Gates & Thiel both wrong on energy, but who is more wrong? | RenewEconomy

Gates & Thiel both wrong on energy, but who is more wrong?

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Bill Gates accepts climate science, thinks solutions don’t yet exist. Peter Thiel doesn’t accept the science, but wants investment in disruptive energy innovation.

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The major causes of climate change and air pollution are the burning of fossil fuels for electrical generation and transportation. Bill Gates accepts that but thinks that technical solutions don’t exist already and need to be discovered. Thiel doesn’t even accept climate change, but still thinks we need to invest in disruptive innovation in energy. He is one of the leading Silicon Valley lights behind the clean energy tech bubble that failed while enormous amounts of money is being made by people who accept the reality of cleantech and energy.

gates and thiel

What is that reality?

We now have technical solutions for each of the major problems in the solution spaces, it’s just a matter of political will and ongoing incremental innovation.

The major problems are political in nature, not technical. It’s the will to transform and deploy existing technologies and let incremental innovation improve them, which is required.

It’s worth stepping through the major problem spaces and identifying solutions which already exist and where innovation is still required.

Electrical Generation

Generation technologies

This is a solved problem. Wind and solar generation are rock-solid technologies which are now at or below grid parity in many parts of the world and still dropping in price. They will eventually be deployed and provide up to 75% of total global generation. That will take a few decades, and most of the problems pertain to achieving stable and level playing fields and the massive scale of replacement of fossil fuels. Hydro is very solid as well, but most of the best sites have been tapped out and many temperate and tropical potential sites would actually have very high CO2 emissions if developed, so are inappropriate regardless of local impacts on fish stocks and the like. The problems here are continuing incremental innovation, scaling of manufacturing, scaling of logistics, and scaling of deployment teams.

Management and integration

Wind and solar are intermittent but very predictable resources. Dealing with that intermittency is a different grid management problem than dealing with the inflexibility of large nuclear, coal, and hydro plants. This problem has been solved as well, as is shown by Denmarkachieving over 40% from wind energy alone annually with peaks over 125%, Germanyachieving almost 100% from renewables relatively frequently, Spain at 37% annually, Texasgetting 40% from wind alone one day, Portugal achieving 100% renewable electricity for 4 days in a row, etc. The solutions are well understood: build lots of transmission and inter-country and inter-regional energy markets, and put in place better weather prediction such asANEMOS. The problems are getting major utility stakeholders that are attached to large fossil fuel assets to accept the new grid reality (e.g. Poland, Montana, Arizona, etc.) and to get jurisdictions that are historically attached to local electrical independence (e.g. Texas, Ontario) to accept more grid interconnections. There are lots of organizational change issues to work through and there’s lots of money to spend, but the solutions are well understood.


The cheapest renewable energy is the demand you eliminate, and we’ve been getting better and better at this. There’s still room to grow here, but it’s more about implementing solutions more broadly than making up new solutions, just as with generation. Major industrial demand management agreements have been around for a couple of decades. Efficiency programs have cut HVAC, lighting, and similar energy consumptions massively. Smart metering along with time-of-use (TOU) billing is driving businesses and consumers to smarter electricity use choices. Those are being implemented globally. While economic activity is increasing, electrical demand is flat in most economies, which is actually a different kind of problem. There are organizational and political issues, and the issues of funding, but the technical issues are implementation of existing technologies and incremental innovation.



This is both more of a solved problem and less of a requirement than most people realize.

The “less of a requirement” point is straightforward. Grid interconnections and energy markets across larger geographic regions are allowing high penetrations of renewables already without storage of any scale. That will continue and reduce the need for storage considerably. Historically, it’s always been cheaper to overbuild generation than to build storage, and wind and solar are going to be so cheap that overbuilding will occur. Wind is already being used as fast-reacting backup in at least one US state just by underutilizing it. Mixed generation with hydro, biofuel thermal, geothermal, and the like provide a pretty good mix that blends reasonably well. Demand management is already working effectively to lower peaks, and is typically a lot cheaper than storage, so it will continue to expand. The most sophisticated study I’ve looked at ignored several of those factors. Most storage outlooks have been geographically constrained and relatively non-systemic, in they consider storage as the primary solution to intermittency, not part of a suite of solution. My gut tells me that total storage requirement is under 20% of maximum demand, not the higher numbers frequently asserted. That’s still a big number, but it’s important to remember that storage is also an endgame problem, important to finalize decarbonization of the grid and not nearly as important in the near term when we can maintain thermal peaker gas plants while ditching baseload coal and gas.

