1 00:00:00,440 --> 00:00:04,680 Speaker 1: Welcome to Zero. I'm Akshatrati. This week a year of war, 2 00:00:05,200 --> 00:00:20,759 Speaker 1: ditching Russia and Europe's new energy landscape. This time last year, 3 00:00:20,840 --> 00:00:24,400 Speaker 1: Russia launched a full scale invasion of Ukraine. What Russia 4 00:00:24,480 --> 00:00:27,240 Speaker 1: hoped would be a quick three day blitz has turned 5 00:00:27,240 --> 00:00:30,160 Speaker 1: out to be a protracted land war that rocked the 6 00:00:30,240 --> 00:00:34,479 Speaker 1: world still recovering from the COVID nineteen pandemic. Its impact 7 00:00:34,560 --> 00:00:39,960 Speaker 1: has spread far and wide, disrupting food systems, supply chains, geopolitics, 8 00:00:40,159 --> 00:00:43,479 Speaker 1: and the global economy. Over the past year, I've been 9 00:00:43,520 --> 00:00:46,639 Speaker 1: working with Bloomberg Energy reporter Will Mathis to look at 10 00:00:46,680 --> 00:00:49,800 Speaker 1: one of those disruptions, how the war in Ukraine has 11 00:00:49,840 --> 00:00:55,800 Speaker 1: transformed Europe's energy landscape. The shift has been remarkable, unprecedented 12 00:00:55,840 --> 00:00:59,600 Speaker 1: in scale, and has immediate and long term implication for 13 00:00:59,640 --> 00:01:03,680 Speaker 1: the use climate goals. On today's episode, we turn the 14 00:01:03,760 --> 00:01:07,319 Speaker 1: tables and Zero's producer Oscar Boyd asks Will and I 15 00:01:07,560 --> 00:01:11,360 Speaker 1: the questions instead, Will the attempts to ditch Russian fossil 16 00:01:11,400 --> 00:01:14,840 Speaker 1: fields speed up the energy transition, or will the high 17 00:01:14,880 --> 00:01:18,560 Speaker 1: price paid for energy security make it harder for the 18 00:01:18,680 --> 00:01:27,720 Speaker 1: EU to live up to its big golds. In the 19 00:01:27,760 --> 00:01:30,840 Speaker 1: last twelve months, there's been an extraordinary change in where 20 00:01:30,920 --> 00:01:33,800 Speaker 1: and how Europe sources its energy, something that the two 21 00:01:33,800 --> 00:01:36,399 Speaker 1: of you will actually have been writing about since the 22 00:01:36,440 --> 00:01:39,360 Speaker 1: start of Russia's invasion of Ukraine. And in your arsicle 23 00:01:39,360 --> 00:01:41,080 Speaker 1: that went out a couple of days ago, you summed 24 00:01:41,160 --> 00:01:44,080 Speaker 1: up what that year of war has done to Europe's 25 00:01:44,120 --> 00:01:48,040 Speaker 1: energy supplies. What did you find Over the past year. 26 00:01:48,080 --> 00:01:52,360 Speaker 1: The headlines have been dominated by Europe's many attempts to 27 00:01:52,360 --> 00:01:56,080 Speaker 1: try and help Ukraine deal with this war. There's been 28 00:01:56,240 --> 00:01:59,880 Speaker 1: aid given, lots of military supply, lots of meetings about 29 00:02:00,240 --> 00:02:02,640 Speaker 1: how to deal with a Russian threat that may come 30 00:02:02,680 --> 00:02:06,080 Speaker 1: to other countries. What's not being talked about, at least 31 00:02:06,080 --> 00:02:09,919 Speaker 1: not in that lens, is how quickly Europe has moved 32 00:02:09,960 --> 00:02:13,640 Speaker 1: away from Russian fossil fuels, strangling one of the biggest 33 00:02:13,680 --> 00:02:17,040 Speaker 1: sources of funding for Putin's war machine. Put that into 34 00:02:17,080 --> 00:02:19,760 Speaker 1: numbers for me when you say it's unprecedented. They're moving 35 00:02:19,800 --> 00:02:22,640 Speaker 1: quickly away from Russia's fossil fuel supply, They're stopping the 36 00:02:22,680 --> 00:02:26,120 Speaker 1: funding to Russia's war machine. What does that mean, Well, 37 00:02:26,320 --> 00:02:29,560 Speaker 1: Russia is a huge source of natural resources right on 38 00:02:29,639 --> 00:02:33,680 Speaker 1: Europe's border, and before the war, Europe spent about a 39 00:02:33,760 --> 00:02:37,040 Speaker 1: billion dollars a day to pay for gas, oil, and 40 00:02:37,200 --> 00:02:41,000 Speaker 1: coal that it imported from Russia, and today that's dropped 41 00:02:41,000 --> 00:02:46,079 Speaker 1: to a small fraction as Europe put embargoes on supplies 42 00:02:46,120 --> 00:02:50,760 Speaker 1: and Russia cut supplies of some other fuels. Oil, crude, oil, coal, 43 00:02:50,880 --> 00:02:54,000 Speaker 1: and gas have fallen not quite to zero, but pretty 44 00:02:54,040 --> 00:02:56,920 Speaker 1: close and much lower than anyone really thought as possible 45 00:02:56,919 --> 00:03:01,400 Speaker 1: a year ago. Even European officials have been supped. European 46 00:03:01,400 --> 00:03:06,280 Speaker 1: Commission's President Ursula Wonderin said earlier this month. Initially we 47 00:03:06,280 --> 00:03:08,400 Speaker 1: were discussing whether we are able to do that till 48 00:03:08,600 --> 00:03:12,040 Speaker 1: twenty twenty seven. Well, you know now that we have 49 00:03:12,160 --> 00:03:16,280 Speaker 1: gotten rid of our dependency completely of Russian fossil fuels. 50 00:03:16,680 --> 00:03:19,800 Speaker 1: It went much faster than we expected. That's good. So 51 00:03:21,200 --> 00:03:23,440 Speaker 1: take me back to this time last year when you 52 00:03:23,480 --> 00:03:26,440 Speaker 1: first started reporting on this. Why was this question of 53 00:03:26,680 --> 00:03:29,760 Speaker 1: Europe's dependency on Russia's energy is so important at that time? 54 00:03:30,000 --> 00:03:33,840 Speaker 1: So it's not just that Europe is paying Russia a 55 00:03:33,880 --> 00:03:36,400 Speaker 1: billion dollars a day, which is then eventually getting into 56 00:03:36,520 --> 00:03:41,000 Speaker 1: the war machine, but Russia controls the supply and there 57 00:03:41,080 --> 00:03:44,839 Speaker 1: was a risk that Russia would use its energy as 58 00:03:44,840 --> 00:03:48,720 Speaker 1: a weapon. Cut off gas supplies, cut off coal supplies, 59 00:03:49,000 --> 00:03:52,080 Speaker 1: and that would bring Europe's economy and its people to 60 00:03:52,120 --> 00:03:54,280 Speaker 1: its knees. And there was good reason to think that, 61 00:03:54,360 --> 00:03:58,520 Speaker 1: because even before the invasion started, Russian supplies of natural 62 00:03:58,560 --> 00:04:01,600 Speaker 1: gas had already been back and president Europe had been 63 00:04:01,640 --> 00:04:04,440 Speaker 1: going up and in late twenty twenty one. In early 64 00:04:04,480 --> 00:04:08,040 Speaker 1: twenty twenty two, people didn't know exactly why Putin was 65 00:04:08,080 --> 00:04:10,600 Speaker 1: doing that, but once the invasion happened, it was clear 66 00:04:10,720 --> 00:04:13,880 Speaker 1: that Russia was willing to use its energy supplies as 67 00:04:14,040 --> 