Speaker 1: With Laurent's segal and from London and Gerard read from Berlin.
Speaker 1: This is redefining energy.
Speaker 2: Happy new year, guys, great to see you. I'm looking
Speaker 2: forward to hearing your voices.
Speaker 3: Happy new Year, Happy new Year to the both of you.
Speaker 3: Is going to be an awesome herr. There's going to
Speaker 3: be so much interesting stuff happening in twenty twenty six.
Speaker 1: Is positive.
Speaker 2: I agree totally with you, Michael, I agree totally. It's
Speaker 2: going to be a crazy year.
Speaker 4: But first, gentlemen, before talking about the new year, we
Speaker 4: need to revisit the prediction we've done a year ago,
Speaker 4: and let me remind our listener six predictions. So Michael said,
Speaker 4: all production down in the US in two twenty five,
Speaker 4: Chard said, old prices eat forty that up buried in
Speaker 4: two twenty five.
Speaker 2: Can I correct you there? I said fifty. No, no,
Speaker 2: you said forty. You just didn't. You couldn't understand my accent, Luren,
Speaker 2: I mean sorry, I fifty is what I said. I
Speaker 2: didn't say forty.
Speaker 3: Sadly, your record is against you on this one's Gerard.
Speaker 4: Yeah, yeah, fifty with starting with the four yeah third
Speaker 4: one geopolitics, stress, supply, chains and energy Bonanz up will
Speaker 4: bring more innovative and better world. That's me okay, So
Speaker 4: that's a Gerrard's style prediction. Number four Michael blood Bath
Speaker 4: or hydrogen transportation sector. Number five record installation of sellar
Speaker 4: seven hundred giga what ev twenty million and batteries two
Speaker 4: hundred giga what hour? From Jerrard and finally from me.
Speaker 4: Number six the end of all financial products labeled ESG,
Speaker 4: climate and carbon. Let's start with number one. Michael, I failed.
Speaker 4: I'm asked by about eight months.
Speaker 3: The oil price and oiled man was bullied because China
Speaker 3: has these massive reserves and has just kept buying oil.
Speaker 3: Are past the point of consumption. Even though actual diesel
Speaker 3: demand gasoline demand is down in China, their petrochemical industry
Speaker 3: has actually gone up a bit, so their actual oil
Speaker 3: assumption is relatively flat, but their reserves. They just don't
Speaker 3: think the geopolitics merit not having significant reserves, so that
Speaker 3: kept it up. That kept the price up to the
Speaker 3: second point, which Kent meant that they did finalize shale
Speaker 3: wells in the United States, but the drill rigs in
Speaker 3: the United States are way off. They are not completing
Speaker 3: nearly as many wells, China's reserves have got to be complete.
Speaker 3: So I'm not making this one of my predictions. But
Speaker 3: I'm off by months. It didn't happen this year.
Speaker 2: And by the way, just join on to that my
Speaker 2: thing about forty dollars oil, it relates to the same thing.
Speaker 2: At the end of the day.
Speaker 5: What happened was demand is strongly that we expected. But
Speaker 5: I would go along also with Michael and say that
Speaker 5: coming year we will see prices down towards the forty dollars.
Speaker 4: Yeah, okay, guy, that's what one. I'm fine. And it's
Speaker 4: true that the price of all is gone to, say,
Speaker 4: from eighty dollars to sixty. That's a lot. But let's
Speaker 4: rate Michael. So, Michael, I give you a two out
Speaker 4: of ten. Job.
Speaker 2: Oh, I give Michael five out of ten. It was
Speaker 2: just a timing was slightly out.
Speaker 1: That's very generous of your gerard. Thank you.
Speaker 2: It's twenty twenty six, it's going to be a great year.
Speaker 3: I would have given myself a three out of ten.
Speaker 3: So at two and a five, I'm in the range.
Speaker 3: I'm happy with that.
Speaker 2: But I do want to say the one thing, Michael,
Speaker 2: get a great explanation of It is just geopolitics of
Speaker 2: energy of what made really twenty twenty five complex. So
Speaker 2: I just want to say.
Speaker 4: That, Okay, Job, your prediction was very simple and you
Speaker 4: got it wrong. So I give you zero because it
Speaker 4: was very binary. So we get a zero out of ten.
Speaker 4: Mike out do you give Job?
Speaker 3: I'm just going to say that my prediction was binary
Speaker 3: as well, and you were more generous to me. I'm
Speaker 3: going to give D three on that. As I said,
Speaker 3: it got down of fifty. It was lower than any
Speaker 3: of the oil botens thought it was going to be.
