0:08

Hello and welcome to The Energy Gang, a

0:11

discussion show about the fast changing world of

0:13

energy. I'm Ed Crooks and

0:15

I want to wish a very happy new year to all of our

0:17

listeners. For this first show of 2024

0:19

we're going to be looking ahead at the coming year

0:22

in energy. We're going to be talking

0:24

now about the people, the places and the technologies

0:26

that everyone's going to be talking about in the year

0:28

to come. And to do that

0:30

now and to look ahead into the crystal

0:32

ball for the coming year, I'm very pleased

0:34

to be joined by Amy Meyers-Jaffee, who's the

0:36

Director of the Energy, Climate Justice and Sustainability

0:38

Lab at New York University. Hi Amy, good

0:40

to see you again. Great to be here

0:43

Ed. How was your holiday? Have a good time? Had

0:45

a great holiday. We have a

0:47

family tradition of theme parking on

0:50

New Year's Eve and this year

0:52

we picked the San Diego Zoo,

0:54

which has a fantastic New Year's

0:56

Eve program. So all fun. Fantastic.

0:59

Very nice indeed. Sounds great. And it's also

1:01

a great pleasure to be joined by Melissa

1:03

Lott, who's the Research Director at Columbia University's

1:05

Center on Global Energy Policy. And she's also

1:07

a professor at Columbia's Climate School. Hi Melissa,

1:09

how are you? And how was your holiday?

1:11

Hey Ed, hey Amy, doing well. The holiday was

1:14

good. I'm still in Texas, you know, so it's

1:16

nice to be back in my home state for

1:18

a bit. I love New York. New York is

1:20

great. Manhattan is wonderful. But man,

1:22

the iced tea and tacos, I am

1:25

full of joy from the two

1:27

of those things. But it was great. Got to

1:29

spend a lot of time with family. How was your holiday Ed? It

1:32

was great. I did something unusual

1:34

for me, which is I spent New Year's Eve in

1:36

Scotland, visited Glasgow for

1:38

Hogmanay, which was exciting and

1:41

actually did not partake of the

1:43

full on experience. Just stayed

1:45

at home having dinner with friends, although some members of our

1:47

party did go out and embrace

1:50

the night. I was quite restrained,

1:52

but still had a very nice time. And it's a beautiful city.

1:54

Hadn't been to Glasgow for a very, very long time. It was

1:56

just reminded what a great place it is. When I

1:58

was working with the International Energy Agency, I went up

2:00

to Edinburgh to spend the New

2:03

Year's Hogmey celebrations. Why not? Had

2:05

never been. And I will say

2:07

not to be too much of an energy walk for

2:09

a minute, but you know how there's not a lot

2:11

of sunlight that time of year up there. It's more

2:14

than if you kept going north, but I just kept

2:16

thinking because it was a really still night because they

2:18

had some different pyrotechnics that were

2:20

happening. And I was thinking about how still it

2:22

was and the air wasn't moving that much. And

2:24

I was thinking, man, the wind and the solar

2:26

are not great this time of year. I wonder

2:28

what the connections are to anything they have

2:30

going offshore. And that started my fascination

2:33

with energy systems in the UK. But

2:36

yeah, it was great. It was a great environment, really

2:38

fun. But I remember thinking that as I

2:40

walked down, what is it the mile that goes up to the

2:42

castle in Edinburgh? And I was like, hmm, not

2:44

great wind. Yeah, good point.

2:46

Scotland is of course often described

2:48

as the Saudi Arabia of wind.

2:50

It's got fantastic wind resource there,

2:53

both offshore and onshore. And certainly

2:55

those still conditions were not a problem when we

2:58

were there and very noticeable on the drive up

3:00

and on the way back again, you go past

3:02

a lot of wind turbines on the motor, all

3:04

of them spinning very, very vigorously. And I was

3:06

thinking exactly the opposite of

3:08

what your thought was. This must be

3:10

making a fantastic contribution to Scotland's energy

3:12

supply because it was clearly making

3:15

that great contribution when we were there. And

3:18

this is why you always have to check the data, which

3:20

is what I tell my students. Always look at the data.

3:22

You have your perception, your observations, check out what other

3:24

observations are. All right, I'm

3:26

back in teacher mode already. Can you tell us the start

3:28

of the semester? Indeed,

3:32

indeed. Down to business then for a

3:34

new year, a new semester, as you

3:36

say. Looking ahead then at 2024,

3:39

I wanna kind of organize our

3:41

conversation by talking about things

3:43

to look out for in various different

3:46

categories as we look ahead to 2024. And

3:49

first one that I wanted to start off with

3:51

is people. And get

3:53

your thoughts on who are the kind of

3:55

interesting people that you're gonna be watching during

3:57

the course of the coming year. you

4:00

think will be movers and shakers, newsmakers,

4:02

important figures in the world of energy

4:04

in that coming 12 months. So

4:06

I don't know when to start. I mean, Amy, what are

4:09

your thoughts on this? Who are the people that you're going

4:11

to be thinking about in 2024? Well,

4:14

I have to tell you, I know

4:16

it's a little hackneyed, but I'm focused

4:18

on President Biden. He has a lot

4:20

of difficulties

4:23

in the energy space coming up for him

4:25

in an election year. The first

4:27

challenge, of course, is coming from

4:29

Bill McKibben, an environmental movement which

4:32

is trying to block new approvals

4:34

for liquefied natural gas

4:36

export facilities on the Gulf

4:39

Coast. And the president is

4:41

sort of coming out against the background

4:45

of the controversial approval

4:47

of Fermini, which was sort of a

4:50

legal issue in part of the Willow

4:52

project in Alaska. And of

4:54

course, we're at record high. U.S.

4:56

oil production is still going up. So

4:59

how does he navigate that? He

5:01

can keep talking about his historic

5:03

Climate Inflation Reduction Act. And

5:06

we're going to have some, you

5:08

know, regulations. We'll see how tight

5:10

they get on methane in the

5:13

United States. But I think the president has

5:15

a rocky road and then whatever

5:17

he decides on the international stage, whether

5:19

it's related to the conflict in the

5:21

Middle East or conflicts elsewhere, you know,

5:23

all of those things are going to

5:26

have a big impact on energy markets.

5:28

Yeah, that's very interesting. And that's fascinating

5:30

that point, as you say, about U.S.

5:32

gas exports, where we're in the middle

5:34

of this huge new wave of investment,

5:36

big construction boom going on. U.S. gas

5:38

exports for the rest of the world

5:40

are set to increase very dramatically. And

5:44

President Biden has kind of presided over that,

5:47

and he's essentially indicated that he sees

5:49

no conflict between that and his climate

5:51

strategy and his ambitions for cutting emissions

5:53

and so on. But now

5:55

there is definitely a faction in his party

5:57

that is holding him to account on

5:59

that. turning up the heat. What

6:01

do you think he's going to do about that? Which way

6:03

do you think the Biden administration will ultimately jump? Well,

6:07

you know, it's basically a US

6:09

Department of Energy process and so

6:11

there's two ways I think they

6:13

could go. They could try to

6:15

do a sleight of hand, which

6:18

is say they have to revisit

6:20

the different features of approving new

6:22

plants and maybe put more emphasis

6:25

on the science of

6:27

methane which has changed over time and

6:29

new studies coming out in the past

6:31

year. That would buy him

6:33

time after the election but you know I

6:35

recently heard an interview with Bill McTibbon where

6:37

he said he really thought that they were

6:39

making progress so they were going to be

6:42

able to block the plant that they've targeted

6:44

so hard enough. Very interesting though,

6:46

as you say, that's going to be a great one to watch

6:49

in the year to come. Melissa, what about you? Who are

6:51

the people you think we should be looking at? Well,

6:53

just say, I mean, there's a lot of different ways my

6:55

brain goes when you ask that question and in terms of

6:57

the different people involved in the conversation. We were

7:00

just talking about COP before the end of the year and

7:02

I will say in our conversations, I know

7:04

Ed, we talked about the number of elections around

7:06

the world. I think Julio Friedman flagged that as

7:08

well. Is that Amy's point? I'm watching Biden but

7:10

I don't know about y'all. I'm watching

7:12

a lot of other countries and then also local

7:14

elections as well so I'm paying attention to what's

7:16

happening here in Texas but also outside of the

7:18

United States. I mean, our neighbors

7:21

Mexico, go down to Venezuela, go

7:23

through Latin America, then think through India, Indonesia.

