Future of Energy and the Planet

Elon Musk talks with Edison International’s Ted Craver.

NEW ORLEANS — In an age when the American electric power system is undergoing transformative, disruptive change, one of the foremost disruptors shared a stage Monday with a utility industry leader for a conversation about the future of electricity, transportation and planet Earth.

Elon Musk, co-founder and chairman of Tesla Motors as well as chairman of SpaceX and SolarCity, sat down to talk with Edison International Chairman, President and CEO Ted Craver at the Edison Electric Institute’s annual convention in New Orleans. Musk was joined on stage by Tesla Motors co-founder JB Straubel.

Musk’s SolarCity is among the new companies entering the electric power business by providing rooftop solar panels directly to homeowners, while Tesla Motors is attempting to shift transportation fuel from petroleum to electricity. He is widely viewed as a visionary whose business ventures are challenging electric utilities, automakers and even the U.S. space program.

“I wouldn’t necessarily call myself disruptive,” Musk said, responding to a question from Craver. “I’m not a big fan of disruption for its own sake. If there’s something that needs to be disrupted to make the world a better place, I’m all for it. But mainly I’m just for things being better.”

Addressing a large room full of electric industry professionals, Musk said he believes that the future for traditional utilities is “quite positive in the long run.”

He noted that electricity generation provides about one-third of the world’s energy, with heating and transportation fuels providing about one-third each. The opportunity to convert transportation to electricity is huge for utilities. “My guess is that demand for electricity is going to more than double,” he said.

He also predicted that despite its rapid growth today, distributed energy such as rooftop solar will account for only about one-third of all power in the future, with utilities’ central plants providing the rest.

Craver conducted the interview in his role as chairman of EEI, the industry’s trade association. His one-year term as chairman ends this week. Craver commented that many of Musk’s diverse businesses seem to have sustainability as a common theme. Musk agreed, and said: “If you ask people if they want the future of the planet to be sustainable, if they’re not insane of course, they’re going to say yes.”

Musk said he believes strongly that solar power is the future, for both customers and utilities. “In the long term, solar will provide the majority, or at least a plurality, of the world’s energy,” he said.

When Craver asked what the utility industry can do to help speed the adoption of electric vehicles such as Tesla’s Model S, Straubel jumped in: “Public charging stations! We could use the industry’s help with permitting, installing and even metering, if necessary, of charging stations.”

Craver noted that Southern California Edison already has worked with Tesla to help expedite permits for the car company’s Superchargers in Southern California. Both the SpaceX rocket factory and Tesla’s auto design studio are in Hawthorne, Calif. SCE also has proposed a plan to the California Public Utilities Commission to install electric vehicle charging stations in its territory.

Craver then turned the conversation to Musk’s latest big venture: battery storage of electricity, which Craver said is long considered the “Holy Grail” of the electric power industry. Storing electricity for later use is seen as the key to widespread adoption of renewable power such as solar and wind, which aren’t always producing power when needed.

Tesla recently unveiled its Powerwall and Powerpack battery products, designed to make battery storage affordable for homeowners and businesses, as well as for utilities. Tesla is building a giant “gigafactory” in Nevada to ramp up production of batteries to help drive down their prices. SCE is also working with Tesla on research into the best uses of battery storage in the electric system.

Musk said he expects “80 percent” of Tesla’s battery sales to be made to utilities, through the large-scale Powerpacks. He added that the Powerwall home batteries are intended more for backup during power outages rather than an economical alternative source of electric service.

Craver noted that SCE has been researching battery storage for years and believes that the best use of storage will be placing it in the neighborhood distribution grid where it can serve many customers simultaneously.

Musk spoke calmly and deliberately throughout the conversation, but became more animated when Craver brought up the government subsidies that Musk’s companies receive. A recent newspaper article listed billions of dollars in tax breaks and other subsidies used by Tesla, SolarCity and SpaceX. Musk has disputed many of the facts of the article.

Musk acknowledged that the nation’s system of tax breaks and subsidies for alternative energy is “clunky,” but necessary for the development of a clean energy future, “until we can get a tax on carbon.”

The conversation among Musk, Straubel and Craver wasn’t all serious. Musk drew chuckles and light applause from the crowd when he said that at his companies, anybody who is in a meeting but has nothing to contribute can just get up and leave.

“Really, that’s OK?” he was asked.

“Not just OK,” said Musk, “we expect it. If you’re just looking at your phone or your laptop, you can do that at your desk. Meetings are a big time suck anyway.”