JOHN WOOLARD: We're very fortunate to have
Secretary of Energy, Ernie Moniz, here today.
He's got a long, very rich history working
in that complicated interface between energy and environment
that dates all the way back to, I guess, the early days of a BS
in physics at Boston College.
Then he got his doctorate in theoretical physics
from Stanford.
But most of the career was balanced between MIT and DOE.
ERNEST MONIZ: Mostly DOE.
JOHN WOOLARD: Mostly DOE.
ERNEST MONIZ: Mostly MIT, mostly MIT, excuse me.
JOHN WOOLARD: So at MIT, Dr. Moniz, or Secretary Moniz,
headed the Department of Physics and the Bates Linear
Accelerator Center, and he was also
founding director of the MIT Energy Initiative
and director of the MIT Laboratory for Energy
and the Environment, so quite a rich past and a fairly
challenging day job today now at DOE.
So we'll do a quick conversation up here,
but then I want to open it up to questions from you guys
as well.
Some of them we'll have from the Dory and others--
do we have mics?
Yes, so we can actually have live questions,
which would be even better.
So first, your mission at DOE states--
and I'm going to have to actually
read this because this was long--
"advancing the President's all-the-above energy strategy,
maintaining the nuclear deterrent
and reducing the nuclear danger, promoting American leadership
in science and clean energy technology innovation,
cleaning up the legacy of the Cold War,
and strengthening management and performance."
So that's quite a burly job description.
Could you just give us a little bit
of a sense of how you balance across all those priorities
and what it really takes to run a department like this?
ERNEST MONIZ: First of all, I can
provide a more concise description of our missions--
weapons and windmills, quarks and quagmires.
Those are the four things that we do.
So in that order, weapons means that-- the Department of Energy
is kind of a derivative of the Atomic Energy
Commission from the old days.
And so we do still have responsibility
for nuclear weapons, for cleaning up
the world of dangerous nuclear materials,
and also providing the propulsion
for the nuclear Navy.
So those all come into our nuclear security remit.
I would just put that in a kind of a policy context.
I think the president stated a strong commitment
recognizing it's a long-time process of reducing
our stockpile and eventually, hopefully,
having the world denuclearized.
In that context, the job that we do
in terms of maintaining a continuously safe and reliable
shrinking stockpile without nuclear testing
is a foundation for being able to pursue
that kind of a policy.
And I might just say-- I'll move onto windmills,
but the last point there, perhaps,
is that this job had to be completely reinvented
in the 1990s because of the absence of underground testing.
So a new science-based approach had to be invented.
It was invented, and it succeeded for 22 years
without testing, and we see no reason to expect that will not
remain the case for a long time.
So I think that's a big success story.
The president also has had a signature item
of reducing nuclear materials globally, and, for example,
sometimes working with Russia-- with whom
we have a little bit of an interesting relationship
at the moment-- but continuing to work with them,
we have eliminated completely high-enriched uranium,
for example, from 12 countries in the last few years.
So that's one mission.
JOHN WOOLARD: And we even consume quite a bit
of the nuclear material from old weapons
in some of our power plants today.
ERNEST MONIZ: Yes, I would argue that the greatest
nonproliferation program that there has been
is the so-called Megatons to Megawatts Program.
It just finished 20 years on schedule,
and 500 tons, metric tons, of Russian HEU material
was blended down into low-enriched uranium
for American nuclear power reactors.
And for 20 years, it provided the fuel
for half of our nuclear fleet.
So we were burning Russian nuclear weapons material
in our reactors, and 500 tons is a lot to get rid of.
Windmills-- of course, our energy mission.
We pursue a clean energy agenda for several reasons,
but I would say preeminently for climate change risk mitigation.
And that agenda-- I presume we're
going to talk more about that as the main focus
of our discussion-- that agenda, I would say,
has a very, very strong technology focus.
And that technology focus ranges from very early
stage basic research through development and demonstration
to a huge deployment program.
In fact, Google has partnered with us
in some of our major loans and loan guarantees that
have implemented large clean energy projects.
I would just mention now that in addition to that technology
development focus, we also have some regulatory authorities,
such as setting efficiency standards for appliances,
for electric motors, et cetera.