The storage technology winners are pretty obvious. Pumped hydro is still the biggest form of active storage globally, and there’s room to increase this capacity. Passive hydro — using naturally refilled dams as on-demand generation as opposed to baseload — is growing and will likely see new builds of major continental “batteries.” Then there will be district grid storage for certain classes of load balancing and distribution side demand management. That’s just a price point for batteries, which are fairly obviously emerging as the winner for that use case over some of the other edge approaches, and battery prices are dropping as rapidly as wind and solar prices.


Personal transportation

This is a solved problem technically, it’s just a deployment problem now more than anything else. Public transit running on electricity, walkable cities, and bikeable cities are obvious levers that have been around for ever — it’s just a matter of asserting their primacy as a pattern and getting away from car-centric city planning. Battery-electric buses are spreading rapidly, light rail is almost always electric, subways are always electric. Just do more of that.

Electric cars have reached the tipping point too, with nearly 400,000 pre-orders for the Tesla Model 3 and every manufacturer announcing electric-only cars. It will take a few decades to work through, and there’s some fallout in charge point standards and approaches, but these aren’t major engineering challenges but societal and deployment challenges.

Freight transportation

This one is fairly straightforward too. Biodiesels and carbon-neutral diesels of a variety of types exist, but aren’t economic. Carbon taxes would go a long way to making them economic. That would drive a lot of incremental innovation which would make the alternative fuels a lot cheaper. This isn’t a technical problem in need of a breakthrough, but an economic and political issue.

Air transportation

Oddly, this is a solved technical problem too. There are carbon-neutral jet fuels which exist, are certified for use, and have been used. They just aren’t cheaper than fossil fuel–based jet fuels yet. Once again, the answer there is to price the carbon and drive use and investment in incremental innovations to bring the price down.

Transitioning to carbon neutrality and to clean air actually isn’t a hard problem technically. There are existing very good solutions in every major instance where there is a need. But there hasn’t been political will to transform and there has been a lot of money spent to reduce political will to transform by people and companies that do very well by selling fossil fuels.

It’s deeply unfortunate that Gates is adding to the delay in addressing these issues by promoting an illusory need for energy breakthroughs. His track record post-Microsoft has been very positive except for this. Thiel’s positions are less surprising given his Libertarianism (despite his claims that it is not narrow but nuanced), but his continued influence shows that people continue to conflate a talent for making money in one space with having credible opinions in others.
This article was originally published on Cleantechnica. Re-produced with permission.

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  1. Farmer Dave 4 years ago

    While I agree with Mike’s overall assessment, I think he is too bullish on biofuels. Biofuels come from plants, and the energy content of plants comes from photosynthesis. The problem is that photosynthesis is not very efficient – something between 2% to 5% of the solar energy is converted. Solar PV panels already do significantly better. The low efficiency of photosynthesis means that large areas of land may be needed to grow the large amounts of biomass needed to, say, replace all of the jet fuel currently burned. I would be surprised if such a substitution were sustainable. However, liquid biofuels will have an important niche role, and solid biofuels derived from wood waste will be important as a source of renewable heat.

    • solarguy 4 years ago

      Dave, although I agree in part with your opinion on bio fuels, plants are not the only material bio’s can be made from. Animal fat is a great source also. Methane from sewerage could be a plentiful fuel and crop, food and garden waste is another feed stock. It may go a long way to supplying enough jet fuel.

      However, the one transport form that was left out the article was shipping which uses vast amounts of oil. For that nuclear may be the only carbon free answer and a better use of it than land based nuclear power, which must be avoided at all costs.

      • Alastair Leith 4 years ago

        much as i like the idea of small scale nuclear reactors sitting innocently in the port of every major city in the world, I fail to see it becoming economical compared with power2fuel or power2gas technologies. Maybe the US navy can show us otherwise with there long promised never released CO2 (extracted from sea water) to shipping oil technology (presumably power by a nuclear reactor on a fuel transport ship).

        • solarguy 4 years ago

          Well Alastair, what could power them? What is this power2fuel capper?

          • Alastair Leith 4 years ago

            power2gas is what France proposed for it’s 95% and 100% RE projections in the report their government commissioned last year. So electricity presumably doing some hydrolysis of water and combining the H2 with CO2 to make CH4. power2fuel is something Dr Lovegrove has speculated about to ship RE generated energy to other countries in Asia with limited access to RE resources (Japan, Indonesia) as an export commodity, suggests Hydrogen, which we all know is a very problematic energy conduit but maybe at the large scale transport it’s a possibility. Other synthetically made biofuels/hydrocarbons and nitrogen fuels exist. This org promotes the benefits of ammonia (NH3), but one of it’s combustion products is NOx which needs to be on-processed with a catalytic conversion to N2 and H2O. I’m not a chemist, so heavens knows what liquid fuel will get up but I have my strong suspicions the Hydrogen economy will never arrive, at least in a distributed sense meaning a great number of hydrogen cars and trucks on the road.

