WEBVTT 1 00:00:04.080 --> 00:00:07.639 With Laurent's segele end from London and Gerard read from Berlin. 2 00:00:08.160 --> 00:00:09.919 This is redefining energy. 3 00:00:10.759 --> 00:00:13.800 Today on RIF Energy Jar we're going to talk about 4 00:00:13.839 --> 00:00:16.800 sign energy. 5 00:00:15.640 --> 00:00:19.480 Absolutely the fastest growing energy technology we've ever seen. 6 00:00:20.199 --> 00:00:21.679 But first of all from my partner. 7 00:00:22.280 --> 00:00:25.239 A b Loco Energy is Europe's premier leaser of ten 8 00:00:25.359 --> 00:00:29.640 foot container mobile batteries built in Europe with COTL best 9 00:00:29.800 --> 00:00:35.600 LFP cells. A Bloco Energy serves fourteen European countries, including France, 10 00:00:36.079 --> 00:00:39.759 Germany and the UK. A Bloco's batteries can be leased 11 00:00:39.799 --> 00:00:42.920 for any duration between six weeks and six years, and 12 00:00:42.960 --> 00:00:46.320 they are monitored by the Dutch award winning platform school 13 00:00:46.920 --> 00:00:50.000 a block O Energy. Make your life easier, make your 14 00:00:50.039 --> 00:00:51.079 business more flexible. 15 00:00:51.320 --> 00:00:56.320 Back to the show, maybe reaching a peak, yeah, maybe 16 00:00:56.439 --> 00:00:59.119 you know, we've had such an explosive growth that sometimes 17 00:00:59.119 --> 00:01:02.840 it's very different to go beyond that explosive growth. And 18 00:01:03.159 --> 00:01:06.040 the concept of the three seas a term coined by 19 00:01:06.239 --> 00:01:10.920 Richard Sperson of Montel The three seas congestion, curtailment, cannibalization, 20 00:01:11.799 --> 00:01:14.760 and somehow that capture the growing pains of an energy 21 00:01:14.799 --> 00:01:18.680 system being transformed almost too fast. That's true. 22 00:01:19.000 --> 00:01:22.519 And actually transformed too fast by solar and that I 23 00:01:22.519 --> 00:01:24.200 suppose we're already going to talk about, isn't it. 24 00:01:24.640 --> 00:01:28.359 Yeah, to umpact this, we have invited one of the 25 00:01:28.400 --> 00:01:32.519 world leading voice in solar energy and it's Sam Wilkinson, 26 00:01:33.280 --> 00:01:36.840 head of Vulnerables at S and P Global Committee. Inside 27 00:01:37.439 --> 00:01:41.439 he has a team of twenty experts focused on analyzing 28 00:01:41.519 --> 00:01:46.680 and forecasting trains around honorable energy markets. So really you 29 00:01:46.760 --> 00:01:50.239 know what he's talking about. Yeah, so let's bring him 30 00:01:50.239 --> 00:01:52.879 on the show. Some welcome to the show. 31 00:01:53.239 --> 00:01:55.439 Thank you very much, Lauren, very happy to be here. 32 00:01:56.319 --> 00:01:58.879 Maybe just a kick off by just just asking really 33 00:01:58.920 --> 00:02:01.439 to talk a little bit about the state of the 34 00:02:01.480 --> 00:02:04.120 global solar market, and then we can dig in dept 35 00:02:04.159 --> 00:02:06.400 into each of the markets well as we come to 36 00:02:06.439 --> 00:02:09.000 the end of twenty twenty five. Be great to hear 37 00:02:09.039 --> 00:02:11.479 your view on what's happened in twenty twenty five and 38 00:02:11.520 --> 00:02:12.240 global solar. 39 00:02:12.719 --> 00:02:15.240 I mean, let me just start off right. I clearly 40 00:02:15.319 --> 00:02:18.840 remember crossing powers with you the first time. Actually, it 41 00:02:18.879 --> 00:02:22.560 was very early in my career as an analyst, and 42 00:02:22.599 --> 00:02:25.080 I've been tracking the solar industry since two thousand and 43 00:02:25.199 --> 00:02:28.240 nine and we're in an incredible place now. Compared to 44 00:02:28.479 --> 00:02:30.599 where we were back then. You know, back then we 45 00:02:30.599 --> 00:02:34.599 were talking about single digit gigawatt global market, and this 46 00:02:34.719 --> 00:02:37.960 year we're going to wind up with something north of 47 00:02:38.080 --> 00:02:42.319 five hundred gigawatts of solar installed, which is an incredible achievement. 48 00:02:42.879 --> 00:02:46.199 I should mention that's an ac number. As analysts, we 49 00:02:46.639 --> 00:02:49.280 throw out different numbers all the time, So five hundred 50 00:02:49.280 --> 00:02:52.000 and thirty gigawatts is what we think what will have 51 00:02:52.039 --> 00:02:56.280 been installed this year globally. But the story is defined 52 00:02:56.319 --> 00:02:58.439 in sort of two hours of a year because the 53 00:02:58.639 --> 00:03:02.560 overall pace of the global market is defined by China. 