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Speaker 1: This is Tom Rowlan's Reese, and you're listening to Switched

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Speaker 1: on the podcast brought to you by Bloomberghenief. Each year,

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Speaker 1: BLOOMBURGHENIF publishes the Energy Transition Investment Trends, which for nearly

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Speaker 1: two decades has tracked where money is actually flowing across

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Speaker 1: clean energy sectors, cutting through hyper narrative to provide a clear,

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Speaker 1: comparable picture of global investment. This year's report shows that

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Speaker 1: total energy transition investment reached a record two point three

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Speaker 1: trillion in twenty twenty five, up eight percent year on year,

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Speaker 1: even as growth has slowed from the rapid expansion scene

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Speaker 1: earlier in the decade. But the story is more nuanced

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Speaker 1: than a single headline number. Renewable energy investment dip globally,

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Speaker 1: driven largely by policy changes in China, while sectors such

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Speaker 1: as clean industry and carbon capture saw renewed momentum. Regionally,

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Speaker 1: the balance shifted again, with growth in Europe, the Middle

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Speaker 1: East and Africa offsetting softer investment in China, underscoring just

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Speaker 1: how dynamic this global race remains, and understanding these shifts

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Speaker 1: means looking beyond the headline figure itself. On today's show,

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Speaker 1: we also step behind the scenes to examine how the

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Speaker 1: numbers come together, from defining what qualifies as transition investment

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Speaker 1: to deciding when capital is truly committed to reconciling everything

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Speaker 1: from EV purchases to nuclear construction and green debt issuance.

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Speaker 1: Turning such complexity into a clear, consistent global total requires

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Speaker 1: a careful judgment, and we unpack that process as part

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Speaker 1: of the discussion. Joining me to review this year's energy

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Speaker 1: transition investment trends is bnef's deputy CEO, Albert Chung and

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Speaker 1: BNEF clients can find this note by heading to BNF

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Speaker 1: go on the Bloomberg terminal or BNF dot com, and

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Speaker 1: if you're not yet a BNF subscriber, you can find

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Speaker 1: a free report summary at about dot BNF dot com.

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Speaker 1: If you'd like to learn more about how BNF approaches

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Speaker 1: strategy research on the energy transition, including developments in commodity markets,

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Speaker 1: trends across different sectors, and the cross cutting technology shaping

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Speaker 1: the future, you can find more information on BNF dot com,

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Speaker 1: and if you'd like to speak with a member of

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Speaker 1: our team about becoming a client, email US at Sales

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Speaker 1: dot BNF at Bloomberg dot net. But for now, let's

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Speaker 1: dig into the data buy in this year's Energy Transition

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Speaker 1: Investment Trends. Albert, Welcome to the podcast.

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Speaker 2: Thanks for having me, Tom.

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Speaker 1: So, we're here to talk about the Energy Transition Investment

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Speaker 1: Trends Report and some of our findings. This is something

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Speaker 1: we do every year, and I'm sure a lot of

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Speaker 1: our regular subscribers as well as people you know, we

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Speaker 1: do put some of these findings out on our public website,

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Speaker 1: so even our non subscribers are familiar with this work.

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Speaker 3: But for those that ant, could you just tell.

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Speaker 1: Us a little bit about what Energy Transition Investment Trends is?

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Speaker 3: Sure?

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Speaker 2: Thanks Tom. Yeah, Energy Transition Investment Trends is an annual report.

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Speaker 2: We do it every January. As you say, we've been

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Speaker 2: doing this in some shape or form really for two decades,

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Speaker 2: and over the time it's really become one of the

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Speaker 2: most important things we do in my opinion, because energy

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Speaker 2: transition and the energy sector in general is a place

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Speaker 2: full of people's assumptions and narratives and priors and a

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Speaker 2: lot of hype as well. And what we do with

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Speaker 2: this report is we really track where is the money

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Speaker 2: actually flowing in these clean energy sectors, which technologies are

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Speaker 2: attracting money, which are growing, which aren't, and how is

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Speaker 2: that differing by geography? And by doing so, I think

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Speaker 2: it provides a really important baseline to begin the year

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Speaker 2: of where where are we actually globally in the energy transition?

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Speaker 2: What's going well? And what maybe isn't going so well?

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Speaker 1: So, I mean, let me just ask you back that question.

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Speaker 1: You just rhetorically asked yourself, where are we in the

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Speaker 1: energy transition right now? I mean, what did the latest

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Speaker 1: report tell us?

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Speaker 2: Okay, so last year we tracked total of two point

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Speaker 2: three trillion dollars of investment and spending into the deployment

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Speaker 2: of energy transition technology. So two point three trillion in

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Speaker 2: twenty twenty five, it's an all time record, which is

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Speaker 2: great to see, and it's eight percent higher than the

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Speaker 2: year before. So in a moment when there are a

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Speaker 2: lot of headwinds in the energy transition, there's policy change,

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Speaker 2: particularly in the US, but also in other markets, trade

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Speaker 2: tensions rising, geopolitical tension, we see that energy transition remains resilient,

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Speaker 2: keeps growing. Now that growth rate isn't as high as

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Speaker 2: it used to be. So when I look back at

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Speaker 2: twenty twenty one. So you know, four years back in

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Speaker 2: the data, that year we tracked twenty seven percent annual growth,

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Speaker 2: and that growth rate has gradually sort of been declining

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Speaker 2: to the point where it's now eight percent below double digits.

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Speaker 2: So I think there's there's always a glass half full,

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Speaker 2: glass half empty story, and I think this year it

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Speaker 2: is it is that it is that we are at

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Speaker 2: a record, but we've also dipped below a double digit growth.

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Speaker 1: I mean, in very simplistic terms, the fact that it's

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Speaker 1: still growing, but it's not growing as much, and there's

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Speaker 1: been all sorts of headwinds. Are we seeing sort of

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Speaker 1: momentum that's carrying over from the era where there were

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Speaker 1: policy tail winds more so? And that you know, we

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Speaker 1: were seeing twenty seven percent growth? I mean, is this

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Speaker 1: isn't an indication that this is going to flatline or

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Speaker 1: potentially decline at some point in the near future, or

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Speaker 1: is it is it more just a sort of a

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Speaker 1: maturing certain things. Maybe nothing can grow at twenty seven

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Speaker 1: percent a year forever, right, even if it's a wild success,

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Speaker 1: it has to tail off. So do you get a

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Speaker 1: sense of where we are? You know, which of those

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Speaker 1: is the truer description of this eight percent thanks.

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Speaker 2: So I tend to subscribe more to the to the

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Speaker 2: sort of second side of your reasoning, which is that

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Speaker 2: things don't grow at twenty seven percent forever. And I think,

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Speaker 2: you know, when we look at the mature parts of

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Speaker 2: the transition, which is if you think about solar and

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Speaker 2: wind and evs, which are you know, really established sectors

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Speaker 2: at this point, they're reaching this point where the barriers

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Speaker 2: to further growth are more complicated than they were at

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Speaker 2: the beginning. You know, solar is reaching certain penetrations in

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Speaker 2: markets where it's hard to add more so to add

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Speaker 2: more renewables in some markets means adding storage and grids,

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Speaker 2: and so you're you're going to see growth rates slow.

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Speaker 2: On the EV side, You've done the innovation and early

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Speaker 2: adopter phase of EV adoption and now you're into the

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Speaker 2: majority where the technology needs to be cheap and it

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Speaker 2: needs to work, and we need to get to a

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Speaker 2: point where evs are at upfront cost parity with internal

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Speaker 2: combustion engines to unlock that next phase of growth. So

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Speaker 2: I tend to subscribe more to the view of you know,

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Speaker 2: as sectors mature, they're large, they're established, they don't grow

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Speaker 2: as quickly, but there's also a lot of complexity within that,

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Speaker 2: and I think what we've seen in this report. I

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Speaker 2: think we're going to talk about countries later. The country

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Speaker 2: level story changes from year to year and is increasingly fragmented,

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Speaker 2: with different stories playing out in different regions as well.

