California Plans to Cut Emissions By 40% By 2030: Edison CEO

Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Joining us now as the president and the chief executive of Edison International, the twenty billion dollar electric utility based in California, Pedro Pizzaro, Pedro, thank you very much for being with us. You've spoken about what the roads in California are going to look like by twenty thirty. I understand somewhere in the order of maybe seven million electric vehicles, that includes

automobiles as well as trucks. Where's the electricity going to come from in order to charge the batteries for those vehicles. Well, we view this as part of a broader perspective for how California gets its greenhouse gas reductions by we see the electricity coming from a resource stack that will be carbon free, so that means a lot of renewables. Uh. We think that will require a lot of storage to

be able to balance intermittency of renewables. But the key thing is that we view that as relying on a modern grid that's able to connect those resources, those sources that are cleaned with us, as like transportation and space and water heating. That will help California achieve its goals in the lowest possible, lowest possible cost. So can you give us just a sense of your role in this goal of reducing emissions in California by by what's your

what's your role? Sure, actually several roles. Starts with having a strong and modern grid. So you know, our main business is running our wire system that provides power to fifteen million residents across fifty thousand square miles. That's one role. We have a role us a procure of energy. We we don't make very much of our own energy. We buy it from the market, and so as we let out contracts, we expect those contracts to go to an increasingly clean set of resources. Today we are STACK is

about renewables and carbon free. We see that again doubling to eight carbon free. We still play a role in contracts for storage, and we also own some storage ourselves, and so the deploying storage. Today we have commitments for around five d megawatts of storage. We believe that the status a whole will need closer to ten thousand megawatts of storage. What big problem is that consumers just aren't buying electric vehicles that quickly, and they still love their SUVs.

I mean, it's like you can't change people's taste. Yeah, well this is happening though, and it's it's uh. I think we're the early part of the s curve here, the growth curve. When you look about four or five years ago, I think in California about one percent of vehicle new vehicle sales had some sort of plug attached ship last year was closed to five percent. We have around three hundred and many thousand electric vehicles in the state right now. It's early days, but it's early days.

With the market that's growing, we're seeing more charging infrastructure deployed. That's another one of our roles, you know, reading the grid for that. And importantly, we see auto manufacturers gearing up for this more and more announcements of electric vehicles, not just to serve California. I mean, we're we play a leading role, but we're only one of a lot of leading roles out there in China now has the largest leading role along with the EU. So this is

a global, UH global initiative that's taking place here. And from a US perspective, you know, I view support for electric vehicles as being critical to our economy and to helping us participate in that infrastructure plan. Do you foresee edited international purchasing residential energy storage companies? UM, We typically don't comment an m n A, but I'd say our main focus continues to be on actually investing in that core grid. So you never say it never about anything,

but it's not our focus right now. Our focus is been on investing in THEE grad. We have purchased some storage for our own use tied to our grade as well. And then outside of the utility, we have Edison Energy which provides services to large commercial and industrial customers, and they were helping helping those customers purchasing own storage as well.

I'm wondering, you know, as you talk about California's plan to reduce emissions by I've struck by President Trump's approach to reducing emissions and that there actually has been a pretty significant attempt to roll back emission standards from former President Obama's era. How does this complicate your goal and how does it complicate sort of the overarching UH sort of target reducing emissions. I think the bottom line is that there is not that much impact that California will feel.

There's some impact, but there's not that much impact in this sense. UM. The rollback of the Clean Power Plan at ep A, well, when you look at how California was going to fulfill, it's part of that. California is doing that already anyway. It's you know, increasing a target for renewables, setting the law for the fort greenhouse gas reduction. None of that is changing in this state, and I think that's similar in other states that are pursuing their

own greenhouse gas reduction pathways. There are touch points, right and UH. One touch point is the fact that e p A has allowed the you know, UH waiver for California in terms of vehicle emission standards. You've seen you know commentary over the last week, and the e p A at the federal level UH talking about a potential

rollback of that or you know, changes to that. UM. Barry Nichols is the chair of their Resources board, I think is at the conference also She was quoted, you know, in the various papers this morning as talking about that and the fact that California may sue to protect it's right to have its standard, but also acknowledging that look, you know, folks will negotiate, they'll talk, and ultimately, I think you know, we'll get this result in large part

