WEBVTT - To go Carbon Neutral, Electrify (All Of) It

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<v Speaker 1>Hi everyone. Today we'll do an interview Danta did before

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<v Speaker 1>we all went home. She'll be talking with Albert Chung,

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<v Speaker 1>venis head of research, and Vickie Cumming, who leads international

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<v Speaker 1>policy research for BENF. They'll discuss some of the findings

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<v Speaker 1>from a report BENIF wrote in partnership with Eaton and

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<v Speaker 1>Statcraft titled Sector Coupling in Europe Powering Decarbonization. If you'd

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<v Speaker 1>like to dig deeper into our findings, this report is

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<v Speaker 1>available on BENF dot com, on the Bloomberg terminal at

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<v Speaker 1>BENF Go, or for free at eaton dot com. That's

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<v Speaker 1>E A T O N dot com. Please note that

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<v Speaker 1>BENIF does not provide investment or strategy advice, and you

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<v Speaker 1>can hear a full disclaimer at the end of the show.

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<v Speaker 1>I'm Mark Taylor here with Dana Perkins, and you're listening

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<v Speaker 1>to switch it on to BENIF podcast. Hi, Vicki, Hi Albert,

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<v Speaker 1>Thank you for joining us today. Hi Danna's Pleasures be on.

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<v Speaker 1>Thank you for having us so we are here to

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<v Speaker 1>talk about sector coupling. And I must say, for the listeners,

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<v Speaker 1>I was very lucky I got to actually attend the

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<v Speaker 1>event where we unveiled the report that we're talking about today,

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<v Speaker 1>and it was a pretty fun event because actually it

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<v Speaker 1>took place on Valentine's Day and it was a sector

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<v Speaker 1>coupling event, so there were a lot of amazing jokes

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<v Speaker 1>to be made about coupling. But really, let's talk about

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<v Speaker 1>this a little bit more, because sector coupling doesn't naturally

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<v Speaker 1>intuitively make sense as a title until you explain to

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<v Speaker 1>us what it actually means. Set a coupling look at

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<v Speaker 1>a confusing term, but it's a term that's well understood now,

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<v Speaker 1>I think in the European energy industry at least, sometimes

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<v Speaker 1>it's called sector integration, and really it's about greater integration,

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<v Speaker 1>greater interaction between the power and gas systems and also

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<v Speaker 1>the three demand side sectors that we covered in the report,

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<v Speaker 1>and that's transport, buildings, and industry. So it's really about

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<v Speaker 1>how those five sectors are going to be more interconnected

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<v Speaker 1>in the future and how that contrived dcobonization. One of

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<v Speaker 1>the guests on the panel, his name was Lord Turner,

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<v Speaker 1>and he's actually Chair of the Energy Transitions Commission, and

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<v Speaker 1>one of the things that he brought up during the

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<v Speaker 1>event was that really it's about electrification, so why are

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<v Speaker 1>people generally calling its sector coupling rather than just electrification. Well,

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<v Speaker 1>electrification is a large part of sector coupling. It was

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<v Speaker 1>the focus of our study. We looked at both direct electrication,

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<v Speaker 1>which is plugging things into the grid, so like electric

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<v Speaker 1>vehicles or he pumps, but also indirect electrification, which is

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<v Speaker 1>electrolysis powered by renewable energy which makes it green hydrogen.

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<v Speaker 1>So electrification it's a large part. But there are other

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<v Speaker 1>aspects of sector coupling as well, And I think it

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<v Speaker 1>would be remiss for us to get too deep into

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<v Speaker 1>this discussion before we acknowledged the fact that we did

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<v Speaker 1>not go it alone. We did this with Statcraft and Eaten.

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<v Speaker 1>So why were they such good partners for us to well,

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<v Speaker 1>one might say, couple with in order to write this report.

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<v Speaker 1>I can't believe you went there. As you know, most

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<v Speaker 1>of our work it goes behind the b n F

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<v Speaker 1>pay wall. Once in a while when one of our

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<v Speaker 1>clients has a really bright idea about something that we

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<v Speaker 1>should spend time on together and put out into the

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<v Speaker 1>public domain. Um, you know, the conversations get going. And

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<v Speaker 1>that's exactly what happened here. They already came to us

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<v Speaker 1>and said well, in Europe, everyone's talking about sector coupling.

