MIT Clean Tech/GABA Lecture with Dr. Hermann Scheer

GREGG DIEGUEZ: I'm Gregg Dieguez of the MIT Club and
Northern California Clean Technology Program.
I want to thank you for coming.
And we'd like to begin with thanking lots of people,
certainly Wilson Sonsini, who is a sponsor of our club for a
number of years, and Google that has made these most
colorful and lavish accommodations
available to us.
We thank them for this excellent facility.
We're working with the German-American Business
Association.
But before I introduce Philip, I wanted to just acknowledge
some of the volunteers here, Deepak Boggavarapu--
it was his conception to have these two series of solar
events that we've held today in San Francisco and here.
John Rethens, who arranged the facility, and Laura.
Where's Laura?
Laura who does our PR.
All right.
So Philip, please.
PHILIP COONS: Thank you, Gregg.
Hi there.
Welcome here to this beautiful site here at Google.
My name is Philip Coons.
I'm the Chair of the GABA Clean Tech Industry Group.
And first of all, I want to thank our colleagues from the
MIT C&C Club.
Because I really think this great collaboration between
two organizations that have different links could bring
different strengths and different people to this event
and really made this possible and made this
such a great day already.
And I'm sure we're going to continue right now.

Of course, I also want to thank Google for the excellent
food they put out here, and the fact that they even allow
us to videotape this.
And the videotape will be out on the
Internet tomorrow hopefully.
And every one of you who wants to listen to some of the
arguments that Hermann is going to make later on again
can certainly do that.
I also want to thank some of the people behind GABA who
have really, really made this happen.
One is Caroline Raynaud, the President of GABA.

Another one is Bianca, Bianca Lautenschlager, who was the
good soul behind all the RSVPs and everything.
Without her we would have been completely lost. And then
there's some more people in the back over there who don't
want to come to the front, Katie and Vanessa, and Alex
[? Schle ?]
who's helping us tonight.
Thank you very, very much.

I'm particularly grateful.
And Dirk will say one more word about him that Martin
Roscheisen has kind of signed up to do the introduction of
Hermann Sheer.
Martin, as you know, is CEO and founder of Nanosolar, one
of the success stories in solar here in the valley with
great funding rounds and good news flow.
And we're particularly happy for one reason that Mr. Scheer
mentioned today during an investor luncheon in the city
in San Francisco.
The continuation of the German feed-in tariff law really
depends on success stories like Nanosolar doing amazing
stuff here in the Bay Area, but also coming to Germany and
doing things over there and creating jobs over there.
Because that's what the general public-- that's what
the politicians are looking for to continue this program
that was so successful in the past and which we hope will be
equally successful in the future.
So without any more I'll pass over to George Michaels, K&L
Gates, who has been the sponsor of this, and has
through Vanessa and Katie, has helped us a great deal with
putting this all together.
GEORGE MICHAELS: Thanks Philip.

I'm going to make it short and swift.
Happy to see all of you, many clients, many friends, and
many future clients and friends hopefully.
Clean tech has become the theme in the Silicon Valley.
My question is whether we are going to know the Silicon
Valley or the San Francisco Bay Area as Clean Tech Bay in
five years and not that much as Silicon Valley.
I think that history is going to show that.
Certainly I'm very happy to be personally part of it and be
with a firm that is a part of it, K&L Gates, 1400 attorneys
from Hong Kong to Berlin and everywhere in between.
We have years of experience in energy.
We have been doing energy alternative and dirty energy
projects for the last 25, 30 years.
For me personally, it's a very great pleasure to see that
alternative energy, clean tech has become prime time in the
Silicon Valley.
So that allows me to use my hobby of project financing for
wind and solar energy projects and to marry it with my job,
and that is working with my emerging growth clients, which
I just love, and VCs, and make them successful.
And I hope that all of you were with emerging growth
clients in the clean tech area will be vastly successful in
the next years, as successful as Nanosolar.
I think Martin Roscheisen doesn't need any further
introduction.
In this young industry of clean tech, he has become
almost something like an icon.
So let me just hand it over to Martin, and thank you very
much for being here.
MARTIN ROSCHEISEN: Thank you very much.
Welcome.
Welcome, everyone.
I'd like to give the Silicon Valley-centric introduction to
Hermann Sheer, which is start out by contrasting Hermann
with Al Gore.
So I love Al Gore.
But you cannot start a company and build a business around
speeches around global warming.
You just cannot.
No customer's going to buy solar panels or install
systems around general concerns on climate change
over tens of years.
What it requires are successful policies, policies
that level the playing field against highly subsidized
nuclear and coal sources, and policies that are working.
Now in particular at Google here, a lot people understand
the difference between getting something right and getting
something close to right or i.e. not getting it right.
And there have been a lot of policies in the world and
start-up in Japan are very successful solar programs that
led to massive solar installations.
But it was done in the kind of closed Japanese way.
In Silicon Valley, if you have a company here or in the rest
of the world, you cannot build a business around selling
panels into Japan because it's a closed market.
There have been a tremendous amount of city-based and state
level-based programs around the world in different
countries, that would level the playing field and incent
solar installations.
But at the end of the day, in the aggregate of them an in
terms of their predictability, they weren't at the type of
scale that's required for doing very aggressive and
Silicon Valley scale investments in and research
and development, that at times takes years and years for the
technologies that take solar from a $500 square meter
economics down to a $50 per square meter economics.
It takes years of our research and development.
We've going to use our close to $200 million dollars in
capital quite well to get to that point.
But it takes substantial investments in these areas.
And do a step of investments that look ahead
for five, six years.
They require a market at the end of day that's predictable.
And that's at a very interesting scale.
And that's what Hermann accomplished in Germany.
It's a first example of a very elegant and simple tariff that
gets it right in terms of predictability, scale, and
ultimately accomplishing nothing else but making green
tech investable, including very R&D intense investments.
And just to say a few things about the current feed-in
tariff we have in Germany is the outgrowth of a number of
programs. Hermann as long back as '93 started one of the
first large scale solar installation programs which
was the 100,000 Rooftop Program in Germany, which he
had heard earlier.
Greenpeace at that time called it unrealistic that it should
be at most 50,000.
So you're welcomed to Silicon Valley for your audacity.
It's good to be called back by Greenpeace as being too green.
But it turned out that the $100,000 Rooftop Program was
fully subscribed between '99 and '03.
And it was kind of predecessor to the feed-in program that is
now in place.
And that applies to both wind and solar installations and
has led to something like 15, 16 gigawat of installations at
this point, and really around the globe unleashing a market
dynamic that's going to fundamentally change the
gestalt of green energy in many countries around the
world, as well as through policy a effort also around in
the area of biofuels achieving a general tax exemption for
biofuels, which makes a very significant difference in a
country where the fuel prices are a factor higher than we
have in the United States here.
And again leveling the playing field for new technologies.
So without further delay, please welcome the man who
made green tech investable.

