MISSION INNOVATION

Accelerating the Clean Energy Revolution

1 A. Front End Material

2 Paris Climate Conference and Agreement – Key Features *

Limit Warming to Well Below Target, and Try to Well Below 2°C Cap at 1.5°C Balance Anthropogenic GHG Sources and Achieve a Balance Removal by Sinks by Mid-Century Countries Will Review and Submit New, More Every 5 years Ambitious Plans Every Five Years Technology Advance Technology Innovation through Mission Development Innovation and Breakthrough Energy Coalition Collectively Mobilize $100B per Year in Public Mobilize Climate and Private Funding for Developing Economies Finance through 2025 Enhanced Enhance Transparency for Reporting GHG Transparency Emissions, Subject to Expert Review

* Report on COP-21, “Inside the Paris Climate Deal”, Science, Warren Cornwall, Dec 2015: Vol. 350, Issue 6267, pp. 1451 3 A Unique Moment in Time

 All on One Stage -- Leaders of 20 Countries Representing over 80% of Global Clean Energy R&D Investment Agreed to Support a Joint Statement on Innovation  Each Country Supported a Doubling of Governmental Clean Energy R&D Investment over Next Five Years (www.mission-innovation.net)  Gov’t Investment was Complemented by a Private Sector Initiative led by Bill Gates, the Breakthrough Energy Coalition (www.breakthroughenergycoalition.com) 4 Baseline Distributed Globally

Europe $3 B Norway Finland Sweden Canada United Kingdom Denmark Netherlands Germany United France European Union Japan States Italy China

Saudi India Republic Mexico Arabia of Korea United Arab Emirates Americas Brazil Indonesia $7 B Australia Chile Asia and Australia $5 B

5 Joint Statement

“Come together to reinvigorate and accelerate public and private global clean energy innovation to make clean energy widely affordable”

 Rationale

 Public Sector Actions

 Private Sector Actions

 Implementation & Cooperation

 Information Sharing www.mission-innovation.net

6 B. Motivation and Rationale

7 Motivating Factors

 On Climate Change, Time is Running Out: Indexed Cost Reductions Since 2008 . Atmospheric Concentrations of GHGs are

Rising, with Inexorable CC Effects Land-Based Wind 120 . Changes in Climate are Manifest, Serious and Distributed PV Increasing 100 Utility-Scale PV . Business as Usual Approach is Unacceptable Modeled Battery Costs

. Current Solutions are Ill-Suited or Too Costly 80 LEDs for a World-Wide Acceptance

. The Pace of Innovation is Too Slow 60

 Widely Affordable Solutions Can Be Found: 40 . Costs of Wind, Solar PV, Battery Costs, and LEDs Have Dropped Dramatically 20 . More Innovative Ideas Are on the Cusp of Realization, but Need a Boost to Market 0 . Private Investment is Poised to Help 2008 2009 2010 2011 2012 2013 2014

. Global Mobilization of Innovative Talent Will Source: Adapted from DOE, “Revolution…Now: The Future Arrives for Five Clean Energy Technologies – 2015 Update,” http://www.energy.gov/eere/downloads/revolution-now- Speed Solutions and Mitigate CC Effects future-arrives-five-clean-energy-technologies-2015-update

8 Gaps in the Innovation Cycle

9 9 Clean Energy Solutions – For Today and Tomorrow

Mission Innovation Clean Energy Ministerial

Future Innovations Deployment Now

Science Policies

Research Tech Best Practices Demos Development Capacity Building

Analysis Prizes, Recognition

Create Improve Reduce Raise Facilitate New Ideas Performance Cost Awareness Market Uptake C. Public Sector Actions

11 Implementation

Mission: Reinvigorate and Accelerate Global Clean Energy Innovation to Make Clean Energy Widely Affordable Pledge: Seek to Double Public Investment in Clean Energy R&D Over Five Years Report Progress: Share Plans, R&D Needs, Priorities and Ongoing Activities Ongoing Activities:  Information Sharing Baseline and Annual Updates on Investments

