WEBVTT 1 00:00:04.200 --> 00:00:07.719 With ron segle and from London and Gerard read from Berlin. 2 00:00:08.240 --> 00:00:10.039 This is Redefining Energy. 3 00:00:10.439 --> 00:00:10.720 Today. 4 00:00:10.759 --> 00:00:14.320 On Redefining Energy, we're going to talk about energy trends 5 00:00:14.359 --> 00:00:15.759 and shocks. 6 00:00:16.079 --> 00:00:19.399 Yeah, and we published this episode at the same time 7 00:00:19.559 --> 00:00:23.719 as our friends at MBER. We just put out last 8 00:00:23.719 --> 00:00:28.559 week to fantastic report, one on energy trends and one 9 00:00:28.640 --> 00:00:32.039 on energy shocks. But first of all, from my partner. 10 00:00:32.240 --> 00:00:35.200 A b Loco Energy is Europe's premier leaser of ten 11 00:00:35.320 --> 00:00:39.600 foot container mobile batteries built in Europe with COTL best 12 00:00:39.759 --> 00:00:45.560 LFP cells. A Bloco Energy serves fourteen European countries, including France, 13 00:00:46.039 --> 00:00:49.719 Germany and the UK. A Bloco's batteries can be leased 14 00:00:49.719 --> 00:00:52.880 for any duration between six weeks and six years, and 15 00:00:52.920 --> 00:00:56.280 they are monitored by the Dutch award winning platform school 16 00:00:56.880 --> 00:01:00.359 A Blocko Energy. Make your life Easier, Make your business 17 00:01:00.359 --> 00:01:01.000 more flexible. 18 00:01:01.280 --> 00:01:04.680 Back to the show. The one they put last Tuesday 19 00:01:04.959 --> 00:01:10.239 is the annual Global Electricity Review, And we also had 20 00:01:10.280 --> 00:01:14.200 a report a few days earlier called twin Shocks. 21 00:01:14.560 --> 00:01:16.879 And to do that we brought a special friend on 22 00:01:17.319 --> 00:01:18.000 to talk about this. 23 00:01:18.159 --> 00:01:24.519 Yeah. He is lead energy strategist at Amber and he 24 00:01:24.640 --> 00:01:28.519 is someone we really like to have great conversation with 25 00:01:29.439 --> 00:01:38.400 and that is. 26 00:01:36.359 --> 00:01:37.400 Mister Bond. 27 00:01:41.439 --> 00:01:42.879 Let's bring in on the show. 28 00:01:43.359 --> 00:01:45.159 Kings Well, good to see you again. I'm glad to 29 00:01:45.200 --> 00:01:45.799 have you on the show. 30 00:01:46.159 --> 00:01:48.359 Thanks to Rob, Thanks Lohole, good to be here. 31 00:01:48.560 --> 00:01:50.840 King's Mill. We have a lot of our play today, 32 00:01:51.079 --> 00:01:54.280 but we're going to start by the great report that 33 00:01:54.719 --> 00:02:00.000 EMBER publishes every year, which is the Global Electricity Review 34 00:02:00.400 --> 00:02:05.079 to twenty six, one hundred and eighteen pages. What are 35 00:02:05.120 --> 00:02:05.959 the main takeaway? 36 00:02:06.640 --> 00:02:09.039 There are four key takeaways I want to highlight. First 37 00:02:09.080 --> 00:02:12.639 of all, the moment has come finally. Renewables are all 38 00:02:12.800 --> 00:02:17.000 of the growth in electricity generation in twenty twenty five. 39 00:02:17.240 --> 00:02:19.800 It's been a long time coming, but that key milestone 40 00:02:19.840 --> 00:02:23.199 has been crossed. Secondly, and linked to it, we have 41 00:02:23.439 --> 00:02:28.159 seen peak fossil fuel demand in electricity generation, which I 42 00:02:28.159 --> 00:02:31.000 should remind you comes on top of peak fossils in 43 00:02:31.000 --> 00:02:34.039 industry in twenty fourteen and buildings in twenty eighteen and 44 00:02:34.080 --> 00:02:39.919 cars in twenty nineteen. Now electricity twenty twenty five key moment. Thirdly, 45 00:02:40.280 --> 00:02:46.280 we've seen peak China fossil fuels in electricity generation specifically 46 00:02:46.599 --> 00:02:48.919 down by fifty six terrible hours again Cray has been 47 00:02:48.960 --> 00:02:51.159 talking about this for a long time, but these are 48 00:02:51.280 --> 00:02:54.360 the numbers, the official or semi official I guess numbers. 49 00:02:54.639 --> 00:02:57.599 And it's extreme neat material because China's been the primary 50 00:02:57.639 --> 00:03:01.879 driver of fossil demand. Then fourth, a slightly new angle 51 00:03:02.439 --> 00:03:05.919 is the growth of batteries is so big. The batteries 52 00:03:05.919 --> 00:03:09.520 are now shifting fourteen percent of the solar which is 53 00:03:09.560 --> 00:03:10.439 being installed. 