DR. HERMANN SCHEER: OK.
Thank you, Martin.

From Albert Einstein, I know a sentence he has written in
this last year in the middle of the '50s.
And the sentence is "The methods who have caused our
programs are unable to solve these problems." And if you'd
look to the global situation and the running energy crisis,
one point is very clear for me.
And I hope after my speech also for you.
The present energy economy, the present dominating energy
economies, their ways of thinking and acting is unable
to solve the problem we have.
We need a consideration why we are aware more and more by the
energy crisis, why are aware of existential problems for
civilization in general.
But why happen so few things?

What happens in policies and economy that there is no
adequate reaction to the energy crisis?

That means we have also to reconsider the strategies and
policies which we have done in the past including the
policies for climate protection
including the Kyoto Protocol.
All these steps are far below the real necessities.
The international panel on climate change and the
governmental panel on climate change recommend an urgent
reduction in the total amount of CO2 emissions in the total
amount of 60% up to 2050.
And this on the basis of the year 1990.
The Kyoto Protocol which is in power up to 2012 ruled only a
reduction of 6%.
And it is not an obligation for all, because some
countries including the United States of America--
they are able to deny that not to
participate in this Protocol.
But even if all would participate including all the
countries which are not asked to participate
like China and India--
if they all would take part and they all would reduce the
emissions about 6% up to 2012, it would be far beyond the
necessities.
And who can imagine that in the same process of political
acting there could be an approaching to the necessity
of the deduction of 60%?
Who can imagine that if someone wants to be realistic?
Again this shows we need other considerations,
other ways of acting.
Otherwise we would lose the race against time.
And we are aware of seven, not only one world energy crisis.
One is the climate crisis.
A second is the availability crisis, which would exist even
if there would be no climate crisis caused by fossil energy
pollutions or emissions.
The availability crisis comes by the running depletion, the
coming depletion of the fossil energy resources, and even the
running depletion of the uranium reserves for nuclear
facilities.
And if you look to the real problem, if you tell the truth
about the energy situation of the world, we have to
recognize that is decreasing curve of reserves.
And it decreases faster the more the
energy consumption increases.
And we have an increase of the energy consumption in the
world mainly because of the development in China and India
where 1/3 of world population live.
1/3.
And if we have a decreasing curve and an increasing curve
of demands and decreasing of possible supplyings, then we
approach to a crossing point of both curves.
If you would arrive at this point, the world would get the
most brutal, bloody conflict ever happened.
Because without energy, nothing works.
Nothing is possible.
And on the way to this crossing point, there will be
many, many conflicts.
The time of energy war has begun.
Not whether the Gulf War, nor the Iraq War would have
happened if there would be the plantation of bananas instead
of the extraction of oil at Arabian Peninsula.
There's no doubt about that.
And economic conflicts will become more and more heavy.
Because if the approach to this curve, to this crossing
point of the two curves, then energy will become more and
more expensive for all.
It creates a social problem for all countries.
It becomes social hypotheque.
And it is still.
This is the third crisis, a social hypotheque, for the
third world countries.
40 countries in the third world I have counted pay for
the importation of oil, more than their total export
earning is.
That means-- speaking about the third world crisis without
referring to the energy problem--
means to understand nothing about the third world crisis.
The only chance for them is to shift as soon and as radical
as possible, as wide as possible, to indigenous
renewable energies.
But even their elites do think that this would
be an economic burden.
It is a total misleaded thinking.
Totally.
And these are three world crises caused by the present
energy system.
The fourth one is the nuclear crisis.
The extension of nuclear technology creates more and
more problems about nuclear weapons proliferation.
The danger for nuclear proliferation is much higher
than it has been 15 years before, much higher.
Look to the Iran crisis.
Look to the situation in North Korea.
Look to other countries.
And the idea to organize nuclear renaissance, and
that's in countries which are not stable.
Because a stable country, a state situation is the
absolute prerequisite for having nuclear powers.
To appeal for nuclear renaissance in the world in
general for overcoming the climate crisis is totally
stupid and totally irresponsible.
Because you don't have the social and political
conditions for that.
Besides that it is a lie that nuclear doesn't contribute to
the climate crisis.
Because nuclear power stations produce many heat which would
not be there in the atmosphere without the nuclear powers.
And the global warming effect is based on the increasing
difficulties in the atmosphere cause of the mounting of the
CO2 emissions that the heat cannot leave the atmosphere
like it happened before with solar heat.
Therefore although nuclear is source of global warming,
besides a lot of other questions.
But I don't want to speak too much about that non-option.
And all who appeal for a nuclear renaissance don't tell
the truth about the real direct costs.
Because even the uranium depletes.
And if someone wants to prolongate the nuclear, he
must tell the truth.
And this would mean immediately to go over to the
fast breeder technology.
And nowhere in the world exists one operational well
functioning fast breeder reactor.
And if it would exist, it would cost much more than the
present nuclear power facilities.
Therefore it is a myth to speak about the future
opportunity of having cheap nuclear energy.
And then we have a fifth crisis caused by the
convention energies, by nuclear and by fossil energy.
This is the high water consumption rate of this
energy system.