 Innovation Analysis and Build and Improve Technology Innovation Roadmaps Road-Mapping and Other Tools For Optimizing and Leveraging Investments  Joint Research and Public-Private and Country-to-Country Collaboration Capacity Building  Private Sector Engagement Collaborate on Data, Analysis, and Technology Expertise *Governmental and/or State-Directed Clean Energy Research and Development Investment. For USG, Federal Investment; Does Not Include State and Local Governments 12 Added R&D Investment is Significant

13 * MI Baseline of $15 billion USD in clean energy R&D is compiled from reports of 23 MI Member Governments. Investment Focus of the MI Doubling Commitment

 Not Just More of the Same  Mission Innovation Funding Supports: . Clean Energy R&D . Early Stage Technology Innovation . Advancing a New Era of Discovery  Aimed at: . Superior Performance Technologies with Significant Cost Reduction . Leveraging MI Countries’ Capacities in Areas of Shared Interest  Breakthrough Energy Coalition will Focus Investment on Projects from MI Countries

14 Next Steps

 Each Country Must Define Its Own Program Scope and Doubling Plan: . Establish a “Mission Innovation” R&D Baseline and Base-Year . Declare Amount of its Doubling Plan and by When . Provide a Country-Narrative Describing R&D Investment Priorities  Additionally, to the Extent Practicable: . Evidence Commitment by Announcing a First-Year Plan . Provide Transparency by Disclosing Composition of Baseline and Growth  Establish Information Sharing Mechanisms Among Countries  Identify R&D Needs, Conduct Analyses, and Launch Road-Mapping  Explore Joint Research & Capacity Building Opportunities  Agree on an International Platform for Sustained MI Operation

First Ministerial Meeting Hosted by the U.S. on June 2, 2016 in San Francisco, CA

15 D. Private Sector Actions

16 Private Sector Actions

“We must…add the skills and resources of leading investors with experience in driving innovation from the lab to the marketplace.”

“The private sector knows how to build companies, evaluate the potential for success and take the risks that lead to taking innovative ideas and bringing them to the world.”

“Governments play an indispensable role in supporting energy research.”

“Government research, however, is not enough. ” -Bill Gates

Bill Gates, “Energy Innovation: Why We Need It and How to Get It,” http://www.breakthroughenergycoalition.com/assets/resources/Energy- Innovation-by-Bill-Gates-Nov-30-2015.pdf; Breakthrough Energy Coalition, “Introducing the Breakthrough Energy Coalition,” http://www.breakthroughenergycoalition.com/en/index.html 17 Gates on “Why We Need Breakthroughs in Energy Technology”  Changes in Climate are Manifest, Serious and Increasing  Poor Countries are Impacted the Most by Climate Change  Affordable Clean Energy Helps Fight Poverty . Energy Access Reduces Time Spent Carrying Water, Gathering Fuel, etc. . High Price of Energy Adds to Cost of Electricity, Transportation, and Other Necessities . Lighting Enables Learning and Productive Activity after Dark  To Stabilize GHG Concentrations, We Need to Move to Net-Zero Emissions . Efficiency is Important . So-Called “Bridge-Fuels” (Lower Carbon) Can Help in Transition

. Ultimately, We Must Power All Sectors with CO2-Neutral Energy Sources  We Can Make Progress with Today’s Tools, But These are Not Enough . Challenges: Intermittency, Land Requirements, Reliability, Costs, etc.  Need to Create an Environment that Mobilizes and Accelerates Innovation

18 Government and Business Together Can Create the Incentives for Innovation

 Drastically Increase Total Private Sector R&D Government Spending Percentage as a Share of Sales Investment in Early- 25% 20.5% Stage R&D 20%

