WEBVTT - Five Energy Transition Lessons for 2025

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<v Speaker 1>This is Dana Perkins and you're listening to Switched on

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<v Speaker 1>the BNAF podcast. It's January, and while we might have

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<v Speaker 1>stopped wishing our friends a happy new year, many of

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<v Speaker 1>us are still taking stock of what we learned in

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<v Speaker 1>twenty twenty four and thinking about how to apply this

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<v Speaker 1>to the future. As each of us do this, we

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<v Speaker 1>find out if we are more of a glass half

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<v Speaker 1>full or half empty kind of person, or perhaps for

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<v Speaker 1>many of us who work in the clean energy and

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<v Speaker 1>climate space, maybe we oscillate between them both. On today's show,

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<v Speaker 1>we're going to bring you something different from our usual

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<v Speaker 1>BNAF analyst interview. Albert Chung, bn EF's deputy CEO is

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<v Speaker 1>going to read his recent note titled five Energy Transition

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<v Speaker 1>Lessons for twenty twenty five. In it, he considers what

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<v Speaker 1>lessons can be gleaned from the year gone by and

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<v Speaker 1>how this should inform the journey ahead in just five points.

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<v Speaker 1>If you like our show and want other people to

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<v Speaker 1>be able to find it, give us a review or

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<v Speaker 1>subscribe wherever you get your podcasts. B and EF subscribers

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<v Speaker 1>will be able to read Albert's note at BNF on

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<v Speaker 1>the Bloomberg terminal or at BNF dot com. Right now,

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<v Speaker 1>let's hear Albert's five energy transition lessons for twenty twenty five.

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<v Speaker 2>Five Energy transition lessons for twenty twenty five. To work

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<v Speaker 2>in clean energy and climate is to live in a

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<v Speaker 2>constant state of cognitive dissonance, stuck between good news and bad.

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<v Speaker 2>On the good side, every year brings continuous growth in

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<v Speaker 2>clean tech industries, record levels of investment and steady technological advances.

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<v Speaker 2>This past year was no different. Record numbers of electric

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<v Speaker 2>vehicles were sold in twenty twenty four, record amounts of

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<v Speaker 2>clean power capacity were installed, New energy storage technologies gain traction,

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<v Speaker 2>and when our investment totals are published later this month,

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<v Speaker 2>we will hopefully see that energy transition investment hit a

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<v Speaker 2>new record. To watch this space, Yet, despite years of

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<v Speaker 2>continuous and rapid acceleration, it has never Each winter, BNF

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<v Speaker 2>analysts spend weeks crunching numbers only to conclude that global

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<v Speaker 2>energy transition investment is running well below the level required

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<v Speaker 2>to get on track for net zero by mid century.

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<v Speaker 2>This year, the story is likely to remain unchanged. Such

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<v Speaker 2>is the relentless logic of being on a growth curve

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<v Speaker 2>that sits stubbornly below the curve you want to be on.

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<v Speaker 2>The dissonance is even stronger this year and has many

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<v Speaker 2>contributing factors, including the incoming Trump administration, the slowing growth

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<v Speaker 2>of evs, the struggles of Europe's battery sector, the limited

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<v Speaker 2>progress on hydrogen and industrial decarbonization, ongoing difficulties in the

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<v Speaker 2>offshore wind sector, and the COP twenty nine finance deal

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<v Speaker 2>that left many countries underwhelmed. This sense of unease carries

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<v Speaker 2>five important lessons that we should absorb as we begin

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<v Speaker 2>a new year of work in the energy transition. One,

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<v Speaker 2>the energy transition won't slow down because of the challenges above.

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<v Speaker 2>The word slow down was never far from the lips

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<v Speaker 2>of commentators and executives last year, but in reality, our

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<v Speaker 2>latest estimates indicate that at twenty twenty four was a

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<v Speaker 2>pretty strong year for clean energy deployment. Solar PV installations

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<v Speaker 2>were up thirty five percent year on year, wind was

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<v Speaker 2>up five percent, energy storage installations rose seventy six percent

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<v Speaker 2>in megal hour terms, and EV sales gained twenty six percent.

