Endgame with Gita Wirjawan - Roland Horne: The Trilemma - Between Energy, Ecology, and Economy

Episode Date: March 13, 2023

Are we trapped in a delusion of decarbonization? How long will the energy transition take? Should we put nuclear power on the table (again)? From a geoengineering point of view, Thomas Davies Barrow Professor of Earth Sciences at Stanford University and Senior Fellow at the Precourt Institute for Energy, Roland Horne explains why we must shift our focus from energy generation to energy storage—and why that will bring the carbon neutrality utopia closer to reality. #Endgame #GitaWirjawan #RolandHorne ----------------- SGPP Indonesia Master of Public Policy March 2023 Intake: [e-mail] https://admissions.sgpp.ac.id https://wa.me/628111522504 Other Endgame episodes: https://youtube.com/playlist?list=PL-... https://youtube.com/playlist?list=PL-... https://youtube.com/playlist?list=PL-... Visit and subscribe: https://youtube.com/@SGPPIndonesia https://www.youtube.com/@VisinemaPict...

The force of people, you know, wanting to improve their life by increasing their energy consumption is going to overpower the force of people who want to move away for fossil fuels. The expectation of how much energy consumption you need or how much energy generation you need to be a modern nation, I think that number will shrink as we go forward. I mean, it really has to. if the population of the planet keeps all increasing, because eventually there isn't going to be enough.

I mean, even now there isn't enough. Hi, friends and fellows. Welcome to this special series of conversations involving personalities coming from a number of campuses, including Stanford University. The purpose of the series is really to unleash thought-provoking ideas that I think would be of tremendous value to you. I want to thank you for your support so far.

and welcome to the special series. Hi, today we have Professor Roland Horne, who is a professor of energy, science, and engineering at Stanford University. Roland, thank you so much for visiting Endgame. I want to start out with a number of questions on how you grew up. You were actually born in the UK, but you spent most of your life both in New Zealand and the United States. Correct. My father is an engineer as I'm

and he worked as a civil engineer mostly in large scale construction. So when we were growing up in Britain, he worked on various construction projects, including power stations and things, he worked on quite a lot. And when I was nine years old, he was engaged to work on the construction

of the Waiyrake geothermal power station in New Zealand and for that reason we moved to New Zealand so I was nine years old so my engagement in Jyrethumal goes back to the family connections for a very long way how did you pick

engineering I think I was influenced by I mean I don't say he influenced me but I was influenced by what he did I was always interested in what he did and it seemed to me kind of a cool

career to actually kind of be building things in. And you did your studies in Auckland. Correct. University or undergraduate and graduate studies. What made you move through the United States? I was looking for a job. So in those days, and perhaps even now, I'm not sure, it was common for young New Zealanders on graduation from university.

either to get married or to save up for a few years and go overseas for a couple of years for experience. It was known at the time as the O.T., the overseas trip, and it was kind of a routine thing that people did. Most of them went to Britain, but some came to the U.S. And at the time, I was motivated by the idea of taking on a faculty position at D.O. University of Auckland, which is where I was, mainly because I think I wasn't very imaginative, so I just was thinking about continuing to do what I was already doing. But to get a faculty position, most of the most attractive candidates to join, you know, the teaching staff of the universities in New Zealand, either had overseas PhDs or some kind of overseas experience.

So I thought, well, going to the U.S. for a year or two would help me find more easily a position at the University of Auckland. So why did you choose California? Just out of curiosity. Well, I tell you this story. I've told this story many times over the years. People asked me how I came to Stanford, and perhaps what they sometimes mean is, how did you come to get a job at Stanford? But at the time, I'd never heard of Stanford. And no kidding.

This is very surprising to people nowadays. Stanford has always been a good school, but in the 1970s it wasn't as famous as it is now. I mean, it was always recognized to be a good quality school. But, you know, the big schools in those days were, you know, Harvard and MIT and Caltech, and Stanford was sort of good but not that well known. And, of course, 1970s, that was, you know, Silicon Valley was only just getting started. Silicon Valley right kind of made Stanford as famous as it as it is today. So I'd never heard of Stanford.

So I was looking for a job. And in those days, when you did research and published papers, you know, we didn't have the internet. We didn't even have so many copy machines. Xerox machines were expensive and rare. So what we used to do in those days is when you published a paper in a journal, we had in our office these postcards with our address on the back and you would mail a postcard to the author of the paper and they would mail you back a what they called a reprint of the paper.

So when you published a paper, the journal would send you 25 copies that were separated that you could mail out to people who asked for copies. So I had published a paper while I was a graduate student in Auckland. One of the best papers I ever wrote, by the way. It was a good one. So I published that paper in mid-1970s, and I received about 30 of these postcards requesting the reprints.

So when I finished my degree a year or a year and a half later, I wrote, and so I sent the reprints. So then I wrote back to all the people who had sent the postcards. I said, well, I hope you like the paper. And by the way, I'm looking for a job. And one of the requests had come from, Sanford and the guy replied, yeah, well, come on over. Come on over, yeah.

