Speaker 1: With Laurent segle And from London and Gerard Reed from Berlin.
Speaker 1: This is redefining.
Speaker 2: Energy linutes today on really if an energy job.
Speaker 1: What's your show? Where have you been invited? I was
Speaker 1: a Wisdom Try which is one of the largest managers
Speaker 1: of ETFs across the world. Wow Exchange traded pumps they
Speaker 1: might to command their podcast which is called The Commodity Exchange,
Speaker 1: and actually was. I thought it was good because listen
Speaker 1: back to basics talking about how you invest in this
Speaker 1: energy and transition, what you need to look out for
Speaker 1: going forward, also in terms of fossil fuels, what it
Speaker 1: means for that, etcetera, etcetera.
Speaker 3: So the episode is cool Energy Transition to Global Investment Guide.
Speaker 1: Let's listen to your interview.
Speaker 2: Welcome to the Commodity Exchange, a podcast where we bring
Speaker 2: you insights from the world of commodities. Whether you are
Speaker 2: an investor, I just want to learn more about the topic.
Speaker 2: I'm Abin Taher Director Macroeconomics and Thematic Research at Wisdom.
Speaker 3: True and I'm as Short head of Commodities and macro
Speaker 3: and economic research here at Wisdom True. Welcome Gerard. It's
Speaker 3: a pleasure to have you on our show. So I
Speaker 3: understand you wear many different hats, and what do you
Speaker 3: tell our audience a little bit about what you do
Speaker 3: in your own podcast and some of the other projects
Speaker 3: you have on Yeah, and.
Speaker 1: I suppose is three parts of my business life. So
Speaker 1: the first one is really I come from the finance
Speaker 1: industry and I'm a partner in business called Alexa Capital,
Speaker 1: which is one of the leaders in Europe in and
Speaker 1: around corporate finance in this energy transition space. That means
Speaker 1: we're raising money for companies, we're selling projects, and we're
Speaker 1: doing na So that's my first hat. The second half
Speaker 1: really is I'm involved in scaling businesses. I think this
Speaker 1: is a unique opportunity in our lifetime to have a
Speaker 1: really big impact by creating new things that actually have
Speaker 1: a positive impact on our world. And I said, the
Speaker 1: third thing that I do is I realized that the
Speaker 1: energy transition is really complicated. It is not easy to
Speaker 1: change an energy transition. And we're trying to move the
Speaker 1: energy transit. By the energy transition, I mean we're trying
Speaker 1: to move from a fossil fuel based system to call
Speaker 1: a clean energy based system. That's not easy and it's
Speaker 1: not easy for lots and lots of reasons, and because
Speaker 1: it's so complex, I just decided, look, and this is
Speaker 1: probably about ten years ago, I said, I'm just going
Speaker 1: to help educate people and give them an independent view
Speaker 1: of what was going on. So I've been a very
Speaker 1: active blogger and obviously I have the podcast, and I'm
Speaker 1: also involved in a think tank called the Energy Transition
Speaker 1: for And again I do this because again it's complex.
Speaker 3: I think a lot of our audience is familiar with
Speaker 3: the energy transition given the number of shows we're dedicated
Speaker 3: to the topic, but we'll always have new listeners. So
Speaker 3: why don't you tell us a little bit in your
Speaker 3: own words about what you believe the transition is, and
Speaker 3: more importantly, tell us why you think this mega trend
Speaker 3: presents an attractive investment opportunity.
Speaker 1: So let's take a step back. I by accident got
Speaker 1: into the whole renewable space twenty years ago, and I
Speaker 1: had an investment client who asked me to look at
Speaker 1: the solar business. And I came back to him and said,
Speaker 1: don't invest. He said to me why, and I said, well,
Speaker 1: the economics of solar make zero sense and never will.
Speaker 1: And he said to me, Jared, I need you to
Speaker 1: meet the founder, and actually met the founder of the business,
Speaker 1: and the founder explained to me why Solo was going
Speaker 1: to revolutionize the world, and it actually is in the
Speaker 1: process of doing that. Right when you think this year,
Speaker 1: for example, we're going to have five hundred gigawa's the
Speaker 1: solar installed across the world. We've never seen an energy
Speaker 1: technology come to market as quick as this, never you
Speaker 1: think of it. You know, nuclear at the peak in
Speaker 1: its seventies, you were probably building thirty forty giga what's
Speaker 1: a year. So just to put that out of that,
Speaker 1: that's the first point I say. But let's see where
Speaker 1: this came from. This technology would really not have got
Speaker 1: to market and to scale without a whole part of
Speaker 1: subsidy programs in the United States, in Spain and Italy,
Speaker 1: in Germany, and also with the help of the Chinese.