54 00:03:10.960 --> 00:03:13.680 Wow, fourteen percent of the solar globally. 55 00:03:13.759 --> 00:03:16.800 That's just so many batteries coming to the system, and 56 00:03:17.039 --> 00:03:20.759 they're basically doubling every year. So we can look forward 57 00:03:20.800 --> 00:03:23.960 to well over probably a corsure of new solar install 58 00:03:24.159 --> 00:03:26.759 lations in twenty twenty six are going to be time 59 00:03:26.759 --> 00:03:27.800 shifted by batteries. 60 00:03:28.360 --> 00:03:31.680 The electricity demand in the world is still growing, and 61 00:03:31.719 --> 00:03:35.120 we grew two point seven percent to twenty five for 62 00:03:35.199 --> 00:03:38.639 our list. Now basically we grew a Japan so solar 63 00:03:38.719 --> 00:03:42.120 grew by thirty percent. I think it grew more because 64 00:03:42.319 --> 00:03:44.080 I'm I'm pretty sure there's a lot of behind the 65 00:03:44.120 --> 00:03:47.719 metal which is difficult to account for. And WIN grew 66 00:03:47.800 --> 00:03:52.280 by eight percent, and all the rest nuclear, hydro cold gas, 67 00:03:52.319 --> 00:03:55.520 and that's all flat. Of course, it depends zone by 68 00:03:55.599 --> 00:03:59.120 zone we'll go there after that. But yeah, that's it. 69 00:03:59.759 --> 00:04:02.120 Just give you a bit of context on this. So soda 70 00:04:01.840 --> 00:04:06.080 and when basically are adding eight hundred and fifty terowa 71 00:04:06.240 --> 00:04:09.759 hours last year. Just when nuclear was being added to 72 00:04:09.800 --> 00:04:12.879 the system in the nineteen seventies, which is the last 73 00:04:13.159 --> 00:04:16.000 giant new thing that was added, it was adding around 74 00:04:16.160 --> 00:04:19.560 one hundred terower hours a year. So this stuff, it's 75 00:04:19.639 --> 00:04:21.639 eight times bigger things. 76 00:04:21.680 --> 00:04:23.160 When it goes back to the point that I always 77 00:04:23.160 --> 00:04:25.639 say is that we've never had an energy technology come 78 00:04:25.680 --> 00:04:29.040 to market as quickly. It's older because it's just so 79 00:04:29.120 --> 00:04:32.839 easy to install. It's cheap to install. And back to 80 00:04:32.920 --> 00:04:34.920 Lauran's point is when I want to get lost, but 81 00:04:35.199 --> 00:04:38.199 it's very clear it's underestimated because we've now got massive 82 00:04:38.240 --> 00:04:41.279 amounts of balcony solar, plug and play sol that goes 83 00:04:41.279 --> 00:04:44.600 in the system, which means that grid operators actually just 84 00:04:44.639 --> 00:04:47.120 don't even see the stuff, right. Yeah, And this is 85 00:04:47.160 --> 00:04:50.199 particularly true of course in the Global South. 86 00:04:50.759 --> 00:04:53.639 And we put out a report last week with the 87 00:04:53.680 --> 00:04:58.240 Climate Vulnerable Nations which identified the fact that there are 88 00:04:58.319 --> 00:05:02.120 dozens of countries in the Global South where the imports 89 00:05:02.120 --> 00:05:06.600 of solar panels are three times higher than the official numbers. 90 00:05:06.879 --> 00:05:09.920 The most famous is Pakistan. There's plenty of other countries 91 00:05:09.959 --> 00:05:11.879 out there where people are just putting this stuff up 92 00:05:11.879 --> 00:05:15.600 on their route. So it really is an opportunity for 93 00:05:15.720 --> 00:05:19.160 those who are energy poor to get energy and rescue 94 00:05:19.160 --> 00:05:20.360 themselves from energy poverty. 95 00:05:20.720 --> 00:05:24.839 Basically, you're telling all the guys that week, guys, they're 96 00:05:24.879 --> 00:05:27.360 not going to put gas, they're going solar. 97 00:05:27.639 --> 00:05:31.000 They need to leap specifically this kind of weird narrative 98 00:05:31.079 --> 00:05:34.920 that we need to bring fossil fuels to the peoples 99 00:05:34.959 --> 00:05:37.079 of the global self who have been let down, incidentally 100 00:05:37.079 --> 00:05:39.680 by the fossil fuel system for the last fifty years. 101 00:05:39.879 --> 00:05:42.160 And actually, no, we don't. We've got this thing called 102 00:05:42.160 --> 00:05:45.040 the Sun which goes past every single morning and provides 103 00:05:45.079 --> 00:05:47.480 you with electricity, and you can now get their electricity cheap, 104 00:05:47.560 --> 00:05:52.240 store it cheap, and massively increase the energy capture of 105 00:05:52.279 --> 00:05:55.160 the people who've never had it before under the fossil system. 