And a lot of these sound individually
small, like efficiency standards for standby power
in microwave ovens, but when you add these up--
and we have picked up the pace dramatically
on these standards-- when we add up all the standards that
had been put in place just in the Obama years
and what we expect to do in the next two years,
and you accumulate that to 2030, we're talking $450 billion
of energy savings and three gigatons of CO2.
So you've got to just keep at it.
We'll do 10 standards this year.
We hope to do 25 more in the next two years.
It's very popular with everyone, I can assure you.
And then, a third element is-- another way
we go about our business is simply by using,
frankly, the convening power of the department.
And a good example of that, again,
is in energy efficiency, something
we call a Better Buildings Challenge, for example.
And we can discuss more of that, but there we have about 11%
of all of the commercial floor space, big commercial space,
under this program, where we convene.
We propagate best practices.
They're shared among the companies.
The goal is 20% energy reduction by 2020,
and we are ahead of that pace.
Some companies have actually reached the goal in a few years
and have doubled down.
So it's everything.
It's science and technology, and its regulatory approaches,
and it's convening.
Third, quarks.
That's the science agenda.
And this morning, actually, I was
out at Slack, one of your neighbors,
one of our 17 national laboratories.
Let me just say that the Department of Energy
sometimes is recognized, sometimes is not,
as an absolute kind of a backbone
in the American science and technology establishment.
The 17 national laboratories, including,
at those laboratories, these facilities like big light
sources, big neutron sources that are nowhere else, frankly.
30,000 scientists use those facilities every year
for their research, from universities and other places.
It's also maybe interesting to know
that if you take our light sources--
we have four places-- a third of their work
is now in the life sciences, biology.
I mean, users coming in to use them-- it's been said,
and I believe it's true, that there is no new drug that
comes onto the market in the United States
that did not, in its development phase,
go through one of our light sources, to understand.
So it's a big responsibility to maintain this science
enterprise, and the quagmire is cleaning up the Cold War mess.
JOHN WOOLARD: Oh, I thought you were talking about Congress.
You said quagmire, but the other quagmire.
ERNEST MONIZ: You know I have no comment on that.
But anyway, just to say that it's a pretty tough--
we've done the 90% of the jobs that
could get done relatively easily,
and now we have some really tough ones left to do.
But let me just note that all four of those mission areas
are fundamentally, largely science and technology areas.
And that's where, again, our laboratory system of 17 labs
comes in as a principal, not the only,
but as a principal way of implementing
our missions in science and technology.
JOHN WOOLARD: One of the things we talked about earlier was
just what's been happening in China recently
and the whole macro picture around carbon
between now and 2050.
I'd love if you could just walk the audience
through a little more of what's happened
in China with the US, what that deal looks like, what it means,
maybe even with respect to the existing policy 111(d),
and how all of this can fit together
from a climate perspective.
ERNEST MONIZ: OK.
A lot of things to put together there.
So, China.
First of all, starting with the announcement on Tuesday--
well, Tuesday here in the United States--
by Presidents Obama and Xi.
Obviously, we've been working on this for a while.
And frankly, in the end, the most important message
was simply the fact that the two presidents stood together
and talked about what, in the different context that we have
in the United States and Russia, are reasonably ambitious goals
for addressing carbon-- well, greenhouse gases more
generally.
Clearly, the nature of the commitments
was quite different in terms of what
goals were discussed on the road to Paris.
In the United States' case, clearly
the reduction of CO2 from 2005 into the 26%,
28% range is going to be aggressive.
I mean, it's aggressive.
We've done modeling, et cetera, and with current authorities,
we think there's a chance.
It's a tough call, I mean, but we think we can do it.
Clearly, we'd be in much better shape if we can get--
and I'm optimistic, frankly, that we
will get-- I don't mean in two years--
but that we will get, relatively soon, some statutory approach,
which would really help make things simpler to reach
those kinds of goals.
Anyway, so that was a major part of the United States statement.
In the Chinese case, the big news is simply-- first of all,
it's simply that they announced that they
are going to tackle carbon.
They announced it in two ways.