Speaker 1: The Chinese have produced and scaled the technologies like we've
Speaker 1: never seen in the history of mankind, and the subsidy
Speaker 1: programs in a lot of the Western countries. What they
Speaker 1: did was saying, now, what was a very expensive product
Speaker 1: to get to market so that there was a market
Speaker 1: for it and the prices went down. That was the
Speaker 1: start of it. So for me, at the beginning, it
Speaker 1: really was part of the green movement and a little
Speaker 1: bit about cleaning up the environment stuff like this. Twenty
Speaker 1: years on, it's not about that anymore. And I don't
Speaker 1: use the word transition anymore. It's not a transition. It's
Speaker 1: a revolution. And in the revolution, businesses people die, and
Speaker 1: there's winners and losers, and we're seeing the beginning of
Speaker 1: that already, and that makes it, by the way, a
Speaker 1: difficult place to invest. I just think of it like
Speaker 1: this energy. You look at some of the valuation to
Speaker 1: some of the companies, the gas companies out there, you
Speaker 1: could actually say, from a historical point of view, they're
Speaker 1: trading up very low multiples. Why well, there's a little
Speaker 1: bit of caution about the future in those businesses. And
Speaker 1: then you know, saying well, okay, let's put money in
Speaker 1: a solar business. Then you look and say, well, the
Speaker 1: margins of those businesses are so low do we really
Speaker 1: want to be in that? So it's a difficult place
Speaker 1: to invest. But I just want to say it's a
Speaker 1: difficult place to invest because there's a revolution going.
Speaker 3: Our observations that Wisdom Tree was that this energy transition
Speaker 3: were equal a revolution gained a lot of momentum in
Speaker 3: traction with investors back in twenty twenty one twenty twenty two,
Speaker 3: but are cooled substantially in twenty twenty three. However, just
Speaker 3: as you say, the investments in the physical assets in
Speaker 3: clean energy are now close to double those in fossil
Speaker 3: fuels when they were kind of equal in twenty sixteen,
Speaker 3: and solar adoption has clearly eclipsed most people's imaginations a
Speaker 3: decade ago. You including, there seems to be a huge
Speaker 3: dichotomy there. The energy transition or revolutions seem to be
Speaker 3: powering it, but investors seem less interested. Is this what
Speaker 3: you see as well? And why do you think that's
Speaker 3: the case.
Speaker 1: I won't say it's less interested. I think what's happened
Speaker 1: is that what we've had is a Chinese government who
Speaker 1: made a strategic decision fifteen years ago that they have
Speaker 1: to dominate these new energy technologies. What do I mean
Speaker 1: by that? I mean China doesn't have its own gas,
Speaker 1: doesn't have its own oil, and as to import them.
Speaker 1: In particular, oil is really the biggest oil import from
Speaker 1: the world. And they look at this from a strategic
Speaker 1: point of view, and they say, we don't really want
Speaker 1: to be continuing to import this Number one. Number two
Speaker 1: is there also is a view from the Chinese government
Speaker 1: really that they believe they should be at the center
Speaker 1: of the world. And if you'ret the center of the world,
Speaker 1: then actually you need to do good things for the world.
Speaker 1: And so the good thing for the world is could
Speaker 1: do something for the environment and lead on that. And
Speaker 1: then the third thing that is related to that is
Speaker 1: industrial policy in China, centralized industrial policy, which means that
Speaker 1: they've got full support to go and scale and take
Speaker 1: it a ten year of view. A lot of companies
Speaker 1: in the West take six month view these days, right,
Speaker 1: So we've never seen anything like that in terms of companies.
Speaker 1: And now the result of this is that you've got
Speaker 1: massive capacities of solar panels, wind turbines, batteries, inverters, you
Speaker 1: name it, core components of this energy transition, and they're
Speaker 1: all made by Chinese companies. And by the way, these
Speaker 1: Chinese companies, we never heard of them fifteen years ago,
Speaker 1: and now I look and I go gold wind Envision,
Speaker 1: bigguse wind turbine manufacturers in the world, c atl BYD,
Speaker 1: biggest battery manufacturer in the world bid biggest EV manufacturer
Speaker 1: in the world. You can go on and on and
Speaker 1: on about what China has done, but what China has
Speaker 1: done is and also does is they say, listen, if
Speaker 1: we're going to really dominate these technologies, we have to
Speaker 1: get to such scale that people aren't going to compet.
Speaker 1: So I can't compete because people like me and the
Speaker 1: finance world say I'm not going to give you a capital.