          • solarguy 4 years ago

            Thanks Alistair, I thought that was what you were on about. Yes indeed, I know about this well, but you through me off the scent with calling it power2fuel, didn’t resonate.
            The CSIRO in Newcastle were working on natural gas and water to make CH12, by reacting H2o and CH4 at high temperatures by way of CST, circa 1000 degrees c, giving it a 25% higher calorific value than CH4.
            Anyway you may not believe this, but I had the idea of turning H2 produced from solar and wind and H2o into CH12 the same way, but using bio CH4 from sewerage as feed stock instead.
            I agree, the H2 economy may not arrive other than to provide stationary energy needs and perhaps shipping. If we can’t get that to work, quickly enough in the interim, shipping may have to be nuke powered until we find a better alternative, in order to meet carbon target.

          • Alastair Leith 4 years ago

            but yeah it’s a big problem isn’t it — especially for air quality in ports with these ‘luxury’ super-liners. no obvious solutions at present that Im aware of.

    • Alastair Leith 4 years ago

      It’s not just Mike who is bullish on bio-fuels, all the IPCC trajectories have heavy reliance on bio-fuels for “negative emissions” in the later part of the now-2050 trajectories. Totally fanciful in countries like australia that are generally seeing a loss of productive land and production not an increase due to climate change in most areas. Not to mention that there just isn’t that much bio-mass to go around.

      City of Sydney in it’s ill-conceived Precinct Power model where they propose to dig up every street in the CBD and beyond to lay a THIRD energy transmission network using safe, reliable and efficient piped hot water(!) wanted to take in all the bio-waste from a 250km radius around Sydeny to make up what they can’t generate within the CBD boundary using Solar and micro-wind*. To bad if any other municipality in NSW wanted any of that bio-mass, to bad if we wanted a bio-fuels industry to replace oil and petrochemical feed stocks for industry. The BZE transport team was having trouble finding enough bio-mass in Australia for the transport sector alone even after they electrified most of the land transport networks in Australia for modelling purposes.

      * The ridiculous condition on planners to preclude RE generation outside the municipal boarders due to “reliability” concerns was nothing more than a dictate for their mad bio-waste cogeneration concept. Especially given that they’re happy to burn FF to truck bio-mass into the city from as far as 250km away every day

      • solarguy 4 years ago

        Yep, that sounds nuts.

  2. Lachlan Mc 4 years ago

    The agricultural industry is a far more significant contributor than most believe, obviously it differs from source to source but the general consensus is deforestation and cattle production are hugely significant.
    From the US EPA:

    The deforestation and clearing that we see in the Amazon and South East Asia, both being considered two of the most significant “Lungs of the World,” in Indonesia last year with the yearly burn off shrouding SE Asia in smog, feeding the unsustainable 7 billion mouths on this planet. It’s hardly ever discussed on this site and I believe that it should. It’s not just the automotive and energy generating sectors that will undergo a revolution in the next few decades.

    • Alastair Leith 4 years ago

      Well said, Lachlan. The reason Mike Barnard can get away with the claim that Energy and Transport are the two biggest sources of CC is that the UNFCCC accounting methodology used by all national estimates omits, obscures and reallocates many emissions away from the ag sector to provide a reassuringly low number that is anything but accurate.

      In Australia, Beyond Zero Emissions and MSSI found in a very careful analysis of all land sector emissions and sequestration performing the accounting more carefully and using a more appropriate time scale to shorter lived emissions (the 20 year timeframe also used by IPCC Assessment Reports) the ag sector contributes 54% go GHG emissions. The that the Zero Carbon Australia | Land Use Report (LUR) documents that all the land sector emissions, 90% is in the livestock production industry, most of it north of the QLD/NSW boarder in QLD and NT. i.e half our national emissions. The three major sources of GHG emissions are enteric fermentation (ruminants breathing out methane), land clearing and savannah burning.

      The on farm sequestration (reforestation) and dietary interventions (pretty limited) that would be required for each dominant ag type in each IBRA sub-region to offset that kind of ag in that sub-region taking account of soil, rainfall, climate etc is also estimate in the LUR. It’s a nontrivial amount of sequestration activity that shames Greg Hunts so called Direct Action policy and mechanism which isn’t even accounting for livestock emissions in any meaningful way.

