As we continue our #EmpoweredCommunity series, CA Energy Commission Chair David Hochschild joined Bloom CEO, Founder and Chairman KR Sridhar for a discussion on the future of renewable #energy in CA, the challenges of resiliency and advancing pathways to #NetZero.
Video Synopsis
Speakers
Chair David Hochschild: David was appointed chair of the California Energy Commission by Governor Gavin Newsome in February of 2019. Chair Hochschild’s career has spanned public service, environmental advocacy, and the private sector. He first got involved in the solar energy field in 2001 in San Francisco as a special assistant to Mayor Willie Brown, where Chair Hochschild launched a citywide $100 million initiative to put solar panels on public buildings. He also co-founded the Vote Solar Initiative, a 60,000-member advocacy organization promoting solar policies at the local, state, and federal levels. Chair Hochschild previously served as a commissioner at the San Francisco Public Utilities Commission and for his work to advance clean energy, he has been awarded the Sierra Club’s Trailblazer Award, the American Lung Association’s Clean Air Hero Award, and the US Department of Energy’s Million Solar Roof True Champion Award.
Dr. KR Sridhar: Bloom Energy Founder and Chairman, Chief Executive Officer. Prior to founding Bloom Energy, KR Sridhar was Director of the Space Technologies Laboratory (STL) at the University of Arizona where he was also a professor of Aerospace and Mechanical Engineering. KR has served as an advisor to NASA and has led major consortia of industry, academia, and national labs. His work for the NASA Mars program to convert Martian atmospheric gases to oxygen for propulsion and life support was recognized by Fortune Magazine, where he was cited as “one of the top five futurists inventing tomorrow, today.” As one of the early pioneers in green tech, KR also serves as a strategic limited partner at Kleiner Perkins Caufield & Byers and as a special advisor to New Enterprise Associates. He has also served on many technical committees, panels and advisory boards and has several publications and patents. KR received his bachelor’s degree in Mechanical Engineering with Honors from the University of Madras (now called NIT, Trichy), India, as well as his master’s degree in Nuclear Engineering and Ph.D. in Mechanical Engineering from the University of Illinois, Urbana-Champaign.
Moderators
Carl Guardino: Executive Vice President of Government Affairs and Policy.
Jimmy Apffel: Government and Community Relations Coordinator
Brady van Engelen: Senior Manager, Policy & Government Affairs, Bloom Energy
Amanda Song: Digital and Social Media Manager, Bloom Energy
Full Transcript
Carl Guardino: Good afternoon and welcome to our Empowered Communities Employee Townhall here at Bloom Energy. We have a very exciting hour ahead with the Chair of the California Energy Commission, David Hochschild, and, of course, our CEO and founder and board chair, Dr. KR Sridhar, for an engaging conversation that will include each of us on this call. Reminder, that this is also on Facebook live and will be recorded for people to join in and watch at future dates and times as well. I want to thank my colleague, Jimmy Apffel for helping with today’s conversation. And we’re going to ask Jimmy to introduce our special guest before we mention, again, the structure of today’s conversation. Jimmy Apffel.
Jimmy Apffel: Thank you, Carl. It’s my pleasure to introduce David Hochschild, who was appointed chair of the California Energy Commission by Governor Gavin Newsome in February of 2019. Chair Hochschild’s career has spanned public service, environmental advocacy, and the private sector. He first got involved in the solar energy field in 2001 in San Francisco as a special assistant to Mayor Willie Brown, where Chair Hochschild launched a citywide $100 million initiative to put solar panels on public buildings. He also co-founded the Vote Solar Initiative, a 60,000-member advocacy organization promoting solar policies at the local, state, and federal level. Chair Hochschild previously served as a commissioner at the San Francisco Public Utilities Commission and for his work to advance clean energy, he has been awarded the Sierra Club’s Trailblazer Award, the American Lung Association’s Clean Air Hero Award, and the US Department of Energy’s Million Solar Roof True Champion Award. Now, without further ado, please join me in welcoming our esteemed guest, Chair David Hochschild. Welcome.
Chair David Hochschild: Thank you. Thank you for that generous eulogy.
Carl Guardino: Chair Hochschild, thank you for joining us. KR, thank you for joining us today. And we are going to remind our Bloom Energy employee colleagues that we structure these conversations into three segments. The first is, that I get to ask about five questions to two incredibly smart, articulate leaders. And we’ll rotate back and forth so that neither of them feels picked on the entire time. Second, we will move into what we lovingly call our lightning round. Eight quick questions with one word to one sentence responses, no run-on sentences. And then finally, my favorite part of our Bloom Energy Empowered Communities employee town hall, that’s hearing from our colleagues here at Bloom Energy, where you can place your questions into the chat box and we will get to as many of your questions to either of our special guests as we can.
Segment One – 5 Questions
Carl Guardino: With that, let’s move forward with segment one, some questions to our two leaders. SB-100, establish the goal of 100% renewable and zero-carbon electricity for California by 2045 and ensuring at least 60% renewable electricity by 2030. Starting with Chair Hochschild, can you share how the California Energy Commission is enabling the next two decades of renewable energy growth? What are some of the key challenges that still need to be met to secure sufficient supplies and maintain reliability? After we hear from Chair Hochschild, we’ll be asking a similar question on SB-100 to KR, Mr. Chair?
