WEBVTT - Net-Zero Window Closing But Still Time to Get On Track 0:00:00.440 --> 0:00:03.600 This is Dana Perkins and you're listening to Switched on 0:00:03.880 --> 0:00:08.520 the BNF podcast. The New Energy Outlook contains BNF's long 0:00:08.600 --> 0:00:11.959 term energy and climate scenarios for the transition to a 0:00:12.000 --> 0:00:15.040 low carbon economy. They're anchored in the real world, looking 0:00:15.080 --> 0:00:18.720 at economics but ignoring politics, which can be a hard 0:00:18.760 --> 0:00:20.920 thing to do in a year with so many elections. 0:00:21.200 --> 0:00:24.360 It takes a full year across nearly all of benf's 0:00:24.400 --> 0:00:27.520 teams to get it done. They look at electricity, industry 0:00:27.720 --> 0:00:30.440 and buildings in transport as some of the key drivers 0:00:30.440 --> 0:00:33.120 for this transition. We hope the research helps people think 0:00:33.120 --> 0:00:35.560 about how the future might play out all the way 0:00:35.640 --> 0:00:39.000 to twenty fifty as one planet on spaceship Earth and 0:00:39.280 --> 0:00:43.080 also as individual countries. Today we have David Hastert on 0:00:43.120 --> 0:00:45.479 the show. He is the global head of Economics and 0:00:45.520 --> 0:00:48.840 Modeling at BENEF and I've asked tomerlands Reese to come 0:00:48.880 --> 0:00:51.160 back as my co host so we can grill David 0:00:51.200 --> 0:00:53.120 a bit and make him tell us why it is 0:00:53.159 --> 0:00:55.720 important to think so far out into the future, as 0:00:55.760 --> 0:00:58.520 well as a bit more about the nine technologies that 0:00:58.560 --> 0:01:02.120 could make or break the low carbon transition and which 0:01:02.120 --> 0:01:04.560 ones are succeeding, and which ones might need a bit 0:01:04.600 --> 0:01:06.920 more work to put it lightly. If you like our show, 0:01:07.040 --> 0:01:09.360 make sure to subscribe or give us a review. And 0:01:09.520 --> 0:01:12.920 right now, let's listen to Tom and my conversation with 0:01:13.080 --> 0:01:15.880 David about the New Energy Outlook for twenty twenty four. 0:01:25.640 --> 0:01:28.240 So we're joined again today on Switched On with a 0:01:28.280 --> 0:01:31.480 co host. So say hello to everybody. Tom, Hi, everyone, 0:01:32.040 --> 0:01:35.160 and our guest today is David. So David, welcome to 0:01:35.200 --> 0:01:35.520 the show. 0:01:35.680 --> 0:01:37.679 Hey Dana, Hey Tom, it's great to be here. It's 0:01:37.760 --> 0:01:39.920 like talking with old friends since we've been working together 0:01:39.920 --> 0:01:40.720 for such a long time. 0:01:41.160 --> 0:01:44.880 I agree, And we're here to talk about this year's 0:01:45.080 --> 0:01:48.480 edition of the New Energy Outlook. And we're not going 0:01:48.520 --> 0:01:51.080 to comprehensively go through the key findings. That's something that 0:01:51.120 --> 0:01:53.560 someone can find from a webinar and is better supported 0:01:53.600 --> 0:01:56.960 by a chart or two or twenty in any case. 0:01:57.040 --> 0:02:01.080 But we're here to talk actually about scenarios generally and 0:02:01.200 --> 0:02:05.400 also what we're trying to accomplish here with our neo report. 0:02:05.520 --> 0:02:08.080 But when we're talking about the New Energy Outlook, why 0:02:08.240 --> 0:02:10.679 is it that in this case, well laying the groundwork, 0:02:10.800 --> 0:02:13.840 why is it a scenario rather than a forecast. 0:02:14.000 --> 0:02:18.040 Yeah, so the new energy outlook is Bloomberg's Energy and 0:02:18.080 --> 0:02:20.880 Climate scenarios. So it's a huge body of work that 0:02:20.960 --> 0:02:24.079 brings together the work that our analysts do across the 0:02:24.080 --> 0:02:26.560 different teams. So across being for we have three hundred 0:02:26.560 --> 0:02:29.560 people and of those seventy you just involved with this project. 