1 00:00:00,510 --> 00:00:11,370 Good afternoon and welcome, welcome the Oxford Martin School, welcome to this afternoon's contribution to our Shaping the Future lecture series. 2 00:00:11,370 --> 00:00:23,280 We've got Professor Malcolm McCulloch this evening. Malcolm is the leader of a serial leader of programmes at the Oxford Martin School, 3 00:00:23,280 --> 00:00:29,460 and he's currently lead researcher on the Oxford Martin programme on the Future of Cooling and 4 00:00:29,460 --> 00:00:35,910 also lead research on the automotive programme on integrating renewable energy across the whole. 5 00:00:35,910 --> 00:00:43,500 University is the group leader of the Energy and Power Group, as well as being associate professor of Engineering Science. 6 00:00:43,500 --> 00:00:49,260 He is also and I was going to say, putting his money where his mouth is. 7 00:00:49,260 --> 00:00:54,180 But it may be waiting for money to appear where his mouth is because he's involved in many spin outs, 8 00:00:54,180 --> 00:00:57,690 some six he was just telling me or alleged in this area. 9 00:00:57,690 --> 00:01:03,150 So he's come today to talk to us about powering the future. 10 00:01:03,150 --> 00:01:14,160 Switching on the renewables. So Malcolm. Right. 11 00:01:14,160 --> 00:01:20,820 Evening, everybody. Those of you who know me know that I always thought of some questions. 12 00:01:20,820 --> 00:01:27,420 So here is a question for the audience and talk to the person next to you and all those six statements. 13 00:01:27,420 --> 00:01:35,460 Which of them are true? So carbon emissions A is carbon emissions grew by two percent, the fastest growth for seven years. 14 00:01:35,460 --> 00:01:43,620 B carbon emissions went down in 2018. See, the strongest growth of primary energy was cold morning, Kristie. 15 00:01:43,620 --> 00:01:49,770 That's what this is all to do with 2018 morning, Kristie was produced by hydro and renewables, then gas. 16 00:01:49,770 --> 00:01:58,110 Primary energy consumption in 2018 grew double the 10 year average, and renewables grew below the 10 year average. 17 00:01:58,110 --> 00:02:01,680 So have a look at those six questions in the post next year. 18 00:02:01,680 --> 00:02:06,320 There are several that are true and several that are false. It's not just one issue on also. 19 00:02:06,320 --> 00:02:11,770 So you got you got yourself 30 seconds, go ahead. 20 00:02:11,770 --> 00:02:17,310 And even in the U.K., this is global growth story. 21 00:02:17,310 --> 00:02:35,280 This is global. So. 22 00:02:35,280 --> 00:02:56,590 He's. And. I wanted to write for 30 seconds off, and the answer is you don't have to wait. 23 00:02:56,590 --> 00:03:02,290 OK, so this is just what I wanted to do is start to talk, but just saying, OK, what's actually happening globally? 24 00:03:02,290 --> 00:03:09,920 And to think through what are the implications as we think about moving to a net zero carbon world? 25 00:03:09,920 --> 00:03:14,840 And so this is data that's all gathered from BP statistical review of the world in 2019. 26 00:03:14,840 --> 00:03:22,430 So this is kind of like the latest global data we have, so we can see if you have a look on the graph on the left hand side, 27 00:03:22,430 --> 00:03:32,190 you can see that this is looking at electricity production and we can see that the top fuel used for electricity is still coal. 28 00:03:32,190 --> 00:03:43,380 Shockingly, and other it's just under 40 percent is produced by coal, which is about the same that happened, you know, almost 20 years ago. 29 00:03:43,380 --> 00:03:51,550 So you kind of think, Oh, OK, then you can have a look and say, OK, this red curve here, this is one of the fastest risers. 30 00:03:51,550 --> 00:03:59,250 What is that? And if you look carefully, you will see this natural gas. So actually, natural gas has been increasing in the power sector. 31 00:03:59,250 --> 00:04:04,070 You look at the blue curve, which is hydro, and you can see that remaining fairly constant. 32 00:04:04,070 --> 00:04:10,160 The orange curve is nuclear has actually been decreasing over the last 10 years or so. 33 00:04:10,160 --> 00:04:15,320 The rapidly rising one is is renewables or renewables all coming up fast? 34 00:04:15,320 --> 00:04:21,110 OK? And others are including things like digestion and waste and that sort of thing. 35 00:04:21,110 --> 00:04:24,860 So the first thing is, if you can look at your skills carefully, 36 00:04:24,860 --> 00:04:35,130 you can see that renewables plus a strength in renewables plus hydro is actually less than gas at the moment. 37 00:04:35,130 --> 00:04:41,150 So that answer was false. OK. Which is a it's catching up fast, which is a good thing. 38 00:04:41,150 --> 00:04:49,070 And then if you have a look in the world, you can see what percentage of of energy was actually produced by that in different regions. 39 00:04:49,070 --> 00:04:57,530 And we can see that Europe is near the top globally, as will, because something like just under nine percent is produced by renewables. 40 00:04:57,530 --> 00:05:02,300 But what's interesting? You could see something like you, Russia down the bottom, which is actually a very large consumer, 41 00:05:02,300 --> 00:05:07,310 and that's where a lot of coal is burnt has actually got almost narrowed animals there altogether. 42 00:05:07,310 --> 00:05:11,660 So that's electricity, and it's kind of like there's a sort of a good news story, 43 00:05:11,660 --> 00:05:19,490 especially looking at what's happening on that graph to say renewables are increasing. 44 00:05:19,490 --> 00:05:28,160 But if you have a look at the total energy production, what you'll find is that basically the orange curve is renewables. 45 00:05:28,160 --> 00:05:37,730 The blue is is hydro, and together they produce less than 14 percent of the total, the total energy that we have in the country, in the world. 46 00:05:37,730 --> 00:05:41,810 So we're going to have to increase that by a factor of seven. 47 00:05:41,810 --> 00:05:47,520 Hydro is not going to be able to do much because we've exhausted not all of the sites, but all of the big ones. 48 00:05:47,520 --> 00:05:53,030 So renewables are going to have to make a dramatic difference if we want to displace, you know, there's coal, 49 00:05:53,030 --> 00:05:59,540 there's gas and oil we want, it's going to be a really big challenge to actually displace all of those. 50 00:05:59,540 --> 00:06:04,790 So if it comes to some of the answers, OK, the green ones are true. 51 00:06:04,790 --> 00:06:10,450 So carbon emissions grew by two percent last year, the fastest growth for seven years. 52 00:06:10,450 --> 00:06:15,490 Connoisseurs, what Paris has done for us or not. 53 00:06:15,490 --> 00:06:25,710 Interestingly, a lot of it was because it was in a lot of areas, it was a lot colder than normal and therefore a lot of that was used for heat. 54 00:06:25,710 --> 00:06:34,290 Carbon emissions did not go down in 2018, the strongest growth in primary energy was not call, it was gas and there wasn't renewables. 55 00:06:34,290 --> 00:06:39,510 More electricity was not produced by hydrogen rules and gas loads getting very close. 56 00:06:39,510 --> 00:06:42,270 Primary energy consumption grew double the 10 year average. 57 00:06:42,270 --> 00:06:48,120 So that means last year would be the growth rate was double that than we normally expecting. 58 00:06:48,120 --> 00:06:57,060 And you can see that from the know. If you look at the slope of the graph here, the top there you can see it is last year really made a step upwards, 59 00:06:57,060 --> 00:07:01,620 which is again is a worry for how do we decarbonise the world with renewables? 60 00:07:01,620 --> 00:07:06,550 And then unusually, renewables grew below the 10 year average. 61 00:07:06,550 --> 00:07:11,100 OK. It was still at 14 percent, so it was still a significant increase, 62 00:07:11,100 --> 00:07:15,630 but it was below what has been happening at the moment, indicating a slight slowdown. 63 00:07:15,630 --> 00:07:23,790 So globally, this picture does not look great, although we can see renewables also having to catch up, but there's nowhere near fast enough. 