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<v Speaker 2>Note these are BNF estimates that predate the end of

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<v Speaker 2>twenty twenty four, even stripping out mainland China, a market

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<v Speaker 2>that can sometimes skew figures does not change the direction

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<v Speaker 2>of travel, with most of these sectors continuing to grow

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<v Speaker 2>in the America's and EMEA regions. Onshore wind outside of

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<v Speaker 2>APAC is a notable exception, with installations down as permitting

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<v Speaker 2>delays and grid connection queues remain a bottleneck. Newer technologies

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<v Speaker 2>like clean hydrogen and carbon capture in storage or CCS,

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<v Speaker 2>have had a tougher year, but here we still see

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<v Speaker 2>growth on the way. Bnof's latest forecasts are for as

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<v Speaker 2>much as sixteen million metric tons of annual clean hydrogen

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<v Speaker 2>production capacity to come online by twenty thirty, up from

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<v Speaker 2>nearly nothing today, and around two hundred million metric tons

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<v Speaker 2>per annum of CCS capacity to be installed by then.

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<v Speaker 2>So even the hard to abate sectors will start to

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<v Speaker 2>make progress. And what about the Trump effect? Our updated

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<v Speaker 2>EV sales forecast for the US now sees them accounting

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<v Speaker 2>for one third of new vehicles sold in twenty thirty,

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<v Speaker 2>roughly a tripling of today's market penetration. True, this is

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<v Speaker 2>lower than the forty eight percent penetration expected by twenty

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<v Speaker 2>thirty under Biden era regulations, but it is still growth.

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<v Speaker 2>As for clean power. We would still expect more than

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<v Speaker 2>nine hundred gigawatts of new solar, wind and storage build

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<v Speaker 2>in the US by twenty thirty five under a scenario

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<v Speaker 2>in which investment and production tax credits are fully repealed.

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<v Speaker 2>This is down from our most recent forecast of over

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<v Speaker 2>one thousand, one hundred gigawatts under existing incentives, but it

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<v Speaker 2>is still growth. So our first lesson is simple. Clean

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<v Speaker 2>energy technologies will continue to grow and the energy transition

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<v Speaker 2>won't slow down, even if it feels hard at times two,

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<v Speaker 2>this is the hard part of the journey. That the

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<v Speaker 2>transition is starting to feel hard shouldn't come as aus

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<v Speaker 2>Many of the easier opportunities have been conquered. Early adopters

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<v Speaker 2>in richer countries have already bought evs and home solar

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<v Speaker 2>systems and renewables developers have snapped up the best sites

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<v Speaker 2>with the cheapest grid connections in the most economically and

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<v Speaker 2>politically stable markets. These early movers played a critical role

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<v Speaker 2>in driving down the costs of clean energy technologies and

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<v Speaker 2>bringing them to scale, but achieving scale means that growth

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<v Speaker 2>rates will start to fall. At the time of writing,

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<v Speaker 2>our latest estimate is that EV sales globally grew twenty

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<v Speaker 2>six percent year on year in twenty twenty four to

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<v Speaker 2>seventeen point two million units, approaching a quarter of all

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<v Speaker 2>new car sales. This is undoubtedly strong growth, but it

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<v Speaker 2>is much slower than the sixty percent and thirty four

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<v Speaker 2>percent growth rates in twenty twenty two and twenty twenty three.

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<v Speaker 2>In fact, the growth is starting to look fairly linear.

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<v Speaker 2>If our projection is right, the global ev market will

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<v Speaker 2>have grown by a steady three point three to three

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<v Speaker 2>point nine million units in each of the last four years.

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<v Speaker 2>Confounding predictions that energy transition technologies always grow exponentially everywhere,

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<v Speaker 2>we now think the solar sector will do something similar.

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<v Speaker 2>Annual solar installations likely grew an impressive thirty five percent

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<v Speaker 2>in twenty twenty four and have quadrupled since twenty twenty,

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<v Speaker 2>but our team is forecasting just eleven percent growth in

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<v Speaker 2>twenty twenty five and more or less linear growth thereafter.

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<v Speaker 2>This is because several advanced markets are reaching high penetrations

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<v Speaker 2>of solar. Greece and Spain, for example, likely drew more

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<v Speaker 2>than a quarter of their electricity from solar last year.