54 00:03:02.639 --> 00:03:06.319 We all know that China's over half of global installations 55 00:03:06.360 --> 00:03:09.319 has been for the last three years running. But this 56 00:03:09.439 --> 00:03:12.719 year that the market's changed dramatically. In the middle of 57 00:03:12.759 --> 00:03:16.319 the year, the market switched from being a market where 58 00:03:16.599 --> 00:03:19.879 all projects were guaranteed a certain price. So on June 59 00:03:19.919 --> 00:03:23.719 the first, the policy switched and now projects have to 60 00:03:23.800 --> 00:03:26.919 compete with each other. And what that meant was that 61 00:03:26.960 --> 00:03:30.240 in May, in the first five months of the year, 62 00:03:30.639 --> 00:03:32.960 there was a huge rush to install in China, and 63 00:03:33.000 --> 00:03:36.840 we saw an incredible ninety gigawatts at sola connected to 64 00:03:36.879 --> 00:03:40.560 the grid in China in May alone, followed by the 65 00:03:40.560 --> 00:03:44.479 market dropping down into the single digits Gigawa's you know, 66 00:03:44.479 --> 00:03:46.840 we're talking less than ten giga what's a month, which 67 00:03:46.840 --> 00:03:50.120 for a market that's used to installing hundreds of giga, 68 00:03:50.199 --> 00:03:53.840 what's a year is a very sharp slower So we see, 69 00:03:53.960 --> 00:03:56.439 you know, in the second half of the year, the 70 00:03:56.599 --> 00:04:02.240 continuation of super aggressive pricing, very very low margins, and 71 00:04:02.319 --> 00:04:05.360 from a business standpoint, it's a very complicated place to 72 00:04:05.400 --> 00:04:07.800 be right now, The. 73 00:04:07.840 --> 00:04:10.879 Question for me is when does the value of solar 74 00:04:11.520 --> 00:04:16.000 really deteriorate to the point where installations fall here? And 75 00:04:16.079 --> 00:04:18.240 you have we reached that point in China now as 76 00:04:18.240 --> 00:04:21.279 buzzes where I'm coming from, and or maybe just talk 77 00:04:21.360 --> 00:04:24.000 about then, how you would see this Chinese market going 78 00:04:24.040 --> 00:04:26.279 for And I'm saying this because obviously it's the biggest 79 00:04:26.319 --> 00:04:28.319 market for solar in the world, and so it was 80 00:04:28.319 --> 00:04:29.680 incredibly important. 81 00:04:30.399 --> 00:04:33.519 I couldn't agree more. So you use the word peak then, 82 00:04:33.920 --> 00:04:37.240 and yes, according to our current forecast. And I stress 83 00:04:37.319 --> 00:04:40.560 that because this is a market where policy interventions can 84 00:04:40.639 --> 00:04:44.519 change things dramatically, and policy is one thing that's almost 85 00:04:44.560 --> 00:04:49.319 impossible to predict. We've seen China intervene before and stimulate 86 00:04:49.360 --> 00:04:54.879 its domestic market to help to support its incredible supply chain. 87 00:04:55.560 --> 00:04:58.399 But right now, based on what we know and what 88 00:04:58.439 --> 00:05:02.199 we can see and the visibility have, we think the 89 00:05:02.240 --> 00:05:06.680 annual additions of solar have peaked in China and the 90 00:05:06.879 --> 00:05:10.879 decrease next year in twenty twenty six is incredibly sharp. 91 00:05:11.560 --> 00:05:15.120 So we right now in our forecast are talking about 92 00:05:15.360 --> 00:05:18.519 roughly three hundred gigawa's this year falling to roughly two 93 00:05:18.600 --> 00:05:21.600 hundred giga what's next year in China? That one hundred 94 00:05:21.639 --> 00:05:24.079 gig or what drop is? You know is extreme in 95 00:05:24.560 --> 00:05:27.720 the global context, but you know, we do see the 96 00:05:27.759 --> 00:05:31.639 possibility that something can be done to support that, and 97 00:05:31.680 --> 00:05:34.279 then clearly what would be in China's interest to do 98 00:05:34.439 --> 00:05:38.040 so if they see a justification for it. The other 99 00:05:38.120 --> 00:05:42.079 thing that you mentioned about the value, you know, that's 100 00:05:42.120 --> 00:05:45.240 what we're kind of haven't seen yet. So China has 101 00:05:45.279 --> 00:05:49.680 moved to this competitive system rather than guaranteeing prices, So 102 00:05:49.839 --> 00:05:52.199 we don't really know quite how that's going to play