WEBVTT 1 00:00:04.320 --> 00:00:07.879 With Laurent Segal end from London and Gerard read from Berlin. 2 00:00:08.400 --> 00:00:11.119 This is redefining energy today. 3 00:00:11.119 --> 00:00:14.000 On redefining energy, Laurent, we've got to talk about I 4 00:00:14.000 --> 00:00:16.519 suppose the future, this energy transition, that's what we're going 5 00:00:16.559 --> 00:00:16.800 to do. 6 00:00:17.320 --> 00:00:20.879 We have a great guest who has been forecasting all 7 00:00:20.920 --> 00:00:25.960 those trends, all the investments, and that's Albert Chung, Deputy 8 00:00:26.120 --> 00:00:29.320 CEO of b ne EF. But first of all, from 9 00:00:29.320 --> 00:00:29.879 my partner. 10 00:00:30.480 --> 00:00:33.439 A b Loco Energy is Europe's premier leaser of ten 11 00:00:33.560 --> 00:00:37.840 foot container mobile batteries built in Europe with COTL best 12 00:00:38.000 --> 00:00:43.799 LFP cells. A Bloco Energy serves fourteen European countries, including France, 13 00:00:44.280 --> 00:00:47.960 Germany and the UK. A Bloco's batteries can be leased 14 00:00:48.000 --> 00:00:51.119 for any duration between six weeks and six years, and 15 00:00:51.159 --> 00:00:54.520 they are monitored by the Dutch award winning platform school 16 00:00:55.119 --> 00:00:58.200 A block O Energy Make your life easier, make your 17 00:00:58.240 --> 00:00:59.280 business more flexible. 18 00:00:59.479 --> 00:01:02.240 Back to the and great pleasure that happened. 19 00:01:02.359 --> 00:01:05.640 I'm actually surprised we haven't had them on before because listen, 20 00:01:05.640 --> 00:01:07.840 we've been following their work for I don't even know 21 00:01:07.879 --> 00:01:10.599 how long, it's fifteen years, at least. 22 00:01:09.959 --> 00:01:12.879 Twenty years in my case, even before there was the 23 00:01:12.959 --> 00:01:17.120 b So when Michael Levi created an EF, they've been 24 00:01:17.319 --> 00:01:21.840 providing the data which is the backbone of all the investment. 25 00:01:21.920 --> 00:01:25.920 Now we're talking about two trillion of investment. I cannot 26 00:01:26.200 --> 00:01:30.719 see an investment committee, a credit committee where in the 27 00:01:30.799 --> 00:01:35.280 documentation there is not a data from bn EF. They've 28 00:01:35.280 --> 00:01:39.000 been so helpful because they bring something that there's so 29 00:01:39.079 --> 00:01:43.319 much noise, and they're bring trust and that is so critical. 30 00:01:43.680 --> 00:01:45.519 We're so happy to all him on the show. 31 00:01:45.799 --> 00:01:48.680 Let's bring him on. Have a chart, Albert. It's great 32 00:01:48.680 --> 00:01:49.480 to have you on the show. 33 00:01:49.879 --> 00:01:51.359 Thanks for having me, Albert. 34 00:01:52.120 --> 00:01:56.359 First question, what is exactly b an EF Now, it's. 35 00:01:56.239 --> 00:01:57.840 Good that you say now, because I know you know 36 00:01:58.000 --> 00:01:59.560 us from a long time ago when we were New 37 00:01:59.599 --> 00:02:03.519 Energy five. But BNF now is a global research provider 38 00:02:03.599 --> 00:02:06.159 covering energy transition and commodity markets. So we have four 39 00:02:06.239 --> 00:02:09.479 hundred experts around the world really tracking what's happening in 40 00:02:09.520 --> 00:02:13.000 the energy transition globally. We cover the technologies that are 41 00:02:13.080 --> 00:02:16.080 driving the transition, the underlying economics and how the costs 42 00:02:16.080 --> 00:02:18.800 are changing, how the competitive landscape is changing, and also, 43 00:02:18.800 --> 00:02:22.919 obviously very importantly, the policy that's driving transition around the world, and. 44 00:02:22.879 --> 00:02:26.919 Of course at the difference of your peers like IA 45 00:02:27.199 --> 00:02:31.800 or I. Right now, you're not a political organization, so 46 00:02:31.840 --> 00:02:34.759 it's really a bottom up and not a bit of 47 00:02:34.800 --> 00:02:36.719 a top down totally. 