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<v Speaker 1>Everyone's talking about how do you get to net zero?

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<v Speaker 1>By what's the role that the power and gas sectors

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<v Speaker 1>have to play in that? Can we explore that together?

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<v Speaker 1>We wanted to do three things with it. One was

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<v Speaker 1>to map out a plausible pathway for coupling, out what

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<v Speaker 1>that would mean for the power sector. And then the

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<v Speaker 1>third part of it was really from a policy perspective,

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<v Speaker 1>what are the considerations what should policy make has been

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<v Speaker 1>thinking about? Let's start with point one, because that's where

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<v Speaker 1>I get really excited about this topic, because really you're

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<v Speaker 1>sitting there thinking, Okay, well, why should I care? I mean,

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<v Speaker 1>maybe everything will just run more efficiently. But if things

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<v Speaker 1>run more efficiently and they lead to fewer emissions, this

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<v Speaker 1>has a huge benefit for I guess life on Earth.

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<v Speaker 1>So net zero by in we're talking about Europe here, correct,

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<v Speaker 1>The study itself is about Europe, but we focused on

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<v Speaker 1>a country like the UK or Germany, which we call

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<v Speaker 1>the Northern European archetype. And one of the really good

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<v Speaker 1>things about sector coupling is that it makes use of

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<v Speaker 1>the decarbonization progress that's been made in the power sector

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<v Speaker 1>already so it takes that progress and then uses it

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<v Speaker 1>for other sectors like transport or buildings which are reliant

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<v Speaker 1>on fossil fuels at the moment. We found with this

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<v Speaker 1>plausible pathway that Albert mentioned that if applied, it could

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<v Speaker 1>lead to a sixty reduction in greenhouse gas emissions across

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<v Speaker 1>these three big sectors industry, buildings, and transport, by which

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<v Speaker 1>make up roughly what percentage of the emissions pie that's

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<v Speaker 1>roughly about okay, so six of a pretty gigantic chunk

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<v Speaker 1>we're looking at here. Who are the winner and all

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<v Speaker 1>of this are their new industries popping up in new

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<v Speaker 1>companies that are going to benefit or is this all

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<v Speaker 1>pain for the emissions gain? I think we're talking about

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<v Speaker 1>a massive industrial shift. So transport is road transport, it's aviation,

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<v Speaker 1>it's marine. You're talking about a pretty much complete switchover

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<v Speaker 1>to electric vehicles on the road, and buildings. In our pathway,

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<v Speaker 1>we envision pretty much complete switch over from phospipl fuel

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<v Speaker 1>based heating to either electrification via heat pumps or two

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<v Speaker 1>clean gases. So there's a major shift in terms of

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<v Speaker 1>the equipment that you're going to go into buildings. Same

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<v Speaker 1>thing in terms of industry, whether it's sort of steal cement, methanol,

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<v Speaker 1>chemicals and so on, really big changes, So there are

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<v Speaker 1>going to be opportunities. We try to only include technologies

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<v Speaker 1>that are going to have a fighting chance of being

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<v Speaker 1>competitive between Some of them are competitive, like we see

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<v Speaker 1>evs being competitive very soon. That's probably the nearest in

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<v Speaker 1>terms of transitions out out of all the technologies we

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<v Speaker 1>looked at in the study. So it's not just about pain,

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<v Speaker 1>it's about opportunity. If these technologies are approaching competitiveness, that

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<v Speaker 1>creates an industrial opportunity. Well so should we taught next

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<v Speaker 1>maybe a little bit about some of the policy and

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<v Speaker 1>mechanisms that are going to need to be in place

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<v Speaker 1>in order for some of these areas to take off,

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<v Speaker 1>because some of them are already well on their way.

