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When I see a tough problem, my first thought
is always, “How can innovation help solve
this?” That’s why Breakthrough Energy was
started – to bring the power of innovation to
bear on the toughest problem humanity
has ever faced: climate change.

Bill Gates, founder of Breakthrough Energy

When I see a tough problem, my first thought is always, “How can
innovation help solve this?” That’s why Breakthrough Energy was
started – to bring the power of innovation to bear on the toughest
problem humanity has ever faced: climate change.

Bill Gates, founder of Breakthrough Energy

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From left to right: Ramya Swaminathan (CEO, Malta), Ann Mettler (BE VP, Europe), Fatih Birol (IEA Executive Director), Bill Gates (BE Founder), and Ursula von der Leyen
(President of the European Commission)

In these regions, we’re focusing on key roadblocks to scaling up promising technologies, like long-duration energy storage (LDES) and green steel. We’re also bringing attention to regulatory bottlenecks and slow permitting; forging partnerships, including with the European Commission, the European Investment Bank and the UK government; and addressing key scaling challenges, such as with LDES and e-fuels.

We’re also working to reduce overall transition costs in an era of high inflation by leveraging private finance, tapping into institutional investors’ capital, and working to increase the availability of public risk capital for emerging climate technologies.

It remains important to work across all fronts, because progress is never linear. The Ukraine war and subsequent energy crisis have slowed progress on electrification, which remains the cheapest decarbonization pathway in Europe — just one example of why, even in a region with exemplary climate leadership, it’s crucial to constantly evaluate and adjust our strategies.

Coal-fired power station at night

But people also emit a ton of carbon without ever plugging into an outlet or connecting to a grid. They drive cars with internal combustion engines. They make steel using coal or heat buildings using natural gas.

We’ll talk about these emissions sources in the following pages, but what they have in common is that often, the best way to decarbonize them is with zero-carbon electricity : replacing your gas-powered car with one that plugs into the wall, for example.

That’s why even though carbon-based electricity accounts for about a quarter of all emissions, carbon-free electricity amounts to more than a quarter of the solution . The world has roughly 8,000 gigawatts of installed electricity capacity. It’s not just a matter of making sure all 8,000 are produced with wind, or solar, or nuclear. It’s a matter of building another 20,000-30,000 carbon-free gigawatts so we can reduce emissions in other areas.

Aerial view of electric towers in green fields

The good news: Of all the grand challenges, the most progress has arguably been made in electricity, propelled by low-cost and widely available clean energy and batteries.

Of course, generating energy and delivering electricity are two different problems. We’ve gotten a lot better at generating clean electricity over the past decade. Figuring out how to deliver and store it for later use has been a little tougher.

The big challenges with delivery are storage and transmission . How do we get clean electricity to people when and where they need it?

Array of solar panels in Nevadan desert

With fossil fuels, it’s easy. You transport coal or natural gas to a power plant, convert it to electricity, and then send the electricity along power lines to the homes and cities that need it.

Solar and wind power don’t work that way. The sunniest and windiest places aren’t the only ones that need electricity, and they’re not usually near big cities either. Plus, you can’t exactly ship sunlight or wind in a railcar or a pipeline.

Storing and transmitting clean electricity will require big, modernized, and interconnected electric grids. Right now, those don’t exist. In some countries, the grids are too small, old, and fragmented — in other countries, they don’t have grids at all.

We’ll get to all of these issues in the sections below. But let’s start at the beginning of the electricity process: Where do we get the energy?

Green and red aurora over a field with power lines

This isn’t just a U.S. problem. Grid challenges are global. From getting permits to finding connecting land, most nations are facing similar obstacles to expanding and updating their grids.

In fact, Europe presents more complicated challenges than the U.S.; instead of 50 states, you’re dealing with over 20 countries. And a third of the European Union's grids are already over 40 years old — by 2030, half will be.

A worker installing a vent duct

Aeroseal , an Ohio-based company, deals with all the air leakage not involving windows. They’ve developed a harmless polymer fog that’s light enough to float in the air. To seal up a building, they close all the doors and windows, blow air into the building to raise the pressure inside, and then release a fog of these polymers. As the air heads for leaky spots in the air ducts and walls, it carries the polymers, and they build up in the cracks and crevices, making them air-tight.