48 00:02:36.759 --> 00:02:39.360 So we're fully independent, we own our own views, our 49 00:02:39.400 --> 00:02:42.280 own data, and we're really trying to provide an objective 50 00:02:42.360 --> 00:02:46.280 view of what's really going on and highlight the opportunities. Really, 51 00:02:46.319 --> 00:02:49.479 I think we've always come at the energy transition from 52 00:02:49.599 --> 00:02:51.599 the point of view of a kind of capitalistic view 53 00:02:51.639 --> 00:02:54.199 of highlighting the opportunities and the investment in the space, 54 00:02:54.680 --> 00:02:56.680 not from a kind of normative view of where we 55 00:02:56.680 --> 00:02:58.319 think the world should go or where it should be. 56 00:02:59.159 --> 00:03:02.319 Well, obviously this is I've been also following you for 57 00:03:02.439 --> 00:03:05.479 years as well, and what I really love is the 58 00:03:05.520 --> 00:03:08.159 fact that once a year you put out this annual 59 00:03:08.199 --> 00:03:11.560 report which gives really a great view in terms of 60 00:03:11.560 --> 00:03:16.719 what's going on from everything from renewable installations to evs, 61 00:03:17.360 --> 00:03:19.439 and you've just published this report. Maybe just talk a 62 00:03:19.439 --> 00:03:22.360 little bit about the highlights of that. What really you 63 00:03:22.439 --> 00:03:24.599 find the most interesting thing of last year. 64 00:03:25.639 --> 00:03:31.120 Now, in order to spoil the conversation, I also downloaded 65 00:03:31.719 --> 00:03:35.000 the same report, but for two twenty and I put 66 00:03:35.039 --> 00:03:38.400 them side by side, and I can tell you you've 67 00:03:38.479 --> 00:03:42.159 been right on a lot of things, most of the 68 00:03:42.199 --> 00:03:46.280 things I think you're the best podcaster here, but also 69 00:03:46.400 --> 00:03:49.479 looking back into twenty there's a lot of things you 70 00:03:49.560 --> 00:03:51.639 were a bit too optimistic about. And I'm going to 71 00:03:51.680 --> 00:03:55.159 summarize very simply. You're right on the electrons, you're wrong 72 00:03:55.199 --> 00:03:56.319 on the molecules. 73 00:03:56.560 --> 00:03:59.439 Okay. Interesting, So, Lauren, I have not gone back and 74 00:03:59.479 --> 00:04:01.280 compared to twenty twenty, so this is going to be 75 00:04:01.280 --> 00:04:03.719 a fascinating discussion. Maybe just to rewind. So what is 76 00:04:03.759 --> 00:04:06.719 the report we're talking about? As we record this BNF 77 00:04:06.759 --> 00:04:08.840 we just published our a New Energy Outlook for twenty 78 00:04:08.840 --> 00:04:12.439 twenty six. It's our annual flagship publication which contains scenarios 79 00:04:12.439 --> 00:04:14.520 for the future of energy, and we come at this 80 00:04:14.560 --> 00:04:16.399 really from an economic point of view. And we have 81 00:04:16.439 --> 00:04:19.319 a base case scenario called the economic transition scenario, where 82 00:04:19.360 --> 00:04:23.560 we assume that policymakers implement no further climate policy and 83 00:04:23.600 --> 00:04:26.279 they just deploy the technologies that are economically rational to 84 00:04:26.279 --> 00:04:28.800 deploy to meet energy demand in their countries over the 85 00:04:28.839 --> 00:04:31.560 next couple of decades. And we also have a climate 86 00:04:31.560 --> 00:04:35.160 scenario which is a high ambition, maximum effort climate scenario 87 00:04:35.360 --> 00:04:37.879 in line with the Paris Agreement. But that is also 88 00:04:37.920 --> 00:04:41.160 a cost optimization exercise, so we're not dictating solutions, We're 89 00:04:41.199 --> 00:04:43.680 asking the model to deliver a kind of least cost 90 00:04:43.759 --> 00:04:47.519 climate aligned scenario. You know, what's really interesting this year 91 00:04:47.560 --> 00:04:49.879 is to think about the energy security implications of all 92 00:04:49.920 --> 00:04:52.480 of that, because we are, of course living through an 93 00:04:52.560 --> 00:04:55.160 unprecedented energy crisis as we record this, you know, the 94 00:04:55.199 --> 00:04:57.279 straightuform mus are still closed and a lot of countries 95 00:04:57.279 --> 00:05:00.279 are grappling with implications of that. So this year one 96 00:05:00.279 --> 00:05:03.199 of the focuses was let's think about what these scenarios 97 00:05:03.279 --> 00:05:06.720 mean for energy security, because frankly, people right now are 98 00:05:06.759 --> 00:05:09.439 much more worried about energy security, energy affordability, and climate 99 00:05:09.480 --> 00:05:11.319 is probably a third priority and in terms of the 100 00:05:11.399 --> 00:05:14.319 hierarchy of needs, And what we find is that if 101 00:05:14.399 --> 00:05:18.399 policy makers just pursue an economic energy transition, no additional cost, 102 00:05:18.439 --> 00:05:21.680 no additional effort, they