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<v Speaker 1>So electric vehicles, as we've discussed, seemed to have quite

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<v Speaker 1>a bit of momentum no pun intended at this point

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<v Speaker 1>in time. But there are other areas where mainly I'm

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<v Speaker 1>actually immediately thinking about heat pumps that might need a

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<v Speaker 1>little bit more incentive in order to get things where

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<v Speaker 1>they need to be. Yes, exactly, So for our plausible pathway,

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<v Speaker 1>we had to make some assumptions of policies that would

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<v Speaker 1>be necessary to kick start the shift away from fossil fuels,

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<v Speaker 1>and so for certain types of buildings we assumed that

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<v Speaker 1>there was bands on connections to the gas grid, which

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<v Speaker 1>has taken place in the Netherlands for example, absolutely, and

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<v Speaker 1>it's being envisaged in this country and in Germany as well,

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<v Speaker 1>this country being the UK apologies yes. And also in

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<v Speaker 1>the industry side, we assumed that because at the moment,

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<v Speaker 1>industry is one of the sectors that's made the lead

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<v Speaker 1>to progress towards de carbonization because of this concern about

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<v Speaker 1>carbon leakage. So that's the concern that companies will move

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<v Speaker 1>to jurisdictions that have less ownerous carbon regulations so they

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<v Speaker 1>therefore have easier time, for example in the EU emissions

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<v Speaker 1>trading scheme. But for our pathway for this report, we

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<v Speaker 1>assume that governments would have to implement policies to ensure

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<v Speaker 1>the industry at least make some effort towards decarbonizing and

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<v Speaker 1>moving away from fossil fuels. Which ones maybe have more

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<v Speaker 1>potential to decarbonized sooner, it's an interesting question. So in

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<v Speaker 1>some of these industries like iron and steel, cement, they

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<v Speaker 1>have big assets with very long lives. So even if

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<v Speaker 1>we're talking about a shift that needs to happen by

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<v Speaker 1>twenty fifty, they need to be planning it now and

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<v Speaker 1>they would need government support to push it through. Whereas

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<v Speaker 1>in some of the industries that don't lie on such

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<v Speaker 1>high temperatures like food and drink, pop and paper, they

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<v Speaker 1>may be able to make more progress sooner. I would

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<v Speaker 1>also say in terms of urgency, seems a long way away.

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<v Speaker 1>The European Commission is thinking about sector integration and strategies

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<v Speaker 1>right now. The direct electrification technologies that we've covered, whether

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<v Speaker 1>it's EVS or heat pumps as such, bottom up, plug

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<v Speaker 1>and play technologies. They don't require system change on an

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<v Speaker 1>individual basis. You can start to install these technologies as

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<v Speaker 1>long as the incentives are in place. Well, you have

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<v Speaker 1>to have a longer horizon. Is some of the pathways

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<v Speaker 1>that involve power to gas, where you're talking about more

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<v Speaker 1>of a system change. You're talking about creating green molecules.

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<v Speaker 1>You're talking about transporting those green molecules, storing them, changing

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<v Speaker 1>out the equipment of the demand side to use those

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<v Speaker 1>green molecules. And I think there's a wide recognition not

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<v Speaker 1>only in Europe but elsewhere that if we want to

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<v Speaker 1>be serious about that move in Theties, we've got to

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<v Speaker 1>start thinking about it now and scaling it up and

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<v Speaker 1>doing part of projects today. So I think that's where

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<v Speaker 1>the discussion really is at the moment. These are major

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<v Speaker 1>infrastructure projects. But would you say that there is a

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<v Speaker 1>large gap between where we are and where we need

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<v Speaker 1>to be from a technological standpoint or is it really

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<v Speaker 1>just around technologies exist, but the economics aren't. Fully they're

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<v Speaker 1>so the government incentives would need to support that in

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<v Speaker 1>order to speed that time horizon. Is it fall into

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<v Speaker 1>a little bit of both or one of the two.

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<v Speaker 1>In large part of the technologies have already been developed,

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<v Speaker 1>it's more a question of scaling up commercialization and bring

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<v Speaker 1>down the costs. Okay, So hydrogen is a prime example

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<v Speaker 1>of this, and some of these pathways are geographically constrained.

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<v Speaker 1>If you want to have a hydrogen based gas grid,

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<v Speaker 1>it's likely to happen at a local level. What we're

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<v Speaker 1>talking about is clusters of places that integrate all these technologies,

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<v Speaker 1>and so while the individual technologies may exist, what we

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<v Speaker 1>need now is to prove out the clusters that you

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<v Speaker 1>can combine and couple these technologies in one place the

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<v Speaker 1>title It's a gift that keeps on giving. So let's

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<v Speaker 1>talk a little bit more about the power system. One

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<v Speaker 1>of the things that you guys were looking at in

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<v Speaker 1>this report and trying to get a little bit deeper

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<v Speaker 1>on is what all of these changes could actually mean

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<v Speaker 1>on that side. So right now we have gas feeding in,

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<v Speaker 1>we have power, you have electricity demand, You have a

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<v Speaker 1>variety of different things, and all of those balances would share.