Chair David Hochschild: Well, thank you, Carl. Good to be with you and KR, you as well. So just, first of all, a little bit about the energy commission. We’re a 750-person state agency based in Sacramento that’s focused on getting our state to a hundred percent clean energy future. We move about a billion dollars a year in grants, although that’s now increasing with this latest budgets. It’s almost 4 billion in the coverage budget for us this year, on everything from electric vehicle charging infrastructure and energy storage and renewable technologies. The passage of SB-100 was really a landmark achievement in our climate story in California. Now it’s a law in 18 states around the country and President Biden has set it as the goal for the country. We have to procure to meet a huge amount of new renewables. So, over the next five years, about 25 gigawatts of renewables, and we are doing it.
Chair David Hochschild: I’m happy to share that as of last week, we just got confirmation that we installed 5.4 gigawatts of renewables in 2021 alone. There are another four gigs coming online by June. So, nine gigawatts over 18 months is pretty darn good. We’ve got to keep up that pace, of course, to be successful. And the strategy here is a diverse portfolio. We don’t want a hundred percent solar. We want many different clean resources, including geothermal and small hydro and solar, offshore wind, onshore wind, biogas, and others. And energy storage is a really important piece of that puzzle as well. We want a diverse portfolio and we always want to focus on energy efficiency, because with strict energy efficiency standards, such as we have here in California, we’re using about half the energy per capita as the rest of the country. And so that means we don’t have to do as much generation.
Chair David Hochschild: And so that’s a really important piece of the puzzle. We pursue that through our codes and standards that we set for new appliances and new construction. So, exciting times, but we need to do a lot. I think I will just close by saying, I think all of us feel great personal urgency on this issue. You can’t live on the West Coast United States and see the fires and breathe that smoke and not feel that. But on top of that, with what’s happening in Ukraine now, ultimately the way to respond to a Petro-thug like Vladimir Putin strategically long term is to reduce our reliance on fossil fuels over time. And so this is both an imperative for our climate and for peace and democracy. And I think for that reason, there’s really great support across the legislature and across the state and certainly from the governor for accelerating this work.
Carl Guardino: Chair Hochschild, thank you for that thoughtful and thorough response. Obviously challenges that Chair Hochschild referred to in terms of wildfires, which often lead to PSPS events and rolling blackouts, and other challenges that often impact our most underserved communities first. KR, how can innovative employers like Bloom Energy help policymakers overcome the challenges unique to this state, but in similar themes across the country and the world?
KR Sridhar: Thank you, Carl and Chair Hochschild, it is so nice to have you on with us and with our employees, so thank you for being here. And like many of us, you started in the private sector and you’re dedicated to public service over the decades. We don’t say this often enough to people who serve, thank you for your service. And so with that, I think you gave a great overview on where the state needs to go and become a leader that other states and other countries can follow in terms of the de-carbonization goals that are, at the foundational level, why we are doing what we are doing with renewables. And it is both climate change. It is also energy access, energy affordability, and it’s about environmental justice and inclusiveness. So I think it encompasses an enormous number of things. When we do this right, so many other things need to become right so it becomes a model and that’s where companies like ours, Bloom, offer in every segment of the de-carbonization, a value proposition.
KR Sridhar: Our technology being on-site, providing that reliable, resilient power that is going to be required in so many places that are critical to everyday life, given that we are going into a digital transformation, becomes a very important complementary technology to anything we do with intermittent solar, wind and all that. And so that level of long-duration firm storage is not just an option. It is a necessity, for us to be able to bring more and more of the intermittent renewables into the mix. The firming of the power becomes extremely important and that comes through long-term, short-term, storage, such as hydrogen, and having a supply of molecules that come reliably, differently, from just the wires that bring the electricity in. Because 101 of resiliency and reliability is you’re not single-threaded to any one supply chain.
KR Sridhar: And if you want to think about electricity as a supply chain, it cannot just come from the high deserts and the oceans to us through a single wire, and our entire society, our lives, depending on that. So, we offer the alternatives, but we also offer it in such a way that it’s environmentally just. Where we put our systems, they look beautiful. They are not dirty things to hide in poor neighborhoods. They are not dirty things. They don’t emit dirty air pollution. So people want it to be located in communities that are already disadvantaged. We just break those paradigms because we believe in doing the right thing from an environmental justice and social justice perspective.
KR Sridhar: So whether it is producing hydrogen with the highest efficiency possible with the renewable power, whether it is the ability to use biogas in small concentrated areas, rather than just aggregating it on large scale and not letting the methane go into the atmosphere, rather converting that into zero-carbon electricity, whether it’s not using water to produce reliable power, which is a very big issue in the state. You know, the number one user of energy in the state is water. And the fact that we don’t use water to produce power becomes very important. So these are the ways we help.
Carl Guardino: KR let’s build on that because any conversation about the transition away from fossil fuels includes, as you mentioned, the role of reliable energy storage, not solely short term, but long term. And by long term, I’m not talking eight hours, I’m talking days or weeks. When you think about long-term affordable and equitable energy storage, what is your vision for the future? And what steps do you think will need to be made for widespread adoption? And again, KR, we’ll start with you and then go to the Chairman.
KR Sridhar: Sure. So look, energy is the ultimate perishable. You know, electricity is the ultimate perishable. When you make it, if you don’t use it, it goes away unless you store it. There are two ways to think about storage. One is short-term storage, which is batteries. You can charge during the day and discharge during the night or during hours. The other one is long-term storage, and long-term storage comes from creating molecules. That’s why oil and gas were wonderful for us to get the previous century to the industrial revolution because it was a storable fuel that you could transport anywhere you want. Of course, it comes with the unintended consequence of the CO2 in the atmosphere and what that does to climate. So, still, a molecule is needed and hydrogen becomes that carrier molecule.