In the United States statistics you have a water
consumption by the present energy system, mainly by the
heat power plants.
And all big power plants are based on the steam processes
if it is nuclear or if it are coal power plants.
And they need so much water that the water consumption of
the energy system, the present energy system is in America
more than 50% of the total water consumption.
And now look to many countries which are in the midst of a
water crisis which increases.
And therefore, there is no future for the present energy
system because of the water in more and more countries.
And then you have a health crisis caused not by the
climate problems, but caused by the other pollutions of the
present energy.
And you have an agricultural crisis caused by the
petrochemical fertilizers--

is one of the main source of agricultural crisis, the
increasing loss of humus potential on our globe.
Each reason is enough for itself a reason to change the
energy system, to change to renewables.
And altogether culminate in the same time and overlap each
other in the same time.
Because they have the same origin or close origins.
And that means we are in a race against time.
And this race against time is not really contradictable.

If we look to the two main limits in general of the
present energy system, you have the
limit of the resource.
And on the other side you have unlimited resource by renewed
energies all derivates from the actual solar
radiation for our globe.
Therefore this is the first big
difference, limited resource.
And on the other side as long the sun exists, an energy
source for our globe which is 15,000 times--
the daily supply of the sun to our globe is 15,000 times
higher than the daily fossil and nuclear
energy consumption is.
To say there would be not enough natural potential of
renewable energies in order to replace the conventional
energies is ridiculous.
Has nothing to do with science.
Has only to do with prejudicial standpoints and
nothing else, with nonscientifically assumptions
in the energy debate.
And the energy forever it is sometimes defined.
This is not totally right.
The science of the astrophysics tells us that the
sun will exist for 5 to 7 billion years more.
One time when I gave this number, one asked me
afterwards did you say 5 billions or 5 million years?
When I said it is 5 billion, then he
answered then I am satisfied.
This is the first big difference.
And the time of the running out is shorter than many
people who think and than the conventional experts confirm.
And they don't confirm it because the answer is too
radical for them.
It should be given to that.
If you look to the oil reserves, we can expect that
the liquid oil reserves will run out in the next roughly
four decades, roughly four decades.
The natural gas reserves are not longer.
Perhaps it could be five years less.
Perhaps it could be five years more.
But this doesn't make a difference.
The uranium reserves, based on the present number of nuclear
facilities, perhaps 50 or 60 years-- on the present number
of nuclear facilities.
Coal, a little bit more than 100.
But who can imagine that after the final exportation of the
other sources, oil would go over to coal, and to continue
by that way the global pyromaniac energy system.

But before the time limit of the reserves, we
have another limit.
This is the limit of the ecosphere.
Because the ecosphere is already overstressed.
That means we are not allowed to burn off all
of these known reserves.
That means we have to replace these energy sources in the
run of the next three or four decades.

And this the challenge of the century.
This is the unique challenge since the beginning of
civilization.
Because without energy, nothing works.
Nothing can move.
It is an existential question.
And the contrast between that question, between that
challenge and the activities is scandalously.

And it is not any more enough to present warnings.

I am not an enthusiast about for instance,
the movie of Al Gore.
The reason for that is he doesn't show a solution.

There is not one detail which is not right in the
description of the dangers--
not one sentence.
It's brilliant formulated.
Brilliant.
But I think it is a problem itself to show such a dramatic
danger and not to show in the same time a solution.
Because what will happen with the people who
are aware of that--
and if they are not aware about the opportunity or the
possibility to come to a solution to
overcome this tension.
Some may become active.
But a silent majority--
this is a normal historical experience--
the silent majority will react in a total other way.
They feel concerned themselves that this problem can never
become solved.
And if they think that, they develop no future mentalities.
They become apathetic.