00:04:18,000 Speaker 1: leverage over Europe right and so at a European level, 68 00:04:18,120 --> 00:04:21,080 Speaker 1: politicians realized this is a pretty unsustainable relationship that they 69 00:04:21,160 --> 00:04:24,000 Speaker 1: need to change quickly. If we go back to the 70 00:04:24,040 --> 00:04:27,600 Speaker 1: start of February twenty twenty two, before the war is happening, 71 00:04:27,960 --> 00:04:31,040 Speaker 1: as a percentage, how much of Europe's energy supply came 72 00:04:31,080 --> 00:04:34,600 Speaker 1: from Russia, I mean, the numbers are spectacular. Europe is 73 00:04:35,120 --> 00:04:39,479 Speaker 1: an energy dependent continent. About sixty percent of all the 74 00:04:39,600 --> 00:04:43,680 Speaker 1: energy it consumed came from importing fossil fuels. Of that, 75 00:04:44,160 --> 00:04:47,640 Speaker 1: forty five percent of its gas came from Russia, twenty 76 00:04:47,640 --> 00:04:52,159 Speaker 1: seven percent oil and forty six percent of its coal, 77 00:04:52,680 --> 00:04:57,400 Speaker 1: and different countries had different exposure to these Russian fuels. 78 00:04:57,600 --> 00:05:00,640 Speaker 1: Germany in particular, built up a huge depend it's on Russia. 79 00:05:00,680 --> 00:05:04,280 Speaker 1: Over half its gas came from Russia. Italy, another one 80 00:05:04,320 --> 00:05:07,320 Speaker 1: of the biggest European economies, got about forty percent of 81 00:05:07,320 --> 00:05:10,880 Speaker 1: its gas, and the Baltic region, which is right on 82 00:05:10,960 --> 00:05:14,600 Speaker 1: Russia's doorstep, got three fourths of their gas from Russia 83 00:05:14,680 --> 00:05:17,560 Speaker 1: in twenty twenty one. And why is it that it 84 00:05:17,600 --> 00:05:20,960 Speaker 1: became so dependent on Russian fossil fuels. I mean, you've 85 00:05:20,960 --> 00:05:23,880 Speaker 1: mentioned one reasons, which is just the actual proximity to Russia. 86 00:05:23,960 --> 00:05:27,320 Speaker 1: But how did that relationship really develop? Well, it's hard 87 00:05:27,360 --> 00:05:30,919 Speaker 1: to underestimate how important being close is, especially when it 88 00:05:30,960 --> 00:05:33,479 Speaker 1: comes to gas. With oil, you know, you can get 89 00:05:33,480 --> 00:05:35,640 Speaker 1: oil anywhere in the world, put in a ship and 90 00:05:35,680 --> 00:05:37,600 Speaker 1: send it where it needs to go. But with gas, 91 00:05:37,720 --> 00:05:40,320 Speaker 1: that's much more difficult and much more expensive. And if 92 00:05:40,320 --> 00:05:43,200 Speaker 1: you can get gas from somewhere nearby, it's gonna be 93 00:05:43,279 --> 00:05:48,840 Speaker 1: much cheaper. So Europe's economic growth and their ability to 94 00:05:48,839 --> 00:05:52,040 Speaker 1: fund the transition to cleaner sources has been predicated on 95 00:05:52,080 --> 00:05:56,520 Speaker 1: the ability to get really cheap energy today from Russia 96 00:05:56,600 --> 00:05:59,320 Speaker 1: and some of This goes back decades right During the 97 00:05:59,400 --> 00:06:03,240 Speaker 1: Cold War, there was a push to have a separation 98 00:06:03,360 --> 00:06:08,280 Speaker 1: between the Soviet Union and Western allies. But after the 99 00:06:08,320 --> 00:06:13,599 Speaker 1: Soviet Union fell, Germany especially but Europe in general, thought 100 00:06:13,720 --> 00:06:17,520 Speaker 1: it would be a good idea to create this economic 101 00:06:17,800 --> 00:06:21,640 Speaker 1: relationship tied to importing fossil fuels from Russia as a 102 00:06:21,640 --> 00:06:24,400 Speaker 1: way to keep peace, which of course has been completely 103 00:06:24,440 --> 00:06:26,880 Speaker 1: proven wrong over the last twelve months. And tell me 104 00:06:26,920 --> 00:06:30,040 Speaker 1: more about that green transition element. Why did your plans 105 00:06:30,040 --> 00:06:32,800 Speaker 1: to go green mean that it ended up relying more 106 00:06:32,880 --> 00:06:36,239 Speaker 1: on Russian fossil fuels. So coal is the dirtiest fossil fuel, 107 00:06:36,360 --> 00:06:38,839 Speaker 1: and Europe burned a lot of coal. Of course, going 108 00:06:38,880 --> 00:06:43,440 Speaker 1: back all the way to the Industrial Revolution, gas provided 109 00:06:43,480 --> 00:06:45,919 Speaker 1: the same amount of energy for about half the emissions, 110 00:06:46,080 --> 00:06:49,040 Speaker 1: So gas was seen as a bridging fuel between dirty 111 00:06:49,080 --> 00:06:54,080 Speaker 1: coal and clean energy. And because cheap gas, especially in 112 00:06:54,080 --> 00:06:57,680 Speaker 1: the form of pipes from Russia, was available at the doorsteps, 113 00:06:57,760 --> 00:07:01,120 Speaker 1: that seemed like the right option if Europe wanted to 114 00:07:01,120 --> 00:07:05,000 Speaker 1: speed up its emissions reduction and find a way to 115 00:07:05,279 --> 00:07:08,240 Speaker 1: make the transition as smooth as possible to clean energy. 116 00:07:08,680 --> 00:07:13,320 Speaker 1: And gas also works really well paired with some renewable resources, 117 00:07:13,360 --> 00:07:17,440 Speaker 1: particularly wind, which countries like Germany and the UK are 118 00:07:17,760 --> 00:07:20,760 Speaker 1: ramping up significantly to cut emissions. So when the wind 119 00:07:20,840 --> 00:07:22,680 Speaker 1: drops all of a sudden, but you still want to 120 00:07:22,720 --> 00:07:24,880 Speaker 1: have the same amount of electricity available, you can really 121 00:07:24,960 --> 00:07:28,600 Speaker 1: quickly burn more gas to match that, even as your 122 00:07:28,640 --> 00:07:33,560 Speaker 1: emissions fall overall as more wind is producing electricity. Another 123 00:07:33,560 --> 00:07:35,680 Speaker 1: turning point in the story was the twenty eleven to 124 00:07:36,080 --> 00:07:39,520 Speaker 1: earthquake and tsunami in northeast Japan and the mountdown that 125 00:07:39,560 --> 00:07:43,120 Speaker 1: followed at the Fukushima Day Nuclear power plant. I'm that 126 00:07:43,240 --> 00:07:47,040 Speaker 1: disaster completely changed how Germany approached its energy mix, particularly 127 00:07:47,080 --> 00:07:49,920 Speaker 1: in regards to nuclear, and also contributed to its dependence 128 00:07:49,920 --> 00:07:52,680 Speaker 1: on Russian gas. Right. I mean, France is the largest 129 00:07:52,800 --> 00:07:57,040 Speaker 1: nuclear power in Europe, and France has not particularly wavered, 130 00:07:57,320 --> 00:08:01,120 Speaker 1: But Germany waving on nuclear mattered a lot because its 131 00:08:01,120 --> 00:08:04,560 Speaker 1: replacement meant it would use more coal found in its 132 00:08:04,560 --> 00:08:06,960 Speaker 1: own backyard, some of the dirtiest form of coal