106 00:05:55.639 --> 00:05:59.360 Now, if we dig deep into the excellent report, and 107 00:05:59.600 --> 00:06:03.959 we'll put lead in the show notes, let's dive into China, US, 108 00:06:04.040 --> 00:06:07.160 Europe and India because it's kind of a different picture. 109 00:06:07.839 --> 00:06:11.800 So China two third of the growth last year, came 110 00:06:11.800 --> 00:06:16.319 from China, and it was entirely met with wind, hydro 111 00:06:16.439 --> 00:06:19.399 and soa. And as you said, call is down. Do 112 00:06:19.399 --> 00:06:21.399 you want to comment to beat down China? 113 00:06:21.680 --> 00:06:24.920 China is particularly material to the global debate because the 114 00:06:24.959 --> 00:06:29.360 world ex China has had essentially flat fossil fuel demand 115 00:06:29.439 --> 00:06:32.720 since twenty eighteen, and it's China which has been the 116 00:06:32.759 --> 00:06:36.560 principal driver, and it's specifically the Chinese electricity sector which 117 00:06:36.560 --> 00:06:40.360 has been the principal driver of fossil fuel demand over 118 00:06:40.519 --> 00:06:43.759 the last seven years. So the fact that it now 119 00:06:43.839 --> 00:06:47.399 reached a long awaited peak in China and is starting 120 00:06:47.399 --> 00:06:51.279 to fall is therefore extremely material to the global debate. 121 00:06:51.439 --> 00:06:53.160 And no, when it comes to China and they're just 122 00:06:53.680 --> 00:06:57.079 throwing up solo and wind and hydro, and they've got 123 00:06:57.120 --> 00:06:58.680 some nuclear in the mix, but you know, it's just 124 00:06:58.800 --> 00:07:01.399 enough to push out fossil fuel. What's also really interesting 125 00:07:01.439 --> 00:07:04.439 about China is that they've figured out ways to get 126 00:07:04.680 --> 00:07:09.639 these low solar and wind prices into electricity prices, which 127 00:07:09.680 --> 00:07:12.680 because Europe has so far failed to do, and because 128 00:07:12.680 --> 00:07:16.480 they've enabled these low prices to come into electricity prices, 129 00:07:16.759 --> 00:07:21.279 that then is helping electricity push other alternatives such as 130 00:07:21.279 --> 00:07:24.279 gas or coal out of the final energy demand as well. 131 00:07:24.360 --> 00:07:27.720 So it's an impressive story. What's going on in China, Kingsman. 132 00:07:27.800 --> 00:07:32.279 What I'll also had is they incentivize by doing that electrification. 133 00:07:32.560 --> 00:07:35.879 That's what they do, which we in certainly in European perspective, 134 00:07:35.879 --> 00:07:38.000 we don't do it because our electricity is so expensive. 135 00:07:38.000 --> 00:07:40.600 I'm talking about the end consumer price, but the end 136 00:07:40.639 --> 00:07:43.319 consumer price in China is so low that you're going 137 00:07:43.360 --> 00:07:46.000 to electrify your automobile, You're going to inject electrifyer heating, 138 00:07:46.000 --> 00:07:47.720 you're going to electrify industrialization. 139 00:07:47.839 --> 00:07:50.360 Right. Yeah. This is the error that we've made in 140 00:07:50.360 --> 00:07:53.519 the Western general, Europe specifically, is we haven't got electricity 141 00:07:53.600 --> 00:07:55.439 prices down, which is load all these extra costs on 142 00:07:55.480 --> 00:07:57.360 to it, and this SECONDO is going to one. If 143 00:07:57.399 --> 00:07:59.839 you load also costs on, then the relative cost of 144 00:08:00.040 --> 00:08:01.879 fifty is just too high. And people don't let fight. 145 00:08:02.079 --> 00:08:04.480 And that is one of the key messages. Now we 146 00:08:04.680 --> 00:08:07.160 have to get their fifty prices down in order to electrify, 147 00:08:07.160 --> 00:08:08.439 in order to get fossils out of the rest of 148 00:08:08.480 --> 00:08:09.360 the system. 