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<v Speaker 1>Left can we make that shift fairly quickly? And what

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<v Speaker 1>parts would need to fundamentally change in order to make

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<v Speaker 1>sector coupling and this potential in emissions a reality. So

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<v Speaker 1>sector coupling would indeed have an enormous impact on the

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<v Speaker 1>power system. For one thing, the power system would need

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<v Speaker 1>to be much bigger because we would expect electricity demand

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<v Speaker 1>to increase far faster and higher than it would without

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<v Speaker 1>sector coupling. The plausible pathway that we mentioned earlier, for example,

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<v Speaker 1>would mean that power demand would nearly double by fifty

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<v Speaker 1>compared with a scenario without sector coupling. So that would

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<v Speaker 1>mean about three quarters of amount of extra generating capacity

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<v Speaker 1>would be needed to meet that demand. And in our

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<v Speaker 1>low cost analysis. Much of that demanan we met by

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<v Speaker 1>wind and solar farms. It's also not out of line

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<v Speaker 1>with what we've seen over the last three decades of

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<v Speaker 1>power system growth in the EU and looking forward the

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<v Speaker 1>next three decades, it's about the same. But that makes

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<v Speaker 1>it sound easy, it's not. I think one of the

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<v Speaker 1>key issues is how do you increase electricity transmission capacity,

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<v Speaker 1>particularly since we already see challenges in places like Germany

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<v Speaker 1>where people just don't want these things to be built

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<v Speaker 1>through land that they own, for example. That's really one

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<v Speaker 1>of the key challenges we highlight in the report that

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<v Speaker 1>we sort of throw at the door of policy makers

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<v Speaker 1>is to say, if you're serious about sector coupling or

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<v Speaker 1>sector integration, what are you going to do about networks?

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<v Speaker 1>How are we going to get the electricity networks built

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<v Speaker 1>to what extent can we rely on gas networks as well?

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<v Speaker 1>To move green molecules instead of green electrons as well?

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<v Speaker 1>Because there is already an increase in electricity demand even

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<v Speaker 1>without this push is they're not well. I think in

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<v Speaker 1>a country like the UK and Germany, power demand growth

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<v Speaker 1>has really leveled off due to things like energy efficiency.

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<v Speaker 1>But while what outbuts says is correct in terms of

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<v Speaker 1>it could be a similar rate if it was like

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<v Speaker 1>a smooth trend upwards. But the problem is we don't

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<v Speaker 1>expect it to necessarily be a smooth trend upwards. For example,

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<v Speaker 1>it could be much steeper in the latter half of

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<v Speaker 1>the period when you start to see some sectors in

0:12:06.760 --> 0:12:11.680
<v Speaker 1>the industry switching to electricity. Also, it could be lumpy

0:12:11.760 --> 0:12:15.559
<v Speaker 1>in terms of across the grid, so where the increase

0:12:15.559 --> 0:12:18.680
<v Speaker 1>in power demand across say the whole transmission grid could

0:12:18.720 --> 0:12:23.160
<v Speaker 1>be exper sent at very local levels where you might

0:12:23.280 --> 0:12:25.880
<v Speaker 1>have suddenly have an entire street in stores, electric vehicles

0:12:25.880 --> 0:12:28.800
<v Speaker 1>and heat pumps. It could be much higher. And there

0:12:28.880 --> 0:12:32.800
<v Speaker 1>is a lack of data visibility and communication between all

0:12:32.800 --> 0:12:37.880
<v Speaker 1>the grid operators and the consumers and drivers of electric

0:12:37.960 --> 0:12:42.120
<v Speaker 1>vehicles and the automakers as to who is installing these

0:12:42.160 --> 0:12:45.920
<v Speaker 1>electrifification technologies, so it makes it very difficult to predict.