15%  Attract Private Capital 11.5% 10% into a Variety of 7.9% 5% 2.4% Potential Solutions Sales of Share a as Percent 0.42% 0%  Act Quickly Given Long Time Frames of Energy Transitions

Source: Bill Gates, “Energy Innovation: Why We Need It and How to 19 Get It,” https://www.gatesnotes.com/Energy/Energy-Innovation Source: American Energy Innovation Council Breakthrough Energy Coalition

 Different Kind of Investor: . Long-term Commitment to New Technologies . Utilize Truly Patient, Flexible Risk-Tolerant Capital  Different Approach to Investment: . Identify Investable Ideas Early . Speed Up Innovation Cycle

. Focus on Ideas that Go to Click to view video Scale . Adopt Different Types of Deal Structures

Bill Gates, gatesnotes, “A Big Win for Cheap, Clean Energy,” https://www.gatesnotes.com/Energy/Investing-in-Energy-Innovation 20 Fund Principles

Provide Seed, Angel and Series A Investments. Once De- 1. Invest Early Risked, Traditional Investors may Follow. Invest Across a Number of Sectors: . Electricity Generation and Storage . Transportation 2. Invest Broadly . Industrial Use . Agriculture . Energy System Efficiency

Novel Technologies and Dramatic Improvements to Existing 3. Invest Boldly Technologies. Credible Path to Rapid Scale-Up without Burdening Essential Systems.

4. Invest Wisely Tap Leading Experts to Guide Investment Decisions. Invest in Mission Innovation Countries’ Innovation 5. Invest Together Pipelines.

21 Breakthrough Energy Coalition

Mukesh John Arnold Mark Benioff Jeff Bezos Alwaleed bin Richard Ray Delio Aliko Dangote John Doerr Ambani Ttalal Branson

Bill Gates Reid Chris Hohn Vinod Jack Ma Patrice Xavier Niel Hasso Julian Hoffman Khosla Motsepe Plattner Robertson

Neil Shen Simons & Masayoshi George Tom Ratan Meg Zhang Xin Mark Zuckerberg, Baxter-Simons Son Soros Steyer Tata Whitman Pan Shiyi Priscilla Chan

• 27 investors & University of California; collective net worth: $300+ billion • Commitment to invest in innovation emerging from Mission Innovation pipeline • Long-term, patient, and risk-tolerant capital 22 Coalition’s Next Steps

 Create an Innovation Pipeline  Build and Expand the Coalition  Make a Case for Greater Early-Stage Investment by Governments  Define Mechanisms for Coordination and Information- Sharing with Mission Innovation Countries  Establish a Series of Investment Funds with Scientific Due Diligence Capability  Goal: Launch Initial Round of Investments by the End of Calendar Year 2016

23 E. Implementation

24 MI Sub-Groups

 Three Thematic, Ad Hoc Sub-Groups: * 1. Information Sharing 2. Analysis and Joint Research 3. Business and Investor Engagement  Sub-Groups “Staffed” by Int’l Volunteers from MI Countries  Sub-Group Products to Flow into MI Framework Document

* Organized around themes of Joint Statement by MI Country Leaders 25 Backup Slides

26 Implementation and Top-Line Results

 Joint Statement:

. “Each Country Will Seek to Double Governmental and/or State-Directed Clean Energy R&D Investment over Five Years”

 Countries Subsequently Agreed to Share:

. Clean Energy RD&D Budget Baseline;

. Base-Year (or Alternative Methodology)

. Doubling Plan and Doubling Year

. Country-Specific Narrative on R&D Plans, Priorities and Progress  Results as of November 14, 2016:

. 22 of 22 Countries Complied + EC

. Total Baseline Figure is $15 Billion . Doubling Figure is $30 Billion by 2020-2021 Joint Statement on MI November 30, 2016 27 MI Portfolio Diverse and Robust