out. 103 00:05:52.519 --> 00:05:54.360 One thing I would say though, is we have an 104 00:05:54.360 --> 00:05:58.199 incredible team of analysts in in China in Shanghai. They're 105 00:05:58.240 --> 00:06:02.680 constantly talking to the industry and the outlook, talking to 106 00:06:02.720 --> 00:06:06.240 all the companies in China is very pessimistic. People are 107 00:06:06.319 --> 00:06:09.000 very concerned about next year. And right now that two 108 00:06:09.079 --> 00:06:12.360 hundred gigawatts that I'm talking about for China for twenty 109 00:06:12.399 --> 00:06:16.759 twenty six, it looks on the optimistic side, I would say, 110 00:06:17.639 --> 00:06:18.199 and some if. 111 00:06:18.160 --> 00:06:20.040 I just take a step back, if I maybe I 112 00:06:20.040 --> 00:06:22.000 think we have to just take a step back and 113 00:06:22.040 --> 00:06:25.160 look at the amount of solar that's been installed in 114 00:06:25.199 --> 00:06:27.399 the last eighteen months. I mean, if I look at that, 115 00:06:28.240 --> 00:06:30.720 the rates that we've installed at are almost sort of 116 00:06:30.759 --> 00:06:33.560 for almost producing in terms of electricity production from that 117 00:06:33.600 --> 00:06:37.319 eighteen months, we're producing what Japan produces and needs in 118 00:06:37.399 --> 00:06:40.560 terms of electricity demanding. I mean, the scale of what 119 00:06:40.600 --> 00:06:45.120 we've done is so crazy that it's at some point 120 00:06:45.199 --> 00:06:47.160 it had to peak. And if I take the point 121 00:06:47.199 --> 00:06:49.959 what you're saying is a China's peaking, maybe you could 122 00:06:49.959 --> 00:06:51.759 talk about the rest of the world. What do you see? 123 00:06:51.800 --> 00:06:53.879 So maybe if we can just go to different reasons 124 00:06:53.879 --> 00:06:56.879 like how's India for example, and then you know, maybe 125 00:06:56.879 --> 00:06:59.600 we going to Europe, North America and other markets to 126 00:06:59.600 --> 00:07:00.959 talk about then please. 127 00:07:01.519 --> 00:07:04.959 We can talk about individual markets. But pretty much across 128 00:07:04.959 --> 00:07:08.959 the board we still see growth on like individual countries 129 00:07:09.000 --> 00:07:13.439 and particularly emerging markets. And that's a story that continues 130 00:07:13.480 --> 00:07:17.680 almost everywhere you look. The solar market continues to grow, 131 00:07:18.120 --> 00:07:21.360 even in places where you tell her about cannibalization and 132 00:07:21.360 --> 00:07:24.120 how that's impacting on the business model. But the thing 133 00:07:24.160 --> 00:07:27.480 is that one hundred gigawak drop in China is like 134 00:07:27.639 --> 00:07:30.000 it's impossible for the rest of the world to step 135 00:07:30.079 --> 00:07:32.759 up and fill that gap. And what that means is 136 00:07:32.879 --> 00:07:38.920 right now you're talking about peaks globally. Our forecast suggests 137 00:07:38.959 --> 00:07:41.839 that next year is for the first time, we are 138 00:07:41.839 --> 00:07:45.279 predicting that the global solar market and by that I 139 00:07:45.319 --> 00:07:48.759 mean the amount installed each year declines for the first time. 140 00:07:49.480 --> 00:07:52.519 It's marginal, you know, we're talking about less than ten 141 00:07:52.560 --> 00:07:55.959 percent decline. But you know that's the big story in 142 00:07:56.000 --> 00:07:58.399 our forecast right now. We've never done that. You're going 143 00:07:58.439 --> 00:08:01.319 back to me joining the industry in two thousand and 144 00:08:01.439 --> 00:08:04.879 nine and tracking and forecasting it ever since. Never once 145 00:08:04.959 --> 00:08:06.920 have we, you know, put our hands up and said 146 00:08:06.959 --> 00:08:10.160 that this global market is going to decline. And I 147 00:08:10.199 --> 00:08:13.199 actually think that's an interesting moment for the market, right 148 00:08:13.279 --> 00:08:16.879 because it clearly can't go on growing every year. It's 149 00:08:17.000 --> 00:08:21.319 just not possible. But this is an incredible supply chain 150 00:08:21.319 --> 00:08:23.800 that's been built very quickly. It's been built on the 151 00:08:23.879 --> 00:08:27.319 back of growth, and it just changes the dynamic completely. 