7:25

I mean, I also wonder, Ed, and I'm

7:27

curious what you're thinking about what's going on

7:29

in the UK with all these statements. You've

7:31

got popular opinion saying we actually need to

7:34

keep decarbonizing, decarbonize faster but then you've got

7:36

a lot of these statements being made about

7:38

actually we need to slow things down and

7:40

we need to delay a couple of different

7:42

actions. So I'm watching a bunch

7:45

of different elections around the world and not

7:49

from a, I like, political quarterbacking point of way

7:51

but specifically for what we're talking about here and

7:53

Amy what you're talking about which is what is

7:55

it gonna do to the near term and longer

7:58

term energy decisions. One

8:00

of the things about that, Melissa, that's

8:02

super interesting is that people

8:04

thought the election in Argentina might take

8:06

them in a different direction, but they

8:08

just announced they're going to a national

8:10

cap and trade, which everybody was very

8:13

surprised about. So the elections sometimes

8:16

bring about improvements, like the election

8:18

in Brazil with deforestation policy and

8:20

so forth. And I'll just repeat

8:22

one quick comment that I made

8:24

the other day in a conversation

8:26

with you Ed, which was climate

8:29

and energy matter in these elections. That is really

8:31

interesting. I think energy has mattered for a long

8:34

time, especially the price of the pump and what

8:36

it's doing the economy. But this energy and climate

8:38

conversation being a major factor in

8:40

a number of these elections is

8:43

really interesting to watch. And I think a step changed

8:45

certainly from when I started in this work 20 years

8:47

ago. Yeah, I think that's

8:49

right. Although I also think it's the case that

8:51

there's a big difference around the world in the

8:53

way that energy and climate issues are viewed. Absolutely.

8:56

So all three of us were based in the

8:58

US. We tend to see things naturally

9:00

through an American lens.

9:03

And it is the case that in the

9:06

US there are very, very bright dividing

9:08

lines between the parties on the issues

9:10

of energy and climate. And the way

9:12

that the 2024 election goes in the

9:14

US will be very significant for the

9:16

future of energy policy and the energy

9:18

system as a whole. I

9:21

mean, possibly with some qualifications, which you might want to

9:23

get into. But anyway, as I say, very

9:25

clear divisions on energy in this country in

9:27

a way that and a lot of

9:29

other parts of the world don't exist in quite the same way.

9:32

And you mentioned the UK, Melissa, if you think about the UK

9:34

election, which is quite likely to happen

9:36

this year, just possible it could be pushed into very,

9:38

very early 2025, but it's most likely

9:41

been 2024. Actually, there

9:43

doesn't look like an election would make a

9:45

massive amount of difference. There's probably a bit

9:48

more commitment to decarbonisation on the part

9:50

of the opposition Labour Party now well

9:52

ahead in the polls, but still the

9:54

currently ruling Conservative Party is very much

9:56

committed to net zero and

9:58

so on. And although they've

10:00

kind of pulled back on a couple of

10:02

minor targets here and there, the

10:05

overall direction of travel is still very much

10:07

the same. And so in

10:09

the UK context, is a change of government

10:11

going to make a massive amount of difference

10:13

to climate and energy strategy overall? No, I

10:15

don't think it will. Yeah,

10:17

it's interesting. I will say we

10:20

have a number of European colleagues within the

10:22

Center on Global Energy Policy, and they

10:24

find it fascinating and comment to me often

10:27

about our elections and kind of what

10:29

the extreme positions are and then comparing it

10:31

to kind of where their positions are and

10:33

where the base line around social license

10:35

to operate in the face of a

10:38

changing climate where that exists or where it doesn't.

10:40

And what it means in terms of carbon budgets

10:42

and commitments and how much wiggle

10:44

room there really is in those

10:46

conversations and what the, what do

10:48

you call it ceiling floor are, not to use

10:50

a cap and trade parallel too strongly, but where the ceiling and

10:52

floor are. Yeah, and just

10:55

thinking about the US then specifically, as I say,

10:57

election coming up this year, very,

10:59

very different positions stick down between the

11:01

parties. And certainly if you hear people

11:03

around President Trump and what he's saying

11:05

about what he'd do if

11:07

he gets another term in office,

11:10

let's talk about dismantling the Inflation Reduction

11:12

Act, very much pulling back on the

11:14

incentives for low carbon energy and EVs

11:17

in the IRA. Probably a few things

11:19

might be safe, perhaps carbon capture, perhaps

11:21

nuclear power, financial support for those would

11:23

be maintained, but the theory is that

11:26

much of the other apparatus incentivizing

11:28

and supporting low carbon energy

11:30

would be dismantled. But

11:33

then you also hear a lot of people say, well, actually,

11:35

if you look at the states that

11:37

are benefiting from these incentives, a lot

11:39

of them are Republican states. They have

11:42

Republican representatives in the House, in

11:44

the Senate, they have Republican governors

11:47

and are all these Republicans

11:50

really going to want to vote for

11:53

taking away a lot of incentives

11:55

that support important industries in

11:57

their states? And so people often

12:00

draw the analogy with the Affordable Care

12:02

Act, Obamacare, which President Trump

12:04

was keen to demolish, but

12:06

couldn't manage to get the votes in Congress

12:09

to make that happen. And

12:11

people say maybe the IRA is going to be

12:13

something similar in a second Trump term. I

12:15

don't know. What do you think about that?

12:18

For me, there's two conversations. One is the Inflation Reduction

12:20

Act. And the idea is it

12:22

is already a law. It is signed dismantling

12:24

it. I mean, you can certainly weaken it,

12:26

but completely getting rid of it, that's very,

12:29

very tough. Versus will there be leadership to

12:31

sort out the rest of the things that

12:33

haven't been sorted out if you want to

12:35

accelerate progress towards net zero and reach the

12:38

nationally determined contributions set of goals and your

12:40

term goals, all of that. So those are

12:42

two different things. And I think that's

12:44

true for all of us, but definitely tell me if you

12:46

disagree or you see it differently. So, yes, you can

12:48

weaken a few things around the Inflation Reduction

12:51

Act, but you can also just not act

12:53

to sort out all the other non-technical barriers

12:55

to getting things built so that they can

12:57

actually capitalize on those incentives, which right now

12:59

we just haven't sorted that out yet. Well,

13:02

and you can appropriate differently. So

13:04

I would imagine a Trump administration

13:07

would appropriate to SMR small nuclear,

13:10

but they wouldn't appropriate to

13:12

some of the more renewables. They probably

13:14

wouldn't do anything to help wind because

13:16

the natural gas industry on some

13:19

level have really spent a lot

13:21

of money trying to kill wind

13:23

in different environments, even though super

13:25

popular with the utilities in Oklahoma.

13:27

So you have these tensions

13:30

and some of that might come

13:32

through appropriations. Maybe a Trump administration

13:34

would appropriate towards certain kinds of

13:37

energy and non-others. Yeah,

13:39

I think that's right. And Sony, that's going to be an important

13:41

thing to watch for in 2025 then if we

13:43

do get a second Trump administration.

13:46

My own personal feeling is I

13:48

think I'm a bit more pessimistic

13:50

about the support for clean

13:53

energy under the Inflation Reduction Act, perhaps than the

13:55

consensus is. I think if you

13:57

think about where kind of conventional wisdom mostly

13:59

seems to be. it's essentially

14:02

making your point, Melissa, that it'll

14:04

be hard to dismantle this whole

14:07

apparatus, this whole framework of legislation and

14:10

incentives. But I

14:13

think there's also going to be a very

14:15

considerable determination on the part of Trump,

14:17

if he does get a second shot of the presidency,

14:20

to push very hard. I think this is

14:23

going to be one of the targets that's

14:25

absolutely on his radar and

14:27

something that he's going to be keen to

14:29

have a success on. And

14:31

so we'll see. I mean, but I think I'm

14:34

still, as I say, other people

14:37

seem rather more optimistic about the outlook than

14:39

I am. Well, and I don't disagree

14:41

that the uncertainty that this brings is not

14:44

already having effects, right? So that uncertainty

14:46

is if the goal

14:48

is to decarbonize as quickly as possible, if

14:50

that is your goal, then that uncertainty is

14:52

concerning because it does end up slowing down

14:54

different projects and people aren't as confident in

14:56

making their bets. What is the number one

14:59

thing I hear from industry, which is give

15:01

me some kind of clear shot,

15:04

like a clear pathway forward. Like this is where

15:06

you're going. And I will optimize things around that.

15:08

But when you add uncertainty in the mix, yeah,

15:10

there's opportunities there. But there's also a lot of

15:12

stuff that just slows me down. So

15:15

I can't move as clearly towards any given

15:17

direction. Hey, listen, the

15:19

oil industry gave themselves a lot of

15:21

goodies in their lobbying for the Inflation

15:23

Reduction Act. And I don't think they're

15:25

looking to not get federal

15:28

assistance for carbon sequestration or DAC.

15:31

I don't think they're not looking to get assistance

15:33

to try to build up hydrogen.

15:36

So maybe we change the definitions

15:38

for hydrogen or something like that.

15:41

But I think a lot of his supporters,

15:44

adamant supporters, want a lot of the

15:46

things that are in the Inflation Reduction

15:48

Act. So I think it's Joe

15:51

Manchin didn't put all that effort in

15:53

to have it all get undone. And

15:56

same thing with a lot of these Republicans who

15:58

didn't vote for it. negotiated

16:00

what mansion would or wouldn't agree to. So I

16:03

think the industry has a lot of things

16:05

they want. That's why I think it'll be

16:08

selective. The easiest thing to do

16:10

is not to try to do it through

16:12

Congress and therefore not succeed. The easiest thing

16:14

is to do it through the appropriations process.