Speaker 1: It was a bad year for oil.
Speaker 2: Agreed.
Speaker 4: Okay, So my prediction was vague, so it was a
Speaker 4: giard style. The winning strategy geopolitics stress, supply chain energy
Speaker 4: bonanza would bring a more innovative and better world. Well better, Well,
Speaker 4: I don't know, but what I do know is that
Speaker 4: the stress on the grids, we've seen advances and transformers.
Speaker 4: We've seen advances in digitization. We've seen incredible development of batteries.
Speaker 4: We even saw fuel cells. If you look at a
Speaker 4: company like Bloom Energy, all of a sudden, they're not
Speaker 4: doing their fuel cells for hydrogen, but for gas. We've
Speaker 4: seen advancement for brid studies. With AI company like Tapestry,
Speaker 4: we have advanture thermal, a lot of work done on flexibility.
Speaker 4: So for me, the geopolitics the demand for energy yet's
Speaker 4: pushed innovation forwards.
Speaker 3: Gentle Amendment, My take is slightly different, not disagreeing with you,
Speaker 3: except on blue Energy, which has always been a natural
Speaker 3: gas fuel cell with very dubious environmental claims. Tried to
Speaker 3: write the hydrogen hype and didn't do much there. Now
Speaker 3: it's writing the data center hype that it's still just
Speaker 3: a ballotoxide fuel cell for methane. But the geopolitics were
Speaker 3: very interesting. Pakistan is trying to find a new home
Speaker 3: for twenty four LNG ships worth of committed long term
Speaker 3: purchased LNG from Qatar that is seismic. The long term
Speaker 3: contracts were what was supposed to be buoying LNG and
Speaker 3: Pakistan says no because of seventeen gigawatts or rooftop solar
Speaker 3: they put in. Similarly, in the first six months of
Speaker 3: this year, India and China dropped LNG imports by double digits,
Speaker 3: and that was on India dropping gas generation by thirty
Speaker 3: four percent year. Every year, the world is changing tremendously
Speaker 3: for the because of cheap solar and batteries. I see
Speaker 3: the evidence of this globally as I look around the place,
Speaker 3: and the LNG industry is just not ready for this.
Speaker 3: It is going to be a bloodbath in the OLNG
Speaker 3: in thesuit, which isn't my prediction by the world, John.
Speaker 2: Well, let me sort of talk about the wording of
Speaker 2: what your prediction. You said geopolitics, stress supply change, and
Speaker 2: energy bonanza would bring a more innovative and better world. Yeah,
Speaker 2: so let's start with stress supply change. I don't see
Speaker 2: any stress supply change. I see oversupply of everything in
Speaker 2: anything out there in the energy space, whether it's oil, gas, coal, electricity.
Speaker 2: We're swimming electricity in Europe. You know, there's too much solar,
Speaker 2: there's too much battery, there's too much wind. And I
Speaker 2: take the point of innovative and better world, I don't
Speaker 2: know about that. What's more innovative than last year? And
Speaker 2: I don't really see any huge innovations over the last
Speaker 2: twelve months. There's no doubt the world is a better place.
Speaker 2: And the Pakistani example is a good example of that
Speaker 2: was so vague and this that, and I'm going to
Speaker 2: give you a five out of.
Speaker 1: Town, Michael.
Speaker 3: I think Gerard is being quite generous giving vagueness. You know,
Speaker 3: I took him to task and I just thumped him
Speaker 3: and said, predictions are testable and quantifiable, and so I
Speaker 3: have to preserve my stance for quantifiability. And so I'm
Speaker 3: going to give you a four, okay, which just gives
Speaker 3: you the highest score on the first round of predictions
Speaker 3: out of three. Is because you know, I failed completely
Speaker 3: on mine and Gerard failed completely on his. Generously, you
Speaker 3: guys gave me more than zero, which I thought was
Speaker 3: very nice in there.
Speaker 4: Okay, So the fourth one, Michael, you nailed it. A
Speaker 4: blood bub for hydrogen your transportation sector. So did you
Speaker 4: have a few examples?
Speaker 3: Oh my god, it is just being schadenfreud a city
Speaker 3: here in Vancouver, my schadenfreud. A cup has been flowing over.