One is as a 20% carbon-free goal and that they
will peak C02 2030, and hopefully--
and they had the statement-- with the intent
of trying to advance that even earlier.
So clearly, getting China, biggest emitter, large,
emerging economy-- frankly, a country whose reluctance
previously to commit to a carbon goal,
even though they were doing a lot of programs domestically
that would lead you there, but that reluctance was clearly
a major issue in terms of how other countries would or would
not come on board.
So we think this was kind of a big deal,
in terms of setting us up for the road to Paris.
JOHN WOOLARD: Now the Chinese had, before this,
goals, but not commitments, I guess.
How far beyond their existing goals--
ERNEST MONIZ: Their goals were never
phrased in terms of carbon.
The goals were--
JOHN WOOLARD: Renewable--
ERNEST MONIZ: --in terms of air pollution,
which of course is a huge issue.
It was in terms of goals for nuclear power expansion, goals
for CAFE standards for vehicles, goals for renewable deployment.
But to actually say that this is about carbon,
and it's going to take us a little bit longer to peak-- us
I mean Chinese-- and then we're going to come down,
is really a big step.
And again, I think, and we all certainly hope and think,
that, again, this will facilitate a very different
discussion internationally, especially
on the road to Paris.
Of course, the EU already also declared
their goals, which, by the way, because
of the different baseline year 1990,
have roughly the same kinds of annual reductions as the United
States.
JOHN WOOLARD: Right, it was a 2005--
they used a 1990 baseline.
ERNEST MONIZ: 1990 baseline, and as we all know,
they have certain carbon advantages
in using 1990 as their baseline.
JOHN WOOLARD: Right.
Now you could say the same about the US,
that we never framed it as much in terms of carbon,
that we've had renewable policy and another driving functions.
Are we going to need to do more than what
exists in law today with 111(d) and some of the other tools?
ERNEST MONIZ: Well, first of all,
I would say that we have spoken about carbon and climate,
et cetera.
After all, the president issued the climate action plan
in June 2013.
Now, we don't have the statutory carbon policy at this stage,
so certainly in terms of the programs we are executing,
they were not authorized specifically
for a carbon context.
But starting with Kyoto, frankly, Copenhagen,
and most especially, I would say, the president's climate
action plan, it's about climate.
And so it's the other way around.
It's about climate.
And there are, by the way, many other advantages and objectives
to be served by these programs.
So whereas in the Chinese case, there really
was no governmental statement about a carbon issue.
So again, it's a big deal.
Now, in terms of the 111(d), et cetera, when we model this out,
we are including the 30% kind of reduction
anticipated from 111(d).
We have to remember, it's a draft rule right now.
The final rule following comments--
the comment period in fact, is, I think just about,
well, it's not quite over yet.
And we hope certainly that will be
on schedule in June of next year to issue the final rule.
But in our modeling, et cetera, yeah, we
are incorporating the CAFE standards.
I remind you, the date given was 2025 for our commitment,
and so there, we already have a CAFE standards trajectory
to 2025, 50 plus miles per gallon, for example,
for light duty vehicles.
We have 111(d) for power plants.
JOHN WOOLARD: Primarily acting on th
the authority that we already have.
ERNEST MONIZ: Yes, so this was all
based upon authorities we have.
And again, the climate action plan
that was put out last year, the president said, initialing it,
that look, we would love to work with Congress
and have a statutory approach.
It gives a lot more flexibility in terms
of an economy-wide approach.
But in the meantime, the words are, we can't wait.
And so that plan was fundamentally as aggressive
as we could be, at least in our thinking at that time,
using existing authorities.
Now, in the meantime, we're still
being challenged to think of other ways
that we can use existing authorities,
and we are making some progress.
So basically, we throw all that into the mix
and feel that the announcement in Beijing
is kind of the stretch side of what we can do in that context.
JOHN WOOLARD: Maybe this is a good way to move to windmills.
So as you look at how decarbonize
or how to get some of these goals,
we don't have a national RPS standard,
but we do have states, but the more cost-effective wind
and solar become, the more they're
going to continue to penetrate the energy supply.
I guess there are two themes to explore here.