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<v Speaker 2>This drives down midday power prices, necessitating new revenue models

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<v Speaker 2>and increased storage deployment to push penetration even higher. We

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<v Speaker 2>know these solutions will come, but they require policy development

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<v Speaker 2>to open a new frontier for the growth of solar

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<v Speaker 2>in mature markets. Growth in emerging markets will be the

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<v Speaker 2>bigger driver in future. India, Pakistan, Turkey, Saudi Arabia and

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<v Speaker 2>Romania all posted more than fifty percent growth in solar

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<v Speaker 2>installations in twenty twenty four by our estimates. However, many

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<v Speaker 2>emerging markets still lack the regulatory market environment needed for

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<v Speaker 2>large scale clean energy adoption. This next phase of the

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<v Speaker 2>transition means tackling new problems, Unlocking storage and flexibility in

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<v Speaker 2>mature renewables markets to drive to higher penetrations, developing renewables

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<v Speaker 2>in markets that lack the proper technical and commercial arrangements,

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<v Speaker 2>getting charging infrastructure right to support mass market drivers and

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<v Speaker 2>truck fleet operators switching to evs, as well as driving

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<v Speaker 2>demand for clean energy and fuels in aviation, shipping, and

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<v Speaker 2>heavy industry. Progress is being made on these challenges, and

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<v Speaker 2>solving them will create new opportunities and stimulate the next

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<v Speaker 2>cycle of growth in the transition.

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<v Speaker 1>Three.

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<v Speaker 2>Be careful not to misinterpret the data in a space

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<v Speaker 2>as complex and a motive. As the energy transition, real

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<v Speaker 2>challenges can often be accompanied by exaggerated ones. Let's take

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<v Speaker 2>the EV sector again, where misinformation or at least to

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<v Speaker 2>misinterpreted data is common. The EV slowdown story in twenty

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<v Speaker 2>twenty four was largely focused on the EU, where sales

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<v Speaker 2>growth did indeed slow down. While most headlines put the

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<v Speaker 2>blame on consumers not wanting evs, the truth was more nuanced.

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<v Speaker 2>For example, in summer twenty twenty four, EV sales in

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<v Speaker 2>Germany slipped by double digits from the year before, but

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<v Speaker 2>news reporting failed to point out that there had been

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<v Speaker 2>a surge in sales the year before, triggered by the

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<v Speaker 2>ending of a subsidy regime. What's more, the European Environment

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<v Speaker 2>Agency has now confirmed that ninety eight out of one

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<v Speaker 2>hundred and one automakers met their binding CO two emissions

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<v Speaker 2>targets in twenty twenty three. The three that didn't are tiny. Crucially,

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<v Speaker 2>the EU wide targets have remained the same from twenty

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<v Speaker 2>twenty one to twenty twenty four, so it is somewhat

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<v Speaker 2>likely that these automakers will have met their targets again

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<v Speaker 2>in twenty twenty four, and EV sales were roughly flat

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<v Speaker 2>in Europe in twenty twenty four, not down. In other words,

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<v Speaker 2>the auto industry is already selling enough evs in Europe

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<v Speaker 2>to comply with the only meaningful emissions policy they are

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<v Speaker 2>subject to. Those emissions targets will tighten up to a

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<v Speaker 2>new level in twenty twenty five, remaining flat again until

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<v Speaker 2>twenty twenty nine. Given this policy design, a perfectly rational

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<v Speaker 2>automaker strategy would be to work wait until twenty twenty

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<v Speaker 2>five before launching new, improved, competitively priced evs, while doing

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<v Speaker 2>the bare minimum to push EV sales in twenty twenty

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<v Speaker 2>four and deferring price cuts even as battery prices fail

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<v Speaker 2>to a new record low. I believe that in retrospect

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<v Speaker 2>we will see that the EU EV slow down in

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<v Speaker 2>twenty twenty four was baked in from the start. It

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<v Speaker 2>was a feature of European emissions policy design, not a bug.

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<v Speaker 2>Lesson learned, Be careful not to misinterpret the data. Four.

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<v Speaker 2>A successful transition is a profitable one. It may be

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<v Speaker 2>a blindingly obvious point, but the past year has reminded

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<v Speaker 2>us that the energy transition will only succeed if clean

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<v Speaker 2>energy investments generate risk adjusted returns that meet the requirements

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<v Speaker 2>of companies and their investors. There is no world in

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<v Speaker 2>which public or concessional capital alone can solve the climate

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<v Speaker 2>mitigation challenge. This truism has reared its head in the

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<v Speaker 2>hydrogen sector, where costs are rising, not falling. Our estimates

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<v Speaker 2>for levelized costs of clean hydrogen are thirty five percent