you 133 00:08:07,000 --> 00:08:10,560 Speaker 1: could get. And as Germany started to set out more 134 00:08:10,600 --> 00:08:13,880 Speaker 1: green goals, it needed to cut coal use. And what 135 00:08:13,920 --> 00:08:19,960 Speaker 1: did it do well, pipes to Russia. So we get 136 00:08:20,000 --> 00:08:22,760 Speaker 1: to February twenty four, twenty twenty two, Russia launches its 137 00:08:22,760 --> 00:08:25,320 Speaker 1: full scale invasion. We see all the images of fighting 138 00:08:25,360 --> 00:08:29,120 Speaker 1: coming out of Ukraine, cities being reduced to rubble. European 139 00:08:29,200 --> 00:08:31,280 Speaker 1: leaders realized that they need to move away from Russian 140 00:08:31,320 --> 00:08:35,280 Speaker 1: energy and quickly, I'm assuming that panicking at this point, 141 00:08:35,400 --> 00:08:39,600 Speaker 1: what options did European countries have. And they were panicking 142 00:08:39,720 --> 00:08:43,000 Speaker 1: because not only did they see their source of energy 143 00:08:43,120 --> 00:08:45,640 Speaker 1: potentially being cut off, but they were also looking at 144 00:08:45,640 --> 00:08:49,040 Speaker 1: the market, and prices of energy were going to levels 145 00:08:49,080 --> 00:08:53,640 Speaker 1: that would have been unimaginable before that, you know, double 146 00:08:53,840 --> 00:08:58,240 Speaker 1: quadruple prices that would be normal, and they're still quite high. 147 00:08:58,280 --> 00:09:02,959 Speaker 1: And we basically through all of the energy sources that 148 00:09:03,040 --> 00:09:05,960 Speaker 1: Europe was relying on Russian fur and then we looked 149 00:09:05,960 --> 00:09:09,080 Speaker 1: at all the possible alternatives. Where could it turn for 150 00:09:09,280 --> 00:09:12,920 Speaker 1: something that wasn't Russian oil, gas and coal, and how 151 00:09:12,960 --> 00:09:16,240 Speaker 1: could it ramp up those alternatives. And one narrative that 152 00:09:16,320 --> 00:09:21,239 Speaker 1: emerged very quickly and worked well with Europe's green ambitions 153 00:09:21,400 --> 00:09:24,960 Speaker 1: was to just speed up the green transition and replace 154 00:09:25,040 --> 00:09:28,719 Speaker 1: all those Russian fossil fuels with wind and solar and batteries. 155 00:09:29,280 --> 00:09:31,760 Speaker 1: That is an option, but those things take time, and 156 00:09:31,800 --> 00:09:34,880 Speaker 1: if you wanted to have energy for the winter, keep 157 00:09:34,920 --> 00:09:38,320 Speaker 1: people warm, keep the lights on, building wind and solar 158 00:09:38,640 --> 00:09:40,960 Speaker 1: could only go so far as ambitious as they might 159 00:09:41,000 --> 00:09:43,359 Speaker 1: want to beat with renewables. They still have a dependency 160 00:09:43,400 --> 00:09:45,720 Speaker 1: on fossil fuels, so it comes a question of where 161 00:09:45,720 --> 00:09:48,320 Speaker 1: do we get it from instead exactly, And then you 162 00:09:48,320 --> 00:09:50,920 Speaker 1: have to look at each of those fossil fuels differently. 163 00:09:51,160 --> 00:09:53,840 Speaker 1: A coal is easy to transport, and so if you 164 00:09:53,880 --> 00:09:55,760 Speaker 1: don't buy it from Russia, well you could go to 165 00:09:55,760 --> 00:09:58,479 Speaker 1: the US a little bit further away, or even Australia, 166 00:09:58,600 --> 00:10:02,240 Speaker 1: which plenty of goal but far away oil. On the 167 00:10:02,240 --> 00:10:05,840 Speaker 1: other hand, global market again can be moved, but politically 168 00:10:05,880 --> 00:10:10,600 Speaker 1: harder because the largest supplier of oil is opaque plus, 169 00:10:10,640 --> 00:10:14,520 Speaker 1: which is the Middle Eastern countries, mostly with Russia, and 170 00:10:14,559 --> 00:10:17,280 Speaker 1: they are in agreement on how much supply they will 171 00:10:17,280 --> 00:10:20,720 Speaker 1: put into the market. And so if Western powers suddenly 172 00:10:20,760 --> 00:10:22,560 Speaker 1: wanted more oil but did not want to take it 173 00:10:22,600 --> 00:10:25,320 Speaker 1: from Russia, they would have to go begging to their 174 00:10:25,360 --> 00:10:29,840 Speaker 1: old foes Iran and Venezuela. Not going to look politically right, 175 00:10:30,040 --> 00:10:32,640 Speaker 1: but there was room to try and increase supply from 176 00:10:32,640 --> 00:10:36,080 Speaker 1: those countries. Gas is a lot harder, yes, in the 177 00:10:36,200 --> 00:10:38,840 Speaker 1: last few decades, we've been able to put gas on 178 00:10:38,920 --> 00:10:41,839 Speaker 1: ships and move it around, but it's not cheap and 179 00:10:41,920 --> 00:10:44,800 Speaker 1: there's just not enough infrastructure to make that happen at 180 00:10:44,800 --> 00:10:48,160 Speaker 1: short notice. So what did you do well? It took 181 00:10:48,280 --> 00:10:52,720 Speaker 1: a different approach for every different fuel, and even different 182 00:10:52,760 --> 00:10:58,280 Speaker 1: countries had slightly different plans. But the biggest challenge was gas, 183 00:10:58,720 --> 00:11:02,000 Speaker 1: and it was also the most urgent because not only 184 00:11:02,040 --> 00:11:05,000 Speaker 1: did the EU want to cut gas demand, but Russia 185 00:11:05,120 --> 00:11:10,200 Speaker 1: was actually slashing supplies to Europe. Russia's state owned energy supply, 186 00:11:10,280 --> 00:11:13,240 Speaker 1: A gas promt says it is indefinitely holding the flow 187 00:11:13,280 --> 00:11:15,960 Speaker 1: of gas through a key pipeline through Germany. But European 188 00:11:16,040 --> 00:11:19,200 Speaker 1: leaders see Russia's move to hold gas supplies to Poland 189 00:11:19,240 --> 00:11:22,400 Speaker 1: and Bulgaria because they won't pay in rubles as aggressive. 190 00:11:22,960 --> 00:11:26,120 Speaker 1: So they really gave the Europeans no choice but to 191 00:11:26,160 --> 00:11:30,720 Speaker 1: move as quickly as possible on gas, and they did 192 00:11:30,800 --> 00:11:34,040 Speaker 1: everything they could to find alternatives. They tried to import 193 00:11:34,120 --> 00:11:37,840 Speaker 1: more from North Africa. They got more from Norway, which 194 00:11:37,920 --> 00:11:41,560 Speaker 1: is the biggest producer in Europe other than Russia. They 195 00:11:41,600 --> 00:11:44,240 Speaker 1: got a bit more from the UK, but the by 196 00:11:44,320 --> 00:11:48,600 Speaker 1: far biggest source of alternative supplies was liquefied natural gas, 197 00:11:48,960 --> 00:11:51,760 Speaker 1: which is a kind of gas that has brought down 198 00:11:51,760 --> 00:11:54,520 Speaker 1: to a really low temperature, put on these weird ships 199 00:11:54,559 --> 00:11:56,440 Speaker 1: and then you can move it all around the world. 