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Speaker 1: I think another I mean when we're talking about those

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Speaker 1: mature technologies as well.

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Speaker 3: Another thing that I think.

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Speaker 1: We sometimes can lose sight of is that behind the

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Speaker 1: figures in terms of investment is cost declines are also happening.

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Speaker 1: So the actual volume of widgets being installed or the

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Speaker 1: increase in that is potentially higher if the costs have

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Speaker 1: come down. And sometimes a slow down in investment is

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Speaker 1: also indicative of falling costs.

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Speaker 3: And do you think that's a factor here?

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Speaker 2: It's a factor. It has been a bigger factor in

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Speaker 2: the past. So what I will say is there been

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Speaker 2: years in the past in this data set where you

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Speaker 2: could see investment flat lining or potentially slowing in some areas,

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Speaker 2: and you could say that's because costs are coming down.

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Speaker 2: The capacity being finance is actually still growing. This year,

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Speaker 2: we've seen a bit less of that because the cost

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Speaker 2: reductions are simply not what they used to be and

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Speaker 2: actually we've just put out our Levelized Cost of Antisity

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Speaker 2: report as we record this in what we find is

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Speaker 2: that some of the key clean energy sectors actually became

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Speaker 2: more expensive on an l COE basis last year. One

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Speaker 2: sector where we are seeing that exact effect, though we're

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Speaker 2: still seeing it, is in energy storage, where we've seen

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Speaker 2: very rapid cost reductions last year and the year before,

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Speaker 2: and within that energy storage investment is still rising rapidly.

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Speaker 2: So the investment would probably rising even more rapidly if

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Speaker 2: the costs had not fallen so much.

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Speaker 3: Got it.

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Speaker 1: So the mature sectors, you know, still robust, maybe as

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Speaker 1: you say, beginning to saturate. The less mature sectors were there.

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Speaker 1: There's some that stood out as still kind of showing

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Speaker 1: the kind of the growth that we were seeing a

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Speaker 1: few years ago, and other others that maybe have had

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Speaker 1: less good twenty twenty fives.

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Speaker 2: Before I go into the sort of less mature sectors,

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Speaker 2: it's worth pointing out that actually renewable energy investment did

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Speaker 2: drop in twenty twenty five. It dropped about nine and

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Speaker 2: a half percent, and it's still a substantial sector. So

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Speaker 2: it was about six hundred and ninety billion in twenty

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Speaker 2: twenty five, and that puts it in second place ease,

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Speaker 2: and the whole electrified transport ecosystem is eight hundred and

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Speaker 2: ninety billion and growing quite strongly. The renewables fell off

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Speaker 2: in twenty twenty five, and that was because, particularly because

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Speaker 2: in China there was a power market rule change that

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Speaker 2: introduced more power price risk into the investment calculus for

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Speaker 2: renewable energy projects, and that happened at the midyear, and

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Speaker 2: so projects in China were sort of front loaded into

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Speaker 2: the first half of the year, and then investment fell

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Speaker 2: off in the second half, and that actually led to

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Speaker 2: a decreased investment in China and globally as well. And

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Speaker 2: I think that's a really good example of this point

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Speaker 2: we were just talking about where things can't grow at

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Speaker 2: an astronomical rate forever because at some point the sort

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Speaker 2: of technocratic, in bureaucratic and market driven things kick in.

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Speaker 1: So the decline in investment in renewables was driven in

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Speaker 1: a large part by those policy changes in China. If

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Speaker 1: you took China out of the picture and talked about

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Speaker 1: the rest of the world excluding China, did the renewable

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Speaker 1: investment go down or was it actually increasing? I mean,

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Speaker 1: so I suppose my question is, is this decline that

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Speaker 1: you saw in renewable energy investment just because of China

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Speaker 1: and that rule change or was there equivalent things happening

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Speaker 1: across the board elsewhere.

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Speaker 2: No, the drop, the global drop was driven by China,

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Speaker 2: and if you took China out of the data, renewable

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Speaker 2: energy investment globally continued to grow in twenty twenty five,

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Speaker 2: as it has been over the last few years. So

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Speaker 2: it was a change, a turnaround for the books, let's

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Speaker 2: say in China, which drove down the global number, but

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Speaker 2: a lot of other markets continued to see growth. I'm

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Speaker 2: not going to say every single one, but yeah, globally

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Speaker 2: ex China, it was a strong year for renewable energy

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Speaker 2: invest and it was also a strong year for offshore

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Speaker 2: wind which, again the rhetoric would have you believe offshore

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Speaker 2: winds having a terrible time, but it was a really

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Speaker 2: strong year of offshore wind particularly in Europe where there

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Speaker 2: were some large projects that reached financial clothes.

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Speaker 1: That's what I love about this report is that it

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Speaker 1: so often provides a counterpoint to the rhetoric which is

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Speaker 1: often not grounded in fact, and it just provides some

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Speaker 1: actually very straightforward facts.

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Speaker 3: Yes, what's actually happening. You know.

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Speaker 1: Meanwhile in the real world says exactly Tom.

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Speaker 2: And that's part of the reason our team, you know,

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Speaker 2: we really enjoy doing this report because first of all,

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Speaker 2: it's a very intense project in the first few weeks

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Speaker 2: of January. But secondly, we don't know the result. It's

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Speaker 2: a report where you just don't know what the results

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Speaker 2: are going to be until you get right to the

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Speaker 2: very end, and there's a cinemut of suspense in the team.

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Speaker 2: There's different bets going on internally on what the numbers

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Speaker 2: are going to look like, which is exciting, kind.

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Speaker 1: Of like almost like Groundhog Day when they bring out

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Speaker 1: the groundhog and they're like, oh, it's going to be

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Speaker 1: a snowy year. Oh, it's going to be a sunny year. Like, well,

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Speaker 1: you don't know what the outlook is until you know

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Speaker 1: the moment comes. I know this is a backward looking report,

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Speaker 1: but still so Yeah, we were talking about some of

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Speaker 1: the less mature sectors. What were some of the different

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Speaker 1: stories you see in the data for.

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Speaker 2: Those, So in terms of what we call emerging sectors,

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Speaker 2: and we have a chart in the report on this,

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Speaker 2: we include six areas under the sort of emerging sector's bucket,

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Speaker 2: So that's nuclear, carbon capture and storage CCS, hydrogen, clean

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Speaker 2: ship which is essentially vessels which can run on net

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Speaker 2: zero fuels, electrified heat which is building heat pumps, and

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Speaker 2: then clean industry, which is everything around industry decarbonization. So

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Speaker 2: six areas. And last year when we taled up the

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Speaker 2: twenty twenty four data, we actually saw a significant drop

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Speaker 2: in investment in those areas, and we'd sort of taken

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Speaker 2: that as a signal that, look, this basket of areas

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Speaker 2: that we've bucketed as as emerging, they've not reached cost

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Speaker 2: competitiveness yet. They require long term, stable and strong policy support,

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Speaker 2: and when that policy support waivers, then investment drops. And

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Speaker 2: we still think that's the case. But the good news

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Speaker 2: is investment in those sectors actually grew in twenty twenty five,

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Speaker 2: So they grew seven percent, which is a bit less

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Speaker 2: than the overall eight percent across all sectors, to one

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Speaker 2: hundred and seventy two billion dollars. And that one hundred

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Speaker 2: and seventy two billion is about seven and a half

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Speaker 2: percent of the overall two point three trillion that we

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Speaker 2: spoke about earlier, So seven and a half percent is

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Speaker 2: not very much, so I think the point here really

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Speaker 2: is that those emerging sectors remain pretty small compared to

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Speaker 2: the overall volume of money that's going into areas like

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Speaker 2: renewables and EVS and grid and energy storage. But at

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Speaker 2: least this year they trended in the right direction, and

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Speaker 2: there were a couple of drivers for that. One was

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Speaker 2: the return of clean industry investment. We saw some clean

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Speaker 2: steel production projects attracting finance, particularly in Asia, which was

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Speaker 2: great to see. And we also saw a big uptick

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Speaker 2: in CCS projects on a relatively small base, so they're

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Speaker 2: not big numbers, but it was automatically. I think it

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Speaker 2: was something like a sixty percent increase in CCS funding

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Speaker 2: last year, driven by projects in Europe and in the

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Speaker 2: Middle East as well. So I think these sectors are

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Speaker 2: going to be very important to watch over the next

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Speaker 2: five years. We know that they need to scale up

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Speaker 2: between now and the early twenty thirties if they're going

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Speaker 2: to have any impact on kind of climate goals and

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Speaker 2: wider decarbonization. So it's good to see those moving in

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Speaker 2: the right direction.