0:02:29.680 --> 0:02:32.640 It's a huge exercise. And fundamentally, when you do these 0:02:32.760 --> 0:02:35.320 big sweeping analysis you can do them in two ways. 0:02:35.360 --> 0:02:38.040 You can either lock up a team of ten PhDs 0:02:38.040 --> 0:02:39.359 in the room and they hash it out and they 0:02:39.360 --> 0:02:41.679 tell the business what is the solution. But the way 0:02:41.720 --> 0:02:43.680 that we've been doing it, which has been really good 0:02:43.680 --> 0:02:46.200 for our internal alignment, is to say, let's bring everybody 0:02:46.200 --> 0:02:49.000 on board and build the scenario together. And as the 0:02:49.160 --> 0:02:52.040 listeners who work in any group have worked in any 0:02:52.040 --> 0:02:55.160 big projects, know, having internal alignment is about the hardest 0:02:55.160 --> 0:02:57.280 thing you can do. So once we have that, we're 0:02:57.320 --> 0:02:59.960 able to build a bottom up, piece by piece picture 0:03:00.400 --> 0:03:03.960 of how the energy transition can play out. When we 0:03:04.200 --> 0:03:06.720 say that any transition, what we mean is the power sector, 0:03:06.760 --> 0:03:12.160 We mean transport, aviation, shipping, road, transport. We talk about buildings, 0:03:12.360 --> 0:03:17.639 we talk about industry, chemicals, cement, aluminium, and these emissions 0:03:17.680 --> 0:03:20.720 together make up about two thirds of global emissions, so 0:03:20.760 --> 0:03:23.000 it's a huge chunk of kind of man made emissions. 0:03:23.000 --> 0:03:26.880 And our role as scenarios makers is to go out 0:03:26.919 --> 0:03:29.320 and say, well, based on what we know today, based 0:03:29.400 --> 0:03:32.120 on what we as being, what our teams know about 0:03:32.120 --> 0:03:36.480 technology costs, about consumer uptake, about how decision making happens 0:03:36.520 --> 0:03:39.520 to the process, what is a reasonable assumption of how 0:03:39.680 --> 0:03:42.440 these sectors can evolve between today and twenty fifty in 0:03:43.000 --> 0:03:45.280 our base case. And we can talk about scenario kind 0:03:45.280 --> 0:03:49.200 of cases in a moment, and then what would this 0:03:49.240 --> 0:03:51.360 have to look like if we wanted to get to 0:03:51.440 --> 0:03:55.560 net zero. Scenarios can be explorative. They can just say well, 0:03:55.640 --> 0:03:58.560 let's just see what the model tells us. We dial 0:03:58.640 --> 0:04:01.800 in policies, soaris are a policy light. We take a 0:04:02.160 --> 0:04:05.480 quait conservative view on policies in that they need to 0:04:05.480 --> 0:04:08.360 be fully funded, they need to be have actual mechanisms 0:04:08.360 --> 0:04:11.160 that affect prices, so not statements of intent, not kind 0:04:11.200 --> 0:04:13.960 of lofty targets, but actual kind of mechanisms. And then 0:04:14.040 --> 0:04:16.760 after that we say, well, let's just take as much 0:04:16.800 --> 0:04:18.560 as possible look at what is the kind of a 0:04:18.600 --> 0:04:21.159 cost based solution, What is an optimal set up here 0:04:21.160 --> 0:04:23.320 like that that really is just in the money. And 0:04:23.400 --> 0:04:26.039 once you let the play out, you start seeing some 0:04:26.120 --> 0:04:28.640 very interesting things. And then yeah, and in the in 0:04:28.680 --> 0:04:32.160 the natzero scenario, we then apply a carbon budget and say, okay, 0:04:32.200 --> 0:04:34.880 now let's do the same thing the same demand. People 0:04:34.920 --> 0:04:37.280 travel by air, they will want to go someday, they 0:04:37.480 --> 0:04:39.640 come home, they turn on the kettle. How can we 0:04:39.960 --> 0:04:44.120 deliver these same utilities the same final energy demand, but 0:04:44.279 --> 0:04:47.280 in a way that doesn't emit carbon or emits less carbon, 0:04:47.440 --> 0:04:49.800 and soo fundamentally, these are two scenarios. We have a 0:04:49.800 --> 0:04:52.720 base case that is exploratory, and then we have a 0:04:53.120 --> 0:04:56.240 NAT zero scenario that is normative. And yeah, the whole 0:04:56.279 --> 0:04:59.400 act of scenario making in itself, you have to accept 0:04:59.400 --> 0:05:00.560 that you'll definitely be wrong. 0:05:00.839 --> 0:05:02.600 That's fine, Like, these are scenarios. 