149 00:08:09.680 --> 00:08:13.120 Let's move to the US and the US it's really 150 00:08:13.199 --> 00:08:18.160 puzzling because yeah, we've seen theman growing, and we've seen 151 00:08:18.519 --> 00:08:23.800 more unoables. But what's very intriguing is that the gas 152 00:08:23.839 --> 00:08:27.240 consumption in the power system went down despite the fact 153 00:08:27.279 --> 00:08:30.480 that it's their cheap and coal went up. Now, if 154 00:08:30.519 --> 00:08:33.799 you look at the US system, it's divided into different 155 00:08:34.120 --> 00:08:38.320 main grids, so where coal has been going up was 156 00:08:38.840 --> 00:08:41.799 a bit in ARCOT and a lot in PGM and 157 00:08:41.919 --> 00:08:44.200 PGM this is where most of the data centers have 158 00:08:44.240 --> 00:08:47.080 been installed. So in fact, it looks like the data 159 00:08:47.080 --> 00:08:50.679 centers have triggered more col consumption. What's your take on 160 00:08:50.720 --> 00:08:51.840 the US system. 161 00:08:52.200 --> 00:08:53.799 The first point to be made about the US, and 162 00:08:53.840 --> 00:08:57.120 this is the one that people don't necessarily realize, is 163 00:08:57.159 --> 00:09:00.120 that two thousands of the growth from solar and three 164 00:09:00.240 --> 00:09:03.200 quarters is from wind and solar together. So you wouldn't 165 00:09:03.240 --> 00:09:07.799 have expected that given what's going on with the current administration. 166 00:09:08.440 --> 00:09:10.759 Basically what's going on in the rest of the world 167 00:09:10.840 --> 00:09:14.360 is still happening in America in spite of the administration's 168 00:09:14.360 --> 00:09:15.240 attempts to cap it. 169 00:09:16.240 --> 00:09:20.840 Europe so eure up. Last year we add eydro down, 170 00:09:21.399 --> 00:09:24.919 so Eidro is more and more fragile, and this year 171 00:09:25.000 --> 00:09:27.960 we have it. In Norway, for instance, I was going 172 00:09:28.039 --> 00:09:32.879 to go down. Call is down, wind was down because 173 00:09:32.919 --> 00:09:36.919 you had a wind draft. Solar fantastic up, but also 174 00:09:37.120 --> 00:09:39.720 gas was up. So what's your take on Europe? 175 00:09:40.200 --> 00:09:44.120 Europe is an awful lot of apparently conflicting things going 176 00:09:44.240 --> 00:09:46.759 on at the same time, but there's still a narrative here. 177 00:09:47.200 --> 00:09:50.440 Don't forget European demand increased last year was only about 178 00:09:50.759 --> 00:09:54.919 fourteen terrible hours, and solar added sixty. So let's be clear, 179 00:09:55.000 --> 00:09:59.320 solar is still absolutely dominant and is helping to push 180 00:09:59.639 --> 00:10:02.919 all other alternatives out of the system. And a visit 181 00:10:03.320 --> 00:10:07.639 this gas to coal issue. It's because of the European 182 00:10:07.799 --> 00:10:11.000 zeal to push coal out of the system, which is 183 00:10:11.480 --> 00:10:15.399 given current circumstances, possibly a little bit misplaced in its speed, 184 00:10:15.759 --> 00:10:18.000 and as a result they've had to use a bit 185 00:10:18.120 --> 00:10:20.919 more gas at the margin in order to make up 186 00:10:20.919 --> 00:10:23.320 for the show fall which came through in hydro. But 187 00:10:23.440 --> 00:10:26.919 it's still a very powerful story that Europe is deploying 188 00:10:27.080 --> 00:10:29.799 sorrow wind at scale over time, is pushing this other 189 00:10:29.840 --> 00:10:33.159 stuff out, and you do get these specific shocks to 190 00:10:33.600 --> 00:10:36.639 hydro nuclear which then require people to use a little 191 00:10:36.679 --> 00:10:38.600 bit more fossil fuels, but that's just temporary. 192 00:10:38.240 --> 00:10:43.080 Issue and then Las, but not least India called down 193 00:10:43.360 --> 00:10:45.080 wind Salah hydra up. 194 00:10:45.720 --> 00:10:50.399 India is a poster child of the electrotic revolution. They 195 00:10:50.600 --> 00:10:54.480 are deploying as you say, wind, sober and hydro space. 196 00:10:54.480 --> 00:10:58.480 So total Indian demongro is around fifty terawa hours last year, 197 00:10:58.639 --> 00:11:02.960 and solar alone added fifty three wins another twenty and 198 00:11:03.159 --> 00:11:05.759 hydros another twenty. So last year, for the first time 199 00:11:05.759 --> 00:11:08.879 in a structural manner, coal demand was actually pushed out 200 00:11:09.000 --> 00:11:12.759 of the system in India. We're not calling a coal 201 00:11:12.919 --> 00:11:17.320 top in India yet because actually last year total demand 202 00:11:17.360 --> 00:11:19.759 growth in India is relatively low, So if you'd go 203 00:11:19.840 --> 00:11:22.200 back to normal levels of growth, you still have a 204 00:11:22.320 --> 00:11:24.600 small amount of opportunity. But