can significantly reduce their exposure to 103 00:05:21.800 --> 00:05:25.199 international oil and gas markets and therefore reduce their energy 104 00:05:25.199 --> 00:05:29.000 security risk. So, for example, markets like the EU and 105 00:05:29.040 --> 00:05:33.439 the UK can roughly have their energy import exposure as 106 00:05:33.439 --> 00:05:35.600 a share of GDP between now and twenty forty, just 107 00:05:35.600 --> 00:05:37.399 by doing the economic things that make sense for them 108 00:05:37.439 --> 00:05:39.879 in terms of energy transition. You know, in Asia there 109 00:05:39.879 --> 00:05:42.720 are economies that are three four five six percent of 110 00:05:42.759 --> 00:05:46.279 their GDP is energy import equivalent and they can see that, 111 00:05:46.480 --> 00:05:48.360 you know, similar benefits as well. So that's kind of 112 00:05:48.360 --> 00:05:51.199 one of the new things for this year, Laura. I'd 113 00:05:51.199 --> 00:05:53.160 love to know what you thought has changed from our 114 00:05:53.199 --> 00:05:55.160 outlook of the last five years and love to get 115 00:05:55.160 --> 00:05:55.879 into that as well. 116 00:05:57.240 --> 00:06:02.480 You forgot the PT scenario put in Trump, which history 117 00:06:02.519 --> 00:06:07.360 will certainly remember that they were extremely good against their 118 00:06:07.399 --> 00:06:11.680 will for a naturally transition. Now looking back at two 119 00:06:11.839 --> 00:06:17.079 twenty versus now, you said sola becomes the cheapest power 120 00:06:17.160 --> 00:06:21.399 source in his story, solar plus win dominate new capacity editions. 121 00:06:21.480 --> 00:06:24.560 You said that six years ago, so bing, so you 122 00:06:24.560 --> 00:06:29.920 were spot on. You also predicted the fall of the 123 00:06:29.959 --> 00:06:34.680 price of batteries. It was spot on. You predicted the 124 00:06:34.759 --> 00:06:38.800 rise of EV's. You said IV would reach twenty percent 125 00:06:38.839 --> 00:06:42.079 of global passenger sales by two or thirty who already 126 00:06:42.160 --> 00:06:45.040 reached this one? But I think you were a bit 127 00:06:45.120 --> 00:06:49.600 too optimistic on the adoption of EV's in the US. 128 00:06:50.160 --> 00:06:53.639 And then when you get it totally wrong. Hydrogel you 129 00:06:53.720 --> 00:06:57.519 said green anddrogen is going to scale rapidly, you said 130 00:06:57.639 --> 00:07:03.279 ccs will grow. So overall very good in technology coscurve 131 00:07:03.360 --> 00:07:05.319 if you adoption sol A we need going to make 132 00:07:05.519 --> 00:07:09.920 supply chain and the weakness which is is more human 133 00:07:09.959 --> 00:07:16.199 than technology, you know, policy friction, geopolitical shocks, hydrogen and permittee. 134 00:07:16.319 --> 00:07:16.879 So that's it. 135 00:07:17.399 --> 00:07:19.120 So overall it's pretty good. 136 00:07:20.160 --> 00:07:23.560 I would say I think we probably underbake solar back then, 137 00:07:23.639 --> 00:07:26.240 and again I haven't actually you've looked at our old 138 00:07:26.360 --> 00:07:29.319 older reports, But there was this huge acceleration of SOLO 139 00:07:29.399 --> 00:07:31.279 from about twenty twenty two to twenty twenty five. The 140 00:07:31.360 --> 00:07:34.800 last three years, you know, installations went from I think 141 00:07:34.800 --> 00:07:36.759 there were about one hundred and fifty gigawats in twenty 142 00:07:36.800 --> 00:07:40.040 twenty and then about six hundred fifty gigawats last year, 143 00:07:40.079 --> 00:07:42.680 so like, you know, more than a quadrupling over five years. 144 00:07:42.720 --> 00:07:45.680 Let's say. You know that we've always been very bullish 145 00:07:45.720 --> 00:07:49.040 about the cost reductions in solar and you know, accelerating employment. 146 00:07:49.079 --> 00:07:51.560 But I don't think even we had that right. Went 147 00:07:51.600 --> 00:07:54.600 even faster than us, and obviously faster than some other 148 00:07:54.639 --> 00:07:56.480 agencies as well, so I think that was a surprise. 149 00:07:57.079 --> 00:08:00.000 I do know that our electricity demand forecasts have risen 150 00:08:00.040 --> 00:08:02.000 as well over the years, and part of that as 151 00:08:02.079 --> 00:08:04.759 data centers, of course, which is now much bigger topic. 