So I did. And this was to teach what field the game. I was at that time. So he was in, that was George Hamsey, who was a professor in chemical engineering, who worked in the field that I had written the paper in, which was fluid mechanics. Right. And he managed to swing some funding for me in chemistry. in chemical engineering

I was my degree is in engineering science which is kind of applied mechanics actually but he he brought me here in chemical engineering but in order to raise the money sufficient money for my salary which wasn't that big but he he sold a piece of me

to the petroleum engineering department so I was acting assistant professor in chemical engineering but I taught a class in petroleum engineering a geothermal class actually interesting times in California at that time

yeah it's a different in the oil industry right it was so I mean that was right between the two energy shocks so we we had the energy shock of what 73 or something like that followed by you know the Iranian crisis thereafter so there were two energy shocks

79 was the Iranian crisis and before that was yes I came in between 73 was the first one. So at that time, that's when renewable energy in general, geothermal specifically became big in California. There was, interestingly enough, influenced strongly by Ronald Reagan, Republican governor of California at that time, and he kind of opened the door in many ways for regulation for wind and solar and geothermal in the state of California. And of course, the same thing happened in the Philippines and in Indonesia too.

Right. That's when the GIFEL Industries in all three places began, more or less. I want to get into this space in a bit, but I want to go back a little bit to New Zealand, where, you know, people out there would have referred to renewables as a space program. Yes. As the Americans would have alluded to, right, in the 60s and 70s. How did that come about? Yeah, so for, in New Zealand there's a small country now, and it was even smaller then, you know, population at that time, maybe two million people. And mostly farming-based was the economy at that time. And for, you know, for engineers, the principal activity, I mean,

the big activities in New Zealand engineering were large construction. projects for energy, hydroelectric projects, for example. So if you were, you know, if you were an engineer in New Zealand, the most exciting things going on were large-scale construction, mostly of hydroelectric dams, etc. But also geothermal. And geothermal was, you know, was kind of cutting edge because it wasn't understood at that time very well. Wyrrachy geothermal power station was basically the second in the world, the first liquid-dominated fuel in the world. Yeah, so geothermal was a new technology. The Italians had developed vapor-dominated systems, but liquid-dominated systems were new.

So there was a lot of science and technology being developed for geothermal. So that really was, as you say, that was our space program in New Zealand at that time. If you wanted to do something that was leading edge in technology, do it happen? I mean, was it propagated by the leadership or it was just something that the civil society took ownership? With that made it. Well, you know, at that time, you know, all of those big projects were government run. You know, all of the power systems, in fact, New Zealand was a, it's perhaps incorrect to call it a socialist country.

It was a welfare state, but it was, the government was really the only institution big enough to undertake large projects. and so they all were. And all of the electrical generation and reticulation system was all government run. So I don't know at what point they began interest in geothermal. I mean, they've been building large hydroelectric projects for some time and continued to do so after that as well.

But somewhere along the line, somebody thought geothermal might be a good idea and undertook that. It's very curious because the economics would have been very compelling for the other alternatives, right? Well, there were, the hydroelectric projects in New Zealand are very large scale. I mean, they were moving, you know, rivers and hands. And water through tunnels and dams. I mean, there were very large-scale projects and continued to be so. One of the peculiar things about the Waraki geothermal development was that it grew actually from the British nuclear program.

So the Waraki Power Station had three stages of turbine, ultimately had three stages of turbine, high pressure, intermediate pressure and low pressure. And in the original design, the intermediate stage was intended to be a heavy water general general. plant to provide heavy water for the British nuclear program. And by the time they eventually constructed it, the heavy water moderated reactors were no longer, you know, required. So they replaced the heavy water plant with intermediate stage steam turbine. So whether or not it was originated by, you know, the British nuclear program, I'm not quite sure, but they were certainly part of it in its initial.

you know, discussion and design. And oil, gas, or coal were never part of a conversation? No. So that was in the late 50s and interest 60s, so oil and gas was sort of considered to be, you know, just available at that time.

New Zealand had some coal and even a little bit of oil, but at that time, oil and gas was not part of our economy. You know, you've got what, renewables making up about 80% of the energy mix? Is that likely to go to 100%? I imagine so. So, you know, there's a large scale coal plant in New Zealand, I think just one. There is coal in New Zealand, but that's more than 30 years old now, and I can't see

much enthusiasm for that. And in actual fact, in the 70s, they discovered a quite considerable natural gas field, two of them actually offshore, the North Island. and so they reticulated that gas to city gas in Auckland and Wellington, and the pipeline went past that newly built coal-fired power plant, and they converted it to natural gas. So it only started burning coal, surprisingly, in the last 10 years or so as the natural gas is being run down. So those natural gas fields are reaching end of life,

so natural gas is going to be a kind of disappearing resource for New Zealand. and the geothermal was kind of static for a long time because of the costs and the uncertainty. Not terrible, but not comparable to hydro and the natural gas. So what happened over time was that they explored and had ready many geothermal resources in museum, much like happened in Indonesia too. But they just left them on the show,

But starting in 2000 or so, they started then, you know, re-sortizing the industry. And a lot of geothermal resources have been built in New Zealand over the last 20 years. It's expanded quite a lot up to 22, 23% of the total power. Wow. And the remainder of the 80%, as you referred to, renewable is almost all hydro. A little bit of wind, a little bit of solar, but not a large amount. I want to take this to a more macro level in the context of the trilateral. Amongst climate crisis, energy crisis and economic crisis.