One is, what do you see in terms of technology and cost,
and the other is, what are the challenging issues
around intermittency and integration with renewables
that you see, and how to think about addressing them?
ERNEST MONIZ: So first of all, in terms
of reaching the low carbon objectives,
we certainly have very strong emphasis on renewables
and efficiency, but I do want to emphasize that we do have,
and really mean, in all of the above strategy, which really
means that we start with the carbon constraint.
We are absolutely committed to looking at a lower carbon
future.
Within that, then, we allocate resources
across the board for approaches to lower carbon.
So for coal, that amounts to carbon capture, and sometimes
carbon utilization, and certainly carbon
underground storage, and nuclear as well,
and renewables and efficiency.
In all cases, the goal is cost reduction.
In the end, that's really what it's all about.
As a reminder, all of these terrific technologies
that are being developed and deployed,
they don't provide fundamental new services to people.
This is not Google.
JOHN WOOLARD: [INAUDIBLE] energy.
ERNEST MONIZ: Right.
It's light.
It's heat.
It's mobility.
But it's providing them in different ways
and in cleaner ways.
And that's critical.
But ultimately, we've got to get the cost down in this business.
As you said, we have seen, in some
of these areas, very dramatic cost reductions.
One you did not mention, which is a huge story, of course,
is LEDs.
It wasn't very long ago, people were talking about $50 LEDs
to replace a 60-watt incandescent.
And even though that was actually
a life cycle good deal, because the energy savings would
be about $130 over the lifetime of the LED-- of course,
that was not a discounted energy savings, number one.
And number two, well, it may be a good life cycle deal.
It's pretty hard to put out $50.
But putting out $5, which is kind
of where we're at least almost at, is a whole different deal.
The payback periods are now getting below a year,
and that's not even counting the ancillary benefits
that you would see from, for example, not having
to change the fixture for a long time.
You want to change something up here, you need a ladder.
You need all kinds of issues.
And so what have we seen?
We've seen a deployment go up 100x in less than three years.
It's the cost reduction and the quality, then,
of what one is getting.
So solar, we all know, we have seen
very, very dramatic reductions.
We are certainly talking for utility-scale solar.
We can be talking, all in, certainly below $2 a watt.
The holy grail has always been $1.
On the module, we're getting very close.
We're very close to the $0.50 per watt module that was always
dreamed of.
We're having a little bit of a harder time on the other costs,
but still for utility-scale, we're
certainly below $2 in most cases.
That's a big deal in terms of the ability now to penetrate.
In fact-- if I may make an aside on that-- if I go to our loan
program, in 2009, the United States
had zero utility-scale photovoltaic plants.
I'm using that to mean 100 megawatts or bigger.
And debt financing in that time period
was, of course, extremely difficult.
The loan program from DOE supported the first five
utility-scale projects.
They all had PPAs.
I mean, they're doing fine.
We're now out of that business.
But there are 17 other projects going forward
with private financing.
And that's exactly the model that we want,
that we kind of helped get going--
take some of the early risk, but then
have the private sector take over.
JOHN WOOLARD: And when you say out of that business,
you're with reference to large utility-scale PV, not
the loan guarantee program.
ERNEST MONIZ: No, exactly.
The loan guarantee program, we are in business.
If we go there for a second-- so we
have loan guarantee and conditional commitments
of about $34 billion.
The losses so far are about 2 and 1/4%, $780 million.
It's interesting-- two days ago, we
announced that, just as an amusing factoid,
that we have now collected $810 million in interest.
So we're actually in the black.
JOHN WOOLARD: Congratulations.
It was good to see.
ERNEST MONIZ: But I don't want that to divert our attention
from the fact that the aim of this program
isn't to make money.
The aim of the program is to get these technologies out there.
And we think a pretty damn good job has been done there.
We do have $40 billion left of authorities,
and we will be working very hard to use at least a very large
fraction that $40 billion over the next two years.
JOHN WOOLARD: What categories are
interesting as you look at how loan guarantee funds could
be used?
ERNEST MONIZ: Well, first of all,
the buckets are not at our discretion.
They're in statute, so we have $4 billion
in play for renewables and efficiency.