152 00:08:05.199 --> 00:08:07.680 And you're totally right that our views on hydrogen and 153 00:08:07.720 --> 00:08:12.720 ccs have have been revised. Now today we only include 154 00:08:13.000 --> 00:08:15.720 any significant amount hydrogen ccs in our climate scenario. The 155 00:08:15.720 --> 00:08:17.959 base case really doesn't have very much at all. But 156 00:08:18.040 --> 00:08:20.959 even in the climate scenario, we have less hydrogen less 157 00:08:20.959 --> 00:08:23.480 ccs than we used to, and that's simply because we 158 00:08:23.519 --> 00:08:25.879 have got much better visibility on the true costs of 159 00:08:25.879 --> 00:08:27.879 those technologies compared to five years ago. We now know 160 00:08:27.959 --> 00:08:30.040 that they cost more than what everyone hoped that they 161 00:08:30.079 --> 00:08:33.360 would over these years, and so they've taken a bit 162 00:08:33.360 --> 00:08:36.080 more of a backseat, and we have more power, more electrification, 163 00:08:36.759 --> 00:08:39.279 frankly a bit more nuclear as well to power that electrification. 164 00:08:39.679 --> 00:08:41.759 If you want to really do the high ambition climate scenario, 165 00:08:41.840 --> 00:08:44.399 you've got to have nuclear, not nuclear, than ccs or 166 00:08:44.440 --> 00:08:44.960 something else. 167 00:08:45.639 --> 00:08:49.759 I was going to just differentiate between molecules and electrons. 168 00:08:50.320 --> 00:08:54.679 For me, molecules is not about technology anymore. It's about geopolitics, 169 00:08:55.000 --> 00:08:59.200 and that's really difficult to predict well. Electrons. A lot 170 00:08:59.240 --> 00:09:01.200 of it's now about technology. It's in other words, you're 171 00:09:01.200 --> 00:09:07.200 talking about solar, wind, batteries AI. They are all technologies, 172 00:09:07.799 --> 00:09:10.919 and I'm not surprised that you've done a good job there. 173 00:09:11.519 --> 00:09:13.759 I think the one on solar is quite interesting because 174 00:09:14.879 --> 00:09:18.559 what's really clear is just an exponential technology. We've never 175 00:09:18.559 --> 00:09:20.600 seen the likes of it in the generation space or 176 00:09:20.639 --> 00:09:23.240 in the energy space. But you've done a much better 177 00:09:23.320 --> 00:09:26.679 job than nearly everybody else when it comes to solar 178 00:09:26.840 --> 00:09:27.720 and batteries. 179 00:09:28.360 --> 00:09:30.960 That's really interesting. I mean, on the point about molecules, though, 180 00:09:31.399 --> 00:09:33.960 one thing that we face is, you know, the doing 181 00:09:34.000 --> 00:09:36.480 these long term outlets many months. It takes our team 182 00:09:36.720 --> 00:09:39.559 about nine months to produce this report and it comes 183 00:09:39.600 --> 00:09:43.080 out in May, and now just by chant, over recent years, 184 00:09:43.279 --> 00:09:46.679 multiple times that've been shocked to the energy system that 185 00:09:46.799 --> 00:09:50.440 happened in February or March, and so to accommodate those 186 00:09:50.519 --> 00:09:52.759 changes is actually really difficult, as you know, because that 187 00:09:53.120 --> 00:09:55.399 you know, the molecule's story changes very quickly when you 188 00:09:55.399 --> 00:09:59.120 have an energy shock, whereas the technology story doesn't change 189 00:09:59.120 --> 00:10:01.480 that much. So we have to adjust, we have to 190 00:10:01.480 --> 00:10:03.679 accommodate we have to really think about the energy security 191 00:10:03.679 --> 00:10:07.200 implications of these different scenarios. And yet if you look 192 00:10:07.240 --> 00:10:10.080 through all that noise, some things actually don't change that much. So, 193 00:10:10.200 --> 00:10:14.480 for example, oil peak in our base case scenario doesn't 194 00:10:14.480 --> 00:10:16.159 move around that much from one year to the next. 195 00:10:16.200 --> 00:10:18.879 It's always between about twenty twenty nine and twenty thirty two. 196 00:10:19.159 --> 00:10:21.360 And it's obviously quite a flat peak, as you know, 197 00:10:21.399 --> 00:10:23.000 it's not a sudden kind of drop off, but it's 198 00:10:23.000 --> 00:10:24.840 a bit of a plateau. So does that plateau begin 199 00:10:24.919 --> 00:10:28.480 in twenty nine or twenty thirty doesn't move that much, 200 00:10:28.679 --> 00:10:30.600 and this year is the same, so you know, we're 201 00:10:30.600 --> 00:10:33.360 not moving the peak around very much. It's twenty twenty 202 00:10:33.399 --> 00:10:36.600 nine this year, and then that drops down towards twenty fifty. 