64 00:07:23,790 --> 00:07:30,600 So what I wanted to do was to say, let's have a look at the UK context in the next part of this of the slides, 65 00:07:30,600 --> 00:07:36,960 because we're always been seen as one of the forefront in disruption in the 66 00:07:36,960 --> 00:07:41,440 energy market and a lot of the models that we develop here get used elsewhere. 67 00:07:41,440 --> 00:07:45,150 So let's understand what's happening here first and what I wanted to see. 68 00:07:45,150 --> 00:07:50,010 So I took over a decade and see what's happening. So I got to be using more natural heat maps. 69 00:07:50,010 --> 00:07:57,510 So these this is conveying about 500000 points of information in one graph and goes as pretty dense. 70 00:07:57,510 --> 00:08:07,600 Let me just explain what's happening in the graph. So this is the total UK electricity demand from 2011 until yesterday. 71 00:08:07,600 --> 00:08:18,510 OK. And on the horizontal axis is basically the say that we have and going from January 2012 all the way through to January 2020. 72 00:08:18,510 --> 00:08:24,960 So each one of those is basically a year. And basically, you can see the year's coming through on the graph here. 73 00:08:24,960 --> 00:08:31,020 This graph in the bottom here basically gives you what is the average daily consumption. 74 00:08:31,020 --> 00:08:37,380 The data has got a few corrections, and so I ignore the things going to zero in on zero there just data points that have gone wrong. 75 00:08:37,380 --> 00:08:41,430 OK. But you can basically see this a real seasonal element to it. 76 00:08:41,430 --> 00:08:48,650 And the lowest point typically is you can see and you can see it in this one year where the colours, you can see the stripes coming down. 77 00:08:48,650 --> 00:08:53,210 Any idea when the energy is a minimum? 78 00:08:53,210 --> 00:09:05,480 Three a.m. on the 26th of December, only when the minimum energy consumption and that's kind of a a quite a standard pattern. 79 00:09:05,480 --> 00:09:08,870 And that's basically because everybody takes a break off during the winter for those days. 80 00:09:08,870 --> 00:09:11,090 And so the energy consumption is the lowest. 81 00:09:11,090 --> 00:09:16,460 But around that, you can see actually the energy consumption is pretty high, and that's many, many due to heating. 82 00:09:16,460 --> 00:09:25,500 The the the vertical axis is basically the time of day, so that starting off at midnight and going through to the peak of the day and in the evening. 83 00:09:25,500 --> 00:09:31,310 And what this is doing is basically showing at every 10 minute period over the last 10 years or so. 84 00:09:31,310 --> 00:09:39,020 The colour tells you what the energy consumption is for that 10 minute period. And the more yellow it is, the more energy we're using. 85 00:09:39,020 --> 00:09:44,780 And so you can see things light in the evening, it tends to be much more use than in the morning. 86 00:09:44,780 --> 00:09:52,910 And you can also see that winter is a higher usage than the summer. You can also kind of see these wavy pictures as you're going along those waves. 87 00:09:52,910 --> 00:09:57,110 That's basically if you look carefully, that looks like a sinusoidal curve. 88 00:09:57,110 --> 00:09:59,450 That's basically sunset. 89 00:09:59,450 --> 00:10:07,410 So that shows you a sunset is and basically a lot of lighting turns on and sunset, and that's why we get a jump in what's happening there. 90 00:10:07,410 --> 00:10:12,020 What's also interesting to see is as you start off from, you know, 10 years ago as well, 91 00:10:12,020 --> 00:10:17,240 2011 to now you can see the intensity of the yellows actually decreasing. 92 00:10:17,240 --> 00:10:21,140 So that means that our actual energy consumption is going down over time. 93 00:10:21,140 --> 00:10:28,310 And if you look at the trends, you can see that actually we can indeed see that the energy is decreasing over time. 94 00:10:28,310 --> 00:10:35,750 So the mainstay of the UK demand is coal. So let's look at what's happened to coal in the UK, and this is quite an interesting story. 95 00:10:35,750 --> 00:10:41,900 So you can see in 2011, it was actually a pretty substantial contributor to the overall system. 96 00:10:41,900 --> 00:10:45,860 But with time, you can see every year is going down and down and down and down, 97 00:10:45,860 --> 00:10:53,950 and you can see there's actually a few days where there's almost no coal usage whatsoever. And so we can see that coal is in fact doing that. 98 00:10:53,950 --> 00:10:58,280 OK, so we are seeing that actually, we are seeing the end of coal in the UK. 99 00:10:58,280 --> 00:11:03,440 And so what is it? What's one of the things that's replacing it is going to be looking at wind? 100 00:11:03,440 --> 00:11:10,160 So if you look at the same picture now for wind, we can see this going on and you can see that over the last 10 years, 101 00:11:10,160 --> 00:11:14,900 you can see every year is getting stronger and stronger and you can see that actually things are 102 00:11:14,900 --> 00:11:20,420 getting we can see that we're getting a definite increase in the amount of wind that we have. 103 00:11:20,420 --> 00:11:25,640 The other interesting thing to notice is that during the day, if you look at the average profile, 104 00:11:25,640 --> 00:11:32,150 which is the dark blue line over there, you can see throughout the day there's almost no variation in wind. 105 00:11:32,150 --> 00:11:40,850 Once the wind turns on, it's on Oops. Sorry, it's going forward once and when someone turns on, it's on for a number of days at a time. 106 00:11:40,850 --> 00:11:45,140 And basically, as friends are moving through, basically we get wind coming on. 107 00:11:45,140 --> 00:11:49,010 But you can see that between days, actually, there's quite a lot of variation. 108 00:11:49,010 --> 00:11:53,060 And the other thing to notice, if you look, you see the peak is run about in the January's. 109 00:11:53,060 --> 00:11:57,890 And so this is if winter is when a lot of the generation comes through. 110 00:11:57,890 --> 00:12:05,000 But in the summer, you can see actually there's actually a decrease in the amount of generation in the summer in the summer months. 111 00:12:05,000 --> 00:12:10,820 Unfortunately, does Solar's only been collected for the last three years or so by National Grid? 112 00:12:10,820 --> 00:12:17,510 And so this is what the solar graph is happening. And again, you can kind of see that it's been slowly increasing, but not nearly as rapidly as when. 113 00:12:17,510 --> 00:12:28,640 The main thing to notice is that actually, we have proof of the solid data is peaking now, not in the winter, but in the summer. 114 00:12:28,640 --> 00:12:36,050 And that's kind of nice because that means that actually the two can be complementary to each other to a certain extent. 115 00:12:36,050 --> 00:12:44,390 What this is showing is that with a strong collapse in coal and natural gas is starting to to peak as southern wind is coming 116 00:12:44,390 --> 00:12:50,870 through that basically the system is actually undergoing quite dramatic change and we need to talk through what that looks like. 117 00:12:50,870 --> 00:12:58,790 And this is just a little pithy comment that I said made a few years ago and actually is becoming true to say when systems are matured. 118 00:12:58,790 --> 00:13:04,760 In other words, if you look at our electrical system was basically power systems putting this like the 1930s, 40s, 50s. 119 00:13:04,760 --> 00:13:11,960 So it's been around for at least half a century, and it means that if I look back, say, 10, 15 years ago, 120 00:13:11,960 --> 00:13:17,970 you need a very narrow specialisms to eke out any new value in the system because it was extremely well understood. 121 00:13:17,970 --> 00:13:22,340 And the challenge that we now have is the system is undergoing rapid change, 122 00:13:22,340 --> 00:13:29,330 and therefore we need a much broader understanding of what's actually going on to understand not only how to eke out value, but where the value is. 123 00:13:29,330 --> 00:13:34,100 And that's one of the key challenges that we have at the moment is that actually in the power system, 124 00:13:34,100 --> 00:13:37,420 we don't really understand where the real value is. 125 00:13:37,420 --> 00:13:47,120 And my instinct is that within 20 years or so, most of the value in the energy system won't be accounted by kilowatt hours. 