because electric vehicles are such a big part of the strategies for the automakers, and that's an important infrastructure play that our economy should not us. You mentioned how you're going to need what about ten gigawatts of battery storage by in order to meet all of these needs. Do you foresee any big changes in battery storage technology by then? Oh? Absolutely, um. With lithium ion dominating the market today, we've already seen

dramatic cost reductions. I think you know, battery soult costs went down by about two thirds between Continued improvements are expected as remote move ahead, but there will be other chemistries to One of the fun things I get to do outside of Edison is that I'm on the board

of ARGON National Lab. Argon has been the hub for de DE Department of Energies research on battery storage, and so they're pursuing a number of other chemistries there, and there's a lot of confidence, uh you know, not only there, but across the market that will see more types of chemistry, more types of battery that will bring greater capacities, more usability,

lower issues, and ultimately lower costs for concerners. Which companies are at the forefront of this, because I think everyone thinks of Elon Musk is being sort of a secret battery whiz and that that's really where his power is going to come from. But are there other kind of people in the industry or companies that really have been pioneers here. Well, look, there's a lot of focus across our economy and the worldwide economy, and I don't want

going through a whole litany of names of companies. Was certainly a purchased Tesla batteries, but we've done work with a number of other companies, both on the manufacturing site for the battery sales, as well as folks who are deploying storage and for example, companies that are contracting with ind use consumers, aggregating those batteries and then presenting that as a package to our utility so we can then

procure the use for that. So You're seeing a lot of focus both in the US, in Asia, in Europe, across multiple folks investing. So you're not going to answer, which comes from a very toughful way. Now to endorse any companies well, good logo, producing comissions by in you know, fifteen years, twelve years, the todd the clock is ticking. Thank you so much for being with us. Bizarro, President, chief executive officer of Edison International, which is based in California.

But he is here at the Bloomberg Future of Energy Global Summit. He has a tall task and many roles playing with respect to this Californian goal. There's sort of a philosophical conundrum in investing today. On one hand, investment manators need to make money for their clients. On the other hand, there's a growing movement to feel good about

where people are putting their money. Here to talk about how one major organization is dealing with that is in Finucan, vice chairman of the Bank of America organization which we all know. Uh so and thanks so much for being here. I want to start with that sort of how do you make sure that you are getting good returns and investing responsibly for the bank while also supporting initiatives that you think lead to a more sustainable, sustainable future from

an energy perspective, Thanks Lisa. So it's uh, it's evolved over time. That doesn't just begin on day one. As you know, a good idea becomes a viable idea when you can get the returns. So what we've been able to do is to approach uh, new products, create new products that are similar to the products that are clients would have known from the past. So municipal bonds, green bonds, a green bond. You can underwrite a green bond, our

issue a green bond. The kind of return you're going to get on it is probably north of what you get on a municipal but not much better. But if that's what you were going to invest in the in the first place, you can also get the return of environmental hit that you would not have been able to get otherwise. So you're talking about reducing greenhouse gas emissions,

energy effici and see water storage or whatever. Likewise, we've been able to do the same thing with tax equity, which actually came out of some of the work we did early on years ago with community development. But applying tax equity where you can UM through tax credits and investments make a better return than say the municipals and so on and so on. So UM we've seen more recently a UM interest in UH the private capital markets, and that's that's where, of course you're gonna make bigger money.

So when private equity gets involved and they are focused on the sustainable development goals and then they're looking to get their kinds of returns, that usually takes different tranches of UH financing. It's not just one thing, but on a blended basis, you can get good return, you can de risk, and you can do some good. Just to mention that your native of Newton UM, you know UH Bloomberg Radio Home is one of those six one Boston

Report and thirty Metro West and the South Shore. So I want to give you the opportunity to maybe draw some connections between the demand for technology of the future Boston in the Boston area known for biotechnology that no one really knew was going to exist in the future, but that public private partnership and the money that came from the private sector is something that helped build it

into a world class industry. Do you think that this is what's happening now with these commitments to sustainable and renewable energy. I do I think this is an evolution. It seems to happen in many industries. I mean that you could say the same of tech in Silicon Valley, you could say it a biotech in in the Boston area. You could say it more generally. In terms of UM environmental efforts, you have to have the early money. That's kind of UM first loss money, if you will, and

and that the willingness to dig in. So in the early days, much of what we were doing environmentally was philanthropic, but there was clearly a business there. I mean, a very practical business is energy efficiency in the real estate space. What what developer doesn't want to be able to have, uh, spend less money on energy use. But if you can think about that upfront rather than doing it on a retroactive basis, is going to help. So it's you know, first you walk, then you run, and then you start