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Speaker 1: It's really interesting that those two are seeing investment and

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Speaker 1: they're seeing investment. I'm saying this, I'm sitting in New

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Speaker 1: York outside of the US because you know, with these

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Speaker 1: policy headwinds that we're seeing in the US.

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Speaker 3: You know, one of the questions.

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Speaker 1: I have asked, both myself and others, is the US

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Speaker 1: potentially going to miss out on some of these industries

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Speaker 1: of the future that's actually quite well positioned on paper

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Speaker 1: to benefit from.

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Speaker 3: And you know, if in the.

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Speaker 1: Long term the future of steel is green steel, and

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Speaker 1: if in the future and the carbon capturing storage becomes

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Speaker 1: a major plank to different countries energy strategies, that then

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Speaker 1: it's sort of all to play for. If it's you know,

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Speaker 1: if CCS project's happening in Europe in the Middle East,

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Speaker 1: you know, those are regions that don't currently export a

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Speaker 1: lot of energy tech. So it also speaks to me

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Speaker 1: a little bit of that there's a playing field that's

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Speaker 1: maybe opening up a little bit in certain areas.

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Speaker 2: Yeah, I would agree with that. And actually, funny enough,

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Speaker 2: you mentioned, as you say, in the US, the US

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Speaker 2: happens to be a leader in electrified steel production and

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Speaker 2: also a leader in carbon capturing storage. Most of the

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Speaker 2: existing CCS projects today are in the US, and a

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Speaker 2: lot of the pipeline out of the next few years

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Speaker 2: is in the US as well, So there's every opportunity

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Speaker 2: for the US to continue to lead in those areas

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Speaker 2: if you know, we can see that those projects really

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Speaker 2: really do come to fruition and don't fall off the

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Speaker 2: pipeline with all of the policy uncertainty that's going on

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Speaker 2: over there.

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Speaker 1: No, I, like I said, I think the US is

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Speaker 1: very well positioned to own some of them well, particularly

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Speaker 1: carbon caatrum storage as well.

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Speaker 3: So who didn't do so.

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Speaker 1: Well in these emerging in these emerging.

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Speaker 2: Areas, So we saw a downtick in hydrogen investment. Hydrogen

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Speaker 2: was down about twenty percent year on year, and I

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Speaker 2: think the headwinds have been very well documented in the

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Speaker 2: hydrogen sector. Certainly the policy changes in the US haven't helped,

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Speaker 2: but you know, more broadly, there's just been a lack

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Speaker 2: of demand for hydrogen and clean hydrogen and its derivatives.

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Speaker 2: And we also saw a slight drop in global nuclear investment.

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Speaker 2: And that might be counterintuitor to some of your listeners

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Speaker 2: only because we hear a lot about, you know, attention

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Speaker 2: on new nuclear projects and new nuclear technologies. The reason

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Speaker 2: nuclear dropped last year was because a couple of big

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Speaker 2: projects in Europe and the US came to completion last year,

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Speaker 2: and so in our data set they drop off the

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Speaker 2: investment modeling, I suppose because the investment's over and so

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Speaker 2: without new projects of the same scale, very large projects

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Speaker 2: beginning construction in the same year, you get that drop

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Speaker 2: off in investment. So I think all of the discussion

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Speaker 2: we're having now about nuclear uprates, new SMR projects, all

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Speaker 2: of that will start to figure into the data over time.

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Speaker 2: It may not replace some of these very large projects

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Speaker 2: that have been completed. I think it will be quite

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Speaker 2: a lot of time before you know SMRs make the

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Speaker 2: same amount of impact on investment. But I don't think

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Speaker 2: we're saying nuclears, you know, got negative momentum or anything

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Speaker 2: like that. It's just some projects got completed.

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Speaker 3: It's going to Yeah.

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Speaker 1: I think it's a really interesting point that we both

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Speaker 1: in a positive and negative sense, we still have to

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Speaker 1: read between the lines on the data. You know, we

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Speaker 1: can't be like, oh, something is growing a lot, therefore

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Speaker 1: its future is right. Something didn't do so well this year,

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Speaker 1: therefore it's it's over for that technology. Because some of

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Speaker 1: those there's very good reasons and you know, in nuclear

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Speaker 1: there's this kind of potential transition from the past to

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Speaker 1: the future in terms of technology, and the future at

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Speaker 1: some stage is always going to be a much smaller

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Speaker 1: volume of investment into new technologies compared to large assets

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Speaker 1: being deployed.

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Speaker 2: Yeah, agreed with that completely.

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Speaker 1: So were there any strong regional stories that stood out

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Speaker 1: when you kind of looked at all the results.

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Speaker 3: Yeah.

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Speaker 2: I thought the regional story this year was so interesting

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Speaker 2: because a year ago, again, when we looked at twenty

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Speaker 2: twenty four, what we found was that most of the

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Speaker 2: growth in global energy transition investment had been driven by

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Speaker 2: Asia Pacific and China in particular, and the US and

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Speaker 2: Europe EMEA regions had been basically flat that year. So

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Speaker 2: we were sat on a data set that said, all

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Speaker 2: the growth is coming out of APEC this year. I've

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Speaker 2: already told you that China invested less year on you,

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Speaker 2: So China's total investment across all of energy transition I

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Speaker 2: think dropped by about three percent. And the growth that

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Speaker 2: I mentioned, the eight percent growth globally was actually primarily

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Speaker 2: driven by Europe, Middle East and Africa, which was a

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Speaker 2: real turnaround, and then other parts of Asia, especially markets

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Speaker 2: like India where you see high growth. So for me,

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Speaker 2: that just really underscores that from one year to the next,

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Speaker 2: these stories change and you have to update your assumptions,

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Speaker 2: you have to update your priors. And then also, you know,

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Speaker 2: it was not long ago at all when I remember

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Speaker 2: sitting in discussions in Europe and the UK and people

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Speaker 2: were terrified that all of the energy transition investment was

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Speaker 2: going to be sucked out of Europe and over into

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Speaker 2: the US. And instead here we are talking about, you know,

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Speaker 2: twenty odd percent growth in the EMIA region. You know,

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Speaker 2: the UK grew thirty six percent last year off the

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Speaker 2: back of some very large offshore wind deals. So again

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Speaker 2: the winds can change very very quickly. And that's just

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Speaker 2: another good reminder for us.

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Speaker 3: That's so interesting.

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Speaker 1: I mean, I remember the world of a few years

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Speaker 1: ago as well, and again there's a brit based in

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Speaker 1: the US.

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Speaker 3: I was speaking to primarily US audiences.

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Speaker 1: As well of the impact of the Inflation Reduction Act,

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Speaker 1: and you looked at the numbers and the narrative was

382
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Speaker 1: really clear. Is you know, if your thesis is that

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Speaker 1: the energy transition is the future, which for me, that

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Speaker 1: is the thesis despite the various headwinds and challenges to that.

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Speaker 1: I was kind of framing as a race to get there,

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Speaker 1: and I said, China is, you know, miles ahead, the

387
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Speaker 1: US is picking up momentum, and o deer for Europe

388
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Speaker 1: is sort of not really in it. And now you know,

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Speaker 1: with investment in China faltering, the US not continuing the

390
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Speaker 1: momentum that it was supposedly going to establish, certainly that

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Speaker 1: Europe is back in the game, and that's it's a

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Speaker 1: real turnaround. And you know, obviously China is still way

393
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Speaker 1: in the lead on this, so let's not you know,

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Speaker 1: delude ourselves. But again, it kind of maybe comes back

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Speaker 1: to this thing I said earlier that there's everything.