For example, as one example-- let me say,
we're open for business.
But the fundamental condition is that the project, of course it
must satisfy a reasonable due diligence in terms
of having a future if it gets this kind of support.
But it has to also move the technology envelope.
Now, it doesn't mean it's going to be revolutionary,
because that will probably test the market viability in most
cases.
But it's got to move the envelope, which
is why I said for utility-scale solar,
unless there is something new about it, we've done five,
and now it's time for the private sector.
You ask, what's an example?
In the renewables, in the request
for applications, the call, one example
given that has not been supported
and has substantial potential is micro hydro, for example.
So there could be that.
It could be re-powering existing dams, et cetera.
Then, we have $8 billion in fossil.
JOHN WOOLARD: And when you say fossil,
that's with sequestration or something novel or new?
ERNEST MONIZ: Could be sequestration,
but it could be a new kind of combined heat and power,
for example.
So it's anything using fossil.
It could be utilizing currently vented resources like methane
and putting those to beneficial use.
So it's anything that reduces greenhouse gas emissions
and has some novelty in pushing the envelope.
Then, we have $16 billion for the Advanced Technology Vehicle
Program.
This is the one that loaned the roughly half billion to Tesla
and was repaid, I think, 19 years early or something.
And there, in the future, we've made it very clear
that auto suppliers, being in the supply chain
for the future efficient vehicles,
would be a very interesting area.
And we've said, hey, open for business, open for business.
And the fourth area is nuclear energy, where, again, we
have had one loan to get the first so-called Generation
III-plus reactors to help them get in that project.
JOHN WOOLARD: That's the Vogtle plant?
ERNEST MONIZ: That's the Vogtle plant in Georgia,
with Westinghouse AP1000 reactors.
But maybe there could be something
on modular reactors, our new fuel that
gives greater efficiency.
It's a very, very broad call.
JOHN WOOLARD: When you look at nuclear, what do you think,
as you look forward, about new technologies versus maybe
the Gen III-plus?
But then, you move into Gen IV and even fusion.
How should we think about how those could play in the mix,
and when those types of technologies
could have access to funding?
ERNEST MONIZ: Anything nuclear is
going to take a long time to-- it's not
an area that changes quickly, and for obvious reasons,
and a strong regulatory process, et cetera.
So the Generation III-plus, there
are reactors being built elsewhere, including China,
but now we have four of those being
built in the United States.
And they have been certified by the NRC,
as has more recently-- a GE advanced boiling water reactor
design has also now been certified by the NRC.
I think the big issue there-- I've
said it all along-- we go back to cost.
Will these new reactors in Georgia and South Carolina
be built on at least reasonably close to cost and schedule?
That'll have a huge impact.
As far as new technologies go, probably the new technology--
and it's new only in one sense-- that
is most near the marketplace are small modular reactors.
We are providing some assistance, for example,
to a 50 megawatt type reactor.
But even there--
JOHN WOOLARD: But it's still a pressurized light water.
ERNEST MONIZ: It's still a light water reactor, exactly.
And it's precisely because, if you take too big a step,
you have a real regulatory challenge.
They do have different features, integral design,
very good safety features.
The question is, what will they cost?
And our view is, we don't know what
they will cost until we start building a couple.
So we are hoping the first couple
will come online in roughly the 2022 time period.
So a decade from now, and then we'll see.
JOHN WOOLARD: If anybody has questions before we run out
of time, there's a mic back there.
You can just stand up, and let's open it up.
But while people are queueing up, and if not,
I've got a few that were submitted earlier
from the Dory.
How do you think about-- one last nuclear question.
Everything feels like it's by necessity incremental.
If you had something a little more, not even radically,
disruptive, but a thorium-based molten salt, something
that was a different approach, what's
the path between where things are today and commercialization
for something that's a little more out of the box?
ERNEST MONIZ: Well, I think there
are a number of very interesting technologies,
but as I say, taking that in the nuclear realm
through the testing, the licensing, et cetera stage,
it's expensive.
To be honest, I would be surprised to see
a kind of a big leap in technology,
actually in kind of a commercial deployment phase.
2030 would be pretty--
JOHN WOOLARD: Realistic.