126 00:13:47,120 --> 00:13:51,150 That's not going to be the primary measure of the value in the system. 127 00:13:51,150 --> 00:13:57,320 The other things. So what I'm going to do is some of the same as before, but I wanted to just talk through basically. 128 00:13:57,320 --> 00:13:59,480 So why is this such a different system? 129 00:13:59,480 --> 00:14:07,010 Because basically the good old days we basically had our coal fired power station, we had our transmission network, 130 00:14:07,010 --> 00:14:13,490 and that basically enabled us to get energy from far away places and get them to the cities where they are. 131 00:14:13,490 --> 00:14:20,330 Very truly, we simply had a retailer where we would catch the money from the end users and then distribute it 132 00:14:20,330 --> 00:14:27,950 back to both the transmission and distribution companies and back to the generation companies. 133 00:14:27,950 --> 00:14:30,320 And that's basically the system that it looked like. 134 00:14:30,320 --> 00:14:37,940 So what are saying is, OK, maybe all we need to do is just swap out the coal fired power station for the wind, and that's exactly the same thing. 135 00:14:37,940 --> 00:14:42,220 But what we saw was that in the wind and the solar, it was a highly variable. 136 00:14:42,220 --> 00:14:47,750 OK, so that means we need to manage that variability and we need to be able to balance the system. 137 00:14:47,750 --> 00:14:50,720 So what we need to do is actually extend the system quite a bit. 138 00:14:50,720 --> 00:14:58,490 So what you're going to be doing now is reintroducing these new block, which is looking at balance balancing services. 139 00:14:58,490 --> 00:14:59,750 Very simply, this one, 140 00:14:59,750 --> 00:15:09,980 basically the network's arbitrage generation and load of space balancing services often draws net generation and load over time. 141 00:15:09,980 --> 00:15:15,860 And that's quite a nice way of actually understanding what's what the challenge is going to be. 142 00:15:15,860 --> 00:15:21,050 But in order to make that work, you need to understand where in the system the challenges are, 143 00:15:21,050 --> 00:15:24,590 where the hotspots goes, where you need to balance and when you need to balance. 144 00:15:24,590 --> 00:15:30,500 So that actually means that we got a new service coming in through that we not only have energy and finance, 145 00:15:30,500 --> 00:15:38,710 we now need to have data coming through because data is going to be a key point to understand, how do we operate this a lot more efficiently? 146 00:15:38,710 --> 00:15:41,770 So what I want to start doing is just concentrating a little bit more on balancing 147 00:15:41,770 --> 00:15:45,970 services for a little bit because that's actually where one of the key deltas are. 148 00:15:45,970 --> 00:15:52,060 So in one sense, we've been doing balancing for quite a while and that's been using pumped hydro. 149 00:15:52,060 --> 00:16:03,190 Pumped hydro is basically to Norway is, I mean, pumped hydro power station in Indian Wells, and it has about 10 gigawatt hours of energy. 150 00:16:03,190 --> 00:16:07,540 And basically, we can see that it's being used primarily in the evening peak. 151 00:16:07,540 --> 00:16:12,580 Remember, that was when the peak demand was was coming through and has been used mainly in the evening peak to 152 00:16:12,580 --> 00:16:17,290 be able to balance out so that we don't have to bring on the coal fired power stations and the like. 153 00:16:17,290 --> 00:16:24,040 So that's basically what it was like. But how does it not change and how much energy do we not need as we go forward? 154 00:16:24,040 --> 00:16:29,110 And this is some of the work that one of my fantastic faithful students Maryam has been doing is looking to say if we 155 00:16:29,110 --> 00:16:37,540 were to consider primarily a wind and solar world what the future look like before I get into too much hot water. 156 00:16:37,540 --> 00:16:42,940 Yes, nuclear will probably be in the mix, but that's still a question mark at the moment. 157 00:16:42,940 --> 00:16:53,140 And this was just explore what happens if we look to the non-nuclear world and just looking primarily at gas and storage at wind and solar. 158 00:16:53,140 --> 00:16:57,670 And so what happens is that this is basically the amount of terawatt hours. 159 00:16:57,670 --> 00:17:06,520 So that's a thousand gigawatt hours that we need in order to balance the system if we just had solar and wind and nothing else. 160 00:17:06,520 --> 00:17:12,190 So and the energy associated with this might be due to changing the demand profile, 161 00:17:12,190 --> 00:17:18,640 changing generation profile as you can, but also being able to store energy over long time periods. 162 00:17:18,640 --> 00:17:24,430 And what's interesting is that the amount of storage that we look like actually increases with time, 163 00:17:24,430 --> 00:17:29,500 and a lot of studies that have been existing at the moment haven't looked at one year's worth of data. 164 00:17:29,500 --> 00:17:34,570 But what we're finding is actually this multi-year variability within this within the seasons. 165 00:17:34,570 --> 00:17:39,340 And that means that actually the longer the time period that you actually consider the moon storage, 166 00:17:39,340 --> 00:17:42,130 you need to actually balance those long time periods. 167 00:17:42,130 --> 00:17:48,850 The way we can basically see that as we know that we have very cold years of very hot year or very windy years or months, 20 years, 168 00:17:48,850 --> 00:17:55,300 and that means that if you're going to do the system, that's going to be sustainable long term, we actually need substantial amounts of storage. 169 00:17:55,300 --> 00:18:04,140 Now this particular case here is let me just decode a little bit for you is this is the number of years that you consider the grave, 170 00:18:04,140 --> 00:18:07,310 but is basically the variability of between which ten years you use, 171 00:18:07,310 --> 00:18:14,860 which 20 years you use, and that that gives you that variability that the but the black curve is like the mean of what it is at the top. 172 00:18:14,860 --> 00:18:20,920 Yeah, you can see basically saying twenty five is seventy five W, which means that in this we'll be looking at. 173 00:18:20,920 --> 00:18:27,160 Twenty five percent of the energy is produced by solar and seventy five percent of the wind is 70 percent. 174 00:18:27,160 --> 00:18:32,980 Seventy five percent of the wind is used by wind and one times X means that we've got a system 175 00:18:32,980 --> 00:18:40,770 where we exactly match the generation requirements of generation capacity to meet the demand. 176 00:18:40,770 --> 00:18:46,760 And so there's no overproduction in that scenario. So you then need a lot of extra storage. 177 00:18:46,760 --> 00:18:57,860 What we do on the on the left hand side is basically saying OK for the same balance of wind and solar, what happens if we move from the blue curve, 178 00:18:57,860 --> 00:19:03,290 which basically says we have exactly the right amount of generation to match it and we increase the generation? 179 00:19:03,290 --> 00:19:04,070 Now what's interesting, 180 00:19:04,070 --> 00:19:12,980 seeing you go from one time to generation and adjust one percent on and they can see there's a huge delta in the amount of storage required. 181 00:19:12,980 --> 00:19:18,260 So actually, over a generation is going to be one of the key things we're doing as increased the amount of over a generation. 182 00:19:18,260 --> 00:19:23,570 So you find that the amount of storage that we acquire actually drops quite dramatically. 183 00:19:23,570 --> 00:19:27,170 So one of the interesting questions is as we go forward is to say what is the balance 184 00:19:27,170 --> 00:19:33,080 between solar and wind that we need and then how much how much storage to actually look at. 185 00:19:33,080 --> 00:19:40,310 So if we say we look at something like a 30 year average and we look at a little bit more detail on how that plays out, 186 00:19:40,310 --> 00:19:46,070 what this is showing is that on the horizontal axis is basically, say, the proportion of energy that you need that comes from the Sun. 187 00:19:46,070 --> 00:19:52,430 The balance is coming from wind and then the colours are basically saying, OK, how much overproduction do we have? 188 00:19:52,430 --> 00:19:57,770 Was kind of interesting is that when you get to something like one point two times to one point five times, 189 00:19:57,770 --> 00:20:06,490 you dramatically decrease the amount of storage that you actually require and you getting down to 10. 