396
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Speaker 2: To play for here, absolutely, and so it's true that

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Speaker 2: China is in the lead trying to investig eight hundred

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Speaker 2: billion out of the two point three trillion last year globally,

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Speaker 2: so really impressive and far up front in the lead

400
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Speaker 2: as an individual market. But to your point about the race,

401
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Speaker 2: you know, if there is a race going on, if

402
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Speaker 2: you add together the US, the European Union and the UK,

403
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Speaker 2: these three markets, and let's say you call that the West,

404
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Speaker 2: which is an oversimplification, but imagine that's the West. That

405
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Speaker 2: West Group invested more than China last year, which not

406
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Speaker 2: a lot of people would would necessarily have appreciated.

407
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Speaker 1: And is that the first time we can say that.

408
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Speaker 2: It isn't, but it gets more interesting. So that hadn't

409
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Speaker 2: not been the case in twenty twenty four. So in

410
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Speaker 2: twenty twenty four, China invested more than that West Group.

411
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Speaker 2: And actually, as we look back over the last four years,

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Speaker 2: that lead between China and the West has changed hands

413
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Speaker 2: every year since twenty twenty one.

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Speaker 1: So yeah, it's this kind of reminds me if you

415
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Speaker 1: ever tune in to the TV and they're playing polo

416
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Speaker 1: and it's always international polo is Argentina versus the rest

417
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Speaker 1: of the world. If this is, you know, it's China

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Speaker 1: versus the West, that seems like maybe a good way

419
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Speaker 1: of framing the kind of the nature of the competition

420
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Speaker 1: right now. And when you frame it like that, it

421
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Speaker 1: seems like it's a real tussle at the top.

422
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Speaker 2: Yeah, for sure. I mean, it certainly makes the race

423
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Speaker 2: more interesting when you can identify too groups that are

424
00:20:01,040 --> 00:20:03,159
Speaker 2: neck and neck and change changing hands every year, So

425
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Speaker 2: it certainly keeps it interesting for us.

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Speaker 1: It's so interesting me on to pull out some of

427
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Speaker 1: these insights, and I think the beauty of et T

428
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Speaker 1: is it distills all of the complexity, all of the

429
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Speaker 1: narratives down into some very comparable numbers of things that

430
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Speaker 1: are normally not easily comparable. And the thing that's maybe

431
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Speaker 1: sometimes deceptive about that is because of maybe the simplicity

432
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Speaker 1: of what we present, it makes it seem like then

433
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Speaker 1: it was a simple process. But I actually think that

434
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Speaker 1: there's an inverse relationship. There is, the simpler the output,

435
00:20:38,680 --> 00:20:41,840
Speaker 1: the more complexity had to be taken on in the

436
00:20:41,880 --> 00:20:45,040
Speaker 1: back end to try and give people that simplicity. Because

437
00:20:45,520 --> 00:20:47,520
Speaker 1: you know, I mean using a simple example, and this

438
00:20:47,560 --> 00:20:48,640
Speaker 1: is the one I'm familiar with.

439
00:20:48,760 --> 00:20:49,520
Speaker 3: I know that in.

440
00:20:49,600 --> 00:20:52,080
Speaker 1: The investment numbers for electric vehicles is based on how

441
00:20:52,119 --> 00:20:55,080
Speaker 1: many cars electric cars are sold, or not just electric cars,

442
00:20:55,080 --> 00:20:58,320
Speaker 1: but it's based on the sort of purchases of vehicles

443
00:20:58,560 --> 00:21:03,440
Speaker 1: versus you know, development of large scale, say nuclear projects.

444
00:21:03,440 --> 00:21:06,119
Speaker 1: You know that they're completely they don't exist in the

445
00:21:06,160 --> 00:21:09,440
Speaker 1: same world, and we throw our methodologies bring them onto

446
00:21:09,480 --> 00:21:12,280
Speaker 1: the same playing field so that they can be compared.

447
00:21:12,520 --> 00:21:14,760
Speaker 1: Can you just talk us I mean, I've given this

448
00:21:14,840 --> 00:21:17,000
Speaker 1: one example, but can you just talk us through some

449
00:21:17,160 --> 00:21:20,400
Speaker 1: of that complexity, the decisions you have to make how

450
00:21:20,440 --> 00:21:23,040
Speaker 1: you do it, Because it's really easy to say, yeah,

451
00:21:23,080 --> 00:21:26,600
Speaker 1: let's total up investment in the energy transition worldwide. But

452
00:21:26,960 --> 00:21:29,320
Speaker 1: as I think, once you've said that and you start

453
00:21:29,359 --> 00:21:32,840
Speaker 1: digging into it, you suddenly realize that you know, even

454
00:21:32,880 --> 00:21:35,240
Speaker 1: before you did, there's a bunch of sort of meta

455
00:21:35,280 --> 00:21:37,639
Speaker 1: decisions you need to make, a bunch of definitions. You

456
00:21:37,680 --> 00:21:40,440
Speaker 1: have to decide where do you start with that.

457
00:21:40,440 --> 00:21:42,439
Speaker 2: That's such a huge question. Now I can try and

458
00:21:42,480 --> 00:21:43,679
Speaker 2: have a go at it, and then maybe we can

459
00:21:43,720 --> 00:21:46,480
Speaker 2: dig a bit deeper. I mean, there's one element maybe

460
00:21:46,880 --> 00:21:50,800
Speaker 2: of that that's really important is the timing of money,

461
00:21:50,880 --> 00:21:53,800
Speaker 2: because actually an investment decision in all these different sectors

462
00:21:53,800 --> 00:21:56,000
Speaker 2: can mean a slightly different thing. In our north star

463
00:21:56,200 --> 00:21:58,679
Speaker 2: for this project is to try and reflect the moment

464
00:21:58,720 --> 00:22:02,000
Speaker 2: when the money is canmitted to a project. But that

465
00:22:02,200 --> 00:22:05,720
Speaker 2: simple ideal turns out it's quite different in different areas.

466
00:22:05,720 --> 00:22:08,800
Speaker 2: So in renewable energy, for example, our team is tracking

467
00:22:08,960 --> 00:22:12,440
Speaker 2: an asset finance decision. So if a project is finance

468
00:22:12,640 --> 00:22:16,440
Speaker 2: like receives debt financing, then it's considered financed in that year,

469
00:22:16,680 --> 00:22:19,919
Speaker 2: or if it signs a procurement contract, then it's considered

470
00:22:19,960 --> 00:22:22,600
Speaker 2: finance because you can imagine that the developer is at

471
00:22:22,600 --> 00:22:24,000
Speaker 2: that point committed to the project.

472
00:22:24,320 --> 00:22:27,159
Speaker 1: Right, So even if the money is spent over several

473
00:22:27,240 --> 00:22:32,159
Speaker 1: subsequent years, we are counting it for a particular year exactly.

474
00:22:32,280 --> 00:22:34,920
Speaker 2: So that project may come to fruition three years after

475
00:22:35,080 --> 00:22:38,000
Speaker 2: we're tracking it as an investment decision, and the money

476
00:22:38,240 --> 00:22:40,800
Speaker 2: being spent is spread over those years, but we track

477
00:22:40,840 --> 00:22:42,400
Speaker 2: it as an investment in that year, and we put

478
00:22:42,400 --> 00:22:43,760
Speaker 2: all the capex in that year.

479
00:22:44,160 --> 00:22:44,760
Speaker 3: It makes sense.

480
00:22:44,800 --> 00:22:47,080
Speaker 1: I mean, there's no perfect answer to this question of

481
00:22:47,119 --> 00:22:48,840
Speaker 1: you know when you're going to count that money, but

482
00:22:49,200 --> 00:22:51,160
Speaker 1: I think I like the idea of this north Star

483
00:22:51,240 --> 00:22:53,600
Speaker 1: that's based around when do you decide.

484
00:22:53,160 --> 00:22:54,000
Speaker 3: To spend the money?