They start to live from day to day as long as possible in the
usual way or they become realistic.
And a society can only create the power, can only start to
overcome a danger if a perspective is seen--
only then on socio-psychological reasons.
It is necessary not leave a society alone with a danger.
It is necessary to show the perspective.
That means it is necessarily to show that there is a
possibility to replace nuclear and fossil energy supply in
general by renewable energies.

This is the challenge to show that.
From the natural potential, showing that is not a problem.
I gave some indications for that.
But then many energy experts say and they reduce its
potential and speak about yes but what is the economic
potential or the technological potential?
And they reduce it radically.
Then they ask what is the economic potential?
Then they give the answer it's too expensive.
And they reduce it again.
But they never ask about the human potential.
And this is the most important thing to have enough human
potential to overcome that problem.
Because we cannot discuss this question only on cost
comparisons.
Who has the courage now?
Or, well, will have the courage-- its let's say-- in
20 or 25 years to tell their own children we could have
solved the problem.
But it was too expensive for us.
The additional cost of $0.03 or $0.04 per kilowatt hour,
for some time were too costly for us.
Such an answer will become shabby, totally shabby.
Refer to the real problem.
Therefore we are challenged in a total other very much more
than the energy debate shows us and much more than the most
energy experts tell us.
The conventional energy experts are a part of the
problem and not a part of the solution mostly.
And the reason for that is that they think in an old
paradigm in the paradigm of the existing energy system.
And this paradigm misleads.
And I'll try to explain this paradigm, this difference.
Because there is a set main contrast between renewables
and the conventional energy system.
The first was polluting energy and energy free of pollution,
emissioning energies and emission free energies.
Second, limited reserves and non-limited reserves.
The third difference is the resource, the potential of the
conventional energies, we find at very few
places in the world.
But energy consumption is everywhere where
people work and live.
That means energy consumption is always decentralized.

Conventional energy promotion is from the early beginning
centralized because of very few reserve places.
60% of the annual oil extraction and consumption
comes from only 40 giant fields in the world-- only 40.
And the more we approach to the exhaustion, to the
depletion, the fewer reserves there are.
And from these 40 reserves, roughly 30, 3/4 are in Islamic
states, from Central Asia like Turkmenistan, to the Caucasus,
like Kazakhstan, then to Iran, then to the Arabian Peninsula.
And then to North Africa like Libya, Sudan, and Nigeria.
And this creates a lot of additional political problems.
This creates increasing security costs.
The new pipeline which became installed in 2005 between the
Caspian Sea and the Mediterranean harbor, Ceyhan,
is guarded day and night by 10,000 soldiers.
Their costs are not in the energy bill.
This is only one example--
only one example.
And if we look to the human disaster in
Sudan, what is the reason?
There reason are conflicting interests of some big powers
since there is the extraction of oil in the year 1999.
That's the reason why there is no contenders in the United
Nations Security Council between China, United States
of America, and the European states.
This is the truth behind that story.

And the situation we have cause of this long chain from
few places to billions of customers is the conventional
energy system can only become supplied by
a long energy chain.
This long energy chain consists of many elements.
Each single element is linked with the others.
And each element is a cashier--
each element.
And the administrators of this system--
that means the energy economy--
is risen by its own chain.
They cannot leave it.
They are dependent from their own business totally.
And if you compare that with a renewable energy natural
supply, renewable energy is everywhere, not at few places,
everywhere supplied by nature.
In different intensities, but solar radiation is everywhere.
Wind is practically in each region more or less.
Nearly everywhere you can plant or you
have biomass, bioenergy.
In many regions of the world you have running water.
Capacities in coastal regions we have wave
energy or tidal energy.
And nearly everywhere you have geothermal energy.
And all these together are derivates
from the daily sunshine--
all of them.
That means the general term for all is solar.
And because it is at very few places in
the world, this creates--
if you start to do that--
a new economic development for all who do that.
It is a opportunity to overcome the decoupling of the
spaces of energy consumption and energy promotion which
defines the present energy system by a process for the
relinking of the spaces of energy
consumption and energy promotion.
That means in the case of renewed energies energy
harvesting.
And this makes possible for each country or for many
reasons within countries, for cities within countries, or in
many cases also for individuals to
get an energy autonomy.
The general formula to describe that process is--
for the global economy that we will arrive in a development
for a globalization of technologies.
Because it is good if all people in the world have
access to the best technologies free of
discrimination.
But the same time of regional resources market and global
technology markets.
And what that means if we look on the tie to that process,
then we come to a total different paradigm of the
energy basis of our societies.
And this paradigm shows that the conventional energy
system, the existing energy system, the existing energy
economy, can never behave, can never be neutral to the
different energy sources.
That's impossible on physical reasons.
Even if they want to be neutral they can't.
Because we had in fact only one decision.
That is a decision about the energy source.
After taking such a decision, all other follow-up decisions
or consequences are coming by itself, the other consequence
from that decision.
Because the choice for energy decides about the question how
far are the sources?
Are they far?
Or are they close to us?
They decide is there a need for promotion--
mining extraction and so forth technologies--
or not?
It decides about the question how much infrastructure is
needed for the transportation of the energy?
It decides about the conversion technologies which
must be introduced for the conversion of primary energy
to final energy which is used.
It decides about the way of distribution of the energy.
And it decides about which structure of companies is
adequate to organize this process.
Because a local utility or all small and medium enterprise is
unable to organize the energy delivering from the Arabian
Peninsula to the United States of America.
This can only be done by a multinational company--
only by them and not by others.
But such a big company is possibly unable to organize
the supply of regional energy sources for regional needs in
the same region.
This is a total other business.
And after the decision for the dominating existing energy
system, have you got an energy economy which is tailored in
all its investments to fossil energies and nuclear?
And all of these investments need a payback.
And there is no time.
You cannot identify scientifically not--
whether scientifically no, then practicality, you cannot
identify for the whole system.
Because such a point doesn't exist.
The point at which all invested money is paid back at
the same time.
That point doesn't exist. Because investments were done
at different times.
We are running investment, not at the same time.
And a lifetime of the
technologies are also different.
That means the present energy system tends--
and its protagonist tends to prolongate
it as long as possible.