the key and the wider 205 00:11:24.639 --> 00:11:27.039 point that we made in a report a month ago 206 00:11:27.399 --> 00:11:31.000 is that India is taking a very different path to 207 00:11:31.120 --> 00:11:33.879 the path the West took fifty years ago, or China 208 00:11:34.080 --> 00:11:37.879 to around twenty to twenty. They are close to their 209 00:11:38.120 --> 00:11:42.200 peak demand of coal per capita at around one megua hour, 210 00:11:42.480 --> 00:11:46.200 whilst of course China famously peaked around four. So India 211 00:11:46.240 --> 00:11:48.159 is taking a new path because they can, because they've 212 00:11:48.159 --> 00:11:50.000 got the solar in the wind, and therefore they are 213 00:11:50.120 --> 00:11:53.000 deploying those new technologies at massive scale. 214 00:11:53.360 --> 00:11:57.120 So overall, it's a picture of the trends that you 215 00:11:57.159 --> 00:11:59.559 have identified a few years ago when you coined the 216 00:11:59.679 --> 00:12:03.480 term with some of your colleague electoral state. These are 217 00:12:03.519 --> 00:12:06.759 long term trains. But on the top of that, you've 218 00:12:06.759 --> 00:12:10.440 got the shocks which are eating the system. And you 219 00:12:10.639 --> 00:12:13.799 published a few days ago a second report called the 220 00:12:13.879 --> 00:12:19.080 twin Shock. So what's your name thesis around the twin. 221 00:12:18.879 --> 00:12:22.000 Shocks in the energy world. The twin oil shocks of 222 00:12:22.039 --> 00:12:25.960 the nineteen seventies are very well remembered, so nineteen seventy 223 00:12:26.000 --> 00:12:29.399 three nineteen seventy nine, and the lessons learned from that 224 00:12:29.480 --> 00:12:32.120 era was that it really took two big shocks to 225 00:12:32.240 --> 00:12:36.759 drive change. So, for example, oil in electricity generation actually 226 00:12:36.919 --> 00:12:39.519 rose from nineteen seventy three to nineteen seventy nine. But 227 00:12:39.559 --> 00:12:42.679 after the second shock, people said, right, enough's enough, we're 228 00:12:42.720 --> 00:12:45.720 going to take it out of electricity generation, and they 229 00:12:45.799 --> 00:12:49.360 made the necessary investments and they drove change. And our 230 00:12:49.440 --> 00:12:52.320 argument today in twenty twenty six is we've had another 231 00:12:52.799 --> 00:12:56.000 dual oil shock. Twenty twenty two put into legal invasion 232 00:12:56.039 --> 00:13:00.360 of Ukraine twenty twenty six, Trump's attack on Iran both 233 00:13:00.399 --> 00:13:05.759 times are driving massive spikes in fossil fuel prices, and 234 00:13:05.840 --> 00:13:09.759 the combination of those in a world where American power 235 00:13:09.879 --> 00:13:13.919 is waning and the packs Americana is falling apart, means 236 00:13:13.960 --> 00:13:17.320 that people need to have a very radically different approach 237 00:13:17.799 --> 00:13:19.320 to the way they are. 238 00:13:19.200 --> 00:13:20.600 Dealing with energy right now. 239 00:13:20.960 --> 00:13:24.759 That's the kind of the scene setting, and the consequence 240 00:13:24.960 --> 00:13:28.440 of this framing is that change will be sped up. 241 00:13:28.759 --> 00:13:30.799 So the changes that we have been talking about for 242 00:13:30.879 --> 00:13:35.080 many years, the deployment of solar wind, the electrication of transport, 243 00:13:34.919 --> 00:13:38.919 and home heat electrification in general, those shifts will be 244 00:13:39.080 --> 00:13:42.480 sped up inevitably by high fossil fuel prices. 245 00:13:43.039 --> 00:13:45.200 Kingsmill, I think you're right if we look at this 246 00:13:45.240 --> 00:13:47.960 from a global scale, but I'd really just look at 247 00:13:48.000 --> 00:13:50.679 it maybe from European perspectives, and I'm going to particularly 248 00:13:50.679 --> 00:13:52.879 look at Germany. Germany seems to be on the exact 249 00:13:52.919 --> 00:13:55.720 opsis way. So what we've got as an economics minister 250 00:13:56.399 --> 00:13:59.960 and her cabinet who really believe that the oppositer is true, 251 00:14:00.320 --> 00:14:03.399 that actually all this renewables as post energy prices up 252 00:14:03.440 --> 00:14:07.159 too much, the grid costs are too expensive. What we 253 00:14:07.240 --> 00:14:11.200 need to do is build more gas. So what do 254 00:14:11.240 --> 00:14:12.440 you think of that now narrative? 