries like the ones the Nissan Leaf uses is costing something like seven hundred dollars per kilowatt hour even if it costs 340 kilowatt three hundred forty dollars a kilowatt hour

the break-even price for that vehicle if the cost would would be five dollars a gallon of gasoline equivalent so you’d have to have five dollars of gasoline equivalent even if you cut the price in half for the cost in half of a lithium-ion battery today to get up to get a leaf a size battery compatible essentially with your value proposition if you did that you are able to get to penetration of these technologies going forward and and what this graphic illustrates is that it takes a long time for these technologies to find their way into the marketplace and one of the things that we need to be be cognizant of is you know these the strategy that we’re putting together in terms of national policies need to have staying power because these transformations in our energy system will take time and there’s no substitute for that the immediate immediate reaction to some of these things simply don’t happen unless you’re working at it fairly aggressively over long periods of time so that’s what that’s the point we made talking about buildings and I want to talk about this as I kind of wrap up the talk but but more importantly than anything is there some public policy that we can use today to help us improve our it’s the energy consumption and the effectiveness with which we use energy and and it’s and it’s really quite quite a testament to the fact that our policies are not yet fully integrated with our with our social and otherwise national objectives and I mean let me just point that out so first first of all forty percent of the energy consumption in the u.s. comes from building seventy percent of our electricity is used in building all right we’ll come back in a minute what you can what you can show is if you look at a building and you look at both its initial cost to put the take consider that will be the mortgage of monthly payment and its energy usage so how much energy would that building consent you can find almost in every building that we have in our country both commercial and residential that there is a minimum or you can say forty percent of the energy and still have a lower life cycle cost of that building alright we said again so that scope still has a consumer you could put in some efficiency measures into that building and lower your monthly bills mortgage plus energy bill from 2500 in this particular building down to like you know 1800 and say forty percent of your energy we’d have to do is you have to make some investments in energy efficiency and then you would reap the benefits that over the life cycle of that building all right now you can do that in almost every building in the country and we don’t do it and the reason we all do it is the first cost of that building is borne by the Builder builder doesn’t live in the building the bill the Builder doesn’t care where that building is efficient or not the tenant pays for the for the energy bill for the life of the building and we’ve decoupled the incentive to make the efficiency investments from the reward of the lower energy prices we’ve decoupled one party gets the benefit one party has to make the investment the other party gets the benefit well that’s a structural issue that’s not the technology issue it’s a structural issue if you have one in the same then you’re incentivized to make to make those changes make that hairy man all right so that’s that’s that there’s lots of things you can do and learn about trying to understand one of those things you can do in terms of the as built environment all right so let me now come back to this thing in terms of a vision the vision is this you know you essentially have a grid in art in our country that’s very archaic it’s it’s old it’s it’s in its in its further aging and deterioration deteriorating we’re not making investments in it it’s not very smart we have good power plants and big wires connecting them and really that’s kind of what we have we’ve had it for a hundred years its work well but it’s no longer doing the job for us and we need to do something very very different all right there’s a lot that needs to be done to make this system look a lot more forgiving to renewable and riaan and distributed resources than what we’ve been able to do all right so there is the current system and the future system the future system is one that really has this much broader vision about the end use and the generation and that they were they’re flexible and that you are actually able to mix and match and take generation from worth being generated and deliver to where it’s needed on a much more robust kind of mechanism at a time scale that then is then it’s currently available we’ve got grid integration projects going on all over the country and one of the things and these are some of the projects that we have over here on this on this side of the graphic one of the things that we can do we contain the largest PV system