203 00:10:37.360 --> 00:10:40.080 Gas also, I mean gas is probably the most interesting 204 00:10:40.120 --> 00:10:43.799 think and most controversial of all the molecules, because for oil, 205 00:10:43.879 --> 00:10:46.080 you can see that the plateau coming. For coal, you 206 00:10:46.120 --> 00:10:48.559 can see it's going to drop, and maybe it's extended 207 00:10:48.600 --> 00:10:50.399 a little bit with the current energy crisis, but it's 208 00:10:50.399 --> 00:10:53.120 going to drop. With gas. In our two scenarios, you 209 00:10:53.159 --> 00:10:56.200 have this k shape where if you just do the economics, 210 00:10:56.240 --> 00:10:59.240 just follow the economics of a rising global energy demand, 211 00:11:00.000 --> 00:11:04.240 growing power system. Even with renewables dominating that power system, 212 00:11:04.279 --> 00:11:07.200 you still see gas growing because of the overall rising 213 00:11:07.320 --> 00:11:10.639 energy demand, whereas in the climate scenario, the that zero scenario, 214 00:11:10.679 --> 00:11:14.279 obviously gas demand tails off is cut very quickly towards 215 00:11:14.360 --> 00:11:19.000 twenty fifty. So that's where you have real controversy. I 216 00:11:19.039 --> 00:11:21.000 think that's why the discussions about what is the role 217 00:11:21.000 --> 00:11:23.559 of gas and the energy transition are so real and 218 00:11:23.600 --> 00:11:26.519 so vital, because it really depends what is your view 219 00:11:26.519 --> 00:11:28.759 of the energy transition. Is it more kind of economic 220 00:11:29.240 --> 00:11:32.279 driven or are we really serious about accelerating towards climate 221 00:11:32.279 --> 00:11:34.559 goals and frankly towards energy security goals as well. 222 00:11:35.399 --> 00:11:38.679 Yeah, if you push more energy security, yeah, of course 223 00:11:38.919 --> 00:11:41.919 you can accept higher prices. Now, if you look at 224 00:11:42.039 --> 00:11:45.759 your up feeling these tanks, three years after Ukraine, they've 225 00:11:45.799 --> 00:11:49.279 become very complacent. You thought that after Ukraine they would 226 00:11:49.639 --> 00:11:52.799 still think energy security. They thought for two years and 227 00:11:52.919 --> 00:11:55.399 the third year they say, okay, what the heck, there 228 00:11:55.440 --> 00:11:58.639 is surplus coming from the US Katar. Everything's going fine. 229 00:11:58.919 --> 00:12:02.840 Cut us the doubling capacity, So they totally forgot. So 230 00:12:03.240 --> 00:12:06.639 I'm always afraid that just people are very short memory 231 00:12:07.080 --> 00:12:10.039 there is to go back to their old ways the 232 00:12:10.200 --> 00:12:13.000 moment they see the prices going down, or they can 233 00:12:13.120 --> 00:12:17.000 anticipate prices going down. So maybe it's the second shot. 234 00:12:17.120 --> 00:12:20.279 Maybe they're going to learn this time now. Guess now 235 00:12:20.320 --> 00:12:23.559 you can do all this you want at three five dollars, 236 00:12:23.600 --> 00:12:27.720 even six seven dollars, membt. Yes there is a future 237 00:12:27.759 --> 00:12:29.759 for gas, but if people need to import it at 238 00:12:29.799 --> 00:12:33.519 fifteen or twenty, forget about it. That's that's pretty much it. 239 00:12:34.159 --> 00:12:35.000 Do you see Differently? 240 00:12:35.879 --> 00:12:40.159 Ailron think that the second crisis that we're living through 241 00:12:40.240 --> 00:12:43.039 now is going to change the world forever. And I'm 242 00:12:43.039 --> 00:12:45.600 going to like in that the second oil crisis. Nothing 243 00:12:45.639 --> 00:12:48.080 really happened after the first oil crisis. The second oil 244 00:12:48.080 --> 00:12:52.720 crisis came along and suddenly France built out nucleer like 245 00:12:52.759 --> 00:12:57.519 nobody's ever bailted. That was Norway drilled, drilled, Baby drilled, 246 00:12:57.679 --> 00:13:00.320 and so the whole all of other countries, and they 247 00:13:00.440 --> 00:13:02.759 reacted really quickly. And I think we're in that moment. 248 00:13:03.600 --> 00:13:07.279 And let's be clear, as we record here May June 249 00:13:07.519 --> 00:13:11.279 of twenty twenty six, this strait of Hormo's crisis could 250 00:13:11.279 --> 00:13:15.200 get worse, and you have real shortages coming into September 251 00:13:15.799 --> 00:13:18.600 and then you know, we're living in a really crazy world. 