16:17

Yeah, that is a great point. And as

16:19

you say, certainly that's kind of more evidence

16:21

on the optimism side of the scale

16:23

in terms of a lot of these provisions

16:25

being maintained. So I want to change the focus a

16:27

little bit with my person to watch in 2024 and

16:30

shift the

16:32

attention to China. My

16:34

choice is Wang Chanfu, who

16:36

is the chairman of BYD,

16:38

the Chinese electric vehicle maker,

16:40

which has just been hitting

16:42

the headlines just recently because

16:44

of outselling Tesla in terms

16:46

of sales of battery electric

16:48

vehicles in the fourth quarter of

16:52

2023, making it the largest EV manufacturer in the

16:54

world. Just tremendous

16:57

story in terms of the

16:59

growth of this company. It's

17:02

very impressive in terms of technological

17:04

progress in China, the way they have

17:07

been developing, not just with

17:09

BYD, but several other companies as well,

17:11

building up from

17:13

essentially nothing, then

17:16

becoming battery producers and then

17:18

taking that into EVs as

17:20

well. These very, very compelling

17:22

offerings. Clearly, they're not

17:25

all the way there yet in terms

17:27

of international competition. So big

17:29

market in China, which is growing very fast

17:32

as an EV market. They've launched

17:34

a few models in Europe, which

17:36

have not yet been hugely successful.

17:38

And you see some

17:40

of the reviews, for instance, they recently launched

17:43

the BYD Seal, which is an executive saloon

17:45

type car intended to compete with a Tesla

17:47

Model 3. Probably it's still not quite as

17:49

good as a Tesla Model 3,

17:52

and it's slightly more expensive even. So they're

17:55

not yet world

17:57

beaters, but it does feel like

18:00

particularly given the enormous amount of

18:02

progress they've made, they're going to get

18:04

there and there's still a lot more to

18:06

come from them. They definitely have

18:08

international ambitions. They're going to be building

18:10

a European plant in Hungary. There

18:13

are predictions that really when Chinese

18:16

automakers get into the

18:18

European market properly, they could take a

18:20

very, very significant share of the European

18:22

EV market. And as

18:25

I say, Wang Chenfu of

18:28

BYD is one of the

18:30

absolutely key figures in that, has

18:32

been very, very personally instrumental in

18:34

building that company, making it

18:36

a competitor. And he's definitely going to

18:38

be someone to watch as

18:40

a very impressive person, definitely someone to

18:43

keep a close eye on in 2024

18:45

and beyond. Well,

18:47

let me just say, Ed, that he

18:50

recently gave a speech saying that

18:52

their aspiration is to take 10% of

18:55

the international market, which would be a big,

18:57

big ambition. The

19:00

Financial Times just did a profile, which of

19:02

course is always, you know, I always tell

19:04

people you invite the evil eye in your

19:06

own country or elsewhere when you get two

19:09

profiles. But one of the

19:11

things they said about him is

19:13

that he's focused very squarely on

19:15

cutting costs and

19:17

on securing supply chains. And

19:19

that would distinguish him from a lot

19:21

of other companies he's competing with. And

19:25

so I do think BYD is a company

19:27

to watch. You might recall that was my,

19:29

in our last episode for the holidays,

19:32

that was in my success bucket for

19:35

2023. And I

19:37

think you're right, their trajectory seems to have a

19:39

lot of momentum. Absolutely. So

19:41

let's move on then. Let's talk about places

19:43

next, places to watch, parts of the world

19:45

that we're going to be keeping an eye

19:48

on in 2024. Melissa, what's it for you?

19:52

Oh, man, we can tell where my

19:54

brain is already because I'm thinking about

19:56

COP. I'm thinking about Azerbaijan. I've

19:59

never been a I guess that will soon

20:01

change as we come into this next year.

20:03

But what are we going to be putting in place? And

20:06

specifically, when I think about the place, it's OK. What are

20:08

the conditions that are being created

20:10

to advance, in particular, the financing, the energy

20:12

transition conversation? We grab that as

20:14

one of the kind of focus

20:16

areas of this last cop and what is going to

20:18

be needed to really

20:21

start accelerating

20:23

infrastructure deployment and build outs, in particular,

20:25

in low income and developing and emerging

20:27

economies. And so I don't know, have

20:29

you all been to Azerbaijan? Have

20:31

you guys spent any time there? Yeah, so

20:34

I think it'll be interesting in having the cop

20:36

in that country, in that place. We talked about how

20:39

much different cops have been affected by the location in

20:41

which they are held. And so I think it will

20:43

be interesting to see how this one comes together. But

20:45

jury's still out. It's early days. Very

20:47

interesting that we're potentially going to get

20:50

three consecutive cops in significant

20:52

oil producing countries. So obviously, COP 28

20:54

in the UAE last year, then this

20:56

year COP 29, that's by John. And

20:58

I think we're scheduled to have COP

21:00

30 in Brazil in 2025 as

21:05

well. So that, again, I mean,

21:08

we've debated this question endlessly.

21:10

I think I've gone

21:12

on and on about my position. I think it's

21:14

a good idea that we have these cops in

21:16

oil producing countries. I think we need global solutions

21:19

to climate change. And that absolutely includes bringing in

21:21

the large energy producers and the large oil and

21:23

gas producers as well. But it's

21:25

going to be interesting to see how that kind of

21:28

shifts the debate over

21:30

time and whether the

21:32

debate manages to stay on track, given the

21:35

strong influence that oil producers are going to

21:37

have. And speaking in Brazil, I mean, that's

21:39

really, it's less than two years out now, right?

21:41

And I'm sure you all are following this too.

21:43

But this whole Brazil launching regulated carbon markets conversation

21:45

is going on right now. I really wonder where

21:48

that's going to be in this next year. And

21:50

then in the run up to hosting COP. It's

21:53

not a small deal. Yeah,

21:56

that's a great point. That's also going to be fascinating to

21:58

watch, as you say. So Amy, what's your place? to watch.

22:01

So, a small place to watch is not

22:04

a singular place but multiple kinds

22:06

of places and that is data centers.

22:09

Our friends at GridStrategy has

22:11

compiled all the Form 714s

22:14

and are showing a

22:16

4.7% rise in

22:19

the United States in electricity use over

22:22

the next five years and some

22:24

of that is going to come from the

22:26

IRA, from the new manufacturing plants and so

22:28

forth but $150 billion of

22:31

that is new data centers to

22:33

French A and

22:35

so that's to me you

22:37

know your 2024 thing to

22:39

watch you've got the new 24-7

22:42

problem free regular

22:45

certificate trading alliance. So, are

22:47

we going to have a

22:49

new market created in

22:52

renewable energy credits that is

22:54

going to bypass you

22:57

know structured markets and try to create

22:59

a new hourly market for

23:01

renewable energy credits. The

23:03

idea behind it is that

23:05

Google, a company called Level

23:07

10, Microsoft, AES, Castillation and

23:09

others that are going to try

23:12

to build this marketplace so that trading

23:14

an hourly, the idea is

23:16

if you have curtailed at noon

23:18

or you have curtailed wind at different

23:21

times of day you could

23:23

then take advantage of that

23:25

in this market and then

23:27

it would incentivize people to put

23:29

in storage. So, in

23:32

the short term people are thinking

23:34

it might help the financing of

23:36

battery storage if this market gets

23:38

off the ground. In

23:40

the long term because

23:42

they're trying to create an hourly

23:44

market, sort of a derivatives hourly

23:46

market, the question is maybe that

23:48

would help with the

23:51

Biden definition by 2028

23:53

or whenever the hourly

23:56

matching green hydrogen definition

23:58

kicks in. It

24:00

could be sort of if it succeeds, it

24:02

could be game-changing. If it doesn't succeed, then

24:04

we have a big problem here in the

24:06

United States because we're going to

24:08

have a lot more electricity demand and how

24:11

are we going to keep decarbonizing momentum going.

24:13

That is fascinating. Yeah, no,

24:15

I hadn't known about all that in terms

24:17

of, as you say, the way that it

24:19

could change the energy market as

24:21

a whole. It's been one of those things where in

24:24

the past, it's been absolutely the

24:26

case that big buyers of

24:28

power and particularly the big tech companies have

24:30

had a huge impact on

24:33

the electricity system. Listen,

24:35

they started off in offsets, they

24:37

were criticized, then they moved to

24:40

purchasing power agreements in the actual

24:42

regions where they had their data

24:44

centers. But this is very

24:46

interesting because it's really like a shot over

24:48

the bow of the utilities. It's like saying,

24:51

listen, you won't put in pricing reform, so

24:53

we're going to create a synthetic

24:56

market to create those pricing signals

24:58

ourselves to make decarbonization and

25:00

the use of storage commercial on

25:03

an hourly basis because you are resisting

25:05

that. It really is a

25:07

threat to the utility model and it really

25:10

could be pretty impactful. It

25:12

made me think about what happened,

25:14

not to date myself, when

25:17

the New York Mercantile Exchange opened a crude

25:19

oil contract back in the day in

25:21

the 80s. The

25:23

oil industry wasn't going to use

25:25

it and it was this thing

25:27

New York traders were doing and

25:29

then all of a sudden, all

25:31

the secret lease-barrel deals and foreign

25:33

contracts on bilateral basis

25:36

and lack of transparency on

25:38

prices went out the window and all

25:41

contracts went to the 9x plus

25:43

or 9x minus or 9x low.