in the u.s. is one that Sempra Energy has in Nevada x 48 min ago wats it’s a big system and we’re looking at what the utility is asking us to look at you know we had these renewable portfolio standards they’re encouraged to put to the system onto the grid that got around the grid now the utilities looking at and saying you know what there’s a whole bunch of stuff in here that makes us nervous makes us nervous about reliability makes us nervous about getting clouds come over what happens to the system how do we accommodate this what about our units we have to ramp them up and wrap them down what about our nuclear units etc etc and we’re looking at these things and we’re looking we’re collecting data so policy got us out started out up front and we’re moving in this in this arena and now when we’re starting to get some significant penetration now you’ve got now you’ve got issues that essentially need to be addressed and so this this is a graphic of a of a large of a large facility that were that we’re monitoring this outline right here is kind of clouds coming over clouds coming over the facility over over the field and these and these graphics right here this is what this is what a dee and I are the solar the solar profile looks like as time of day goes it goes by if you just look at one segment of the of this of this deal you get this kind of volatility or variability as you start integrating the larger system you get this smaller amount of variation it indicates to us what we’ve kind of already believed that if you look at this thing in a much more sophisticated way you can begin to balance out some of these so-called intermittency and you can begin to smooth those again with a much smarter grid that you have today so its technology that needs that you know it’s a sophistication that we need to understand as we think about a new future for ourselves all right so let me just talk about the last thing which is a new building that we’ve not going up at our laboratory and this building is our research support facility acronyms run everything so it’s the rsf and in this particular building is where most of our researchers will be housed all right so we’re finishing that last segment just in the next few weeks my office is right up in here I’ll be moving in literally in several weeks 1400 people right now 800 people are already in the building but we’ll have 1400 people 1400 feet all right this building was designed so that it would not only be LEED Platinum that’s the Leadership in Energy and Environmental Design it’s the US Green Building Council I think other countries use different things but it was designed with an idea that it would be hannaford be LEED Platinum but also that it would use half of the energy consumption of a normal building now remember that graph I showed you earlier regarding ability all right if you look at commercial buildings here’s this commercial building eighty percent of our energy consumption goes to commercial buildings if you look at what are the things inside that building that actually use and consume energy the biggest piece is well okay then you start with heating and cooling and then also some blood loads been less than a variety of other things that is what of the profile of a typical buildings all right so we kind of purpose to say you know what let’s do something very different in this building and what we didn’t decided to do was to say all right let’s look at everything we know how to do as we construct his building going forward so the first thing we did as we said it’s orientation so we didn’t give it to the architects sorry Freddy architects in their audience we give to the engineers and instead you know what would it need to look like what’s the envelope you look like look what needs to be long and narrow and it needs think you know kind of you know follow the win the solar profile are up around around the day and so that’s kind of what and then we gave to the architects and said they make it look nice so that was that was maybe the first big big change the other time so they like one hundred percent data this building is one hundred percent daily meaning that on a day when the sun is shining you do not have to turn the lights on unless you want to you can but you don’t have to all right so that was the first thing we did and you know inside the building we’ve got things like light louvers that actually channel the light so that it doesn’t have direct lighting on your station but in fact over cross across the building second thing we did was thermal max huge thermal mass very thermal management origin so again lots of thick walls if they could go along with with the building one of the things we did we put elaborates underneath the building big concrete structure with these with these uh kind of passages in it but allow you to collect cool air during the evening hours of the summer months and warm air during the winter months so that you could actually begin to manage the energy usage of the building the next thing we did is we we actually put in natural ventilation in the US government don’t ask me why you cannot open and close windows although they’re fixed and you’re not allowed to open and close windows well we’ve got a special you know if to get an act of Congress to get open-closed window not

not too sophisticated but we got open to close windows in our building which is really important the next thing with yet as we said okay let’s let’s put the solar skin on the building is like the equivalent of a trauma wall passive solar heating except in this case it’s active it’s a essentially a technology we invented at the laboratory literally is a metal plate with some holes in it and essentially warm air is drawn through this via some you know positive pressure and you bring the air in and you put it down in the labyrinth and you can use it for the purposes that you need the next thing we did is we we actually have a datacenter in this in this building turns out it’s urgent it is the lion’s share of the energy usage in the building is the data set but you ever going into data center so we put a data center in our deniability and it is got a very very unique set of of cooling approaches to it and in fact is one of the greenest data centers got a big award for it in the country and in fact we probably think in the world it’s got a pua at the performance magic measure of 1.1 where the previous one in the building that we’re in now is three point up so it uses one-third of the energy of a normal data sensors that recognize that that’s an important piece of it the next thing we putted electrochromic and thermochromic windows so you know when one side of the electrochromic on the other side of that thermochromic triple-pane windows everywhere we end up putting heated and cooling into a set of tubes