0:12:46.679 --> 0:12:49.240
<v Speaker 1>That leads onto another key element of the report, which

0:12:49.240 --> 0:12:51.720
<v Speaker 1>was looking at this issue of flexibility. Now we know

0:12:51.800 --> 0:12:55.000
<v Speaker 1>that flexibility becomes important in a high renewable power system,

0:12:55.160 --> 0:12:57.560
<v Speaker 1>whether or not you have sector coupling. Once you add

0:12:57.600 --> 0:13:01.560
<v Speaker 1>in high electrification of the economy, you are in a

0:13:01.600 --> 0:13:05.120
<v Speaker 1>situation where you're potentially massively increasing, for example, your winter

0:13:05.320 --> 0:13:08.600
<v Speaker 1>evening peak. We did a partial analysis looking at EV's

0:13:08.640 --> 0:13:11.400
<v Speaker 1>and buildings I think it's just residential buildings actually, and

0:13:11.440 --> 0:13:13.600
<v Speaker 1>we found that your winter evening peak could be fifty

0:13:13.880 --> 0:13:17.040
<v Speaker 1>bigger on a typical winter's night if you can't flex

0:13:17.120 --> 0:13:20.840
<v Speaker 1>those loads. Whereas if you have smart EV charging and

0:13:20.960 --> 0:13:24.160
<v Speaker 1>you have a reasonably well insulated building stocks, so you

0:13:24.200 --> 0:13:27.400
<v Speaker 1>can preheat your homes before you get home, for example,

0:13:27.400 --> 0:13:29.360
<v Speaker 1>a couple of hours before, and you can start to

0:13:29.360 --> 0:13:32.760
<v Speaker 1>shave that peak pretty significantly. And that's not only so

0:13:32.880 --> 0:13:35.400
<v Speaker 1>that you can run less power generation. It means you

0:13:35.400 --> 0:13:37.640
<v Speaker 1>can have a smaller grid. It also means you have

0:13:37.679 --> 0:13:40.360
<v Speaker 1>lower emissions because if you're moving that load to some

0:13:40.400 --> 0:13:41.840
<v Speaker 1>other part of the day, you're likely to be able

0:13:41.880 --> 0:13:44.440
<v Speaker 1>to use more renewables versus that winter evening peak when

0:13:44.440 --> 0:13:47.280
<v Speaker 1>you're probably using fossil fuels to meet that load, So

0:13:47.320 --> 0:13:50.240
<v Speaker 1>that the importance of demand side flexibility with such coupling

0:13:50.760 --> 0:13:53.920
<v Speaker 1>is even greater than what we already thought with a

0:13:54.240 --> 0:13:57.000
<v Speaker 1>higher renewables power system. Well, so this is great because

0:13:57.000 --> 0:14:00.720
<v Speaker 1>this leads us directly into consumer uptake. I think, and

0:14:01.360 --> 0:14:04.600
<v Speaker 1>really you, me, everybody who's listening, and how we interact

0:14:04.600 --> 0:14:07.400
<v Speaker 1>in the real world. And I'm gonna admit that I've

0:14:07.440 --> 0:14:09.960
<v Speaker 1>come to this with a real life example that I

0:14:10.000 --> 0:14:13.520
<v Speaker 1>am currently struggling with. So I need a new water boiler,

0:14:13.520 --> 0:14:15.760
<v Speaker 1>and I must tell you taking a hot shower is

0:14:15.800 --> 0:14:17.240
<v Speaker 1>one of my favorite things in the world, but it

0:14:17.320 --> 0:14:21.040
<v Speaker 1>comes with the guilt of knowing that I am burning

0:14:21.080 --> 0:14:23.120
<v Speaker 1>all of that gas to get myself some hot water.

0:14:23.440 --> 0:14:26.680
<v Speaker 1>So if I could just have an electric water boiler

0:14:26.880 --> 0:14:29.120
<v Speaker 1>that would then enable me to have a guilt free,

0:14:29.240 --> 0:14:32.520
<v Speaker 1>warm hot shower, that would be amazing. Yet in the UK,

0:14:32.720 --> 0:14:34.600
<v Speaker 1>so one of the countries that we're talking about as

0:14:34.640 --> 0:14:38.120
<v Speaker 1>an example here, I am having trouble finding a plumber

0:14:38.160 --> 0:14:41.000
<v Speaker 1>that can install heat pump or that will even tell

0:14:41.040 --> 0:14:43.760
<v Speaker 1>me that they're reliable. So can we talk a little

0:14:43.760 --> 0:14:47.840
<v Speaker 1>bit about some of this gap that exists and maybe

0:14:47.880 --> 0:14:52.040
<v Speaker 1>where we might beyond the typical policy mechanisms that we're

0:14:52.080 --> 0:14:57.800
<v Speaker 1>talking about, where you have regulations and then other financial incentives.