25:47

I think this could wind up being the same

25:49

thing. They could actually force electricity pricing

25:51

reform in the United States if they can

25:53

get the market off the ground. What

26:01

was the title of it? Britain's economy is not

26:03

working here, two key reasons. And the next sentence

26:06

said, the power grid can't keep up with what's

26:08

going on, essentially my paraphrasing of the next sentence.

26:10

But it was the power grid was the first

26:12

thing that I highlighted. And I thought it was

26:14

really interesting. You talk about markets, Amy, my mind

26:16

is immediately going to, if I want to develop

26:18

and if I want to build a business and

26:20

if I want to, in some cases, realize incentives

26:22

that exist under existing policy. So in the New

26:25

York Times article, they flagged the CHIPS Act. So

26:28

around it, what am I going to do if I

26:30

can't get a connection? And the number of companies I've talked

26:33

to who are like, I'm having trouble getting

26:35

my utility to call me back. I need a

26:37

bigger pipe. I need a bigger wire to get

26:39

more electrons into my system because

26:41

I want to use that electricity to

26:43

do XYZ, insert lots of different processes

26:46

here, testing out emerging technologies, using existing

26:48

technologies to produce things we want, et

26:50

cetera, et cetera. And I can't get

26:52

a callback, much less get

26:54

the wires built. And if I do that,

26:56

I mean, it's really, really expensive. And

26:58

I've got to think through that. So actually I'm evaluating

27:01

my onsite generation potential and I'm picking

27:03

different locations from my facility based on

27:05

my ability to get enough land to

27:07

actually do that. And

27:09

this is a really big emerging thing. And you

27:11

add all the local regulations and kind of,

27:13

again, back to the non-technical barriers we haven't sorted

27:16

out for building infrastructure. And this

27:18

is a massive, massive thing. And it's not just in

27:20

the US. It's not just in any state. It is

27:22

a global and certainly in the case

27:24

of the New York Times article, they were

27:26

highlighted in the UK in this case in

27:28

semiconductor manufacturing, but it is so far from

27:30

being isolated to those industries and those locations.

27:33

Yeah, absolutely. That is fascinating. I agree. Amy,

27:35

just jumping back to those numbers you cited,

27:37

just a check. That was a, did you

27:39

say in specifically in the US,

27:42

that's a 4.7% increase in electricity demand

27:45

over five years, not 4.7% a year, it's 4.7% in

27:47

five years. In

27:51

over five years. But you know,

27:53

US electricity demand for 20 years

27:55

was completely flat. Yeah. Absolutely.

27:58

Yeah, I just wanted to make that point to. listeners who might

28:01

think, oh, that doesn't sound like very

28:03

much, actually by the standards of the

28:05

power industry in the United States. That's

28:07

a very big deal. Yeah. And their standard

28:09

operating procedures have been largely built around, okay,

28:11

there's local cases where electricity demand has gone

28:13

up as cities have developed, etc, etc. But

28:15

overall, when you've been operating in this paradigm,

28:17

we're like replacement, there's some growth in some

28:19

locations, but there's also maybe some shrinking in

28:22

other areas, or certainly growth is in what

28:24

you might have expected. And now

28:26

all of a sudden, you're going, whoa, whoa, whoa, whoa, we're

28:28

going up again, how do I get approval to build all

28:30

this stuff? And then more to the point, how do I

28:32

actually get it built? What are my non wires options? What

28:34

are my wires options? At the end of the day, I'm

28:36

going to need more electrons. So where do I get them

28:38

from? This is something that is

28:40

coming not from policy in this case, it's

28:42

from demand for a service that we want

28:45

with these data centers, and all the things

28:47

that we use those data centers for. So

28:50

let me just say, because grid strategies

28:52

was, you know, quite detailed, you know,

28:55

in their assessment, and they

28:57

say that the peak level of electricity

28:59

demand in this five year period is going

29:01

to grow by 38 gigawatts. So just

29:03

to put a tangible number

29:05

on it, I mean, and that that's a big

29:08

number in electricity work. And

29:11

as Melissa was saying, that's looking at the

29:13

national average, which in a

29:15

way can be a bit misleading, because

29:17

it'll be concentrated in certain parts of

29:19

the country, I guess, presumably, Texas, probably

29:21

something California, other states that have large

29:24

concentrations of data centers. And

29:26

so, in terms of the local

29:28

impact in specific markets, it's going to be much

29:30

greater than that. Well, then the question

29:32

is, if I'm a state that's looking

29:34

to build my economy, do I want to

29:36

attract a data center? Or I want to

29:39

drive out data centers? You know,

29:41

I think it's like an interesting question,

29:44

in terms of, you know, what is

29:46

the path going forward? Yeah,

29:49

absolutely. Now I want to shift focus again, then

29:51

to bring up my place to

29:54

watch in 2024, which is a

29:56

bit of an obvious one, really, because I guess the eyes

29:58

of the world are very much on this region

30:00

already, which is the Arabian

30:03

Peninsula and the seas around it. Because

30:06

of the drone and

30:08

other attacks on shipping

30:10

by Houthis from Yemen,

30:13

there's been severe disruption to shipping

30:16

traffic moving through the Red Sea. It's

30:19

clear that it's not

30:22

gonna be easy to resolve that. We've

30:24

already had the United States and many

30:26

other countries kind of flexing

30:28

their muscles, mobilizing resources to the region to try

30:30

and stop it, but it hasn't

30:33

been stopped yet. And

30:35

there is clearly a severe risk

30:37

of escalation. I noticed that Iran

30:39

had sent a warship to the

30:41

region recently. And for

30:44

energy purposes, that Red

30:46

Sea route through the Suez Canal is important

30:48

for some products, but clearly the

30:50

really big issue is over

30:53

on the other side of the Arabian Peninsula,

30:55

the Arabian Gulf, Strait of Hormuz, through

30:58

which about 15 million barrels

31:00

a day of crude and about 5

31:02

million barrels a day of oil products

31:05

passes, 20 million

31:07

barrels a day or so, in total roughly 20% of all

31:09

the world's oil goes

31:12

through that one very narrow Strait. If

31:15

the situation worsens, if

31:17

there's some kind of escalation, that

31:19

could create huge disruption in

31:21

global oil markets and a very

31:24

steep increase in prices. Oil

31:26

markets at the moment don't seem really

31:28

very worried about it.

31:30

Brent Crude is trading, as

31:33

we speak, just looking it up, it's about $78 a barrel, so

31:36

it's no kind of elevated

31:39

level really. It's been significantly higher

31:41

than that last year. And so

31:43

traders don't seem to be worried

31:45

about the risk of escalation, particularly

31:47

at the moment, but it's

31:49

definitely something I would want to flag up and

31:51

definitely something people should be keeping a very close

31:53

eye on is what happens in that region

31:56

over the coming months. And

31:58

I do think, Ed, that there are... all

32:00

kinds of different ways where things could flare

32:02

up. Part of the thing that's

32:04

been driving markets to be healthy in

32:06

the soft landing and all that kind

32:08

of stuff is that we

32:12

were thinking that inflation was getting under control.

32:15

But if I can't do this

32:17

shipping route through the Suez Canal,

32:19

that is inflationary. You've got the

32:21

low water levels for the Panama

32:23

Canal. And then you have

32:25

these other sort of hot spots. You've got this,

32:28

do we, don't we believe that

32:31

Maduro has the guts to try to launch

32:33

a military action against the

32:35

border with Guyana. So

32:37

there are a lot of flash

32:40

points because Brazil put troops to

32:42

kind of discourage Venezuela. It

32:44

would mean we have to start

32:47

in with sanctions again. What happens

32:49

if the United States, here accidentally

32:51

or by necessity, gets into a

32:53

military conflict with Iran, that

32:56

we have to start telling China we don't want

32:58

them to buy Iranian fruit and

33:00

will the Chinese comply or not comply. So there

33:03

are a lot of red flags

33:05

out there in the sort

33:07

of traditional energy space. And

33:09

I think the thing is, I just

33:12

noticed that the statistics just came

33:14

out, believe it or not, financial

33:16

player, speculative positions, long

33:18

positions in the futures

33:21

market at a low. So

33:23

a little bit surprising. I mean, I think maybe

33:26

there's so much uncertainty. Everybody got out of their

33:28

positions for the end of the year. So

33:31

now the question is, what happens now? Depending

33:33

on what happens, sort of on the world

33:35

stage. I'll say to both of your points,

33:37

these regional dynamics, and we talk so much

33:40

about the next steps in the energy transition,

33:42

2030, 2050, all that, but

33:45

these near term dynamics are gonna be really interesting to

33:47

watch. And to Amy's point, the

33:49

regions, they're some of the ones we might classically

33:51

think of, even if we're not energy folks. But

33:54

then also, I think these regional dynamics

33:56

are gonna be really important to follow,

33:59

completely agree. And I'm not sure

34:01

what's going to happen in the next six to 12 months. When

34:03

you've got elections, all these other things going on,

34:05

it's going to be interesting.