Speaker 3: I've been talking about hydrogen and transportation and publishing and
Speaker 3: analyzing it for over a decade, and this year all
Speaker 3: the dreams come tumbling down. Let's just start with one
Speaker 3: of the big ones, heavy trucking. Obviously, batteries aren't going
Speaker 3: to cut it for heavy trucks in the freight industry,
Speaker 3: excepted in Aina, which is run the experiment with hydrogen
Speaker 3: versus battery electric. They saw ninety thousand battery electric heavy
Speaker 3: truckspoled in the first nine months of this year, and
Speaker 3: the number of hydrogen trucks blapsed went from the low
Speaker 3: thousands to lower thousands, you know, so it was off
Speaker 3: by forty percent or something like that. That's kind of
Speaker 3: data point one. Globally, we're seeing battery electric trucks being delivered,
Speaker 3: not hydrogen trucks. Similarly, the fuel cell cars disappeared. Alstom
Speaker 3: actually is now out of the hydrogen train business. They said,
Speaker 3: we're going to close down that division. Well, if you
Speaker 3: still want the hydrogen trains that you've got an order,
Speaker 3: will deliver them. But clearly they're signaling to their customers
Speaker 3: you shouldn't even eat them and keep you a battery
Speaker 3: electric instead. Similarly, in every data point I've tracked right now,
Speaker 3: a list of one hundred and seventy one firms and
Speaker 3: organizations that were active in hydrogen transportation in theory this year,
Speaker 3: they claim they're active and full thirty six percent have
Speaker 3: dropped hydrogen or pivoted out of it. Formally, now that
Speaker 3: thirty six percent is underrepresenting that number substantially because my
Speaker 3: standards for them dropping it are high. They have to
Speaker 3: explicitly said we're dropping it, as opposed to just quietly
Speaker 3: slinking away. So I think the number is well over
Speaker 3: fifty percent. Airbus dropped their hydrogen aviation program. Stillantis dropped
Speaker 3: hydrogen trucks. It's just terrible. Plug power fuel Cell Energy
Speaker 3: are struggling with reverse stock splits to try to stay
Speaker 3: on the stock market. They're cutting maintenance at their hydrogen plants,
Speaker 3: which is just dangerous. It is really ugly in hydrogen
Speaker 3: for transportation land and as I said, I'm enjoying every
Speaker 3: minute of it.
Speaker 4: Hey girl, we're done, so I give you eight out
Speaker 4: of ten.
Speaker 2: I'll give you a nine because you've been calling for
Speaker 2: quite a while. Well, though, great job.
Speaker 3: I'm wondering what more of a bloodbath do you want?
Speaker 3: What would cause it not to be to be a ten?
Speaker 3: Based on what I've shared.
Speaker 4: It's very simple. I have quantitative criteria, and I think
Speaker 4: your and so was it vague? Okay, job number five?
Speaker 4: Now job that he gave number, and the number were
Speaker 4: pretty good.
Speaker 2: I was put under pressure, so I said seven hundred
Speaker 2: gigaba's the solar and I think to us have listen,
Speaker 2: we don't really have the numbers fully, but I think
Speaker 2: they were near to that, maybe six hundred and eighty
Speaker 2: something like that. EV's twenty million, we're there, or maybe
Speaker 2: a little bit above that, and definitely batteries into we sat.
Speaker 2: I said sort of two hundred gigawatts hours, and I
Speaker 2: think it's probably even higher that, right, Yeah, so I
Speaker 2: think it is going to be pretty well my numbers.
Speaker 4: But it was a very good trick on your side
Speaker 4: because first you said two hundred gigawatts and then you
Speaker 4: said our so in fact, because of the batteries of
Speaker 4: four hours, well done, well done on this one, and
Speaker 4: that these.
Speaker 2: Record numbers, right, they really were. It's amazing and you
Speaker 2: know what went on all right, So on.
Speaker 4: This one you deserve a ten out of ten.
Speaker 3: I'm giving you a ten out of ten as well,
Speaker 3: will reward you for being predicting and bleedingly obvious.
Speaker 1: But you did pick.
Speaker 3: Numbers, and you were precise, and you actually had three
Speaker 3: different numbers. And yeah, twenty twenty five has been an
Speaker 3: amazing year the global transformation in the energy industry.
Speaker 4: Okay, so the last prediction of last year was myself
Speaker 4: the end of all financial products label ESG, climate and carbon.