0:14:57.800 --> 0:14:59.600
<v Speaker 1>Are there things that we also need to do, like

0:14:59.680 --> 0:15:02.200
<v Speaker 1>resk killing a workforce that need to take place in

0:15:02.320 --> 0:15:06.560
<v Speaker 1>order to make some of these dreams and a reality. Absolutely,

0:15:06.640 --> 0:15:09.359
<v Speaker 1>we would need to. Governments need to take into accounts

0:15:09.520 --> 0:15:13.120
<v Speaker 1>the need to re educate and to train a workforce,

0:15:13.640 --> 0:15:15.880
<v Speaker 1>and this will need to be done sufficiently early, so

0:15:15.960 --> 0:15:19.160
<v Speaker 1>as when the people like Dana want to go buy

0:15:19.320 --> 0:15:21.720
<v Speaker 1>a non fosil fuel boiler, there are people already with

0:15:21.800 --> 0:15:25.240
<v Speaker 1>the required skills to do so. Okay, So in the

0:15:25.240 --> 0:15:27.720
<v Speaker 1>near term, we've seemed to have solved my problem, or

0:15:27.720 --> 0:15:29.480
<v Speaker 1>at least we will in the next couple of years,

0:15:29.520 --> 0:15:31.680
<v Speaker 1>and I can get my guilt free shower soon enough.

0:15:32.400 --> 0:15:35.960
<v Speaker 1>In the meantime, we looked at these specific countries, these

0:15:36.040 --> 0:15:39.520
<v Speaker 1>archetypes in Europe with the intention that we could extrapolate

0:15:39.520 --> 0:15:43.560
<v Speaker 1>this out across the rest of Europe potentially. Are there

0:15:43.560 --> 0:15:46.360
<v Speaker 1>other commonalities that we can see in other things that

0:15:46.440 --> 0:15:50.600
<v Speaker 1>we think that other countries, maybe in Asia, Africa, even

0:15:50.600 --> 0:15:54.040
<v Speaker 1>North America? What can they take from this report if

0:15:54.040 --> 0:15:57.400
<v Speaker 1>they're not located in Europe, and have they frightening lee

0:15:57.400 --> 0:16:02.520
<v Speaker 1>similar looking grid? So it's coupling. Isn't a European thing. Yes,

0:16:02.560 --> 0:16:05.560
<v Speaker 1>the term might be European at the moment, but electrification

0:16:05.640 --> 0:16:09.920
<v Speaker 1>more broadly can happen anywhere, but it would have different

0:16:10.360 --> 0:16:14.400
<v Speaker 1>permutations and different implications in terms of the policies regard

0:16:14.440 --> 0:16:17.600
<v Speaker 1>to kick start the process itself and to enable that

0:16:18.080 --> 0:16:20.560
<v Speaker 1>set to coupling doesn't have a detrimental impact on the

0:16:20.560 --> 0:16:23.720
<v Speaker 1>power system. I think anywhere that sort of seriously thinking

0:16:23.720 --> 0:16:26.240
<v Speaker 1>about getting to net zero needs to think about this topic.

0:16:26.520 --> 0:16:28.720
<v Speaker 1>A good example of New York State where they now

0:16:28.760 --> 0:16:32.360
<v Speaker 1>have this Green New Deal that's targeting carbon neutrality. By

0:16:32.520 --> 0:16:34.200
<v Speaker 1>New York looks a bit like some of our Northern

0:16:34.200 --> 0:16:37.800
<v Speaker 1>European archetypes because it gets cold, so they have heating demand,

0:16:38.280 --> 0:16:40.240
<v Speaker 1>they have some industrial demand, etcetera. So it's not a

0:16:40.240 --> 0:16:44.360
<v Speaker 1>bad proxy, and they are funding about seven billion dollars

0:16:44.440 --> 0:16:48.240
<v Speaker 1>over the current five year period for energy efficiency measures

0:16:48.280 --> 0:16:52.360
<v Speaker 1>in buildings, including heat pumps, including electrification, but also just

0:16:53.040 --> 0:16:56.160
<v Speaker 1>making those buildings more efficient. We did look at a

0:16:56.240 --> 0:17:00.640
<v Speaker 1>Southern European archetype, which is a bit different because it

0:17:00.680 --> 0:17:04.280
<v Speaker 1>doesn't get cold, and actually what we found was some

0:17:04.359 --> 0:17:07.120
<v Speaker 1>of the elements are a bit easier because if you've

0:17:07.119 --> 0:17:09.359
<v Speaker 1>got less heating demand, first of all, you don't have

0:17:09.400 --> 0:17:11.320
<v Speaker 1>as much of this sort of flexibility problem in the winter.