And it is impossible on sources reasons and technology
reasons to keep the structure of this energy system which is
tailored to the conventional energy sources to keep it and
to take renewables through the system.
Because even if we promote, if we use renewables, the
technological and economic prerequisites for that must be
tailored then to the new resources.
And the difference are tremendous.
The way to renewable energies is away from, as I told, few
sources, a few giant fields to sources everywhere.
It's away from commercial primary energy, like coal,
gas, and uranium, and oil, to non-commercial primary
energies with the exception of biomass.
Because if you take biomass from agriculture, the
agricultural world must be paid.
But solar radiation and wind are primary energies free of
cost. That means it is impossible to change, to shift
from the business, being a seller of oil and gas to
become a seller of solar radiation and wind.
That means this part of the energy economy will lose its
job without alternative.
They can do other things.
But they cannot change their role as primary energy
supplies to renewables.
That's impossible on natural scientific reasons.
And you can imagine how many resistances come cause of that
against renewable energies.
You can imagine because the resistants are everywhere.
And it became the only possible to overcome it by
strong policies--
only then.
It can never by itself.
It was always blocked by the conventional power structures.
And moreover, it is a way from few power plants and
refineries to many.
Because of the lower energy density of renewable energy
sources, it is impossible to replace a 1000 megawatt
reactor, nuclear powered or coal powered reactor by a 1000
megawatt windmill.
The alternative to 1000 megawatt reactor are--
let's say--
several hundred windmills or seven 10,000 rooftops, or
several dozens biogas or biomass plants.
That means it is total other ownership
possible and will come.
It is not in the hand of few companies.
It's impossible to keep renewable energy supply in the
hand of few companies if it overcome the monopolistic
supplying structure by itself if it comes.
They can take part.
But they can never keep their present monopolistic
structures if we go to renewables.
And all this show big difference.
And moreover, if you have a natural supply and you are not
dependent from far away resources, you can save
infrastructures.
And that means you have other calculations.
All of the investments for renewable energies with the
exception of biomass are only investments for technologies--
only.
Nothing else.
Not more for fuels.
And in most cases the possibility to avoid
infrastructural investments.
And that means you have possibly higher initial costs.
But then you have not any more fuel costs.
That means you need a 10 or 15 years or 20 years calculation.
And all who compare the investment costs of a
conventional energy system with its fervor running costs
for fuels--
if you compare that with the investment cost for PV or for
wind, you will not come to adequate results if you forget
the system costs for a period of 10, 15, or 20 years.
That means the longer you think about renewables, the
cheaper will it be.
And because we are only technology costs, the
situation is that this is the experience of 200 years
technological development.
The renewable energy costs can only go down by new
technologies, technological improvement, and by mass
production of its technologies.
The conventional energy costs can only go up cause of the
increasing fuel costs and costs of the increasing
environmental damages which have to be paid at
one time if not yet.
And costs of the increasing infrastructural and security
costs in the run of the depletion of resources.
That means we are now on a watershed.
If we postpone the way to renewables then we create
unsolvable energy problems in the future and unpayable
problems in the future.
If you don't postpone it, we can get for all the future
energy security and clean energy.
The decision is very clear.
If we leave this question to the energy companies which are
the vested interests against renewables itself, then they
have to go to renewables at a specific time.
When they are at the end of their possibilities
and this will come.
But this would be a postponement about three or
four decades.
And if we could allow that or would allow that, we would
lose worldwide the race against time.
That means the answer is to create a policy which doesn't
leave this question anymore--
the energy decisions to the existing energy companies, but
which inspires and gives room for maneuvering their society
and many investors to go straight to renewable energy
investments without being dependent in that from the
power structure.
This is the only way to get success in the short run--
the only way.
And this shows the experience in Germany.
The idea when we started, when we initiated the renewable act
was to organize an independent development, independent from
the existing power structure.
That was the reason why they fighted against it and they go
on with their fight against this law.
But the solution was we installed three elements in
this renewable energy act.
First first element was a guaranteed access to the grid
for each power supplier from renewables even it is a very
small one with a one kilowatt peak photovoltaic device.
If he wants to sell it for others and if he needs the
grid, he has a guaranteed access to the grid, legally
guaranteed.
There is no more way and opportunity to obstruct it by
the power companies.
Second element to give a guaranteed fee.
Because it is possible to block such a business if the
grid companies pay only a low fee which doesn't allow an
investment.
And therefore gives a guaranteed fee in a total
amount which allow investments and revenues from that.
And the third element is not to eliminate the quantity of
introduction.
Because only if there's no limitation of the quantity for
the introduction of renewable energies--
only then there are enough companies who start the
production.
Because a company who starts a production needs a long-term
perspective.
Because they never get the payback for their investment
in production facilities if they have only perspective of
a two or three years program.
And that means without quantity and limitations the
quantities allows and moderates firms to extend
their production and by this way to reduce, to cut the
costs by joining mass production.
Exactly that happens.
And therefore we created a new group, a new movement of
investments and investors who were not any more obliged, who
had no reason anymore to ask the power companies for a
permission for their investments.
They can do it without asking someone.
And the result was that we have in the last six years
annually 3000 megawatt new renewable energy installations
without large hydropower.
Without large hydropower annually 3000 megawatts.
In six years 20,000 megawatt altogether.
We created a new industry with 150,000 new jobs.
The windmill industry, PV industry, and biogas plant
industry, and others.