0:05:02.600 --> 0:05:05.600 They're not forecasts, they're not what we necessarily believe will 0:05:05.640 --> 0:05:08.240 actually happen. But what they can tell you is a 0:05:08.720 --> 0:05:12.800 glimpse into a future that you can't just project based 0:05:12.839 --> 0:05:16.000 on announcements. Because when you start modeling things, you start 0:05:16.040 --> 0:05:18.760 finding new things and new surprising things, and you start 0:05:18.800 --> 0:05:22.440 finding those tipping points that are so hard to predict right. 0:05:22.640 --> 0:05:25.680 Things sometimes change slowly and then they change rapidly, and 0:05:25.720 --> 0:05:28.920 we've seen that in the solar sector. We've seen that 0:05:29.000 --> 0:05:31.839 in a way within the ev actually vehicle sector. So 0:05:31.880 --> 0:05:34.960 there's a lot of kind of nonlinear stuff going on 0:05:35.279 --> 0:05:38.360 that's just really really hard to just forecasts or predict. 0:05:38.480 --> 0:05:41.080 And then in turn, our scenarios can then guide us 0:05:41.200 --> 0:05:43.320 to come back to and say, well, okay, given that 0:05:43.360 --> 0:05:45.240 we think that's going to be a higher of renewables, 0:05:45.320 --> 0:05:48.800 let's just say that's a no regrets decision to more enneables. 0:05:48.839 --> 0:05:51.040 What in turn is then needed to integrate them? What 0:05:51.080 --> 0:05:53.320 are the kind of market designs that we need? What 0:05:53.360 --> 0:05:55.920 does it actually mean to level the playing field? So 0:05:55.960 --> 0:05:58.200 you can have an informed debate, and you know, in 0:05:58.200 --> 0:06:01.279 a year's time we'll do another scenario, we'll find new things, 0:06:01.360 --> 0:06:04.520 we'll adapt our of you, and this way we can kind. 0:06:04.360 --> 0:06:06.760 Of slowly slowly cross the river. 0:06:06.760 --> 0:06:10.359 Feeling the stones, as the famous Chinese proverb goes, can. 0:06:10.200 --> 0:06:12.159 I just push back on this a little bit or 0:06:12.200 --> 0:06:12.880 really probe it? 0:06:13.320 --> 0:06:13.400 So? 0:06:14.920 --> 0:06:18.960 Sebhen Best, who used to run Neo and at different 0:06:19.000 --> 0:06:23.840 points in time, was everyone on this podcast's boss, although 0:06:24.000 --> 0:06:27.080 weirdly never all at the same time, which is interesting. 0:06:27.720 --> 0:06:32.120 This whole scenarios versus forecasts was his favorite little narrative 0:06:32.480 --> 0:06:35.760 and any difficult question you ever asked him, Like you say, Seb, 0:06:35.960 --> 0:06:37.840 you know, is there such a thing as free will? 0:06:37.960 --> 0:06:39.440 And be like, oh, well, you have to understand the 0:06:39.480 --> 0:06:43.080 difference between a forecast and a scenario. Like and by 0:06:43.160 --> 0:06:45.640 the way, I am about to go and have coffee 0:06:45.680 --> 0:06:48.800 with Seb after we finish this podcast. 0:06:48.839 --> 0:06:49.400 We're all friends. 0:06:49.400 --> 0:06:51.120 It's okay that I'm pulling him under the bus here, 0:06:51.240 --> 0:06:53.360 But isn't that a bit of a cop out? I mean, 0:06:53.400 --> 0:06:55.919 wouldn't it be much more useful if we had a 0:06:55.960 --> 0:06:59.240 forecast like this scenario is it? Couldn't it be that 0:06:59.279 --> 0:07:01.359 we just tried a little bit harder to make a 0:07:01.440 --> 0:07:04.920 forecast like our scenario is? Like, really, can you explain 0:07:05.320 --> 0:07:07.279 why a scenario is really useful? 0:07:07.920 --> 0:07:08.120 Yeah? 0:07:08.160 --> 0:07:10.040 No, thanks to Tom, and I appreciate the amount of 0:07:10.240 --> 0:07:17.160 stank in that question that we're not trying so first up, 0:07:17.360 --> 0:07:22.760 even putting together a scenario, you know, how however unreliable. 0:07:22.800 --> 0:07:25.440 You think it requires a huge amount of work and 0:07:25.520 --> 0:07:27.680 set up. So do you even get to the stage 0:07:27.680 --> 0:07:30.360 where you have a scenario that's vaguely credible. That's that's 0:07:30.400 --> 0:07:34.400 in itself as a huge step. The second is that 0:07:34.760 --> 0:07:37.920 when you when you do these kind of forecasts, you say, 0:07:38.080 --> 0:07:40.240 we want to be when we do this scenario, we 0:07:40.280 --> 0:07:42.600 want to be really really sure about the next five years. 