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BILL GROSS: My solve for X is making solar energy cheaper
than fossil fuels with no subsidies.
So that's a very tall order.
I believe it will be revolutionary and important
for the world.
And I'll explain to you how I think we can get there.
First, I want to frame the problem.
And then I'll tell you the moonshot thinking that I think
we need to apply to succeed at this.
So first, when you look at the different forms of energy that
we get today, hydropower is the cheapest.
But all the good lakes and rivers have been dammed up and
have been used.
We can make hydropower for about $0.03 a kilowatt hour.
Next, we have coal, just about $0.05 now.
Natural gas is coming down close to that
price, but still higher.
Then wind, and then solar, which is up near $0.20, just
barely getting below $0.20.
So all the solar that's been deployed in the world that has
been connected to the grid has been subsidized by some kind
of government or some other form of incentive.
In the United States right now, we have a 30% investment
tax credit that drives down the price of the
$0.20, closer to $0.14.
That's still higher than the $0.12 we pay for retail
electricity in California.
So what you have to do when you want to build a power
plant and put that electricity in the grid is you have to get
a permit to increase the cost of everybody's electricity
from $0.12 to 12.1 cents.
And of course, people don't like that.
If you could actually make the power for less than the price
of fossil fuels, this would take off at a scale beyond our
imagination.
So what do we have to do to get there?
Well first, PV panels have been coming down in price
dramatically over the last few years.
But the total install system price has not been coming down
fast enough.
So there's a lot of other things that are complicating
the price of the systems that's not allowing us to get
down the cost per watt or the cost per kilowatt hour low
enough fast enough.
Next, if you compare the two major methods of converting
sunlight to electricity, photovoltaic on the left and
concentrated solar power on the right, photovoltaic panels
cost about $224 a square meter to make.
And the mirrors, the high reflectivity mirrors, low iron
glass mirrors that are used in concentrated solar power
plants are only $18 a square meter.
The reason why this ends up being so expensive, though, is
there's so many other costs behind that $18 a square meter
that add up to make them even more expensive than
photovoltaic.
This is one example of a plant that does that.
And its breakthrough thinking is going to be needed to get
the price another factor or three lower, so you can
compete with fossil fuels with no subsidies.
And I wanted to give you some sense
of why it's so difficult.
In the past--
20 years ago, 30 years ago-- people made these huge
heliostat tower mirrors.
And a number of companies recently--
BrightSource, eSolar, and others--
have broken up those large mirrors into smaller mirrors
and put more computer control and less mass.
And that has lowered the price, but
still not nearly enough.
The cost per square meter of installing these systems is
still in the $100 to $200 per square meter range.
Even though the mirror itself only costs $18, by the time
you do everything else to track it and mount it and
install it, you end up costing well over $100 a square meter.
You have to have rows of racks of steel to
hold them all in place.
You need that kind of structure.
You need a gear box to hold it and actuate it.
You need to actuate it accurate to
about 1/10 of a degree.
And one of the very expensive parts, believe it or not, is
this final gear.
The final gear in the gear box has to hold all the torque
load of the wind.
Because if one tooth breaks off that gear,
your system is shot.
So you have to build for the 100 mile per hour
outlier wind case.
And no matter what you do, whatever size mirror you make,
even as you make it smaller, this ends up being quite
expensive to control and track those mirrors.
And then you need to support the mirrors.
You need some kind of metal to hold them in shape.
Whether they're curved or flat, you still need to
support them like that.
And you need to make frames behind them.
And then you need to build a whole power block.
The whole power plant needs a power block and cooling towers
and all the other stuff that goes along with it.
And all of this requires lots of construction and crews.
And all of those things end up blowing your price.
And I alone, just from some companies that I started, have
invested over $200 million in the last 10 years trying to
drive the price down.
I think people in the room here have invested more than
$1 billion trying to do it.
And around the world, many billions of dollars have been
tried to get the price down to fossil fuels.
And we're just not there.
So if we're not there with that, how are we
going to get there?
Well, first, let me tell you about how long
I've had this passion.
When I was 14 years old--
I grew up in San Fernando Valley--
it was the year 1973 when the energy crisis struck.
And there were odd and even number days you had to buy
gasoline, $5 rationing of gasoline in California.