Speaker 1: So the result of that is we don't have manufacturer
Speaker 1: of any of these core technologies in the Western world,
Speaker 1: with the exception really a Tesla. Okay, with the exception
Speaker 1: of Tesla. The rest is in China. And that's what
Speaker 1: makes it very difficult to invest. How do you compete
Speaker 1: with the Chinese? And you can say, I can put
Speaker 1: a subsidy on it, I can do this, that and
Speaker 1: the other thing. But the investors really like putting money
Speaker 1: in a factory just because you're going to get a subviously,
Speaker 1: knowing that you won't compete with it, you know what
Speaker 1: I mean. That's what makes it very difficult. And the
Speaker 1: other thing is that you have hype circles in this
Speaker 1: space you talked about twenty twenty one, twenty twenty two
Speaker 1: massive hype cycle. The world's hydrogen. You know, hydrogen is
Speaker 1: going to be the next big thing. We're the leaders
Speaker 1: in it, and we've got plug power, we've got ballard,
Speaker 1: and we got this, and there's share prices of all collapsed. Okay.
Speaker 1: And also, by the way, we had the whole spack
Speaker 1: movement as well, again crazy evaluations in around companies that
Speaker 1: had nothing or very little, and you have a crash,
Speaker 1: which is probably similar in this space to the crash
Speaker 1: the Internet boom or BOST, but very clear, out of
Speaker 1: the Internet boom of BOST came a whole pile of
Speaker 1: great businesses right, including Amazon. So I'm not negative about it.
Speaker 1: I'm just saying there's an opportunity now to pick winrors.
Speaker 2: Jared, speaking of hype cycles, one thing that's very hyped
Speaker 2: up right now is the AI wave, certainly, and I
Speaker 2: saw statistic recently from the International Energy Agency which said
Speaker 2: that one query submitted to chat GPT requires ten times
Speaker 2: the amount of energy as a simple Google search. It's
Speaker 2: a good memorable way to just remember how energy intensive
Speaker 2: the AI revolution is. And of course, with more data
Speaker 2: centers having to be deployed, more devices with AI capabilities
Speaker 2: and so forth. But this also potentially has an impact
Speaker 2: on the energy transition becauseally some of those data centers
Speaker 2: good turned towards renewables and maybe that's a new source
Speaker 2: of demand. How do you see the impact and the
Speaker 2: increased use of energy from the AI revolution on the
Speaker 2: energy transition?
Speaker 1: I look at it very positively. And the reason I
Speaker 1: say that is because it's all about electricity and what
Speaker 1: any form of data center or software does it and
Speaker 1: power electronics. It enables you to control powerflows. I can
Speaker 1: see data centers being part of the solution going forward.
Speaker 1: Let me let me explain what I mean by that is,
Speaker 1: I can tell you, like I'm in Europe, if I
Speaker 1: use CHATCHBT in my morning, it's really quick. I go
Speaker 1: and use it in the evening it's really slow. Why
Speaker 1: is that Well, because we're using US data centers in
Speaker 1: the morning and guess what, You're all sleep and then
Speaker 1: when you guys all wake up, then guess what happens
Speaker 1: to get slow? Now where am I coming from this?
Speaker 1: That's already happening within this, which is your moving demand
Speaker 1: in data center based on where you have capacity. But
Speaker 1: I'm also going to come to another point. You're going
Speaker 1: to do this based on electricity. So where's the cheap electricity?
Speaker 1: Oh yeah, there's too much wind in the UK, let's
Speaker 1: go there. So we're going to flexibilize a lot of
Speaker 1: what we're seeing from the Googles and the Microsoft to
Speaker 1: this world. We're going to use them as part of
Speaker 1: the solution. And I'm very happy about the fact that
Speaker 1: these guys are actually putting their hands up and saying
Speaker 1: we're going to leave this, We're going to do this.
Speaker 1: They're not shying away and sort of saying, oh yeah, yeah, yeah,
Speaker 1: we're going to just buy carbon credits and keep our
Speaker 1: heads down. They're actually putting their heads up and saying
Speaker 1: we're going to be part of the solution. And tech
Speaker 1: is part of the solution. That's what I want to
Speaker 1: say on that whole issue. And it's very clear if
Speaker 1: you look at who the big energy user is going forward,
Speaker 1: or it used to be the big chemical companies, it
Speaker 1: was Dow, it was BSF, and it's not. I mean,
Speaker 1: the big big electricity us is going forward are Google, Microsoft, Accessia, right,
Speaker 1: And we have to make sure that they're part of
Speaker 1: the solution going forward rather than the And the other
Speaker 1: thing I would say is if you want to think
Speaker 1: about cleaning up our energy system, you have to electrify
Speaker 1: as much as you can. And electrifying as much as
Speaker 1: you can means actually that what you need to move
Speaker 1: into a world is where everything is connected together and
Speaker 1: it is powered by AI. So I can walk into
Speaker 1: the house, guess what, the house senses that I'm there,
Speaker 1: and the heating system goes on and then it actually
Speaker 1: goes Oh. But by the way, there's no sun out
Speaker 1: there today, so I'm not going to charge your car.
