Speaker 1: With a round segle and from London and Gerard read
Speaker 1: from Berlin.
Speaker 2: This is redefining.
Speaker 3: Energy Today on really find Energy Job, we're going to
Speaker 3: talk about solar and especially an extraordinary conversation you had
Speaker 3: with Anaconde of PVK. So can you give us a
Speaker 3: bit of a context?
Speaker 4: Yeah, what sort of PV case is one of the
Speaker 4: world's leading software.
Speaker 5: Platforms for anyone who's designing.
Speaker 4: Large scale PV systems, and they have a podcast they
Speaker 4: invited me to come on, and really the whole teases
Speaker 4: for me is that going forward, the economic core of
Speaker 4: the future power system is solar and storage. And the
Speaker 4: reason for this is just because of cost simpler ast
Speaker 4: that it's just solar. We've never seen an electricity production
Speaker 4: technology as cheap as it. And also it can be
Speaker 4: put anywhere and add a bit of storage into that
Speaker 4: and you can do a huge amount. And actually i'd
Speaker 4: make a point as well, ple really you just can't
Speaker 4: block it because we're moving into a world of plug
Speaker 4: and play solar, and plug and play solar really means
Speaker 4: I put up my back garden, I plug it into
Speaker 4: a socket and put a battery beside it, and I've
Speaker 4: got a small power plant and guess what, My utility
Speaker 4: hasn't a clue on what's going on, My grid operator
Speaker 4: hasn't a clue what's going on.
Speaker 5: That's a no European perspective.
Speaker 4: But if I go to the global South, my god,
Speaker 4: how you're going to revolutionize the world by being able
Speaker 4: to put these systems in.
Speaker 6: It's incredibly exciting.
Speaker 3: So let's listen to your conversation with Annaconde. But first
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Speaker 2: Back to the show, Gerard, welcome to our show.
Speaker 5: My pleasure looking forward to You really do.
Speaker 2: Bring a very perspective and I'm very excited to dive
Speaker 2: into what energy transition looks like when you zoom out
Speaker 2: and connect the dots. You've been quite open about the
Speaker 2: fact that you were initially skeptical of solder. What were
Speaker 2: you skeptical about and what ultimately changed your mind.
Speaker 6: What I was.
Speaker 5: Skeptical about really was the ability to get costs down quickly.
Speaker 6: And where I was.
Speaker 5: Coming from this this is twenty years ago. We've actually
Speaker 5: had solar panels for over fifty years, but sort of
Speaker 5: nothing happened in the space and I just didn't really
Speaker 5: see a path. When I went to see a solar
Speaker 5: factory in Berlin twenty years ago, I really just didn't
Speaker 5: see the ability to be able to get the cost down.
Speaker 5: But I didn't understand what was going on. If I'd
Speaker 5: be really honest. What I saw was a group of
Speaker 5: people who were making modules and they were doing this
Speaker 5: by hand, and I just thought this is a joke.
Speaker 5: So that's where I was coming from. Now, I was
Speaker 5: thankfully able to listen to people who knew more than
Speaker 5: I did and convince me otherwise. And here we are
Speaker 5: twenty years later, and it really is the lowest cost form.
Speaker 5: I might even just save an electricity of energy out there.
Speaker 5: You're just not going to get anything lower cost.
Speaker 2: Yeah, that's interesting and Honestly, I think it sounds like
Speaker 2: that evolution sort of mirrors what we've seen across finance
Speaker 2: more Brady, there's early doubt that is followed by a
Speaker 2: rapid reassessment once the data becomes a little bit more
Speaker 2: impossible to ignore.
Speaker 5: Yeah, and I go back, and if you look at
Speaker 5: the history of SOLO, we talk about a solar coaster,
Speaker 5: as in a roller coaster. It's up, down, up, down
Speaker 5: a scene. I don't have any updown cycle to seen
Speaker 5: at this point down, but maybe this is every three
Speaker 5: or four years you have another upcycle or another down cycle. Now,
Speaker 5: the good news today is SOLDO is in a much
Speaker 5: more sustainable position than it's ever been because it's costs
Speaker 5: us solow And also what's increasingly happening is you we
Speaker 5: do have facilitating technologies alongside it. For me, the facilitating
Speaker 5: technologies with batteries, power electronics, stuff like this that just
Speaker 5: make it much easier to integrate solar into a wider system.
Speaker 5: So that's sort of why it's in a much better
Speaker 5: position than it's ever been.
Speaker 2: Really, and at some point you also shifted from seeing
Speaker 2: solar as a niche solution to calling it the bedrock
Speaker 2: of the future energy system. What was the moment or
Speaker 2: realization that led you to that shift.