KR Sridhar: So it can be green hydrogen. Now, that hydrogen, if you want it to be reliable on-site, needs to come through a pipe. Luckily, so pipes are not bad. It’s the molecules in the pipe, just like the internet is not bad. It just depends on if you use it for bad purposes, just because you’re watching things you should not be watching does not make the internet pipe bad. Similarly, the pipe is not a bad pipe. It is the molecules inside. What are the attributes you need? Now, the cleanest of all the fossil fuels, which we are going to need in the world for another 30 years, even in the best scenario, is natural gas. But here in this state, how do we start blending more and more of the natural gas with green molecules?
KR Sridhar: Whether it comes from biogas, whether it comes from hydrogen, and all of the above, and you start blending that in, but you are going to need more than one single carrier of energy coming into critical vital industries, mission-critical support structures, businesses for us to have a reliable electricity system. So this notion of getting rid of the pipes and electrifying everything comes from people who don’t understand reliability and resiliency are of utmost importance with energy. And without them, we will not get the public to accept something because that’s a public hazard.
Carl Guardino: KR, thank you, David Hochschild?
Chair David Hochschild: Yeah. So I would agree with that. I think that things are evolving with electrification and it’s funny that we’re having this conversation. I spent all of yesterday afternoon on a legislative hearing on Hydrogen. I’ve never answered so many questions in my life until yesterday, but the way that I see it is that there is absolutely a niche for hydrogen. I don’t see hydrogen supplanting everything that today is powered by fossil fuels simply because the regional electrification is expanding. And so you see, for example, in passenger duty vehicles, Bloomberg New Energy Finance tracks this, we have 472 models of electric vehicles announced coming to market by 2024. Three models of fuel cell passenger vehicles. That’s not really where I see the fuel cell play on transportation. I think that’s much more a heavy-duty play.
Chair David Hochschild: There’s a bunch of things that I think are inherently very difficult to electrify. Everything from aviation to some of the long-range rail and some industrial applications and the power sector as well. So, we will need multiple strategies as you suggest. But I do think the pipeline is a tricky one in that there is a limit to the amount of hydrogen you can get into a pipeline before you start dealing with embrittlement. And so some of these applications, I do think they’re going to have to be some dedicated pipelines and so forth for us to meet our goals. But I will say on the storage side, there’s some really exciting news. The governor has added to our budget this year, $380 million for long-duration storage. That’s everything from iron air, zinc, air, thermal, pumped hydro, et cetera.
Chair David Hochschild: And that’s more money than we’ve ever had infused into this space and together with the rest of the budget, which is incredibly bold. This year there’s $6 billion just for transportation electrification, which includes EVs and fuel cell vehicles and infrastructure. Added to the $4 billion from last year. It’s $10 billion over two years. This budget this year, is really the right way to understand it, it is like any one of the landmark climate bills we’ve had, SB-100 or AB-32, just in its size. We had very healthy tax returns from a bunch of tech sector exits last year. And it’s really helped us be able to be in the position we are, which is really exciting from an investment perspective.
Carl Guardino: And David, if you could, just define how the governor is viewing long duration? When you talk about $380 million for long-duration storage, that’s music to our ears.
Chair David Hochschild: Yeah.
Carl Guardino: How are we defining long?
Chair David Hochschild: So, that’s going to be the workshop. We’re going to be doing a workshop and welcome your guy’s participation. I believe it is calendared for next month, to begin to get stakeholder input on how that program gets designed. And also, there are some real questions about when a program of that size, not just the scope, but then the size of the grants. Like, what’s really, do you want to do like one landmark big project in a particular area? Do you sprinkle the seeds pretty widely, those kinds of questions? So we’re actually going to be taking stakeholder input on that in April and I’ll have my chief of staff get you the day as soon as that’s on the calendar.
Carl Guardino: Wonderful. Thank you, Mr. Chair. Our next question. A 3,500-megawatt shortfall in California was identified last autumn. As our energy demands grow, what work is being done to ensure the reliability and resiliency of the grid? What are some of the key partnerships necessary to name California’s commitment to green energy? Chair Hochschild, we will begin with you and then here from KR.
Chair David Hochschild: So first of all, that’s a huge amount of procurement. 11.5 gigawatts of new clean resources are being procured. Huge focus on battery storage. So, a couple of years ago, I think in 2019, we were at 200 megawatts of battery storage. Today, we’re at four gigawatts and then a big focus on micro-grids. We’ve funded 40 micro-grids around the state, as well as beginning to ramp up our demand response programs in California, which I have been really underwhelmed with for a long time. I think that’s an important part of the strategy because we can manipulate demand, including for things like electric vehicles. You know, we just passed the 1 million mark in terms of electric vehicle sales in California. How and when we charge these vehicles matters a lot. We got to get smarter on the demand side. So, it’s a whole portfolio of approaches, but I would say, we’re having better and closer collaboration with our sister agencies than we’ve ever had on this. So, that includes the PUC and C ISO especially, but also the ARB on all this as we ramp up.
Carl Guardino: Thank you, Chairman. KR, same question.
KR Sridhar: So I think it becomes a question really of, as we take care of the shortfall, I think as Chair Hochschild clearly pointed out, the price point on when solar in large scale is such that building additional gigawatts of that in the locations that are optimal for that, like the High Desert and the oceans, that’s going to be something that the industry is going to be able to do. And the bulk generation costs are going to be economical and it’s going to work. The question really then becomes the last mile problem. The distribution problem. The transformation problem, and the reliability issues. There, I’m not as optimistic about battery storage being able to take care of the long-term storage. The four gigawatts sounds really good David, until we look at that’s one to two hours’ worth of the four gigawatts of shortage that we have.
