A leading venture capitalist, Vinod Khosla is the co-founder of Daisy Systems and founding Chief Executive Officer of Sun Microsystems. Khosla pioneered open systems and commercial RISC processors. He became a general partner of the venture capital firm Kleiner, Perkins, Caufield & Byers in 1986 and has mentored many entrepreneurs in building technology-based businesses. In 2004, he started his own firm, Khosla Ventures. He is an advocate of clean energy and supported the campaign to pass California's Proposition 87. Born in 1955 in India, Khosla was determined to pursue technology as a career since his early teens. Khosla was educated at the IIT Delhi, Carnegie Mellon University and the Stanford Graduate School of Business.
Question: What are the environmental problems surrounding coal?
Vinod Khosla: So conventional wisdom has had it that we have no cheaper source of electricity than coal, and in fact we have no reliable source. And part of the reason we have that belief system is because environmentalists have generally pushed wind power and __________, which can be a small percentage – five, 10, 15, maybe even 20 percent of our electricity supply. And that makes them huge markets. But 10, 15, 20 percent of our supply is not a climate change solution. There are great investment opportunities and we invest in them. But we have to be clear: They won’t solve the climate change problem. For that we need something that can have the kind of reliability and dependability coal has. You can sign a 20 year contract for the utility and say something other than, “I’ll ship you power when the wind blows.” It doesn’t quite work for utility. There are newer technologies coming along that solve that problem. Geothermal solves that problem. You can deliver power when the utility needs it. New kinds of technologies like solar thermal . . . And Florida just announced the use of those technologies for a massive solar project in Florida. Not considered a traditional solar strength state. These technologies can have what’s called “dispatchable power”. When the utility customers need power, you can supply it to the utility so they can supply it to their customers and not make excuses like, “It’s not sunny,” or, “The wind isn’t blowing.” And that kind of utility great power – power I call “__________ power” – is absolutely key to cracking coal. Not only that, it has to be cheap enough. Fortunately the cost of coal based power has been going up. Environmental regulations for criteria pollutants like sulfur dioxide and mercury have been getting more stringent. And because of that, coal now costs quite a lot more to produce . . . coal-based power costs a lot more to produce than it did five years ago, or even two years ago. That gives us an opportunity. The coal industry is talking about next generation coal power plant technology called “IGCC”. And IGCC with carbon sequestration is what they think is the solution – the so called “clean coal” solution. That solution should be attempted. We should try it. My personal belief is solar thermal technologies and geothermal technologies will be cheaper than those technologies. And because they will be cheaper, they’ll beat them in the marketplace, and we will find that we don’t need as much coal for power generation. There are other good uses for coal, so I’m not against coal. But it shouldn’t end up in our atmosphere.You know I believe, having watched technology development over the last three to five years, that today, the biggest problem is having people believe that we can replace oil with a cheaper alternative; that we can replace IGCC coal plants with a cheaper source of power that are more renewable . . . 100 percent renewable. Having the world believe that is, I think, the biggest problem. We still need to make more progress in technology, but I do believe it’s a mostly solved problem.
Recorded on: September 26, 2007.