152 00:08:28.000 --> 00:08:31.079 You know, we no longer have that luxury of knowing 153 00:08:31.240 --> 00:08:33.519 that next year the market's going to be bigger than 154 00:08:33.559 --> 00:08:36.240 it was the year before in terms of volumes at least, right, 155 00:08:36.759 --> 00:08:38.519 and that totally changes things. 156 00:08:39.240 --> 00:08:41.679 So, simon, if I hear you and there's going to 157 00:08:41.679 --> 00:08:45.600 be one hundred gig less in China, is it going 158 00:08:45.679 --> 00:08:49.639 to go against the current narrative than China is decobanizing. 159 00:08:50.240 --> 00:08:53.200 First of all, before I talk specifically about China, it's 160 00:08:53.240 --> 00:08:56.840 worth just recognizing the fact that we are still installing 161 00:08:57.000 --> 00:09:02.240 huge amounts of solar every year and other renew as well. 162 00:09:02.519 --> 00:09:06.639 Despite we're in this my colleagues that are in the 163 00:09:06.679 --> 00:09:09.120 power and the scenario is being called it this re 164 00:09:09.360 --> 00:09:11.960 that scenario. We're in this moment where people are just 165 00:09:12.000 --> 00:09:15.879 reconsidering their positions on the energy transition, thinking more about 166 00:09:15.919 --> 00:09:20.399 security than decarbonization. Yeah, and it's called this policy reset. 167 00:09:20.960 --> 00:09:24.679 Despite that, and despite the fact that annual additions globally 168 00:09:24.799 --> 00:09:26.879 will be less next year than they were this year. 169 00:09:27.519 --> 00:09:31.120 Over the next five years, We're still going to double 170 00:09:31.159 --> 00:09:34.279 the amount of solar installed in the world, just because 171 00:09:34.320 --> 00:09:36.960 the amount we're adding each year is perhaps slowing down 172 00:09:37.080 --> 00:09:39.480 or is less, or is roughly the same, or it's 173 00:09:39.200 --> 00:09:41.799 but it's not growing one hundred percent like it has 174 00:09:41.840 --> 00:09:45.480 done in the past. We're still going to install roughly 175 00:09:45.519 --> 00:09:48.320 something like two terror watts of solar in the next 176 00:09:48.360 --> 00:09:51.960 four years. We're just talking about installing five to six 177 00:09:52.039 --> 00:09:55.279 hundred gigawat's a year, rather than it being more than 178 00:09:55.279 --> 00:09:57.159 the year before and more than a year before that. 179 00:09:57.480 --> 00:10:00.879 It's just a total change in the dynamic takes away 180 00:10:00.879 --> 00:10:04.679 that luxury of growth every year, which which makes the 181 00:10:04.720 --> 00:10:07.799 supply chain behave in a certain way. That's one of 182 00:10:07.840 --> 00:10:11.360 the interesting things for me. This supply chain thrives on 183 00:10:11.559 --> 00:10:15.279 high volume and high scale, and I think people take 184 00:10:15.320 --> 00:10:19.200 the time to appreciate just how high volume solar manufacturing is. 185 00:10:20.000 --> 00:10:24.080 Roughly speaking back of the envelope calculation, eighty billion solar 186 00:10:24.120 --> 00:10:27.600 cells made a year right now something like that. Just 187 00:10:27.639 --> 00:10:31.679 for context, iPhones is like two hundred million. On smartphone 188 00:10:31.720 --> 00:10:34.000 market in total is one million. I can't think of 189 00:10:34.159 --> 00:10:37.159 any other electronic device that is made in that volume, 190 00:10:37.639 --> 00:10:42.200 and so it thrives on that volume and just continued 191 00:10:43.000 --> 00:10:46.440 high utilization rates of the supply chain. And people have 192 00:10:46.480 --> 00:10:49.360 always been ahead of demand, building out supply in the 193 00:10:49.360 --> 00:10:52.240 hope that demand will come, and we've always been confident 194 00:10:52.279 --> 00:10:55.120 of doing that. But right now that doesn't feel like 195 00:10:55.240 --> 00:10:57.559 something we can we can bet on. So I think 196 00:10:57.559 --> 00:10:59.600 it's going to really change the way the supply chain 197 00:10:59.639 --> 00:11:01.120 behave as well. 198 00:11:01.679 --> 00:11:04.639 So so maybe let's move to what the repercussions are, 199 00:11:04.679 --> 00:11:07.519 because I think that's the really interesting thing. So I 200 00:11:07.519 --> 00:11:10.320 would have told the first thing I would see is consolidation. 201 00:11:11.480 --> 00:11:13.320 What else would we think will happen? 202 00:11:13.919 --> 00:11:17.360 Well, we've already seen this playing out in terms of prices. 