0:07:42.640 --> 0:07:45.880 Right in scenario making you care about the next five years, 0:07:46.000 --> 0:07:48.520 and then you have this kind of hot, steamy reality 0:07:48.640 --> 0:07:52.440 where stuff happens, there's politics, there's policy, there's kind of 0:07:52.560 --> 0:07:56.280 weird pandemics thrown in supply chain disruption. Things happen, So so 0:07:56.320 --> 0:07:59.400 we want to be as right as possible on that front. 0:07:59.480 --> 0:08:01.560 But then it's point you have to transition it into 0:08:01.640 --> 0:08:05.560 this kind of cold modeling reality and where most of 0:08:05.600 --> 0:08:08.560 the scenario work happens. And the team, if you think 0:08:08.560 --> 0:08:10.480 about what do we spend most time on, it's that 0:08:10.600 --> 0:08:14.400 interface between this kind of messy, hot reality and then 0:08:14.440 --> 0:08:18.160 this cold modeling world. And when these two fronts meet, 0:08:18.200 --> 0:08:20.680 you have thunderstorms, you just get a lot of messy interactions. 0:08:20.720 --> 0:08:22.360 So so a lot of time is spent kind of 0:08:22.720 --> 0:08:26.360 threading our forecast, which we do tom and you know 0:08:26.600 --> 0:08:28.840 on a quarterly basis, we up at our renewables forecast, 0:08:28.920 --> 0:08:30.800 we take it into consideration all of these things, but 0:08:30.840 --> 0:08:32.840 at some points you have to thread in where you 0:08:32.880 --> 0:08:35.560 go beyond what you know today, and then you come 0:08:35.880 --> 0:08:38.199 into an even a bigger assumption than free will, which 0:08:38.240 --> 0:08:41.000 is rationality. You have to make an assumption that to 0:08:41.080 --> 0:08:44.080 a degree, we will take rational decisions. Because if you 0:08:44.160 --> 0:08:46.280 start dialing in all the things we already know or 0:08:46.440 --> 0:08:49.160 think we know, like you know, say, for example, vehicle 0:08:49.360 --> 0:08:53.479 ev phase outdates Germany, it's a huge European car manufacturer. 0:08:53.559 --> 0:08:56.040 They had a phase outdate for evs that got put 0:08:56.080 --> 0:08:59.120 into question again, so policids. We thought, oh, surely Germany, 0:08:59.320 --> 0:09:02.199 which in our G twenty policy rankings is one of 0:09:02.240 --> 0:09:04.840 the highest ranking countries, very firm policies, very kind of 0:09:04.880 --> 0:09:08.280 good track record. But there's walking back on these commitments. 0:09:08.360 --> 0:09:09.880 When you dial all of these in and think they're 0:09:09.920 --> 0:09:12.480 magically happen, you're just going to overshoot what happens, and 0:09:12.520 --> 0:09:14.959 you just end as the correcting and adapting. So that 0:09:15.000 --> 0:09:18.400 this is where I think no good forecast would be 0:09:18.480 --> 0:09:21.319 good without becoming for policy, and I think us stepping 0:09:21.440 --> 0:09:24.000 away from that and saying, look, we're not going to 0:09:24.040 --> 0:09:25.760 look at that, we really look at the economics and 0:09:25.920 --> 0:09:28.400 assume there's a level playing field already gives us more 0:09:28.600 --> 0:09:32.200 insightful answers rather than seventy people kind of coming together 0:09:32.280 --> 0:09:34.880 and guessing what they think is going to be the 0:09:34.960 --> 0:09:35.720 right mix. 0:09:36.040 --> 0:09:40.160 So we're imagining a world that could be real and 0:09:40.200 --> 0:09:42.320 that we have is self consistent in the way we 0:09:42.320 --> 0:09:45.040 think about it, and there's some useful insights we can 0:09:45.080 --> 0:09:47.880 derive from that. So it's like it's maybe like nineteen 0:09:47.880 --> 0:09:49.600 eighty four rather than Star Wars. 0:09:49.880 --> 0:09:52.600 It's a world in the multiverse that you know, if 0:09:52.600 --> 