What are your views about where we're headed going forward? In the world, as to achieve sustainability. That's a pretty broad question, but we can deep dive. I can largely only speak to the energy market. I mean, obviously there's food and water and all of other things that are equally important, if not more so. But speaking about the energy field, so we have, as you know, primary energy of the planet is two-thirds, at least, fossil fuels. Right.

So all of that has to be replaced before we can achieve either sustainability or address climate change. And exactly how to do that is not clear even to, I think, energy professionals. So, I mean, the oil and gas industry

setting aside coal for the moment, the oil and gas industry by itself is the second largest industry on the planet. And you don't sort of shut it down overnight. So, I mean, I think what we can and will most appropriately do is to draw back from oil and gas. So it will be replaced piece by piece over the next, I don't know how long, but probably 100 years. You know, I think it's a common misconception, you know, in the public eye sometimes saying that we should just stop tomorrow and do solar instead. And we should do that. We should replace oil and gas by other renewables, including solar and geothermal and others.

But it's not something that you can do overnight. But California actually is a good example of how fast you can do it. California has succeeded quite well in putting renewable energy in. And probably on a normal day, we get up to 30 percent renewables. You know, on a good day with geothermal is about, what, 8, 9 percent? Theothermal is 6 percent of our electric production in California. But, you know, a few decades ago there was this fantastic. piece on peak oil, right? Would the scenario now be different from how people would have

pontificated back then? Well, I mean, at the rate that we're seeing, you know, the rate at which renewables are growing, it just seems within logic that, you know, there is no such scenario as peak oil. I think there will be. So, the The common misconception about peak oil is that there is one peak oil, but actually there are two. So there is a peak in discoveries, and there's a peak in production. Yeah. And the peak in discoveries actually is long gone. It was probably 2005 we reached peak in discoveries.

But typically, you know, oil and gas fuels last for some decades, and therefore we, we can see the peak in production which follows. In the US, it was probably 30, 35 years after the peak in discoveries. We obviously have, I mean, that's the simplest of explanations, but there are variations to it. So, tide oil, shale gas and share oil was something which was, in many ways, unexpected. So that's kind of a, that's kind of an increment that got added on. to what otherwise would have been the peak. Without shale oil and shale gas, we would have passed a peak in production

probably 10 years ago. But the addition of, you know, billions of barrels of reserves actually extends the peak. But it doesn't extend it forever. And, you know, the hope that people had, you know, 5, 10 years ago that shale gas and shale oil,

like we have had in North America, could be propagated elsewhere in the world, has not eventuated. I mean, we do have shale gas and shale oil production in some other places, but in a modest way, nothing like we've seen in the United States. So as you undoubtedly know, the production characteristics of shale wells,

even in North America, is very fast. They run down very quickly. They have no useful life of four or five years, something like that. Okay, wow. So they're keeping on drilling them in the hundreds of thousands, but eventually you kind of run out of the capacity

to do that. So shale gas, shale oil has tremendously expanded the US, well, gas production, doubled it. However, it's not sustainable. Well, they seem to have been able to bring costs down, right? extraction, production, all that stuff. They have. But that's on the supply side, but what about on the demand side?

Do you see that peaking at about 100 million barrels a day? You see that declining in the next couple of decades? I famously gave a talk about the future of oil in 2008, as far as I remember. and I predicted that. At that time, I think the world oil consumption was 83 million barrels equivalent, oil and gas. And based upon the peak predictions of discoveries, that was sort of before shale or shale gas. You know, I predicted the world would never consume more than 90 million barrels a day. And I said that, which I subsequently regretted.

I don't know what we're at now, over 100 already, 103, right? I think so. Well, a forecast are made to be revised. Yep. So I don't see an expectation that the consumption demand will kind of overpass the supply. And I know others have said, other than that, you know, people have said, well, you know, all of the oil is going to be stranded in the ground because nobody's going to want to buy it. But I honestly don't see that happening.

I mean, it could well be that in some societies, you know, it comes to be considered unacceptable to use oil and gas. I mean, we're sort of moving that way in California. However, it's a very large ship to turn. You know, here in Palo Alto, you know, 35% of the vehicles sold in last year were, yeah, electric. or plug-ins of some kind, which is great. But two-thirds of them were not. And Palo Alto probably has the highest concentration of plug-in vehicles on the planet.