Speaker 5: Well, the bedrock really is what's your foundation of an
Speaker 5: energy system. If we really look globally today, the foundation
Speaker 5: of our energy system.
Speaker 6: Is really oil.
Speaker 5: And what actually happens is every time you have an
Speaker 5: industrial revolution, you do have a new form of energy
Speaker 5: that takes over. So you had the first industrial revolution,
Speaker 5: we really moved from wood to coal, okay, but then
Speaker 5: around alongside coal you had the steam engine, and then
Speaker 5: we had an internal combustion engine. Obviously it needed oil.
Speaker 5: And now what we've got is electrification and an AI
Speaker 5: I would say, at this point in time, digitalization, all
Speaker 5: our tech anologies need electricity, don't They don't need oil.
Speaker 5: So that's the big shift. But the other other shift
Speaker 5: is it's the lowest cost form of producing a usable
Speaker 5: form of energy. And that's the key difference because you
Speaker 5: can't stop that. Because the other thing that's really interesting
Speaker 5: for me about solar is the fact that you can
Speaker 5: use it anywhere. And of course you can say, oh
Speaker 5: my god, well we don't have a lot of sun
Speaker 5: in northern Europe. Yeah, so what talk to the plants
Speaker 5: in the back garden or your front garden about that.
Speaker 6: They go, listen, we're quite happy.
Speaker 5: We survived with this, you know, son Ony being here
Speaker 5: whatever it is eight hours a day in winter. So
Speaker 5: I don't take that argument because I just think what
Speaker 5: happens is you adapt. It's all about low cost and flexibility.
Speaker 5: That's what solar has.
Speaker 2: I agree. Yeah, it's funny how quickly that perception changed,
Speaker 2: and almost before many people even realized it was happening.
Speaker 2: The costs feel faster than almost anyone had forecasted deployment
Speaker 2: scale globally, and then suddenly solar wasn't just a technology story,
Speaker 2: it was a system story.
Speaker 5: Yeah, And I want to say I only think we're
Speaker 5: at the beginnings of that system story because if I
Speaker 5: take let's called the Western world.
Speaker 6: North America, Europe.
Speaker 5: What we've got there is you're replacing an old system
Speaker 5: that's more difficult. But okay, if I got a Pakistan,
Speaker 5: I'm not replacing an old system. What I'm doing is
Speaker 5: I'm bringing power to my people, and you can't stop
Speaker 5: it in that environment. Because people want to have a
Speaker 5: better life and a better life for your kids means
Speaker 5: you need to have electricity and you need to have internet.
Speaker 5: They are the basic things you want if you want
Speaker 5: your kids.
Speaker 6: To lip so, guess what you do. You've got to
Speaker 6: put solar on your rooftop.
Speaker 5: And even if you've only have electricity for eight hours
Speaker 5: a day, it's better than zero, right, And if you
Speaker 5: add batteries in there, it goes. So I think, really
Speaker 5: the big story of solars only starting, but it's a
Speaker 5: different story. It is creating an energy system where solar
Speaker 5: is the betrol I agree.
Speaker 2: And how has your background and investment, banking and capital
Speaker 2: markets shaped how you look at the energy tancision compared
Speaker 2: to say from a purely technical or policy lens.
Speaker 5: Okay, so if you're a scientist or an engineer, what
Speaker 5: you're interested in is physics, and you're interested in efficiencies,
Speaker 5: and you're looking at it from a first principle point
Speaker 5: of view as a finance person. But for me, it's economics.
Speaker 5: Does it make economic sense? Because if the physics is
Speaker 5: great and the economics makes no sense, it ain't going
Speaker 5: to scale. So I really look at the economics of stuff.
Speaker 5: That's what I really really focus on. And every single
Speaker 5: technology I always think, does this make economic sense? Or
Speaker 5: could this in the future make economic sense? And I
Speaker 5: think that's the key thing that you focus on. Just
Speaker 5: keep focus on the economics, economics, economics. So I give
Speaker 5: you a very practical example. If I take the case
Speaker 5: of hydrogen green hydrogen, it's really difficult for that to
Speaker 5: compete in a market with brown hydrogen, right, it's very difficult.
Speaker 5: Maybe it isn't it even extra impossible? And you sort
Speaker 5: of argue, Okay, do we really need to do that?
Speaker 5: Are people really willing to pay for that? They are
Speaker 5: questions that I ask, And that means that I'm constantly
Speaker 5: focusing on what's the best economic decision. That's what I'm
Speaker 5: trying to do in everything that I'm looking at. Don't
Speaker 5: necessarily get it right all the time, because again, you're
Speaker 5: looking at the future all the time. But I think
Speaker 5: a lot of people don't do that. What they do
Speaker 5: is they get carried away with a story and stories
Speaker 5: maybe how you get some capital.