And I just started reading "Popular Science" and any
magazine I could about what was happening in the world of
energy and what could be done.
And I started sketching little Stirling engines and other
things I could do to convert sunlight to electricity.
And I made my first Stirling engine in metal
shop in high school.
And then I started making little
parabolic dishes for them.
And I even started selling plans for them.
I made a little booklet called "The Parabola," and how to
concentrate solar energy with a parabola.
And I copied these at Kinko's.
And I sold these plans for $4 in the back of "Popular
Science" magazine.
I ended up selling 10,000 copies of these plans, which
helped me pay my way through Caltech.
In fact, I think I might even have gotten accepted to
Caltech because I was doing this at the time.
So this had a huge influence on me when I was young.
And that's why I was so passionate about it, but still
not able to get down near the price of fossil fuels.
So I think we need a moonshot for cost reduction.
We need some really radical out of the box thinking to get
the price down.
And for the last year, I was trying to think of what areas
we need to apply that type of moonshot thinking.
And I've outlined these areas.
We need to rethink storage.
And I say this because when you're making a solar plant
and it's only going to run for six hours a day, you can't
afford the CAPEX of that thing sitting idle for
the other 18 hours.
And that's been a real killer in getting the price down.
So if we can come up with cheap enough storage so the
plant can run around the clock, that would be an
important breakthrough to get the price down.
We need to rethink the engine.
After building these power plants with big Bauer blocks
from GE and from Siemens and all the construction costs to
do that, we need to come up with something that's much
more modular, much more install it and forget it, that
can run for 20 years with no maintenance, something that
requires no water.
We have to be able to put these things
where there is no water.
So we really need to rethink how we do the energy
conversion.
We need to rethink the actuation.
If we're going to move something, we need to rethink
how we could move it dramatically cheaper.
And then finally, we need to rethink the installation.
We can't have these construction crews
out there in fields.
If we want to build gigawatts and terawatts of power, we
can't do it with these one-off
construction engineering projects.
You're never going to get the price low enough.
Because the CAPEX of a solar plant is 95% of the cost of
its operation over 20 years.
The CAPEX of a fossil fuel plant is only about 5% or 10%.
The cost over the many years is the fuel.
So you're amortizing that over a long period of time.
Here the CAPEX is all up front.
So you have to come up with some way to make that much,
much cheaper.
So let me give you some examples of moonshot thinking
that I think we need to make, hopefully as instigation for
other things that people can take away, and brainstorming
that we can take to try and really make this happen.
So first on the storage.
The first idea that we've come up with, but there are many
others, is to come up with a form of storage which is
integrated rock storage right in the tower.
So what we do is we put rocks in the tower.
Rocks are as cheap as you can get.
They're $20 a ton.
They're basically as cheap as dirt, because they are dirt.
And you fill the tower with rocks.
You heat the rocks during the day.
And the power plant will run for the 18 hours at night.
You can recover the heat.
You can have insulation around it, so you
only lose 1% per day.
And this will allow you to produce power on cloudy days,
and even a week later with only 7% loss.
So I think rock storage is one example of a very, very cost
effective way to all a sudden get a 24 hour plant.
Second, this new modular engine.
A Stirling engine, as an example, that can be put at
the base of each tower and just produces electricity.
That way you don't have to pump
anything around the field.
You don't have to pump hot fluids.
You don't have to pump oil, molten salt, anything.
You just pump electrons.
You have to make solar more like a wind farm, where at the
base of each tower there's a wire that comes off with
electricity, and not where you have to pump expensive or hot
things around a field to bring them to a centralized turbine.
Next-- and this might be the biggest breakthrough.
We need more thinking around this area.
And it's this.
The realization that when you're trying to concentrate
sunlight, you are really just bending
photons, weightless photons.
And yet you're building this strong structure.
And I explained to you the heavy duty gear you need to
make to be able to resist the 100 mile an hour wind.
Well, one idea we came up with in the last year to try to
breakthrough away from that is to make a retractable pool
cover solar field.
What you do is as soon as the wind is above 25 miles an
hour, you just cover the field.
And all of a sudden, everything you put below the
cover can now be very lightweight.
You don't need nearly as much metal.
The actuation can be very delicate and wire drive.
You can actually actuate the mirrors almost like a
marionette, with very delicate stainless steel cables.