200 00:11:56,880 --> 00:11:58,800 Speaker 1: And most of the supplies of L and G you 201 00:11:58,840 --> 00:12:03,000 Speaker 1: come from the US, which has unlimited natural gas. Wise 202 00:12:03,040 --> 00:12:07,679 Speaker 1: and Qatar and the Europeans went to the US and 203 00:12:07,960 --> 00:12:11,960 Speaker 1: paid whatever price was necessary to swap as much elergy 204 00:12:12,240 --> 00:12:16,320 Speaker 1: as was available, and luckily enough for Europe there was 205 00:12:16,520 --> 00:12:20,680 Speaker 1: more lergy available than normal. Normally, the biggest player buyer 206 00:12:20,920 --> 00:12:24,640 Speaker 1: for liquefied natural gas is China, but China's economy was 207 00:12:24,679 --> 00:12:27,440 Speaker 1: shut because of COVID last year, so there was a 208 00:12:27,440 --> 00:12:30,440 Speaker 1: big amount of supply available for the Europeans to take 209 00:12:30,480 --> 00:12:33,680 Speaker 1: in and meet their needs and fill up storage. These 210 00:12:33,720 --> 00:12:36,600 Speaker 1: weird chips, though, we should explain they look like these 211 00:12:36,960 --> 00:12:40,200 Speaker 1: bulbous bodies floating in the ocean. There is a good 212 00:12:40,200 --> 00:12:44,800 Speaker 1: reason for them being bulbous, right. They are essentially spherical tanks, 213 00:12:45,320 --> 00:12:48,240 Speaker 1: multiple of them, and they're spherical because you've just put 214 00:12:48,280 --> 00:12:51,840 Speaker 1: all this very high pressured gas, turned it into a liquid, 215 00:12:51,920 --> 00:12:54,280 Speaker 1: and put it into a sphere. And the sphere is 216 00:12:54,280 --> 00:12:58,160 Speaker 1: an object that has fewer margins to have errors and 217 00:12:58,240 --> 00:13:00,640 Speaker 1: so you can actually store it for longer. So yes, 218 00:13:00,760 --> 00:13:05,920 Speaker 1: it looks weird, but physics guys Llengy facts. We had 219 00:13:05,920 --> 00:13:08,080 Speaker 1: to put a picture in the show notes sharing these ships. 220 00:13:08,679 --> 00:13:12,080 Speaker 1: But it wasn't a unified strategy to start with. When 221 00:13:12,360 --> 00:13:15,040 Speaker 1: the European Union was trying to fix its gas problem, 222 00:13:15,080 --> 00:13:17,520 Speaker 1: it affects me that its member states run around and 223 00:13:17,559 --> 00:13:20,079 Speaker 1: just get their hands on as much gas as they 224 00:13:20,080 --> 00:13:22,600 Speaker 1: could for as much money as they were willing to pay. Yeah, 225 00:13:22,600 --> 00:13:25,080 Speaker 1: and they did things that they would have never done before. 226 00:13:25,440 --> 00:13:29,200 Speaker 1: Germany had been completely relying on gas from Russia and 227 00:13:29,240 --> 00:13:32,160 Speaker 1: they didn't have any of the facilities to import ellengy, 228 00:13:32,720 --> 00:13:35,560 Speaker 1: so they bought it indirectly from other countries that did 229 00:13:35,600 --> 00:13:38,760 Speaker 1: have supplies and facilities to bring it into the gas grid. 230 00:13:38,800 --> 00:13:43,280 Speaker 1: But they also basically just throughout their environmental regulations to 231 00:13:43,800 --> 00:13:49,280 Speaker 1: very quickly bring on floating ellen import terminals. You know, 232 00:13:49,679 --> 00:13:55,120 Speaker 1: German regulations are notoriously cumbersome and projects take a long 233 00:13:55,160 --> 00:13:57,480 Speaker 1: time to build there. But in Germany last year they said, 234 00:13:57,600 --> 00:14:00,120 Speaker 1: forget about all that, we need these supplies right now, 235 00:14:00,240 --> 00:14:03,800 Speaker 1: and there's gas diplomacy had downstream impacts right There were 236 00:14:03,800 --> 00:14:08,800 Speaker 1: countries like Pakistan that had built gas power plants dependent 237 00:14:08,960 --> 00:14:11,640 Speaker 1: on ellen G at a certain price, and they were 238 00:14:11,679 --> 00:14:14,240 Speaker 1: priced out to the extent where they could not have 239 00:14:14,360 --> 00:14:17,640 Speaker 1: enough gas and there were blackouts. So Europe in the 240 00:14:17,760 --> 00:14:21,080 Speaker 1: end does avoid blackouts, but there were blackouts in other 241 00:14:21,080 --> 00:14:24,240 Speaker 1: countries Bangladesh with another one. So if gas is the 242 00:14:24,280 --> 00:14:27,440 Speaker 1: most difficult, most pressing challenge to fix, what did they 243 00:14:27,520 --> 00:14:29,840 Speaker 1: do with both coal and oil? So oil, because of 244 00:14:29,880 --> 00:14:33,200 Speaker 1: the political nature of that commodity, they ended up setting 245 00:14:33,200 --> 00:14:36,440 Speaker 1: out a target that was going out a few months, 246 00:14:36,680 --> 00:14:41,480 Speaker 1: so by December they would sanction any imports of crude 247 00:14:41,480 --> 00:14:46,160 Speaker 1: oil from Russia so that refineries and countries could figure 248 00:14:46,200 --> 00:14:49,240 Speaker 1: out where the remainder of the supply would come from. 249 00:14:49,280 --> 00:14:52,000 Speaker 1: As it turned out, some of that supply ended up 250 00:14:52,000 --> 00:14:55,560 Speaker 1: coming through India, so India started importing a lot more 251 00:14:55,640 --> 00:15:00,320 Speaker 1: of Russian crude. India has plenty of refineries capacity, so 252 00:15:00,440 --> 00:15:04,520 Speaker 1: India took cheap Russian crewed, refined it and then exported 253 00:15:04,560 --> 00:15:06,840 Speaker 1: that to Europe and we don't count that as coming 254 00:15:06,840 --> 00:15:10,080 Speaker 1: from Russia. That's true. That's how Europe has been able 255 00:15:10,120 --> 00:15:13,880 Speaker 1: to manage its petrol and diesel prices, and then on 256 00:15:14,120 --> 00:15:17,960 Speaker 1: coal because they could import stuff from other countries. Extra 257 00:15:18,040 --> 00:15:21,720 Speaker 1: supply came from the US, from Colombia and from South Africa. 