KR Sridhar: When you translate that to gigawatt-hours that you need to generate because the charge/discharge is where we need to go. So, we still need to continue to do that, but we need a lot more than that. So I would say, should we just go forward and increase all these things? The answer is absolutely, as aggressively as we can, but we need more than that. Without that there’s going to be a shortfall. And what that shortfall does supply/demand to prices of electricity prices as delivered, not as generated, is the really carbon-intensive or fuel-intensive or energy-intensive companies leave the state.
KR Sridhar: And they generate the products with a lot more carbon-intensive fuel than they would have if they had stayed in the state and it comes at an expense to us and we lose our jobs here, the manufacturing jobs. That’s not good for the state. That’s not justice for the middle class and lower class. So we need to think through this a lot more smartly by saying, how do we keep those carbon intensive factories here, as long as we are consuming those products and make them less carbon-intensive, as opposed to driving them out of the state. Because of this, out of sight out of mind, but it’s one single atmosphere we’re not helping the climate when we do that.
Carl Guardino: David, would you like to respond before the next question?
Chair David Hochschild: Yeah. Well, I think you’re absolutely right about energy costs. And I think one of the things that is driving that is that climate change is making it harder to fight climate change in the sense that, for example, the liability cost of these wildfires bizarrely, unfairly, in my view, is then imposed on ratepayers; you know? And so we’re doing these wildfires settlements with communities who need compensation, but that’s being basically passed onto ratepayers. And so it has jacked up rates. To counter that, there are a bunch of measures that are being put in place now to attract manufacturing. We have one of those programs, which is $250 million to support electric vehicle manufacturing in California. We’re breaking that up into three buckets, one for vehicles, one for the batteries, and one for EV chargers. And we’re providing those grants.
Chair David Hochschild: There’s a bunch of new tax credits. There are a billion dollars of new tax credits for various new clean energy headquartered companies here, as well as sales tax, exemptions, and so forth. But you are absolutely right. It is an issue. It’s a big issue, our energy costs. And when I’ve been engaging with these companies, that is one of the top challenges they cite. We do offer proximity-to-market, which I think is very attractive to your battery manufacturer or an EV manufacturer. We have 43 companies making EVs in the state today, and it was our number one export in 2020, but it is a huge issue. KR, you’re right to identify it.
Carl Guardino: Thank you both. We’re going to move on to our next question. And I’m going to state the obvious with you two and the people here at Bloom online, that the industries with some of the highest CO2 emissions like steel, cement, and chemical manufacturing are also some of the hardest to decarbonize. Yet, it’s imperative that we find a way to reduce their emissions. Looking forward, what are some solutions to de-carbonization that you are excited about? We’re going to first hear from KR and then Chair Hochschild.
KR Sridhar: So, that’s a great question. And that leads to what David, you just talked about. For us to see a lot more wind and solar and offshore wind, you need a heck of a lot of steel. We need a heck of a lot of aluminum. These are huge carbon-intensive industries today, as they’re structured. I think creating an environment to promote those companies to come out here, the most polluting industries to come out here and showing them with the incentives we have and the technology that we have, that we can reduce the carbon footprint. May sound counterintuitive if you went and talked about it. Why would we bring the polluting industries? Not in my backyard. But it’s happening in somebody else’s backyard at five times the pollution. It’s doing the same damage to you and your health and your children’s future. That’s the argument to be made.
KR Sridhar: That’s a tough argument to make, but that’s the argument to be made. So, if you are an economist saying for every dollar I spend, how do I make the most effective use of that carbon intensity? I would say, bring the dirtiest of industries out here with the right incentives, right technology, and lower that footprint. And the way we move the needle with that, and the jobs we create, and the model we set for the rest of the world and enable the production of those materials, that’ll then help all the renewable technologies we are looking for. Whether it is lithium produced in the dirtiest possible way today for batteries, or the steel that has the most carbon intensity for it. I think these are real facts that we have to address, right?
Chair David Hochschild: Yeah. I would totally agree with that last point. And we can’t fully decarbonize every industry. I do want to start with that reality. I think we do need carbon capture. I did a tour actually last week, visiting four companies that are doing carbon capture. Two of them, Heirloom and Mosaic Materials, are doing direct air capture. Then I’ve visited 12 and Ebb, or have some different approaches. And I’m going to be visiting Iceland next month to take a look at the Climb Works Direct Air Capture technology. I do think that has to be a part of the portfolio, but we can do a lot on the industrial de-carb side. We have in this, one of the reasons I keep coming back to the budget, it just has so much good stuff in it. There’s $210 million in there for industrial de-carbonization. That includes things like cement manufacturing.
Chair David Hochschild: So we’re going to focus very heavily on that. There’s going to be like Blue Planet and others that are finding ways to capture carbon and put it into cement. I think that’s really exciting and really necessary. And then you mentioned, KR, what we’re doing with lithium. This has been a huge focus for us. We just did a round table with President Biden and Governor Newsome two weeks ago on this. And we are right now, 95% of the lithium in the world comes from four countries. Chile and Argentina, and Australia and China. In Australia and China, it’s hard rock mining. So you’re busting up this rock until it’s 94% rock and 6% lithium. And then you put it on a ship and send it to a refinery. It’s energy-intensive and carbon-intensive to create that lithium. And then in Chile and Argentina these massive evaporation pots, a pretty big environmental footprint.