485
00:22:55,200 --> 00:22:57,439
Speaker 1: Yeah, I suppose it's the better word, when do you

486
00:22:57,440 --> 00:22:58,720
Speaker 1: commit to spending that money?

487
00:22:58,920 --> 00:23:02,840
Speaker 2: Exactly? And to earlier examples, that looks totally different in

488
00:23:02,880 --> 00:23:06,080
Speaker 2: the EV sector and the nuclear sector. So for evs,

489
00:23:06,400 --> 00:23:09,679
Speaker 2: that commitment to buy an EV as a consumer purchase,

490
00:23:09,720 --> 00:23:11,560
Speaker 2: so we look at EV sales in a given year

491
00:23:11,720 --> 00:23:14,000
Speaker 2: and investments in charging infrastruction in a given year and

492
00:23:14,040 --> 00:23:18,000
Speaker 2: so on. But for nuclear it's different again because you know,

493
00:23:18,000 --> 00:23:20,280
Speaker 2: our nuclear team is obviously tracking all of the reactors

494
00:23:20,359 --> 00:23:24,240
Speaker 2: under construction and restart around the world. But those projects

495
00:23:24,400 --> 00:23:28,240
Speaker 2: can seem like they're fully committed but then get paused

496
00:23:28,400 --> 00:23:31,280
Speaker 2: or canceled or delayed or whatever it may be over

497
00:23:31,320 --> 00:23:34,919
Speaker 2: the course of runs or that's crossover runs. Yeah, how

498
00:23:35,040 --> 00:23:38,480
Speaker 2: that in the data? Yeah, no, exactly. So our nuclear

499
00:23:38,520 --> 00:23:40,760
Speaker 2: team takes a view that you should spread the money

500
00:23:40,800 --> 00:23:43,359
Speaker 2: over the five, six, seven years that it takes to

501
00:23:43,359 --> 00:23:46,080
Speaker 2: build the project, because the projects may get killed after

502
00:23:46,080 --> 00:23:48,159
Speaker 2: two years. So we in nuclear we don't take all

503
00:23:48,160 --> 00:23:49,920
Speaker 2: the money put it in the in the year of commitment.

504
00:23:50,080 --> 00:23:52,199
Speaker 2: So you have to make all of these and you know,

505
00:23:52,200 --> 00:23:54,960
Speaker 2: there's sort of even just this issue of timing of money,

506
00:23:54,960 --> 00:23:57,520
Speaker 2: there's probably twenty decisions we've had to make to try

507
00:23:57,560 --> 00:23:59,520
Speaker 2: and get it to be as apples tapples, or at

508
00:23:59,560 --> 00:24:02,920
Speaker 2: least as fair to the sector and its context as possible.

509
00:24:03,160 --> 00:24:05,880
Speaker 1: That's so interesting. I've got a few other questions about

510
00:24:05,880 --> 00:24:08,439
Speaker 1: the methodolgy. I mean, one is I mean, as you

511
00:24:08,480 --> 00:24:10,560
Speaker 1: well know, me and Albert have worked together for a

512
00:24:10,640 --> 00:24:12,800
Speaker 1: very long time. Albert was my first manager of being

513
00:24:12,840 --> 00:24:14,800
Speaker 1: the e F and and I was covering energy efficiency

514
00:24:14,920 --> 00:24:17,160
Speaker 1: and one of the things I struggled with sometimes when

515
00:24:17,200 --> 00:24:19,360
Speaker 1: I was trying to add up numbers, say how much

516
00:24:19,400 --> 00:24:23,600
Speaker 1: was investing in energy efficiency? Is you know the ambiguities

517
00:24:24,080 --> 00:24:26,520
Speaker 1: you know in energy efficiency? The example I be is,

518
00:24:26,560 --> 00:24:29,760
Speaker 1: you know, if someone's bought energy efficient lighting, to one extent,

519
00:24:29,840 --> 00:24:31,679
Speaker 1: is that an investment in energy efficiency?

520
00:24:31,720 --> 00:24:34,280
Speaker 3: And to what extent is an investment in lighting?

521
00:24:34,440 --> 00:24:37,960
Speaker 1: You know, how much should we say was specifically invested

522
00:24:37,960 --> 00:24:41,760
Speaker 1: in the efficiency part? I'm sure there's multiple ambiguities that

523
00:24:41,840 --> 00:24:44,760
Speaker 1: you come across in this project. Is that is that

524
00:24:44,800 --> 00:24:45,440
Speaker 1: fair to say?

525
00:24:45,600 --> 00:24:47,679
Speaker 3: And how do you deal with those ambiguities?

526
00:24:48,080 --> 00:24:50,720
Speaker 2: Well, energy efficiency is a great example. We have tried,

527
00:24:50,800 --> 00:24:52,840
Speaker 2: and Tom you've been a big part of that over

528
00:24:52,840 --> 00:24:55,439
Speaker 2: the years of getting to a good understanding of what

529
00:24:55,560 --> 00:24:58,199
Speaker 2: energy efficiency investment means. And actually for the purpose of

530
00:24:58,200 --> 00:25:01,159
Speaker 2: this Energy Transition Investment project, we haven't been able to

531
00:25:01,200 --> 00:25:04,879
Speaker 2: include it apart from in the sense of electrication, heat palms,

532
00:25:04,880 --> 00:25:07,240
Speaker 2: EVS and so on, simply because it's too difficult to

533
00:25:07,240 --> 00:25:09,760
Speaker 2: get to a set of definitions and methodology that truly

534
00:25:09,800 --> 00:25:11,639
Speaker 2: is defensible in our view. And I know there are

535
00:25:11,680 --> 00:25:13,439
Speaker 2: other groups that do it, but we just haven't been

536
00:25:13,440 --> 00:25:16,119
Speaker 2: able to get comfortable ourselves. I think some of the

537
00:25:16,160 --> 00:25:20,280
Speaker 2: trickier things maybe relate to industry, for example, So we've

538
00:25:20,280 --> 00:25:22,520
Speaker 2: had to make a decision as to what's included in

539
00:25:22,560 --> 00:25:25,760
Speaker 2: our clean steel investment numbers, and you know, we include

540
00:25:25,760 --> 00:25:28,720
Speaker 2: electric arc furnaces that are being built that may or

541
00:25:28,760 --> 00:25:30,880
Speaker 2: may not run on clean electricity in the first year

542
00:25:31,000 --> 00:25:33,439
Speaker 2: and maybe in future they will, maybe they don't at

543
00:25:33,480 --> 00:25:38,760
Speaker 2: the beginning. There are direct reduction furnaces that are hydrogen

544
00:25:38,840 --> 00:25:40,640
Speaker 2: capable that are in the data set that we don't

545
00:25:40,680 --> 00:25:42,840
Speaker 2: know if they'll be run on hydrogen at the beginning,

546
00:25:42,960 --> 00:25:45,639
Speaker 2: and so we've made some decisions around inclusion of those

547
00:25:45,960 --> 00:25:50,679
Speaker 2: assets where we feel that those investments wouldn't be stranded

548
00:25:50,920 --> 00:25:54,760
Speaker 2: in a net zero world, or they are not directly

549
00:25:54,760 --> 00:25:57,720
Speaker 2: emitting and could run off a clean fuel. Same thing

550
00:25:57,760 --> 00:26:00,879
Speaker 2: with dual fuel shipping vessels, which can run on a

551
00:26:00,880 --> 00:26:03,120
Speaker 2: conventional fuel and a net zero fuel. You know, we've

552
00:26:03,160 --> 00:26:05,439
Speaker 2: made decisions to include those kinds of things. So there

553
00:26:05,480 --> 00:26:07,439
Speaker 2: are judgment calls that the one has to make with

554
00:26:07,480 --> 00:26:09,800
Speaker 2: this sort of thing, and we have to make sure

555
00:26:09,840 --> 00:26:12,600
Speaker 2: that it's useful and usable to the folks who are

556
00:26:12,640 --> 00:26:13,360
Speaker 2: using our research.