34:08

Yeah, absolutely. And when you think about

34:10

the potential for short-term volatility and what could

34:12

be making the headlines in energy during the

34:14

coming year, that's very

34:17

high on the list. That's got to be one of the

34:19

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35:22

I want to move on, though, and talk

35:24

about technologies now and to talk about the

35:27

technologies that you're going to be following closely

35:30

and thinking about in 2024. Maybe

35:33

Melissa, start with you. What do you think

35:35

will be a particularly interesting technology to look

35:37

at this year? Oh,

35:40

man, I wonder if Tim Latimer is going to hear me say

35:42

this and sure is. He hears it. I'm

35:44

watching enhanced geothermal. I am watching it from

35:46

the tech perspective. I'm really interested. You all

35:48

know I don't need to go down the

35:50

line about firm dispatchable power and what we're

35:52

figuring out. And I'll

35:55

put a comment about nuclear and some heartbreak I

35:57

had towards the end of the year on that one.

35:59

You know, I'll put that on a nice for just a moment. But

36:01

I'll say, you know, when I look

36:04

at that plant, Project Red out in

36:06

Nevada and coming online, you know, that

36:08

was the one that is Fervo Energy,

36:10

so that's why I mentioned him, and

36:12

Google, and it's actually supplying energy to

36:14

your point, Amy, it's in support of

36:17

data centers, massive data centers in that area.

36:19

And so I'm really looking at this because

36:21

we have to figure out this clean,

36:24

firm, dispatchable power equation somehow. Because if

36:26

we don't, we know what the numbers

36:28

tell us, which is you end up

36:30

with unreliable and or unaffordable,

36:32

so costly power, which is the backbone

36:34

to carbonization, that's a big problem. So

36:37

I'm excited to follow it because it's

36:39

reached the point where this is not

36:42

just theory or small, this is actually

36:44

going into the bigger demonstration and bigger.

36:46

This is a 3.5 megawatt

36:48

project in the case of Project Red, these

36:50

are bigger projects, and that's exciting. So I'm

36:52

like gigawatts, let's go, you know,

36:54

where are we gonna go? So I'm following that

36:56

one. I'm curious which ones y'all are following, if

36:58

you had to pick one, because I limited myself

37:00

to one. Amy? So

37:02

I'm following, although it's had a

37:04

rocky road, I'm following

37:06

sort of like solid-state batteries

37:09

or the sort of

37:11

the EV innovation path because

37:13

Hyundai just found a patent

37:16

for an all solid-state EV

37:18

battery. I'm gonna make a quote here

37:20

because you know I'm not a technologist per

37:22

se, which the pressure

37:24

is constantly maintained in each

37:26

cell regardless of charging

37:28

or discharging rates. It's some kind

37:31

of fluid-based system. They

37:33

say it's gonna make it same thing

37:35

that we've been promised by Toyota, but

37:37

seeing delays, you know, lighter, faster charging,

37:40

and you know that comes on top

37:42

of Oak Ridge National Lab saying

37:45

they've developed a new lithium-ion

37:47

material with a formulation where

37:49

the electrolyte also maintains a

37:51

better ion flow that would

37:53

triple battery lifespan and you

37:56

know speed recharging. So I

37:58

think that there's gonna be

38:00

a next generation and that's

38:02

the technology I'm watching. Yeah, I'm

38:04

certainly going to agree with you that it's

38:06

worth watching. I do feel, as

38:09

you alluded to, that we've been

38:11

here before and we've been burned

38:13

before and hopes

38:15

have been raised about solid-state

38:17

batteries. In principle, they sound

38:19

fantastic and they can have

38:21

longer range and quicker charging

38:23

and greater safety than liquid

38:25

electrolyte lithium-ion batteries. However,

38:28

it feels like – and you mentioned Toyota, as you say – Toyota

38:31

were talking last year about exciting plans

38:34

and they're rolling out production, I think they were saying

38:36

from 2026 of a

38:38

solid-state battery. Now they're saying

38:40

2030, so that's why I put a

38:42

caveat on that. Exactly. For

38:44

people who didn't see this kind of clarification of

38:47

their earlier announcement, because it felt like there was

38:49

a big fanfare about the initial announcement, then there

38:51

was somewhat quieter with it later on. Obviously

38:54

the plan is to start production in 2026, 2027,

38:56

they'll be rolling these cars

38:59

with solid-state batteries out, but in

39:01

pretty limited numbers for the rest

39:03

of the 2020s with

39:06

a view then, hopefully, ideally

39:08

to large-scale deployment and a

39:10

wide rollout after 2030. So

39:15

that feels like, again, it's kind of being put off,

39:17

put off, put off. In the meantime, we would

39:20

hope and expect that cars

39:22

with more conventional lithium-ion batteries and

39:24

cars with maybe even with

39:27

some sodium-ion batteries will be coming

39:29

up now, because we're seeing CATL

39:31

of China actually building

39:33

a plant to build sodium-ion

39:35

batteries which can go into EVs, and

39:38

so that technology apparently is coming up

39:40

fast now. So is there

39:42

going to be demand for solid-state batteries

39:44

in the long term? Could they be

39:46

a very important part of the EV

39:48

landscape in the longer term, i.e.

39:50

into the 2030s? Yes, they certainly

39:52

could, but do they still have quite a lot

39:55

to prove? Yes, I think they do. Fair,

39:57

Amy? Well, listen, it's a lot of different...

40:00

of different companies, GM,

40:02

VW, Ford, Nissan, Honda. I mean, people

40:04

are working on this, but you're right.

40:06

Maybe I'm too optimistic to think it'll

40:08

be in the news in 2024. But

40:12

Hyundai just made their announcement. So

40:14

when I was focused on that.

40:17

No, I agree. And as you say, it's

40:19

definitely interesting, definitely something to watch. Now, I

40:21

also want to highlight a technology that I

40:23

think has quite a lot to prove. And

40:25

Melissa, you alluded to this earlier, small modular

40:27

reactors. I think about

40:30

the year that technology

40:32

had last year and the very

40:34

significant setback in terms of the

40:37

most advanced project for SMRs

40:39

in the US getting cancelled.

40:42

It seems to me then that 2024 is a very critical year for both

40:48

NewScale, the company that was hoping to supply

40:51

the technology supply, the reactors for that project

40:53

and other companies that are developing

40:56

SMRs. They really need

40:58

to show significant progress this year.

41:00

Or I think there's going

41:02

to be a general sense, oh,

41:04

this is another full storm. This is

41:06

something else that was promised that generated

41:08

excitement. The famous nuclear hype

41:11

cycle where new technology comes along and everyone

41:13

gets excited about it for a while. And

41:15

then it turns up in reality not to

41:17

live up to the promises that were made.

41:20

And then you get a lot of

41:22

disappointment and hopes deflate. I

41:25

think there's a danger that we're just

41:27

kind of on the tipping point of

41:29

that for SMRs. And so

41:31

I think it's an industry that badly needs

41:33

some good news. And I think there's a

41:35

lot of excitement over nuclear power at COP28.

41:38

And we had these 24 governments setting

41:41

this goal of tripling nuclear generation

41:43

capacity by 2050. There

41:46

was certainly a higher profile for nuclear power

41:48

in its role in addressing climate change at

41:50

COP28 than there had been at any previous

41:52

COP. All of that is true. But

41:55

even so, you can't, as

41:58

an industry, survive on... hopes

42:00

and goals and aspirations

42:03

and promises for distant

42:05

achievements in the future, there needs

42:07

to be some real

42:09

progress in terms of contracts being

42:12

signed, developments making progress,

42:15

regulatory approvals being secured, perhaps

42:17

even construction starting, probably a bit unrealistic

42:19

to think about that happening this year,

42:21

but certainly it will be important I

42:23

think to see preparations being made to

42:25

allow construction to start on

42:28

SMR projects as I say, so

42:30

that's something I think is going

42:32

to be worth watching very closely

42:35

is this kind of pivotal moment

42:37

for that technology in 2024. So

42:40

Ed, I'm curious if we're talking about

42:42

the same kind of announcements that were

42:44

happening last year, I will say

42:46

that kind of a moment where you see

42:48

the announcement because I talk about that project

42:50

in Alaska all the time, the Oklo Microactor,

42:52

all of that, and it got pulled that

42:54

was announced before the end of the year.

42:56

Is that the one you're

42:59

talking about? Are you talking about another one? No,

43:01

no, I'm thinking about quite another setback. I

43:03

meant the Idaho Falls project, which

43:07

was meant to be quite a significant

43:09

scale plant using small modular reactor technology,

43:12

which essentially they couldn't find customers

43:14

for customers who could have bought the power

43:16

from the plant decided it was just too expensive.