We organized by that way a cost decrease, because we
arrived in the early beginning of mass production cost
decrease of 15% in the run of very few years.
And we got-- if you let me give one example--
by this way the cheapest renewable energies compared to
the others.
And in UK they have a total other system.
They have a system based not on the price
regulation like we did it.
They have a regulation in quantities.
They obliged the energy supplier to take a specific
percentage of energy from renewables into their supply.
The result is many deviations for them.
The result is that we have 20 times more installed wind
energy capacity than UK, although UK has better wind
conditions than we.
And the wind energy is cheaper in Germany than in UK, about
30% cheaper.
This is a result of policy not the result of having better
engineers of having more diligent or
more intelligent people.
It's only the result of a different policy.
And I assume the new ambitious targets within the United
States like California or some other states have now, because
they don't want any more to wait for a federal law--
All these states targets and ambitions can only become
matched with the right policy.
And I have my doubts if the mostly used or introduced
renewable energy portfolio standards policies will allow
to match the official targets.
And if there is the clear evaluation of policies shows
you shall not leave it to the present energy sector.
You shall not give them a veto power for the introduction of
renewable energies neither directly nor indirectly.
And you must give the incentives for new players.
And the general economic view about that is we can show
already a lot of macroeconomic benefits by going to
renewables in contrast to the increasing macroeconomic
burdens of the conventional energies.
But economically a macroeconomic benefit is not
in the same time for all economic players a
microeconomic benefit.
Therefore the political art is to translate, to transform
with the right policy instruments the macroeconomic
benefit into a microeconomic incentives for
investors and customers.
And if someone follows this line, he can
create a dynamic process.
And this dynamic process is needed to give an example
which inspires others to do the same.
We shall not wait for international negotiations.
We have now within 35 years experiences of global energy
conferences and environment conferences.
Most of these conferences have only one result.
This is a decision for organizing a follow-up
conference.
And in the same time you have a rapid growth of the drama.
And the number of participants increases.
But the results are too low.
And this is based on a wrong premise.
The wrong premise of all these world climate conference and
other conference is that the way from the conventional
energy system is the source of the problems. The way to
energy efficiency and finally the way to another energy
source, to renewable energies.
[UNINTELLIGIBLE]
energies.
This way would be an economic burden.
And therefore such an economic burden should be carried by
all or by none.
This is a philosophy.
And what is estimated as a burden leads to the bazaar of
international negotiations and leads to the trying to get a
broad consensus.
And the broad consensus, this trying, is in a deep
contradiction methodologically in a deep contradiction to the
needs to have speed.
It's in a deep unbridgeable contradiction.
And there is no example in history of modern technologies
since 200 years in which a new technology which creates a new
paradigm based on other calculations which creates new
opportunities apart from the former experiences--
there is no example in history that a breakthrough for the
technology came by an international treaty.
Not one example.
And therefore we need the organization wherever there is
enough human power to do that, enough ambitions, enough
commitment.
The organization of such a dynamic process--
we started that in this sense in Germany.
And I think it would be a fantastic if California could
do the same.
Because the world needs such examples.
And I want to close this speech with a
sentence of the Polish--
PHILIP COONS: Thank you very much.
I'm sure your passion and deep insights into renewable energy
policy making spark a lot of
questions here in the audience.
So please raise your hand and state your name and
affiliation briefly before you and start with your question.

BRIAN WONG: Hi.
My name's Brian Wong.
I'm a computer consultant here in the Bay Area currently
working on a contract at Visa.
I have a question with regards to nuclear power.
I think that coal is far worse than nuclear power.
And I think that the issue that you brought up in regards
to nuclear power proliferation, and you were
looking at the cost should be considered for renewables.
So then your cost arguments probably don't need to be
addressed for nuclear.
But that you've got the three gigawatts per year in Germany.
You still have coal power which is killing 8000 people
per year in Germany, and especially air pollution--
particulates and that kind of thing causing heart disease
and that kind of stuff.
So because a million people a year die from the pollution
from coal,, shouldn't that be some kind of a priority issue
to work with everything else including nuclear until we get
rid of coal?
HERMANN SCHEER: Yes.
Perhaps you are right.
But this has nothing to do with my speech
what you have said.
Because I did not recommend coal instead of nuclear.
I do not that.

It is not a good choice between--
it's like having a choice between cancer and cholera.