Speaker 4: If I look at the amount of funds who claimed
Speaker 4: the were named climate or ESG, twenty five percent of
Speaker 4: them have been rebranded from sustainable to transition. In the US,
Speaker 4: there have been twelve consecutive quarters of outflows. It's about
Speaker 4: de carbonization versus the eddication. So everything that's de carbonization
Speaker 4: really large, and I'm talking carbon capture, hydrogen. These guys
Speaker 4: are just burning money only to be bailed out by
Speaker 4: taxpayers and probably less and less words, the rectification funds
Speaker 4: are doing great because, as I always said, switch to
Speaker 4: fuel makes more sense than fix the fuel.
Speaker 2: Gentlemen, great speech, London, But I'm about facts. And I
Speaker 2: just go into Google and I put ESG investing in,
Speaker 2: and what comes up is PIMCO, you know. So I
Speaker 2: go to Pimco and look, I go Pimco Climate, pand
Speaker 2: Fond Global Investment, Great Credit, Eschi Fond and so there's
Speaker 2: no end and mean it's finished. I mean it's still here.
Speaker 2: That's the reality. So there's no way of getting good
Speaker 2: marks for me.
Speaker 4: Michael, you got.
Speaker 3: The direction to travel, right, But like oil a for
Speaker 3: Gerard and I you missed the timing. You're far too
Speaker 3: aggressive on the timing. Yes, they're down, but I'd like
Speaker 3: to say that twenty five percent is less than thirty
Speaker 3: six percent. So from a qualification perspective, you certainly are
Speaker 3: getting perfect. I think it's a five out of ten
Speaker 3: personal You're right in that a bunch of them dropped
Speaker 3: and a bunch of changes occurred in that space, but
Speaker 3: it wasn't a blood bath in ESG and climate funds
Speaker 3: in the same way.
Speaker 2: Yeah, I'll give you four.
Speaker 4: So I recount as usual, I'm lost, and we are
Speaker 4: a winner again. It's Michael.
Speaker 3: I was expecting not to be the winner this year
Speaker 3: because I missed one really badly.
Speaker 4: Yeah, but you got Yeah, we're done pretty good. Oh yeah, yeah,
Speaker 4: and John the first was such a disaster that was sold,
Speaker 4: but that was not enough to catch up on Mike out.
Speaker 4: So as usual, the winner is Michael.
Speaker 3: Well, Michael, I'd just like to say that my uncle
Speaker 3: Nostro Damas is rolling over in his brave. I was
Speaker 3: far too precise and testable my predictions.
Speaker 4: There has been two additional predictions that we did along
Speaker 4: the way. The first is we thought that VP would
Speaker 4: not survive two twenty five. They did so good for them, Yeah,
Speaker 4: they did. And the other one is child the prediction
Speaker 4: you did fifteen months ago on the price of silver
Speaker 4: and you saw very botish silver. And when you said
Speaker 4: that silver was at thirty dollars and now it's at sixty.
Speaker 4: So this one, Jared, well done you.
Speaker 2: One right, that's good.
Speaker 4: Okay, gentlemen, it's time to move for our prediction for
Speaker 4: two or twenty six. Who want to go first?
Speaker 3: I'll go first this time. My first prediction is that
Speaker 3: we're going to see in China at battery storage auctions
Speaker 3: forty dollars for Killowa hour for battery energy storage systems
Speaker 3: on the grid with twenty year contracts maintained and deployed. Yeah,
Speaker 3: we're at sixty five last December, which was astounding. I
Speaker 3: think we're gonna head forty this year.
Speaker 2: Can I ask you a question, Michael Sure, what technology
Speaker 2: is it Lytia Mayon or is that sodium ion or
Speaker 2: what's your view?
Speaker 3: LFP sodium ion and extra batteries that coatl Is bring
Speaker 3: in are promising, but they're also economically heavily challenged by
Speaker 3: LFP being dirt cheap and having been most to the advantages.
Speaker 4: What's incredible is the new form factors which are arriving
Speaker 4: because everybody used to work on her three forty hours
Speaker 4: and now it's the five eighty seven. And we even
Speaker 4: see cells which are above one thousand and powers. So
Speaker 4: the bigger cells, the lower the cost of the system.
Speaker 2: It has huge gramifications, isn't it, Because actually, if you
Speaker 2: just think of solar and batteries together, right, crazy prices.
Speaker 3: And it's not just the sales loratl which was wrong
Speaker 3: and trite. And first principles was that it would be
Speaker 3: the same kind of thing we see with hydrogen electrolysis plants,
Speaker 3: where the balance of plant wouldn't get cheaper because it
Speaker 3: was commoditized. I expected that was true for the balance
Speaker 3: of the battery energy storage system. But in China with LFP,
Speaker 3: they assemble the cells. They just put them in a rack.