0:09:55.400 all certain things lined up to be true. But I 0:09:55.440 --> 0:09:57.360 actually want to talk about the year that we go 0:09:57.400 --> 0:09:59.360 out to. So this year twenty fifty is something that 0:09:59.400 --> 0:10:02.040 everybody's really in the climate space when they're thinking about 0:10:02.040 --> 0:10:05.360 emissions targets. We're really comfortable with talking about twenty fifty 0:10:05.440 --> 0:10:08.200 like it's tomorrow, But it's not tomorrow. Maybe we would 0:10:08.240 --> 0:10:10.040 like it to be further away. Would we think about 0:10:10.040 --> 0:10:13.320 how quickly the entire economy needs to transition from an 0:10:13.360 --> 0:10:17.040 emission standpoint. But when it comes to election cycles and 0:10:17.080 --> 0:10:19.600 what any policy maker may really be thinking about in 0:10:19.640 --> 0:10:22.960 terms of getting re elected or investors in how long 0:10:23.040 --> 0:10:25.959 they're going to hold an asset or a position, or 0:10:26.000 --> 0:10:28.080 any sort of investment that they're looking to see to 0:10:28.200 --> 0:10:32.440 make a return on. It's much much nearer. So what 0:10:32.600 --> 0:10:38.640 is it about twenty fifty? Why should those individuals be 0:10:38.840 --> 0:10:41.800 looking at something so far into the future. Is it 0:10:41.800 --> 0:10:43.440 the tipping points? Or is it something else? 0:10:44.040 --> 0:10:47.440 We collectively get sucked into a debate where we have 0:10:47.480 --> 0:10:49.520 a few kind of NOV starts that no everybody knows. 0:10:49.640 --> 0:10:52.960 It's one point five. That's a NOV style that we 0:10:53.000 --> 0:10:55.400 now have. It's twenty to fifty, and then if you 0:10:55.440 --> 0:10:57.959 want to add a word, it's net zero. So all 0:10:58.000 --> 0:11:03.040 of these dates in minds are self reinforcing. The range 0:11:03.120 --> 0:11:04.960 for us to have a one point five degree outcome 0:11:05.080 --> 0:11:08.079 is huge. If you look at the actual climate science 0:11:08.120 --> 0:11:10.240 behind it, there's a huge range. It could be as 0:11:10.280 --> 0:11:12.280 early as twenty thirty, it could be as late as 0:11:12.320 --> 0:11:14.800 twenty sixty's. There's just a lot of uncertainty. The same 0:11:14.840 --> 0:11:17.880 is with the year twenty fifty. That's not a date 0:11:17.960 --> 0:11:20.840 set in stone. It is just a coerescing point for 0:11:20.920 --> 0:11:23.040 us to think about the question and have a certain 0:11:23.280 --> 0:11:25.839 common timeframe about it. I get stressed when I think 0:11:25.840 --> 0:11:27.720 about twenty fifty. I get stressed when I think about 0:11:27.720 --> 0:11:30.319 twenty thirty. But the point is not to get hang 0:11:30.400 --> 0:11:32.280 up on these individual dates. The point is to say, 0:11:32.559 --> 0:11:35.880 let's have a common frame and create a sense of urgency, 0:11:36.040 --> 0:11:39.080 not panic, just urgency, because if we think about our 0:11:39.480 --> 0:11:42.040 emissions curves in our net zero scenario, a lot of 0:11:42.040 --> 0:11:44.000 the emissions that we save in the next five to 0:11:44.040 --> 0:11:45.120 ten years are. 0:11:45.040 --> 0:11:47.200 So much more worth, so much more. 0:11:47.040 --> 0:11:49.000 Than the emissions that we save in the twenty forties. 0:11:49.120 --> 0:11:51.640 I give you an example in our net zero scenario, 0:11:51.679 --> 0:11:53.680 which is a one point seven five degree scenario, and 0:11:53.720 --> 0:11:56.080 we can talk maybe why we didn't pick a one 0:11:56.080 --> 0:11:59.040 point five degree scenario. In that scenario, the energy sector 0:11:59.160 --> 0:12:02.200 reduces emissions ninety three percent by twenty thirty five, so 0:12:02.520 --> 0:12:05.199 it is just around the corner. It's a very short time. 0:12:05.360 --> 0:12:07.480 So in order to we need to think about twenty fifty, 0:12:07.480 --> 0:12:09.640 because we need to think backwards about the technologies that 0:12:09.679 --> 0:12:12.080 we need by them, or the types of