43:19

Well, and you know, the question is,

43:21

luckily no repercussions,

43:24

but having the earthquake in Japan

43:26

might also revisit

43:28

this whole question about the safety

43:31

of nuclear power, even though luckily

43:33

there were no nuclear accidents. So I

43:35

just think it's a tough

43:37

technology to permit and find you

43:40

everywhere. And I know we don't have an hour

43:42

for it today, so I'll just put in two

43:45

great comments. One, to your

43:47

point, Ed, around how

43:50

we figure out streamlining these processes to figure

43:52

out if these technologies will be able to

43:54

live up to the promise. I think the

43:57

reason the canceled contract in Alaska and the

43:59

Air Force composed of it was one

44:01

of those ones that I just kind of went, this is

44:03

a particularly tough one for the US nuclear

44:05

picture, which will bring me to my second point, is

44:08

that when you think about streamlining, and

44:10

we think about stuff, it's like on

44:12

a military base, like where there is

44:14

kind of one organization controlling a lot

44:17

of the decision making authority, and one

44:19

kind of flow of Capital One, you

44:21

know, these types of things, it just,

44:24

you know, gave me that moment where it was like, okay, how

44:26

do we get too much more streamlined than that? That was the

44:28

question that went through my head, and I'm not saying there's

44:30

not an answer to that. I'm going to have to

44:32

call Rich Powell over at Clear Path and talk to

44:34

Josh Fried and see what their takes on it are

44:36

and their thoughts are here in the New Year and

44:38

where we go from here. But that was just one

44:40

of those moments for the US picture. But that's the

44:43

second comment, which is, at the same time, we're seeing

44:45

Poland full steam ahead, we're seeing additional announcements outside of

44:47

the US. And so what I wonder for nuclear is

44:50

how much of this is a US story

44:52

and countries like the US that have made

44:54

choices like Germany, they turn off nuclear,

44:56

that's just that there's a whole history behind it,

44:58

which goes to Amy's points around concerns that

45:01

have happened and you know what happens after accidents.

45:03

But I do wonder where the international story is

45:05

going to go on this and what

45:08

countries are going to choose that nuclear is

45:10

going to be their firm dispatchable power, because

45:12

power doesn't have decades to wait if you

45:14

want to hit decarbonization targets, it's the first

45:16

mover. And so we have to figure this

45:18

out. But Amy, your thoughts? Well,

45:20

I think you know, one of the big features

45:22

that no one talks about, like the elephant in

45:25

the room is that even Bill Gates's plan had

45:27

a delay, because they

45:30

don't have a secure uranium

45:32

supply. And so this

45:34

whole question about readily available

45:37

fuel for nuclear is

45:40

also a barrier right now. And there

45:42

isn't really like a clear, I mean, we've

45:44

had some, you know, mining

45:47

projects that have been discussed and so

45:49

forth, but there's supply chain problems in

45:51

terms of the fuel. And

45:54

so I think that's, you know, also

45:56

not discussed too often, but maybe even

45:58

a bigger factor that if I

46:00

can get the community around these plans to accept

46:02

it. And for those who

46:04

missed it, there was a conversation we had after

46:07

Russia invaded Ukraine. It was with Amy Harder,

46:09

I think. It was, yeah, that's right. Yeah,

46:13

exactly to your point, Amy, around

46:15

how do we think about this highly

46:18

enriched low assay, the

46:21

fuel we need for these advanced reactors? How do we

46:23

think about HALU? And what happens

46:25

when you've got one single supplier?

46:27

And it's not that other companies can't supply it,

46:29

exactly to your point. It's that they're saying, if

46:31

we're going to make those investments, we need to

46:34

clearly have a market which goes back to the

46:36

need for all these demand pull technologies. We've got

46:38

to create markets. We've got to create the conditions

46:40

in which these things can be snowballs rolling down

46:42

hills. Otherwise, they become one-off projects that one

46:45

or two changes in the conditions ends

46:47

up shattering them before they actually get

46:50

off the ground. Listen, there's a chicken

46:52

and broth. I can't get funding for

46:54

the HALU project because I can't get

46:56

guaranteed offtake from these new projects. And

46:59

I can't do the new projects unless

47:01

I'm sure I have the fuel. At

47:04

least in the United States, it's a pretty

47:06

dire picture. So I don't know how that

47:08

gets resolved. And my last

47:10

comment I have to make on this, and it's not

47:12

because I am part of Energy Policy Center, but it's

47:14

when you talk chicken and egg, I'm like, all right,

47:16

policy, where and how are you going to

47:19

step in? Where is an appropriate role? Because that's

47:21

how we get through these chicken-eggs issues. Yeah,

47:25

absolutely. And that's something else I think which

47:27

is going to be interesting to watch in

47:29

2024 is whether the US government, other governments

47:32

around the world decide to take action on

47:34

that and whether they think, as you say,

47:36

there is a log jam here that needs

47:38

to be broken by policy action and whether

47:40

there's something that they can do to break

47:42

that log jam. So that's well worth keeping

47:44

an eye on, I think. So

47:46

something else I want to talk about. Stories

47:49

that are currently going under the radar

47:51

a bit but could be significant in

47:53

2024. What do you think? Well,

47:56

I'm focused on the US Securities

47:58

and Exchange Commission saying that

48:00

they're going to actually try to bring out the

48:02

new rules for how companies

48:04

must report their greenhouse gas

48:07

emissions and how they must

48:09

report on their tangible material

48:12

climate risk. California

48:14

has already put down

48:16

the gauntlet and said that companies with over

48:18

500 million in annual revenues

48:21

that do business in California have

48:24

to report on climate risk and

48:26

for companies of a billion

48:29

annual revenue doing business in California have

48:31

to report on their scope one and

48:33

two greenhouse gas emissions starting in 2026

48:36

and then scope three in 2027. So

48:42

we're kind of moving forward on that. That

48:45

is going to be a boom I think for the sort

48:47

of carbon tech space because

48:50

people need new software, they're going to

48:52

need new systems. If the

48:54

regulator is going to actually look carefully

48:57

at how you're reporting your emissions and

48:59

how you're reporting your

49:02

exposures with the possibility

49:04

that you could be prosecuted for greenwashing, I

49:06

think that's kind of created the whole boom

49:08

to the cottage industry that was already developed.

49:11

Yeah, very interesting. I think that I

49:13

agree with you. That's going to be a very big deal in

49:15

the US in 2024. And I still

49:17

think it's something which is probably not fully appreciated by

49:19

a lot of people. A lot

49:21

of people in business in the US still

49:23

seem not to fully have taken on board

49:25

what the requirements are going to be, what

49:27

they're going to have to do. So definitely

49:29

as the sort of reality of that sinks

49:31

in, it's going to be,

49:34

as you say, definitely one to watch. Melissa,

49:36

what's yours? Something under the radar. I

49:38

think it's under the radar if you don't

49:40

live in these circles. But Ed, I'm pretty

49:42

sure you're looking at the second half of

49:44

what I'm going to say, which is I'm

49:47

looking at mining and I'm looking at South

49:49

America and I'm looking at Chile and Panama,

49:51

specifically in the Chile case, this new deal

49:53

that's happened around lithium and the SQM, Kedokho

49:55

stuff. But with Panama, copper.

50:00

to it, I bet you are. Yeah, and actually

50:02

that was going to be my suggestion

50:04

for something that's going on. I'm not surprised.

50:06

I'm saying, dear. We're very much on the

50:09

same page. I mean, the thing that in

50:11

particular I just wanted to highlight for people

50:13

was just how copper intensive low carbon energy

50:15

technologies are compared to high carbon technologies. If

50:18

you compare a OSHA

50:21

wind turbine, if you compare

50:23

OSHA wind power generation to coal

50:26

or natural gas power generation, it

50:28

needs about five times as much copper in

50:31

terms of tons per

50:33

gigawatt of capacity. If

50:35

you compare solar to gas

50:38

or coal, it needs about twice as

50:40

much copper. If you

50:42

think about expected growth, if

50:44

you think about another commitment from COP28,

50:48

tripling renewable power generation

50:50

by 2030, that

50:53

implies a very significant increase

50:56

in demand for copper. And

50:58

it's just not clear how that demand is going

51:00

to be bad. It's

51:02

not clear where the projects are around the world.

51:04

They're going to be able to ramp up that

51:06

quickly. It's not clear that the mining industry is

51:09

ready to take that on board

51:11

to make the investment that's going to be required

51:14

to increase capacity. And as you say, then you get

51:16

some of these kind of political

51:19

issues, security issues in

51:21

many parts of the world that are going

51:23

to potentially disrupt supply. Tell me about the

51:25

Panama situation. Yeah, so I don't know if you saw the, this

51:28

was right before the holidays, where it

51:31

was the protesters that came out and

51:33

it just shows some of the tensions in the

51:36

transition to low carbon technology. So essentially

51:39

it was like one week after

51:41

Congress had renewed the

51:43

Cobra Panama's mine contract,

51:46

they ended up having huge environmental protests

51:48

against it. And so it's this idea

51:51

of like, okay, so

51:53

what happens next? Because we need

51:55

copper to your point to be

51:57

able to actually transition. But

52:00

if we can't get it, you know, with

52:02

existing mines continuing their operation, which is actually

52:04

a conversation going on, Chile, but also expanding

52:07

operations and creating new mines, like what happens?