But nevertheless we have, as I said, between cancer and
cholera, nuclear cancer and fossil cholera.
No.
The alternative is renewable energies.
And it is a distributed myth that we would need too much
time to go to renewables.
That is not right.
It is totally wrong.
Nothing can become implemented faster
than renewable energies.
Nothing.
The 20,000 megawatts we have introduced in the last six
years, the 20,000 new renewables.
Not [UNINTELLIGIBLE]
involved in that number.
This as an energy equivalent from their annual production
of that 8000 megawatts conventional power plant--
If there would have been instead of the renewable
energy act in Germany the decision to construct 8000
megawatt reactors if it is nuclear or coal, not one of
them would work today.
Because they have a construction time of 5, 6,
sometimes 8, 10, 12 years.
Not one would work, or perhaps only one or two.
And a windmill is installed in one week.
And it is not an equivalent alone.
It's not an equivalent to a big power station.
But several hundred are equivalent together.
But each one module can work immediately after
installation.
The big power station can only start to produce the first
kilowatt hour when all things are constructed.
And this example shows nothing can be done faster.
It is possible if there is the adequate will and the
advantage of a society about the real possibilities to come
within 15 years to 100% renewable energy system in
direct [INAUDIBLE].
Perhaps not in the field of fuels if you think about the
traffic, the cars, biodegrading the fossil fuels
by biofuels.
Perhaps for this you need some more time.
Because you can make a lot of mistakes by doing that, a lot
of environmental mistakes if it is not done well.
But in the electric power sector, it is very easy to
show a very fast development.
Therefore there is no reason to decide between coal or gas
on the one side and nuclear on the other side.
I think we need a moritorium for both, a
moritorium for both.
No new plants, no new coal plants, no new nuclear plants,
and all future investments into renewable energies are at
least coal generations.
These are the last coal generation as long as some
fossil fuels are involved.
Nothing else.
Then we have the right speed and for the future.
PHILIP COONS: If you could use the microphone I'm sure the
people from the filmmaking would appreciate that a lot.
Thank you.
AUDIENCE: Michael Schopenhauer.
Great talk.
I don't want to insult you.
But some of the ideas that you're talking about are
things that we already had about 20 years ago.
The things about decentralization and stories
about heat power coupling et cetera, et cetera, those are
ideas and concepts that were probably developed in the late
'70s and in the early '80s.
And they were out there at that time.
And we're now 20 years down the road.
We really haven't seen too much technological progress in
a lot of these things.
These things are now being put in place.
When you're looking at Germany at a point in time where your
power cost in Germany is about $0.65 per kilowatt hour.
All power costs in California is somewhere around $0.20 to
$0.30 cents per kilowatt hour.
So we have a serious issue in operating under similar
economic interactivity scenarios as opposed to where
Germany is.
If our energy would be about twice the price, we probably
would see more move towards photovoltaic, et cetera.
But that doesn't really happen.
And the energy costs in this state is not going to go up.
So if you want to burn this down to what is supposed to
happen in California, what concrete suggestions are there
to do that?
And in particular the question is how and what can we do
using a low temperature energy?
How can we use that in a beneficial way?
Because this is where the other problem is.
When you're boiling down the systems as to something that
is actually working, what is very efficient--
the thermodynamic reason why the things that are happening
in Germany do happen in Germany and do work in Germany
is because you can do something with
low temperature power.
We can't really do a lot with that.
Because we have a lot of sun in summer here.
And people really don't have an interest in having more low
temperature heat here in summer.
So that is thermodynamically a problem in putting some of
those heat power coupling units into the place here in
California.
Do you have any concrete suggestions or
ideas about that one?
HERMANN SCHEER: Yes.
But give an adequate answer requires to think about the
special ways how to substitute the conventional energy
structures.

And not only because of the change of the energy basis,
but also because for technological development in
the society which change the kinds of energy demands.
And the most important step in this way is that more and
more, electric power will substitute other energy
sources, even in the conventional
structure more and more.
Cause of the technological development, information
technologies, lead in its mass introduction--
and this happens--
leads to more electric power demand.
There's no doubt.
But the biggest step comes by another development.
And I expect this development in the run of the next five
years at least in the run up the next 10 years.
I have no doubts that the car of the future will be an
electric powered car.
I have no doubt about that.
All other options for the car, for fueling the car cannot
match the benefits of electric powered car, no other option.
Because we have to look beyond fossil fuels for the cars.
And there is no doubt.
And if we compare the different alternatives,
hydrogen or biofuels, then I think all evaluations lead--
if they are done in the comprehensive way--
lead to electric powered car.
And the electric power must be produced from renewables.

And only then you get a clean city.

You can get CO2 neutral fuel by bioenergy.
But you cannot clean the cities by that way.