Speaker 3: They slap a bus on top of the lumin conductors,
Speaker 3: which is dirt cheap and he easy to assemble, and
Speaker 3: they shriek wrap them and put them in a box
Speaker 3: and put the box in a field. It's insanely light
Speaker 3: balance of plant. They're still innovating on everything in the system.
Speaker 3: There's still juice to be squeezed out of that level.
Speaker 4: Good job, Okay. So I'm going to go second, and
Speaker 4: of course I'm going to talk about data centers. Data
Speaker 4: centers and the new panic of eighteen seventy three. We're
Speaker 4: going to see a gigantique perch. And of course people
Speaker 4: hear about the bubble, which has been especially the case
Speaker 4: at Gen of last year. There have been some extremely
Speaker 4: unhealthy behavior. A startup that is borrowing money to build
Speaker 4: data center for another startup. They are both losing tremendous
Speaker 4: amount of cash and yes, somehow being able to raise
Speaker 4: the debt capital in order to fund this bill out
Speaker 4: again without having customer of the visibility into those investments
Speaker 4: paying off. I can predict that you like last decade
Speaker 4: Adam Neumann from we Work, I can tell you some
Speaker 4: old man from open Ai is the Adam Newman of
Speaker 4: the decade, but with a bigger order of magnitude. The Google,
Speaker 4: the Microsoft, They're going to be okay. But on the
Speaker 4: peripherry there are number of companies and I'm even wondering
Speaker 4: if we not put Oracle inside that group. Blue Owl
Speaker 4: Core with everything is built on credit and if you
Speaker 4: look at the CDs, and I mean I was at
Speaker 4: Liman twenty years ago, so everybody knew what created default
Speaker 4: swab was and everybody has forgotten since then. And for
Speaker 4: the past three months people talk about CDs again and
Speaker 4: the CDs of those peripheral company is the same as
Speaker 4: EGYP TOI, Twopao, Sri Lanka. So when I find j
Speaker 4: how you go to see Pimco A Pimko. They've given
Speaker 4: me a twenty billion of credit. So could you give
Speaker 4: us one line please so we can actually quantify it
Speaker 4: and actually see if you're right around. Okay, fifty of
Speaker 4: the data center announced will never be built.
Speaker 3: That's remarkably low, but I'll take fifty percent. That's an
Speaker 3: easy target to hit.
Speaker 1: I agree.
Speaker 3: I have specked data centers in my professional career. I've
Speaker 3: been put loads in data centers the first.
Speaker 1: Time in the eighties.
Speaker 3: I put loads in the clouds and cloud based data centers.
Speaker 3: And I've been doing AI professionally on and off for
Speaker 3: fifteen years, including in you know, one of my current firms.
Speaker 3: And I've been a performance engineer on major software. So
Speaker 3: I note three rules for software. First, never optimize early.
Speaker 3: Just assume you're able to throw hardware at it.
Speaker 1: Because that'll be the cheapest fix. Ducay, If you.
Speaker 3: Have a performance problem, throw hardware at it because that's
Speaker 3: the cheapest fix. Third, if you can't fix it with
Speaker 3: cheap hardware, then get intelligent people to optimize it. And
Speaker 3: that's what deep Seek did this year. Deep Seek at
Speaker 3: intelligent people. They optimize the software. They got amazing results
Speaker 3: with back level chips in a fraction of the training
Speaker 3: and processing time, and they're selling that model globally. A
Speaker 3: lot of the innovation in stuff is scripting that isn't
Speaker 3: using the large language models. So I know the demand
Speaker 3: bubble is gone. Now I'd like to talk about just
Speaker 3: a little bit of what the corollary is to the
Speaker 3: implications of that. When I analyzed the AI spike, what
Speaker 3: I found was that vast majority of the data center
Speaker 3: buildout is in the United States. All of the stock
Speaker 3: gains of the US stock market have been in the
Speaker 3: seven big tech companies. We're building massive data centers. Everything
Speaker 3: else is flat or declining. The United States is in
Speaker 3: structural recession except for the AI data center build So
Speaker 3: that's kind of economic indicator one. Economic indicator two is
Speaker 3: that the top ten percent of income earners are spending
Speaker 3: fifty percent of the consumer spending. They're spending that because
Speaker 3: their four to one k's are good. Because of this
Speaker 3: data center thing. They've got index funds that are over
Speaker 3: invested in these data centers. There is a bloodshed coming.