And there are plenty of places where, you know, people can't afford electric vehicles at the moment because they're too expensive. And there are many places where you have people, you know, moving out of poverty into the middle class. China is a good example of very large numbers of people doing that, but not only China, many other places too, for which the cost of non-fossor fuel transportation is just not imaginable. You know, they have no alternative or don't see an alternative to doing that. So as we have billions of people, you know, moving up the economic scale,

that I think will increase demand, not reduce it. So even though there are places of more forward-thinking people who will move in that direction, there are a large fraction of the population of planet doesn't have that choice or doesn't see that choice or doesn't choose to make that choice. So I think we will exceed 100 million barrels of oil production for some time

and probably increase more from where we're at. If you take a look at the EV guys, they seem to have been able to bring down cost quite significantly in the last 10 years. Yes, battery costs, but some even have broken a parody with ice, right? And it seems that it's going to continue to come down. So it would boil down to the economics, right? at the end of the day.

I'm with you in a sense that I think with respect to maybe some of the developing economies in the world, it's going to be a lot tougher to embrace this new paradigm. But, you know, places like Norway, they got 90% of the cars sold or actually. Or literally, yes. Right? And if you talk to the big oil and gas players, their narrative seems to be more of a transition, as opposed to renewability. Correct.

Explain that. Yes, so you're right. That is, you know, the field that we are playing in, currently in the oil and gas industry. So, you know, our research groups here at Stafford changed, we changed our names from Supri, Stafford University Petroleum Research Institute to Sue Tree, Stafford University Energy Transition Research Institute. And that's what people are doing everywhere.

So, you know, the oil and gas companies themselves understand that they won't be producing oil and gas forever, and they're looking to diversify their activities for other kinds of energy production, including geothermal, but not only that wind and solar as well. So that's the transition which is taking place. So I don't disagree with that at all. I just don't think it's going to happen very quickly. And so you have two forces. You have a growing demand from people moving up the economic scale planet-wide,

and you have a demand, you have a force which is pushing away from oil and gas, away from fossil fuels towards renewables. And they're happening at the same time. I think, however, at the moment at least, and probably for, you know, a little time, I don't know how long, 10 years maybe, the force of people, you know, wanting to improve their life by increasing their energy consumption is going to overpower the force of people

who want to move away for fossil fuels. But there's no question in my mind that's ultimately going to happen. And it's going to be driven by, you know, like in Europe, for example, California too, there's no more internal combustion engine vehicles after a certain period of time. So that will dampen the demand.

However, I mean, you recognize what will happen is that if boiling gas is less demanded, the price would drop. Once the price drops, then, you know, the burgeoning economies of the world will sort of swoop in and demand more. So it's a regulating system. It will work on both sides.

You know, if we take a look at most of the developing economies, they're structurally limited in terms of their fiscal space. Right. If anybody within that camp of developing economies, they want to encourage a lot more people to adopt this new parents. I just don't see them structurally being able to fiscally support because, you know, with the developed economies, there's been serious degree of subsidization by the governments, right, for people to adopt this new paradigm.

So at the end of the day, it's going to boil down to the cost structure of either alternative. But I'm somewhat optimistic in the sense that technological innovations to assure much more efficient, you know, renewable alternative is there. You know, it's in the horizon. Yeah, I agree. I mean, I think the technology is undoubtedly there, and it's getting better and it's getting cheaper. So we're on a good path in that direction.

It's simply a large problem to overcome if you have to do it nationwide and planet wide. I mean, I do remember the first times, you know, going to Indonesia, you know, 30 years ago, it was just considered normal that every, you know, large office building or facility had its own diesel generator. Yeah. Because they, they couldn't rely on the infrastructure for electricity, you know, transmission. Within the renewable space, so you alluded to the fact that in California, California, hydro was not legally classified as renewable.

Correct. That's true in many parts of North America and in other countries too. Why is that? I think it's political as much as anything. So during the 70s, when the governments were encouraging renewable energy development, they did it with, you know, with fee tax rebates and fee reductions and things like that. that to encourage new renewable developments. And the honest answer is I don't know why,

but this is my speculation was that at the time, there were many, and still are many large hydroelectric projects. So the people around them said, you know, could have said, okay, we're renewable, give us the rebates. So that was, you know, by not classifying large hydro as renewable, they've never been really accessible for tax advantages and things like that, feed in tariffs, etc.

Small hydro is, but large hydro is not. So currently, somewhat paradoxically, small hydro is classified as renewable, but large hydro is not in California and in several other places, many other places. Talk about the landscape within renewables. You've got hydro, you've got solar, wind, geothermal, and all that good stuff. how are the dynamics amongst these and how do you see them moving forward? So they don't compete if, you know, by dynamics you mean sort of market dynamics. Which is likely to grow more than the other.

Interesting question. So they have different characteristics. So solar is intermittent on a more or less predictable fashion, you know, night and day. Wind is intermittent on a less predictable fashion, but based upon the weather. And actually, hydro is kind of intermittent too on the decade scale that we have, in California at least. You know, we've had drought for the last three years, so hydro has really dropped considerably. Then we have a big old rain like we just had, and then hydro is looking good again. So we have these different levels of intermency.

and what that means is that no one of those resources can satisfy the market by itself, and what we need is all of them at the same time. Geothermal, of course, runs all of the time. So the combination of those various renewable resources is a good thing. It's a necessary thing for the grid to actually work. In terms of how they develop what we have seen over the last few years, you know, solar has grown cheaper and cheaper, and that's the reason why it's expanded as rapidly as it has.