And even hydrogen will create a problem for the cities.
Because they have all the kind of pollution that is steam.
Burning hydrogen leads to synthesis of oxygen in the air
and leads to water.
You produce water by burning hydrogen.
And that is comes from out of car in the form of steam.
And if you do it in the countryside, it's no problem.
But if you do it in the city like Los Angeles, or San
Francisco, or New York, or Berlin, or Paris, you will get
so much air humidity, additional humidity that this
will overstress many people.
There is no doubt about that.
And a real clean city is only possible with individual
traffic, with cars, with electric powered cars.
And the technological prerequisites to come to that
are much closer to reality, to implementation, than all the
other options--
much closer.
Even in America--
perhaps you have seen the movie Who Killed the Electric
Car?, which was shown some months ago
in the United States.
Who Killed the Electric Car?
It is the automotive industry cause of one reason why they
forgot the technology of the electric
car in the last decades.
The working time of an internal combustion engine,
like it is now in the cars, is not more than
between 3 and $4000--
the real working time.
The working time of electric motor is up two $100,000.
And therefore the difference between electric car, electric
motor and the internal combustion motor is for the
industry very, very relevant.
That is the reason why the automotive industry hesitates
to do that what is reasonable or hesitated to develop that.
But one producer will start with that.
And then he will win.
Look to the hybrid car from Toyota.
This is a step to that direction.
It's not the final solution.
It is a step to that.
And Toyota became the most successful automobile producer
in the world cause of that.
And the automotive industry who misses that will create a
lot of dangers for the societies which are dependent
on such industries, like Germany, like
United States of America.

That means in general you will have more electric power needs
replacing other energy demands.
And based on that, we can have already enough time to see for
the perspective in which the heating and cooling of
buildings will come by direct solar radiation use mostly.

The cars will become fueled by elected power.
And electric power needs from the day will remain.
And in this field a lot of new technologies will come or will
become introduced.
Some we don't know.
But even that what we know is enough to show a full
perspective.

With low temperature it will also become possible to
produce electric power.
One option is the Stirling engine.
With a Stirling engine you can produce electric power with 60
or 70 degrees Celsius, 60 or 70 degrees.
And if you take coal generation perhaps based on
biomass or biogas mainly, then you can come from the power
and cheap production to power, heat, and power production,
three steps from one source.
The creation of renewable energy system leads to a new
diversity of energy technologies.
I suppose it is the second industrial revolution.
The first was driven by the steam engine, and then the
fossil fuel economy.
The second will come by that way.

And it is impossible to show all the branches which will
become developed by that today.
You can give a roughly imagination of that.
PHILIP COONS: Sorry.
Unfortunately we only have time for one more question,
since we want to get all the people are helping here on the
Google side out and in time.
I'm happy to introduce Edgar Gunther, who is writing an
excellent solar blog.
Those of you who haven't read it yet should definitely start
to have a look at it either tonight or tomorrow morning.
EDGAR GUNTHER: Thank you.
I really didn't have a question.
I was looking through my notes.
PHILIP COONS: Oh, OK.
Then I got it wrong.
You had a question, right.
AUDIENCE: I did.
Yes.
It's a brief one.
My name is Dana Sanderson.
Thank you.
This was very informative and exciting this evening.
Are you currently in any a dialogue with the
Schwarzenegger administration here in California?
Has there been any contact between your organizations and
the California solar policymakers?
Can we be hopeful of that?
HERMANN SCHEER: I was invited two years ago when the first
legislation was introduced.
And I gave a speech in the capitol in Sacramento at also
a meeting with Arnold Schwarzenegger.
And I am in contact with the head of the California Energy
Commission, John Geesman.
And perhaps I will have a meeting with
him in the next days.
It depends on the different agendas.
I met him two months ago in Washington.
And my running argument is don't take care anymore about
the claims of the present energy companies.
And make a full step to a [UNINTELLIGIBLE] cycle nation
like we have with the renewable energy act.
And then I'm totally sure that you would get a dynamic larger
dynamic than we have. Because you have in some cases better
conditions than we.
You have a lot of coasts in Germany with more wind than we
have. And you have several--
what is the average of the solar radiation per square
meter in California?
Twice.
That means 2000, 2000 hours, yeah?
2000 kilowatt hours per square meter, 1800.
We have in the average 1100.
And the costs would be the same for the technology.
There you can imagine what could happen in California.
And I have a big hope that this will happen.
Because it's not good to be alone in a
front running situation.
Because more and more arguments we have around--

you isolate yourself, and all of these things.
It is necessary to have alliance for that.
That means states would do the same with the same ambition,
with adequate policies, and who can create the same
dynamic development.
And I think therefore I would appreciate it totally if this
would happen here.
And what I can do to inspire that I do.
That's why I'm here.

PHILIP COONS: Please join me in thanking Hemann for this
great speech.

And before closing, here let me just make a few remarks.
Well thanks again so much for the MIT and C&C Club for
organizing this together with us.
This was a truly great experience with you guys.
I want to briefly mention Vote Solar, the Rahus Institute and
also the German-American Chamber of Commerce who's also
helped promoting this.
And I want to draw your attention to an event that the
German-American Chamber-- and maybe Stephan, you want to
stand up one second and identify yourself--
organizes with our support which is the German-California
Solar Day which is going to happen in March 13th I believe
it is in San Francisco.
So unfortunately Hermann is not going to be there.
But lots of interesting German and California solar companies
and some policy makers.
And in saying that, let me close.
We have Energy Autonomy, Hermann's latest book here
which we're selling, and which I'm sure he's happy to sign.
And it would be great if we could thank our host here at
Google by trying to be out of here by 9 o'clock or just
after 9:00.
I know they have a lot of people here helping us and
supporting us.
And I'm sure they would appreciate that a lot.
Thanks again to all of you for coming here.
And bye-bye.