557
00:26:13,760 --> 00:26:18,000
Speaker 1: And so from around understanding the delineation we use is

558
00:26:18,400 --> 00:26:22,320
Speaker 1: technology based, so there's a sort of a binary. We're

559
00:26:22,359 --> 00:26:24,239
Speaker 1: either counting a technology or we're not.

560
00:26:24,359 --> 00:26:25,840
Speaker 3: Like heat pumps it in.

561
00:26:26,200 --> 00:26:28,199
Speaker 1: We're not making this how much of this would have

562
00:26:28,200 --> 00:26:31,119
Speaker 1: happened anyway. It is just an investment in heating versus

563
00:26:31,240 --> 00:26:34,560
Speaker 1: an investment in energy efficient heating, as opposed to like

564
00:26:34,920 --> 00:26:38,040
Speaker 1: us trying to either look at saying the business models

565
00:26:38,119 --> 00:26:40,399
Speaker 1: behind it, which I know for energy efficiency was one

566
00:26:40,400 --> 00:26:43,080
Speaker 1: way you'd try and make that delineation, which also has

567
00:26:43,119 --> 00:26:45,720
Speaker 1: its shortcomings, And we're not trying to do anything clever

568
00:26:45,920 --> 00:26:48,600
Speaker 1: like oh, you know, if it's a dual fuel ship,

569
00:26:48,640 --> 00:26:51,960
Speaker 1: we'll count it as fifty percent. We're basically saying either

570
00:26:51,960 --> 00:26:53,960
Speaker 1: a technology is in and we count it and we're

571
00:26:54,000 --> 00:26:56,280
Speaker 1: transparent about it and we will tell you how much

572
00:26:56,359 --> 00:26:58,119
Speaker 1: of those we're invested in.

573
00:26:58,320 --> 00:26:58,800
Speaker 3: Or it's not.

574
00:26:59,200 --> 00:27:00,399
Speaker 1: Is that a fair to say that we use a

575
00:27:00,440 --> 00:27:02,960
Speaker 1: sort of a technology based delineation and we make a

576
00:27:03,000 --> 00:27:05,640
Speaker 1: decision on technologies on a case by case basis.

577
00:27:06,160 --> 00:27:08,240
Speaker 2: Yes, that's right, and it's important to us that we're

578
00:27:08,240 --> 00:27:10,720
Speaker 2: transparent about those choices. So you know, we have to

579
00:27:10,720 --> 00:27:13,080
Speaker 2: be clear in the methodology of what we're including. And

580
00:27:13,359 --> 00:27:15,960
Speaker 2: I think, well, there's one more example which I think

581
00:27:15,960 --> 00:27:19,120
Speaker 2: really illuminates that choice, which is on power grids, which Tom,

582
00:27:19,119 --> 00:27:21,879
Speaker 2: as you know, we in our power grids investment figure,

583
00:27:21,880 --> 00:27:25,080
Speaker 2: we include all grid investment at the transmission and distribution

584
00:27:25,200 --> 00:27:27,560
Speaker 2: level in all of the markets that we track, regardless

585
00:27:27,560 --> 00:27:29,960
Speaker 2: of whether or not those projects are explicitly for a

586
00:27:29,960 --> 00:27:33,720
Speaker 2: green or energy transition purpose. So it's almost certain that

587
00:27:33,760 --> 00:27:37,600
Speaker 2: we're including power grid investment that connects fossil generation. And

588
00:27:37,840 --> 00:27:39,440
Speaker 2: there's a few reasons we do that. I mean, one

589
00:27:39,480 --> 00:27:41,880
Speaker 2: is to this point about transparency, that comes a point

590
00:27:41,920 --> 00:27:44,919
Speaker 2: when you can overcomplicate. And if you over complicate and

591
00:27:44,960 --> 00:27:47,760
Speaker 2: you say, well, that country has only got thirty percent renewables,

592
00:27:47,760 --> 00:27:49,200
Speaker 2: so we're going to take thirty percent of as power

593
00:27:49,240 --> 00:27:51,879
Speaker 2: grid investment and include it and exclude the other seventy percent.

594
00:27:51,960 --> 00:27:53,679
Speaker 2: The question you head up against there is is that

595
00:27:53,760 --> 00:27:54,439
Speaker 2: still useful?

596
00:27:55,040 --> 00:27:56,880
Speaker 3: It's about to say what use is that?

597
00:27:57,359 --> 00:28:01,280
Speaker 1: Yeah, who's going to make use It's academically useful, it's

598
00:28:01,359 --> 00:28:05,000
Speaker 1: useful for people having arguments on Twitter, all three on X,

599
00:28:05,400 --> 00:28:08,840
Speaker 1: but it's not useful for anyone making decisions exactly.

600
00:28:08,880 --> 00:28:11,720
Speaker 2: So there's a risk of sort of inadvertently obfuscating the

601
00:28:11,800 --> 00:28:14,760
Speaker 2: numbers that you're actually trying to illuminate. But with that said,

602
00:28:14,800 --> 00:28:17,360
Speaker 2: there are groups out there. There's a Green Grids Initiative

603
00:28:17,359 --> 00:28:19,440
Speaker 2: of the Utilities for Net Zero Alliance who are working

604
00:28:19,440 --> 00:28:22,400
Speaker 2: on this question of well, what constitutes a green grid investment?

605
00:28:22,480 --> 00:28:25,240
Speaker 2: Can you build a taxonomy around it so that finance

606
00:28:25,240 --> 00:28:27,800
Speaker 2: can flow to those project I think that's very worthy work,

607
00:28:28,000 --> 00:28:31,280
Speaker 2: and we support that kind of work. It's just that

608
00:28:31,320 --> 00:28:33,680
Speaker 2: when you're trying to produce a consistent report, the most

609
00:28:33,680 --> 00:28:36,680
Speaker 2: important thing is transparency and clarity, and maybe perfection is

610
00:28:36,840 --> 00:28:37,640
Speaker 2: a little bit too far.

611
00:28:38,120 --> 00:28:40,960
Speaker 1: Yeah, I think it's important to be transparent about this stuff,

612
00:28:41,000 --> 00:28:44,360
Speaker 1: but also not to overcomplicate it because that still gives

613
00:28:44,400 --> 00:28:48,440
Speaker 1: people the room to reinterpret the results along what they

614
00:28:48,520 --> 00:28:51,200
Speaker 1: believe is right. Another question on the sort of the

615
00:28:51,240 --> 00:28:54,400
Speaker 1: methodological side of things. We've talked a lot about where

616
00:28:54,440 --> 00:28:57,360
Speaker 1: the money is going. I know there's this whole flip

617
00:28:57,400 --> 00:29:00,480
Speaker 1: side to the report around where the money's come from.

618
00:29:01,080 --> 00:29:04,440
Speaker 1: So we're talking about things like different forms of green debt.

619
00:29:04,480 --> 00:29:08,520
Speaker 1: There's also venture capital, M and A. How do we

620
00:29:08,560 --> 00:29:11,240
Speaker 1: make sense of all of that? Again, it's all very

621
00:29:11,280 --> 00:29:16,640
Speaker 1: different kinds of money and not necessarily easy to just

622
00:29:16,880 --> 00:29:19,400
Speaker 1: stack up and add together, you know, even though it

623
00:29:19,400 --> 00:29:22,160
Speaker 1: should simplistically it should be when you dig into the details,

624
00:29:22,200 --> 00:29:24,760
Speaker 1: it's not. What are some of the like the challenges there.

625
00:29:25,120 --> 00:29:27,440
Speaker 2: Thanks Tom, Yeah, this is a really interesting question. So

626
00:29:27,720 --> 00:29:30,320
Speaker 2: what we do track in the report is equity fund

627
00:29:30,360 --> 00:29:33,520
Speaker 2: raising by climate tech companies, which was about seventy seven

628
00:29:33,560 --> 00:29:36,479
Speaker 2: billion dollars in twenty twenty five and up very strongly,

629
00:29:36,560 --> 00:29:39,000
Speaker 2: up fifty percent after dropping for three years. So that's

630
00:29:39,000 --> 00:29:42,240
Speaker 2: great to see. So that's the equity side or private investment.