that are all ultimately the the thermal management of the building so in every floor we have like over 42 miles of this piping essentially is the way in which we heat and cool the building with chill bar and hot water all running to the same set of tubes then we put on top of the building a photovoltaic and roughly 2.5 megawatts of PV on the building alright we have a number of other sustainability features these are the support columns these columns our refi recycled natural gas pipelines that we’ve got from the natural gas book once they fill them up the concrete there are the structural members of the building we which gives that we have pine forests thinnings we have a thing called beetle kill in our country primarily as a result of climate change and now the insects are beginning to you know they’re living longer because of the seasons are now sure that the winter season are shorter and they don’t kill the larvae anymore with the freezes and so now we’re losing a big part of our force we’re thinning those thoresen and the beetle kill pine forests are now being used as aesthetic features of the building all right this building now is is not only so here’s the here’s the photo will take 2.5 megawatts again with the with that on the parking garages that are associated with this building we measure everything in this building we have a display that you that you have and when you walk in you can you see what’s going on if you’re a staff member in this building you are you are challenged to be energy that could an energy conservative one of the things that we do if you take the overall usage of the building number of kilowatt hours on an annual basis and divide it by the number of people in the building it’s less than 300 watts per person okay lest it’s about 285 watts per person that’s all in that’s everything the actual watts per duty station is 70 watts less than about it about like a light bulb and then could decimal so so we you know and you walk onto this building and the first thing you recognize this is a highly energy-efficient the first thing we did is we is we said okay you have a budget you as an individual walking in the door you have an energy budget it’s less than 300 watts but I want you to use more than your than your share so all of a sudden a little space heaters if you turn on sometimes to put them underneath your desk that’s contraband in our building so we don’t want anybody have that stuff no but nobody has you know all not everyone has a copier on their desk getting all these kind of things are now we look at how do you make these as energy efficient as possible everybody you know a monitor is 300 watts by itself so we gave about LED monitor of 24 bucks apiece so you start to think about energy and everything you do everything is measured alright the next thing I’ll say is this question everybody asks is all right that’s great so how much extra did you pay for this okay what I’m telling you it is here’s this building my budget was three hundred dollars a square foot we built the building for two hundred and fifty nine dollars a square foot and if you add the photovoltaics on it two hundred and eighty six dollars a square foot I was able to build this building at less than the budget that I had of 300 Arthur square foot which is what it typically cost to build a building built a code in the Denver area okay what I’m telling you is we sent avise here to put the energy features into this building because we’re the tenants with the ones that are going to live with the energy costs of this building long-term all right we put things that were essentially off-the-shelf into the

building this is not revolutionary this is technology that’s here today if you were to ask the question and and and one of the things that that were that we focus on is if all the commercial buildings in our region were the new ones were of the same profile as us on a hot summer afternoon at the peak point when the cook when the utility is actually asking everybody to get off of energy because they can barely keep up to the load now they’re running at max power we’re exporting energy into the grid if you ask them what if all your commercial clients were like us and you’re exporting energy in the bed into the grid whenever you have the peak demand on your energy system they will all tell you the same thing it’s a game changer it will change everything what it will do is make us as an utility not interested in how we deliver the energy in a traditional format but how do we the energy that you’re bringing in and bust it to somebody who else who needs energy and how do we begin to broker things now we’re talking about it a business night proposition very different than utilities have today utilities have an energy proposition today it says if I if I sell electricity and if I build the power plants I get paid that’s how my shelf my shareholders actually value what I do and those are the two things that they get if you have this environment it’s a very different value proposition now they are worried about how do I get this technology how do I get the energy on how do I get it off how do I broker it it’s an IT like in infrastructure all of a sudden it’s not about big power plants big wires it’s about distributed generation and it’s all of the attendance value services when you talk about energy in a different way than the morning we’ll have an egg now and so when you talk about new green energy economy and all those kinds of things this is the economy of the future not that part that says I’m going to try to think out how I’m going to play into the existing infrastructure the way it is today and I think that’s really the biggest issue that we have in front of us we can we can do this there’s no question that we have the opportunities plenty of resource and then we have a business diet proposition that works today if we were to use it you know I frequently get asked the question