making money. I'm wondering, you know, when you were talking about the tax credits being somehow embedded into some of these financial instruments to get people into sustainable investing, how much UH does the lack of interest by the current presidential administration kind of impact sort of the sort of investing landscape here, because there has been a pullback from underwriting sort of mason efforts to get the grid to

be more sustainable. Well, the pullback is actually in the tax reform, so UM, I think we can work our way through that. I think we've gotten sophisticated enough about that. On the other hand, the business community hasn't pulled back at all. We haven't and I can't think of any big company that committed in two thousand and fifty, in December of two thousand and fifteen to the COP twenty one that's actually pulled back. Because for us, we see business.

We also have UM an employee base that expects us to do that, and frankly, we have an investor base that expects us to do that. I can't tell you how many conversations we have. And I have these conversations. I meet with about fifty institutional investors a year and uh, three years ago, no one asked about E s G

and now everybody does. And and when I say E s G, they're mostly focused on E. So how do you make sure that you're measuring the E accurately, because when you talk about green bonds, I know that some people have complained that there are a lot of arbitrary standards for what counts as green. So how do you how do you evaluate that and how do you judge

what's getting less and less arbitrary begin there. Uh, you need to have results, so you need to reduce something, so you need to reduce the greenhouse gas emissions or improve your water storage, so you have to have definable outcomes. The um issue with green bonds is it takes a little more to do because you have to calibrate all of that, you have to have a report at the

end of it. So I think that's really the complaint, not so much that it's not definable, but that it takes a little work to do to do the work. Um and I would say so going back to the government, uh uh, regardless of what this administration is is saying, the reality is is that we're not living administration to administration. We're trying to look at this in the long term. We're talking about this to the end of this century and how much money is needed, and we're seeing opportunity.

I mean, we committed a hundred and twenty billion dollars in two thousand and thirteen. We thought that we would make that goal in two thousand and five, and five years in we're well, we're beyond halfway mark and and with momentum, so the first few year was much slower than this past year. This past year we did just like I think, six billion dollars in UM green bonds alone, so underwriting them, underwriting them and with the number one underwriter of green bonds, number one on UM tax equity

UM financial firm. And we're very focused on this, I mean energy efficiencies probably first, to my surprise, wind is next than solar. So catalytic finance initiative part of this. Just give us the low down on on what it is and what you look for the future. Yeah, I think we have to come up with a better name for that. That's sort of a mouthful, but we have it. We're gonna have a contest after right, Okay, But what

it is is UM. When there are projects that are harder to finance by one company or one one client or one bank, it is a way of getting other financial institutions involved. So we made a billion dollar commitment

rather whether to d risk or invest wouldn't either way. Uh. And we've got seven other financial firms of different types and also nonprofits, and together various tranches of financing have been able to do a wind farm in the North Sea, solar panels homes in Spain, and conservation land in Africa. Thank you very much, Thinking is a vice chair of Bank of America. Nuclear Fusion. We're going to be focusing on this now. We're not gonna be talking about the sun.

We're gonna be talking about how perhaps we can create uh, fossil fuel free energy in a cheap, efficient way here on Earth. Joining us now, Chris Maori, chief executive officer of General Fusion, which is based in Vancouver, but is joining us here at the Bloomberg New Energy Finance Future of Energy Global Summit. Chris, Before we get into the nitty gritty of the financing and the potential, what is nuclear fusion? At least it's great to be here this morning. UH.

Fusion is the opposite of nuclear power. In nuclear power, you think about splitting heavy atoms like uranium. Fusion is all about putting together the lightest atoms. And for us, we put together to hydrogen atoms and make helium and that is an incredibly powerful reaction. It's the most powerful reaction that we know of, and it's also incredibly clean. The fuel for fusion, for our version of fusion, comes from water. It comes from the hydrogen out of water.