Speaker 3: This is not my prediction that there's bloodshed coming in
Speaker 3: the American economy next year as these economic indicators collide
Speaker 3: and the top ten percent stop spending.
Speaker 6: I think your boat row. Oh, I think it'll be
Speaker 6: twenty twenty seven, not twenty twenty six. Okay, you got
Speaker 6: your time in ronk job. You're going to explain me.
Speaker 6: Texas right now, receive two hundred and twenty six gigawa
Speaker 6: requests or new data center and the peak loode is
Speaker 6: eighty five.
Speaker 2: No, what you said in terms of data centers, I
Speaker 2: agree they're not going to be built.
Speaker 1: Right.
Speaker 2: It's the same as look at all the battery development
Speaker 2: projects that are in Germ not going to be built.
Speaker 2: But the point is you are going to say record
Speaker 2: CAPPAX expenditures in twenty twenty six.
Speaker 4: No, no, no, no, you're a romantic. Okay, you look
Speaker 4: at equit.
Speaker 2: Okay, but you're thinking about fifty percent of you know,
Speaker 2: when everybody's rushing for quick connections. What they do is
Speaker 2: they go and try and get quick connections everywhere that's
Speaker 2: not going to be built. So your prediction for me,
Speaker 2: it's not a proper prediction.
Speaker 4: Okay, Okay, you'll say that's what I'm just saying is
Speaker 4: because you force me, you corner me into giving you
Speaker 4: a number. But what I'm just saying is the debt
Speaker 4: market will simply not finance all those data cent always
Speaker 4: been announced, period, There's just too much that now the
Speaker 4: people who provide that stuff freaking out. The risk premium
Speaker 4: is going up. So that's it. We agree to disagree.
Speaker 4: We've got our chicken in this two day job. Your
Speaker 4: first prediction, I'm not going to be vague. What you're
Speaker 4: going to see is lower global wind and solar installations
Speaker 4: in twenty twenty six and twenty twenty five. And in fact,
Speaker 4: I even go so far as to say we've seen
Speaker 4: peak global wind and solar installations, and I'll explain why.
Speaker 4: By the way, this is not to say that the
Speaker 4: energy transition is failing. What actually is happening is you've
Speaker 4: just got massive system constraints. Grids are full, permitting is slow,
Speaker 4: financing is higher cost courtailment is rising, capture price the falling.
Speaker 4: That's what's going on, and in some ways wind and
Speaker 4: solar have sort of become a victim of their own success.
Speaker 4: But as said, I would just describe this as part
Speaker 4: of the revolution that we're going through. Okay, well, so
Speaker 4: the peak solar we did an episode last year and
Speaker 4: winds grew in two twenty five.
Speaker 3: So I yeah, I'd like to reflect on this because
Speaker 3: it actually leads into my prediction, which I won't share.
Speaker 3: But there's one key country I always look at because
Speaker 3: what China does moves the needle. China change its solar
Speaker 3: price points for developers, and so that was three quarters
Speaker 3: of the way through the year, and everybody was rushing in
Speaker 3: China to get the solar in at those price points.
Speaker 3: It's just we see the same behavior everywhere. Will whether
Speaker 3: it's feed in tariffs or the investment tax credit or
Speaker 3: production tax credit in the United States, fiscal incentives from
Speaker 3: governments and price points make a difference. So this year
Speaker 3: three hundred gigawatts of solar going in. Next year the
Speaker 3: best number is likely two hundred gigawats of stolar going
Speaker 3: in in China, and so I think Gerard is right. Maybe,
Speaker 3: but I'm in my prediction. I'm going to hold out
Speaker 3: a very interesting thing potential, and let's finish off. Gerards
Speaker 3: Laurent has said, I said, almost nothing has it abused
Speaker 3: you yet?
Speaker 1: What's going on?
Speaker 2: No, that's all right, that's good, he's been nice to me.
Speaker 2: Go on, you go straight into yours of mighty.
Speaker 3: Okay, China drops under gigawatts of capacity installs last year.
Speaker 3: Let's assume that's true. There's more than three hundred gigawatts
Speaker 3: of solar panel capacity. And is China an insular country?
Speaker 3: Does it not trade?
Speaker 1: No?
Speaker 3: No, that one hundred gigawatts of production is not going
Speaker 3: to be used domestically.
Speaker 1: It's going to be used internationally.