Chair David Hochschild: We have the greenest way to produce lithium in the world with this closed-loop Duraway system in the Salton sea, very light footprint. Powered by a hundred percent geothermal energy. So there’s some really exciting, something is a huge reserve. The global market for Lithium’s 420,000 tons. There are 600,000 tons annually estimated in our reserve in California. So there are some really exciting developments, that we can make a lot of progress on decarbonizing. And KR, your point, one thing about industries that do come to California, if you’re plugged into our grid, we’re getting almost two-thirds of our electricity today from carbon-free sources. On route to a hundred percent. So, your industry is relatively green compared to the rest of the world, the rest of the country, and getting greener every year as our power grid mix gets to a hundred percent.
Carl Guardino: Chair Hochschild, we’re going to come to you next for our final question in this segment, because there’s a lot of excitement nationwide around the department of energy’s clean hydrogen hub’s $8 billion grant program that was in the bipartisan infrastructure bill signed by the President at the end of last year. Can you talk about California’s plans to respond to this opportunity so that somewhere in California, we are one of the selected sites for a hydrogen hub? And then I’d like to hear from KR.
Chair David Hochschild: Yeah, absolutely. So, I am like a kid in the candy store with this infrastructure package. I want to get everything that we possibly can get into California, including the hydrogen hub. I’m absolutely convinced the money will go farther here for our goals and for Present Biden’s goals, with the talent and the capability that we have here. We’ve already put in well over a quarter billion dollars into hydrogen-related infrastructure, just through my agency alone. That’s more than every nation in the world except for Japan, okay? So we have, I think a good foundation for that here.
Chair David Hochschild: There are some terrific stakeholders who are working together and we’re engaging with them on an application to try to have a hydrogen hub application to bring that money home. I would add there’s also the chance to do a carbon capture hub and a battery hub and a few other hubs as well. The infrastructure package is once in a generation piece of legislation and is really incumbent on us to make use of that. I think the thing that puts us in a strong position as a state, going into an application process like this, is the ability to leverage state dollars because we can say, Hey, we can match. Here, we can provide significant state support. And so the federal money will go farther here because of that, which not every state’s in that position.
Carl Guardino: Thank you. We’re as excited, almost as excited, about these opportunities as you are. Both for California and across the country. KR what can clean energy technology companies, like Bloom, do to support these efforts?
KR Sridhar: I think we are plugged in from a technology perspective to contribute heavily, both with hydrogen and carbon capture. Chair Hochschild, this is something we haven’t discussed in detail before, but our exhaust stream, whether it is bio-methane or natural gas, is 240 times more concentrated at CO2 than a gas turbine or anything like that. So, 95% of our exhaust stream, once we knock out the water, is carbon dioxide. So, carbon capture comes almost for free, and to be able to utilize that, whether it is in an industrial process like cement or to sequester it, is much easier. It’s the capture part that’s hard on the technology and our technology is uniquely suited.
KR Sridhar: There is no other technology in the world to do this. This is California technology. So, I would say we should work with you to figure out how to showcase this on that side. On the hydrogen side, being a high temperature, electrolyzer, the physics says that we will be more energy efficient than any low-temperature electrolyzer between 15% and 40%. The 15% to 20% comes purely out of using green electricity. The 40% comes when we work with a company like Heliogen or anybody else that concentrates the solar and creates the steam, and that high-temperature steam is what we break up with the renewable electricity. And we are 40% less energy-intensive to create the same amount of hydrogen. So, in both these areas, we bring unique capabilities to the table. We are excited to partner on any of these opportunities as you see fit.
Carl Guardino: And Chair Hochschild, before we move to our next segment, our lightning round. Any response to KR?
Chair David Hochschild: No, those are great points. And I’d love to follow up with you after this KR, on that. Thank you.
Carl Guardino: Wonderful. We’ll meet you in that backdrop you have in Yosemite, David.
Segment Two – Lightning Round
Carl Guardino: We’re going to move to segment two. Again, which we lovingly call our lightning round. As we make this transition, I want to remind our colleagues to go into the chat box with your questions for either of our two special guests. I see we already have some questions loading in the chat box. You can also text me directly. We can work off of both platforms for those questions and we’ll get to as many employee questions as we can. Our lightning round, I will again, rotate back and forth. I’m going to pick on our special guest, David Hochschild first. Number one of our lightning round questions. What do you listen to while you drive?
Chair David Hochschild: Well, I’m in a book club, and actually right now we’re just starting to read about Putin. So, going to be starting a book on that. But, my favorite podcast is This American Life, which is a wonderful weekly one-hour show. And I love it because I get lost in a really good story and I find it very restorative to listen to.
Carl Guardino: That’s wonderful, but when you’re getting lost in a good story, don’t miss your exit. We need you. We need you healthy and whole. KR Sridhar, what do you listen to while you drive?
KR Sridhar: Ira Glass is wonderful David. I like him too. But usually, it’s on NPR or BBC.
Carl Guardino: And I’m just going to put in a plug now. Our longtime board member who stepped off our board last spring, John Doerr, just came out with a book. Speed and Scale, on meeting the climate crisis with, of course, OKRs to meet the climate crisis. OKRs again are objectives and key results. Highly recommend that book. In our second lightning round question, we’ll start with KR. How do you take a break from work?
KR Sridhar: Usually I like to-
Carl Guardino: Everyone on this call wants to hear this answer.
KR Sridhar: Usually I like to exercise. That’s the best way for me to just get my mind clear. Running.
Carl Guardino: Running. Terrific. David?
Chair David Hochschild: Well, I only run when I’m being chased, but I do play basketball. That’s my main exercise. And then I do beekeeping. I’ve been beekeeping for about 15 years and bottling the honey. I really enjoy that.
Carl Guardino: Wow, well that would get me running if there were bees behind me. Our next lightning round question, starting with Chair Hochschild. What is a hobby you wish you had more time for?