So there's basically an unlimited supply of this fuel that's available to everybody everywhere. If if Lisa were to go to UH British Columbia to Vancouver and you were to show her your plan sima injector, can you describe what would it look like and what does it do? So plasma, let me start by just saying that that plasma. You can think of plasma as lightning. When when you look up in the sky during a thunderstorm you see a

flash of light, that light is actually plasma. It is electricity UH that has gone through the air in the atmosphere and heated that up so much that it stripped all the electrons off the protons of those atoms and made it glow. And that is that's really what plasma is. And when you look at the sun, that's what you see that the sun is a burning ball of high temperature plasma. And so our plasma injector, which is is like the fuel injector of a diesel engine. Uh, it

basically creates the starting point for fusion process. It creates this plasma. So it's a it's a machine that's uh six or seven feet in diameter, about fifteen feet long, where we put an incredible amount of electricity through just us a very very little bit of hydrogen gas a couple of grams and heat that up to about five million degrees and that's kind of the starting point of view will to creating fusion here on Earth. Okay, So to heat something up to five million degrees sounds like

it takes a bit of energy itself. How do you how do you source that energy to create this energy? Well, in the fusion plant, you have recirculating energy, right, So, uh, the good news about fusion, it just makes an incredible When the fusion reaction happens, it makes an incredible amount of energy, and so you recirculate some of that back to start the next reaction. Again. Our machine is really analogous to a diesel engine. It's a pulse process that

in the power plant will happen once a second. So basically you'll create a plasma injected into our machine and compress it actually pretty much just the way a diesel engine works too. You reach fusion conditions, which is when you heat up this plasma to over fifty million degrees and at that pressure and temperature, the helium, the hydrogen atoms actually burn and fuse together into helium and release

an unbelievable amount of energy. And uh so you just recirculate some of that to create new new plasma, but there's plenty of left over to make clean electricity. Point you're looking perhaps to build an even bigger plasma injector. Correct, Well, what we're doing a plasma injector again going back to my analogy of a diesel engine, and plasma injector is

just one part of the overall engine. And so what General Fusion has done for the last fifteen years is really develop all the systems of our fusion engine, if you will. And what we're getting ready to do now, which is really exciting, is to really build a demonstration fusion plant, okay, and the purpose of this is to actually prove that we have the capability to make electricity

out of fusion energy. It's not going to be a functioning power plant in the sense of putting megawatts on the grid because actually the back end of our power plant is something that's completely conventional. We don't need to prove that. We're really kind of proving out on an integrated basis the fusion island, which is that the set of equipment that makes this plasma, compresses it, burns it, and turns it into electricity. That's the goal, and this

will be done at scale. So, uh, Jeff Bezos, the founder of Amazon is an investor, is backing general fusion. Can you walk us through what has to happen for this to be adopted on some kind of mass scale and also how does it compare and cost to other

types of energy generators. So one of the exciting things about fusion, at least I can certainly speak to General Fusion, is that when you evaluate the projected cost of electricity, it's extremely competitive, uh, competitive with the future forecast of wind and solar. And of course it's available twenty seven. You know what we talked about it as on demand or flexible energy, right, and so whereas renewable, you need to complement it with something, whether it's energy storage or

some form of flexible on demand energy. UM in this case, it's something that in itself is very economically competitive and that that's a key piece of this thing. So for us, we are at the last stage of commercialization, so building this demonstration plant. When it's up and running in the next several years um, and it works the way we hope it works, we'll be ready for commercial deploy at the next step will be a commercial reference plant that

will actually put clean electrons on the grid. Thank you very much for joining us and sharing this a new technology with us. Chris Malory is the chief executive of a General Fusion talking about the private sector bet on using fusion technology to create electrics. Much appreciative this time to take a look at small and MidCap shares, and of course Dave Wilson Bluebirk, Sex editor, columnist and blogger at M Live go On at the Bluebird joins us.

Now risk on in small caps give us the details please, Well it sure looks that way, Lisa. I mean you see the Russell two thousand at the moment higher by one point seven percent, basically keeping pace with the S and P five hundred, which is up. I don't know

about one at the moment. The Russell's biggest game by far belongs to Veraphone Systems, whose ticker is pay p a Y. The provider of credit card readers is up fifty two after accepting a buyout offer from a group led by private equity firm Francisco Partners that deals value at three point four billion dollars will assume debt. Spectrum

Pharmaceuticals sp p I is gained twenty t five. The drug developer gave a positive update on research into a proposed lung cancer treatment, and a keen group took her f r a C has gained nine and a half percent. The provider of fracking services was raised to the equivalent by from holding RBC Capital Markets. The Russell steepest drop belongs to v t V Therapeutics took her v t VT.

The drug developer has plunged seventy three and a half percent after it proposed Alzheimer's medicine failed in the final stage study and selected biosciences to her s c LB has fallen about eleven and a half percent. The company released mid stage data on the treatment for gout, and analysts express concerned about the results on a conference call. Thank you very much, Dave Wilson Bloomberg Stocks comm is.