190 00:20:06,490 --> 00:20:14,690 But that's about between 10 and 12 terawatt hours of energy required to put that in context. 191 00:20:14,690 --> 00:20:21,980 At the moment, we consume about one terawatt hours of energy per day, so that's about four or five days of energy that when. 192 00:20:21,980 --> 00:20:30,230 Right. It's about seven to 12 days of energy storage will need in that in that kind of world in the future. 193 00:20:30,230 --> 00:20:35,360 The other thing to notice is that if you look at something like the peak point years, 194 00:20:35,360 --> 00:20:41,330 about twenty five percent of energy from solar and seventy five percent from wind. 195 00:20:41,330 --> 00:20:46,550 You then go to say, Well, what does that mean in terms of the capacity of those two that you acquire? 196 00:20:46,550 --> 00:20:50,960 Now what we saw from solar is that you. 197 00:20:50,960 --> 00:20:58,840 Your capacity factor, which is basically what is the rated amount that you can actually get from what you actually get is only about 10 percent. 198 00:20:58,840 --> 00:21:04,290 That's mainly because the Sun don't shine at night and also that you've got the mornings in the evening. 199 00:21:04,290 --> 00:21:10,460 So that means we only have about a 20 percent reduction in the capacity effect of wind 200 00:21:10,460 --> 00:21:17,160 is only about 10 percent for wind onshore and sitting around between 30 35 offshore. 201 00:21:17,160 --> 00:21:25,190 It's not getting up to 40 percent or something like that. So that means that when you're getting into the kind of 25 30 percent share of solar, 202 00:21:25,190 --> 00:21:30,020 that means that you actually have an equal capacity of solar and wind. 203 00:21:30,020 --> 00:21:37,500 So if you've got 100 gigawatts of wind, you're going to have about 100 gigawatts of solar, but the wind will be giving you three times as much energy. 204 00:21:37,500 --> 00:21:45,620 OK, so now that's kind of interesting to note because at the moment, we have a lot more wind capacity at the moment than we do solar capacity. 205 00:21:45,620 --> 00:21:49,220 And so one of the things that we can see going forward is we are going to have to put a 206 00:21:49,220 --> 00:21:54,590 lot more solar in the future if we want to avoid the huge costs associated with storage. 207 00:21:54,590 --> 00:21:58,970 And that's one of the really interesting challenges that we're going to work through. 208 00:21:58,970 --> 00:22:04,520 Now what does work has been doing is basically assuming and we know naively 209 00:22:04,520 --> 00:22:08,960 that it's in demand as usual and we know that demand is going to be changing. 210 00:22:08,960 --> 00:22:13,220 So what are the two big ones and what are the implications going to be? 211 00:22:13,220 --> 00:22:19,040 Well, two big ones is going to be around electric vehicles and the other one is going to be around heating. 212 00:22:19,040 --> 00:22:29,270 So let me just talk a little bit about electric vehicles. If we were to electrify the fleet tomorrow, some interesting not that we can, but if we did, 213 00:22:29,270 --> 00:22:37,400 we would have between one and a half and two and a half terawatt hours of energy storage, almost for free. 214 00:22:37,400 --> 00:22:44,780 So that starts to get us kind of like two, two and a half days of the 10 days that we need, but it tends to be short term storage. 215 00:22:44,780 --> 00:22:47,840 But he said to me, Malcolm Van Hollen, isn't that being used for the journeys? 216 00:22:47,840 --> 00:22:52,280 OK, well, if you look at, you know, if you're going to go and purchase a new vehicle, 217 00:22:52,280 --> 00:22:57,950 you probably want to have something like a two to three hundred kilometre range. 218 00:22:57,950 --> 00:23:04,910 But typically, in most days, 90 percent of the time, you'll never use it for more than, say, 20 kilometres. 219 00:23:04,910 --> 00:23:09,710 So you have something between 80 and 90 percent of that. Energy storage is never used. 220 00:23:09,710 --> 00:23:16,010 But at these used for the one or two times that you really wanted, so you kind of got this free storage hanging around, that's doing it. 221 00:23:16,010 --> 00:23:27,890 The other interesting thing is that if you have that many vehicles, basically those vehicles would have a power rating of something. 222 00:23:27,890 --> 00:23:31,820 If you use something like a seven kilowatt chargers with the standard one set to look like, 223 00:23:31,820 --> 00:23:37,760 I mean through it means you would have something like 100 gigawatts of power available. 224 00:23:37,760 --> 00:23:44,570 And that to give you an idea at the moment of total power station capacity is about fifty five gigawatts. 225 00:23:44,570 --> 00:23:51,340 So that means electric vehicles will be. Almost double the capacity that we have form from power stations. 226 00:23:51,340 --> 00:23:53,050 So the world is changing. 227 00:23:53,050 --> 00:24:02,800 OK, in terms of energy requirements, we reckon it's going to be something like 20 percent increase in electricity that we need. 228 00:24:02,800 --> 00:24:07,090 If you do it smartly, you won't need any more existing capacity, 229 00:24:07,090 --> 00:24:15,130 generate existing capacity because basically you can fill up the load periods doing that during the night and you've got a huge amount of advantages. 230 00:24:15,130 --> 00:24:24,460 So to me, electric vehicles can can kind of turn into one of the angels in the power system and solve a lot of problems in the power system. 231 00:24:24,460 --> 00:24:29,590 Heating is is a slightly different challenge. 232 00:24:29,590 --> 00:24:36,670 It's something between we're going to have to go between half and double that of the electricity consumption to do with to deal with heating, 233 00:24:36,670 --> 00:24:45,730 depending how we do it and what happens with the what do we do with the building infrastructure within prove that or not? 234 00:24:45,730 --> 00:24:50,590 And so again, that's going to be a quite a substantial increase in generation that we need. 235 00:24:50,590 --> 00:24:56,380 But it's not 10 times the amount it's it's it's a manageable amount. 236 00:24:56,380 --> 00:25:03,460 Again, the thing the interesting thing with heating is that buildings are pretty good at storing energy, thermal energy. 237 00:25:03,460 --> 00:25:09,760 So there are ways of providing again, a flexibility service over the over a day or two. 238 00:25:09,760 --> 00:25:17,170 The challenge is, is that it mainly happens in the winter rather than the summer, so your peak loads get quite dramatic. 239 00:25:17,170 --> 00:25:27,040 So. And also remember, solar doesn't work very well in the winter, so we're going to have to rely on wind primarily to alter to meet the heating load. 240 00:25:27,040 --> 00:25:28,960 There's an interesting question at the moment, 241 00:25:28,960 --> 00:25:38,950 heating is a lot more uncertain because we know that there's heating is not necessarily going to be done by electricity in the future. 242 00:25:38,950 --> 00:25:45,880 It could be done by other mechanisms. One of the favourites out at the moment is hydrogen. 243 00:25:45,880 --> 00:25:52,080 I don't think hydrogen is going to work, but we might see ammonia or another gas coming in, also another fuel to actually replace it. 244 00:25:52,080 --> 00:25:57,700 So whereas electric vehicles, I think, are absolutely coming down the line and you know, 245 00:25:57,700 --> 00:26:00,010 there's almost a hundred percent certainty that they will be coming down the 246 00:26:00,010 --> 00:26:05,650 line heating is going to be about 30 percent certainty that it'll go electric. 247 00:26:05,650 --> 00:26:09,790 My view is that probably go electric in in a lot of places, but not all places. 