solutions that 0:12:12.120 --> 0:12:14.120 we need by then, and so that we can start 0:12:14.360 --> 0:12:17.480 getting them up to speed, because these things take time, 0:12:17.720 --> 0:12:20.760 and every year that we emit at peak emissions as 0:12:20.800 --> 0:12:24.240 we're doing at the moment, we're losing time to enact them. 0:12:24.400 --> 0:12:26.160 And that's why I think twenty fifty to one point 0:12:26.240 --> 0:12:29.720 five are such useful narratives for everybody to keep in mind. 0:12:30.120 --> 0:12:33.480 Behind that, the reality is much more complicated and much 0:12:33.480 --> 0:12:34.200 more nuanced. 0:12:34.440 --> 0:12:36.160 Can I just follo up on this question of twenty 0:12:36.240 --> 0:12:39.120 fifty and you mention you're stressed about twenty thirty, and 0:12:39.160 --> 0:12:42.000 you mention you're stressed about twenty fifty. I also imagine 0:12:42.040 --> 0:12:44.440 you're stressed because you have to deliver a neo report 0:12:44.480 --> 0:12:48.000 every year. This is like a huge amount of work 0:12:48.160 --> 0:12:52.720 a cross BNF, but for you personally and your team individually. 0:12:52.800 --> 0:12:55.120 And I know that you know every year we add 0:12:55.200 --> 0:12:57.800 new nuances and features the analysis, but a lot of 0:12:57.840 --> 0:13:00.320 the analysis is the same at its core, maybe with 0:13:00.320 --> 0:13:04.080 different assumptions. So given the twenty fifty times scale, like 0:13:04.120 --> 0:13:06.760 what differs year on year in the core analysis? What 0:13:06.840 --> 0:13:08.040 new insights do we get? 0:13:08.080 --> 0:13:10.160 Typically? Why are we doing this to ourselves? 0:13:10.800 --> 0:13:13.280 Yeah, that's a question that I get asked a lot 0:13:13.320 --> 0:13:18.760 by my family. The value of doing it regularly is 0:13:18.800 --> 0:13:21.720 that new information comes to light. That risk is that 0:13:21.800 --> 0:13:24.400 actually the downside of redoing it every year can be 0:13:24.440 --> 0:13:27.680 higher than the reward. The issue with more complexity and 0:13:27.720 --> 0:13:30.560 more topics is apart from the fact that there's more 0:13:30.640 --> 0:13:33.440 room for errors is also that you might lose of 0:13:33.559 --> 0:13:36.520 the things that actually are matter, just because there's so 0:13:36.600 --> 0:13:39.080 much complexity and so much interaction. So that's another thing 0:13:39.120 --> 0:13:41.520 we're very mindful about to say, sure, we can add 0:13:41.720 --> 0:13:45.079 more countries, add more feedback loops, more complexity. But some 0:13:45.120 --> 0:13:48.360 of the strong messages that we've gotten from new they 0:13:48.480 --> 0:13:52.160 have evolved over the years. They haven't necessarily changed radically, 0:13:52.400 --> 0:13:54.320 but there is some new stuff like this. This year, 0:13:54.320 --> 0:13:57.040 for example, we did much more work about the limits 0:13:57.080 --> 0:14:00.440 of solar power, so we now have much more better 0:14:00.480 --> 0:14:04.040 idea of what are the economic limits of sola wide? 0:14:04.080 --> 0:14:06.600 Don't more batteries just help? And we're not in a 0:14:06.600 --> 0:14:09.680 curious position where we, as Baniev have a lower solo 0:14:09.760 --> 0:14:12.920 forecast than the IA, the International Energy Agency, And for 0:14:13.120 --> 0:14:15.520 years that was the other way around. For years Baniev 0:14:15.679 --> 0:14:18.679 was super bullish and soler the IA was catching up. 0:14:18.880 --> 0:14:21.960 And now we're reversed. And this is again because you 0:14:22.080 --> 0:14:24.480 keep looking at you you find these new dynamics that 0:14:24.600 --> 0:14:25.920 tell you something new. 0:14:26.320 --> 0:14:28.680 Maybe it's now a good time to ask the question. 