Bill Gates told President-elect Donald Trump last month that energy and climate change provide a "chance for American leadership."
The exchange between the two billionaires occurred in a post-election phone call, the details of which were not originally known. In a brief interview yesterday with E&E News, Gates said he told Trump that there’s a lot of opportunity for innovation generally and that energy can "provide a lot of return" on the right type of research.
"It was a good start of what will be an ongoing discussion, including over time with the people who get appointed to the key roles like Department of Energy," the Microsoft co-founder said yesterday, recalling the short exchange. "I’m sure I’ll be talking to him more as time goes on."
The interview with Gates occurred before it became known that Trump is planning to tap former Texas Gov. Rick Perry (R) to be Energy secretary (see related story).
Gates said he also discussed education and health epidemics with the president-elect.
As to what he would tell Trump about energy the next time they spoke, Gates said he would emphasize the importance of increased federal clean energy research and its impact on jobs and exports.
"The universities and national labs are incredible resources," he said. "I have a view that research in all of these areas is going to be particularly productive in the next decade, because of the digital tools we have that let us simulate things and share information."
According to pool reports, Gates met with Trump again today in New York and discussed energy as part of a "wide-ranging conservation about the power of innovation."
Trump’s views on research and the national labs are not fully known, although a circulated document last week from transition officials to the Department of Energy raised eyebrows for including questions about how much lab research has been successful without subsidies (Greenwire, Dec. 9).
Regardless of what the next administration does, Gates said he is moving forward with his own plans to lead a more than $1 billion investment fund to support breakthrough technologies and companies with the potential to help bring global greenhouse gas emissions to "near zero."
Gates yesterday outlined details of the Breakthrough Energy Ventures Fund, which has a 20-year horizon and is supported by 20 other business leaders like Amazon CEO Jeff Bezos and Virgin Group founder Richard Branson (Greenwire, Dec. 12). The net worth of the investor group is at least $150 billion.
The fund is the next phase of the Breakthrough Energy Coalition, a group of investors who pledged in Paris last year to fight climate change in tandem with governments vowing to double research and development spending over five years as part of "Mission Innovation."
In the United States, Congress has largely blocked that effort, at least for now.
Gates said he hoped there would be more government R&D, as it would generate more ideas for funds like Breakthrough Energy Ventures to support. But "we’re going full speed ahead with BEV no matter what various country policies are," he said.
That includes a plan to begin investments from the fund next year and bring in a management team, with about a half-dozen investments annually in the most promising technologies that meet a dual mandate of cutting carbon emissions and offering a financial return.
Gates didn’t specify how much the fund would eventually spend overall but said he expected the initial billion dollars to span four or five years.
"We don’t know how quickly it will go out, because we need to see something that’s got a good chance of success and will have a chance of having a meaningful impact," he said. "I don’t see much difficulty in getting more money."
Since the coalition’s launch, there has been speculation that nuclear technologies might be a chief investment focus, considering Gates’ financial support for TerraPower, a Washington state-based nuclear power company. Many of the other investors in the coalition, like Branson, also back nuclear technologies.
But Gates said next-generation reactors and nuclear fusion options could end up receiving as little as "zero" investment from the fund, or as much as 25 percent. There will "absolutely" be substantial investments in lower-cost renewables, transmission, solar fuels and storage, he said.
"On the two parts of nuclear, I don’t know. … We’ll look at it," Gates said.
Debating government R&D investments
One of the criteria for investment is to find technologies that can reduce emissions by at least half a gigaton annually at full deployment, he said.
The fact that U.S. energy R&D rose in recent years is a good sign, he said, noting discussions with Democrats and Republicans in Congress on the issue. Gates said he would make the case to Congress and federal officials that "it really is a good deal to do even more than we’re doing now."
Even so, a report out today from the Information Technology and Innovation Foundation concluded that U.S. federal funding for energy research and development lags behind that of 11 other countries as a percentage of gross domestic product.
Brad Townsend, associate director for energy innovation at the Bipartisan Policy Center, said the fund’s 20-year outlook could be significant, considering typical venture capitalists have a five-year horizon or less. Many of the past challenges with energy venture capital resulted from that short time frame, he said.
"If they’re able to demonstrate an effective, long-term approach that uses private capital to develop and commercialize early-stage, government-funded energy research, they could create a new model for the private sector," Townsend said.
On a media call yesterday, Gates and several other investors said the new fund would be different in other ways, including by working directly with companies in key hiring and planning decisions. Gates told E&E News he wouldn’t rule out investing in promising lab products, in addition to companies.
Gates and the coalition have their share of critics, like Joe Romm, a Center for American Progress senior fellow.
In December 2015, Romm blogged after the coalition’s formation that the world needs 100 times more money for deployment than it does R&D to fight climate change, and that the focus should be on countries like India making decisions right now about coal plants. Priorities have to change, especially considering the election of Trump, Romm said.
"The path to deploy as much renewables as this country wants is clear, and it does not require any of his so-called breakthroughs," he said, adding that deployment also can push innovation in the process.
Gates maintains, though, that the intermittent nature of wind and solar means they alone can’t bring emissions down to the level needed to prevent catastrophic climate change. For that, there need to be major advances in storage and other technologies, he said.
"It’s great that wind and solar are being rolled out. … It’s great that various programs have been willing to pay a premium for those things to help them get down a learning curve," Gates said. "That’s all good. I’m all for that, but we should be realistic on how far that could go."