248 00:26:09,790 --> 00:26:15,170 And so what that actually looks like is the challenge. So that's basically where we're coming from. 249 00:26:15,170 --> 00:26:20,980 So what I thought I'd do in the last part of the session is basically just talk through some of 250 00:26:20,980 --> 00:26:24,670 the areas where we think the challenges are going to be really be in how we're going to do that. 251 00:26:24,670 --> 00:26:29,590 And so what I just wanted to do is use the framework that we developed as part of the modern 252 00:26:29,590 --> 00:26:34,840 school programme in integrating renewables and just talk through with some of the challenges, 253 00:26:34,840 --> 00:26:42,610 also just a reminder of what there's going to be. We've talked about technology already, about wind and solar panels and wind and things like that. 254 00:26:42,610 --> 00:26:45,880 But what I haven't talked very much about is market arrangements are going to be really critical. 255 00:26:45,880 --> 00:26:50,610 In fact, that I think is one of the missing factors, and I'll talk to that in a moment. 256 00:26:50,610 --> 00:26:53,950 The next one is just how do we do with social engagement in this? 257 00:26:53,950 --> 00:27:02,560 And the last one is how do we deal with governance and policy? So what I thought I'd do is start off with our our framework and basically 258 00:27:02,560 --> 00:27:07,660 along the verticals we can see is resource basically solar and wind storage, 259 00:27:07,660 --> 00:27:14,710 what the challenge on storage than we have networks and then end users. And basically those are kind of like the key blocks of the energy system. 260 00:27:14,710 --> 00:27:18,730 And then the verticals are basically challenges that we need to be dealing with. 261 00:27:18,730 --> 00:27:25,000 And what I wanted to do was just quickly go through each of those intersections and basically give it a ranking. 262 00:27:25,000 --> 00:27:30,640 And that's what I did a little bit more fun for the younger members in the group and use emojis. 263 00:27:30,640 --> 00:27:38,260 So if we ever look and I'll just kind of talk through, these are different emojis. So if you look at things like resource and technology development, 264 00:27:38,260 --> 00:27:45,610 if we look at the costs of solar and the cost of wind in terms of the underlying technology, it's rapidly increasing. 265 00:27:45,610 --> 00:27:51,190 I mean, to give you an idea in 2018, the cost of solar panels, we're pushing 32 pence last year, 266 00:27:51,190 --> 00:27:56,620 the twenty four pence, 24 cents, nothing in them, at 18 cents. 267 00:27:56,620 --> 00:28:00,170 So that cost the cost of solar panels is coming down dramatically. 268 00:28:00,170 --> 00:28:07,390 Wind is doing the same sort of thing. So I think in terms of looking at technology and resources, I think we're we're on the right trajectory. 269 00:28:07,390 --> 00:28:12,640 Still a long way to go, but we're on the right trajectory in terms of storage. 270 00:28:12,640 --> 00:28:20,110 I'll kind of put a kind of quizzical face because I think short term into the entry, into a storage. 271 00:28:20,110 --> 00:28:24,820 I think we got a way to go forward and I think there is solutions coming through there. 272 00:28:24,820 --> 00:28:36,400 If you're looking at week month season multi-year, yes, they're on missions that are viable at the moment and that's going to be a real challenge. 273 00:28:36,400 --> 00:28:40,330 And I think that's one of the really interesting topics and things like using 274 00:28:40,330 --> 00:28:44,080 hydrogen in the forms of ammonia or other forms and how we're going to do that, 275 00:28:44,080 --> 00:28:49,140 that store long term storage as. Well, as saying, how do we exploit demand? 276 00:28:49,140 --> 00:28:56,940 How do we change demand in order to meet that? So that's that's kind of like a quizzical phase networks and technology development. 277 00:28:56,940 --> 00:29:03,270 So in terms of copper and wires, aluminium and transformers, that's happy. 278 00:29:03,270 --> 00:29:09,840 The quizzical bits of the data, you know, the power sector is not designed to be able to use data and use it efficiently. 279 00:29:09,840 --> 00:29:15,540 So the way they do that, I think, is good. That's going to be a real challenge for them and how they manage that. 280 00:29:15,540 --> 00:29:25,200 I think for end users is that we've seen a rapid increase in smarts in homes and therefore the for them in terms of technology and intended use. 281 00:29:25,200 --> 00:29:29,230 If we get the next line right, I think this is an opportunity. 282 00:29:29,230 --> 00:29:35,610 There are a lot of developers working in the space. We will see technology solutions that are fit for purpose coming through really rapidly. 283 00:29:35,610 --> 00:29:42,300 So I got off with the half his face. I need you to have a happy face on the wall, so it's going to get to the end. 284 00:29:42,300 --> 00:29:52,980 So market arrangements, this is where actually things are a lot less happy solstice. 285 00:29:52,980 --> 00:30:03,270 So if you look at things like resources is immense, solar panels is that once you put the solar panel down, you're not putting fuel in the side. 286 00:30:03,270 --> 00:30:08,040 So that means if you had a solar panel that was rated to give you 10 kilowatts, 287 00:30:08,040 --> 00:30:12,090 and at that particular point you're only producing eight, there's enough sunshine to give you. 288 00:30:12,090 --> 00:30:17,580 Two can move to nine or 10. Basically, the marginal cost of you doing that is zero. 289 00:30:17,580 --> 00:30:23,970 So because you got the results there, what's not clear is when you want to go to 11 because you don't actually have the panels in place. 290 00:30:23,970 --> 00:30:30,190 So that means that your Long-Run model costs. In other words, the long term to put an extra panel in is high. 291 00:30:30,190 --> 00:30:39,120 The short term operations one is low, and our market structure is basically designed for having or managing shorter and multiple costs. 292 00:30:39,120 --> 00:30:44,790 In other words, of minimising the amount of fuel that goes into the system, not the amount of capital that goes into the system. 293 00:30:44,790 --> 00:30:51,060 And we've been trying different ways and and spectacularly failing in my humble view in actually coming 294 00:30:51,060 --> 00:30:55,830 up with the market structure that's actually going to be fit for purpose for a decarbonised world. 295 00:30:55,830 --> 00:30:59,490 And it's going to be really challenging. If you look at storage. 296 00:30:59,490 --> 00:31:08,340 That's probably even a worse situation is how do we actually set up a market value for storage? 297 00:31:08,340 --> 00:31:12,660 That, coupled with the challenge down on the bottom, is really challenging. 298 00:31:12,660 --> 00:31:17,520 So we used to have a strong market signal coming through to US charges. 299 00:31:17,520 --> 00:31:22,350 That's basically distribution use of service charges, which basically says that at the night time, 300 00:31:22,350 --> 00:31:28,230 it's if you're a company, it costs you more to use the distribution system than it does during the daytime. 301 00:31:28,230 --> 00:31:32,400 And that incentivises, you choose storage so you can store some energy so you don't use that. 302 00:31:32,400 --> 00:31:39,870 You don't draw energy from an interesting the day time. That was a great market signal, and a lot of players came up and started to develop it. 303 00:31:39,870 --> 00:31:46,860 And what Ofgem has just done is remove that market signal, and that suddenly means that that market arrangement has disappeared. 304 00:31:46,860 --> 00:31:51,570 So the value for storage is now almost nil and a lot of places. 305 00:31:51,570 --> 00:32:00,030 And so that's that's going to be a real challenge. And how do we get that out networks again and happy face? 306 00:32:00,030 --> 00:32:05,670 How do we actually provide a market structure that enables them to do the right 307 00:32:05,670 --> 00:32:11,640 thing without enabling them to unexpectedly take a lot of rent from the system? 308 00:32:11,640 --> 00:32:15,810 How do you do that in a regulated monopoly? 309 00:32:15,810 --> 00:32:19,830 I think that's again really challenging, and there's a lot of work that's going on in that space. 