However, we're coming now, we've already reached a point now where California, at least, is kind of saturated with solar. So, you know, at 1 o'clock in the afternoon on a sunny day, we have more electricity than we can use to the point the price can go negative. So solar is sky. kind of maxed out in its classic format and the technology now required to make more solar is storage currently based upon batteries. So solar now joins the, you know, is joined in the partnership with battery storage to keep the kind of growth curve. But that of course makes it more

expensive. Right. And if you have a, if you build a solar farm that you can't run all of the time, because you got excess during the middle of day, then of course that lowers the income from it and it increases the cost. So again, it's a kind of a self-regulating market that once you go, when you get past the point that you're generating electricity that you can no longer sell, then its costs go up to the point that you don't build anymore. Wind has increased. Actually, wind grew first in California because at the time it was cheaper than solar.

But wind has kind of leveled off somewhat too. I think mostly in competition with competition from solar, which became cheaper. So that kind of crimped somewhat the enthusiasm or expansion for wind. But as the cost levels kind of go up and down, your wind obviously has still capacity to be built further in California and many other places too. You know, if, you know, on the assumption that some of these renewables are actually interming in nature, that makes it difficult for supply and demand to intersect. Yes. And I was talking to some people the other day who are thinking of, you know, taking advantage of this scenario. This could be a tradable commodity, right?

And how real is that? I think it's actually working that way already. So, you know, there are people on the market who, you know, will have a picker plant, gas pig plant with no other idea in mind that they may run it, you know, for an hour, every couple of days just to fill in a gap somewhere and get, you know, $5 a kilowatt hour for the, you know, just filling in a gap when it's most needed. So there are people who are making bets on gaps in the market. You can actually approach anybody with a wind turbine, anybody with a solar panel,

even anybody with an EV to the extent that there's access energy. Let that be redistributed, you know, for other purposes and stuff like that. And that, I think, is not sure if that. That's an exciting future, but that's something that that probably needs to be thought of. Certainly, yeah. I mean, the integration with EVs in particular. So if we substitute all of internal combustion engine cars with EVs, then you have a significant demand for electricity in order to make that work.

You know, not an overwhelming demand. It's not as big as actually people imagine it to be. However, it's large. So from that point of view, you have to think about when you're going to actually charge those vehicles. And it's obviously a good time to do it would be at one o'clock in the afternoon when solar is at a max. Unfortunately, that's not when people want to charge their EVs. You know, it's most convenient to pull in the garage a night and plug it in at 6pm, which of course is actually the peak to mind. for electricity.

It used to be, interestingly enough, 10 years ago, PG&E, who supplies electricity to the northern, not right, us here, but a bit north of here, San Francisco, they introduced, you know, time of day pricing on their grid, and people who had EVs could program their cars. They plug them in, but they programmed not to start charging. until midnight. So after midnight, PG&E actually sold the power at a lower price because the demand was low, you know, they had had plenty of capacity on the grid. That is no longer true. So the, you know,

the cheapest price is not after midnight. I actually don't know what PG&E sells for now, but you know, in the middle of the day, you know, on the statewide grid, we can have negative pricing. That's when the cars should be charging. But unfortunately, they're not at home at that time. I want to ask you about the grid. What the consequences are with respect to the grid in the context of how we're seeing solar growing so fast and how it's getting democratized, right?

To the extent that it's going to get so much more democratized, the need for the grid will decline. And to the extent that even geothermal, you know, geothermal heat pump capabilities, you get a lot more democratized within residential areas at least, then the need for the grid is also going to decline. Well, the need for the grid will change, that's for sure, in its character.

So currently in California, the solar, so-called behind-the-meter solar, which is people's rooftops, you know, they're generating electricity, but it's not coming through their electricity meter. If it does, it goes in the other direction. It's more or less similar in capacity to the grid-connected solar. It's somewhat less, but anyway, they're the same magnitude. So there's a lot of behind-a-meter solar,

which is belonging to individuals or is supplied anyway directly to individuals. And from that point of view, you're right they don't need the grid. However, that's only eight hours of the day. So there are two reasons why we still need the grid. One of them is because people who are generating rooftop solar need to be supplied for the remainder of the day. And then secondly, we need the grid to take advantage of the excess electricity that those distributed sources are actually generating. But you're right, overall, you know, if everybody had solar panels, geothermal heat pumps.

Yep. Sheathor gas source heat pumps, then they could be kind of independent for part of the day or maybe, you know, in increment or the totality of their energy consumption, they could supply their own. So they could be actually borrowing from the grid during the night and supplying the grid during the day. So they could be a component of the distribution rather than just a consumer. I mean, technological innovation is only likely to take us to a point where there's going to be enough energy absorbed by the solar panel during the day for all 24 hours.

Yes. So storage becomes the technology again we need. And if there's a need for a grid, that would be for basically redistributing that access energy for other parts. purposes, right? So it just seems existential for the pre-existing grit. Yes. I don't believe, however, that it's going away. Oh, no, no, I'm just not any times. It's certainly going to change. Yeah. Talk about geothermal. Why is it growing at a less rate than solar. It's more expensive.