Speaker 6: In the door.
Speaker 5: But stories are not how you create the future. You
Speaker 5: create the future by really bringing something at low cost
Speaker 5: to market.
Speaker 6: That's how you create the future.
Speaker 2: I really like that for I mean, because capital, in
Speaker 2: the end has a way of revealing the truth. Money
Speaker 2: moves towards what scales and away from what doesn't. And
Speaker 2: you've mentioned solar and batteries before, so when you talk
Speaker 2: about this energy revolution, now we really talk about solar alone.
Speaker 2: It's really solid plus batteries. Why is this parents critical
Speaker 2: these days?
Speaker 5: So, first and foremost, storage has always been a critical
Speaker 5: part of our energy system, and we just let's start
Speaker 5: with the basics of how we live our life every day.
Speaker 5: The most important storage device I have is probably my fridge. Okay,
Speaker 5: that's what I'm doing and keeping my food there, of which.
Speaker 6: I use every day.
Speaker 5: But if you go beyond that, in the fossil fuel world,
Speaker 5: we've got massive amounts of story that we've built up
Speaker 5: over the last hundred years. Right, We've got oil tanks,
Speaker 5: we've got gas tanks, we've got oil tankers that transport that.
Speaker 5: So we've got massive capability to do so. So storage
Speaker 5: is to all of us as clear. Storage is a
Speaker 5: clear part of the energy system. Electricity is slightly different.
Speaker 5: There's not a huge amount of electricity storage out there
Speaker 5: because what you have to do is you have to
Speaker 5: take that electricity and convert it into another form of energy.
Speaker 6: So you know, you push it up.
Speaker 5: Water and bring it back down as pumped hydro or something,
Speaker 5: and we realize in the past probably easier just to
Speaker 5: rely on the fossil fuel storage. In other words, what
Speaker 5: you do is when you need more electricity, you take
Speaker 5: that coal in the bunker and you burn more of it.
Speaker 5: That's sort of what we've been doing. But in a
Speaker 5: world of renewables, where renewables is so low cost and
Speaker 5: where you know, the reality is because it makes so
Speaker 5: much economic sense for people to put more and more
Speaker 5: solar in the system, whether it be in the home
Speaker 5: or whatever it is, you then have periods of excess.
Speaker 5: Then you go, what's the most efficient and cost effective
Speaker 5: way to do it. Let's use a battery, and that's
Speaker 5: that's the reality of it. You know, you could put
Speaker 5: it up the wall, you could put it up a mountain,
Speaker 5: or you could do something like that, but it's more
Speaker 5: expensive and you've got inefficiencies in terms of the efficiency.
Speaker 6: The losses that you have are higher, and.
Speaker 5: In particularly in the case of lithium ion lithie iron is.
Speaker 5: I do use the story that nothing happened in batteries
Speaker 5: between probably nineteen hundred in about twenty ten, and then
Speaker 5: we have litiumine and obviously LiTi mine is in every
Speaker 5: device that we have as a lithium ion battery in it,
Speaker 5: and they're getting.
Speaker 6: Better and better.
Speaker 5: And also then we've also got new forms of batteries
Speaker 5: which are lower cost, higher performance coming our way as well,
Speaker 5: so that battery revolution continues. But the thing that really
Speaker 5: lends itself to batteries with solar is the fact that
Speaker 5: every day the sun goes up and the sun goes down,
Speaker 5: and when it's down, that means you always have potential
Speaker 5: to actually use any excess that you've saved to the
Speaker 5: time when the sun is not there, so you can
Speaker 5: do this one. You can bank on this every day.
Speaker 5: Let me contrast that with say wind or hydro wind.
Speaker 5: You have no idea what's going to happen, because what
Speaker 5: often happens is wind comes comes in fronts, and these
Speaker 5: fronts could be richy for two or three days. So
Speaker 5: that means is I go and go, hey, I'm going
Speaker 5: to take this storage, I'm going to save it for night.
Speaker 6: It don't work wind because you might have to save it.
Speaker 5: For three days. Now, that's okay, you save it for
Speaker 5: three days, but with solar, it's much easier. You save
Speaker 5: it until it's dark. The exact same thing you would
Speaker 5: also say with hydro as well, you use hydro as well,
Speaker 5: the same thing you say again, going to save it.
Speaker 5: You could do that, but there are better ways of
Speaker 5: doing it, what I would say. So that's why I
Speaker 5: say it really does lend itself to solar as opposed
Speaker 5: to other technologies.
Speaker 6: That's what I would say.