258 00:15:21,840 --> 00:15:24,960 Speaker 1: And also let's note that coal was burned more than 259 00:15:25,080 --> 00:15:28,760 Speaker 1: usual because gas was so expensive that some of the 260 00:15:28,760 --> 00:15:32,080 Speaker 1: power plants that were supposed to retire were put on hold, 261 00:15:32,200 --> 00:15:35,040 Speaker 1: and some of the coal power plants that didn't use 262 00:15:35,120 --> 00:15:37,480 Speaker 1: that much goal in the past were using more coal. 263 00:15:38,000 --> 00:15:42,360 Speaker 1: And coal burned for the past year jumped about seven percent. Okay, 264 00:15:42,400 --> 00:15:44,760 Speaker 1: so the cold amount actually increased, it did. Yeah, so 265 00:15:44,800 --> 00:15:47,240 Speaker 1: it's not just that imports were replaced from Russia, but 266 00:15:47,280 --> 00:15:55,960 Speaker 1: there was more coal burned after the break. Enough about 267 00:15:56,000 --> 00:15:58,800 Speaker 1: fossil fuels, how have renewables helped Europe out of its 268 00:15:58,880 --> 00:16:01,880 Speaker 1: energy crisis? Where the heat pumps fit into the equation, 269 00:16:14,200 --> 00:16:16,720 Speaker 1: So we know that Europe has had a green strategy 270 00:16:17,000 --> 00:16:20,520 Speaker 1: for a couple of decades now that actually helped alleviate 271 00:16:20,560 --> 00:16:23,800 Speaker 1: some of the pressure on Europe because they had developed 272 00:16:23,840 --> 00:16:27,720 Speaker 1: these non fossil fuel sources over multiple years. But at 273 00:16:27,760 --> 00:16:31,000 Speaker 1: the beginning of the crisis, there is this narrative that emerges, 274 00:16:31,040 --> 00:16:33,520 Speaker 1: which is, yes, we can accelerate renewables as much as 275 00:16:33,560 --> 00:16:36,200 Speaker 1: possible to try and fill some of the gap. So 276 00:16:36,280 --> 00:16:38,520 Speaker 1: how much of a role have renewables ended up playing 277 00:16:38,800 --> 00:16:41,600 Speaker 1: well This time last year when we were looking at 278 00:16:41,640 --> 00:16:46,040 Speaker 1: what could Europe possibly do. The one clean energy source 279 00:16:46,120 --> 00:16:48,840 Speaker 1: that we saw as potentially playing a role in going 280 00:16:48,880 --> 00:16:52,920 Speaker 1: faster with solar because solar panels are really simple. You 281 00:16:52,960 --> 00:16:55,520 Speaker 1: can just basically put them anywhere, They're very easy to 282 00:16:55,520 --> 00:17:00,000 Speaker 1: set up, and they start producing electricity immediately. And Europe 283 00:17:00,120 --> 00:17:03,720 Speaker 1: really lived up to that. They installed by far record 284 00:17:03,720 --> 00:17:07,520 Speaker 1: amount of new solar capacity all over. You know, countries 285 00:17:07,560 --> 00:17:11,960 Speaker 1: like the Netherlands, which aren't particularly sunny places, installed record 286 00:17:12,000 --> 00:17:13,640 Speaker 1: amounts of new solar and a lot of that came 287 00:17:13,720 --> 00:17:17,600 Speaker 1: from households and businesses that we're seeing their bills rise 288 00:17:17,760 --> 00:17:21,520 Speaker 1: astronomically and just thought it made economic sense to put 289 00:17:21,560 --> 00:17:24,639 Speaker 1: in some solar panels and also a lot of them 290 00:17:24,760 --> 00:17:29,160 Speaker 1: added batteries as well, so those are now permanently there 291 00:17:29,280 --> 00:17:32,800 Speaker 1: and not just helping people last year to cut fossil fuels, 292 00:17:32,840 --> 00:17:37,680 Speaker 1: but for the foreseeable future. Wind was about what we expected. 293 00:17:37,760 --> 00:17:40,879 Speaker 1: But wind farms are much more complicated than solar. You 294 00:17:40,880 --> 00:17:43,760 Speaker 1: can't just put a wind turbine anywhere. You need to 295 00:17:43,880 --> 00:17:46,960 Speaker 1: permit them. And while there were some efforts to cut 296 00:17:46,960 --> 00:17:50,280 Speaker 1: down on the time it takes to permit. They're just 297 00:17:50,960 --> 00:17:54,560 Speaker 1: wasn't that much possibility to go faster with wind. So 298 00:17:54,640 --> 00:17:57,720 Speaker 1: while it did play a really important role and Europe 299 00:17:57,720 --> 00:18:00,480 Speaker 1: has been ramping up wind and it was a record 300 00:18:00,560 --> 00:18:03,400 Speaker 1: level last year, it didn't go that much faster than 301 00:18:03,480 --> 00:18:07,159 Speaker 1: otherwise would have and Europe needed this transition also because 302 00:18:07,280 --> 00:18:11,399 Speaker 1: climate change plays havoc. In fact, last year because of 303 00:18:11,480 --> 00:18:15,159 Speaker 1: climate impacts, hydropower, which is one of the biggest sources 304 00:18:15,160 --> 00:18:19,000 Speaker 1: of clean power, took a real hit. Europe experience its 305 00:18:19,080 --> 00:18:22,040 Speaker 1: worst route in five hundred years, pushing down the level 306 00:18:22,080 --> 00:18:26,280 Speaker 1: of water in many reservoirs and crimping hydropower supplies. A 307 00:18:26,359 --> 00:18:30,199 Speaker 1: summer of record breaking heat is drying up rivers across Europe. 308 00:18:30,560 --> 00:18:33,800 Speaker 1: Shipping companies in Germany preparing for the worst as levels 309 00:18:33,800 --> 00:18:36,440 Speaker 1: on the River Rhine dropped through critical levels with more 310 00:18:36,480 --> 00:18:39,520 Speaker 1: than sixty percent if The European Union and the UK 311 00:18:40,040 --> 00:18:44,080 Speaker 1: now under a drought alert or warning. Reservoirs and rivers 312 00:18:44,160 --> 00:18:48,600 Speaker 1: are receding. At the same time, which made matters worse. 313 00:18:48,960 --> 00:18:52,879 Speaker 1: Nuclear power was becoming a trouble. There were nuclear reactors 314 00:18:52,920 --> 00:18:55,840 Speaker 1: in France, which is a major source of nuclear power, 315 00:18:56,040 --> 00:18:59,680 Speaker 1: and exporter off nuclear power to many countries which had 316 00:19:00,040 --> 00:19:05,120 Speaker 1: any maintenance issues, some expected, others not, and because of 317 00:19:05,160 --> 00:19:08,280 Speaker 1: the lower production of hydropower and nuclear power, Europe had 318 00:19:08,320 --> 00:19:11,119 Speaker 1: to burn even more fossil fuels. In that period, we 319 00:19:11,200 --> 00:19:13,840 Speaker 1: also heard stories about solo pannel costs going up, wind 320 00:19:13,840 --> 00:19:16,760 Speaker 1: turbine prices going up, and when we spoke to maud Nipper, 321 00:19:16,840 --> 00:19:19,560 Speaker 1: the CEO of Allstead for our episode in January, he 322 00:19:19,640 --> 00:19:21,879 Speaker 1: was talking about how complicated it is to get permits 323 00:19:21,880 --> 00:19:23,600 Speaker 1: for new wind farms. But he also bought up the 324 00:19:23,640 --> 00:19:26,199 Speaker 1: issue of supply chains and inflation and how that was 325 00:19:26,240 --> 00:19:28,600 Speaker 1: forcing him to put more pressure on his supplies. How 326 00:19:28,640 --> 00:19:32,399 Speaker 1: did those higher prices affect this renewable transition. That's true, 327 00:19:32,440 --> 00:19:36,919 Speaker 1: and it certainly ought to have renewable energy prices go up, 328 00:19:36,960 --> 00:19:40,960 Speaker 1: which have been for years going down. But because the delta, 329 00:19:41,040 --> 00:19:45,760 Speaker 1: the difference between higher fossil fuel prices and slightly higher 330 00:19:46,160 --> 00:19:50,080 Speaker 1: renewable prices only grew. The case for renewables has only 331 00:19:50,200 --> 00:19:54,880 Speaker 1: gotten stronger. And there are also reliable You know, you're 332 00:19:54,920 --> 00:19:59,439 Speaker 1: never going to have a country cutting off your source 333 00:19:59,440 --> 00:20:03,639 Speaker 1: of wind solar, So the value of solar and wind 334 00:20:03,720 --> 00:20:06,879 Speaker 1: from a political perspective has really gone up because energy 335 00:20:06,920 --> 00:20:10,919 Speaker 1: security has come to the forefront of many policymakers minds, 336 00:20:11,000 --> 00:20:14,760 Speaker 1: and they now see renewables as part of that strategy. 