203 00:11:17.519 --> 00:11:20.720 We're talking in the like ten cents of what price 204 00:11:20.840 --> 00:11:23.679 range now for solo modules, which is something that going 205 00:11:23.720 --> 00:11:27.200 back in history we almost never would have believed. But 206 00:11:27.519 --> 00:11:31.360 again on that like volume thing, this volume has allowed 207 00:11:31.600 --> 00:11:35.919 innovation and cost reduction that people just never saw possible. 208 00:11:36.600 --> 00:11:40.200 So you know, these prices, whilst margins are either very 209 00:11:40.279 --> 00:11:43.679 very low or potentially zero right now throughout the supply chain, 210 00:11:43.960 --> 00:11:46.960 these prices are a factor of that incredible progress that 211 00:11:47.000 --> 00:11:50.519 the technology has made. Clearly that's going to lead to consolidation. 212 00:11:50.720 --> 00:11:53.639 You can't have all of these manufacturers making no money. 213 00:11:53.679 --> 00:11:58.159 So consolidation is one obvious impact. But the other thing 214 00:11:58.320 --> 00:12:00.960 that this industry has, you know, I meant I'd called 215 00:12:01.000 --> 00:12:04.399 it like water earlier, but it has this elasticity as well, Right, 216 00:12:04.720 --> 00:12:08.320 these low prices and this slow down somewhere else, solar 217 00:12:08.320 --> 00:12:11.559 has this incredible ability to go and find markets and 218 00:12:11.639 --> 00:12:15.039 make markets. So I see the Pakistan was the thing 219 00:12:15.080 --> 00:12:17.240 that was talked about like a lot in recent years, 220 00:12:17.360 --> 00:12:20.759 all of a sudden, like consumed this huge gigawatts of 221 00:12:20.840 --> 00:12:25.320 solar panels, having not been a solar market previously, and 222 00:12:25.360 --> 00:12:27.960 there's so many other markets around the world that will 223 00:12:28.000 --> 00:12:31.480 do that. This sort of unique scalability of solar as 224 00:12:31.480 --> 00:12:35.000 a power generation technology means that we're going to see 225 00:12:35.039 --> 00:12:39.679 markets that there weren't there before, in Africa, in Southeast Asia, 226 00:12:39.879 --> 00:12:43.279 in South America, in these emerging economies, they're going to 227 00:12:43.519 --> 00:12:46.960 probably start to consume solar because it's such an accessible 228 00:12:47.279 --> 00:12:51.000 price point. So I think that's one thing. And another 229 00:12:51.039 --> 00:12:54.720 thing is again the innovation outside of the solar panel. Right, 230 00:12:54.879 --> 00:12:57.200 almost everything we've talked about today has been to do 231 00:12:57.320 --> 00:13:00.279 with the panel, and anytime we've related it out to 232 00:13:00.320 --> 00:13:03.360 the supply chain, but all of the other technology that's 233 00:13:03.399 --> 00:13:07.480 going into optimizing the building and the maintenance and the 234 00:13:07.519 --> 00:13:11.960 operations of these assets, adding in batteries to help with 235 00:13:12.080 --> 00:13:15.279 like making these more flexible and dispatchable. There's going to 236 00:13:15.320 --> 00:13:18.759 be a real focus on that in terms of maintaining 237 00:13:18.799 --> 00:13:22.759 like high quality, high performance assets rather than just this 238 00:13:22.960 --> 00:13:27.080 focus on generating hardware and hooking it up to the grid. 239 00:13:28.080 --> 00:13:30.360 That's a very good point. So the question for me 240 00:13:30.399 --> 00:13:32.360 though on that is who does this? In other words, 241 00:13:32.399 --> 00:13:34.600 is it the module manufacturer that's going to push these 242 00:13:34.600 --> 00:13:36.639 it's going to be the inversion manufacturer in other words, 243 00:13:36.720 --> 00:13:39.279 who's going to be the winner out of providing that 244 00:13:39.519 --> 00:13:40.840 solution to customers. 245 00:13:41.440 --> 00:13:43.559 Well, there's so many roles to play that it's difficult 246 00:13:43.559 --> 00:13:45.679 to give us simple answer to that. But one thing 247 00:13:45.720 --> 00:13:49.559 I would say that we've noticed very clearly in recent 248 00:13:49.679 --> 00:13:55.600 years is that the module manufacturers recognized these are top 249 00:13:55.639 --> 00:14:01.120 tier manufacturing companies, right, These these sort of Chinese panel giants, 250 00:14:01.559 --> 00:14:04.519 they saw this coming and they knew they had to diversify. 