about soap but what about the built environment can’t do that for old buildings that’s true you can’t but we’re not doing it our new buildings either and the question that you really need to be thinking about is what future do I want and invent this future and I think you need to invest in innovation it’s not about the short term it’s about the long term and in fact it really is about access to capital and so when you talk about all the policy instruments if you can have policy instruments that gives you access to capital so you can have innovation and you can transform the energy system then you’re on the right track independent of which instrument you use and there’s going to be debate about what your summer to use but what you can say is making the transformation is it is actually the path of that is the path that’s going to be the best path in the future if we delay it’s going to get harder and it’s going to be more expensive if we don’t delay we’ll get started it’ll be rough but at least we’ll get there hopefully in a reasonable amount of time so that’s all I have for you today hopefully I left some time for some questions thank you thank you for the question I didn’t have time to cover one of the things that I think are the most important things going forward and that’s systems integration the you know as these utilities are beginning to recognize is that so these distributed resources operate differently than we anticipated we really don’t have the research done on that that we need to have we’ve just invested the government just invested in a new facility called the energy systems integration facility it’s 135 million dollar new capability to do essentially megawatt style integration of distributing resources so that’s everything from vehicles that you plug-in vehicle to grid all the storage technologies all the various technologies that relate to generation you know solar winds of geothermal all those things and how they operate on to the grid so we’ll have a high-performance computing center and a stimulation instead of software where the utilities can come in simulate what their grid looks like and then put these technologies that are somewhat yet knew all the power electronics all the control technologies and the things that relate to how do you integrate these things onto the grid and allow them to essentially do the experiment virtually before they actually put it onto the grid it is about related risk reduction and that’s the most important thing going for and so I think in energy integration and the integration of new sources distributed resources onto the

grid is one of the most important challenges going forward and probably the biggest barrier we have to wide-scale adoption of these technologies and so I think that’s the next big thing that has to happen and that’s precisely what we hope we do get a lot of interest both internationally and from the Department of Defense and others as well just question that is the operating cost side of things there’s any policy moves of the investors when commercial president to have some sort of even calendar likely operating partner chemicals yeah one of the one of the things I didn’t say is still very true and that is the you know the you would think that the easiest thing to do in terms of the as built environment or the new building environment is to just change the codes and the standards to acknowledge the fact that you want to save energy in the building that would be the easy way of doing the essentially the restructuring of this market turns out that that’s the hard way because there are literally thousands maybe tens of thousands of jurisdictions for how you develop the the requirements around buildings and we try to harmonize those in one size fits all kind of thing and you’ll get you know you get a certain backlash that that’s pretty pretty ugly you know there’s a lot of work that still needs to be done to to make the public aware of what the attendant benefits are of this some what I would consider to be a fairly minor public policy regulatory you no requirement to say consider energy efficiency in the context of new building construction and I think we’re making progress in that area but still a long ways to go and you know some of these things there’s just resistance because it’s just going to be difficult to change the status quo but a part of the part of the awareness is getting getting people to recognize what out what future do I want and how do I get there and having them be have it be market tall rather than technology or otherwise repertory push push pick me are they support and license or trans men who measures like any Paris or us all became our life to the solar energy which do you think would be the debtor misspent oh well so you know I think one of the things that that certainly face in the u.s. is the fact that the sector the energy sector as I described is not classical supplying a man you know it’s not IT it’s not semiconductors it’s it’s it’s very unique and we you know we have government intervention whether we like it or not we’ve had given an intervention and so there’s the the government I think role needs to continue you know I think there’s there’s a general consensus that market forces kind of our most efficient they will let them work but given the fact that this is a highly regulated environment investment allow investment in R&D and innovation allows you to put things into pipelines and hopefully those pipelines and then gets gets pulled into the marketplace you need to get over the barriers of of adoption of the technologies into the marketplace even if something is at grid parity its law it’s unlikely that the market is going to adopt it unless it has you know what we call a much more compelling value proposition that makes it much better than the combat technique that it might not work so there’s there’s a there’s an investment required to get over a hurdle all right there’s a couple ways to do that want is to raise the prices of the companies another is to is essentially to put some some some incentives in to get over the barrier ultimately it’s my feeling based on my many years of watching this this is that you need that you need these technologies to be in the marketplace and you need the market to actually be the primary driver of reducing the costs you can’t wait until you have the better technology for the market to adopt it you’ve got to be in the market and driving the cost down so one of the things that I believe is a role for government is that you need to have incentive so the government allows the