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<v Speaker 2>high on average than two years ago, at three dollars

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<v Speaker 2>seventy five four to eleven dollars seventy per kilogram, depending

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<v Speaker 2>on geographical location and other factors. An ammonia auction by

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<v Speaker 2>Germany's H two Global Foundation last year priced green ammonia

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<v Speaker 2>imports at double the price of gray ammonia in Western Europe,

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<v Speaker 2>and there are now very few places in the world

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<v Speaker 2>where we expect clean hydrogen to compete with the gray

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<v Speaker 2>variety by twenty fifty. So for prospective industrial users and

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<v Speaker 2>producers of hydrogen who must make multi decadal investments to

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<v Speaker 2>adopt greener molecules, meeting any return expectations will depend on

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<v Speaker 2>regulations such as carbon pricing and subsidy for the foreseeable future.

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<v Speaker 2>Governments that are serious about driving hydrogen use in sectors

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<v Speaker 2>such as fertilizers chemicals and steel must make sure that

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<v Speaker 2>long term incentives, regulations, and demand side policy are in

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<v Speaker 2>place to support companies and investors down this road. The

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<v Speaker 2>benefits can be counted not only in terms of carbon emissions,

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<v Speaker 2>but also enhanced energy security. The offshore wind industry offers

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<v Speaker 2>a contrasting but equally relevant example. The emergence of zero

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<v Speaker 2>subsidy offshore wind projects in Europe in the late twenty

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<v Speaker 2>tens led to a surge in interest across the world,

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<v Speaker 2>with new opportunities arising in the US and Asia, National

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<v Speaker 2>and state government agencies set up auction processors to award

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<v Speaker 2>the cheapest power purchase contracts to the most aggressive bidders,

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<v Speaker 2>and in many cases those developers were also made to

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<v Speaker 2>bid competitively for seabed leases or offer other non monetary

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<v Speaker 2>benefits to make their bids more attractive. This ultra competitive

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<v Speaker 2>approach has delivered impressively low clean power prices, but has

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<v Speaker 2>also sown the seeds of other problems. Even before the

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<v Speaker 2>inflation surge of twenty twenty two to twenty twenty three,

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<v Speaker 2>wind turbine manufacturer's margins were being squeezed by their over

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<v Speaker 2>ambitious customers and pressure to invest in ever larger turbine platforms.

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<v Speaker 2>Rising costs have since led to failed auctions in various

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<v Speaker 2>countries and a spate of canceled projects in the US

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<v Speaker 2>and other markets. Only now are lessons beginning to be learned.

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<v Speaker 2>As recently as December, an offshore wind auction in Denmark

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<v Speaker 2>failed as developers were expected to pay for the right

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<v Speaker 2>to develop their power plant with no revenue contract on offer.

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<v Speaker 2>The risk adjusted returns were simply not there. Against this backdrop,

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<v Speaker 2>it is no wonder that a number of all oil

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<v Speaker 2>and gas companies have moved to limit their exposure to

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<v Speaker 2>offshore wind. This may even prove to be a positive

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<v Speaker 2>for the industry if it reduces competition and demonstrates that

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<v Speaker 2>policy regimes still need to attract private sector investment. The

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<v Speaker 2>same logic applies to financial institutions and their role in

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<v Speaker 2>the transition, and here we are at an exciting juncture.

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<v Speaker 2>A growing list of banks, including JP, Morgan City and RBC,

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<v Speaker 2>have committed to publish their ratios of clean energy financing

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<v Speaker 2>to fossil fuel financing, and BNP Paraber has set a

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<v Speaker 2>target of ninety percent, or a nine to one clean

0:12:30.559 --> 0:12:34.080
<v Speaker 2>to fossil financing ratio for twenty thirty by focusing on

0:12:34.120 --> 0:12:37.600
<v Speaker 2>the solutions building clean energy and not only the problem

0:12:37.840 --> 0:12:40.680
<v Speaker 2>fossil fuel emissions. These types of metrics are a big

0:12:40.679 --> 0:12:42.760
<v Speaker 2>step in the right direction and will likely form a

0:12:42.840 --> 0:12:46.520
<v Speaker 2>key part of banks transition plans. However, the banks cannot

0:12:46.559 --> 0:12:49.160
<v Speaker 2>achieve these ratios on their own. For these aims to

0:12:49.200 --> 0:12:52.000
<v Speaker 2>be realized, the conditions in the real economy must exist

0:12:52.080 --> 0:12:55.960
<v Speaker 2>to allow attractive risk adjusted returns on energy transition investments,

0:12:56.000 --> 0:12:58.319
<v Speaker 2>and only government can create those conditions.