Speaker 2: Yeah, And I think this distinction matters a lot, especially
Speaker 2: when people still talk about these technologies as if there
Speaker 2: are optional add ons. Really, with solar without storage you
Speaker 2: have generation, but solar with batters you do have like
Speaker 2: a real infrastructure exactly exactly. Now, you often emphasize the
Speaker 2: need for us stemic view of indergy transition. Can you
Speaker 2: unpack what that really means and why focusing on one
Speaker 2: technology in isolation can be misleading?
Speaker 5: Yes, what you have is don't forget again. I'm going
Speaker 5: to come back to the Western world, because the Western world,
Speaker 5: what we've got is a whole pile of technologies that
Speaker 5: are used out there in the system. So you've got
Speaker 5: fossil fuels, we already have electricity, and I'm sort of saying, well,
Speaker 5: the future is based on solar. Then the question is
Speaker 5: how do you get there? And should you get there?
Speaker 5: And doesn't make economic sense. And what we end up
Speaker 5: doing is we make changes all across this system and
Speaker 5: we just make it more and more complex. And what
Speaker 5: this mean is we end up with unforeseen consequences, and
Speaker 5: even when we do see the consequences, we don't act.
Speaker 5: So I give you a very simple example, the Spanish
Speaker 5: blackout that took place last year. Every grid operator in
Speaker 5: Europe has been talking about really behind the scenes that
Speaker 5: we would have this type of event. Some have been
Speaker 5: preparing for it and some haven't. The Spanish have not been.
Speaker 5: Let's be really clear on that.
Speaker 6: Now.
Speaker 5: That is a criticism of the Spanish great operator and
Speaker 5: the regulator. But the point is we know what's going on.
Speaker 5: And I can go on and on and give you
Speaker 5: a really simple example. I'm in Ireland today and if
Speaker 5: I go back twelve months ago, Ireland had a storm
Speaker 5: that came in and a large power of West Ireland
Speaker 5: lost power for whatever it was a day and a half.
Speaker 5: Some people lost it for much more than that, and
Speaker 5: it's like shock horror. Ireland had a storm. I go
Speaker 5: We've always had storms number one and number two. All
Speaker 5: the climate models have been saying for fifteen years that
Speaker 5: the storms in Ireland would get more severe, so it
Speaker 5: didn't prepare. That's what I'm talking about when I'm talking
Speaker 5: about even where there were consequences that we could foresee,
Speaker 5: the powers that we haven't made the changes that need
Speaker 5: to be made, then we talk about unforeseen conc foreseeen
Speaker 5: is something you just could predict. So give you a
Speaker 5: very very practical example of that. We had a whole
Speaker 5: series of nuclear power plants in France last summer that
Speaker 5: had to close because of jellyfish. Now you go, what
Speaker 5: the hell are jellyfish doing? What jellyfish were doing was
Speaker 5: they were congregating in and around the water inlets for
Speaker 5: cooling the plants. Okay, now why am I saying that? Well,
Speaker 5: the reason jellyfish are there is because the waters are
Speaker 5: getting warmer. And again, unforeseen something. There's so many unforeseen consequences.
Speaker 5: So the only way you can really think about this is,
Speaker 5: I think, is to really think of this at a
Speaker 5: very very systematic level. And the systematic level is where
Speaker 5: do we want to go? Is the first question? Where
Speaker 5: do we want to go? And then the question is
Speaker 5: what's the best way to get there? From both an
Speaker 5: economic and a society a point of view? And I
Speaker 5: don't see this anywhere in the world. What you've got
Speaker 5: is regulators saying one thing, government's saying another, and this,
Speaker 5: you know, and it's being pulled in every different direction.
Speaker 5: And as I said, it just gets more and more complex.
Speaker 5: And this is not helpful to producing a low cost
Speaker 5: energy system is suitable for our future. That's where I
Speaker 5: come from.
Speaker 2: Yeah, So that's really a helpful way of thinking about it,
Speaker 2: because we're often debating about pieces of the puzzle without
Speaker 2: really stepping back to look at the whole picture. And
Speaker 2: we could really say that we don't have a technology problem,
Speaker 2: what we have is a coordination problem exactly.
Speaker 5: That's a good way I put the coordination problem. I
Speaker 5: know it's difficult to coordinate all the different parties, but
Speaker 5: i'd also call, like, let let's take in the case
Speaker 5: of Europe, if you really want to go and move forward.
Speaker 5: So I think what you have to sort of put
Speaker 5: together is I call it a Future Energies Commission that
Speaker 5: really has keith and that can actually go and put
Speaker 5: in that can make change happen across you. Now that's
Speaker 5: maybe a pipe dream for me. But I'm going back
Speaker 5: to what I briefly said earlier. Around was we're in
Speaker 5: an industrial revolution, and this is probably the biggest industrial
Speaker 5: revolution the history of mankind, and that industrial levelation is
Speaker 5: AI and electricity. And so you could do two things.