337 00:20:15,480 --> 00:20:17,560 Speaker 1: One thing that's also been in the news for all 338 00:20:17,600 --> 00:20:21,400 Speaker 1: sorts of reasons is Europe's push to actually reduce energy demand. 339 00:20:21,520 --> 00:20:22,959 Speaker 1: One of the big stories that came out, I think 340 00:20:22,960 --> 00:20:26,040 Speaker 1: it was back in September when France says, past midnight, 341 00:20:26,080 --> 00:20:29,200 Speaker 1: the Eiffel Tower, our greatest national monument, will no longer 342 00:20:29,240 --> 00:20:32,359 Speaker 1: be lit up. How successful his Europe been reducing its 343 00:20:32,480 --> 00:20:35,800 Speaker 1: energy needs and demands. So one thing we expected when 344 00:20:35,960 --> 00:20:38,040 Speaker 1: we were looking at this story right after the war 345 00:20:38,119 --> 00:20:42,000 Speaker 1: began was that if Europe or to take some of 346 00:20:42,000 --> 00:20:45,960 Speaker 1: the lessons of previous energy crises, it would have gone 347 00:20:46,000 --> 00:20:50,000 Speaker 1: on into a propaganda mode to urge citizens to lower 348 00:20:50,080 --> 00:20:55,320 Speaker 1: their termal stats, to burn less oil, to use cars 349 00:20:55,320 --> 00:20:58,160 Speaker 1: only on alternate days. Those are all things that were 350 00:20:58,480 --> 00:21:01,120 Speaker 1: done in nineteen seventy three, and there was another crisis, 351 00:21:01,359 --> 00:21:04,480 Speaker 1: would be so very little of it. And while there 352 00:21:04,480 --> 00:21:07,840 Speaker 1: were efforts to limit how warm swimming pools could be 353 00:21:08,160 --> 00:21:12,000 Speaker 1: and to lower the thermostats and office buildings and public buildings, 354 00:21:12,160 --> 00:21:15,400 Speaker 1: and just politicians urging people to try and cut down. 355 00:21:15,640 --> 00:21:19,560 Speaker 1: The most effective way to cut demand for energy last 356 00:21:19,640 --> 00:21:24,119 Speaker 1: year was just the weather. We had a incredibly warm 357 00:21:24,440 --> 00:21:26,800 Speaker 1: fall and winter. I know, I didn't turn on my 358 00:21:26,840 --> 00:21:31,160 Speaker 1: heat until December, and because of that, there was an 359 00:21:31,160 --> 00:21:36,159 Speaker 1: incredibly successful ability for Europe to cut demand. And that 360 00:21:36,280 --> 00:21:38,399 Speaker 1: was kind of an easy way to cut demand. And 361 00:21:38,440 --> 00:21:41,119 Speaker 1: there was also a difficult way, which was that a 362 00:21:41,119 --> 00:21:45,240 Speaker 1: lot of industries were seeing the price of gas and 363 00:21:45,320 --> 00:21:49,080 Speaker 1: electricity go up to five times what they were used 364 00:21:49,080 --> 00:21:52,640 Speaker 1: to paying and it just wasn't economical anymore to continue 365 00:21:52,680 --> 00:21:54,760 Speaker 1: to produce. So a lot of industries shut down and 366 00:21:54,840 --> 00:21:56,879 Speaker 1: some of them may never turn back on right And 367 00:21:56,920 --> 00:21:59,480 Speaker 1: according to the figures that you used annual article, those 368 00:21:59,600 --> 00:22:03,200 Speaker 1: jobs a massive industrial gas use fell by eighteen percent 369 00:22:03,320 --> 00:22:06,200 Speaker 1: in twenty twenty two, higher than the fourteen percent drop 370 00:22:06,280 --> 00:22:08,399 Speaker 1: during the first year of the pandemic, and demand for 371 00:22:08,520 --> 00:22:12,000 Speaker 1: residential gas fell by fifteen percent. But coming back to 372 00:22:12,000 --> 00:22:14,600 Speaker 1: your headline figure that this time year ago, Europe was 373 00:22:14,640 --> 00:22:16,840 Speaker 1: sending as much as one billion dollars a day to 374 00:22:16,920 --> 00:22:19,240 Speaker 1: Russia and that's now being reduced to a fraction of 375 00:22:19,240 --> 00:22:21,560 Speaker 1: what it once was. That is a real transformation, and 376 00:22:21,600 --> 00:22:24,199 Speaker 1: the speed of it has been remarkable. But what has 377 00:22:24,200 --> 00:22:27,440 Speaker 1: been the cost of responding to this energy crisis. Well, 378 00:22:27,440 --> 00:22:30,600 Speaker 1: while Europe wanted people to use less, they didn't want 379 00:22:30,680 --> 00:22:34,000 Speaker 1: them to be forced to not turn the heat on 380 00:22:34,040 --> 00:22:37,920 Speaker 1: because they couldn't afford it. And so according to the 381 00:22:37,960 --> 00:22:42,399 Speaker 1: International Energy Agency, the EU spent about three hundred and 382 00:22:42,440 --> 00:22:47,560 Speaker 1: fifty billion dollars subsidizing fossil fuel consumption last year, and 383 00:22:48,200 --> 00:22:51,639 Speaker 1: the overall price was much higher than that just to 384 00:22:51,800 --> 00:22:54,840 Speaker 1: account for the energy that people did pay for that 385 00:22:55,000 --> 00:22:58,480 Speaker 1: wasn't subsidized, to hundreds of billions of euros, which meant 386 00:22:58,680 --> 00:23:01,320 Speaker 1: you ended up spending more than what you would have 387 00:23:01,359 --> 00:23:04,480 Speaker 1: paid poutin. But that was the goal to try and 388 00:23:04,600 --> 00:23:07,159 Speaker 1: not pay pootin as much money. You talked about the 389 00:23:07,240 --> 00:23:10,240 Speaker 1: number of solar installations rising to record high levels, But 390 00:23:10,400 --> 00:23:13,040 Speaker 1: what clean tech we've seen being adopted that will impact 391 00:23:13,119 --> 00:23:17,399 Speaker 1: the demand Heat bumps. Look, heat bumps are magic. They 392 00:23:17,440 --> 00:23:20,440 Speaker 1: take one unit of energy from the grid and give 393 00:23:20,480 --> 00:23:23,800 Speaker 1: you four units of energy. And that's exactly what everybody 394 00:23:23,880 --> 00:23:26,920 Speaker 1: understood across Europe. As it turns out from sales figures, 395 00:23:27,320 --> 00:23:30,680 Speaker 1: we've got recent figures suggesting that sales across Europe grew 396 00:23:30,760 --> 00:23:34,399 Speaker 1: by thirty seven percent year over year, and so clearly 397 00:23:34,640 --> 00:23:36,879 Speaker 1: heat bumps are things, at least for those who can 398 00:23:36,920 --> 00:23:40,320 Speaker 1: afford