0:14:29.080 --> 0:14:34.440 My pop culture reference, so in the novel Foundation by 0:14:34.520 --> 0:14:39.160 Isaac Asimov, which has recently been converted to a very 0:14:39.200 --> 0:14:42.760 excellent series on Apple TV. The core character is this guy, 0:14:42.760 --> 0:14:46.160 Harry Selden, who's a mathematician who invents this field of 0:14:46.200 --> 0:14:50.320 mathematics called psychohistory, where basically he models everything and predicts 0:14:50.320 --> 0:14:54.280 the future. In the series, he predicts the downfall of 0:14:54.320 --> 0:14:57.240 the Galactic Empire and years of chaos, and then he 0:14:57.960 --> 0:15:01.720 promotes this alternative scenario if he gets some funding to 0:15:01.760 --> 0:15:04.400 go and set up a sort of a foundation hence 0:15:04.440 --> 0:15:07.120 the name, with all the knowledge of humanity, he can 0:15:07.200 --> 0:15:10.920 help usher humankind through those dark ages and have them 0:15:10.960 --> 0:15:13.240 bounce back a lot quicker. And the thing I found 0:15:13.280 --> 0:15:15.200 a bit ridiculous, and it kind of alludes to this 0:15:15.360 --> 0:15:18.680 question of the challenge of forecasts. Is throughout the series, 0:15:19.000 --> 0:15:22.600 like with unerring accuracy, a little hologram of Harry Selden 0:15:22.680 --> 0:15:25.000 five hundred years after he's died pops up and he's like, 0:15:25.040 --> 0:15:27.360 I guess you've just navigated this particular crisis. 0:15:27.560 --> 0:15:29.040 This version of history. 0:15:28.680 --> 0:15:32.480 That he's modeled includes his own interventions, and so therefore 0:15:32.560 --> 0:15:35.000 he has a much better chance of getting it right. 0:15:35.080 --> 0:15:38.960 I suppose what I'm saying is because our net zero scenario, 0:15:39.000 --> 0:15:44.120 for example, involves a bunch of interventions. Are we I 0:15:44.160 --> 0:15:48.600 suppose giving a map for policymakers around the world industry 0:15:49.160 --> 0:15:52.280 to say, like, this isn't going to happen. But it 0:15:52.360 --> 0:15:55.120 could be that this is a forecast of the future. 0:15:55.400 --> 0:15:58.440 If you look at this and see the interventions you 0:15:58.480 --> 0:16:01.200 need to make Like, is it like a circular logic 0:16:01.320 --> 0:16:03.320 that we're offering to the market. 0:16:03.600 --> 0:16:03.800 Yeah. 0:16:03.840 --> 0:16:06.520 So what Asimov talks a lot about is kind of 0:16:07.160 --> 0:16:10.880 questions of ethics and moral philosophy. And if the question 0:16:11.080 --> 0:16:13.240 is kind of what does it mean? Then the kind 0:16:13.240 --> 0:16:15.520 of ethical or moral question is what should we do? 0:16:15.760 --> 0:16:19.080 So as as Beanie of what we try to do 0:16:19.160 --> 0:16:21.640 is show like this is a here's an outcome that 0:16:21.720 --> 0:16:24.280 makes sense just from a monetor perspective. You know, we 0:16:24.280 --> 0:16:27.400 haven't factored in human health. We haven't factored in obviously 0:16:27.440 --> 0:16:30.480 they're good implications for keeping temperatures slow, for human health 0:16:30.520 --> 0:16:33.480 and migration and all these other well dimensions of well being. 0:16:33.560 --> 0:16:37.080 But just from a kind of cost perspective, which is narrow, 0:16:37.280 --> 0:16:40.480 here's a solution that just makes sense and it works, 0:16:40.840 --> 0:16:42.840 and it works in the case of the power system 0:16:42.840 --> 0:16:44.320 at an hourly level. And we looked at this in 0:16:44.320 --> 0:16:46.920 great detail. This can work. We also then go and say, 0:16:46.920 --> 0:16:48.760 here's a bunch of barriers that are in the way 0:16:48.840 --> 0:16:50.840 that we didn't model in it before because we didn't 0:16:50.840 --> 0:16:53.120 want to presuppose what will happen. I give you an example. 0:16:53.160 --> 0:16:55.960 We need a lot of batteries in our scenario. These 0:16:55.960 --> 0:16:58.960 batteries need metals. We know these critical metals and minerals 0:16:59.000 --> 0:17:02.200 are in short supply, but we also believe that technology 0:17:02.280 --> 0:17:05.119 change can help adapt some of them. So the amount 0:17:05.160 --> 0:17:07.919 of cobalt, for example, which is say critical mineral that 0:17:08.040 --> 0:17:10.440 is needed in matteries, the amount we forecast is needed 0:17:10.480 --> 0:17:12.800 has come down every year, even though we increase of 0:17:12.920 --> 0:17:15.680 battery focus every year, simply because battery chemistry is changed. 