0:12:59.320 --> 0:12:59.600
<v Speaker 1>Five.

0:13:00.480 --> 0:13:05.080
<v Speaker 2>Geoeconomic competition has become the biggest complicating factor in the

0:13:05.080 --> 0:13:08.240
<v Speaker 2>two decades that benef has been around. The overarching narrative

0:13:08.280 --> 0:13:12.800
<v Speaker 2>around multilateral climate action has shifted twice, first from sacrifice

0:13:12.800 --> 0:13:16.480
<v Speaker 2>to opportunity, and then more recently, from opportunity to competition.

0:13:16.960 --> 0:13:20.280
<v Speaker 2>During the twenty tens, the narrative of shared sacrifice, where

0:13:20.320 --> 0:13:23.160
<v Speaker 2>countries look to limit their own responsibility for climate action

0:13:23.240 --> 0:13:26.000
<v Speaker 2>while pushing more onto others, was replaced by a new

0:13:26.120 --> 0:13:30.080
<v Speaker 2>narrative of opportunity and leadership. As the twenty twenties began,

0:13:30.280 --> 0:13:33.640
<v Speaker 2>countries race to show their seriousness about climate action, announcing

0:13:33.880 --> 0:13:38.480
<v Speaker 2>zero targets and more ambitious nationally determined contributions NDCs and

0:13:38.600 --> 0:13:42.680
<v Speaker 2>implementing more clean energy policies. Narrow self interest seemed to

0:13:42.720 --> 0:13:46.120
<v Speaker 2>give way to enlightened self interest. A second shift is

0:13:46.160 --> 0:13:49.080
<v Speaker 2>now in full swing toward hard nosed calculations of how

0:13:49.160 --> 0:13:52.720
<v Speaker 2>much economic value and national security benefit countries can capture

0:13:52.760 --> 0:13:55.480
<v Speaker 2>from the clean energy transition, and how they can compete

0:13:55.559 --> 0:13:59.360
<v Speaker 2>in these new industries against geopolitical and economic rivals. The

0:13:59.440 --> 0:14:02.000
<v Speaker 2>narrative of opportunity has not gone away, but it has

0:14:02.120 --> 0:14:05.760
<v Speaker 2>had a strong dose of realism and competition injected. This

0:14:05.800 --> 0:14:09.600
<v Speaker 2>shift is understandable and possibly inevitable. For example, there are

0:14:09.640 --> 0:14:13.559
<v Speaker 2>several major economies in Asia whose large incumbent steel industries

0:14:13.679 --> 0:14:17.679
<v Speaker 2>are predicated on access to cost competitive coal resources. Some

0:14:17.720 --> 0:14:20.960
<v Speaker 2>of these countries may never be cost competitive hydrogen producers,

0:14:21.040 --> 0:14:24.000
<v Speaker 2>so the shift from coal to hydrogen based steel may

0:14:24.080 --> 0:14:27.880
<v Speaker 2>permanently alter their competitive position in a global industry. These

0:14:27.960 --> 0:14:31.000
<v Speaker 2>are complex considerations which have not featured in the power

0:14:31.040 --> 0:14:34.480
<v Speaker 2>sector transition, where competition is mainly domestic. In the clean

0:14:34.560 --> 0:14:38.440
<v Speaker 2>tech manufacturing industries, especially solar and batteries, many countries are

0:14:38.480 --> 0:14:41.360
<v Speaker 2>now trying to gain a foothold. However, a massive wave

0:14:41.440 --> 0:14:44.120
<v Speaker 2>of investment in mainland China in twenty twenty two to

0:14:44.160 --> 0:14:47.560
<v Speaker 2>twenty twenty three has led to significant over capacity globally,

0:14:47.680 --> 0:14:50.880
<v Speaker 2>with nameplate capacity outstripping demand by more than double in

0:14:50.960 --> 0:14:54.800
<v Speaker 2>twenty twenty four. For both technologies, Prices of key technologies

0:14:54.800 --> 0:14:57.040
<v Speaker 2>have fallen to new lows, speeding the pace of the

0:14:57.120 --> 0:15:01.480
<v Speaker 2>energy transition but bringing pain to manufacturers. Electoralizer manufacturing sector

0:15:01.480 --> 0:15:04.160
<v Speaker 2>could be about to experience a similar supply glut, and

0:15:04.280 --> 0:15:08.080
<v Speaker 2>wind in China has suffered the same fate under these circumstances.

