Winning the Climate War: BNEF Summit Executive Dialogue with Tom Steyer
Highlighting the $2 trillion dollar in clean energy investment just last year, VX News shares this Executive Dialogue with Tom Steyer, Co-Executive Chair of Galvanize Climate Solutions, and Bloomberg NEF Editor Vandana Gombar from the BNEF Summit in San Francisco earlier this month. As a venture capitalist, Steyer makes the business case for continuing investment in the green economy despite the shocks, set backs, and uncertainty permeating the new US federal administration.
“When we consider the global transition, let’s be clear: it’s happening. The advantages of new technologies keep growing. Costs continue to drop, and capabilities continue to increase.”
Tom, you straddle the worlds of politics, climate, and business. There is a clear and compelling business case for green energy and the green transition. You have written a whole book on it—I read it. There's a chapter titled Sharpening Your BS/Nonsense Detector. So, my first question is: What do you make of the new administration and the policy shocks? To what extent can the business case for green investments be impaired? How threatened is the U.S. green economy, in your opinion?
My basic thesis in the book remains true. The book came out about seven or eight months ago, and its central idea is that we live in a market economy—a capitalist economy—where people and companies buy things that are good for them. If you're selling cheaper, faster, or better, you’re going to win. If you’re selling something more expensive, slower, or worse, you’re going to lose.
If we keep our eyes on that fundamental capitalist tenet, we’ll see that change happens through new disruptive products—ones that aren’t just marginally better, but substantially, disruptively better. People and companies buy them because it’s in their best interest. Now, here we are in early February 2025, looking at changes in how we generate electricity and energy worldwide. The question is: How different is the landscape from six months ago?
Let me say this—I am a dyed-in-the-wool capitalist. I believe in a level playing field for different technologies, companies, and products. That’s how people around the world, and countries around the world, are best served. That’s where the best companies emerge. Let’s examine what’s changed. In terms of global electricity generation, last year, over 90% of new power plants were renewable. No one made those investments to be nice—everyone did it because it was a better deal.
When you look at electricity generation globally, solar prices have dropped 80% in the last decade. Batteries have also dropped 80% in price over the last decade, and their market has been growing at 68% per year since 2010. People are making choices because it’s good for them. Fossil fuels haven’t decreased in price for 100 years when adjusted for inflation.
Do I think batteries will drop another 80% this decade? Yes. Do I think solar will drop another 80% this decade? Yes. Solar and wind are already cheaper than natural gas for electricity generation in the United States. People worldwide are choosing new technologies—better, cheaper, outstanding technologies. Is that going to change? No.
Now, let’s address electric vehicles. In the U.S., EV sales rose by 9% last year, which some saw as slow. Globally, EV sales grew 25%. In China, EV sales rose 40% by year-end, and by December, electric and plug-in hybrid vehicles made up over 80% of new car sales. That’s in the world’s largest car market. Chinese carmaker BYD is expanding rapidly, opening plants in Turkey, Thailand, Indonesia, Brazil, and Hungary—covering Eastern Europe, Asia, the Middle East, and South America.
When we consider the global transition, let’s be clear: it’s happening. The advantages of new technologies keep growing. Costs continue to drop, and capabilities continue to increase. On a fair playing field, the best companies, products, and technologies win. At Galvanize, we focus on being on the winning side of that transition. There’s nothing nice about it—it’s business.
Galvanize Climate Solutions provides venture and growth capital. Tom, you invest in public equities and look at decarbonization opportunities in real estate. At Bloomberg, we always say, follow the money. How is or has strategy been changing at your company?
Let me say this—we’ve never believed in subsidies. We’ve never believed in free money. We’ve always believed in competing on a fair, level playing field. That’s what we’re doing.
So, for us, when people ask, Is there something we’re doing that’s going to be hurt? the answer is no. We are betting on capabilities, technologies, people, and change where we believe there is a dramatically better value proposition for our customers.