Speaker 1: I don't want to think about that. But the AI
Speaker 1: will enable decisions like that to be made and automated
Speaker 1: going forward. And that's the world that we're going into.
Speaker 1: And by the way, that lends itself very well to
Speaker 1: let's call it flexible side of renewables, because the reality
Speaker 1: is solar is the cheapest form of electricity producer in
Speaker 1: the world. But the problem is it's not there at night.
Speaker 1: Well guess what, we don't use our data centers at night.
Speaker 1: So there's ways around it. That's what I want to say.
Speaker 1: I look at it positive, don't look at it as negative. Anyway.
Speaker 2: The sector that is electrifying very quickly, and you just
Speaker 2: said it is cause that need to be charged electric vehicles,
Speaker 2: and they two go through their own ebb and flow
Speaker 2: in terms of the press they receive. Of course, recently
Speaker 2: there's been some negative press, perhaps more so out of
Speaker 2: the US, where EV adoption might be a bit slur
Speaker 2: compared to parts of Europe or indeed China, but the
Speaker 2: world at large, you know, overall, we're on track to
Speaker 2: sell seventeen million evs in twenty twenty four, and if
Speaker 2: you compare that to twenty twenty be so close to
Speaker 2: three million sales. So we're on this very strong growth trajectory,
Speaker 2: certainly in the electrification of road transportation. Give us your
Speaker 2: take on how you see the EV industry. Is it
Speaker 2: breaking or is it accelerating?
Speaker 1: Oh, it's accelerating. And by the way, it's a little
Speaker 1: bit like the solar industry in the past. What you
Speaker 1: tended to have was a boom of three years, and
Speaker 1: then what would happen would be would slow down, it
Speaker 1: might even go almost negative or flat accelerates again. But
Speaker 1: there is always one market up and one market down.
Speaker 1: That's where it is, right So yeah, okay, you know
Speaker 1: the German market is down this year somewhat, the Chinese
Speaker 1: market is up this year, right. The trend is very, very,
Speaker 1: very clear. And I think the most interesting thing for
Speaker 1: me in and around EVS is if you think what's
Speaker 1: happened is EV's manufacturers have focused on the upper end
Speaker 1: of the market. So if you think of a Tesla,
Speaker 1: it started at a model S and the cars are
Speaker 1: pretty expensive and it's normally right, that's what you do
Speaker 1: when you bringing new technology to market. You go with
Speaker 1: the upper end and you try to make as much
Speaker 1: margin as possible. Okay, well, we've seen in the last
Speaker 1: year forty percent reduction in the cost of batteries. Have
Speaker 1: we seen forty percent reduction the price of EV's? No?
Speaker 1: Why not? Because you know well BYD and Tesla actually
Speaker 1: have very strong margins in this business, and that actually
Speaker 1: enables them to keep that. Yes, they can push down
Speaker 1: prices if they want, but the point about it is
Speaker 1: they don't necessarily need it that. There's the point I'm
Speaker 1: also making is there is more room for prices to
Speaker 1: go down to these evs, and so the parity between
Speaker 1: evs an internal combustion engine at the upper end of
Speaker 1: the market is there already. And for those of you
Speaker 1: who are buying an expensive car, I mean, I just
Speaker 1: look at myself. I would just I'll never go back
Speaker 1: to internal combustion engine. When I've got a car that
Speaker 1: does three hundred and fifty miles over five hundred kilometers
Speaker 1: in range, it's sort of game over for me already.
Speaker 1: And if I look at the driving experience of these
Speaker 1: cars and compare them to these the old cars, way,
Speaker 1: so you can't stop. You've been trying to improve the
Speaker 1: internal commessation engine for one hundred years at this point
Speaker 1: in time, and we've got the law of diminishing returns
Speaker 1: set in a long, long, long while ago, while you
Speaker 1: haven't the opposite in the EV space, which is you
Speaker 1: still have technology improvements and cost reduction going forward. So
Speaker 1: my own view is it's really unstoppable at this point
Speaker 1: in time.
Speaker 3: I guess you and you have to look at China
Speaker 3: as an example that, right. I mean, the compact in
Speaker 3: the small cars are already cheaper in EV format in
Speaker 3: China than they are in internal combustion engine format, right,
Speaker 3: So I guess it's already written a blueprint for the
Speaker 3: rest of the world.