0:15:08.200 --> 0:15:11.680
<v Speaker 2>Policies in the US, India, Europe and other markets which

0:15:11.720 --> 0:15:15.400
<v Speaker 2>aim to protect and grow domestic manufacturers, face an uphill struggle,

0:15:15.520 --> 0:15:18.320
<v Speaker 2>and it doesn't seem like they're getting everything right. In

0:15:18.400 --> 0:15:22.040
<v Speaker 2>Western markets, where battery factory projects are struggling, evs are

0:15:22.080 --> 0:15:25.440
<v Speaker 2>still not fully cost competitive. This is despite global battery

0:15:25.440 --> 0:15:28.600
<v Speaker 2>prices falling twenty percent last year to a new record low,

0:15:28.840 --> 0:15:32.920
<v Speaker 2>driven by declining battery metal prices and intense competition especially

0:15:33.000 --> 0:15:36.080
<v Speaker 2>among lithium iron phosphate battery producers in China. In the

0:15:36.200 --> 0:15:38.960
<v Speaker 2>US and India, developers continue to pay over the odds

0:15:39.000 --> 0:15:41.720
<v Speaker 2>for solar equipment because of trade tariffs and other barriers.

0:15:42.160 --> 0:15:44.680
<v Speaker 2>Like the US, the EU is trying to use tariffs

0:15:44.680 --> 0:15:47.680
<v Speaker 2>to slow imports of Chinese made evs. It is also

0:15:47.720 --> 0:15:50.520
<v Speaker 2>taking steps to protect its wind sector and its fledgling

0:15:50.560 --> 0:15:55.520
<v Speaker 2>electoralizer industry from Chinese imports. Policymakers are knowingly or not

0:15:55.840 --> 0:15:59.200
<v Speaker 2>choosing a costlier transition with the expectation that this will

0:15:59.200 --> 0:16:04.000
<v Speaker 2>reap economic, security and political benefits. This choice is rarely

0:16:04.040 --> 0:16:07.600
<v Speaker 2>discussed explicitly, and the phenomenon goes beyond the US and Europe.

0:16:07.760 --> 0:16:11.600
<v Speaker 2>In twenty twenty four, Turkey, Brazil, and Canada also raised

0:16:11.720 --> 0:16:15.320
<v Speaker 2>or introduced tariffs for clean tech imports. Chinese and other

0:16:15.360 --> 0:16:17.840
<v Speaker 2>Asian companies have built a clear lead in new energy

0:16:17.880 --> 0:16:20.800
<v Speaker 2>manufacturing industries, not only in terms of scale and cost,

0:16:20.880 --> 0:16:23.680
<v Speaker 2>but also in terms of technology and knowhow. Yet the

0:16:23.760 --> 0:16:26.360
<v Speaker 2>reality is that many of these clean tech manufacturers are

0:16:26.440 --> 0:16:30.000
<v Speaker 2>nursing their wounds over low or negative margins while searching

0:16:30.040 --> 0:16:32.920
<v Speaker 2>for new overseas markets that won't shut them out. For

0:16:32.960 --> 0:16:36.040
<v Speaker 2>the sake of a successful transition, policymakers around the world

0:16:36.120 --> 0:16:40.880
<v Speaker 2>should be focused on limiting excess investment in specific oversupplied technologies,

0:16:40.920 --> 0:16:43.920
<v Speaker 2>while also looking for other investment opportunities where their countries

0:16:43.960 --> 0:16:47.360
<v Speaker 2>may possess competitive advantage. Not every country needs to be

0:16:47.400 --> 0:16:50.760
<v Speaker 2>a solar cell and battery maker, and diversifying supplies for

0:16:50.840 --> 0:16:54.400
<v Speaker 2>security purposes does not have to mean onshoring. At the

0:16:54.440 --> 0:16:57.920
<v Speaker 2>same time, they must remain focused on creating supportive policy

0:16:57.920 --> 0:17:01.360
<v Speaker 2>regimes for the transition itself, per lesson number four above,

0:17:01.440 --> 0:17:05.160
<v Speaker 2>to create demand for clean tech. Shutting out foreign companies