255 00:14:14.919 --> 00:14:16.879 Why would you build more gas from the price is 256 00:14:16.879 --> 00:14:20.480 twenty dollars per be to you, it's just stupid, beyond belief. 257 00:14:20.480 --> 00:14:23.360 But anyway, leaving that minor point aside, you've got to 258 00:14:23.399 --> 00:14:27.200 distinguish between short term and long term. In the short term, 259 00:14:27.240 --> 00:14:29.559 when you get a shock, you have to do whatever 260 00:14:29.600 --> 00:14:31.639 you can do to keep the lights on, saying you 261 00:14:31.960 --> 00:14:35.240 flick back on your coal fired power, you drive slower, 262 00:14:35.799 --> 00:14:38.399 you deploy any source you can find to keep the 263 00:14:38.440 --> 00:14:42.159 lights on temporarily. That's the short term action that people take. 264 00:14:42.559 --> 00:14:45.799 But much more importantly is what is the long term 265 00:14:45.840 --> 00:14:49.679 consequence of yet another oil shock. And there is this 266 00:14:49.759 --> 00:14:52.559 fight out between those who would have us go back 267 00:14:52.600 --> 00:14:55.960 to the old playbook of saying, look, there's been a shot, 268 00:14:56.039 --> 00:14:59.519 let's just extract more, versus those who say, there's been 269 00:14:59.559 --> 00:15:04.159 a shock, let's do things differently this time. The reason 270 00:15:04.240 --> 00:15:08.240 why it makes absolutely no sense to go back to 271 00:15:08.360 --> 00:15:11.200 the old fossil playbook is, for the first time in 272 00:15:11.360 --> 00:15:14.320 history at the time of an oil shock, we have 273 00:15:14.600 --> 00:15:20.519 a massive superior solution in all of these electrotech technologies, 274 00:15:20.559 --> 00:15:24.799 so solar and wind and batteries, electric vehicles, and electrication, 275 00:15:25.639 --> 00:15:27.720 so no way to learn it eight times bigger than 276 00:15:27.799 --> 00:15:31.639 nuclear was in the nineteen seventies. Electrication solutions that we 277 00:15:31.720 --> 00:15:34.000 have today we didn't have in the nineteen seventies. We 278 00:15:34.039 --> 00:15:37.799 pushed oil out of electricity generation that was ten percent. 279 00:15:37.879 --> 00:15:40.080 This time we're going to push oil out of transport 280 00:15:40.279 --> 00:15:44.440 forty nine percent of oil demand. So it's a completely 281 00:15:44.480 --> 00:15:48.080 different world with completely different tools. And those who want 282 00:15:48.080 --> 00:15:50.120 to go back to the past, really it's beyond Beney. 283 00:15:50.200 --> 00:15:54.799 And then final observation. You have supply reaction to high prices, 284 00:15:54.799 --> 00:16:00.000 which is, let's get more fossils and more electrotech, more renewables. 285 00:16:00.440 --> 00:16:03.840 But you also folks have a demand response, and the 286 00:16:03.840 --> 00:16:09.120 demand response is let's use less expensive stuff, which in 287 00:16:09.159 --> 00:16:12.240 this instance is fossil fuels and more cheap stuff which 288 00:16:12.279 --> 00:16:18.200 is renewable. It's absolutely simple, clean, clear moment for people 289 00:16:18.480 --> 00:16:20.120 to get out of the old into the new. 290 00:16:21.000 --> 00:16:24.720 One remark, I believe that in the head of decision maker, 291 00:16:25.440 --> 00:16:28.559 they always think that there will be a return to 292 00:16:28.840 --> 00:16:34.240 the status quante. They always think, as you said, it's temporary, 293 00:16:34.480 --> 00:16:37.440 we'll go back to But now if you look at 294 00:16:37.480 --> 00:16:40.080 the fact and you pointed it well, and it's not 295 00:16:40.120 --> 00:16:43.720 a climate debate anymore. It's a really energy security debate. 