Speaker 5: You can become a luddite and you can block all
Speaker 5: of this, but good luck to you on that, because
Speaker 5: what you're doing is you're putting all of us in
Speaker 5: the future into a very economically weak situation. So then
Speaker 5: the question is what to do. That's where I'm coming from,
Speaker 5: and I'm thinking about this, and by the way, I
Speaker 5: spend an awful lot of my time really thinking about
Speaker 5: AI and what it does and what it doesn't do,
Speaker 5: because it's the speed of change in that area is
Speaker 5: just so quick and it's not going to slow down.
Speaker 5: So that's where I'm coming from all this. This industrial
Speaker 5: revolution is quicker than any industrial revolution we've ever seen.
Speaker 5: The first steam coal revolution took one hundred and fifty years.
Speaker 5: The automobile revolution maybe it took fifty years. This is
Speaker 5: not going to take fifty years. This is a ten
Speaker 5: year revolution.
Speaker 2: But somehow, for me, the irony is striking because we
Speaker 2: have cleaner, cheaper technologies available, but then crisis planning still
Speaker 2: sort of default. The twentieth century. Now, you mentioned the
Speaker 2: power outage in Spain. I know Berlin hats martages a
Speaker 2: couple of weeks ago. Boulder, Colorado also had some. So
Speaker 2: what do these moments really tell us about resilience.
Speaker 5: I'm going to just say they're warning signs to all
Speaker 5: of us, okay, and we have to heed these warnings. So,
Speaker 5: and I give a very practical example of this. There
Speaker 5: have been attacks, physical attacks on transformers in the United States.
Speaker 6: And what do the United States do. All the states get.
Speaker 5: Together, all the energy regulators, all the utilities, and they say, okay,
Speaker 5: we need to support each other if there's an attack
Speaker 5: on one of these pieces of critical infrastructure. That means
Speaker 5: they have strategies in place in case there's an attack
Speaker 5: on one of these piece of critical infrastructure. There's nothing
Speaker 5: like that in place in Europe. Okay, And I'm going
Speaker 5: to say totally unacceptable. Totally unacceptable, because the issue is
Speaker 5: the risks if something goes wrong are just so big
Speaker 5: because society will, as we know it, in a major
Speaker 5: city collapse if you don't have power for three days.
Speaker 5: That's the reality of the world we live in. So
Speaker 5: accept this, don't run away from it, except for it,
Speaker 5: and then you have to go and change your approach
Speaker 5: to how you run that system, because then you go
Speaker 5: and say, Okay, what are the risks in this system?
Speaker 5: What are the major ones?
Speaker 6: And how do.
Speaker 5: I deal with those risks? If a horrendous event takes place,
Speaker 5: what do I do? How do I react? And how
Speaker 5: do I get the system back running as quickly as possible?
Speaker 6: Okay? That's it.
Speaker 5: Have these open conversations, And by the way, that's also
Speaker 5: systemic thinking, because that requires people to be really open
Speaker 5: and honest about this and rather than hiding the threads
Speaker 5: and the weaknesses of the system as it is.
Speaker 6: You know, That's where I'm coming from.
Speaker 5: So the last thing I'd say if I said to
Speaker 5: you today I was running my businesses with faxes, you
Speaker 5: would break out laugh and you go, what are you
Speaker 5: talking about? And I go, Okay, I can tell you
Speaker 5: the names and many grid operators that are still using taxes,
Speaker 5: and they'll turn around and they'll say it's more secure.
Speaker 6: Yeah a bit.
Speaker 5: So isn't it for the world that we're in a
Speaker 5: present where you know, electricity is moving base at the
Speaker 5: speed of light and you're telling me you're waiting for
Speaker 5: your facts before you make a decision. I mean, come on,
Speaker 5: this is a joke. And if there's a grid operator
Speaker 5: here listening, there will be cringing on, Oh my god,
Speaker 5: how dare you say this? He's not even an engineer.
Speaker 5: I mean, I go listen if you're an engineer, shows
Speaker 5: that you're an engineer and actually improve the situation and
Speaker 5: really come out there and deal with the risks around
Speaker 5: what you're doing for a job every day.
Speaker 2: And there's a lot of talk about microgrids and distributed
Speaker 2: generation as a way forward. How important do you think
Speaker 2: this is for decentralization to build real resilience.