0:17:12.040 --> 0:17:14.320
<v Speaker 1>You've also got seasonal balance because you've got more air

0:17:14.320 --> 0:17:17.240
<v Speaker 1>conditioning demand, which manifests in the summer, so actually it

0:17:17.280 --> 0:17:20.879
<v Speaker 1>could be more economically favorable, you know, this sort of

0:17:20.880 --> 0:17:24.320
<v Speaker 1>transition that we're talking about in southern latitudes. So before

0:17:24.320 --> 0:17:29.080
<v Speaker 1>we wrap up, which of the subsectors of transport buildings

0:17:29.080 --> 0:17:33.439
<v Speaker 1>in industry do you most want to see really succeed,

0:17:33.480 --> 0:17:36.080
<v Speaker 1>Because I'm telling you right now you know that it's

0:17:36.119 --> 0:17:39.600
<v Speaker 1>the water boiler issue for me. I think I would

0:17:39.640 --> 0:17:42.800
<v Speaker 1>like the hardest to a boat sector for me is cement.

0:17:43.560 --> 0:17:46.560
<v Speaker 1>It's got really long asset lives for various reasons. It's

0:17:46.560 --> 0:17:50.200
<v Speaker 1>difficult to use the harmon capture and storage and to

0:17:50.240 --> 0:17:53.800
<v Speaker 1>introduce green hydrogen. It also accounts for a large shared

0:17:53.960 --> 0:17:57.439
<v Speaker 1>energy consumption within Europe. So I'm going to go with cement.

0:17:58.320 --> 0:17:59.840
<v Speaker 1>I was actually going to go with buildings for the

0:18:00.040 --> 0:18:02.160
<v Speaker 1>same reason, but just with a slightly different take, because

0:18:02.200 --> 0:18:03.800
<v Speaker 1>I think some of these things are going to be

0:18:03.840 --> 0:18:06.639
<v Speaker 1>easier than other thing. Evis are becoming quite sexy. I

0:18:06.680 --> 0:18:09.920
<v Speaker 1>think people want them. Buildings are almost the elephant in

0:18:09.960 --> 0:18:12.439
<v Speaker 1>the room that if you're serious about net zero as

0:18:12.480 --> 0:18:15.639
<v Speaker 1>a policymaker for me, the way that you show that

0:18:15.680 --> 0:18:18.119
<v Speaker 1>you're serious as you really get to grips with the

0:18:18.160 --> 0:18:21.400
<v Speaker 1>buildings issues, particularly northern Europe, because it's difficult. We've got

0:18:21.480 --> 0:18:25.119
<v Speaker 1>drafty buildings, You've got millions of them that are owned

0:18:25.119 --> 0:18:28.719
<v Speaker 1>by different people that don't that sometimes don't live in them.

0:18:28.760 --> 0:18:31.320
<v Speaker 1>It's such a thorny problem and I think if we

0:18:31.400 --> 0:18:34.840
<v Speaker 1>can crack that, it means we're on our way. So

0:18:34.880 --> 0:18:38.040
<v Speaker 1>in order to get there, now, what would you guys

0:18:38.080 --> 0:18:43.360
<v Speaker 1>recommend as the most impactful policy recommendation that you could make?