This can be done at a fraction of the cost — and time — of the traditional manual process. And thanks to deals with several large homebuilders and developers in the United States and Canada, Aeroseal has already sealed over 250,000 buildings.

A flower box outside a home with cracks and peeling paint

Unfortunately, sealing your ducts and updating your HVAC system just isn’t as sexy to homebuyers, renters, or real estate agents as redoing your kitchen or adding an extra bathroom.

Right now, it just doesn’t affect the home value as much. As we’ve seen with the other grand challenges, many of the necessary changes don’t affect comfort, quality, or functionality for the consumer, so it’s difficult to convince them to accept the Green Premium.

What’s more, there’s a split incentive problem at play when it comes to big apartment complexes and commercial buildings: If the renter is paying the electricity bill, the landlord has little incentive to retrofit the building with more energy efficient appliances, such as an improved HVAC system or better-insulated windows. These behavioral challenges are at the core of the decarbonization challenge in the buildings sector.

So this will be an uphill battle, but the technology is already here. The Green Premiums are lower than for other grand challenges, and in some cases even negative. And the impact on our climate could be a game-changer.

How can we find a cheaper, greener option for materials that are already cheap, that are already low-carbon, and that are so abundant that they literally compose the foundation of our world?

An important first step would be “electrifying everything” that we are able to as we outlined in the previous chapter: innovative electrification technologies will be required to cut down on the energy footprint of cement and steel manufacturing. Then, with the innovative technologies at our disposal, and sufficient investments in them, we can improve nearly every step of both these processes, from cleaner component parts of cement to the way iron ore is reduced into steel. For the final stretch, we need to harness public policy, regulations, and behavioral change to actually increase uptake of these innovations in industries that are often set in their ways.

When it comes to building codes, we should move from prescriptive (i.e. conservative) standards to performance-based standards that encourage innovation.

Both functional and regulatory barriers have prevented the wider uptake of innovations to ordinary Portland cement. Portland cement has exactly the right pH to prevent the corrosion of reinforcing steel, which is the main reason concrete structures fail; this is one of its hardest functions to replicate. What’s more, there’s huge economic inertia towards these alternatives, because of the sunk costs — nearly a trillion dollars — in old-school Portland cement.

Something that can help move the needle on uptake and regulation is more funding to promising technologies to demonstrate its use at scale, which can motivate regulatory changes and create a virtuous cycle. More broadly, financial incentives like demo project funding and tax credits can help overcome the Green Premium for producers. One great example of this is the Bipartisan Infrastructure Law (BIL) passed in the United States in 2021, which earmarked over $500 billion for precisely such purposes.

There are some modes of transportation — like cars — where the battery-for-gasoline tradeoff makes sense. But as we start talking about vehicles that need to drive longer distances and carry heavier loads than a family sedan, the rationale for batteries breaks down. An electric cargo truck capable of driving 600 miles in a single charge would need to carry so many batteries, it would have to haul 25% less cargo. And that’s saying nothing of ships that need to stay afloat and planes that need to stay aloft.

Good news is, trucking and aviation are changing. A higher percentage of flights are short, which means more flights can be electrified or hydrogen-powered, especially cargo fleets and regional passenger travel. And trucks are more volume-limited than weight-limited these days, meaning they can use more of their weight-carrying capacity for batteries.

But for the full decarbonization of these modes, we will likely need a solution other than batteries. And the best way we’ve found is to create a fuel that approximates what’s used now — something that can be used in existing infrastructure and looks like gasoline, works like gasoline, but doesn’t emit carbon dioxide (CO₂) like gasoline. That’s the key innovation challenge for transportation: clean, liquid fuels.

Layers of soil

Nature-based carbon removal is the only tool we have that’s scalable today, and we need it in order to manage land use change emissions over the next decade.

And yet, for all its affordability and scalability, it doesn’t provide the permanence of engineered solutions. Nature-based solutions can be a stopgap, but we need advanced engineering and technology to take us the rest of the way.


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