Speaker 3: So the same dynamic that occurred in Pakistan, which all
Speaker 3: of a sudden was flooded with cheap solar panels and
Speaker 3: to a lesser extent, batteries, they could just get seventeen
Speaker 3: gigawants of mostly behind the meter solar in a single year,
Speaker 3: blowing out everybody's expectations. And as we discussed earlier, disrupting
Speaker 3: the global LNG market. That's gonna occur global it We
Speaker 3: already saw the breakout of solar in Africa.
Speaker 1: There's a flywheel for Africa.
Speaker 3: There's a million Chinese expats living across Africa. The Belgian
Speaker 3: Road Initiative has built twelve ports, it's built railways, It's
Speaker 3: built twelve thousand kilometers of highways. Africa is now a
Speaker 3: free trade zone between countries. China has this massive glut
Speaker 3: of solar panels and it'll have a lot of battery capacity.
Speaker 3: What this tells me we're already seeing an uptick. Last
Speaker 3: year there was two point five gigawatts of total solar
Speaker 3: deployed in Africa. My prediction for twenty twenty six is
Speaker 3: twenty gigawatts.
Speaker 1: I'd like to say more, wow wow wow wow.
Speaker 3: So prediction twenty gigawatts of solar in Africa in twenty
Speaker 3: twenty six. I think I'm being conservative, Franklin, We're all
Speaker 3: going to be surprised.
Speaker 2: I'm actually tot to which totally? Which a not Michel.
Speaker 2: I actually agree with you, Toto.
Speaker 4: Okay, So my prediction number two is the fight for
Speaker 4: the Greeners Gas Protocol is going to turn ugly. Let
Speaker 4: me remind you of the previous episodes. The Greeners Gas
Speaker 4: Protocol is a non binding volutary system to account for
Speaker 4: CO two emission. It was established twenty five years ago
Speaker 4: and it's due to revision on a regular basis, and
Speaker 4: now they are currently negotiating the third revision. And the
Speaker 4: most important part is are we going to count the
Speaker 4: electrons or our certificates? They used to count on an
Speaker 4: yearly basis, and now the new system which is proposed,
Speaker 4: is going to count on an hourly basis. And ninety
Speaker 4: nine percent of the companies agree with you moving towards
Speaker 4: an hourly system. And there are two old doubts, which
Speaker 4: I'm going to call because they've been already naming the press.
Speaker 4: I would name them Dark Amazon and Dark Meta, the
Speaker 4: two lots sits who are absolutely making everything they can
Speaker 4: to lower the standards. And they have this alternative system
Speaker 4: called emission first, who really, frankly is a joke. And
Speaker 4: because they've been put in minority, and now they've threatened
Speaker 4: to go to the US Senate, So the fight's going
Speaker 4: to turn very quidly, and I hope reason will prevail,
Speaker 4: but there's going to be some tough time ahead. That's
Speaker 4: my prediction.
Speaker 3: I actually published and analyzed a bunch of stuff about
Speaker 3: the new projections. Because there's various groups who do the
Speaker 3: accounting the old way, and they like the old way,
Speaker 3: and there's actually spin off of URMI and nonprofit what Time,
Speaker 3: and what they do is another company which resure You,
Speaker 3: which does liability assessments for VPPs and vppas. Their position
Speaker 3: has been always that the global emissions are what count,
Speaker 3: and so that putting a solar farm in a high
Speaker 3: coal area is better than putting a solar farm next
Speaker 3: to a data center if the data center happens to
Speaker 3: be in a lower col player. And that's a valid point,
Speaker 3: but the argument right now is about additionality, temporality and locality,
Speaker 3: and that's kind of broken down. Additionally, bring more beer
Speaker 3: to the party you're going to, don't drink beer that's
Speaker 3: already at the party. Our temporality is bring beer to
Speaker 3: the party when the party is actually going as opposed
Speaker 3: to the next day. And locality is bring beer to
Speaker 3: the house that's having a party, not the house next door.
Speaker 3: What that means is you got to you've got to
Speaker 3: put new generation near the demand area. You've got to
Speaker 3: have the demand match to the generation from the new asset.
Speaker 3: It's close and arrow matched. That's a tough standard. It's
Speaker 3: an expensive standard.
Speaker 4: Three two guys. Okay, I'm not going to name them.
Speaker 4: They exactly know who they are against the rest and
Speaker 4: the fact that they are ready to use strong gum
Speaker 4: tactics and using their lobbying power going to the Senate
Speaker 4: to do imo skull dodgery, namely the way you want.
Speaker 4: But that's not how our industry and community works. So
Speaker 4: don minoit. And the only UNSWERI is, look is my
Speaker 4: way or the eyeway? Sorry, it's going to be the eyeway.