Simply spoken, but not in the long run, though, right? Correct. So, you know, the older geothermal systems have made billions of dollars. You know, the California generation and those in Indonesia too. Very profitable operations, actually. The difficulty with geothermal is the geothermal uncertainty. So the problem is that you have, when you build a solar farm, you have a certain number of panels, you have a good understanding of what this insulation is like, in other words, how much sun is going to shine over the course of the year.

So you can predict with good accuracy how much electricity are going to generate. And eventually you can do that with geothermal tube, but it probably takes you a number of years and some hundreds of million, dollars to discover exactly how much is going to generate and how long it's going to last. That's my field, actually, is geothermal reservoir reservoir engineering, figuring that out. And so if you are a banker or a company wanting to invest in electricity generation, geothermal is a riskier bet. It may ultimately be more profitable. It may ultimately be cheap electricity.

but you don't know that in advance. So it's one of the reasons why resource companies, like oil and gas companies, are a good fit for geothermal development because they understand it, because oil and gas is exactly the same. You never know exactly what's going to be there. So resource uncertainty is, I think,

the principal difference between geothermal and wind and solar. Would it be higher risk than oil and gas? Similar. Similar. Well, it differs in an important way, in some ways. So if you're in an onshore environment in oil and gas, you drill a well, you find some oil. You can sell it for $100 a barrel tomorrow. So then you have an income stream.

Geothermal isn't that way. So you can drill a well. You find some steam. you have potential to generate electricity. However, you can't sell it yet. So you have to drill 20 or 30 more wells and you have to spend $200,000 to build a power plant and a steam gathering system, etc.,

before you can make any money. So your upfront cost, your capital investment has to be upfront and it has to be paid up two, three years in advance before you can actually start taking income. How much is, in terms of capacity installed already, would it be like, what, in the tens of thousands of megawatts? In the world?

I think 12,000 megawatts is our current capacity, if I remember correctly. And the biggest would be in the U.S. Yes, U.S. is 3,000. Indonesia is in excess of 2,000. Philippines, 2,000 also. Okay. And Indonesia is the largest geothermal resource or has the largest. Potentially, okay.

What would it take for countries like Indonesia, you think, to jump on this bandwagon? Capital. I think the only thing that's holding Indonesia back is, you know, access to large amounts of capital. I mean, obviously, if you're the government of Indonesia, you have, you know, many, things that you need to spend your capital on. You know, you're a large population, you've got a thing about food and transportation, etc. So, you know, I'm sure there's plenty of capital in the nation, but it's a question of prioritizing what you're going to spend it on. Well, there's capital, but there is a lot more capital outside Indonesia.

Yes, I'm sure that's true. My question is with respect to what would it take for all kinds a capital to participate so that, you know, it does become, you know, a pretty successful narrative from a sustainability standpoint. I, well, that's a financial question to which I'm not really expert to answer. But I think that what other countries have done usefully, and of course Indonesia's did this too, both in oil and gas, energy or thermal, is to bring in outside, you. concessionists who provided the capital and developed a resource and then receive, you know, income from it. It's a structured arrangement.

But it means then you have outside agencies who have the capital that you don't have to supply it for yourself. It's obviously advantageous ultimately on a successful project if you supply your own capital. However, you've got someone else who takes the risk in a build, operate, transfer way. that can be very effective. That's been done. It has been done in Indonesia. Weying windows an example. Right.

To what extent would tariff matter? I'm sure that helps a lot too. So, you know, building tariffs are the mechanism that have been used in many countries, Japan, Germany. For beans. Yes. And developed geothermal. The U.S. doesn't do it quite that way. Production tax credit is how it's done here.

but that's worked well as well. It was starting 10 years ago when production tax credit first got applied to geothermal, that sort of accelerated development a lot. And of course, production tax credit was supplied to wind and solar before that, and that's, I'm sure, contributed to the expansion that we've seen there too.

I mean, some of the international capital holders and technology holders, have decided not to stay in places like Indonesia. One argument would have been tariff related in the sense that it's not as perhaps appealing as in some other countries. The economics do matter right at the end of the day. I'm sort of like in the camp that things and believes that, you know, until and unless that gets recalibrated,

we're not going to see critical mass. And I want to put this in the context of You know, how nations like Indonesia would like to be a modern nation, right? Right now our electrification is Probably to the extent of between 1,000 to 1,500 kilowatt hour Countries like Singapore are at about 10,000 kilowatt hour If you want to be a modern nation, you need to be at least 5,000 kilowatt hour So you need to basically multiply your pre-existing power generation capabilities by five times.

And we have what, about 72,000 megawatts worth of power generation capabilities. Most of that is basically carbon emitting, right? So if you want to be a modern nation, you need to multiply by five, you need to build a delta of about 270,000 megawatts. at the rate of only building 3,000 megawatts a year. Most of that is in coal. You know, our kids and grandkids are going to have to wait a long time, about 90 years, right? 270, 280,000 megawatts divided by 3,000, that's about 90 years.