252 00:13:19.639 --> 00:13:21.559 I agree with that. Two things we have to watch 253 00:13:21.600 --> 00:13:24.240 really closely well three. The first thing you already mentioned 254 00:13:24.279 --> 00:13:26.200 is how long does this crisis go on? For two 255 00:13:26.279 --> 00:13:29.559 other things. One is we see demand destruction happening right 256 00:13:29.639 --> 00:13:32.679 now around the world, particularly in Asia. The question is 257 00:13:32.720 --> 00:13:35.279 how much of that demand destruction is temporary and it's 258 00:13:35.360 --> 00:13:37.440 you know, things like people are working from home more 259 00:13:37.559 --> 00:13:39.639 and the crisis ends, they'll get back in their cars, 260 00:13:40.320 --> 00:13:42.799 or temporary rationing of things. And how much of that 261 00:13:42.879 --> 00:13:47.000 demand destruction is structural, you know, people switching to buying evs, 262 00:13:47.039 --> 00:13:49.960 people buying induction stoves. And I think the longer the 263 00:13:50.000 --> 00:13:53.639 crisis goes on, the more you have the structural demand destruction, 264 00:13:53.720 --> 00:13:55.639 which is durable in the long term and really does 265 00:13:55.759 --> 00:13:58.120 lead to a change. The second thing to watch, and 266 00:13:58.200 --> 00:14:00.480 I think this is still emerging, is what really is 267 00:14:00.519 --> 00:14:02.600 the policy response going to be, particularly in the Asian 268 00:14:02.639 --> 00:14:05.559 markets that are most impacted by the current crisis, Because 269 00:14:06.200 --> 00:14:08.639 right now, most of the policy response is just trying 270 00:14:08.679 --> 00:14:11.879 to cushion the impact on consumers tax breaks and subsidies 271 00:14:12.159 --> 00:14:15.679 and things like that. Do we really see a policy 272 00:14:15.759 --> 00:14:18.320 response when the crisis is over that is durable, that 273 00:14:18.399 --> 00:14:20.679 says we are now going to insulate ourselves from these 274 00:14:20.879 --> 00:14:23.120 rolling fossil fuel crisis which do happen every four or 275 00:14:23.159 --> 00:14:27.279 five years by accelerating electrification and renewables. There are glimmers 276 00:14:27.320 --> 00:14:29.840 of that, but I don't yet feel that that's really solid. 277 00:14:29.960 --> 00:14:32.320 I think we're still waiting to see countries really grasp 278 00:14:32.440 --> 00:14:33.159 that opportunity. 279 00:14:33.879 --> 00:14:37.240 Look, if you have gas underneath your feet and you 280 00:14:37.360 --> 00:14:40.120 get shape, you use it in the power sector. But 281 00:14:40.279 --> 00:14:43.879 I cannot see gas in any future scenario in the 282 00:14:43.960 --> 00:14:46.480 power sector. If you need to import it, then maybe 283 00:14:47.120 --> 00:14:49.720 you're going to say yeah, But the Japanese are doing yeah. 284 00:14:50.000 --> 00:14:54.320 Maybe that's the exception. But for the rest, gas is 285 00:14:54.519 --> 00:14:58.360 out of any important country in the litricity sector. 286 00:14:58.840 --> 00:15:03.000 John with Laurent Toltali in this absolutely yeah. 287 00:15:03.080 --> 00:15:04.919 And I think when you look at those markets in 288 00:15:04.960 --> 00:15:08.440 Asia and most of them, the economic competition is between 289 00:15:08.480 --> 00:15:11.200 coal and renewables. Like for the future of those power systems, 290 00:15:11.679 --> 00:15:14.799 that's the contest. It's coal and renewables, and of course 291 00:15:14.840 --> 00:15:17.879 our viewers that renewables will dominate in the long term. 292 00:15:18.039 --> 00:15:21.159 The economics of coal won't be very good. Actually, globally 293 00:15:21.200 --> 00:15:23.600 we get to kind of two thirds renewables by twenty fifty, 294 00:15:24.159 --> 00:15:26.440 so I kind of agree with you. There are going 295 00:15:26.480 --> 00:15:28.480 to be markets where gas continues to play roll. Obviously 296 00:15:28.519 --> 00:15:30.759 the US is a major example of that, but for 297 00:15:30.840 --> 00:15:32.639 most of these Asian markets that are facing the jury 298 00:15:32.639 --> 00:15:35.480 crisis right now, gas isn't really a big vector in 299 00:15:35.519 --> 00:15:36.120 the power sector. 