28 Power of Innovation When Prices Drop, Markets Soar

120 Cost Reductions Market Uptake 100000

100 Batteries

Land-Based Utility-Scale 80 10000 Wind PV

60

Distributed PV 40 1000 LEDs

20

0 100 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014

Source: Adapted from DOE, “Revolution…Now: The Future Arrives for Five Clean Energy Technologies – 2015 Update,” http://www.energy.gov/eere/downloads/revolution-now-future-arrives-five-clean-energy-technologies-2015-update 29 Innovation and Deployment -- A Natural Fit

Mission Innovation Clean Energy Ministerial

Future Innovations Deployment Now

Science Policies

Research Tech Best Practices Demos Development Capacity Building

Analysis Prizes, Recognition

Create Improve Reduce Raise Facilitate New Ideas Performance Cost Awareness Market Uptake

30 Clean Energy Solutions – Examples

Mission Innovation Clean Energy Ministerial

Smart Buildings, Internet of Things Renewable Energy Atlas

Advanced Manufacturing Electric Super-Efficient Appliances Vehicles Novel CCS Technologies ISO 50001 Energy Management Smart New Materials Solutions Center (1,000 Requests) Grids Revolutionary Aircraft 10 Billion LED Bulbs

Create Improve Reduce Raise Facilitate New Ideas Performance Cost Awareness Market Uptake

31 MI + CEM = Path to Actualize the Paris Agreement

 COP21 -- Historic Achievement: . 187 Countries (98% of GHGs) Produced a Globally Inclusive “Paris Agreement” . Nearly All of World’s Countries Submitted INDCs . The Transformation to a Clean Energy Future is Beginning to Take Shape  Bad News . Sum of the INDCs Falls Short of What is Needed . Costs are Still Too High; and the Pace of Technology Innovation is Too Slow  Good News – Mission Innovation Can: . Create New Technologies, Improve Existing Technologies, and Reduce Costs . Attract Business and Investor Interest and Spur Global Action . Make Clean Energy Widely Affordable to a Global Population  Better News . MI + CEM Together Can Provide a Path to “Actualize” the Paris Agreement, and . With Realized Gains, Enable More Ambition at the Next 5-Year INDC Review

32 Accelerated Innovation Drives AcceleratedConclusions Progress (v1)

MI + CEM + Investors, Business and Industry = Accelerated Progress

65

60 Pre-INDC Reduction

due to INDCs

) yr

/ 55

eq 2 2

Potential additional 50 reduction due to Historical accelerated innovation and deployment Median of

45 COP21 INDCs GHG Emissions (GtCOEmissions GHG

40 80% Conditional and Least-cost mitigation Median Unconditional scenarios to stay below INDC Ranges from COP21 20% 2°C 35 2000 2005 2010 2015 2020 2025 2030 33 Source: Adapted from UNFCCC, Synthesis report of INDCs, October 2015; http://unfccc.int/resource/docs/2015/cop21/eng/07.pdf Next Steps

 MI Funding . Solidify Doubling Plans  MI Research & Innovation . Share Information on Country R&D Portfolios and Priorities . Carry Out Joint Analysis & Technology Road-Mapping . Explore & Develop Collaborative Research Opportunities . Engage Business and Industry in R&D Plans and Projects  MI Demonstration & Deployment . Link with Clean Energy Ministerial . Raise Awareness of Most Promising New Techs . Facilitate Market Uptake  MI Implementation and Sustained Innovation . Periodically Take Stock of MI Progress . Make Strategic Adjustments, as Needed