What do you think could be the solution for developing nations like Indonesia to become modern nations within our lifetime? Because you need something that's clean, something that's scalable. Geothermal, I think, could be of scale. Right. Yes, so geothermal Indonesia specifically could, is reported, I think, believably so, to be able to reach 20,000 megawatts. Right.

Which is, would make it. It's now 2,000, right? So you need to multiply that by 10. So that would be hugely greater than the United States. But that's not going to happen quickly, and it's not going to increase your national capacity by a factor 5. In fact, it's going to increase it by 25%. So geothermal alone cannot do it,

although it's certainly one of the steps that could be taken, should be taken. So how do you get the rest? It rains a lot in Indonesia. I had noticed from a person experience, so hydro seems attractive. But the supply is on the other side, the demand is on the opposite side. True. How do you?

Well, I think they go in both directions. So, you know, what you have in Singapore, the example you gave, you know, a nation which is almost exclusively, you know, a consuming nation, Right. Yeah, it doesn't produce anything other than people and ambition. So you can sort of move, I mean, the demand and the supply can actually go in opposite directions as they have in other places. That's perhaps an oversimplification, but state of California has an energy demand today, which is almost exactly the same as it was in 1980 per capita. The rest of the United States is double today what it was in 1980. So California, by regulation as well as by culture, if you like,

has stabilized its energy demand at a specific level, more or less, roughly speaking. perhaps in the future we can start to take it downwards. So therefore the expectation of how much energy consumption you need or how much energy generation you need to be a modern nation, I think that number will shrink as we go forward. I mean, it really has to, if the population of the planet keeps solid increasing, because eventually there isn't going to be enough. I mean, even now there isn't even up.

So, demand will go down, not hugely, but anyway, it will creep down. It's still going to be like kilojoules. Right. And the production has to increase. So I've been holding back on this word called nuclear. Because that's something that somehow a lot of people around the world are afraid. to mention, right? And I just see that as a possible alternative in terms of scale and cleanliness. And put that in the context of what we have to achieve by 2050, 2040, 2030, 2050,

you know, carbon neutrality, absolute carbon neutrality, we're just not going to get there until unless we do something a little bit different, if not starkly different from, you know, pre-existing paradigms. We need, for sure, a huge amount, a tremendous amount of energy production, which is not fossil fuel generator, you know, from somewhere, okay, and a number of alternatives for that are few, and nuclear is one of them. at the same time so that's

the economic and the sort of the engineering answer but we also have to consider the social aspect of it as well so however sensible an idea nuclear is

there are many people willing to reject sensible ideas for various reasons of their own we have not the United States has sort of gone full circle twice on nuclear there was tremendous enthusiasm in the 60s and 70s 100 nuclear reactors

running in the United States but the last one was built in the 1970s and then the reaction against them built up to the point that they no longer became viable three mile island was a point. But starting in the 2000 to 2000s before 2010, you know, nuclear started

going back on the table. You know, companies were making plans to actually, you know, not talking about, they were making plans to actually build new nuclear power plants in the United States until 2011, which was Fukushima. And suddenly all of the enthusiasm instantly disappeared. And of course, not only in the United States, but in other countries, suit Germany. Right. And even in France, which depends critically.

70%. Yeah, 70%. And they're done okay. But even there, you know, they had some very innovative ideas for fast-breed reactors, which ultimately got crimped. Actually, before, Fukushima.

You know, the data that I've looked at, suggest that, you know, the number of casualties by way of nuclear in the last few decades would have been about 3,000 to 4,000 people per year compared to air pollution, which would have cost about 7 to 8 million debts per year. However, I just don't see any practical solution for a lot of developing countries out there until and unless we start thinking about game-changing the pre-existing energy equation. And that inevitably would have to involve a nuclear narrative.

I guess we want to wait 90 years to become modernation. I think that's true. From an engineering technological standpoint, that's true. You know, we face this problem in almost all technologies, including geothermal. you know, there's strong resistance against geothermal in some countries, Japan being one of them, because of the concern about the loss of hot water production

for spires and hotels or whatever, which people care about a lot. In other places in Europe, the concern is in due seismicity. So there are technological or social concerns against many of these technologies that cause them to be, slowed down to an engineer like me. What that means is, you know, address the technological challenges.

You don't just say, okay, well, that's horrible. Forget about that unless you got some suitable alternative, which I don't think we do. And I think nuclear is in that category too. technologically, there needs to be solutions for the challenges that people are concerned about. Whether or not those will be sufficient to kind of pacify people's concerns, I'm not so sure about. I was in Tokyo in March of 2011 and saw Fukushima nuclear plus. explode on live TV. And I have to tell you, that was one of... Pretty scary.

One of the scariest moments of my life, knowing it was 200 kilometers from where I was at the time. I went there just a couple of months. We'll be to see the consequences. But, yeah, I'm just, you know, sort of like spinning my head on how do we make sure that this planet becomes more environmentally friendly? I mean, we become more environmentally friendly with the planet and how we modernize properly. Because there's, you know, we're not Norway.