251 00:14:05.039 --> 00:14:07.200 And so you look at the kind of cohort of 252 00:14:07.399 --> 00:14:10.799 top tier companies there and you see how they've all 253 00:14:10.919 --> 00:14:15.000 diversified through various methods into energy storage. Some of them 254 00:14:15.000 --> 00:14:19.799 are making electoralizers, and they're all trying to find other 255 00:14:20.320 --> 00:14:24.279 revenue streams as well. And the inverter companies too, right, 256 00:14:24.320 --> 00:14:27.600 it was a very natural step for them to go 257 00:14:27.759 --> 00:14:31.440 into energy storage power conversion, and now a lot of 258 00:14:31.440 --> 00:14:35.399 them are for providing full energy storage systems as well. 259 00:14:35.799 --> 00:14:40.639 So that diversification is very clear, But it comes at 260 00:14:40.679 --> 00:14:44.440 a time where it's not like these are great industries 261 00:14:44.480 --> 00:14:46.600 to be in as well. In terms of being a manufacturer, 262 00:14:46.639 --> 00:14:51.399 they're very overcrowded, as any high growth industry always is, right. 263 00:14:51.440 --> 00:14:53.519 It attracts a lot of people in and more people 264 00:14:53.559 --> 00:14:58.360 than the demand can sustain these companies that the manufacturers 265 00:14:58.399 --> 00:15:02.080 are clearly trying to diversey FI there, but then all 266 00:15:02.080 --> 00:15:04.279 the other places, right, you know, we look at like 267 00:15:04.480 --> 00:15:07.720 robotics and drones in O and M, the use of 268 00:15:07.799 --> 00:15:12.840 AI and optimization. There's so much going on still downstream 269 00:15:13.000 --> 00:15:16.879 in that sector that there is still plenty of innovation 270 00:15:17.120 --> 00:15:20.039 to happen. And I just think that that focus actually 271 00:15:20.120 --> 00:15:23.879 on the sort of high quality projects and systems is 272 00:15:23.919 --> 00:15:25.080 actually really quite healthy. 273 00:15:25.720 --> 00:15:29.000 I like the way you think about the future. But 274 00:15:29.120 --> 00:15:31.360 before we go there. I like to kill the few 275 00:15:31.720 --> 00:15:36.519 dinosaur along the way. There's been desperate attempts in Europe 276 00:15:36.600 --> 00:15:39.840 and in the US and diverse administration to build a 277 00:15:39.919 --> 00:15:42.879 local supply chain of cell up panel and they've thrown 278 00:15:42.960 --> 00:15:45.919 a lot of money on It's the status of this 279 00:15:46.519 --> 00:15:48.320 reinsourcing of set up panels. 280 00:15:48.799 --> 00:15:51.879 Yeah, it's a good question, and it's something that's been 281 00:15:51.879 --> 00:15:55.320 talked about a lot. Like my thoughts are, i'd see 282 00:15:55.320 --> 00:15:59.759 the value in building like supply chains. So like I guess, 283 00:15:59.799 --> 00:16:02.399 you know a confession that start with I think you 284 00:16:02.399 --> 00:16:04.879 can look at China and the dominance of the supply 285 00:16:05.000 --> 00:16:08.679 chain either like with admiration or as a threat. I 286 00:16:08.840 --> 00:16:12.000 have to say that I recognized the dangers of having 287 00:16:12.559 --> 00:16:16.840 a supply chain concentrated in one country. But I have 288 00:16:16.919 --> 00:16:20.080 been visiting China and out for like over ten years, 289 00:16:20.080 --> 00:16:23.279 like regularly. I'd remember the first time I like set 290 00:16:23.320 --> 00:16:27.360 foot in that country and started visiting these companies and 291 00:16:27.399 --> 00:16:31.559 I just was just been fascinated by it. Like I remember, 292 00:16:31.879 --> 00:16:34.679 like I was like Coli Culkin and like home alone, 293 00:16:34.840 --> 00:16:36.440 like you know, the New York visit where he's like 294 00:16:36.480 --> 00:16:39.879 hanging out the taxi, like just amazed by what he's seeing. 295 00:16:40.279 --> 00:16:42.480 I was kind of like that kid, and I've sort 296 00:16:42.519 --> 00:16:48.200 of like seen these companies grow into incredible technology companies. 