300 00:15:36.799 --> 00:15:42.120 Let's move to electrification in general. EVS. You forecasted EV 301 00:15:42.440 --> 00:15:46.320 pretty well. Are you still as bullish for the rest 302 00:15:46.360 --> 00:15:48.399 of the decade and after? We can go into the 303 00:15:48.480 --> 00:15:51.600 past center heating and other things, But let's talk about 304 00:15:51.600 --> 00:15:52.600 transportation first. 305 00:15:53.279 --> 00:15:55.799 So on EV's about a quarter of the world's car 306 00:15:55.919 --> 00:15:58.559 sales last year were electrified, either pure electric or plug 307 00:15:58.600 --> 00:16:00.960 in hybrid. I think it's worth just pausing for a 308 00:16:01.039 --> 00:16:04.440 moment to consider the achievement that that represents given where 309 00:16:04.480 --> 00:16:07.879 we were five ten years ago, that is an incredible achievement. 310 00:16:08.360 --> 00:16:11.320 China's far ahead above fifty percent already. Europe has at 311 00:16:11.399 --> 00:16:15.320 about the global average about a quarter and leading other markets. 312 00:16:15.399 --> 00:16:19.000 So if you think about where the US is, Japan, India, 313 00:16:19.039 --> 00:16:22.279 other markets are far behind. We absolutely see that continue 314 00:16:22.320 --> 00:16:24.600 to rise and there's no real slow down in the 315 00:16:24.759 --> 00:16:28.480 EV story that we see aside from in the US. 316 00:16:28.840 --> 00:16:32.039 So we have reduced our forecast for USV adoption, but 317 00:16:32.159 --> 00:16:35.320 on a global level, the numbers keep going up. Now, 318 00:16:35.759 --> 00:16:38.080 the growth isn't what it used to be. If you 319 00:16:38.159 --> 00:16:40.159 look at twenty twenty eight, twenty twenty one, you're talking 320 00:16:40.200 --> 00:16:42.120 one hundred percent growth in the EV market. You're on 321 00:16:42.200 --> 00:16:44.600 year sixty percent growth and that keeps dropping. So it 322 00:16:44.639 --> 00:16:47.720 goes to forty twenty ten, and it's still above ten 323 00:16:47.759 --> 00:16:50.639 percent growth today. But that's kind of what maturity looks 324 00:16:50.679 --> 00:16:52.639 like in the market. So you have linear growth. Now. 325 00:16:53.240 --> 00:16:55.639 That's the bit that we need to grapple with is 326 00:16:56.600 --> 00:16:59.720 there's a narrative out there that says everything's always exponential. 327 00:17:00.039 --> 00:17:03.279 Everything in the energy transition is always exponential. You apply 328 00:17:03.399 --> 00:17:05.960 a kago and it just keeps going and going and going. Actually, 329 00:17:06.000 --> 00:17:07.920 the lived experience is not that. And with EV's we're 330 00:17:07.960 --> 00:17:10.079 going to go through a linear period of growth that's 331 00:17:10.160 --> 00:17:12.039 deep part of the S curve. It is an S curve, 332 00:17:12.119 --> 00:17:15.440 and then eventually it tails off. So we feel optimistic 333 00:17:15.440 --> 00:17:17.759 about EV's, but the growth rate simply isn't going to 334 00:17:17.799 --> 00:17:20.039 be what it was. I will also take this opportunity 335 00:17:20.039 --> 00:17:22.599 to plug. We have our annual ev outlook coming out 336 00:17:22.599 --> 00:17:25.319 in a few weeks time, so please keep a lookout 337 00:17:25.400 --> 00:17:26.839 for that, and that's going to have all the updated 338 00:17:26.920 --> 00:17:27.319 numbers for. 339 00:17:27.319 --> 00:17:31.319 You, Alberta. On a transport thing, I'd be very interested 340 00:17:31.359 --> 00:17:35.039 to hear your thoughts moving beyond the automobile, in other words, 341 00:17:35.400 --> 00:17:39.599 moving into trucking and other forms of transport, receiving trains, 342 00:17:39.640 --> 00:17:42.640 actually moving to batteries. What's your view going forward on 343 00:17:43.039 --> 00:17:44.640 the bachelorization. 344 00:17:44.039 --> 00:17:45.359 Of other parts of transport. 