296 00:16:44.200 --> 00:16:46.759 At some point when the tank are empty. The tank 297 00:16:46.799 --> 00:16:52.879 are empty because a Ukrainian have courageously taken on the 298 00:16:52.919 --> 00:16:57.639 oil infrastructure of Russia, and because the idea that you 299 00:16:57.639 --> 00:17:00.120 could pass one hundred ships per day through the bit 300 00:17:00.200 --> 00:17:05.759 of almost without paying anything to anybody freely, that's gone. 301 00:17:06.119 --> 00:17:09.920 There is this recalibration that needs to happen, and it's 302 00:17:09.920 --> 00:17:14.359 happening much faster. At the consumer level. Even my wife 303 00:17:14.640 --> 00:17:18.319 will love her car, say start looking at Eve's. Okay, 304 00:17:18.319 --> 00:17:20.640 it's a bit of an anecdote, but two three years 305 00:17:20.640 --> 00:17:22.680 ago she would not even consider IV and now she's 306 00:17:22.720 --> 00:17:25.960 looking at EV's. But the decision maker, they take more 307 00:17:26.039 --> 00:17:31.319 time because of incubancy, because of lobbying, because of intellectual laziness, 308 00:17:32.400 --> 00:17:36.200 sometimes stupidity. I don't want to say that some guys 309 00:17:36.240 --> 00:17:41.039 are nefarious, but sometimes they even wonder the change in paradigm, 310 00:17:41.400 --> 00:17:43.400 it's now in the head of the people. 311 00:17:44.200 --> 00:17:47.720 It also is worth while remembering that we in Europe 312 00:17:47.720 --> 00:17:50.640 have been like the frog in the pot. We have 313 00:17:50.920 --> 00:17:57.759 increased our fossil fuel input dependency consistently over decades and 314 00:17:57.799 --> 00:18:02.640 it's now sixty percent so out of ten units of energy, 315 00:18:02.680 --> 00:18:04.319 and it's eight out of ten in Ireland by the 316 00:18:04.359 --> 00:18:11.759 way that people use our imported fossil fuels. And suddenly 317 00:18:11.920 --> 00:18:15.240 we are now shifting very obviously to an environment where 318 00:18:15.279 --> 00:18:20.640 that degree of import dependency is far too risky. So 319 00:18:20.920 --> 00:18:24.400 the starting point we are well beyond where we need 320 00:18:24.480 --> 00:18:28.160 to be, and we absolutely have to dramatically reduce that 321 00:18:28.279 --> 00:18:32.519 level of fossil fuel import dependency. The good news is 322 00:18:32.519 --> 00:18:34.119 that for the first time ever we can do this thing. 323 00:18:34.599 --> 00:18:38.039 Got the solutions and they're cheaper and they can be 324 00:18:38.079 --> 00:18:43.960 deployed quickly. When people start to make fundamental strategic plans 325 00:18:44.000 --> 00:18:46.599 for how to get out of this mess now and 326 00:18:46.680 --> 00:18:50.160 for the next few decades, this will be their very 327 00:18:50.200 --> 00:18:54.759 clear answer. Renewables, electrification and the other absolutely key point 328 00:18:55.119 --> 00:18:57.640 Now during this crisis, we should not waste the prices. 329 00:18:58.240 --> 00:19:03.359 We have lots of inertia and old rules propping up 330 00:19:03.400 --> 00:19:07.000 the fossil system. This is the moment, folks, to clear 331 00:19:07.039 --> 00:19:12.319 those away, to clear away the massive undergrowth of regulatory 332 00:19:12.480 --> 00:19:14.000 infrastructure with holds back change. 333 00:19:14.839 --> 00:19:16.799 So things about and laurn. I want to add one 334 00:19:16.799 --> 00:19:18.440 other thing that you didn't really talk about it. 335 00:19:18.519 --> 00:19:22.079 Is what we've got now is an economic driver for 336 00:19:22.119 --> 00:19:23.839 electrification that we didn't have before. 337 00:19:23.880 --> 00:19:26.039 And what I mean by that is you sort of 338 00:19:26.079 --> 00:19:26.759 hinted at it. 339 00:19:27.240 --> 00:19:30.559 The reality is, why do you electrify your automobile because 340 00:19:30.559 --> 00:19:35.519 it's cheaper, Why do you electrify industrial processes because it's cheaper. 341 00:19:35.799 --> 00:19:39.920 Because the technologies that we have in the hardware side 342 00:19:40.759 --> 00:19:44.319 enable us to actually lower the cost of producing stuff 343 00:19:44.359 --> 00:19:47.079 and running stuff. I think that's the big difference than 344 00:19:47.119 --> 00:19:50.319 maybe ten years ago. And I'd also add to that 345 00:19:50.400 --> 00:19:55.119 as well, is that the speed of innovation in and 346 00:19:55.200 --> 00:19:59.200 around the hardware in the whole energy space is off 347 00:19:59.240 --> 00:20:02.480 the charts. The other day, I was in the Netherlands 348 00:20:02.640 --> 00:20:06.000 and I drove a Chinese car called a Neil eight 349 00:20:06.119 --> 00:20:08.799 hundred kilometer range. I've never been in a car like it, 350 00:20:08.839 --> 00:20:11.480 I must admit in terms of what I couldn't couldn't 351 00:20:11.480 --> 00:20:15.400 do to me. It gave me a massage. But battery 352 00:20:16.039 --> 00:20:20.920 swapping capabilities, Okay, you pull in the car, swaps the 353 00:20:20.960 --> 00:20:21.640 battery out. 354 00:20:21.720 --> 00:20:23.960 Two minutes you're ready to go another eight hundred kilometers. 