ERNEST MONIZ: --ambitious.
Realistic, ambitious.
Right.
We'll see.
Again, the smaller reactors, including-- by the way,
there are some, as we know-- Bill Gates, for example,
is very interested in a very new design reactor.
The Chinese have a demonstration of a high temperature gas
reactor, which, of course, we used
to have one in the United States,
and that didn't work out too well.
Some of those, maybe those could move back
into the decade time scale.
But I think to see anything before a decade deployed is
just not realistic in the nuclear business.
JOHN WOOLARD: I've got a couple of questions
that had come in online.
And once again, feel free.
If anybody has questions, the mic's up there.
Actually, most of them we've covered, I believe.
This one's an interesting angle.
I'm going to re-ask you the thorium question.
"So as weapons diminish as the central focus
of American nuclear policy, will we investigate thorium
fuel reactors as a proliferation-resistant,
carbon-free, waste-minimizing source of energy?"
ERNEST MONIZ: Well, first of all,
we have, of course, researched thorium reactors.
I think one of the issues with thorium reactors
that is often not mentioned is, you
do need to go into a recycling economy,
if you want to do a thorium reactor.
Thorium is not a fissile material.
So what a thorium reactor is really fissioning
is Uranium-233, which you breed, and then, you
have to go through a recycling.
If you have a pure U-233, that is not
very proliferation-resistant.
So there are ways of addressing that, called Radkowsky cycles,
for example.
Without going through a whole big deal about Radkowsky
cycles, let's just say that it does accomplish
the goal of having uranium that is not viewed as a weapon
material present at any time in the fuel cycle.
However, the price you pay is you have introduced plutonium
back into the system.
Not as much as with current reactors, but it's there.
I think there are some interesting features of thorium
reactors, but it does require recycling,
and right now, I would again say, don't count on
that in the next decade.
JOHN WOOLARD: I think we had a question.
AUDIENCE: Hi, thank you, Secretary Moniz,
for coming and speaking to us.
I actually have two questions.
I was wondering about-- early on, I
think, the Department of Energy or the predecessor sponsored
a lot of test nuclear reactors that
could test some of the concepts like you were describing,
the thorium reactor.
Or another concept that I've heard a lot of press about
was these trans-- I think it's called transuranic processing
life cycle reactors that could actually
burn some of the nuclear wastes that are very problematic.
And if I could ask another question,
earlier today, there was a news report
about how Russia is starting to step away
from some of the nonproliferation partnerships
that the United States has had, and which
have been very successful.
If you have any comments on that,
that'd be very interesting.
Thank you.
ERNEST MONIZ: OK, so on the first one,
what's being referred to for the non-nuclear aficionados
is that when you burn up the fuel in a nuclear power plant,
you produce plutonium.
The plutonium, of course, can be--
and I'm not going to get into the nonproliferation issues--
but certainly from an energy perspective,
the plutonium can be recycled and reused in the reactor.
However, those who do that, for example, the French-- in doing
that, the transuranic elements other than plutonium
are put into the waste stream.
Neptunium and americium and curium, et cetera.
They are also very long-lived and still
contribute to a waste stream that has the millennia time
scale as opposed to the century time scale.
So the idea is, instead, put all of those elements
back into the fuel and burn them in a reactor that
has a fast neutron spectrum.
Again, no law of physics is violated in doing that.
However, it is tough, and there are some real issues
if you want to do that, in terms of the inventory
you build up within the reactors, et cetera.
I think that has some attraction as kind of a nuclear waste
holy grail, but again, don't even think about 2030 for that.
It's farther downstream.
And there's a huge R&D program needed.
It'd be very expensive.
Frankly, other than paper studies,
we don't have a lot going on on that today.
On the second issue with Russia, for obvious reasons,
we have a difficult relationship at the moment.
Statements have been made that our cooperation on securing
nuclear materials will not go on past 2014.
That's a little bit too stark.
First of all, a statement has been
made that we would continue to cooperate
in removing nuclear materials from 30 countries.
I think I mentioned earlier that we
have worked, in fact, together to do that to remove fuel
from third countries, for example.