Speaker 1: And it's is you're talking right on that already. And
Speaker 1: by the way, but there's a cultural thing in China
Speaker 1: versus the West that we need to understand. In the West,
Speaker 1: we've had internal combustion engines for one hundred years and
Speaker 1: people really love them. It's part of the culture of
Speaker 1: society right now. China doesn't have that, and everybody is
Speaker 1: used to for the last fifteen years driving around in
Speaker 1: electric scooters where you know, you had extension cables coming
Speaker 1: out balconies down to charge a car, so everybody has
Speaker 1: had that experience of it. Now, we would never do
Speaker 1: this in the West. You know what, you want me
Speaker 1: to put an extension cable down to power my scooter
Speaker 1: for them was normal. So for them to then go
Speaker 1: for electric scooter to an electric vehicle, it's just normal
Speaker 1: for them to go to an internal combustion engine, which
Speaker 1: is no easy, dirty and a different expense. That's for
Speaker 1: them to step backwards. So to just think of the mentality,
Speaker 1: and that's why in the first half of twenty twenty four,
Speaker 1: fifty percent of Chinese newse car sales were hybrid, you know,
Speaker 1: with a large battery and are fully electric. So yes,
Speaker 1: they're ahead, they're ahead and adoption, but they're also ahead
Speaker 1: and production.
Speaker 3: Looking at your website for Lexic Capital, you have why
Speaker 3: called one hundred and fifty page book called Investing in
Speaker 3: the Energy Storage Revolution. Give us a little summary, tell
Speaker 3: us why you think energy storage is so important in
Speaker 3: a world of renewed books, and where do you think
Speaker 3: the storage revolution will lead to the most opportunities. Basic
Speaker 3: principle in human development.
Speaker 1: Is all around energy storage. Okay, you build a gas
Speaker 1: terminal that's energy storage, a coal boker, a fridge, these
Speaker 1: are all means to store energy and they have driven
Speaker 1: Manchi for in particularly the last hundred and fifty years,
Speaker 1: the innovation and energy storage. It's incredible. If I look
Speaker 1: in the last fifteen years, there's one technology, one storage
Speaker 1: technology has revolutionized our world, and it's called a lithium
Speaker 1: ion battery. Our modern lives are dependent on a mobile
Speaker 1: phone that has one of those batteries. And I can
Speaker 1: go on and on and on about where batteries are.
Speaker 1: I think I counted my own home in the region
Speaker 1: of four hundred batteries though. So that's the first point.
Speaker 1: The second point, though, is that if you want to
Speaker 1: go and see what's happened in terms of lidium IE
Speaker 1: in the last say decade, what's happened is performance improvements
Speaker 1: cost reductions has opened up new markets. So if we
Speaker 1: talked ten years ago and said George, do you think
Speaker 1: we're going to actually electrify aviation? I would have laughed
Speaker 1: at you. I'm not laughing anymore. The reason is because
Speaker 1: I'm looking at what's going on in batteries. I'm seeing
Speaker 1: the innovations in a realm of motors and paraelectronics, and
Speaker 1: I go, not only possible, but you know, you can
Speaker 1: see already there's a pathway to not just drones with
Speaker 1: short distance airplane rides being electric. And it's not because
Speaker 1: of climate, it's because of technology change, and because the
Speaker 1: economics of it make a lot of sense. That's what
Speaker 1: going for. We go forward and we say, okay, storage
Speaker 1: prices keep going down, Well what does that mean? At
Speaker 1: some point in time you might say, well, if I'm
Speaker 1: sitting in Nigeria today and I don't have electricity, do
Speaker 1: Nigerian government have a decision to make. Do they continue
Speaker 1: building out the power grid the way we've built it,
Speaker 1: or maybe they go, mayebe won't do that because that's
Speaker 1: a bit expensive. Let's actually go and put in solar
Speaker 1: and batteries. Let's think about it in a different way,
Speaker 1: and I said little in my batteries, but I said
Speaker 1: energy storage broader, because there is a huge amount of
Speaker 1: innovation taking place in that whole wider energy storage space.
Speaker 1: And again, every energy transition needs some fall of storage.
Speaker 1: You think of it moving from the horse and cart
Speaker 1: to the forward model T when you couldn't do this
Speaker 1: without the gasoline infrastructure be import in place. So as
Speaker 1: it stands now, as we're moving from a world where
Speaker 1: we burnt everything through internal combustion engines or burnt whatever
Speaker 1: it is for heat purposes, we're now worring to a
Speaker 1: world where you're electrifying. So that means we're going to
Speaker 1: have to find other ways to electrify. And there's, as
Speaker 1: I said, massive innovation taking place in that wider storage area,
Speaker 1: and that's why I think everyone needs to look at it.
