Silicon Valley’s innovations and market revolutions are legendary. Although it is not generally viewed as an epicenter for the energy sector like Houston or Abu Dhabi, the pace of change in “Energy Valley” is so fast it’s hard to keep up. But it cannot be ignored. Get an overview of how the ecosystem is working towards a greener future from Eric Vettel, the president of the American Energy Society.
In May 2018, Stanford University hosted the Global Energy Forum, a small and private gathering of thought-leaders from a wide variety of sectors, including Bill Gates, Governor Jerry Brown, Senator Lisa Murkowski, and Brian Moynihan (CEO of Bank of America).
By any measure, the event was an enormous success. Indeed, the universally recognizable attendees and their cutting-edge ideas confirmed the value of the gathering. However, Sally Benson, co-director of the Precourt Energy Institute at Stanford University, was not entirely satisfied. She asked Eric Vettel, President of the American Energy Society, if the next Global Energy Forum might also include local thought-leaders from Silicon Valley. Eric asked, “who do you have in mind?” This simple question got them wondering: How many energy stakeholders are actually located in Silicon Valley? Sally and Eric offered a wager, with both that the total number of energy enterprises in Silicon Valley was “…probably around 500.”
They were off. By quite a bit.
It turns out that there are around 1,500 energy enterprises in Silicon Valley. Both knew about Silicon Valley’s capacity for innovation, and that this unique ecosystem consisted of elite research universities, large multi-national corporates, active venture and private investors, and a plethora of start-ups. But 1,500? Silicon Valley’s energy ecosystem is a lot bigger than anyone anticipated.
Eric Vettel has been president of the American Energy Society for almost ten years. But with headquarters in Palo Alto, he has been able watch the development of the ecosystem from the inside.
“It is a landscape that has changed quite considerably over the past 10 years, and has emerged quite rapidly as a global leader in the renewable energy evolution. Growing awareness of climate change and passionate commitment to sustainability is the tailwind that will push the region to greater achievement in the next few years”
In other words, the ‘green’ ecosystem in Silicon Valley is poised for take-off.
Going green. Sustainability. Decarbonization. Words matter, and different words mean different things to different people. According to Vettel, “decarbonization” has supplanted “green” as the inspiration behind California’s transition to a cleaner, more efficient, and more sustainable economy.
“We use the term “decarbonize” because it describes our goals and objectives more accurately than the term “green.” It gives everyone a better sense of our common objective. It is more precise – did your new technology or new start-up activity remove carbon from the atmosphere? Or, was the net-result merely an offset? Staying in place is no longer an acceptable outcome … we have to actively remove carbon from the atmosphere. Thought-leaders in Silicon Valley did not fully appreciate that nuance 10 years ago, but they are starting to understand. Sally Benson’s co-director at Precourt, Arun Majumdar, calls carbon a “gigaton” problem. The Silicon Valley energy ecosystem is finally starting to understand the scale of the challenge.
What does the next energy transition look like in Silicon Valley? And how might the Silicon Valley energy ecosystem contribute to the transition? According to Vettel, the energy transition will benefit from Silicon Valley’s fast-pace. For instance, venture capital is impatient for a return on investment. While that impatience may not always benefit an energy startup, it certainly conveys the urgency that is necessary.
“We have a gigaton problem – actually, a teraton problem – and we need solutions quickly. Innovation happens faster in Silicon Valley than perhaps anywhere else. That sense of urgency is both a blessing and curse. There is urgent need for low and de-carbonizing solutions right now, but Silicon Valley is one of the rare places – maybe the only ecosystem in the world – that should seriously consider slowing down. Ready-fire-aim is not an effective way to solve a problem.
The flip side of the fast pace that drives Silicon Valley is the hype that inspires misguided innovations at full speed, or the hubris that fails to consider or ignores negative consequences.
For instance, from 2005 thru 2008, Silicon Valley went crazy for rooftop solar, and then by 2010 realized that solar rooftop had intermittency and storage problems. The net result – there were some benefits, but there was also an enormous amount of wasted time and resources. Or consider the latest subsector craze: the circular economy, sometimes referred to as “circularity”. The concept is certainly powerful and certainly essential to achieve decarbonization. But Silicon Valley seems to think it invented the idea and forges ahead without regard, or even seeming aware of, valuable lessons and best practices.
“The strength and weakness of Silicon Valley is the willingness to dream, cut loose and take every risk possible. To decarbonize the economy, we need to move smart, not just fast.”
Denmark has exceptionally strong “green” competencies that align with the emerging green ecosystem in Silicon Valley and more broadly throughout California. To facilitate future partnerships and deliver on decarbonization, it is essential that stakeholders in Denmark and California connect. Enabling these essential international green partnerships is a key priority at Innovation Centre Denmark Silicon Valley.
When asked how the Silicon Valley energy ecosystem do more, Vettel recognized the value and benefit of collaborating with global thought-leaders, especially in Denmark.
“I also see you Danes as integral to the green ecosystem in Silicon Valley. There are so many opportunities for the Danes to lead – smart grid, offshore wind, hydrogen…. But most of all, collaboration and partnerships with Danish innovators would bring much more thoughtful approach to the business of innovation, which Silicon Valley desperately needs.”
Stay tuned for the Danish Energy Ecosystem Map
American Energy Society and Innovation Centre Denmark Silicon Valley are currently partnering with State of Green and other supporting partners in Denmark to map the green energy ecosystem in Denmark. This map will illustrate the rich clusters of green innovation we have in Denmark and will be a new way to showcase the Danish ecosystem to stakeholders in California. The interactive map will also help introduce the Danish ecosystem to the rest of the world, just as the Silicon Valley Energy Ecosystem map did for the Precourt Energy Institute at Stanford University.