310 00:32:19,830 --> 00:32:22,980 No clear answers are coming through in the long term. 311 00:32:22,980 --> 00:32:28,170 And then lastly, I think users are kind of sitting there saying, OK, what the heck is going to happen here? 312 00:32:28,170 --> 00:32:34,050 How are we going to actually in this kind of quizzical look to say, okay, if the market arrangements were right, I would participate quite rapidly. 313 00:32:34,050 --> 00:32:38,130 But but they're not right at the moment. 314 00:32:38,130 --> 00:32:45,510 Social engagement I again, I kind of say, I think this is basically saying and we can see this quite strongly, 315 00:32:45,510 --> 00:32:50,940 that actually social engagement is angry face. You know, we're kind of saying, why aren't we moving faster? 316 00:32:50,940 --> 00:32:57,240 We can see there's a lot of social manoeuvres in this place, like talking to people, for instance, and Siemens, 317 00:32:57,240 --> 00:33:04,050 who the headquarters were picketed because they were providing signalling to our system that was providing a line, 318 00:33:04,050 --> 00:33:11,880 providing a system to mine a coal mine so we can kind of see that actually, 319 00:33:11,880 --> 00:33:18,270 the social structure has really engaged to saying that climate change is an issue. 320 00:33:18,270 --> 00:33:27,030 We need to start dealing with that. What's interesting to me is that actually a lot of people controlling capital flows have also picked up on this. 321 00:33:27,030 --> 00:33:28,590 So there's some real angry faces, 322 00:33:28,590 --> 00:33:36,690 which I think is actually going to be a significant driver to get the other sides to actually start to get going and we've lost. 323 00:33:36,690 --> 00:33:47,390 Lost one is governance and policy, and that's basically to say that I think governance at the moment is kind of. 324 00:33:47,390 --> 00:33:52,470 Being challenged from multiple sectors and multiple sides and saying, you know, 325 00:33:52,470 --> 00:33:56,000 if you falcons feed in tariffs, yes, they were good for a short time period, 326 00:33:56,000 --> 00:34:01,580 but they quickly got caught up because the price of solar were down so low and we still paying the price for that now. 327 00:34:01,580 --> 00:34:07,400 So they made a number of steps going forward, which would have caused some challenging same thing around storage. 328 00:34:07,400 --> 00:34:14,990 How do you actually intend buy storage in the right way? How does that work? Those are very unclear ways forward. 329 00:34:14,990 --> 00:34:22,400 And put it this way, I have a lot of sympathy that it's a non-trivial problem that they're trying to deal with networks. 330 00:34:22,400 --> 00:34:29,870 I think I'm covering this in terms of saying the way the network charging those to a couple together strongly because they are highly regulated. 331 00:34:29,870 --> 00:34:36,830 So those two are the same story. And governance and policy is, I think people know that that users need to have an incentive, 332 00:34:36,830 --> 00:34:45,560 but we're not quite sure how we do it in such a way that we actually do it equitably so that everybody can benefit from this from the future. 333 00:34:45,560 --> 00:34:51,220 So to finish off some key points, change is happening fast. 334 00:34:51,220 --> 00:34:57,850 OK, and we don't always know how to account for this. Storage is going to be absolutely critical. 335 00:34:57,850 --> 00:35:03,820 There's going to be a blurring between demand and supply, especially in the role of things like electric vehicles. 336 00:35:03,820 --> 00:35:08,560 Which brings us to point four, which is the electrical system cannot be decoupled from transport and heat for 337 00:35:08,560 --> 00:35:13,000 absolutely all of the longer spend time and the more and more coupling they have. 338 00:35:13,000 --> 00:35:18,310 But that's also a good thing, as well as a bad thing. So there's some real opportunities in those two sectors. 339 00:35:18,310 --> 00:35:22,480 Market reform and governance really needs some radical reform and how that's going to come 340 00:35:22,480 --> 00:35:27,400 forward and and how do you do it in a way that doesn't destroy the system as a going forward? 341 00:35:27,400 --> 00:35:34,420 And how do you do it so that it adapts as things are changing is going to be really challenging. 342 00:35:34,420 --> 00:35:39,160 The last one is kind of like, you know, we need, you know, 343 00:35:39,160 --> 00:35:46,870 several hundred billion pounds of investments into the sector and it needs to have a de-risk environment 344 00:35:46,870 --> 00:35:52,870 for that amount of capital to actually flow so that we can actually achieve what we're going to do. 345 00:35:52,870 --> 00:35:56,230 And this is just the U.K., which is kind of at the forefront of it. 346 00:35:56,230 --> 00:36:01,060 How did people like Russia and other places cope if we can't do it in a fantastic way? 347 00:36:01,060 --> 00:36:13,910 And that's the end of my talk. Thank you. And if you say yes, you are. 348 00:36:13,910 --> 00:36:19,370 Thank you very much, Malcolm, and we've got time now for Q&A. 349 00:36:19,370 --> 00:36:23,810 Just to say, as usual, this is being filmed and webcast, 350 00:36:23,810 --> 00:36:32,090 so if you're not comfortable with that to stick your hand up and he's away from Mike so that those people online will be able to hear the question. 351 00:36:32,090 --> 00:36:40,930 So we have a question right here at the front. Daniel Schaaf, it's a question of the powering up to power down. 352 00:36:40,930 --> 00:36:46,690 Yes, and suppose the electrification of cars amounts to 10 per cent car ownership. 353 00:36:46,690 --> 00:36:51,860 So instead of 30 million, you have far fewer there utilised they actually used. 354 00:36:51,860 --> 00:37:01,150 You have nothing in the battery that isn't used the L, the HGV, the light van, they don't even have electricity, they're hydrogen or some other fuel. 355 00:37:01,150 --> 00:37:07,090 So you don't have your storage. It's all being used for transport because if you're going to spend your energy in imported 356 00:37:07,090 --> 00:37:12,550 carbon and building it in the next decade in which some will overshoot the carbon boundaries. 357 00:37:12,550 --> 00:37:22,450 So, okay, so this is a whole wrinkle that one has to think through the interesting challenges in mobility because 358 00:37:22,450 --> 00:37:28,210 I spent quite all the time of mobility is we actually going through two or three massive changes, 359 00:37:28,210 --> 00:37:32,830 but they're happening at different timescales. So electrification is coming up really fast. 360 00:37:32,830 --> 00:37:40,580 So my kind of prediction is by. Twenty twenty five twenty twenty six half of all new vehicles sold in the UK will be electric. 361 00:37:40,580 --> 00:37:49,060 OK, so that's not stock that's just coming in and especially after the announcement a couple of days ago about stuff that's that's accelerating that, 362 00:37:49,060 --> 00:37:55,930 that timeframe. And the second trend that's coming through is the materialisation. 363 00:37:55,930 --> 00:38:04,930 So basically, the younger generation are moving away from having stuff to having services, and that talks to your trend about going through. 364 00:38:04,930 --> 00:38:08,620 But that's that's going to take at least another 10 years to really kick in 365 00:38:08,620 --> 00:38:13,300 because that generation has to work through to become to become really dominant. 366 00:38:13,300 --> 00:38:21,700 And the third one, which kind of enables is kind of piggyback to that one is basically the autonomous 367 00:38:21,700 --> 00:38:26,890 vehicles and mobility as a service coming through a lot more strongly. 368 00:38:26,890 --> 00:38:30,010 And but I think that's going to kind of be the tipping point is going to be 369 00:38:30,010 --> 00:38:34,630 about 20 30 is if you look at the rate that autonomous vehicles are going to be, 370 00:38:34,630 --> 00:38:40,660 you know, we had viable electric vehicles probably five or six years ago technically. 371 00:38:40,660 --> 00:38:46,810 But now the marketplace is only starting to come through that one. It's going to take the same sort of timeframe going ahead. 