631
00:29:42,520 --> 00:29:46,160
Speaker 2: The other thing we do track is debt issuance by companies,

632
00:29:46,280 --> 00:29:49,320
Speaker 2: governments and projects where the debt is being issued for

633
00:29:49,440 --> 00:29:52,360
Speaker 2: an energy transition related purpose, so we think that money

634
00:29:52,400 --> 00:29:54,720
Speaker 2: is being then used by the government or the project

635
00:29:54,760 --> 00:29:57,400
Speaker 2: of the company to build a project or ramp up

636
00:29:57,440 --> 00:30:00,840
Speaker 2: manufacturing or some other thing that's energy transition related. And

637
00:30:00,880 --> 00:30:03,960
Speaker 2: that was one point two trillion dollars in twenty twenty

638
00:30:04,000 --> 00:30:08,120
Speaker 2: five and up seventeen percent. So those are two of

639
00:30:07,880 --> 00:30:10,080
Speaker 2: the key things in my view when it comes to

640
00:30:10,120 --> 00:30:12,640
Speaker 2: kind of the financial markets that underpin the energy transition.

641
00:30:12,920 --> 00:30:14,920
Speaker 2: I mean, the first thing to say is people can

642
00:30:14,960 --> 00:30:18,000
Speaker 2: sometimes be surprised just how much greater the debt number

643
00:30:18,040 --> 00:30:20,040
Speaker 2: is than the equity number because there's so much hype

644
00:30:20,040 --> 00:30:22,640
Speaker 2: around venture capital and private equity and IPOs and so

645
00:30:22,680 --> 00:30:25,240
Speaker 2: on of companies in the climate tech space. But it's

646
00:30:25,280 --> 00:30:27,320
Speaker 2: really a drop in the ocean compared to the amount

647
00:30:27,320 --> 00:30:31,200
Speaker 2: of debt being raised by especially by utility companies energy companies,

648
00:30:31,280 --> 00:30:34,400
Speaker 2: which is then being deployed into energy transition sectors.

649
00:30:34,680 --> 00:30:37,400
Speaker 3: Debt is it might be boring, but it's a sign.

650
00:30:37,240 --> 00:30:40,760
Speaker 1: That your sector is mature or maturing, right, And that's

651
00:30:40,800 --> 00:30:41,840
Speaker 1: a lot of that's going into the.

652
00:30:41,760 --> 00:30:45,800
Speaker 2: Assets exactly exactly. It's financing the factories that make the

653
00:30:45,840 --> 00:30:48,840
Speaker 2: batteries and evs and so on, and you know, the

654
00:30:48,880 --> 00:30:51,880
Speaker 2: grids and all the rest of it. Those numbers, so

655
00:30:51,920 --> 00:30:53,880
Speaker 2: the one point two trillion of debt, the seventy seven

656
00:30:53,920 --> 00:30:56,680
Speaker 2: billion of equity, they don't add up to the same

657
00:30:56,680 --> 00:31:00,480
Speaker 2: amount that's going into energy transition and supply chain. And

658
00:31:00,480 --> 00:31:02,880
Speaker 2: there's lots of reasons for that, but let's pick one

659
00:31:02,920 --> 00:31:04,360
Speaker 2: of the one or two of the key reasons. One

660
00:31:04,440 --> 00:31:06,520
Speaker 2: is there's a lot of kind of just government subsidy

661
00:31:06,600 --> 00:31:09,600
Speaker 2: and grant and other investment that is separate. And then

662
00:31:09,600 --> 00:31:12,760
Speaker 2: there's a huge chunk of consumer spending that goes in

663
00:31:12,800 --> 00:31:15,840
Speaker 2: as well, and that's consumers buying rooftop solar and heat

664
00:31:15,840 --> 00:31:19,600
Speaker 2: pumps and evs, which isn't reflected in your equity and

665
00:31:19,600 --> 00:31:22,080
Speaker 2: debt financing, and just is a different source of spending.

666
00:31:22,480 --> 00:31:24,000
Speaker 1: I was going to say, if you were to subtract

667
00:31:24,160 --> 00:31:28,680
Speaker 1: the investment in electric vehicles from your total, then I'm

668
00:31:28,720 --> 00:31:31,440
Speaker 1: sure your two figures of where the money's coming from

669
00:31:31,480 --> 00:31:33,840
Speaker 1: and where it's going to would come a lot closer

670
00:31:33,840 --> 00:31:34,560
Speaker 1: to adding up.

671
00:31:34,960 --> 00:31:37,920
Speaker 2: Yeah, if you adjusted all the scope of sectors and things,

672
00:31:37,960 --> 00:31:40,360
Speaker 2: you get a lot closer, but you'd still have issues

673
00:31:40,400 --> 00:31:43,200
Speaker 2: around timing where money raised in one year might not

674
00:31:43,240 --> 00:31:45,240
Speaker 2: be spent until later on, et cetera, et cetera, So

675
00:31:45,320 --> 00:31:48,000
Speaker 2: you'll you'll never get it quite right. But yeah, you'd

676
00:31:48,000 --> 00:31:48,840
Speaker 2: get a lot closer.

677
00:31:49,120 --> 00:31:52,640
Speaker 1: And are there any I mean, you mentioned climate tech

678
00:31:52,640 --> 00:31:55,920
Speaker 1: equity finance jumped fifty three percent to seventy seven point

679
00:31:55,960 --> 00:31:58,920
Speaker 1: three billion. Is is that a new high or is

680
00:31:58,960 --> 00:32:01,760
Speaker 1: that sort of a recovering from a low base.

681
00:32:02,080 --> 00:32:05,600
Speaker 2: It's a recovery. It basically recovers more or less one

682
00:32:05,640 --> 00:32:08,360
Speaker 2: year's worth of losses, so it gets us almost back

683
00:32:08,400 --> 00:32:11,480
Speaker 2: to where we were in twenty twenty three, and it's

684
00:32:11,520 --> 00:32:15,080
Speaker 2: still I think, less than half of the figure that

685
00:32:15,080 --> 00:32:18,560
Speaker 2: we saw back in twenty twenty one. So it's definitely

686
00:32:18,600 --> 00:32:21,520
Speaker 2: not a new record or anything like that, but it's

687
00:32:21,560 --> 00:32:24,600
Speaker 2: the beginning of a recovery. And what else was interesting

688
00:32:24,600 --> 00:32:27,200
Speaker 2: about that is that most of that is in the

689
00:32:27,200 --> 00:32:34,600
Speaker 2: public markets. It's established players like Iberdrola BYDCATL raising capital

690
00:32:34,640 --> 00:32:37,640
Speaker 2: in the public markets to invest at scale, and the

691
00:32:37,840 --> 00:32:40,560
Speaker 2: early stage and mid stage Ventu capital private equity side

692
00:32:40,560 --> 00:32:43,840
Speaker 2: of the equation continued to decline in twenty twenty five. Actually,

693
00:32:43,960 --> 00:32:46,960
Speaker 2: so we saw this slightly k shaped recovery where public

694
00:32:46,960 --> 00:32:49,200
Speaker 2: markets went first. That may pave the way for more

695
00:32:49,240 --> 00:32:51,920
Speaker 2: Ventu capital and private equity to flow in the coming year,

696
00:32:52,320 --> 00:32:53,360
Speaker 2: but that remains to be seen.

697
00:32:54,080 --> 00:32:57,640
Speaker 1: So I suppose one last question for me twenty twenty six. Obviously,

698
00:32:57,640 --> 00:33:01,280
Speaker 1: I'm not asking you to predict what our issults are

699
00:33:01,320 --> 00:33:04,680
Speaker 1: going to show, but do we have any ideas of

700
00:33:04,920 --> 00:33:07,440
Speaker 1: things we might change in the report, things we might

701
00:33:07,440 --> 00:33:09,880
Speaker 1: add in, things we might refine. You know, since we

702
00:33:10,040 --> 00:33:11,600
Speaker 1: ended up talking a lot about the sort of the

703
00:33:11,680 --> 00:33:14,320
Speaker 1: methodology behind this, I'd be kind of curious to know

704
00:33:14,520 --> 00:33:16,640
Speaker 1: what the team's thinking is on, you.