Chair David Hochschild: So, I hunt for wild boar. I only go maybe once or twice a year, but I love it. We make wild boar sausage with fennel and coriander and salt and pepper, and that always get me out in the wilderness. So, I would love more time for that.
Carl Guardino: My home address to send that wild boar sausage. I will send it to you in the chat. KR?
KR Sridhar: Skiing.
Carl Guardino: KR. We’re coming back to you. What’s your favorite part about your position?
KR Sridhar: You know, when I’m proudly able to showcase what our employees do to people outside.
Carl Guardino: And you do that every day. Chair Hochschild?
Chair David Hochschild: You know, I love building a healthy culture at work and I read an article recently by Robert Reich, the former labor secretary, about how to survive in these tough times. And one of the things he really mentions and focuses on, building a team and being very deliberate about a sense of teamwork and then celebrating your successes. So, we try to be very intentional about that at the energy commission, when we launch a new program or we achieve a big milestone to bring folks together and congratulate the folks who worked hard and then hopefully have that inspire others. I enjoy trying to facilitate that.
Carl Guardino: I’m glad you mentioned that because we are so good in the innovation economy of big wins. We’re not so good at taking a moment to breathe and celebrate before moving on to the next challenge.
Chair David Hochschild: Exactly.
Carl Guardino: Great reminder. Thank you. Chair Hochschild, we’re going to start with you. We live in a beautiful state. Where is your favorite place in California for a staycation?
Chair David Hochschild: Oh, well that’s like asking me which one of my kids I love the most. That’s hard to answer.
Carl Guardino: That’s the next question.
Chair David Hochschild: So, my wife and I were married in Costa Noah, which is a wonderful coastal lodge about an hour south of San Francisco. So, that’s a great, great getaway for us.
Carl Guardino: Wonderful. KR?
KR Sridhar: Big Sur.
Carl Guardino: Beautiful spots. Beautiful spots. KR, what is your favorite home-cooked meal?
KR Sridhar: Pizza. Homecooked pizza.
Carl Guardino: Ah, that you home cook?
KR Sridhar: Yeah.
Carl Guardino: I always knew you were Italian and now it’s confirmed. Chair Hochschild?
Chair David Hochschild: I love to make vegetable soup and get fresh veggies from the farmer’s market and make a big pot of soup on the weekend.
Carl Guardino: Chair Hochschild-
Chair David Hochschild: This is like a dating show or something where you answer all these questions.
Carl Guardino: Chair Hochschild, what is another profession you know you’d secretly be great at?
Chair David Hochschild: Well, I don’t know if I’d be great at it, but I would love to be the pilot flying the coast guard helicopter. So, next lifetime. That’s on my list.
Carl Guardino: Wow. Do you fly?
Chair David Hochschild: I do. Yeah, but not helicopters. Yeah.
Carl Guardino: Impressive. KR?
KR Sridhar: My childhood dream of being an astronaut.
Chair David Hochschild: All right.
Carl Guardino: Fascinating, fascinating. KR, our final lightning round question is back to you. What gives you optimism for the future?
KR Sridhar: The next generation.
Carl Guardino: And Chair Hochschild?
Chair David Hochschild: Yeah, I have the same answer. I am so inspired by seeing young people today coming into the field and it does give me hope and I do feel that hope resides in the human spirit for a reason. I think there always is hope and I just feel very conscious of it when I meet just really impressive young people that just refuels me in a way I can’t describe. Great response. And thank you. That is the end of our lightning round questions.
Segment Three – Questions from Colleagues
Carl Guardino: My favorite part of our Bloom Energy Empowered Employee Community Town Halls is questions from colleagues. The first one, Chair Hochschild, is from a name you all recognize. I know how highly he thinks of you. Arthur Haubenstock on our legal and regulatory team asks, Chair Hochschild, welcome. Thank you for spending this time with us. In your view, how important is the role of clean firm base-load power to California and its clean energy future?
Chair David Hochschild: Well, Arthur, good to hear from you, and congratulations to you and your wife again on the latest baby. I think it’s hugely important. One of the reasons why is that Diablo Canyon, which is the last remaining of the five nuclear plants we built in California, is being decommissioned in 2025. That’s 2.2 gigs of firm power. And so replacing that is critical. It’s critical in normal times, but even more important now because we’re electrifying so much, we’re adding about 650 electric vehicles a day to California. And so, electric demand is going up. So it is absolutely a critical piece of the puzzle.
Carl Guardino: Thank you, Chair Hochschild. KR, your thoughts?
KR Sridhar: You know, I think micro-grids are going to become a necessity. There is going to be a time between, as we make these changes, it’s like trying to bring security to a town. You can’t secure the entire town, but first, you secure your banks. You secure your vulnerable neighborhoods first before you secure anything else. That’s not part of the equation right now. The state legal process does not allow it in a simplistic way. The PUC rules don’t allow it, but that has to become a necessity in order for us to secure those critical infrastructures for social good.
Carl Guardino: Our next question was texted to me and I’m going to shorten it because it’s a bit long. In many ways, California has relied on a hidden grid of diesel generators as a backup source of generation. Diesel generators tend to be polluting both from a greenhouse gas perspective and a local air pollution perspective. How can we, as a state, move forward with fewer diesel generators as our backup source of power?
Chair David Hochschild: That is a great question. And it’s really one that I hope your company is going to be able to help meet that need. We do get applications, a lot from Silicon Valley, for backup generation and it’s mostly diesel. And it’s a shame because building diesel today, just feels like such a 20th century, even 19th century, technology. And it’s never popular, particularly with environmental justice communities. Even when it’s just backup generation, it is not operating on a day-to-day basis. There’s a lot of strong opposition to it for good reason, but the energy density and the energy loads on these facilities are significant. So they need the ability to back up a big data center and have it provide completely reliable power instantaneously. And it is a technology challenge, but I’m really hoping that’s when we’ve, Carl and KR and I, discussed this in the past, that Bloom, I think has a niche here to really help.