Send David email at d Wilson at Bloomberg dot net and sign up for his daily free email newsletter Sanctions against Russia. They have at least taken their toll on. One proposed deal is having to do with Glencore, the world's largest commodities trader, and here to tell us more. As Tom Wilson are mining and commodities reporter for Bloomberg News,

he joins us from London. Tom tell people exactly what was proposed between Glencore and an aluminum company that they were going to have a share swap with, but that doesn't look to be happening anytime soon exactly. So glen Call, the world's biggest commodity company, has a long history with like Derri Pasca, the sanctioned billionaire, and with one of his companies, in particular Russell, So it hold an eight point seven five percent steak in that business that it's

had sent about two thousand and seven. Now, Derri Pasca back in the autumn, he decided he wanted to list a holding company called M Plus in London, and in order to do that, he approached his good friend Ivan Glazeberger glenc call and Outer Golenko would step into the cornerstone investor by swapping its steak in Russell for a

steak in the newly created listed entity n Plus. UM glen Core agreed that deal was going to happen by the end of April, and now, following the sanctions against Dera, Pasco, Russell and N Plus last week, Glencre confirmed this morning

UM that that is suspended. You know, one thing that I'm struck by, Tom, is that there's been a broad based withdrawal from frankly everything having to do with Russia, but Russel has been singularly punished since it's oligarch head was among those sanctions, and I'm wondering, you know, can you talk about the effect of the sanctions on the supply chain of aluminum, for example, which is the specialty of Russel, or some of the other commodities that Russia

supplies to Europe and the rest of the world. The main focus here at the moment really is on on and on aluminum or aluminiums as we call it in London. Russia is the world biggest producer of aluminium outside of China, so I had a huge market share and the way

in which these sanctions work. They're basically designed to to be cut roust out off from the US financial system, but the implications are far more reaching, and really it means that you can no longer as a US business, and ultimately probably is now as a European business, as as the budiness will ultimately follow the direction of U S sanctions. You can no longer buy any aluminium from RUTA whatsoever. So that's the scene that's really sent the

aluminium market into a bit of a spin. Aluminium seen the biggest two day gain in more than six years. UM Russell lost half of its value on Monday and was down another nine percent in trading today in Hong Kong. On the flip side, UM, anybody that doesn't have Russian Russian aluminium, so the Chinese aluminium producers are up. Equally anybody with exposure to US aliminium producers, particularly following Trump's

new tarifts on steel and aluminium. If you already have aluminium inside the US, people are willing to pay the tree them for it. M The rest of the Russian economy is dominated by fast or fuel, particularly oil and natural gas. What effect I've sanctions had on those businesses,

So no or no immediate lasting sanctions. I mean, we've seen we've seen the ruble slipping value against almost every other currency in the last eight hours, and certainly in London speaking to invest here, there is a lot of kind of wider alarm and contagious effects at the moment. So people are concerned, um that about almost they're doing any Russian business, because if they're not on the tanking list today, what's to say they might not appear on

that list in due course. I think some of some of that concern will probably ease off in the next few days, but it is certainly becoming a more and more whisky jurisdiction to do business with the kind of specter of an ever expanding U S sanctioned program in

the background. So, Tom, when you talk to experts in the aluminium how is that fields, I'm wondering, is there any sense that there's some kind of inside it's surprised for aluminum prices if say, the sanctions are lifted, or as people sort of pass the details and get the sense that this is more necessarily break the supply chains that much. I think I think we have to expect some of that price really to come off in the next few weeks. But I mean, no one is really

talking about these sanctions being lifted anytime soon. Um, so be the potential consequences that we need to be aware of is in the past, when Russian businessmen have been sanctioned by by the U S or other foreign regimes, the Russian government has stepped in to provide some solutions

or support. So I would guess at the Kremlin will be thinking now about creative solutions that it can potentially offer to Russo to say part of that business, you know, can they can they repackage some of the aluminium production units under a different entity? Is there are ways to circumvent sanctions there? But I also think that if you look at the breadth of the sanctions effort against Aripaska, eight of his businesses were targeted to Yeah, this isn't

simply a warning to him. This is very much a blocking action. They are saying to their no, your your businesses are no longer welcoming to you, no longer able to trade. Tem Wilson, thank you so much, Minding and Commodities reporter for Bloomberg News. Unfortunately, we're going to have to leave it there. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer.

I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Bloomberg Radio