0:18:44.560 --> 0:18:48.000
<v Speaker 1>So for me, one of the surprising things was the

0:18:48.080 --> 0:18:51.440
<v Speaker 1>increasing importance of the men on the street. We've seen

0:18:51.480 --> 0:18:54.560
<v Speaker 1>in various countries across Europe there have been increasing public

0:18:54.560 --> 0:18:58.399
<v Speaker 1>opposition to new wind and solar plants, particularly wind. But

0:18:58.680 --> 0:19:01.719
<v Speaker 1>if we want to have a green sector coupling, we

0:19:01.800 --> 0:19:04.840
<v Speaker 1>need more wind and solar plants and we need them

0:19:04.840 --> 0:19:07.920
<v Speaker 1>to actually be able to be built. Likewise, with these,

0:19:07.920 --> 0:19:10.560
<v Speaker 1>we need to be able to reinforce the transmission grade,

0:19:10.600 --> 0:19:12.560
<v Speaker 1>so we need to be able to build some of

0:19:12.600 --> 0:19:16.119
<v Speaker 1>that not underground because that's incredibly expensive. And we also

0:19:16.200 --> 0:19:17.960
<v Speaker 1>need for the man on the street to be able

0:19:18.040 --> 0:19:21.359
<v Speaker 1>to choose the right electricity to tariffs so that they

0:19:21.440 --> 0:19:24.280
<v Speaker 1>respond to price so they can change so they don't

0:19:24.320 --> 0:19:26.920
<v Speaker 1>all want to change their e V at exactive same

0:19:26.960 --> 0:19:29.320
<v Speaker 1>time as they want to use the heat pump. So

0:19:29.480 --> 0:19:32.840
<v Speaker 1>for me, it's policies to get the man on the

0:19:32.880 --> 0:19:36.760
<v Speaker 1>street on board. Okay, So maybe it's just education. To

0:19:36.800 --> 0:19:39.159
<v Speaker 1>be honest, I think we might need a bit more,

0:19:39.160 --> 0:19:41.399
<v Speaker 1>a little bit more than a kick, Okay. So not

0:19:41.520 --> 0:19:45.520
<v Speaker 1>everybody finds wind turbines as beautiful as I do. No, Sadly,

0:19:45.560 --> 0:19:49.760
<v Speaker 1>I think we might need at least some financial incentive, Okay, Albert.

0:19:50.240 --> 0:19:51.879
<v Speaker 1>So in the report we go through sort of what

0:19:51.920 --> 0:19:53.399
<v Speaker 1>do we need to do on market design, what do

0:19:53.400 --> 0:19:55.879
<v Speaker 1>we need to do on sector integration, etcetera. I'm going

0:19:55.920 --> 0:19:58.040
<v Speaker 1>to zoom right back out and just say in the end,

0:19:58.080 --> 0:20:01.800
<v Speaker 1>this is really about decarbonization, and none of this happens

0:20:01.920 --> 0:20:06.240
<v Speaker 1>unless they are real, long, last incredible incentives um and

0:20:06.440 --> 0:20:08.960
<v Speaker 1>regulations and mandates and so on to decarbonize these hard

0:20:08.960 --> 0:20:12.960
<v Speaker 1>sectors what be at buildings, steel, etcetera. And we say

0:20:12.960 --> 0:20:15.560
<v Speaker 1>in the report, in this Northern European archetype, we could

0:20:15.560 --> 0:20:20.280
<v Speaker 1>electrify fift these sectors by It kind of doesn't matter

0:20:20.280 --> 0:20:23.040
<v Speaker 1>if we're right or wrong about those numbers, because if

0:20:23.080 --> 0:20:27.040
<v Speaker 1>we put in place the incentives to decarbonize, whether it's

0:20:27.040 --> 0:20:30.280
<v Speaker 1>through electrification or through other means, that's really the key thing.

0:20:30.359 --> 0:20:32.200
<v Speaker 1>So we might be slightly wrong on the margins of

0:20:32.240 --> 0:20:34.560
<v Speaker 1>how much gets electrified, is how much it's still gas

0:20:34.640 --> 0:20:36.600
<v Speaker 1>and so on. That doesn't matter, but we just need

0:20:36.640 --> 0:20:41.800
<v Speaker 1>the policies in place. Okay, so viva policy. Let's see that.

0:20:41.840 --> 0:20:44.800
<v Speaker 1>Hopefully I'll come to pass. Vicky and Albert, thank you

0:20:44.840 --> 0:20:47.800
<v Speaker 1>so much for joining us today. Thank you for having us.

0:20:51.680 --> 0:20:54.679
<v Speaker 1>Bloombergina is a service provided by Bloomberg Finance LP and

0:20:54.680 --> 0:20:57.560
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0:20:57.560 --> 0:21:00.960
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0:21:00.960 --> 0:21:04.240
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0:21:07.040 --> 0:21:10.480
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