KR Sridhar: I would totally agree with you. And just the city next to us, Santa Clara got, I think, during COVID of all times when it is a respiratory issue, more than 250 megawatts worth of diesel gen-sets as special permission to keep factories on when they were not allowing us to install our systems. That is morally, ethically, and should be legally wrong.
Carl Guardino: Both of you, thank you for weighing in on that topic. Another one sent to my phone is, “I was at Sarah Week in Houston last week where both John Kerry and Secretary Granholm discussed the short-, mid-, and long-term role of natural gas to play in our energy transition. How do you view the role of natural gas as an element of the energy transition in California?”
Chair David Hochschild: Yeah, so long term, my view is ultimately we need to move beyond fossil fuel. So that’s the long-term goal from my perspective. None of that happens overnight, and in fact, there are devastating consequences for that to happen overnight because we have a system today where we still have a gas power plant fleet that’s a really important part of the energy portfolio today. But I think you begin by focusing on the areas that really do lend themselves to electrification. So, we just adopted, is it just an example, a code in August for new construction. We build about 100,000 new homes a year in California and we’re pushing electrification in areas where it really makes sense to do so. Water heating. I just replaced my gas water heater a couple of years ago with an electric heat pump. It’s the same size, it’s the same shape.
Chair David Hochschild: It’s more efficient to operate. My water heating bill went down and it’s super reliable. And people at the end of the day, don’t really care if their water’s heated from gas or electricity. Those kinds of applications make a lot of sense. There are a bunch of others where it’s much harder to electrify. As an example, we had given a grant, we do a bunch of food processing. So, we gave a grant to Sun-Maid Raisins to try and electrify their dryers, which today are gas-powered. That turned out not to pencil, and they canceled the grant. So there’s stuff like that, that’s still harder to do, but there’s a lot that is actually, I think, lending itself to electrification. And you’ve got to start with that, but I think the end goal, we need to decarbonize our world and that’s not an option.
Chair David Hochschild: I really see that as an imperative, but you have to be kind of ruthlessly pragmatic about how to proceed to make sure you’re making progress every single day. And some of that, by the way, is changing the incentive. So, as an example, the PUC has a proceeding that will resolve and I think be voted on in October, which basically will remove the subsidy; all repairs now subsidized, new natural gas distribution lines, and that subsidy will be removed if this decision gets adopted. So that’s about $120 million a year of subsidy for natural gas infrastructure.
Chair David Hochschild: That’s the kind of thing, over time, that I think is the smart thing to do. And then just to make also a very, very efficient use of the gas that we do use, so we’re not actually using more than we need. And the other piece of it, I think is really important is fugitive emissions. We have two million wellheads in the United States, there are fugitive emissions from that. Some of the new mappings of that is really scary because there’s actually a lot more leakage than was previously acknowledged and that’s got to be capped. It’s got to be regulated well, and that’s all, I think, poor President Biden came in with a lot to do, but he’s got to build the architecture to do all that well.
Carl Guardino: KR?
KR Sridhar: So, look in the short term, I think there are a few things that we should do immediately with natural gas. It is the best option between now and 2030 to bring about de-carbonization in addition to what solar and wind can do. If you’re looking for places to bring significant billion tons. So, all the additional infrastructure in the world put together between now and 2030, if we meet the net-zero emissions by 2050 goals would be about 3.8 billion tons. The additional solar and wind that we put together. If we replace coal with gas, in addition to that existing stuff in the world, that is an opportunity for about seven to eight billion tons of additional CO2 removal. If it is about the speed at which we take CO2 out of the atmosphere, that’s what we need to do. But on top of that, by eliminating fugitive emissions, which the Chair spoke about, you have significantly greater opportunity and that’s very large.
KR Sridhar: And so you’ll be very happy to hear that at Bloom, we were the first company to say, our entire fleet will only run out of responsibly sourced gas that has no fugitive emissions or minimal fugitive emissions as verified by third party institutes like RMI. So, that’s what we do. We have to do that. The place where I would take a slightly different view is we actually should be funding gas infrastructure to minimize the leaks and enable it for a future green molecule, as opposed to taking funding away, which will only lead to more leaks between now and then. So, I would take a very different view on that, on what we need to do about the pipe. Again, the pipe is not the enemy out here. It is draining the molecule that needs to happen over time, but I would be spending more money on monitoring and making sure the pipes don’t have leaks. And we have a better pipe infrastructure.
Carl Guardino: David, response on that before we go to the next question?
Chair David Hochschild: Well, I think we will have a piping infrastructure. I think maybe where I have a different view than KR, I think it’ll be a lot smaller than what we have today. And in fact, for residential new construction, I actually think that can be completely electrified and that’s the direction builders are going. So you don’t actually need a lot of this new distribution infrastructure that’s being proposed. And in fact, I think it does add cost to have two duplicative delivery infrastructures for energy where only electricity could suffice. Again, there’re applications where they’re hard to electrify that you’re going to need pipes. But I think that the reach of electrification, even in the last 18 months, I would say, has been rapidly expanding in terms of what’s possible.
Carl Guardino: And I love it when we’re able to have this type of interaction. KR, any final thoughts? We have at least three more questions that I’m hoping to get to as time allows. KR, any thoughts?
KR Sridhar: You know, let’s go to the questions. I think it’s good to get as many questions.