We're not in the United States. I mean, there's a lot of people in the world that are like, you know, countries like Indonesia. How many times have you been to Indonesia? I do remember. I used to go once a year, probably 30 times. I don't remember. Tell us what would have been the most interesting moment you had. I mean, you've taught there a couple of times.

times, right? Yes, I used to go every year, until 2015, actually, when the Ormbrite, I used to teach well-test analysis for a company in Jakarta called LDI Training. And they first invited me in 1990, and I did it every year. And sometimes I taught twice. We taught a geothermal class as well. Used to always be in Jakarta, subsequently in Bandung a couple of times I taught in Jog, Jakarta and Bali as well. but one of the most interesting experiences I had was

they used to always use the Hilton actually no longer called the Hilton in Jakarta but on one particular occasion the Hilton was full when they wanted to have the course and they had it instead in the

one of the other big hotels Shangri-Lah Okay. Something like that. Anyway, they had a nightclub in that Shangri-La. And again, I don't know what was going on in Jakarta that summer, but there was all of the hotels booked,

and all of the meeting rooms in the Shangri-La was also booked. So they had the course in the nightclub. I'm sure everybody was paying attention. During the daytime, of course, they weren't otherwise using it. So we had the... That's a new idea. So I had the class there. with the silver ball, with the mirrors on,

and all of the round chairs, et cetera. So we had, we held the course on the dance floor, so we had the table set out there with the computers. Any PowerPoint presentation? Oh, yes. Of course, they tore it all down every afternoon and put it all back the next morning. So that was the time I performed in the nightcloth.

In Jakarta. Roland, I want to end the conversation on where you think the world is headed towards 2045 or even 2050. Are you optimistic about achieving carbon neutrality? I'm optimistic that we'll move in that direction. I mean, I think we're already moving in that direction. So it's pretty clear that this is something that's already happening. Yeah.

I don't honestly believe we're going to reach neutrality by 2050. That's too soon. But I think we can have a good shot at it. I mean, that said, don't mistake what I'm saying here, I think we should strive for, we should target 2050 for carbon neutrality. I mean, I think regulation, people's behavior, et cetera, should be targeting that, actually achieving it. I think it's going to be more difficult.

What would it take? I'm in a camp that believes that it's more about technology as opposed to policy. I think there are three components. There's technology, there's policy, and also human behavior. And, you know, the vector on human behavior has not been good over the last five years.

You know, people are growing more extreme in both directions. And that's not a good sign for reaching consensus of moving in a positive direction, you know, where, you know, a good idea like phasing out internal combustion engine vehicles is propagated in one state. And in response to that, another state introduces legislation to ban electric vehicles. simply just for spite. So this kind of reaction is not helpful.

And the moving towards the two extremes is holding us away from an advantageous middle, which is probably what we need to get to where we need to go. Where do you see the mix of renewables? heading to in 2045. Will that still be filled mostly with solar or a lot more about geothermal and hydro and? I think all of the above. I mean, I think the cutting edge that we're, or the leading edge that we're at right now is based upon storage. Yeah. So the technology we need now is storage. Storage actually, you know, enables all of those renewables and any others that any people may come up with.

So how that works is probably a combination of things, be grid-connect to storage, be, you know, people with big batteries in their garage that, you know, will keep their lights on overnight. Do you see planes being electric in the near foreseeable future? Ships. Boats. Well, boats will be a lot easier. Yeah, ships could, you know, transportation by ocean could certainly be done differently. You know, even sail. Yeah.

The way we used to do it is not a bad idea at all. Planes are obviously a lot harder, but, you know, people are producing electric planes. Right. Or small ones already. you know, biofuel powered planes certainly is feasible. Yeah. You see a

transatlantic, trans-Pacific airplane being electrified in the next, what, 30 years? I don't, but I'm quite sure that there's people who are smarter than I working on that. I mean, I'd never

say never. Yeah. I mean, I think what we're likely to see, ultimately, we're seeing it already, is a movement away from, you know, transatlantic, trans-Pacific travel. Instead of me traveling to, you know, teach well-testing in the Jakarta Hilton, you know, teaching it by remote, which actually we've started to do. So I think, you know, telecommuting and telecommunication will substitute a lot for transportation. It already has. The pandemic kind of taught people how to do that. We already knew how to do it,

but they taught them to do it. And that is a change. It's a structure of change in the way people are working now that they did in five years ago. And not all of it was good, but some of it was good. And we can take advantage of that to actually cut down on moving people

and large objects from place to place and just do what we need to do where we are at the time. But the storage of the data, the computation of the data will require energy in the back. It will, but much less than moving a professor from one side of the planet to the other. And burning a lot less. Yes. Thank you so much.

Thank you. Yeah. That was Professor Roland Horne from Stanford University. Thank you. Inelah Endgame. Are you doing these in echelon? You're doing a series of it? Yeah.

You're the I think the seventh person I've interviewed on campus. So I'm all right. Well, you should have, you should have shown that during the interview. That was too cold. Are you around in the next couple of weeks? Yep. Okay. I'm teaching this course, so I can't go anyway.

Oh, for you. Nice to meet you about him. Yeah. Thank you.