355 00:20:24.480 --> 00:20:26.920 And I'm only using as an example of the innovation 356 00:20:27.000 --> 00:20:30.200 that we're not really seeing because the speed of it 357 00:20:30.240 --> 00:20:32.359 is so good. And the reason I also bring that 358 00:20:32.400 --> 00:20:35.519 forward is because that's the opportunity as well, is to 359 00:20:35.559 --> 00:20:39.119 be part of that revolution. Yeah, you're sitting there in Dublin, 360 00:20:39.200 --> 00:20:44.279 and if Island wants to reduce its massive import dependency, 361 00:20:44.680 --> 00:20:48.039 the solution is not give away oil at lower prices. 362 00:20:48.039 --> 00:20:51.599 A solution is help people shift across to electric vehicles 363 00:20:51.640 --> 00:20:54.599 and never buy the oider gain. Instead of buying diesel 364 00:20:54.799 --> 00:20:58.839 two pounds a liter, you can buy electricity effectively at 365 00:20:58.880 --> 00:21:04.079 about twenty pla. I mean, it's just dramatically cheaper to 366 00:21:04.200 --> 00:21:06.400 go down this route, and you can do it quickly. 367 00:21:06.440 --> 00:21:08.599 So I think that's the other difference between this and 368 00:21:09.160 --> 00:21:11.799 let's say the nineteen seventies and nineteen seventies was all 369 00:21:12.000 --> 00:21:15.279 governmental lead, massive programs in nuclear and so and so forth. 370 00:21:15.559 --> 00:21:18.279 This time around, this can be a consumer led revolution. 371 00:21:18.599 --> 00:21:20.920 You trin't go out there and bioletric vehicle and put 372 00:21:20.920 --> 00:21:23.160 some solar panels on your roof. These things take weeks, 373 00:21:23.200 --> 00:21:24.000 not decades. 374 00:21:24.880 --> 00:21:26.440 Kingsman, what do you think this all means? 375 00:21:27.079 --> 00:21:31.480 Three for very profound implications of these twin shocks. The 376 00:21:31.519 --> 00:21:35.400 first is specifically that Asia, which is where all the 377 00:21:35.440 --> 00:21:39.519 growth is coming from. Asia is going to pivot to electrotech. 378 00:21:39.559 --> 00:21:41.000 I mean, if you've seen, as we all have, the 379 00:21:41.599 --> 00:21:44.759 cues in the streets and the lack of energy for 380 00:21:44.880 --> 00:21:48.279 cooking and transport, and the four day weeks and so 381 00:21:48.319 --> 00:21:50.519 on and so forth. Asia has been sold the lie 382 00:21:50.799 --> 00:21:54.480 that fossil fuels would be cheap and available and give 383 00:21:54.519 --> 00:21:57.960 them independence. That's clearly not true. They're going Asia clearly 384 00:21:58.000 --> 00:22:01.759 now is already electrifying, is going to electrify fast and 385 00:22:01.799 --> 00:22:04.359 deploy renewables faster. So Alisia goes to electritic fast. As 386 00:22:04.359 --> 00:22:09.720 the first conclusion. The second conclusion is the weakest pieces 387 00:22:09.960 --> 00:22:14.519 of the fossil fuel system will now see more rapid change. 388 00:22:14.799 --> 00:22:17.599 And the weakest piece of the fossil system right now 389 00:22:17.839 --> 00:22:20.720 is oil in transport, So we're going to see oil 390 00:22:21.079 --> 00:22:24.359 in transport, which is nearly half of transport demand road transport, 391 00:22:24.599 --> 00:22:27.400 oil pushed out of road transport. And the third piece 392 00:22:27.519 --> 00:22:30.799 where you're going to see change is the other solution 393 00:22:30.839 --> 00:22:33.000 at the very top end of the costco of LNG 394 00:22:33.559 --> 00:22:37.839 in electricity generation. Around one third of LNG is going 395 00:22:37.960 --> 00:22:42.599 into electricity generation, and that's just far too expensive. Is 396 00:22:42.640 --> 00:22:45.839 going to be pushed out by solar and wind. And 397 00:22:45.880 --> 00:22:50.559 then the final conclusion really worth highlighting is pre coil 398 00:22:50.599 --> 00:22:53.000 demand is not a very big call given the fact 399 00:22:53.039 --> 00:22:55.680 we can't even get the oil, but pea coil and 400 00:22:55.680 --> 00:22:58.279 peak fossil fuel demand, we've been bumping along a plateau 401 00:22:58.359 --> 00:23:01.319