34 MISSION INNOVATION -- EXAMPLES

Science Research Development Analysis  New Materials  Regional Clean Energy  Sustainable Transportation  Demand Response and . High Temperature Innovation Partnerships . SuperTrucks Dynamic Pricing . Tailored Mechanical Chemical  Small Business Innovation . Vehicle Lightweighting  Generation Flexibility Properties Partnership Program . Zero-Emission Vehicle Systems  Microgrids . Tailored Electrical Magnetic  Energy Technology Innovation . Optimized Multi-Modal Intercity &  Distributed Generation Properties Accelerators Freight Transport  Physical and Synthetic Inertia  Heat Transfer & Fluid Dynamics  ARPA-E . Very Low Aviation Emissions  Electric Vehicles  Combustion Materials  2 New National Network for  Renewable Power  Power Electronics  Electro & Thermo Chemistry Manufacturing Innovation . Solar, SunShot Initiative  Resiliency  Photo & Radiation Chemistry Institutes for Clean Energy . Wind  Cybersecurity  Membranes & Separations  Materials in Extreme Conditions . Water  Polygeneration  Condensed Matter Physics Initiative . Geothermal  Hybrid Generation  Nanosciences  Materials Manufacturing for Grid . Biomass  Combined Heat and Power  Geosciences & Hydrology Applications Initiative . Fuel Cells  Waste Heat Recovery

 Chemical Catalysis  New Desalination Hub  Energy Efficiency  CO2 as a Working Fluid  Bio-Catalysis  Sensors & Instrumentation . High Impact Technology (HIT)  Carbon Management  Plant and Microbial Genomics  Basic Clean Energy Research Catalysts  NGCC Carbon Capture Pilot (Biotechnology)  Zero-Emission Fossil Energy . LEDs Plant

 Bio-Based & Bio Inspired  Direct CO2 Capture from . Building Management and  3 Post Combustion CO2 Processing Atmosphere Information Systems Capture Pilot Plants (10 MW  Environmental Science  Safe Long-Term Ocean Storage . Shading Attachments and Awnings Scale)  Earth and Climate Science . Refrigeration Controls  2 New FEED Studies for  Atmospheric Science . Commercial Fans and Blowers Advanced Combustion  Advanced Scientific Computing . Smart Buildings Models and Simulations . Smart Meters  Fusion and Plasma Sciences . Energy Managed Communities . Plasma Confinement Systems . Advanced Sensors and Controls . High Energy Density Physics  Advanced Nuclear Energy  5 New Energy Frontier . Pebble Bed Research Centers (Total of 37) . Molten Chloride Fast Reactor . Gen IV Energy Systems . Advanced Nuclear Fuels . Small Modular Reactors 35 CLEAN ENERGY MINISTERIAL -- EXAMPLES

Energy Efficiency & Demand Energy Supply Energy Systems & Integration Crosscutting  Super-Efficient Equipment  Solar and Wind  21st Century Power Partnership  Clean Energy Education and and Appliance Deployment . Global Atlas for . Technical Assistance for Policy Empowerment . Appliance Energy Renewable Energy and Regulatory Implementation . Awards for Mid-Career Efficiency Policy Exchange . Renewable Energy . 21CPP Fellowship Program Leadership in Clean Energy Forum Learning Partnership . Distributed Generation  Clean Energy Solutions Center . Efficiency Awards . Capacity Development Regulation Resource Library . Ask-an-Expert Service . Street Lighting Tool Needs Diagnostics for . Renewable Energy Roadmap . Online Training and . Efficiency Standards and Renewable Energy for India Resources Labeling (CaDRE)  Global Lighting and Energy . Finance Solutions Center  Global Lighting Challenge . Renewable Energy Access Partnership (10 Billion High Efficiency Auctions and Policies . Global LEAP Awards Bulbs) Guides . Off-grid Appliance Quality and  Electric Vehicles  Carbon Sequestration Efficiency Testing . EV City Casebooks Leadership Forum . Global Lighting Quality . Global EV Outlook Assurance Framework  Energy Management . Mini-Grids Quality Assurance Working Group Framework . ISO 50001 Energy  International Smart Grid Action Management Network . Energy Management . Smart Grids Best Practice Toolbox and Case Studies Handbook  Cool Roofs and Pavements . Smart Grids Training Academy Toolkit . Smart Grids Integration Awards  CHP/DHC Country Scorecards

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