297 00:16:48.639 --> 00:16:51.200 I always tell this story. I visited the same company 298 00:16:51.240 --> 00:16:55.240 ten years apart, roughly in twenty eleven twenty twelve. It 299 00:16:55.320 --> 00:16:58.600 was that time when solar inverteds were like impossible to 300 00:16:58.600 --> 00:17:01.559 get hold of. There was a shortage sober inverters, and 301 00:17:01.600 --> 00:17:04.680 I remember visiting this company that makes inverters and they 302 00:17:04.720 --> 00:17:06.759 were literally like building them in the car park. It 303 00:17:06.799 --> 00:17:10.880 was total chaos. They were running around like couldn't really 304 00:17:10.920 --> 00:17:13.599 tell what was going on. Ten years later, I visited 305 00:17:13.640 --> 00:17:18.039 the same company and they're like operation was like the slickest, 306 00:17:18.240 --> 00:17:22.480 most modern factory I have ever seen, Like this is 307 00:17:22.599 --> 00:17:26.920 like grade A plus plus plus plus plus manufacturing. And 308 00:17:26.960 --> 00:17:28.680 the point I'm trying to make is, you know, when 309 00:17:28.720 --> 00:17:30.880 we talk about China as a threat in terms of 310 00:17:31.000 --> 00:17:35.279 manufacturing and its dominance, you've got to recognize that it's 311 00:17:35.400 --> 00:17:40.559 not like a low cost, low quality option anymore. It 312 00:17:40.680 --> 00:17:42.519 is the leader in terms of cost, it's the leader 313 00:17:42.599 --> 00:17:45.400 in terms of technology, it's the leader in terms of quality, 314 00:17:45.839 --> 00:17:48.920 it's the leader in terms of innovation. So there's a 315 00:17:48.920 --> 00:17:51.559 bit of meaning that always looks at this from a 316 00:17:51.680 --> 00:17:56.200 very sort of pragmatic standpoint, looking back from the global 317 00:17:56.279 --> 00:18:00.720 high vision, why not use that great top of the range, 318 00:18:01.000 --> 00:18:08.279 low cost technology and use it to decarbonize and build renewables. 319 00:18:08.480 --> 00:18:12.480 So there's that piece of me that always sort of questions, 320 00:18:12.559 --> 00:18:15.480 why would you want to build a factory that is 321 00:18:15.559 --> 00:18:20.240 higher cost potentially lower quality. We don't really know, and 322 00:18:20.279 --> 00:18:23.039 that's a question I always ask myself. But I understand 323 00:18:23.039 --> 00:18:25.440 from a political point of view, you want to have 324 00:18:25.559 --> 00:18:28.559 that energy security, you need to build it. So the 325 00:18:28.559 --> 00:18:31.759 status is jerub To get back to your direct question, 326 00:18:32.400 --> 00:18:34.680 very little progress has been made. If you look at 327 00:18:34.960 --> 00:18:38.400 the numbers. Still you're talking eighty to ninety percent of 328 00:18:38.440 --> 00:18:41.799 manufacturing is in China. There is some factories built in 329 00:18:41.799 --> 00:18:45.079 the Middle East, in Africa, I in the US that 330 00:18:45.079 --> 00:18:48.759 gets very complicated with the latest policy changes. In Europe, 331 00:18:48.880 --> 00:18:53.160 very very little, so it's happening, but still the vast 332 00:18:53.200 --> 00:18:55.960 majority of product comes from China. And I sort of 333 00:18:55.960 --> 00:18:59.519 sometimes put myself on the shoes of the end market, 334 00:18:59.559 --> 00:19:03.200 the develop or the owner of the investor, and they're 335 00:19:03.240 --> 00:19:05.799 looking at it and saying, well, if the best products 336 00:19:05.839 --> 00:19:09.039 come from China and the lowest cost comes from China. 337 00:19:09.079 --> 00:19:11.799 Why do I even want to buy it locally? And 338 00:19:11.839 --> 00:19:14.519 that's why the politicians have to step in and intervene 339 00:19:14.599 --> 00:19:15.640 and somehow. 340 00:19:15.359 --> 00:19:18.839 Enforce Ero sin Sam. I agree with you saying I 341 00:19:18.839 --> 00:19:21.079 think there's an additional point that I would add to that. 342 00:19:21.720 --> 00:19:26.200 I think politicians completely misunderstand solar and what I mean 343 00:19:26.240 --> 00:19:29.359 by that is they think it's like normal fossil fuels, 344 00:19:29.799 --> 00:19:31.599 which is where I have to go and get a fuel. 345 00:19:32.160 --> 00:19:34.279 I don't need to get a fuel for that solar panel. 346 00:19:34.319 --> 00:19:38.319 So once it's installed, it's installed and it's producing electricity 347 00:19:38.359 --> 00:19:40.880 for twenty twenty five years. If I put a gas 348 00:19:40.920 --> 00:19:43.160 turbine in, I need to make sure there's fuel there 349 00:19:43.200 --> 00:19:46.200 for twenty five years, So there's an energy security issue 350 00:19:46.240 --> 00:19:48.960 for twenty five years you have there isn't that with 351 00:19:49.039 --> 00:19:52.160 a solar panel. That's the big difference. And I'm totally witcher. 