Speaker 4: That's my prediction, okay, job.
Speaker 1: Yeah.
Speaker 2: Last prediction is sort of back again to Michael, and
Speaker 2: we've sort of agreed, and that is the golden days
Speaker 2: of ler G are over. What I mean by that
Speaker 2: is you're going to.
Speaker 7: See a whole pile of businesses that get themselves in
Speaker 7: financial difficulties because they're going to be selling it negative margins.
Speaker 7: And you've also got increasing LNG capacity coming online, which
Speaker 7: means you're also going to see asset problems with the
Speaker 7: investments in those assets. There's a few reasons for this.
Speaker 7: The first thing is global demand for gas has peaked,
Speaker 7: could actually have peaked already in twenty twenty five, but
Speaker 7: if not, it's twenty twenty six, and this is because
Speaker 7: OEZ demand is shrinking keeps shrinking, China growth is down.
Speaker 7: What Michael said earlier on about Pakistan putting on solar,
Speaker 7: etcetera center that's going to come more important, and this
Speaker 7: means that also as an example of Pakistan, as these
Speaker 7: emerging markets are becoming much more price sensitive. The other
Speaker 7: thing that I would say as a final point is
Speaker 7: we'll see Russian gas come back into Europe and that
Speaker 7: changes the whole dynamics so much. And I'm saying that
Speaker 7: because I believe part of the peace agreement will be
Speaker 7: that Russian gas comes back in. So that means that
Speaker 7: golden days of LNG are over. And I say, you
Speaker 7: think you're going to see the beginnings of the restructuring
Speaker 7: of that system towards the end of twenty twenty six.
Speaker 1: Let's talk about that LNG thing.
Speaker 2: Go for it. You talk about it because you brought
Speaker 2: it up. Michael Gofer.
Speaker 1: Yeah, I think Gerard is right.
Speaker 3: I've been looking at global LNG demand and the growth there,
Speaker 3: especially North American growth in LNG exports.
Speaker 1: Canada.
Speaker 3: We've got two massive programs part of Mark Kearney's Major
Speaker 3: Project's Office approving pipelines Now the implications of all this
Speaker 3: capacity coming online are very interesting for the United States.
Speaker 3: Again another intomic problem because Joe Biden put a halt
Speaker 3: to new LNG export ports because domestic gas prices were rising.
Speaker 3: They are now pegged to international prices, not to domestic prices.
Speaker 3: With massive amounts of export coming online and bidding for
Speaker 3: spot market stuff, that's going to drive up domestic prices.
Speaker 3: At the same time, the cost of domestic production is
Speaker 3: going up. Just as the shale oil is now hitting
Speaker 3: the marginal stuff, the shale gas is hitting the marginal
Speaker 3: sites as well, So costs are going up for domestic production.
Speaker 3: It's exposed to international prices even if they're depressed. Domestic
Speaker 3: energy prices in the United States are going to spike
Speaker 3: because they remain very gas seating. People are going to
Speaker 3: be in real financial trouble in the United States in
Speaker 3: the coming year.
Speaker 4: Okay, gentlemen, if I summarize our six prediction, Michael, China
Speaker 4: buttery system will go down to forty dot per kilo.
Speaker 4: What hour I predict a credit and great crisis around you?
Speaker 4: That do center? So you ask a number, is fifty
Speaker 4: percent of that announced will never be built? Chire the
Speaker 4: lower wind and solar installation in twenty six compared to
Speaker 4: to twenty five Michael twenty giga out of solar in
Speaker 4: Africa in twenty six. The fight for the greenhouse Gas
Speaker 4: Protocol revision is going to turn ugly and finally the
Speaker 4: LNG glut will create the stress as set with flat
Speaker 4: demand and more supplies arriving on the market center. Man,
Speaker 4: I like to remind you and our listeners that Ukraine
Speaker 4: is still at war, is going to be almost four
Speaker 4: years and our heart goes to the Ukrainian who are
Speaker 4: resisting every day and those awful attacks, so our heart
Speaker 4: is with them. Any last word, gentlemen.
Speaker 2: Well, I'm going to just wish you both a grade
Speaker 2: twenty twenty six and all our listeners thank you very
Speaker 2: much for listening to it. We're looking forward to serving
Speaker 2: you over the next twelve months.
Speaker 3: Thank you for listening to Redefining Energy. Don't forget to
Speaker 3: rate the show and subscribe on Apple Podcasts, Spotify, or
Speaker 3: the platform of your choice.