it, because the upfront cost is high something that 399 00:23:40,359 --> 00:23:42,879 Speaker 1: people are turning to because the long term running cost 400 00:23:42,920 --> 00:23:45,520 Speaker 1: of a heat bump is much much lower. The other 401 00:23:45,560 --> 00:23:49,440 Speaker 1: one is electry vehicles, which have been on an upward 402 00:23:49,480 --> 00:23:53,919 Speaker 1: trajectory and last year they increased about twenty percent according 403 00:23:54,000 --> 00:23:57,720 Speaker 1: to our colleagues at PNF, and that's not going to 404 00:23:57,800 --> 00:24:00,480 Speaker 1: cut that much demand in the short term, but overall, 405 00:24:00,560 --> 00:24:03,280 Speaker 1: over time, evs should cut down on how much oil 406 00:24:03,359 --> 00:24:06,600 Speaker 1: and petroleum products Europeans need to burn. And of course 407 00:24:06,680 --> 00:24:09,720 Speaker 1: evening numbers are lower because prices of evs have gone 408 00:24:09,760 --> 00:24:13,560 Speaker 1: up because of supply chain constraints, inflation, and of course 409 00:24:13,760 --> 00:24:16,239 Speaker 1: the cost of living crisis, which made it harder for 410 00:24:16,280 --> 00:24:19,960 Speaker 1: people to make big purchases like evs in the past year. 411 00:24:20,480 --> 00:24:23,040 Speaker 1: There is also one big motivation that will come through 412 00:24:23,160 --> 00:24:27,960 Speaker 1: in the future years as Europe titans its carbon emission standards, 413 00:24:28,000 --> 00:24:32,080 Speaker 1: which will make evs just much more attractive, and so 414 00:24:32,119 --> 00:24:35,480 Speaker 1: that transition continues at pace. So you mentioned the cost 415 00:24:35,520 --> 00:24:37,280 Speaker 1: of living crisis there. We've talked a bit about how 416 00:24:37,359 --> 00:24:39,600 Speaker 1: much this is will cost now that we're through the 417 00:24:39,600 --> 00:24:41,840 Speaker 1: worst of winter. Can we expect prices for energy to 418 00:24:41,920 --> 00:24:44,320 Speaker 1: fall in twenty twenty three, Well, so far that is 419 00:24:44,320 --> 00:24:48,280 Speaker 1: what we're seeing. Prices are now below what they were 420 00:24:48,320 --> 00:24:50,720 Speaker 1: at the start of the war, which is still high. 421 00:24:50,840 --> 00:24:54,200 Speaker 1: Gas in Europe went below fifty euros for the first 422 00:24:54,200 --> 00:24:56,760 Speaker 1: time since the start of the war, but back in 423 00:24:57,359 --> 00:25:01,440 Speaker 1: twenty nineteen gas could be fifteen euros. Is still quite high, 424 00:25:01,560 --> 00:25:06,520 Speaker 1: but we're seemed to be for now out of the 425 00:25:06,520 --> 00:25:10,680 Speaker 1: real crisis that happened last summer when gas prices looked 426 00:25:10,680 --> 00:25:14,080 Speaker 1: like they could just keep going up forever. Also this year, 427 00:25:14,359 --> 00:25:18,200 Speaker 1: there is expectation that hydropower will return, and so will 428 00:25:18,359 --> 00:25:22,800 Speaker 1: nuclear power. And if you combine more renewables, more hydro, 429 00:25:23,080 --> 00:25:27,200 Speaker 1: more nuclear with lower demand, what you get is a 430 00:25:27,240 --> 00:25:32,240 Speaker 1: pretty spectacular outcome. According to bloom Bogenne, this year, Europe 431 00:25:32,280 --> 00:25:36,199 Speaker 1: is set to burn forty three percent fewer fossil fuels 432 00:25:36,240 --> 00:25:41,480 Speaker 1: for electricity compared to last year. Prior to the war, 433 00:25:41,560 --> 00:25:44,600 Speaker 1: year have already had relatively ambitious plans to reduce its emissions. 434 00:25:44,600 --> 00:25:47,520 Speaker 1: Back in July twenty twenty one, it launched fifty five, 435 00:25:47,640 --> 00:25:49,840 Speaker 1: which was its program to cut emissions by fifty five 436 00:25:50,240 --> 00:25:53,480 Speaker 1: by twenty thirty across Europe. But with the war, it's 437 00:25:53,480 --> 00:25:57,080 Speaker 1: had to expand coal use, he said, by seven eight percent. 438 00:25:57,520 --> 00:26:00,000 Speaker 1: It's had to build new fossil fuel infrastructure. We had 439 00:26:00,040 --> 00:26:03,679 Speaker 1: Germany building alleng terminals and delay the closure of some 440 00:26:03,760 --> 00:26:07,159 Speaker 1: of its fossil fuel run power stations. So macro picture 441 00:26:07,200 --> 00:26:09,880 Speaker 1: hit what does the last year mean for Europe's clean 442 00:26:10,160 --> 00:26:13,760 Speaker 1: energy transition. Well, we heard from Jennifer Morgan, the Climate 443 00:26:13,880 --> 00:26:17,800 Speaker 1: Nuary for Germany that the goal, at least from Germany's 444 00:26:17,800 --> 00:26:20,960 Speaker 1: side building all these allen Gy terminals is not to 445 00:26:21,080 --> 00:26:23,520 Speaker 1: lock in the fossil fuel. They have said they will 446 00:26:23,560 --> 00:26:27,320 Speaker 1: make those terminals be hydrogen ready. How believable that is 447 00:26:27,480 --> 00:26:31,119 Speaker 1: remains to be seen, but there are options that Europe 448 00:26:31,240 --> 00:26:34,639 Speaker 1: is building into this new fossil fuel infrastructure to go clean. 449 00:26:35,240 --> 00:26:39,919 Speaker 1: They also have tried to address some of the issues 450 00:26:39,960 --> 00:26:42,920 Speaker 1: that have been holding back the development of renewables which 451 00:26:42,960 --> 00:26:48,000 Speaker 1: would permanently displace the need for fossil fuels. So the 452 00:26:48,040 --> 00:26:52,040 Speaker 1: biggest one being permitting for wind farms can take an 453 00:26:52,040 --> 00:26:55,320 Speaker 1: extremely long time, and Europe at the highest level at 454 00:26:55,400 --> 00:26:58,480 Speaker 1: least has finally come to terms to that problem is 455 00:26:58,520 --> 00:27:01,960 Speaker 1: trying to address it to up the deployment of not 456 00:27:02,080 --> 00:27:05,119 Speaker 1: just solar but also wind, and we should recognize that 457 00:27:05,200 --> 00:27:09,920 Speaker 1: despite more coal being burned llergy terminals being built, actually 458 00:27:09,960 --> 00:27:13,680 Speaker 1: the emissions from Europe in twenty twenty two fell by 459 00:27:13,680 --> 00:27:16,399 Speaker 1: one percent, and so Europe's not being put off track. 460 00:27:16,720 --> 00:27:20,480 Speaker 1: In fact, in some sectors like solar, the transition is 461 00:27:20,520 --> 00:27:24,440 Speaker 1: actually years ahead of where people estimated it to be. 462 00:27:24,440 --> 00:27:27,600 Speaker 1: Because the price signals drove people to clean energy sources. 