Speaker 3: That's really interesting. I was thinking back to the energy
Speaker 3: crisis that started in twenty twenty two in Europe with
Speaker 3: the Russia Ukraine War. We used to gas flowing on tap,
Speaker 3: and then suddenly we had to stop that because of
Speaker 3: the Russian supply and go to firstly through shipment from
Speaker 3: liquefied natural gases. So I guess there's some similarity. So
Speaker 3: are you saying that when countries and there are a
Speaker 3: lot of countries who are at a much earlier phase
Speaker 3: of development at the moment that don't have a big
Speaker 3: grid infrastructure at the moment, if they're planning their energy
Speaker 3: needs for the next twenty years, they're better off focusing
Speaker 3: on storage and combining with renewables.
Speaker 2: Is that is that I.
Speaker 1: Would say they have to rethink the way we build
Speaker 1: an energy system and just take a point that the
Speaker 1: energy system that we have in placed, the electricity system
Speaker 1: that we haven't placed today, was designed over one hundred
Speaker 1: and fifty years ago. Ultimately, why should we use a
Speaker 1: one hundred and fifty year old design. You should look
Speaker 1: at it a different way, and I guarantee that you
Speaker 1: come up with a quicker way to electrifyz society and
Speaker 1: a lower cost way. That's where I'm coming from. And
Speaker 1: storage and so are going to be really critical parts
Speaker 1: of that. But there are other technologies as well, but
Speaker 1: those two are obviously just from a commercial point of view.
Speaker 1: These technologies are commercial straight away and they're just getting cheap.
Speaker 3: Do you think there's enough battery building capacity for that
Speaker 3: new part of.
Speaker 1: Yeah, listen, absolutely, I do. A'm not worried about the
Speaker 1: capacity in the market or anything like that, no wish whatsoever.
Speaker 1: I'm not worried about the materials either. There was obviously
Speaker 1: concerns in and around cobalts at some point in time,
Speaker 1: but if you actually look, the market will very quickly
Speaker 1: away from cobalts. And if you look at the materials
Speaker 1: that are used in the battery, there's a lot of
Speaker 1: them out there, right and there's a lot of particularly lithium.
Speaker 1: Obviously it's a core lithium. There's a lot of lithium
Speaker 1: coming out there. I would have even maybe been concerned
Speaker 1: a little bit about copper because it takes quite a
Speaker 1: while to get copper minds out onto the market. But
Speaker 1: you're also seeing innovation in the mining space. When you
Speaker 1: really think about it. In the oil and gas space,
Speaker 1: it's had share what is that, it's decentralized drilling. Well,
Speaker 1: we're sort of moving to the same thing in the
Speaker 1: mining space as well. There's just huge innovation in that
Speaker 1: area that we're not even thinking about. I'm also very
Speaker 1: positive in and around that, and if you take the
Speaker 1: bigger picture of it, there's a lot of criticisms. Again,
Speaker 1: where do you get all the materials from Oh my god,
Speaker 1: it's not very sustainable in the same thing, go, well, sorry,
Speaker 1: that's actually not true, because we're going to reuse ninety
Speaker 1: five percent of these materials again, so you're actually going
Speaker 1: to get a point where it's all point you won't
Speaker 1: need to actually take any more stuff out of the ground.
Speaker 1: And if I compare that to whatever, if I'm talking
Speaker 1: about coal or gas rot, you just keep taking it
Speaker 1: out of the ground. You have to keep drilling every year.
Speaker 1: You know, you can't reuse it. So it's also from
Speaker 1: stainless sustainability point of view, actually these technologies are very,
Speaker 1: very very interesting. And again, to take the solar poddle,
Speaker 1: what is solar it's basically silicon, it's sand and there's
Speaker 1: some silver in it and not some other stuff that
Speaker 1: you can also recycles. And these products last a long while, right,
Speaker 1: You put up solar panel up a roof and it'll
Speaker 1: be working thirty years later. Very simple technologies, very scalable,
Speaker 1: that's what we like.
Speaker 2: Sure, So I guess we're certainly seeing a lot of
Speaker 2: investment in things like solar and wind, which I think
Speaker 2: it would be fair to say have become mainstream energy technologies,
Speaker 2: But there are other innovations that aren't necessary mainstream but
Speaker 2: do have great decarbonization potential if done correctly, you know,
Speaker 2: things like biofuels, hydrogen, carbon capture, and so forth. Do
Speaker 2: you think the world is striking the right balance at
Speaker 2: this point in time between investing in these mainstream energy
Speaker 2: transition technologies like wind and solar and looking at these
Speaker 2: other emerging technologies that have great potential as well.
Speaker 1: In some ways, a lot of these technologies are a distraction,
Speaker 1: because if we have the technologies out there, we should
Speaker 1: just implement them as quick as possible. And I'm not
Speaker 1: saying that you don't put money into carbon sequestration and
Speaker 1: all that type of stuff. That's fine, but the economics
Speaker 1: of it are just so far away. And also I
Speaker 1: would argue that I don't see any revolutions in those areas.