52:09

And in the very, very near term, existing

52:12

mines are maybe what I'm referring to as like

52:14

the slightly under the radar piece of this, which

52:16

is OK, what's happening with existing mines? Kind of

52:19

like existing nuclear reactors, are they going to start

52:21

phasing out, in which case we're kind of making

52:23

the hole deeper that we have to dig ourselves

52:25

out of. So

52:27

that's the tension I was talking about.

52:30

And this happened, it was right before

52:32

the holidays. So 15, 16, 17,

52:35

18, December, right in the middle of the month. What

52:37

about some good news you think we might get

52:39

during 2024? I actually

52:41

think I did a spoiler on myself earlier. So

52:44

I'm wondering how Brazil's carbon markets are going to go.

52:46

And Amy, you

52:48

mentioned Argentina and Cabotrade. Like, I'm really I

52:51

think we might get some good news around us recognizing

52:53

the externality in markets, which has a significant

52:56

force, even if it's a smaller carbon

52:58

price, it still affects the market. So

53:01

the interesting thing, Melissa, I think that's

53:03

an excellent one. And the interesting thing

53:05

about it is that what

53:07

Brazil is choosing to do, because of course,

53:10

most of their emissions are from deforestation, and

53:12

they're not going to include that. So

53:16

what's interesting is they're choosing to

53:19

focus on industrial emissions. And

53:21

that would make a big stand.

53:24

I think part of the motivation for

53:26

that is the concern about the European

53:28

carbon border adjustment. But

53:31

if they do something very

53:33

innovative that promotes reductions

53:35

of the emissions in steel and other

53:37

hard to abate sector, then

53:39

I do think because Brazil is

53:42

such an important economy, what

53:44

they do if it's successful could set very

53:46

good precedents for other countries. Yeah,

53:49

great. That is very significant development

53:51

potentially there. So now, Amy, what's

53:53

your choice for something good

53:55

news that we could potentially look out for in 2024? So

53:58

I may regret this. If we have

54:00

a follow on show next year, which is

54:02

like how good were you on 2024, because

54:05

I've already stuck my neck out on

54:08

several things, including the SEC, which might

54:10

get litigated and doesn't happen. You

54:13

know, I'm thinking that 2024 might

54:16

be the year, the actual year of

54:18

hydrogen, and that it's not hype.

54:21

And that is because we've got 24

54:23

countries that have committed government

54:26

incentives and support

54:28

for building hydrogen markets. We

54:31

have some vertically

54:34

integrated international

54:36

trade projects. That's Germany

54:38

in Namibia, Germany, Morocco.

54:41

You've got the Saudi-Japan

54:44

arrangement. And

54:47

then Australia has sort of plunked their

54:50

commitment down to export

54:52

it. So I do think

54:55

that between that and the hydrogen hubs

54:57

in the United States, that

55:00

hydrogen may really be

55:02

finding its time, that we may be seeing

55:04

in these German deals, you've got

55:07

actual end-use buyers, the German deals

55:09

and the way they're structured, and

55:11

even really the Saudi-Japan deal, look

55:13

a little bit like early liquefied

55:15

natural gas deals were

55:18

constructed. We know

55:20

that eventually that market did take off.

55:22

So I'm feeling like this might be

55:24

the year where companies need

55:27

to think seriously about whether

55:30

they're committing to a

55:32

10-year or 15-year profile to doing

55:34

new projects for liquefied natural

55:37

gas and whether they actually need

55:39

to be shifting to something that's

55:41

hydrogen-related. Very interesting.

55:44

As you say, it'll be fascinating to come back

55:46

in a year and talk about that. There

55:50

is a lot of momentum behind hydrogen,

55:52

a lot of interest, a

55:54

lot of excitement created by it. There

55:57

are also enormous hurdles to

55:59

be surmounted. in all kinds of areas

56:01

in terms of the economics, in terms of the environmental

56:03

impact and so on. So yeah,

56:05

interesting to see, as you say,

56:08

this could be a very significant year of

56:10

progress, but let's check in at a year's

56:12

time and see how that panned out.

56:14

So my choice of something to look out

56:16

for in 2024 that could be good news

56:19

is a much safer option, I

56:21

think, because it's something that happened

56:24

already in 2023, which is a

56:26

significant fall in the cost

56:28

of lithium ion batteries. And

56:31

it's something that we saw a lot

56:34

of concern coming out of the pandemic about whether

56:36

there would be a lot of problems

56:39

with supply chains. And for a

56:41

while, there was an

56:44

end to the decline in the cost of

56:46

lithium ion batteries, and actually they even went up

56:48

a little bit. But by the end of the

56:50

year, last year, they were

56:52

very significantly down still. And

56:54

I think we may well see that again in

56:57

2024. The price of lithium

57:01

compounds has been falling steadily.

57:04

I think there's a good chance it could

57:07

fall again during 2024. And

57:09

the cost of batteries as

57:11

well, new capacity coming on stream and so

57:13

on, I think we may well see those

57:15

continuing to decline. And so there is a

57:17

bit of a narrative that had started to

57:20

emerge about EVs. EVs will kind of never

57:22

be competitive with internal combustion engines. And there

57:25

were promises about falling battery costs. And

57:27

now we're seeing that that decline has

57:29

come to an end. And therefore, batteries

57:32

won't get cheaper over time. And

57:35

therefore, EVs will always be more

57:37

expensive than comparable internal combustion engine

57:39

cars. I think we're now

57:41

seeing perhaps a return to normality, if

57:44

you like. And we can see that

57:46

perhaps the decline in lithium ion batteries

57:48

paused for a bit, but did not

57:50

stop. And I think it's

57:52

going to continue through this year. And so

57:54

when you think about EVs

57:56

becoming more competitive, I still

57:58

think the prospects for that are pretty broken. So

58:01

let me just say, you

58:03

know, I always have to tell the

58:05

listeners, you know, years and years

58:08

watching different commodity markets, I said this

58:10

about lithium and it's probably true about

58:12

a lot of the other metals too

58:14

because if I have the incentive to

58:16

look for it, I'll find it, i.e.

58:18

in the United States and India and

58:20

elsewhere. And then on top

58:22

of the new supply then you have thrifting

58:24

which is the word for making the battery

58:27

using less material and making it more efficient.

58:30

And then we have innovations where we might have

58:32

some batteries that are not going to actually even

58:34

use lithium. So I've

58:36

always been a big believer that

58:39

as these markets mature in commodities

58:41

in the metals world, you're

58:43

going to get new mining, you're going to

58:45

get new efficiency. And so I'm

58:48

not the least bit surprised about what you're

58:50

saying because I always believed in it. I

58:52

was throwing that down that I called

58:55

that one. And I was

58:57

on many panels where people said she doesn't

58:59

know what she's talking about, but they were

59:01

just saying their book because you know, I

59:03

was right. Fair point, fair point. I am

59:05

certainly playing it safe with that one, I think.

59:07

But still, I do think that's something which is

59:09

going to be a significant trend

59:11

through this coming year, watching

59:14

that decline in battery prices continue. And so certainly

59:16

I think it's something that people ought to be

59:18

thinking about. So now we've

59:20

just about run out of time. Just before

59:23

we go, though, I want to pick up

59:25

on an idea of yours, Amy, which

59:27

I do think is a brilliant idea. This is usually the point

59:29

in the show where we do free electrons and we talk about

59:31

random personal things that we brought

59:33

in. But for

59:35

this opening show of 2024, instead, we're going to

59:37

have New Year resolutions. So

59:40

we're going to talk about the energy related New

59:43

Year's resolutions that we've all made.

59:46

So Melissa, what's yours? I

59:48

actually have one. I didn't even have to like think

59:50

about it. It's right off the top in my

59:52

bucket of things that I'm going to target for this

59:54

year. Last year, I had the target

59:56

of reading at least one book per month. I

59:58

did it. I really enjoyed it

1:00:01

just kind of focusing on making sure I

1:00:03

did that I read a ton but Specifically

1:00:05

diving into books which go really deep. So

1:00:07

this year I've got one energy and climate

1:00:09

related book per month plus One

1:00:11

non energy and climate related book for months last year with

1:00:13

a mix of things So I've got

1:00:15

already my two big contenders for February I actually

1:00:17

want to ask for you all to vote on

1:00:20

what I do in the near term So at

1:00:22

the end of January, I don't know if you

1:00:24

guys are following at the war below by Ernie

1:00:26

Schneider is coming out Earnest Schneider the

1:00:28

lithium copper and the global battle battle to power

1:00:31

our lives that one's on my list And

1:00:33

the other one is powering humanity by Michael

1:00:35

Weber So those both come out in February

1:00:37

the second one actually comes out on Valentine's

1:00:39

Day So it'll be a you know romantic

1:00:41

decision to read all these essays about a

1:00:43

true team power in the middle But

1:00:45

I got to figure out January and I

1:00:47

just finished a book and I've got two they're sitting

1:00:49

right here energy and climate Cadillac

1:00:52

desert, okay, which I know Ed we've

1:00:54

talked about or should I read our

1:00:56

fragile moment by Michael Mann, which I actually

1:00:58

haven't read yet Um, so what's what's the

1:01:00

vote we go in Cadillac desert we going

1:01:02

our fragile moment, which one are we going for?