Speaker 5: Anybody who's in the system's theory area will tell you
Speaker 5: that the best form of systems are decentralized. That's the
Speaker 5: reality of it. If you have a centralized system with
Speaker 5: just a small number of connections, well that's a pretty
Speaker 5: weak system. So the more redundancy you can have in
Speaker 5: the system, the better. But redundancy also it's about this
Speaker 5: whole idea I would say of being able to island
Speaker 5: the system and island for me is if the power
Speaker 5: system in Norway goes out, that would be felt across Europe. Okay,
Speaker 5: because we're all connected in together, so it goes out.
Speaker 5: But then the question is can Sweden protect itself from that?
Speaker 5: Can Denmark protect itself of that? Let's go back to
Speaker 5: the Spanish situation. Portugal was not able to island eye.
Speaker 5: It's great when they had problems in Spain. Okay, So
Speaker 5: that's not very resilient either from the Portuguese. So the
Speaker 5: question is what can you do in these extreme situations
Speaker 5: to make sure that these systems stay stable? And I
Speaker 5: said this at a national level, but then well what
Speaker 5: happens at the local level as well. So if you
Speaker 5: take the case of Berlin, obviously part of Berlin, one
Speaker 5: cable in West Berlin is taken out and there's no
Speaker 5: power in that region.
Speaker 6: For five days.
Speaker 5: That ain't very resilient because you have to ask, quote,
Speaker 5: why did that region not have another cable coming in
Speaker 5: that's got to supply the power, or if you knew
Speaker 5: about that one cable coming in and hand the importance,
Speaker 5: But then the question is why would you not put
Speaker 5: a battery in there to deal with it, to make
Speaker 5: sure that if something happens, you still have backup power
Speaker 5: or whatever it is there in cage or by the
Speaker 5: way you protect that cable you keep a camera on
Speaker 5: it because you know it's your weak point.
Speaker 6: Because the reality is there's.
Speaker 5: A pile of websites out there where I can go
Speaker 5: in and I can go and look at the distribution
Speaker 5: transmission grids, the gas grids, I can look at critical
Speaker 5: infrastructure and I can see exactly where things are. That's
Speaker 5: the reality. So let's face reality. There are people out there,
Speaker 5: bad actors, and they go in and do and see
Speaker 5: all this. So that's the world we're in. You have
Speaker 5: to deal with that, okay, And again it goes back
Speaker 5: to the reality is that you can't do it electricity.
Speaker 5: And by the way, that's only a minor situation. I
Speaker 5: would say it's a part of Berlin one hundred thousand
Speaker 5: people without electricity. That's not three million people in Berlin
Speaker 5: with electricity for three days or five days in the winter.
Speaker 5: Then you'd see what would happen. Right then you'd have
Speaker 5: the German government.
Speaker 2: Falling, you would have exactly exactly. Yeah, it all comes
Speaker 2: down to just those islands and just making sure that
Speaker 2: everything is a little bit more intelligently connected.
Speaker 6: Good way partners absolutely.
Speaker 2: I guess from a financial market perspective, what are the
Speaker 2: biggest risks and opportunities in solar storage and clean energy today.
Speaker 5: From your point of view, let's start with the risk,
Speaker 5: so get the bad news out of the way. The
Speaker 5: biggest risk is the fact that we've got in regions
Speaker 5: across the world. Again, I could take the case of Pakistan,
Speaker 5: I could take the pace of Europe, take the case
Speaker 5: of Texas. You have periods of the day too much
Speaker 5: electricity in the system, and the too much electricity in
Speaker 5: the system means that prices collapse down to zero or
Speaker 5: they might even know minus. In that type of environment.
Speaker 5: If I got a solar system and I'm hoping to
Speaker 5: get thirty euros for forty euros first and get zero,
Speaker 5: then I've got it in trouble. So i might eat
Speaker 5: it the lowest cost form of electricity generation, but nobody
Speaker 5: wants my electricity on a June day at twelve o'clock.
Speaker 5: That's the biggest risk, is that what we're really seeing
Speaker 5: is this, By the way, let's talk about the first
Speaker 5: phase of renewables was build, build, build to replace fossil fuels. Okay,
Speaker 5: that was fine, and we subsidized this, that and the other.
Speaker 6: But the next phase is not about that.
Speaker 5: The next phase is about producing low cost electricity for people.
Speaker 5: And don't get me wrong, solar and all these are
Speaker 5: a very big part of that. But the business model
Speaker 5: is going to change. So just take the case of
Speaker 5: say solar, you're definitely going to see more behind the meter,
Speaker 5: you know, in other words, at home, in our businesses,
Speaker 5: on our rooftops, in our gardens, and you connect them
Speaker 5: with a battery, okay, in with storage.