Speaker 1: I don't see a revolution in hydrogen. I don't see
Speaker 1: a revolution in the nuclear space. I'm not saying that
Speaker 1: we don't meet them. I'm just saying I don't see
Speaker 1: the revolutions in those areas. If you ask me what
Speaker 1: could I get wrong by view of the world, I
Speaker 1: think you probably see something like geothermal would be the
Speaker 1: one that could be the outsider. And the reason for
Speaker 1: that is geothermal. At the end of the day, you're
Speaker 1: just taking heat from the ground and using it, and
Speaker 1: you're probably going to be using it to heat water
Speaker 1: if you use it the heating system or something like that,
Speaker 1: or you could use it in the turbine if if
Speaker 1: it's warm enough. Well, why that's really interesting is because
Speaker 1: what's the revolution in the last ten years. The biggest
Speaker 1: revolution and energy the last ten years is shale oil
Speaker 1: and gas drilling. It's drilling technologies, and those drilling technologies
Speaker 1: can be brought into the geothermal space, and I think
Speaker 1: that could be really really that's the one I put
Speaker 1: my money on where I really keep an eye and
Speaker 1: I say that could be the one that really is
Speaker 1: an outsider, that could be sort of part of this revolution,
Speaker 1: could have a very very very big impact building tree there.
Speaker 2: We see a lot of investors accessing the energy transitional
Speaker 2: opportunity while the commodity is route.
Speaker 1: Now.
Speaker 2: Everything we want to do with the energy transition, you know,
Speaker 2: building solar power, wind energy, and so forth, all of
Speaker 2: that is enabled by the raw materials, you know, which
Speaker 2: are commodities. How do you see the investment opportunity in
Speaker 2: the world of commodities as it relates to the energy transition.
Speaker 1: That's how I also invest. I invest in the commodities
Speaker 1: because remember when I just said, we start up when
Speaker 1: I said, it's very difficult to invest in companies that
Speaker 1: are trying to compete with China, and there's a lot
Speaker 1: of companies in the Western world that are trying to
Speaker 1: compete but don't have competitive advantage. So if you look
Speaker 1: in the mining space at materials that are needed in
Speaker 1: this transition, it's without a doubt a very interesting place
Speaker 1: to look at. Just take the case of silver. You
Speaker 1: can invest in silver because of the fact that it's
Speaker 1: a precious metal like gold. I don't I look at
Speaker 1: it and go it's a precious metal, and its biggest
Speaker 1: industrial use is now solar panels, and that market is
Speaker 1: just going to get bigger and bigger and bigger. That's
Speaker 1: why I take the view on that. And I would
Speaker 1: also say the same with litium. Right you look at it,
Speaker 1: you say we're going to use lithium for the next
Speaker 1: ten years, it's a growth opportunity for ten years for
Speaker 1: any lity of mining company right just nowhere around it.
Speaker 1: And again you can go and look at the other
Speaker 1: battery metals in a similar way. So that's the way
Speaker 1: I do look the words. So definitely, I'm totally whiching up.
Speaker 1: I would say that there's not enough money going into
Speaker 1: those areas. That's the concern I would have a little bit.
Speaker 1: It's just that people look at them and go, oh,
Speaker 1: they're dirty. So you've got a whole pile of sustainable
Speaker 1: funds and you know they I don't see them having
Speaker 1: real tinto in their portfolio or anything like that. But
Speaker 1: we have to realize that these are really we can't
Speaker 1: do this without taking stuff out of the ground.
Speaker 3: It's interesting you mentioned silver. I came because an article
Speaker 3: a few weeks ago indicating that something has built a
Speaker 3: new solid state battery technology that uses a lot of silver. So,
Speaker 3: in addition to all the uses that we got in
Speaker 3: photo of it takes which you at point is the
Speaker 3: biggest industrial source of silver demand probably going to have
Speaker 3: batteries also competing for that space if this is true.
Speaker 3: Was to see whether you have any intel on whether
Speaker 3: that a solid state.
Speaker 1: You're going to use more and more silver and electric cars,
Speaker 1: so there's no doubt silver is going to be used
Speaker 1: increasingly going forward. I'm invested in it, so I'm a believer.
Speaker 3: I guess then extension of that is battery technology, as
Speaker 3: he has pointed out, was largely lithium mind technology, which
Speaker 3: is really revolutionized things. But within the lithium in battery,
Speaker 3: there's lots of shifts in technology you mentioned earlier, and
Speaker 3: nickel and cobbot heavy chemistry shifted towards litiumine phosphates technologies.
Speaker 3: We're probably going to see a lot more shifts in
Speaker 3: the future the solid state. How do you think we
Speaker 3: could go about identifying potential winners of tomorrow or is
Speaker 3: that just a fruitless task and just you know, is
Speaker 3: there something to you know, go in terms of investing
Speaker 3: in big baskets of commodities for the equities involved in
Speaker 3: the space, I.