Carl Guardino: Great. The next one is from Amber and it’s, KR, to you. Does LG’s recent poll from the solar industry impact Bloom’s collaboration with LG in any way?
KR Sridhar: Sorry, does LGs what?
Carl Guardino: “Recent poll from the solar industry” … impact Bloom’s collaboration with LG in any way?
KR Sridhar: Look, we are partnered with SK. That’s our Korean company that we partner with. And so we don’t have a relationship today with LG. So I’m happy to take it offline with Amber and understand the question better.
Carl Guardino: Great, good. And then two came to my text. The first one is, as California increasingly electrifies, how can we leverage customer investments to help assure reliability and maintain reasonable rates? David?
Chair David Hochschild: Well, I think the model for energy is changing. Traditionally, it used to be energy demand that drove energy production. So, in factor, you turn it on and then someone fires up a natural gas power plant, and you have your power. Now, a subset of that is going to switch and we’re going to be able to make use of renewables that are producing. And that’s when we charge our batteries. That’s when we charge our vehicles. That’s when we pre-cool our homes. That’s when we make use of these other demands that are flexible and we have to be really smart about that. And when we are, that actually delivers a lot of ratepayer savings.
Chair David Hochschild: So. It’s really important to be intelligent about that. And this is an area where I will admit, I think we’ve been weak as a state on demand response. I think our programs to date have not been effective. So, we’re working really hard on that. I have my top guy at the Energy Commission. Siva Gunda is my Vice-Chair focused on that. And we are doing meetings with all the demand response companies and so forth because it’s imperative for grid reliability. And for rates. You reduce the amount of new capacity you need to build when you’re intelligent about demand response.
Carl Guardino: KR, would you like to respond to that as well?
KR Sridhar: Sure. This is an easy one because I think the Chair is charter and what they do in their group is centuries separated from the sister organization or the PUC that has a rate structure coming from the gaslight era. Rate design is crazy. It’s how rates are designed, and how punitive charges are applied to companies that innovate and provide a service to corporations and customers. How do you help the economy, how is carbon priced? What are we incentivizing right and what are we not incentivizing right. These are all things I don’t think have seeped into the fundamental concept of what incentivizes markets and market forces, which is rate design. And I think it’s way overdue, and that’s what’s lacking in the state is for all the innovation that’s happening at the CEC, for all the innovation that’s happening in the private corporations, where is the PUC on all this?
Carl Guardino: And we are going to move to some closing comments. There was one more question. It was geopolitical in nature with what’s going on in Ukraine. I’m not sure we could do that justice in 60 seconds, unfortunately. What we would like to do though, is hear from two members of our team with closing remarks of nuggets. What did they hear today that they are going to take away from this conversation? We’re going to start with Amanda Song, on our communications and marketing team. Amanda?
Amanda Song: Thank you, Carl. And thank you both, Chair Hochschild and KR, for being here and sharing your thoughts with us. Something that KR said really stuck with me during this discussion. So, KR, you said that energy is the ultimate perishable because if you don’t use it, you lose it unless you find a way to store it. And when you think about the fact that so many people don’t even have enough access to electricity and energy as it is, and most of our energy is still procured in a way that releases emissions and causes damage to our environment.
Amanda Song: So, energy is a really precious resource. And I think if we want to increase our energy efficiency, finding a way to store that energy and stop wasting even one gigawatt of power is essential. So, I was so thankful to hear both of your thoughts on energy storage. I’m really glad to hear that we have $380 million in funding from the government. And moreover, Bloom is working on hydrogen electrolysis, which is one way to help store excess energy, especially from renewables. So yeah, those are some of the main takeaways I got from this. And thank you very much.
Carl Guardino: Amanda, thank you. And Brady van Engelen, who leads our work in building relationships and solutions with many of our California government agencies. Brady?
Brady van Engelen: Thanks, Carl. And thanks KR and Chair Hochschild. It was actually a really, really enjoyable conversation, just listening to you guys go back and forth a little bit discussing some of the questions that Carl had posed. Something that stuck out to me very early on was just the broad term of diversification. I think that the first two questions really kind of highlighted that and then finding that right energy mix to ensure that we have a balance from both an economical perspective, an equity perspective, and also that when people want to turn their lights on, they do in fact, turn on. So, ensuring that we have the right balance of renewables with clean firm power that can be delivered and timed appropriately. That was the key thing that I took away from that conversation.
Carl Guardino: Brady, thank you. California Energy Commission, Chair David Hochschild. We often hear that we need to meet the moment, and you in this vital role at this time in the state’s history and the world’s history, we are very fortunate to have your leadership setting the culture and setting the agenda for the 40 million people in California, but also folks across our country and our globe. So, thank you for your public service. We first met a couple of decades ago when you were in the private sector and your passion, your professionalism, shown through then is even more important today.
Carl Guardino: So we want to thank you. Dr. KR Sridhar, thank you again for leading Bloom Energy as we continue to grow across the globe, serving customers’ demands and the essential needs for clean, resilient, affordable energy, and is exciting how much we continue to invest in California with hundreds of job openings now, both in engineering, finance, logistics, and supply chain, and also jobs for folks that don’t even require a high school diploma that want a career to help lead the clean, resilient energy future. Hundreds of job openings now. David we’re coming after your 750 staff, David. Fill those roles. We have a tradition at Bloom Energy. We start on time. We end on time. We respect your time. It is the top of the hour, and this concludes our Bloom Energy Empowered Communities employee town hall. Thank you all.
Chair David Hochschild: Thank you, guys. All right, take care.
KR Sridhar: Thank you.