Speaker 6: You can see this very very very clearly. That's where
Speaker 6: we're going. I can see if you.
Speaker 5: Take large scales the same things. You could say, we
Speaker 5: can have the German government or whichever government is financing
Speaker 5: us to build more and more solar, and you go, well,
Speaker 5: why would you finance someone to build more of something
Speaker 5: when the.
Speaker 6: Price is going to be zero?
Speaker 5: So that requires us to that you stop subsidizing, or
Speaker 5: actually you change the way the market works. In other words,
Speaker 5: enable the customer to benefit from the fact that there's
Speaker 5: a load of solar on a sunny day every weekend
Speaker 5: and allow them benefit. And how do you do this?
Speaker 5: Think radically about it. If you look what's going on
Speaker 5: in Australia, what are they going to do? They're going
Speaker 5: to give away electricity when there's too much solar in
Speaker 5: the system. So why would we not say to our
Speaker 5: industry across Europe, Guys, every weekend, you've got free electricity
Speaker 5: during the day. Okay, it's either that or you have
Speaker 5: too much of it and you pay someone to take it.
Speaker 6: You know, you curtail it. I think we need to
Speaker 6: be creative in.
Speaker 5: Our solutions in and around this. This We have to
Speaker 5: rather than over regulating it, just be a little bit
Speaker 5: more afraidive.
Speaker 6: I go back to.
Speaker 5: The risk is financing solar and renewables is now more
Speaker 5: difficult than what it was because you don't have this
Speaker 5: long term PPA call it a feed in tariff or
Speaker 5: whatever it is. You don't have that in place anymore.
Speaker 5: There's something else there and this requires everybody in the
Speaker 5: industry to change because this is called growing up, growing
Speaker 5: up and maturing. So that's what's going on.
Speaker 6: That's the risk.
Speaker 5: If you ask me, what's the opportunity, The real opportunity
Speaker 5: again is how do you integrate storage and other forms
Speaker 5: of generation in and around solar. That's really the thing
Speaker 5: that I really think about in a different way. And
Speaker 5: again I'm going to start with solar because it's the
Speaker 5: lowest cosse pump and it's the one that you can't block.
Speaker 5: I can block off show win by just saying no
Speaker 5: to it.
Speaker 6: You're not going to be at a block solar.
Speaker 5: Because that customer who generates electricity at ten cents using
Speaker 5: solar on the rooftop is going to keep doing it
Speaker 5: because guess what the electricity in the grid is thirty
Speaker 5: Because be really clear, that's why we can't block it.
Speaker 5: Then we've got balcony solar and the whole part of
Speaker 5: stuff so plug and soap lave solar is there.
Speaker 6: So you can't block this.
Speaker 5: That's the most exciting.
Speaker 6: Thing in and around this.
Speaker 5: And it also means that, let me call it, the
Speaker 5: optimization of these assets is really important. What I mean
Speaker 5: by that is trading the assets. These assets are solar
Speaker 5: assets going to be around for forty years. Okay, so
Speaker 5: I have a power purchase agreement for eight years, Well
Speaker 5: what do why do you have to year eight? There's
Speaker 5: a whole part of creativity that's needed in and around
Speaker 5: what you do with this going forward, and that is
Speaker 5: the area where I think is very exciting and ultimately
Speaker 5: I do think the future this is going to be
Speaker 5: a large part in developing countries. So I'm going to
Speaker 5: go and talk about the Global South, unbelieve what's going there,
Speaker 5: Or just take Australia in terms of their whole system
Speaker 5: is being turned upside down because the customer wants solar because.
Speaker 6: It is cheap.
Speaker 5: That's sort of way you have to look at if
Speaker 5: you want to get an understanding of what's happening or
Speaker 5: what's not happening in this space.
Speaker 2: That's really a great point. It's often not the technology
Speaker 2: that trips people up, but it's all of the assumptions
Speaker 2: around it. Now, if you could change one major thing,
Speaker 2: and let's say policy, market design, regulation, to accelerate the transition,
Speaker 2: what would it be.
Speaker 5: I would enable the system to be flexible. And what
Speaker 5: I mean by flexible is that we need to get
Speaker 5: the customers involved in this energy transition in a much
Speaker 5: more active way than they are at present now. It
Speaker 5: doesn't mean that the customer has to decide, oh good,
Speaker 5: look the power price is low, I'm gott to switch
Speaker 5: off my refrigerator and I got to put on my air.