1:01:04

They're both sitting right here. So Michael

1:01:07

Mann is an interesting and

1:01:09

controversial character I've never anything of his books

1:01:11

would be interesting to see what you think

1:01:13

of it I would vote for you reading

1:01:15

that and then give us a download on

1:01:18

what he says and what you make of it

1:01:20

Cadillac desert is a book which was very heavily

1:01:22

featured in the water knife Which is the book

1:01:24

that you and I and Robbie Orvis were all

1:01:26

reading last year I think you

1:01:28

should maybe put that off and read that before we

1:01:30

have that discussion about that book Which we've been promising

1:01:32

for a long time, but we are going to have

1:01:35

I'm promising it still But

1:01:37

yeah, why not read the Michael Mann? I'd be really interested

1:01:39

to hear what you think Amy. Do you agree? Is this

1:01:41

a good choice? I think I

1:01:43

think one has to read Michael Mann to

1:01:45

be sort of educated on the broad range

1:01:47

of the literature and I'm

1:01:49

starting a climate justice book club out

1:01:52

of my program at NYU and we

1:01:54

had a vote And

1:01:56

I'm afraid to say water knife did not

1:01:58

come in first reading Braiding

1:02:01

Sweetgrass, which is

1:02:03

a wonderfully written

1:02:05

book and really sort

1:02:07

of mind-opening way of thinking about

1:02:11

how we organize ourselves and

1:02:14

our relationship to nature. So anyway,

1:02:17

that's sort of where I'm going in that realm. Okay.

1:02:21

Well, I'll say what you've

1:02:23

now done is forced me to

1:02:25

have a hardback book

1:02:27

in my bag when I go to Davos here in a

1:02:29

week, which is fine. I'm joking, y'all, but no,

1:02:31

I'm looking forward to it. So Michael Mann wins

1:02:34

out. And I've read Michael Mann's work, but I

1:02:36

have not read this book and I've heard interesting

1:02:38

and very good things about it. So I'm looking

1:02:40

forward to reading it. So I

1:02:42

will report back and, sorry, Mark, Cadillac

1:02:45

Desert's going to be pushed back to

1:02:47

at least merch because there's no way

1:02:49

I'm not going to read about Critical Minerals and

1:02:51

then Michael Weber's new book when those come out.

1:02:54

Yes, actually, that is a very good reminder to

1:02:56

me as well to be reading more energy-related

1:02:59

books. And that's certainly something I should be thinking about

1:03:01

myself as well for 2024, though I

1:03:03

do actually have a different resolution. But before

1:03:05

we get to mine, Amy, what's

1:03:07

yours? Well, my New

1:03:10

Year's resolution is partly being

1:03:12

forced by government policy because

1:03:14

New York City has put

1:03:16

in a congestion tax now,

1:03:18

quite hefty, for cars coming

1:03:20

into the city in

1:03:23

midtown Manhattan below 57th Street.

1:03:25

And NYU is below 57th

1:03:28

Street. But I am really

1:03:30

committing to public transportation because I

1:03:32

think now COVID had sort

1:03:34

of a dent in people's habits,

1:03:36

but we all need to go

1:03:38

back to these public transportation. We

1:03:40

need to get congestion out of

1:03:42

cities for so many different reasons.

1:03:45

And it's important for lowering

1:03:47

emissions. So I'm committing to an

1:03:50

increased use of public transportation and to leave

1:03:52

the car at home. Excellent. Sounds

1:03:54

like a great thing to do. And looking

1:03:56

forward to hearing from you at a year's time

1:03:58

about how that's gone. Sure, it's

1:04:00

going to work. It's going to

1:04:02

be good. It'll be fine. So

1:04:04

my resolution, unfortunately, is one that

1:04:06

I have already broken. So

1:04:09

my plan was the resolution that

1:04:11

I kind of come up with was not

1:04:14

to get suckered in by

1:04:16

hype over technological innovations and

1:04:19

advances and exciting breakthroughs that

1:04:21

people talk about. And you

1:04:24

hear about these things and read

1:04:26

about them in the media and in scientific papers

1:04:28

and there's a sudden kind of Russia. Well, this

1:04:30

is going to be the thing. This is going

1:04:32

to transform all of our lives. And this is

1:04:34

the thing that is at last going to solve

1:04:37

all the problems we face in terms of energy

1:04:39

and climate. And I've thought

1:04:41

I'm just going to not believe anything. I read

1:04:43

it being disappointed so many times.

1:04:46

And then a couple of days ago, as I say,

1:04:48

immediately after I'd made this resolution, I saw

1:04:51

this a new story about

1:04:53

a potential new breakthrough in

1:04:55

room temperature superconductivity,

1:04:57

which if you remember, there was

1:04:59

a whole kind of to do

1:05:01

last year, last summer about a

1:05:04

claimed breakthrough. It

1:05:06

was then examined more closely. It

1:05:09

seemed like in fact, there

1:05:11

were other explanations of what was going on. It

1:05:14

wasn't really real. The claimed breakthrough

1:05:16

had not in fact been made. And

1:05:19

the whole thing seemed to just fiddle

1:05:22

out. And everyone said onto the next

1:05:24

thing, because this is not really the

1:05:26

transformative innovation that we

1:05:28

had been promised initially when the first

1:05:31

papers were published. Now

1:05:33

we have another announcement about

1:05:35

room temperature superconductivity, which if

1:05:38

it turned out to be true, would

1:05:41

be absolutely revolutionary in energy terms,

1:05:43

would make a colossal difference to

1:05:45

electricity, transmission and generation would be

1:05:48

a huge thing in terms of

1:05:50

being able to accelerate the decarbonisation

1:05:53

of the energy system in general and

1:05:56

the electricity system in

1:05:58

particular. And I'm now

1:06:00

thinking, oh, this seems exciting. And maybe

1:06:02

actually where that one, the announcement we

1:06:04

had last year, now that wasn't real,

1:06:06

but this one now, actually there's more

1:06:08

to it, more solidly based,

1:06:10

some refinements compared to what was discussed

1:06:13

last year. This is the new thing.

1:06:15

This really is the thing that is

1:06:17

going to be transformative. Obviously

1:06:20

we have to expect

1:06:22

that we'll be on that same

1:06:24

hype cycle and that when other

1:06:26

people try to replicate the results

1:06:28

and people dig into it and

1:06:30

everything, the conclusions will be undermined

1:06:33

and the breakthrough will turn out to be

1:06:35

not a breakthrough after all, and we'll all

1:06:37

be very disappointed and then go back to

1:06:39

the safest quote before, unless

1:06:42

we don't. And unless actually it

1:06:45

does turn out to be robust and

1:06:47

replicable and something that is

1:06:50

capable of commercialization and

1:06:52

large scale deployment. And

1:06:54

so just for now, at least I'm clinging to

1:06:56

that hope. I want to believe I choose

1:06:59

to hope that there is something

1:07:01

really dramatic and exciting happening and

1:07:05

we'll see. And maybe I'll be disappointed again, but maybe

1:07:07

I won't. It is the

1:07:09

classically important breakthrough we could

1:07:12

have because if you

1:07:14

could have transmission that

1:07:16

didn't change temperature, you

1:07:19

would need a lot less power generation

1:07:21

because you could move electricity around with

1:07:23

the international dateline and peak

1:07:26

would be in a different time

1:07:28

in different places that you could

1:07:30

move a lot more cross border

1:07:32

electricity trade to balance renewables and

1:07:34

to eliminate the need

1:07:37

for extra generation. Even even

1:07:39

within countries, it would be significant like

1:07:41

the United States has multiple times out.

1:07:44

So we

1:07:46

worked on that when I was a professor at

1:07:48

Rice University as a big group working on that.

1:07:51

And it's really an important area of

1:07:53

science. So we

1:07:55

do have to leave it there. I'm

1:07:57

afraid. Melissa, thanks very

1:07:59

much. joining us today. Thanks for having me. It's

1:08:01

really fun chatting with y'all. And Amy, thanks

1:08:03

very much to you. Very good. I'm looking

1:08:06

forward to a great 2024 on the Energy Gang.

1:08:08

Absolutely, yeah.

1:08:10

Thanks to our producers, Sam Nash and Toby

1:08:12

Biggenskill-Christ, and above all, many thanks to all

1:08:15

of you for listening. And as Amy says,

1:08:17

we hope you all have a fantastic 2024. As ever,

1:08:19

we're very keen

1:08:22

to hear from you. Please do send

1:08:24

us your feedback, comments, criticism, complaints, suggestions,

1:08:26

ideas for subjects we will be covering

1:08:28

in the future. And we'll be back

1:08:30

in two weeks with all the latest

1:08:32

news and views from the Energy Transition.

1:08:35

Until then, goodbye.