Speaker 1: Can only tell you that what I did in the past,
Speaker 1: and I went through a period where I was investing
Speaker 1: heavily in the battery metals and I did well, and
Speaker 1: then I got too stuck in my work to actually
Speaker 1: put the work in. But I was in cobalt really
Speaker 1: really early. And the reason I was in cobalt was
Speaker 1: because I understood that these high performance cars needed cobalt
Speaker 1: going forward. I then didn't do as the research I
Speaker 1: needed to do, and guess what, Then suddenly we had
Speaker 1: lithium AIND phosphate. The Chinese did amazing innovation in this
Speaker 1: area to really bring the energy performance of these batteries
Speaker 1: up almost to the level of the cobalt batteries, but
Speaker 1: to do it at a much lower cost. So the
Speaker 1: only thing I can say is you have to really
Speaker 1: look at what the science guys are doing. They're all
Speaker 1: putting out technology reports and they're giving a direction of
Speaker 1: where they're going, what they're thinking, and all that type
Speaker 1: of stuff. There's four or five big battery manufacturers and
Speaker 1: you need to follow them closely and see what's on roadmaps.
Speaker 1: That's what I would say in terms of that. But
Speaker 1: what is clear is that lithium is there, and lithium
Speaker 1: is there to stay. I don't see anything displacing it
Speaker 1: for another decade. And the reason I said it is
Speaker 1: because the there's so much room for improvement. Right if
Speaker 1: you just take on the anut side of the battery,
Speaker 1: you move into more and more silicon, which is cheap.
Speaker 1: It also gives better performance. The stuff like that going on.
Speaker 1: There's road maps you can see you talked about solid
Speaker 1: state batteries, a lot of talk about it. I think
Speaker 1: you're still a decade away from from really having commercial
Speaker 1: products there in the market, except for there's probably some
Speaker 1: interesting niche markets for that first move of products for
Speaker 1: that markets that I think it's very early in my view.
Speaker 2: Jared, you host the podcast Redefining Energy. It's a podcast
Speaker 2: I would strongly recommend to our audience for those who
Speaker 2: haven't listened to it yet and are interested in the topic.
Speaker 2: Before we let you go, I just love you for
Speaker 2: our audience. Just give us your take on what sort
Speaker 2: of topics you would like to think more deeply on
Speaker 2: the energy transition going forward. What are you looking forward
Speaker 2: to exploring a bit further, whether it's on your podcast
Speaker 2: or in just your work in general. And where a
Speaker 2: can our audience find you, whether it's weblinks or social
Speaker 2: media accounts.
Speaker 1: Well, let's just start with myself. If you want to
Speaker 1: find me, just find me on LinkedIn and just feel
Speaker 1: free to reach out to me. Right. I'm available for
Speaker 1: well listen, I'm available for interesting discussions with people. And
Speaker 1: I'm also quite happy to you know this that I
Speaker 1: really want to get involved in scaling business and help
Speaker 1: this transition. So if I can help people with that,
Speaker 1: more than happy to have a conversation. In terms of
Speaker 1: what really interests me going forward, what interests me really
Speaker 1: is being able to make sure I have a good
Speaker 1: understanding of what's going to happen going forward and what
Speaker 1: the best parts are. I really think that the areas
Speaker 1: that are of great interest to me is what do
Speaker 1: we do in decarbonizing buildings and decarbonizing industry. I think
Speaker 1: they're the real interesting things going forward. It's not about
Speaker 1: building solar wind parks anymore. That's still it's easy to do.
Speaker 1: But how do we take a building and improve energy
Speaker 1: efficiency in it and improve energy performance? How do we
Speaker 1: do the same any industry. How do we make sure
Speaker 1: that this energy transition is low cost, just and enabled
Speaker 1: us to have a competitive advantage. There are the areas
Speaker 1: that I really really want to focus on, and I'll
Speaker 1: tell you if I look at what I love in
Speaker 1: terms of conversations, I just want to have good conversations
Speaker 1: with entrepreneurs and people who are really interested in this space,
Speaker 1: wherever they are in the world. Because it's a global transition.
Speaker 1: As I said, he it's a revolution, a technology revolution,
Speaker 1: and we have a lot to learn from each other
Speaker 1: and we just share those learnings.
Speaker 2: Really excellent and we look forward to having more such
Speaker 2: conversations there. Thank you so much for your insights today.
Speaker 2: It was a great conversation. We enjoyed it.
Speaker 1: Thank you for listening to Redefining Energy. Don't forget to
Speaker 1: rate the show and subscribe on Apple Podcast, Spotify, or
Speaker 1: the platform of your choice.