All these things can dramatically reduce the cost
of the field, because now you're no longer
fighting the elements.
You're just hiding from the elements.
And in wind power, wind is your friend.
In solar power, wind is your enemy.
And most of the cost of the solar field is going to
resisting the wind.
And that can be simply avoided by just hiding or
covering the field.
AUDIENCE: But why don't you just keep it covered all the
time with a clear cover?
BILL GROSS: You could use a clear cover.
That would be a possibility.
You would lose 8% of the light going through the cover, and
8% coming back through.
And that might be a possibility as well.
But the basic idea of not fighting the wind and making
something very delicate just to bend the photons, I think
it's a huge new movement.
And I think something like that is what's going to be
needed to get the price where you need it to go.
And then finally, this is what that
actuation could look like.
You could have a very delicate beam.
The mirrors can be pulled very simply.
You can have centralized motors that actuate them.
And now you need very, very tiny motors and drives, not
those big heavy duty gears I showed you.
And then finally, and a nod to Rodney, who's right here, you
need robotic field installation.
You have to get away from cranes and
construction projects.
And what I'm envisioning here is a factory in the back of a
U-Haul truck, with two of Rodney's robots
right in the back.
And what's inside here is an aluminum roll and a
roll-forming machine, stacks of
mirrors, a bunch of actuators.
And as the truck is driving at a mile per hour, the field is
being rolled out from behind the truck.
Now if you could build a PV factory in a truck, you might
be able to do a PV factory like this as well.
But the PV factory has all the clean room
aspects and all the machinery.
And also, a PV factory costs $1 billion for a gigawatt.
This thing costs $50,000 for a gigawatt.
It's way, way cheaper.
$50,000 for the rope, two robots.
$50,000 for the truck.
And you could be basically building way, way higher
volume for way lower CAPEX.
And just from some simple calculations of this, with
this truck moving a mile an hour, going 10 hours a day,
even if you're only working during daylight hours.
And you don't have to work only during
the daylight hours.
Right now we have installed a total amount of 100 gigawatts
of solar in history.
You would be able to do 100 gigawatts a month with a
number of trucks in parallel, rolling out
something like this.
So there actually is the potential, since all there is
is aluminum and glass, and then the rock storage and the
engines, to be able to roll out a lot of this with a
relatively low CAPEX.
And then where does all this lead?
So some combination of all these things leads to you
start off with the old system of lifting up these big things
on cranes and mounting them on the ground.
The mirrors are $18 a square meter.
That's flat.
You're using the same mirror in both cases.
But here you need the crane.
Here you don't need a crane.
Here you need the backing, all the metal.
Here you make the mirror small enough that you don't even
need a backing.
And of course, as you said, if the mirror's underneath glass,
the mirror doesn't need any steel on
the back of it anymore.
So you save all of that cost.
The actuation goes from $45 a square meter down to $9.
The metal frame that goes in the ground goes
from $27 down to $8.
The labor goes from $24 down to $7.
And you're down from $150 a square meter,
basically, to $47.
And at $47, you could finally get to that price.
What all of this leads to is a plant that
could look like this.
You have to make the field four times bigger than you
used to have to make it if you want to run 24 hours a day.
Because for six hours, you'll gather enough energy to run
for six hours.
Now you need three more fields to make enough power during
the day to store it to run for the 18 hours when
the sun's not out.
But if the field is cheap enough, you could
afford to do that.
Where all this leads, when you add it all up, is with these
kinds of moonshot thinking, and many more--
I hope this will inspire more
conversations while we're here--
you could actually get to 4.9 cents a kilowatt hour, 4.9
cents a kilowatt hour with no subsidies whatsoever.
And I still think there would be subsidies.
There might be some price of carbon.
There might be some other government help.
But here you can actually produce solar power and put it
in the grid and lower people's energy bills, not have to go
to the public or the commission and try and get
them to get approval to raise people's energy bills.
Once you can lower people's energy bills with solar, I
think it will take off like crazy.
And I'm really, really anxious about making something like
this happen in the world.
But after a decade of frustration of trying to do
it, I feel the only way to get there is to win on price.
We're not going to win by winning people's hearts.
We're only going to win by beating the price.
And I think moonshot thinking is going to be
required to get there.
Thank you very much for listening.
You've been a great audience.
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