Speaker 5: That's not what I mean. It's enabling that so that
Speaker 5: what can happen is an energy service customer can can
Speaker 5: come in to you and do this for you and
Speaker 5: manage it and can do it as an energy as
Speaker 5: a service type thing. All this that's the really really
Speaker 5: interesting thing is is to enable that. What does that
Speaker 5: mean to enable flexibility? Well, that means to be able
Speaker 5: to allow storage into the system as quickly as possible
Speaker 5: right across it. Secondly, to remove all barriers in and
Speaker 5: around solar and generation generally in the home. Make sure
Speaker 5: you have smart meat in place to enable this. And
Speaker 5: then basically to allow aggregators to be able to take
Speaker 5: this demand and energy and use it in the different way.
Speaker 5: And I forgot as well, it's very important to be
Speaker 5: using electric cars. I've got these one hundred kill what
Speaker 5: our batteries just sitting there, so use them? How can
Speaker 5: we use them? You should be using them for backup power.
Speaker 5: So okay, you know you have a blackout. Guess what
Speaker 5: you've got your car? You can plug in brilliant. Okay,
Speaker 5: you can use it in the power system. Do smart
Speaker 5: charging enabling all of this smartness, particularly the demand side,
Speaker 5: and to do this almost without the customer knowing. And
Speaker 5: I will give a vision of the future for me.
Speaker 5: Every device in our homes in the next year is
Speaker 5: will have a battery in it. The reason they'll have
Speaker 5: a battery in it is because it makes economic sense. Now,
Speaker 5: what's really interesting is if you look at the white
Speaker 5: good manufacturers already I'm talking Samsung, Ergy, Panasonic, what do.
Speaker 6: They do as well? Guess what they do batteries.
Speaker 5: It's very obvious that they put into device that. I mean,
Speaker 5: you think of a smart TV today, Samson's smart TV today.
Speaker 5: I have control of that. I can do different things
Speaker 5: with it. You can see where I'm coming from. More devices.
Speaker 5: Instead of them selling you a refrigerator, they said you
Speaker 5: was cooling as a service. They say, okay, don't buy
Speaker 5: the refrigerator for me. What you do is you pay
Speaker 5: ten euros a month. And by the way, you might
Speaker 5: laugh and go, oh, there's no way you're going to
Speaker 5: do that. Well, okay, I can go back and say
Speaker 5: to here, that's what we do with mobile phones. Sorry, right,
Speaker 5: And you could maybe say twenty years ago we wouldn't
Speaker 5: have done it, but we do. Of us models is
Speaker 5: what people are understand and it makes sense to them.
Speaker 5: And then what happens is I'm just making sure it's
Speaker 5: all working for me and I don't need to think
Speaker 5: about it.
Speaker 6: So that means you've.
Speaker 5: Got a whole pile of actors that are able with
Speaker 5: their devices and their services to make sure that the
Speaker 5: customer is involved in being part of the solution, in
Speaker 5: and around making sure that we electrify in a low
Speaker 5: cost efficient way. That's where we're going from.
Speaker 6: And by the way, you have resilience in the system
Speaker 6: when you do that.
Speaker 2: I really couldn't agree more. I think sometimes progress is
Speaker 2: and about inventing something new. It's more about removing the friction, so,
Speaker 2: as you say, just making things a little easier.
Speaker 6: Agreed.
Speaker 2: This has really been a powerful conversation, not just about
Speaker 2: solar storage, but about how the entire energy system is
Speaker 2: being written in real time. The takeaway for me is clear,
Speaker 2: the transition is moving faster than most institutions are prepared for,
Speaker 2: and the winners will be those who understand the system
Speaker 2: and not just the technology.
Speaker 6: It's a good way to end that. I agree with you,
Speaker 6: Na absolutely.
Speaker 2: Thank you for sharing your perspective and challenging us to
Speaker 2: think bigger.
Speaker 5: I suppose around in conclusion, I'd like to hear your thoughts.
Speaker 6: You know you listen to it.
Speaker 5: Do you think I'm being completely stark rating mad or
Speaker 5: what's your thoughts.
Speaker 3: My thoughts are you are right below the Fortiers parallel.
Speaker 3: Above you have the season win is going to be
Speaker 3: much more important, So below the fortio sparallel. I'm with you,
Speaker 3: but it's not going to work for northern Europe, northern US.
Speaker 6: So yes, I no, yeah, you talk to me.
Speaker 5: Sometimes you're blessed by history and sometimes you're cursed.
Speaker 4: So I think the global South is blessed and the
Speaker 4: global North is.
Speaker 6: Probably be cursed. Right, but we'll finish with a song.
Speaker 6: Very good, very good, good, Okay, John, talk to you
Speaker 6: next week. Welcome forward to us.
Speaker 2: Thank you for listening to Redefining Energy.
Speaker 5: Don't forget to rate the show and subscribe on Apple, Podcast, Spotify,
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