If you think just in terms of real estate, we believe you can dramatically increase net operating income if you're smart about how you generate and use energy. We’re doing it because we believe it leads to better returns. Does it also get us to net zero in those buildings? Yes, it does. But if we didn’t get better returns, we wouldn’t do it—because what scales is profits. What scales are things that people want to buy—not things that you guilt them into buying.
People in this world are not that guilty when they go to the grocery store—they buy what they want. So, to a great extent, what we believe in is: Don’t be concessionary. You have to succeed because success is what scales. Success is what has an impact, and success is what drives investment returns.
Thank you. Tom’s a die-hard optimist—keep that in mind when you listen to his answers. Three green sectors seem to be very close to your heart: next-generation energy storage, next-generation geothermal, and info-tech which enables the energy transition. Which sectors look most promising under Trump 2.0?
The first two—storage and geothermal—are about, how we get not just cheap generation, but cheap baseload generation. That’s particularly important as we look at new generating capabilities in the developed world, where people want to build AI plants.
Geothermal is something where the projections could be 15% of electricity generation worldwide by 2050, which is a huge deal. It’s completely clean. They’re bringing new technologies to completely different depths. Geothermal—think Old Faithful in Yellowstone—it’s hot water and steam underground that you bring to the surface through old-fashioned fracking technologies. To a large extent, that’s baseload power.
The same thing with batteries going down another 80%, and that’s important. But what’s important is, to what extent do new battery technologies allow duration to change to go from four hours to days to seasons? Because at that point, renewables plus batteries are truly baseload power for somebody who needs 24/7/365, to an incredibly high degree of certainty.
Let’s talk about the third one, which is information technology. I live in Northern California. If you look at the 21st century, what the United States has built to—I won’t say an overwhelming extent, but kind of an overwhelming extent—is information technology businesses. You think about the new businesses in the United States that have grown up over the last 25 years, a lot of them are here. Most of them are on the West Coast, and they’re based on information and using information in completely new ways. When we think about how we’re going to do electricity generation, how we’re going to rebuild the grid, how we’re going to do transportation—everybody thinks about gadgets. We’re going to rebuild the grid. We need to rebuild the grid to put all these new renewable projects on the grid–we need more grid capacity.
One second about information. They were trying to get increased capacity in a utility in the Midwest. They increased it by 50% by putting sensors on the grid and software. Fifty percent. It costs $48,000 per mile to do that. To rebuild the grid and get the same upgrade would have cost $600,000 per mile. It would have taken two years to do it, and they would have had to shut down the grid as they did it. $48,000 versus $600,000. When we’re talking about creating new capabilities, we can use information and real-time control and decision-making in a completely different way on the existing footprint. That’s why I’m excited about it. Think about the difference in cost, speed, and scope. If you can do that, it’s a completely different way of thinking. Do I hope that this new administration makes permitting faster and easier to do? Of course. From my standpoint, that would be fantastic.
Information technology—that is something we are good at. When we look at how we’re going to do this, we need to think about how we put real-time decision-making in the hands of people who are running big projects and companies, so we get better decision-making and save a ton of money. They’re a hell of a lot more efficient.
Regarding the push towards tariffs on imports, there's a whole layer to this narrative. There is a buildout of overcapacity, strategic risk, and a focus on the local economy and local jobs. But we are erasing efficiency and possibly economies of scale. Do you see the attempt at carving out alternative supply chains as a positive or a negative step?
Let's talk about why we would want to have alternative supply chains. All you have to do is look at what happened to Europe when they were relying on Mr. Putin for their energy to realize that there is a political aspect to supply chains. To the extent that we are relying on people who will use those supply chains, as Mr. Putin did, for political reasons against us, that is something that we have to protect ourselves from–and I understand that.
The second thing is, when we look at people who we believe are unfairly competing and dumping products into the United States, that is not a fair tactic. It's something we need to protect ourselves from, from a competitive and a job standpoint. In both those instances, we have to be worried in the real world about how we protect ourselves and give ourselves a chance to compete.
