LONDON — Despite recent political and economic headwinds, the energy transition needs to accelerate, with innovation playing a central role, three policy and financial leaders told an audience at the Breakthrough Energy summit in London on Wednesday.

Progress toward decarbonization is picking up, but the challenges are also growing, said John Podesta, a climate advisor to United States President Joe Biden, in comments further echoed by Mario Draghi, a former prime minister of Italy and former head of the European Central Bank.

Podesta and Draghi were joined by Noel Quinn, the chief executive of the global bank HSBC, in a discussion moderated by Cipher’s Amy Harder as part of the summit’s opening session. Quinn emphasized the need for speed in the global energy transition.

Draghi, who is spearheading a top-level report on Europe’s competitiveness, noted the economy on the continent has stagnated, leaving Europeans poorer, while political leadership is shifting, potentially hampering progress on climate change.

“Europe is stressed in a variety of ways,” he said.

As Russia’s war in Ukraine drags on, the European Union must increase defense spending even as it ramps up an expensive energy transition, said Draghi. In some ways, the transition in Europe has already stalled, given that the continent is scrambling to meet energy demand and in some cases is replacing Russian natural gas with more fossil fuels, he said.

“By 2028 we foresee 17 new liquid natural gas terminals and 11 new installations. That’s not going in the right direction,” he said.

Quinn of HSBC said technological innovation needs to play a key role in pushing such a huge transformation forward quickly.

“We can’t reinvent today’s industrial landscape simply by a process of evolution. There’s got to be an element of revolution,” he said.

Bill Gates (right) in conversation with Breakthrough Energy’s executive director Rodi Guidero at the Breakthrough Energy summit in London on June 26. Photo by Cat Clifford.

Draghi and Podesta also underscored earlier comments from Bill Gates, whose Breakthrough Energy initiative is sponsoring the conference, that achieving a level of political consensus around responding to climate change is critical in both the U.S. and Europe. (Breakthrough Energy supports Cipher.)

“Climate is on the ballot,” said Podesta, referring to the November presidential election in the U.S.

Podesta said the U.S. 2022 Inflation Reduction Act — essentially a large-scale law aimed at accelerating the energy transition — is particularly focused on creating green jobs and bolstering economic growth in states traditionally dominated by Republicans, who have been skeptical about climate change and government efforts to address it.

“More than 300,000 good paying jobs are being created and businesses are being created,” Podesta said. “This private sector-led transition is working.”

Editor’s note: Bill Gates founded Breakthrough Energy, which supports Cipher.

More from the summit:

• Scale matters. Let’s talk about it.

Today’s Hot Takes:

• Bill Gates on political consensus at London confab

Bill’s take: Political consensus is critical to moving the energy transition forward, Bill Gates said at the Breakthrough Energy summit. Political headwinds, particularly from conservative parties in the U.S. and EU, have dominated headlines in recent weeks.

• Bill Gates on artificial intelligence in London

Bill’s take: At the Breakthrough Energy Summit on Wednesday morning, Bill Gates said artificial intelligence techniques will accelerate understanding of energy system and energy transition challenges. AI’s impact is the hottest topic in energy, from the energy it requires to the contribution it can make to various climate solutions.

• The extraordinary scale of the energy transition

Bill’s take: The scale of the energy transition is “extraordinary,” especially with many developing countries having no access to modern energy systems, said Eric Toone, chief technology officer of Breakthrough Energy, laying the foundations for the three-day conference.

• New grid model initiative announced

Anca’s take: Breakthrough Energy announced a Grid Modeling Initiative, meant to help the world decarbonize the grid faster and more efficiently through an open-source platform. As Rajeev Ram from Breakthrough Energy Ventures told me on stage at the London summit, you can think of it as the operating system of grid decarbonization that will require data from various stakeholders.

• Key investor talks artificial intelligence and fusion

Cat’s take: Vinod Khosla, the founder of Khosla Ventures, was the first venture investor in OpenAI in 2018. The same year, he also invested in Commonwealth Fusion Systems. Those investments are related. “OpenAI, of course, will create AI that consumes lots and lots of power,” Khosla told a packed room at the London summit. But fusion would solve that problem, he said.

• An ‘AI scientist’ is coming, influential investor predicts

Cat’s take: Interesting: Vinod Khosla expects an “AI scientist” will be created in the next year or two. “And then we will have real solutions to climate because that scientist is what we need to solve hard problems,” he said at the London summit.

• Buildings are the U.S. Army’s biggest source of emissions

Bill’s take: The U.S. army is responsible for 200k buildings, the largest source of the armed service’s emissions, said Rachel Jacobson, assistant secretary of U.S. Army for Installations, Energy and Environment. The U.S. armed services are the government’s biggest greenhouse gas emitters.

• Cleantech startup CEOs talk about finding their first customers

Anca’s take: Finding your first customer as a cleantech startup takes a lot of patience and perseverance as you convince people your innovation works, CEOs of 3 cleantech startups said at the London summit. It’s interesting to get some insights into the challenges these companies face on their way to commercialization and their efforts in the early development years.

• Less expensive, lower-emitting cement alternatives exist, CEO says at summit

Bill’s take: Cement is among the highest carbon emitting products, but clean replacements are available at no higher cost, according to Donal O’Riain, CEO of Ecocem Materials Ltd., which makes one of those. Most alternative decarbonized technologies carry what’s often known as a “green premium,” one of the biggest impediments to speeding up their adoption.

• Startup CEOs reflect on the importance of constant innovation

Cat’s take: The CEOs of Antora, Form Energy and SOURCE Global spoke at the cleantech summit about moving out of the lab and into development and manufacturing. Innovation is still core to their DNA. “I think of innovation for a company as the company equivalent of education to humans. And if you ever think you’re done with it, you’re probably not very good at it,” said Mateo Jaramillo, CEO of Form.

See more summit coverage here.