705
00:33:16,600 --> 00:33:18,280
Speaker 3: Know, where to next in that regard.

706
00:33:18,640 --> 00:33:20,800
Speaker 2: It's a correct question, and I wish I could answer it,

707
00:33:20,800 --> 00:33:23,920
Speaker 2: but honestly, you know, we're at the moment we're I

708
00:33:23,920 --> 00:33:27,440
Speaker 2: think three or four weeks post publication. We're still talking

709
00:33:27,480 --> 00:33:32,640
Speaker 2: to clients about the findings and explaining what's what's happened,

710
00:33:32,840 --> 00:33:34,920
Speaker 2: and kind of discussing what it means for our clients.

711
00:33:35,000 --> 00:33:37,160
Speaker 2: So it's a little bit too early, honestly to say

712
00:33:37,200 --> 00:33:39,520
Speaker 2: what the next year will bring. But every year we

713
00:33:39,560 --> 00:33:42,920
Speaker 2: look to improve and we refine methodologies, we adjust scope.

714
00:33:43,120 --> 00:33:44,800
Speaker 2: We didn't talk about it too much, but this year

715
00:33:44,800 --> 00:33:46,960
Speaker 2: we included a little bit more on data centers, a

716
00:33:47,000 --> 00:33:49,840
Speaker 2: little bit more on adaptation and resilience as well, just

717
00:33:49,920 --> 00:33:52,600
Speaker 2: you know, small tweaks here and there. So I'm sure

718
00:33:52,600 --> 00:33:55,160
Speaker 2: there'll be opportunities. So if people have ideas, they should

719
00:33:55,360 --> 00:33:56,480
Speaker 2: definitely come and speak to us.

720
00:33:56,760 --> 00:33:57,560
Speaker 3: That's very fair.

721
00:33:57,600 --> 00:33:59,960
Speaker 1: And you know, for those of you kind of curious

722
00:34:00,000 --> 00:34:03,360
Speaker 1: about how we make decisions, you know, our client feedback

723
00:34:03,440 --> 00:34:07,400
Speaker 1: is hugely important to us in terms of people saying, oh,

724
00:34:07,440 --> 00:34:09,920
Speaker 1: I think that this would be an interesting thing to

725
00:34:10,000 --> 00:34:12,240
Speaker 1: look at, or you know, I felt this was missing.

726
00:34:12,680 --> 00:34:15,480
Speaker 1: You know, we're not just going to do everything people suggest,

727
00:34:15,560 --> 00:34:18,319
Speaker 1: but we don't just pull our ideas internally. We're we're

728
00:34:18,360 --> 00:34:22,359
Speaker 1: always we're always willing to hear suggestions of you know,

729
00:34:22,480 --> 00:34:24,719
Speaker 1: how to expand I think the adaptation piece will be

730
00:34:24,760 --> 00:34:28,480
Speaker 1: really interesting to track and to see that flesh out.

731
00:34:28,800 --> 00:34:30,560
Speaker 3: I'm sure that's going to be more and more important

732
00:34:30,600 --> 00:34:31,200
Speaker 3: over the years.

733
00:34:31,520 --> 00:34:34,400
Speaker 2: Yeah, exactly. It's the flip side of the coin and

734
00:34:34,680 --> 00:34:37,319
Speaker 2: doesn't get nearly enough attention to so we'll we'll be

735
00:34:37,360 --> 00:34:38,640
Speaker 2: spending more time in that for sure.

736
00:34:38,719 --> 00:34:40,759
Speaker 1: And then over the years, I mean, if we look

737
00:34:40,760 --> 00:34:42,560
Speaker 1: at the history of et I T, I mean, it

738
00:34:42,680 --> 00:34:45,840
Speaker 1: started out just being renewables investment, but then I remember,

739
00:34:45,880 --> 00:34:47,640
Speaker 1: you know, we added an EVS and then at some

740
00:34:47,680 --> 00:34:49,960
Speaker 1: point we added grids, which means that you know, we

741
00:34:50,000 --> 00:34:53,600
Speaker 1: always caveat with our historical time series that you have

742
00:34:53,680 --> 00:34:56,560
Speaker 1: to you have to be slightly aware of that when

743
00:34:56,640 --> 00:34:59,360
Speaker 1: comparing over the years, that some years.

744
00:34:59,080 --> 00:34:59,799
Speaker 3: Have more stuff in.

745
00:35:00,320 --> 00:35:03,080
Speaker 1: But I'm sure there'll be more things added in over time,

746
00:35:03,120 --> 00:35:05,560
Speaker 1: and we don't necessarily at this point in twenty twenty

747
00:35:05,600 --> 00:35:07,799
Speaker 1: six know exactly what those will be, but as this

748
00:35:07,880 --> 00:35:10,719
Speaker 1: space evolves, there'll be more scope for us to put

749
00:35:10,800 --> 00:35:11,359
Speaker 1: new things in.

750
00:35:11,920 --> 00:35:14,840
Speaker 2: Definitely, so our our ideas on a postcard and we

751
00:35:14,840 --> 00:35:15,880
Speaker 2: will consider everything.

752
00:35:16,400 --> 00:35:20,440
Speaker 1: Albert, it's been really fascinating both to hear about what

753
00:35:20,560 --> 00:35:23,840
Speaker 1: the latest report is telling us and also just to

754
00:35:24,000 --> 00:35:27,399
Speaker 1: get your perspective on how the sausage is made, because

755
00:35:27,480 --> 00:35:29,440
Speaker 1: you know, as I said, it all seems so simple

756
00:35:29,480 --> 00:35:32,480
Speaker 1: when everything is condensed down to a number, and that's

757
00:35:32,520 --> 00:35:35,920
Speaker 1: the joy of it is we can start making some conclusions,

758
00:35:35,960 --> 00:35:37,840
Speaker 1: but the condensing it down to a number is.

759
00:35:38,040 --> 00:35:39,080
Speaker 3: Far from straightforward.

760
00:35:39,080 --> 00:35:40,960
Speaker 1: So thank you for explaining all of that, and you know,

761
00:35:41,880 --> 00:35:43,759
Speaker 1: a big shout out to the team that did all

762
00:35:43,800 --> 00:35:44,400
Speaker 1: of that work.

763
00:35:44,640 --> 00:35:46,719
Speaker 2: Thanks Tom, it's an absolute pleasure to chat to you

764
00:35:46,760 --> 00:35:50,479
Speaker 2: about it. And look, there's about seventy analysts at bn

765
00:35:50,480 --> 00:35:53,239
Speaker 2: EF who work really hard in the months leading up

766
00:35:53,239 --> 00:35:57,000
Speaker 2: to this report, so absolute tribute to them, and thanks

767
00:35:57,040 --> 00:36:05,000
Speaker 2: for having me today, Tom, Thanks Albert.

768
00:36:07,680 --> 00:36:10,799
Speaker 3: Today's episode of Switched On was produced by Cam Gray

769
00:36:11,000 --> 00:36:13,360
Speaker 3: with production assistance from Kamala Shelling.

770
00:36:13,560 --> 00:36:16,719
Speaker 1: Bloomberg NIF is a service provided by Bloomberg Finance LP

771
00:36:16,880 --> 00:36:17,759
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772
00:36:17,800 --> 00:36:20,480
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773
00:36:20,520 --> 00:36:24,319
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774
00:36:24,360 --> 00:36:25,960
Speaker 2: to an investment or other strategy.

775
00:36:26,000 --> 00:36:29,399
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776
00:36:29,440 --> 00:36:31,160
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777
00:36:31,280 --> 00:36:34,239
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778
00:36:34,280 --> 00:36:38,000
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779
00:36:38,000 --> 00:36:41,000
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780
00:36:41,040 --> 00:36:43,719
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