these technologies to be de Gris in other words I believe what we do at our laboratory is reduce the risk of private sector investment and if you if you can get to a point where you’re reducing the risk of private sector investment I think you’ve got the best government policy some of that’s going to be on the front end and some of that’s going to be on the back end but I don’t think there’s any substitute for doing it along the entire spectrum because you simply cannot just put it in the front end and hope that think good things happen it doesn’t not in this environment you need to be participant and perhaps the diminishing role is you get closer and closer to commercialization but there is a legitimate government role in my opinion based on the nature of that of that sector that allows there to be government involvement along the entire spectrum that’s why we have so many industry partnerships it’s about de-risking the technology and now all of them are going to be successful but at least we’re in a position where we can move that technology more quickly it really is about access to capital and moving the technology more quickly and I think those are the things that hopefully will inform good public policy especially for TV football day from the rooftops etc and others large government loans going out to institutions that are producing solar cell to make like that this part of access to capital for people to build Indian community solar array or to get TV on their rooftop what type of creative ideas as n robert capa didn’t work out the ideas at all to you he’s a-hidin copper people that rates this is really hard against the money because right now they’re low especially yet a very very much that’s precisely the point well one of the things that I’ve tried to do well in my tenure at the laboratory I’ve now almost completing my sixth year there is to is to be a resource a resource for the financial community for the policy community for the technology community so that they can go to somewhere to help them make wiser decisions access to capital i think is by by many measures of the one biggest issue that they that all would agree is an issue there’s a number of ways to get access to capital and so one of the things that we try to do the laboratory is I you know we’re not in a position where we are advocating any one policy mechanism over another but we are in a position where we can talk about how this marketplace works based on our relationship with the private sector and based on our understanding of how the technology will ultimately be integrated into that into that into that market place so you know the the the one thing I can tell you is is that you know you want to let the market work as much as the market can work and and and to the degree it needs some level of support then that’s where they were i think the the national programs in the public policy ought to participate so so to the degree that again you can you can recognize that that there is a serious need on the delta both in the multiple valleys of death would call them at various places there’s ways in which you can have kind of minimal government involvement but at least have government leadership part of that is in the regulatory environment and part of that is it you know in the US one of the things that’s being contemplated is a clinton a thing called clean Energy Development Bank CED a it is it is a way in which the private sector can kind of lead a national asset a government asset and so you don’t have the government necessarily being the one manipulating and big venture capitalist but you gotta you gotta more what i would call venture capital like structure that helps you get that same outcome without the direct government involvement it’s kind of indirect of involvement maybe that has some legs to it maybe that’s another way of doing it to get round of all the other tenant issues that we that we face in the number of other fronts but no question that we need to have very very wise and thoughtful government policies the you know one of the things that you don’t want is to try things in the marketplace only to find out that you had unintended consequences that’s really that’s really damaging it sets you back in time so let’s be what more thoughtful is our proposition let’s have strategic energy analysis in a much more sophisticated way that we’ve ever had them before and at least be well-informed about some of those public policies that need to be put into play so I think all of those things suggest you know we as laboratory where resource now aren’t my tent my intent is that we offer you know counsel as to you know here’s a model you dial on this policy mechanism you get this outcome you dial it the other way you get a different outcome that should be a transparent methodology that everyone agrees to and then you can debate the public posture or that or that or the wood of the wisdom of the public approaches but let’s at least have let’s not fly blind and I think that’s too large degree what we’re doing in the past and let’s let’s be more informed so absolutely we need we need investment in

developing this this infrastructure and this this this methodology and strategic thinking around how we use and ultimately generate energy for the future two you