352 00:19:52.799 --> 00:19:56.920 They're better, they're cheaper, so why not just buy them now. 353 00:19:56.920 --> 00:19:58.680 I could take the other approach, which is say what 354 00:19:58.720 --> 00:20:01.480 the US does, which is they say no, we're going 355 00:20:01.519 --> 00:20:03.720 to do it ourselves, and the result of it actually 356 00:20:04.039 --> 00:20:07.759 is that they're actually slowing down their own market because 357 00:20:07.799 --> 00:20:10.640 installation costs etc. Are just way higher than the art 358 00:20:10.640 --> 00:20:11.480 and the rest of the world. 359 00:20:12.240 --> 00:20:15.440 Well, yeah, exactly. I've stood back and watched whilst the 360 00:20:15.559 --> 00:20:19.039 US is politically intervened and you know, in terms of 361 00:20:19.079 --> 00:20:23.039 trying to localize various different you know, policy attempts over 362 00:20:23.039 --> 00:20:25.319 the years, and the end result is that the US 363 00:20:25.440 --> 00:20:28.279 pays double triple the amount of the rest of the 364 00:20:28.279 --> 00:20:32.160 world for its solar panels. Sadly, we don't know exactly 365 00:20:32.200 --> 00:20:34.119 how things are going to play out right now because 366 00:20:34.160 --> 00:20:37.359 we don't have the luxury of any predictability for US 367 00:20:37.559 --> 00:20:40.799 policy right now. But batteries looks like it all go 368 00:20:40.880 --> 00:20:42.759 the same way, Like the US is going to be 369 00:20:42.759 --> 00:20:44.559 more expensive than the rest of the world because of 370 00:20:44.680 --> 00:20:47.559 tariffs or all the various policies in place. So I 371 00:20:47.599 --> 00:20:50.880 get that totally, and you're absolutely right the earlier when 372 00:20:50.880 --> 00:20:53.799 we're talking about peaks, when we talk about peak solar, 373 00:20:53.920 --> 00:20:56.480 we're not talking about the same thing as peak oil. 374 00:20:56.799 --> 00:20:59.160 We talking about peak oil. We're talking about fuel and 375 00:20:59.160 --> 00:21:02.920 how much fuel is consumed. The equivalent when we're talking 376 00:21:02.920 --> 00:21:05.000 about peak solo would be to talk about how much 377 00:21:05.039 --> 00:21:07.559 sunshine is coming out of the sky, and that's just 378 00:21:07.680 --> 00:21:11.960 not even a sensible comparison to make, whereas what we're 379 00:21:12.000 --> 00:21:14.680 talking about is how much extra capacity is being added 380 00:21:14.759 --> 00:21:17.920 each year, and even if that declines over the next 381 00:21:18.200 --> 00:21:20.680 decade or so, which ultimately it would have to at 382 00:21:20.720 --> 00:21:24.839 some point, we're still adding capacity. And that's just you know, 383 00:21:24.880 --> 00:21:26.920 going back to what you're saying, we're talking about a 384 00:21:26.960 --> 00:21:32.440 technology that completely cuts your dependence on fuel supplies in 385 00:21:32.480 --> 00:21:35.440 the same way that like a conventional fuel would. I 386 00:21:35.440 --> 00:21:37.039 mean that said, you know, I have to put my 387 00:21:37.079 --> 00:21:40.079 hand up and say, these conventional fuels do play a role. 388 00:21:40.599 --> 00:21:42.279 You know, we don't live in a world where we 389 00:21:42.319 --> 00:21:46.039 can survive on just soda and wind and have a 390 00:21:46.279 --> 00:21:50.880 stable electricity supply. So we do see a world where, 391 00:21:51.279 --> 00:21:55.000 especially as power demand grows, because we're living at a 392 00:21:55.039 --> 00:21:59.200 time where demand for electrons is increasing at a phenomenal rate, 393 00:22:00.160 --> 00:22:03.799 those like conventional power generation technologies are going to play 394 00:22:03.799 --> 00:22:06.960 a role in that and we can't bring on enough capacity. 395 00:22:07.279 --> 00:22:08.920 Like just from Sola and win. 396 00:22:09.759 --> 00:22:11.799 Well, it's summer. It was a bit of a down 397 00:22:11.839 --> 00:22:15.279 beat episode. We don't like downbeat. So you's going to 398 00:22:15.279 --> 00:22:17.799 ask the last question and hopefully there's going to be 399 00:22:18.359 --> 00:22:20.079 a bit more optimism. 400 00:22:20.559 --> 00:22:22.799 So Sam, I'd like to actually just get to your 401 00:22:22.920 --> 00:22:25.559