0:17:05.240 --> 0:17:07.399
<v Speaker 2>will raise the cost of the energy transition for the

0:17:07.520 --> 0:17:10.640
<v Speaker 2>end user and prevent the spread of much needed technical

0:17:10.720 --> 0:17:13.480
<v Speaker 2>know how and innovations At a time when both energy

0:17:13.520 --> 0:17:17.320
<v Speaker 2>security and climate outcomes are at stake. Policy makers would

0:17:17.320 --> 0:17:19.919
<v Speaker 2>be better off working out how to productively bring the

0:17:19.960 --> 0:17:23.480
<v Speaker 2>expertise of the world's leading companies onto their shores, whether

0:17:23.520 --> 0:17:26.920
<v Speaker 2>through joint ventures or intellectual property arrangements, and making sure

0:17:26.960 --> 0:17:31.919
<v Speaker 2>that they foster a dynamic local industry for installation, operations, maintenance,

0:17:31.960 --> 0:17:35.800
<v Speaker 2>and end of life management for energy transition technologies. Finally,

0:17:36.160 --> 0:17:39.359
<v Speaker 2>many countries remain heavily dependent on fossil fuel imports that

0:17:39.440 --> 0:17:43.440
<v Speaker 2>carry significant geopolitical and energy security risks. As they transition

0:17:43.520 --> 0:17:46.199
<v Speaker 2>to a cleaner mix, these risks will recede even if

0:17:46.280 --> 0:17:49.919
<v Speaker 2>key energy transition technologies are imported. Remember that the lights

0:17:49.960 --> 0:17:53.680
<v Speaker 2>stay on even if clean tech imports are slowed. Geoeconomic

0:17:53.680 --> 0:17:56.760
<v Speaker 2>competition may be an inevitable feature of the energy transitioned,

0:17:56.840 --> 0:17:59.320
<v Speaker 2>but policymakers have a choice in how to address it.

0:17:59.680 --> 0:18:02.760
<v Speaker 2>Those choices, more than anything else, will shape the energy

0:18:02.760 --> 0:18:06.080
<v Speaker 2>transition in twenty twenty five and beyond. So there you

0:18:06.119 --> 0:18:09.280
<v Speaker 2>have it, our five energy transition lessons for twenty twenty five.

0:18:09.880 --> 0:18:13.439
<v Speaker 2>One the energy transition won't slow down. Two, This is

0:18:13.480 --> 0:18:16.320
<v Speaker 2>the hard part of the journey. Three, be careful not

0:18:16.359 --> 0:18:20.040
<v Speaker 2>to misinterpret the data. Four A successful transition is a

0:18:20.040 --> 0:18:24.240
<v Speaker 2>profitable one, and five geoeconomic competition has become the biggest

0:18:24.320 --> 0:18:28.040
<v Speaker 2>complicating factor. Very best of luck to all those navigating

0:18:28.080 --> 0:18:33.800
<v Speaker 2>the complexities of the energy transition in twenty twenty five.

0:18:39.840 --> 0:18:42.960
<v Speaker 1>Today's episode of Switched On was produced by Cam Gray

0:18:43.160 --> 0:18:46.840
<v Speaker 1>with production assistance from Kamala Shelling. Bloomberg NEF is a

0:18:46.880 --> 0:18:50.000
<v Speaker 1>service provided by Bloomberg Finance LP and its affiliates. This

0:18:50.119 --> 0:18:52.800
<v Speaker 1>recording does not constitute, nor should it be construed as

0:18:52.840 --> 0:18:56.560
<v Speaker 1>investment in vice, investment recommendations, or a recommendation as to

0:18:56.640 --> 0:18:59.880
<v Speaker 1>an investment or other strategy. BLOOMBERGINNIF should not be considered

0:19:00.040 --> 0:19:03.320
<v Speaker 1>as information sufficient upon which to base an investment decision.

0:19:03.400 --> 0:19:06.360
<v Speaker 1>Neither Bloomberg Finance LP, nor any of its affiliates makes

0:19:06.400 --> 0:19:10.119
<v Speaker 1>any representation or warranty as to the accuracy or completeness

0:19:10.160 --> 0:19:13.159
<v Speaker 1>of the information contained in this recording, and any liability

0:19:13.200 --> 0:19:15.879
<v Speaker 1>as a result of this recording is expressly disclaimed