463 00:27:28,040 --> 00:27:30,560 Speaker 1: It's clear that they use long term directions toward renewables 464 00:27:30,560 --> 00:27:33,560 Speaker 1: and other green tech. The war has spurred a huge 465 00:27:33,680 --> 00:27:37,760 Speaker 1: increase in deployment. Will that demand stay as high during 466 00:27:37,800 --> 00:27:41,280 Speaker 1: twenty twenty three or now that the kind of initial 467 00:27:41,440 --> 00:27:44,200 Speaker 1: crisis has begun to ease a little bit, do you 468 00:27:44,240 --> 00:27:47,240 Speaker 1: think that demand will actually slow. In the case of solar, 469 00:27:47,320 --> 00:27:51,200 Speaker 1: we know that Europe actually has something like seventy gig 470 00:27:51,200 --> 00:27:56,080 Speaker 1: awards of solar already imported from many countries, and so 471 00:27:56,240 --> 00:28:00,159 Speaker 1: deployment of solar is likely to stay high. Wind, on 472 00:28:00,200 --> 00:28:02,639 Speaker 1: the other hand, may see a decline just because of 473 00:28:02,680 --> 00:28:05,080 Speaker 1: all these other issues that are playing out for the 474 00:28:05,119 --> 00:28:08,400 Speaker 1: next couple of years, and then rise again. But batteries 475 00:28:08,400 --> 00:28:11,880 Speaker 1: and evs have a pretty positive outlook. Batteries doubled in 476 00:28:11,920 --> 00:28:15,000 Speaker 1: their deployment in a year. We may not see another doubling, 477 00:28:15,359 --> 00:28:18,680 Speaker 1: but there's expected to be an increased deployment. And evs 478 00:28:18,800 --> 00:28:21,840 Speaker 1: saw twenty percent increase and lightly will see another increase. 479 00:28:22,359 --> 00:28:24,720 Speaker 1: I think it's important to think about what this speeding 480 00:28:24,800 --> 00:28:27,679 Speaker 1: up really means at the macro level. I talked to 481 00:28:27,720 --> 00:28:30,719 Speaker 1: people this year who worked for the companies that were 482 00:28:30,760 --> 00:28:34,439 Speaker 1: installing solar panels, and they were starting academies to train 483 00:28:34,520 --> 00:28:38,400 Speaker 1: installers and hiring those people on and developing the supply chains. 484 00:28:38,560 --> 00:28:41,680 Speaker 1: And once that's established, it's there. It's going to keep 485 00:28:41,760 --> 00:28:44,200 Speaker 1: being there and can just keep growing. You get renewable 486 00:28:44,240 --> 00:28:48,400 Speaker 1: lock in. Yeah. So what we've seen with the war 487 00:28:48,680 --> 00:28:50,560 Speaker 1: in twenty twenty two and into this early part of 488 00:28:50,600 --> 00:28:54,360 Speaker 1: twenty twenty three is Europe's energy landscape being permanently altered. 489 00:28:54,880 --> 00:28:57,840 Speaker 1: But there's another debate playing out, and that's the growing 490 00:28:57,840 --> 00:29:01,440 Speaker 1: competition between the EU and the US. How is that 491 00:29:01,800 --> 00:29:05,880 Speaker 1: going to affect transition? So far, Europe has relied a 492 00:29:05,960 --> 00:29:10,000 Speaker 1: lot on imported solar panels or batteries to try and 493 00:29:10,040 --> 00:29:14,040 Speaker 1: push its green transition. The European Green Deal was supposed 494 00:29:14,040 --> 00:29:16,800 Speaker 1: to bring in more manufacturing of batteries and other green 495 00:29:16,840 --> 00:29:21,840 Speaker 1: technologies into Europe. But because of the pandemic and then 496 00:29:21,880 --> 00:29:25,280 Speaker 1: the war, that conversation had sort of died down, and 497 00:29:25,320 --> 00:29:27,920 Speaker 1: that's suddenly been lit up by what's happened in the 498 00:29:28,040 --> 00:29:30,800 Speaker 1: US with the Inflation Reduction Act, which has all these 499 00:29:30,840 --> 00:29:34,920 Speaker 1: incentives to try and bring manufacturing into the US, and 500 00:29:35,000 --> 00:29:39,240 Speaker 1: that's making Europe reflect on its own shortcomings in the 501 00:29:39,280 --> 00:29:43,160 Speaker 1: green deal, in its regulatory nature and in its market 502 00:29:43,600 --> 00:29:47,760 Speaker 1: structure to try and speed up the manufacturing of green 503 00:29:47,760 --> 00:29:51,400 Speaker 1: technologies in Europe. If it does that, and we don't 504 00:29:51,440 --> 00:29:54,400 Speaker 1: know if Europe can match up to the big challenge 505 00:29:54,440 --> 00:29:56,960 Speaker 1: that the US has put out, but if it does it, 506 00:29:56,960 --> 00:30:00,520 Speaker 1: it's only going to make the green transition faster because 507 00:30:00,560 --> 00:30:04,480 Speaker 1: it's going to bring manufacturing jobs tied to green industry 508 00:30:04,600 --> 00:30:08,320 Speaker 1: in Europe and maybe even lower the cost of many 509 00:30:08,360 --> 00:30:13,640 Speaker 1: of these green technologies further well Act charts. Thank you 510 00:30:13,680 --> 00:30:15,800 Speaker 1: very much, thanks for having me, Thanks for having us 511 00:30:15,840 --> 00:30:27,440 Speaker 1: on the show, Oscar. Europe's move away from Russian fossil 512 00:30:27,480 --> 00:30:31,440 Speaker 1: fuels towards other energy sources has happened at an extraordinary pace, 513 00:30:31,720 --> 00:30:34,320 Speaker 1: and it's been beautifully illustrated in charts and figures as 514 00:30:34,360 --> 00:30:37,160 Speaker 1: part of Will and Natschat's recent article, which we've linked 515 00:30:37,200 --> 00:30:40,280 Speaker 1: in the show notes. In our conversation, we also discussed 516 00:30:40,280 --> 00:30:42,560 Speaker 1: some of our previous episodes with German Climate on Void, 517 00:30:42,600 --> 00:30:45,840 Speaker 1: Jennifer Morgan and austed CEO Mad Snipper. If you want 518 00:30:45,840 --> 00:30:47,520 Speaker 1: to hear more from Zero, you can listen to those 519 00:30:47,520 --> 00:30:51,480 Speaker 1: episodes now wherever you get your podcasts. Thank you for 520 00:30:51,520 --> 00:30:53,720 Speaker 1: listening to Zero. If you like this episode, please take 521 00:30:53,720 --> 00:30:56,040 Speaker 1: a moment to rate and review us on Apple Podcasts 522 00:30:56,120 --> 00:30:58,760 Speaker 1: or Spotify, send it to a friend, or share it 523 00:30:58,840 --> 00:31:01,600 Speaker 1: with an energy executive. If you've got a suggestion for 524 00:31:01,640 --> 00:31:03,760 Speaker 1: a guest or topic, or something you just want us 525 00:31:03,760 --> 00:31:05,960 Speaker 1: to look into, get in touch. We're at Zero pod 526 00:31:06,080 --> 00:31:09,760 Speaker 1: at Bloomberg dot Net. Zero's producer is me Oscar Boyd 527 00:31:09,760 --> 00:31:12,920 Speaker 1: and our senior producer is Christine Driskell. Our theme music 528 00:31:13,000 --> 00:31:16,280 Speaker 1: is composed by Wonderley Special thanks to Todd Gillespie, John 529 00:31:16,320 --> 00:31:19,400 Speaker 1: Angel and Kira Binjo. We'll be back with that Chat 530 00:31:19,400 --> 00:31:20,600 Speaker 1: as host next week.