0:17:15.760 --> 0:17:18.399 So we need to acknowledge that there's the technological change 0:17:18.440 --> 0:17:21.600 can also remove some barriers. It's important to talk about them, 0:17:21.600 --> 0:17:25.040 but it's also important, I believe, not to bake them 0:17:25.040 --> 0:17:27.440 in too much into your model because you then don't 0:17:27.520 --> 0:17:30.520 learn something. So when we think about these barriers, there's 0:17:30.560 --> 0:17:34.560 also grids. There is kind of the amount of manufacturing 0:17:34.600 --> 0:17:36.760 that we need. You need to look at these questions 0:17:36.760 --> 0:17:38.399 and then you need to apply another lens, which is 0:17:38.400 --> 0:17:41.240 the country level it's no good to have global scenarios. 0:17:41.240 --> 0:17:44.359 You need to have country scenarios because countries is where 0:17:44.440 --> 0:17:47.280 the action happens, where the policies happen, or the change happens. 0:17:47.280 --> 0:17:48.640 And then you need to look at the country picture 0:17:48.680 --> 0:17:51.760 and say, well, given these barriers, given this you know, 0:17:51.840 --> 0:17:55.680 glorious future that could happen, what is it you should 0:17:55.760 --> 0:17:58.359 be then thinking about. And then that's when it comes 0:17:58.359 --> 0:18:02.080 to market design. So if we have a bunch of 0:18:02.320 --> 0:18:05.480 zero costs or like low cost generators I'm running, that'll 0:18:05.520 --> 0:18:06.920 do things to the power price. So you need to 0:18:06.920 --> 0:18:09.119 think about these things. So we're not trying to be 0:18:09.480 --> 0:18:12.080 normative in the sense of saying that here's the truth 0:18:12.200 --> 0:18:15.040 by BNIF and and you know, if you follow this 0:18:15.119 --> 0:18:17.440 map you'll find the golden treasure. We're trying to say, 0:18:17.520 --> 0:18:21.159 here's like a rational future that we maybe can work towards. 0:18:21.160 --> 0:18:24.920 And I said earlier that rationality is a huge assumption 0:18:25.200 --> 0:18:28.080 in all of this, because energy policy has been anything 0:18:28.160 --> 0:18:29.000 but rational. 0:18:29.600 --> 0:18:32.439 This is a report really for techno optimists, and if 0:18:32.480 --> 0:18:35.280 we're thinking about it, it's a story of technology and 0:18:35.359 --> 0:18:38.240 economics that are associated with this technology. But this fundamental 0:18:38.280 --> 0:18:41.320 premise that the right technologies at the right price are 0:18:41.359 --> 0:18:44.879 going to lead us to this much lower emissions future. 0:18:44.960 --> 0:18:45.600 Yeah, totally. 0:18:45.680 --> 0:18:49.399 And you can overlay behavioral change on that, and you know, 0:18:49.440 --> 0:18:50.800 you can say, well, if I wanted to look at 0:18:50.800 --> 0:18:52.959 my personal footprint, I should be doing this and this 0:18:53.000 --> 0:18:56.159 and this and but fundamentally it's an optimistic view and 0:18:56.200 --> 0:18:59.480 technology and an agnostic view and policy. Policy is a 0:18:59.600 --> 0:19:02.239 very import important role to play as an enabler of this, 0:19:02.359 --> 0:19:04.680 but it's not a driver of this scenario. 0:19:04.760 --> 0:19:06.879 Well, And one of the things that's important when setting 0:19:06.880 --> 0:19:08.720 a target of any kind is to kind of rally 0:19:08.760 --> 0:19:11.600 behind a few things, to just still it down to 0:19:12.080 --> 0:19:14.800 just a list in order for us to be able 0:19:14.800 --> 0:19:17.120 to concentrate. For the same reasons that you're pointing out 0:19:17.160 --> 0:19:19.760 that twenty fifty and twenty thirty and one point five 0:19:19.800 --> 0:19:22.600 are really important things for us to see as benchmarks 0:19:22.600 --> 0:19:24.280 that we start to create a narrative around. 0:19:24.359 --> 0:19:25.040