Let’s take away those two instances and talk about competition. I know you don’t think it looking at me, but I used to care a lot about basketball, and I used to play a lot of basketball. One of the rules of sports is: If you want to be good at sports, you’ve got to compete against people who are good at sports. If you want to be good at basketball, you’ve got to play against people who are good at basketball. The same is true in business. If you want to compete in something, you’ve got to go head-to-head with the people who are good at that. You can’t give yourself a break–you can’t hide–you have to be able to go out and examine what they’re doing and figure out a way to compete with them and use our natural advantages to do that.
The idea that the United States can’t do that is false. We definitely can do that. We've always done that–we have to do that. To my mind, you're asking a basic question about tariffs. I understand there are times when tariffs are a way of protecting us against either geopolitical risk or against people who are competing unfairly—check. But having said that, we must have a level playing field around the world and compete around the world and use our specific capabilities, our advantages—the things we do incredibly well—to build businesses that succeed globally. I think the idea of hiding and using old-fashioned technology to try and compete against people who are blowing past you is a mistake for us. We need to be on the cutting edge. Compete on the cutting edge.
What encouraging words would a die-hard optimist like you want to share with those who are feeling rather pessimistic about the energy transition in the US right now?
I would view myself as a die-hard realist, and I look at the numbers in each one of these industries, the technologies—because I see them—and I look at the possibilities and the returns. I’m not someone sitting here from 30,000 feet telling you, ‘Oh, it’s all great. Don’t you worry, it’s all gonna work out.’ No. We're looking at specific returns for specific investments, and honestly, we think they’re really good.
From my standpoint, I am very optimistic that this transition is going to happen and that it has a huge tailwind. It has had a huge tailwind, and it will continue to. The issue here is a race between two things: the transition that is happening inexorably, and the deterioration in the natural world that is also happening inexorably. Both of them are moving toward tipping points. At this point, over 90% of new electricity generation is renewable. That’s a tipping point, for goodness’ sake! On the other hand, if you look at what’s going on in the natural world, it’s pretty clear that we have either passed some tipping points or we’re flirting with them very seriously.
On a data-driven and business basis, I’m extremely optimistic. The question is: At what pace do we have to succeed in handling the problems that are showing up in the natural world? I could talk to you all day about the business opportunities they present, but our goal is actually to get ahead of that and to change emissions in a completely profitable way, to get better outcomes for people across the board, and really, to create a sustainable business environment on a level playing field that is extremely profitable. The pace at which that happens is going to have a profound impact on how the natural world responds.
I'm itching to ask—’drill, baby, drill’ and emissions, how do they go together?
We are the largest producer of oil in the world by a lot. If we do everything they’re talking about, I think we produce 13.5 million barrels of oil a day. The world consumes, I think, somewhere around 102 million barrels a day. If we go crazy, we’ll probably go from 13.5 million barrels a day to 14–not that big a change, honestly.
The real question is: What is going to happen in terms of the competitiveness between different technologies? Is that something where you can see that level of oil usage continuing? Oil usage has plateaued in the developed world. 60% of oil is used for transportation—for cars and trucks. You can look at that and say, Is that the future? Are we going to sell a bunch of oil this year? Yes. How long is that going to be true? I don’t know. But what I do know is, it’s a competition.
And if you look at the way the costs are moving, it’s a competition where new technologies are going to be powerful and disruptive. I'll just give you some numbers—I’m sure you guys all know this. You know there's a $12,000 BYD plug-in hybrid that goes 1,200 miles. That’s a fact. $12,000. Do I think the cost of plug-in hybrids and EVs in China is going down? Yes. It’s going down 1% per month. When you talk about where are we going, and what technologies look disruptive—that sounds disruptive.
I'm going to add my positive comment here. Bloomberg and BNEF track data on the energy transition—investments in the energy transition. Last year’s number? Over $2 trillion. It’s the first time, and we will keep tracking it. The numbers show a positive story—countries that were not so green, going the green way. Maybe your vision is what will prevail, but let’s see.
It certainly prevailed, and the costs got lower. This year, they are—and they’ll get lower next year. Amazing.