372 00:38:46,810 --> 00:38:51,270 So we're going to have this really interesting gap, I think between twenty twenty three and twenty twenty seven. 373 00:38:51,270 --> 00:38:56,980 We're going to have a lot of electric vehicles coming on board. And then I think the cells are going to decrease. 374 00:38:56,980 --> 00:39:02,380 But that gives us some time, some breathing space in between to actually accelerate the system. 375 00:39:02,380 --> 00:39:09,790 And then one can start to look at to say, OK, hopefully by then we would have sorted out a proper market mechanism for storage, 376 00:39:09,790 --> 00:39:17,410 which would allow for ground for ground based storage to kick in because ground based storage is going to be a lot cheaper than mobile storage. 377 00:39:17,410 --> 00:39:21,610 So, so, so to me, it's a transition in the way it's part of the thing. 378 00:39:21,610 --> 00:39:28,780 But it's fascinating that you've got all these curves coming one off the other and you know, it's kind of a challenge to work through. 379 00:39:28,780 --> 00:39:36,310 Does that help you? There's a question just in my mind. 380 00:39:36,310 --> 00:39:50,280 How would a carbon tax help to bring forward renewable growth? 381 00:39:50,280 --> 00:39:55,280 So a carbon tax can help, but the question is. 382 00:39:55,280 --> 00:39:59,510 Is that mitigated by suppliers? 383 00:39:59,510 --> 00:40:09,440 So the question would be, is that if you have a supplier that is taking multiple sources of energy, do they just arbitrage the carbon tax away? 384 00:40:09,440 --> 00:40:15,590 And so the end user doesn't really see the carbon tax and therefore doesn't really come forward. 385 00:40:15,590 --> 00:40:22,760 What you could see, though, is that it could incentivise increased prices for non carbon sources to do that. 386 00:40:22,760 --> 00:40:26,780 But the market structure at the moment is so, so challenged in this area. 387 00:40:26,780 --> 00:40:31,700 I think, yes, carbon tax will make a difference, but not in the short term. 388 00:40:31,700 --> 00:40:44,020 There's going to have to be bigger jolts to get the system working properly. And here folks are back. 389 00:40:44,020 --> 00:40:49,900 Great presentation. My name is the one in the executive MBA programme at the Side Business School, 390 00:40:49,900 --> 00:40:56,890 working on a start-up right now in the low carbon fuel space, primarily targeting trucks, ships and planes. 391 00:40:56,890 --> 00:41:05,680 So I like hard to electrify transport sectors. It just sort of talk briefly about that, that market, the viability of it. 392 00:41:05,680 --> 00:41:13,690 And then, you know, I know you don't have a crystal ball, but like just your thoughts on the electrification of those which transport sector, 393 00:41:13,690 --> 00:41:17,890 the sort of trucks, ships and planes and the, I guess, the heavy goods. 394 00:41:17,890 --> 00:41:26,440 Yeah. Yeah, exactly. Well, that's I guess. Oh, it's one of those spaces. 395 00:41:26,440 --> 00:41:32,110 It's a bit like eating because there are multiple different technologies that are coming through simultaneously, 396 00:41:32,110 --> 00:41:36,910 and it's unclear to see at the moment which is going to be the winners. 397 00:41:36,910 --> 00:41:45,010 So one thing I mentioned earlier on is that in 2002, I built the first hydrogen sports car, so I've done all of work and hydrogen mobility. 398 00:41:45,010 --> 00:41:50,860 And what all the hydrogen people don't tell you is how bloody hard it is to do. 399 00:41:50,860 --> 00:41:55,390 The other thing just to give you a little marker just to show how things have changed 400 00:41:55,390 --> 00:42:02,210 is one of the 20 to fuel cells with costing about a thousand dollars a kilowatt. 401 00:42:02,210 --> 00:42:09,020 Batteries were costing about a thousand dollars a kilowatt hour because the battery storage, not power related. 402 00:42:09,020 --> 00:42:14,110 Now, so that is worth a thousand dollars a kilowatt hour. 403 00:42:14,110 --> 00:42:22,970 Now GM published Lost in November that they were paying under $100 a kilowatt hour for batteries. 404 00:42:22,970 --> 00:42:27,570 So in that time frame, batteries have come down by a factor of 10. 405 00:42:27,570 --> 00:42:31,870 If you gone from five PEM fuel cells like we would try to do, then. 406 00:42:31,870 --> 00:42:37,950 Remember, there were a thousand dollars a kilowatt hour, a thousand dollars a kilowatt. I stole a thousand dollars a kilowatt. 407 00:42:37,950 --> 00:42:45,000 They haven't gone down the knowledge curve. And that's the real challenge that I have around hydrogen based systems. 408 00:42:45,000 --> 00:42:50,850 So to me, as you know, everybody thinks FTV is going to be impossible to do by electric. 409 00:42:50,850 --> 00:42:57,370 And yet eLong is just his big heavy goods vehicle. All electric has just come out. 410 00:42:57,370 --> 00:43:04,390 It's going to be an interesting challenge that Crystal Ball is very foggy at the moment, and I can answer the question. 411 00:43:04,390 --> 00:43:13,000 But if it to me in my heart of hearts, I think the long term winner that is still going to wall to go is going to be ammonia. 412 00:43:13,000 --> 00:43:25,030 Because the money is very much easier to carry than hydrogen. It has an energy density, you know, in the same order of magnitude as as gasoline, 413 00:43:25,030 --> 00:43:28,900 you can use conventional technologies to burn at all sorts of things like that. 414 00:43:28,900 --> 00:43:37,180 You can go through a green ammonia route. To me, the main advantage is that you've got a billion or multi-billion pound industry called fertilisers, 415 00:43:37,180 --> 00:43:42,140 which will help drive that that greenness of ammonia. 416 00:43:42,140 --> 00:43:48,970 And you piggybacking on the back of that. My problem of fuel so pampered is where's your billion pound industry to piggyback onto? 417 00:43:48,970 --> 00:43:56,620 And there isn't one. Yeah, that's kind of like my instinct. Thank you. 418 00:43:56,620 --> 00:44:01,420 How do you read Malcolm, the changing mood in the oil industry? 419 00:44:01,420 --> 00:44:07,060 This week's announcement from the new boss of BP, for example, but they are coming pretty regularly at the moment. 420 00:44:07,060 --> 00:44:11,080 Statements of that kind from. Yeah, I was in the oil industry. 421 00:44:11,080 --> 00:44:21,010 What difference is it going to make? I'm. OK, so again, looking at my little crystal ball and that industry, 422 00:44:21,010 --> 00:44:28,080 I think we've reached a moment that happened in the car industry about a year and a half ago. 423 00:44:28,080 --> 00:44:32,990 So it's actually not two years ago, so what happened two years ago was like, 424 00:44:32,990 --> 00:44:39,120 I'm using Elon Musk basically made 300 million dollars in four days without selling a damn thing. 425 00:44:39,120 --> 00:44:46,950 And how did you do it? He basically said, if you wanted to buy more a Model three Tesla, you have to put a thousand dollar deposit down. 426 00:44:46,950 --> 00:44:51,330 Everybody is expecting to get between 20 and 30 thousand people. 427 00:44:51,330 --> 00:45:01,820 He got over 10 times that amount. And interestingly, this is the US all working very strongly with a lot of the the OEMs and the auto sector. 428 00:45:01,820 --> 00:45:07,540 The change from a week before to a week after that happened was dramatic. 429 00:45:07,540 --> 00:45:11,920 And now you can see that they have actually started to move, even VW is not producing electric vehicles. 430 00:45:11,920 --> 00:45:17,960 That event was was really changed the mood. 431 00:45:17,960 --> 00:45:21,260 To me, what's interesting is not the oil sector that's changed. 432 00:45:21,260 --> 00:45:27,830 It's the investors and the investment managers have really changed the idea behind this, 433 00:45:27,830 --> 00:45:31,880 and that is not driving the oil slick to say, Okay, we need to take account of this. 434 00:45:31,880 --> 00:45:37,190 And they made music that's been happening since, you know, middle of last year. 435 00:45:37,190 --> 00:45:41,930 You know, I read the Financial Times. You kind of see this drip drip drip of things and that's really coming to the fore. 436 00:45:41,930 --> 00:45:47,300 And I think that's really driven that that actually. Well, may just need to make a change. 