      Potentially farmers who have bid as part of a consortium in a successful Direct Action application for funds would be generating more GHGs every year from livestock (and land clearing or cleared recently) than they say they will sequester over time by not clearing other vegetation. Ludicrous situation that only Greg Hunt could crow about.

    • solarguy 4 years ago

      I agree, I have said this before, that over population is the biggest problem this planet has. But of course no one listens.

      • Alastair Leith 4 years ago

        it’s as if it inimical to their lifestyle or something? even BZE who produced the Land Use Report identifying that ag sector in australia is responsible for 54% of emissions (including their sequestrations credits) using 20 yr GWP accounting and will soon be 50% using 100 year GWP accounting have not campaigned strongly on the issue of ag sector emissions.

        90% of this associated with ruminant livestock production. As much as Cowspiracy went the cloak-and-dagger angle (and I would say overbaked the evidence they presented of a large, well organised conspiracy), it was pretty on the money with the deathly silence and obfuscation on this issue from the major NGOs, Governmental agencies and departments, and basically everyone who can’t contemplate changing their lifestyle for the sake of civilisation and preservation of what remains of the natural environment.

  3. Bryan Elliott 4 years ago

    The central conceit of the article is correct: climate change is a thing, we do have the tech to combat it affordably, and the problems are largely political.

    Then the author gets just as wrong: the extant technology we have is mostly nuclear, not wind and solar. Even at grid parity for the technologies themselves, storage is not up to snuff, and represents a serious requirement in a renewables-driven grid.

    • Alastair Leith 4 years ago

      Good thing concentrated solar thermal with thermal storage have cost projections cheaper than coal in suitable locations (like most of Australia for example). Nuclear has had seven decades being paid a kings ransom by all the superpowers to match coal and gas and has failed. It has a raft of other environmental and GHG emissions issues and most importantly is poor at ramping (in a cost effective way at least) to produce ‘dispatch’ energy which is what a grid with high penetrations of RE needs due to the variability of wind and solar and the potential for weeks in any year where turbines are becalmed and CST with storage is clouded over.

      • Bryan Elliott 4 years ago

        “Good thing concentrated solar thermal with thermal storage have cost projections cheaper than coal in suitable locations (like most of Australia for example). Nuclear has had seven decades being paid a kings ransom by all the superpowers to match coal and gas and has failed.”

        The largest solar thermal installation in US, Ivanpah, cost $19.92 / annualized* W. Skipping Watts Bar 2 (because it needed to, effectively, be built twice, with a 20 year gap between them), Comanche Peak was the last nuclear power plant completed in US. It cost $5.81/ annualized W, when converted to 2016$.

        Meanwhile, South Korea and China regularly build nuclear plants at $2-4 / W.

        No, it’s not often cheap as coal ($2-3 / W) – but each plant does offset its power rating in carbon emissions for 60 years. And yes: it’s a _hell_ of a lot cheaper than solar thermal.

        * “Annualized”, or “average power output over a year”, is a much better method to calculate overnight costs, as it takes into account variability, however that variability is dealt with. Storage costs extra, and, given a strategy and variance profile, I can give you a per-watt and per-kWh estimate of that as well.

        • Ian 4 years ago

          What are the costs of permanent storage of spent fuels, low grade radiation waste, end of life remediation, and security and insurance costs of nuclear power?

        • Alastair Leith 4 years ago

          Ivanpah was the first utility-scale CST built in the USA and first by Brightsource I think. Yes, expensive. But the learnings curve already has costs falling. This site has published several stories about costs in reverse auctions for CST with thermal storage (which Ivanpah lacks) and cost projections by developers for the near future.

          This (fresnel type) trough systems by FRENELL is claiming costs for less than coal (assuming a 2013 coal price).

          LOCE for nuclear almost always omits costs that fall to the taxpayer like catastrophic disaster underwriting (can’t buy it on the market so it’s priceless but Gorbachov said Chernobyl cost USSR the cold war and crippled their already extended economy and Fukushima is looking like a very costly net cost to Japanese economy). Waste containment and storage for 100,000 years, etc etc.

          Also in grids that will increasingly have variable generation from wind and solarPV dispatch power will attract a premium value to balance the difference between generation and demand. Nuclear is slow to ramp compared to CST & thermal storage and more to the point it makes it much less cost effective, nuclear likes to run flat-out baseload to make money on it’s massive capital costs.

    • solarguy 4 years ago

      Storage of course is needed, but not as much as you would think at network level.

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