345 00:17:45.920 --> 00:17:48.880 We have a team that looks at commercial transport, both 346 00:17:49.000 --> 00:17:52.279 road and also shipping and aviation. Just taking vans and 347 00:17:52.319 --> 00:17:54.680 trucks for a minute. You know, the economics for electrifying 348 00:17:55.039 --> 00:17:58.680 vans for urban and shorthol duty cycles are already really good, 349 00:17:59.279 --> 00:18:01.279 and we see the beginnings of really good adoption in 350 00:18:01.319 --> 00:18:03.880 different markets around the world. And the issue there is 351 00:18:03.960 --> 00:18:05.799 going to be the same as in passenger where you know, 352 00:18:05.920 --> 00:18:08.079 do you have the infrastructure and is it usable and 353 00:18:08.119 --> 00:18:10.480 all of that. For heavy duty and long haul it's 354 00:18:10.640 --> 00:18:13.759 a slightly different story. We have line of sight to 355 00:18:13.880 --> 00:18:17.680 a point where electrification will be TCO positive for heavy duty. 356 00:18:17.799 --> 00:18:21.000 Like it's close, it's getting there, but not the case everywhere, 357 00:18:21.440 --> 00:18:23.119 and the infrastructure is going to be a challenge. So 358 00:18:23.279 --> 00:18:25.200 kind of long haul you need the highways and so on, 359 00:18:25.279 --> 00:18:27.839 and there's good work being done to set up corridors 360 00:18:27.880 --> 00:18:31.079 and different markets for that. One of the big issues though, 361 00:18:31.279 --> 00:18:34.599 is that between the OEMs and the fleet operators and 362 00:18:34.640 --> 00:18:37.440 the shippers and you know, the financiers of these assets, 363 00:18:37.440 --> 00:18:41.240 because they are financed assets, is there's still a perception 364 00:18:41.480 --> 00:18:44.440 of certain risks that has to be managed. So one 365 00:18:44.519 --> 00:18:46.720 is utilization risk if you're thinking about the overall kind 366 00:18:46.720 --> 00:18:50.839 of charging and truck ecosystem. One is battery residual value risk, 367 00:18:50.880 --> 00:18:53.960 which still needs some work. There's still fear of after 368 00:18:54.200 --> 00:18:56.640 a certain number of years the value of the battery 369 00:18:56.640 --> 00:18:58.640 in the truck is is diminished and therefore it's difficult 370 00:18:58.640 --> 00:19:01.319 to finance. So I think what's needed there is to 371 00:19:01.400 --> 00:19:04.480 build experience, to build up the data set that shows 372 00:19:04.720 --> 00:19:07.119 two investors and to the financiers that you can finance 373 00:19:07.200 --> 00:19:10.640 these assets. The batteries last. I think they do. We 374 00:19:10.799 --> 00:19:12.599 just need to have the proof points in the data 375 00:19:12.680 --> 00:19:15.759 and the real life operations to make that case. Well. 376 00:19:16.079 --> 00:19:19.119 On this one, I think you're too perish the trucking industry. 377 00:19:19.519 --> 00:19:23.319 It's going to be absolutely phenomenal because once you have 378 00:19:23.519 --> 00:19:26.640 the test lessony that's out and a lot of things 379 00:19:26.680 --> 00:19:30.640 happening in China, and the price of diesel for me, 380 00:19:30.799 --> 00:19:33.160 it's going to go much faster. Look, I'm going to 381 00:19:33.200 --> 00:19:36.359 give you an example. One of my company portfolio is 382 00:19:36.480 --> 00:19:39.559 using batteries. Okay, so we get called from the EV 383 00:19:39.759 --> 00:19:42.680 chargers or are not making a lot of money, but 384 00:19:42.839 --> 00:19:47.200 they need more power for their IV charging station, and 385 00:19:47.319 --> 00:19:50.680 of course they can't get grit upgrade for months or something, 386 00:19:50.759 --> 00:19:53.599 so they would like to rent batteries to give more hoomph. 387 00:19:54.200 --> 00:19:56.759 For whatever reason, my batteries were too small. So I 388 00:19:56.880 --> 00:20:02.319 called one of the guys Big Motorway and he said, oh, yeah, yeah, 389 00:20:02.680 --> 00:20:05.319 we bought a sun Grow Power Titan three points zero. 390 00:20:05.720 --> 00:20:07.839 And then I called another guy, say yeah, I call 391 00:20:07.920 --> 00:20:11.440 my colleague, which is my competitor, and we bought the 392 00:20:11.480 --> 00:20:15.880 sun Growth. You know, they didn't even make any tender analysis. 393 00:20:15.960 --> 00:20:19.519 The guy say, oh you bought this battery. Does it work? Okay, boomer, 394 00:20:20.200 --> 00:20:23.039 there's a silent revolution. And then in your report you're 395 00:20:23.039 --> 00:20:25.400 going to see in a few months or years, oh 396 00:20:25.480 --> 00:20:27.960 my god, every EV chargers have put some row batteries 397 00:20:28.079 --> 00:20:30.960 or you know, competitors. There are other good products out there. 398 00:20:31.759 --> 00:20:33.519 It's going to be like Pakistan all of a sudden, 399 00:20:33.559 --> 00:20:36.039 nobody talks about Pakistan and now everybody to, oh my god, 400 00:20:36.079 --> 00:20:38.720 they put ten gig of solar and nobody saw that coming, 401 00:20:39.359 --> 00:20:43.880