And the fuel, the high-enriched uranium,
goes back to either the United States or Russia,
typically, the country from which it first came.
So for example, last year, we did that from Vietnam,
for example-- moved all the HEU out from Vietnam together.
And it went to Russia.
So those opportunities, as they arise,
are clearly in our mutual interest,
and we expect to keep doing that.
With regard to other programs, especially those
taking place within Russia, we have a dialogue continuing.
It's clear that the cooperation will not
be at the level it was, following 2014.
But I do believe on a case-by-case basis,
as we see important programs of mutual interest,
I think there's still a good possibility
that we can move forward.
But it's a different dialogue, let's face it, at the moment.
JOHN WOOLARD: So given those challenges,
as you look at how to find large, single-source, or large,
dispatchable power plants that are zero carbon
and for the next 20 years, do you tend to put more of a heavy
focus on things like coal or natural gas with sequestration
as a more viable, nearer-to-mid-term path?
Or do you still think we should be building up nuclear?
Do we need to build up sort of a nuclear,
given just conventional or today's existing technologies?
ERNEST MONIZ: Our view is that, first of all,
our job really is to help the marketplace--
policymakers, regulators, investors--
understand what the options are.
And to understand them means not only
to get invested in the earlier stage, technology developments,
but to help in the deployment of these technologies, which
has played a big role also in part of the cost reduction.
The way I come at it is, it's not up to us
to dictate a market share, that ultimately, we
want the marketplace to make the low carbon choices, of course,
in the context of a carbon policy that
has to be established.
JOHN WOOLARD: But you can encourage
R&D in various categories?
ERNEST MONIZ: So the R&D, we are carrying out across the board.
We really are.
The R&D, the loan program-- these are all across the board.
And one of the important points, I think,
which is not emphasized often enough,
is that there is no one low carbon solution.
Different countries and different parts
of our own country are going to have different low carbon
solutions, depending upon resource
mix in that part of the country, frankly,
depending upon regulatory structure.
For example, it's no accident that the four new nuclear power
plants being built are in the southeast.
It's largely because of the regulatory structure.
So we're just going to see different mixes,
and we feel our job is to help prepare the grounds so that all
of these technologies and their cost and performance
characteristics are understood as well as possible.
JOHN WOOLARD: Well, we appreciate your--
ERNEST MONIZ: And, of course, also work
on the enabling technologies.
You mentioned earlier-- I didn't go to it.
For example, you mentioned large deployment
of variable resources, wind and solar.
Clearly, storage is very important.
Clearly, what we do with the grid,
both high voltage grid, smart grid, distribution systems,
distributed energy, distributed storage--
those are all areas that we are advancing, and I might say,
in the technology space.
But also in trying to provide analytics,
because a lot of these things I mentioned--
let's say storage or end-use efficiency.
How those are valued in a rate structure
is not exactly in great shape at the moment.
JOHN WOOLARD: So you're going to enter the rate-making business
with the PUCs.
ERNEST MONIZ: Yeah.
We don't do that, but we can provide
analysis and technical assistance,
et cetera, capacity markets.
So we know, huge fight's going on.
Net metering, I mean, you've got it.
So we are in a transition period.
Transition periods are always challenging
for a variety of newcomers and incumbents.
A new set of rules is used.
Look, to take the most simple example, kind
of an historical approach to retail electricity prices,
based upon-- I'll exaggerate slightly
--putting everything on a kilowatt hour basis.
It may have been fine at one time.
If we talk now about a dramatically changed
architecture of the system, we're
going to have to go to where the actual services being provided
are costed appropriately.
And, let's face it, we have not figured that out.
And again, it's a hodgepodge in different parts of the country.
We have a big transformation to a low carbon
future that we are trying to accelerate,
and doing that has got challenges in business models,
in technology, and regulation across the board.
And we're trying to take a big picture view of this
and see if we can move it along.
JOHN WOOLARD: We need somebody with a big picture view
because right now, we're getting a lot of flawed incentive
structures out there, and it's a little bit of a mess.
Thanks for your time today.
We really appreciate it.
ERNEST MONIZ: I appreciate it.
JOHN WOOLARD: If everybody can give him a warm hand.
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