437 00:45:47,300 --> 00:45:54,190 My kind of view is, you know, don't necessarily divest in the oil majors. 438 00:45:54,190 --> 00:46:00,910 Rather strong on them to say you're not you don't need to be an oil major, you need to be a clean energy major. 439 00:46:00,910 --> 00:46:06,430 They have a lot of capital, they've got a lot of lives that a lot of people, they've got a lot of capability to be able to do that. 440 00:46:06,430 --> 00:46:15,040 And what we need to be doing is enabling them to make that change. Yeah. 441 00:46:15,040 --> 00:46:22,680 Hey, so going back to your energy slide, you identified the importance of the energy use as a key part of the sector, 442 00:46:22,680 --> 00:46:26,400 and you gave a smiley face relating to technology and a large part agree with you. 443 00:46:26,400 --> 00:46:31,650 There's a lot of really interesting stuff space for someone like me who is a, you know, smart wind energy nerd. 444 00:46:31,650 --> 00:46:37,710 But you go to things like local government postings and you come across people who are quite concerned about the pace of change. 445 00:46:37,710 --> 00:46:45,870 So my question is, to what extent does the future energy consumer have a right to be disengaged with the system? 446 00:46:45,870 --> 00:46:53,010 And does that go against Ofgem's kind of we protect the current and the future consumers of the British? 447 00:46:53,010 --> 00:46:57,690 Right? You actually not talking about users, you're talking about governance, 448 00:46:57,690 --> 00:47:02,790 essentially because they're saying, how do we actually regulate and governance the sector? 449 00:47:02,790 --> 00:47:10,650 And I think again, remember I said, this is one of my murky fields because it's not easy to see where the right one going forward. 450 00:47:10,650 --> 00:47:19,590 I'll just give you a little analogy is do we have an Ofgem that regulates the supermarkets or the well, 451 00:47:19,590 --> 00:47:22,710 the guys who sell fruits and veggies in the store there? 452 00:47:22,710 --> 00:47:26,700 What we do is we have a food standards agency, which makes sure that the quality of the product is right, 453 00:47:26,700 --> 00:47:32,940 that they don't have any governance in terms of how you actually sell it and what price you sell it at. 454 00:47:32,940 --> 00:47:35,610 It's not regulated, it's not regulated in that sense. 455 00:47:35,610 --> 00:47:42,470 Yes, we are the CMA on Competition Markets Authority, but that's basically to ensure that there's enough people around. 456 00:47:42,470 --> 00:47:48,980 So the interesting question is, if that's true for such a vital services, food wasn't that true for energy. 457 00:47:48,980 --> 00:47:53,570 And then you can take it to the next stage, Ford is, as some of you know, 458 00:47:53,570 --> 00:48:00,320 I do a lot of work in Africa and I was at a refugee camp and one of the really interesting things. 459 00:48:00,320 --> 00:48:08,120 There were a group of guys. Your age basically had a solar panel, a nice German solar panel about this was I don't know where they got it from, 460 00:48:08,120 --> 00:48:17,240 but they got it and they had a little shop going and there's a guy sitting in the back with a say, voters hair is really important in African culture. 461 00:48:17,240 --> 00:48:20,030 And they had music going and the head of computer games, 462 00:48:20,030 --> 00:48:27,170 and basically they were an energy provider in the local area there, but they are completely unregulated. 463 00:48:27,170 --> 00:48:31,460 And so what's interesting is because of solar panels means that the investment 464 00:48:31,460 --> 00:48:35,520 that you need to actually become your own energy produces now dramatically lower. 465 00:48:35,520 --> 00:48:41,310 It's not billions of pounds that you need, it's hundreds or thousands of pounds that you need. 466 00:48:41,310 --> 00:48:51,810 I think there's a really interesting question to say, do we go to a regulated market to something more like a consumer market or commodities market? 467 00:48:51,810 --> 00:48:55,710 And that's an interesting question. And I know the answer is no, we don't. 468 00:48:55,710 --> 00:49:00,240 But but I think there's some interesting aspects of that that we need to be bringing over. 469 00:49:00,240 --> 00:49:06,960 And exactly the same thing comes into play to say, you know, should I be able to have my fridge, 470 00:49:06,960 --> 00:49:16,220 have a different provider than my cooker than my hot water heater or my, you know, my heat pump? 471 00:49:16,220 --> 00:49:21,300 You know, in that type of brave new world, you can actually see a lot more innovation coming through and actually then the question is, 472 00:49:21,300 --> 00:49:27,960 I guess the what's consumer protection all about? And then one has to get into all of, you know, 473 00:49:27,960 --> 00:49:36,580 wonderful things about how do we ensure that we have that nobody is left behind in this place and how do we enable that? 474 00:49:36,580 --> 00:49:41,710 And that means to come through. It's it's a interesting space. 475 00:49:41,710 --> 00:49:45,490 This is why I got a lot of sympathy with with the governance structures because there's 476 00:49:45,490 --> 00:49:49,870 a whole lot of innovation that's coming through that's completely changing the game. 477 00:49:49,870 --> 00:49:55,510 Yeah. A friend of Auburn, I think I follow on from that, Malcolm. 478 00:49:55,510 --> 00:49:57,010 As ever. 479 00:49:57,010 --> 00:50:05,470 What I'm interested in, if you could expand a bit on this issue that we've used to have a system with high capital costs and high running costs. 480 00:50:05,470 --> 00:50:10,340 Yes. We're now moving to a system with just high capital costs. 481 00:50:10,340 --> 00:50:17,260 Yes. What? What are the implications? Who's in terms of especially in terms of equity and consumers? 482 00:50:17,260 --> 00:50:22,960 Who's going to benefit and who's going to lose out? And in what ways? 483 00:50:22,960 --> 00:50:32,520 Oh, Brenda, you always often ask the question and the interesting one, huh? 484 00:50:32,520 --> 00:50:42,480 OK, so the interesting thing is, you could say, OK, so let's have a look at another marketplace where you have something similar. 485 00:50:42,480 --> 00:50:49,110 Not quite the same, but it's its equivalent and that is motor vehicles. So motor vehicles have a high capital cost. 486 00:50:49,110 --> 00:50:54,870 And as far as the manufacturers concerned, there's a zero almost zero running cost as just your maintenance time, 487 00:50:54,870 --> 00:50:58,440 you pay for the running costs directly to a separate one. 488 00:50:58,440 --> 00:51:05,400 And so you can sort of think of saying, Okay, so how do we enable mobility to take place in in our society? 489 00:51:05,400 --> 00:51:08,850 And basically what we do is we find we have different types of providers. 490 00:51:08,850 --> 00:51:14,010 So we have people say, for instance, if you want to have your own vehicle, you can either pay the capital upfront, 491 00:51:14,010 --> 00:51:19,980 which is the cuts that's, you know, probably 70 percent or 80 percent of the population so that you can't afford it. 492 00:51:19,980 --> 00:51:22,760 But then you can go to something like a leasing model. 493 00:51:22,760 --> 00:51:31,560 So one of the things that we could say, for instance, in the future is to say you don't buy energy, but you lease so many panels in the form. 494 00:51:31,560 --> 00:51:39,210 Or you lose your panels on that, losing your panels on your roof has come through and is coming through or you go to say, actually, 495 00:51:39,210 --> 00:51:46,560 you start to have a co-operative of people and they then act together as a group to be able to do stuff and then they share energy amongst themselves. 496 00:51:46,560 --> 00:51:51,420 And this is the whole space around peer to peer networks and all that type of thing. 497 00:51:51,420 --> 00:51:55,650 And what's really interesting in the work that we've done both here in New Zealand, 498 00:51:55,650 --> 00:52:02,100 is that a tremendous amount of people who want to participate in that don't necessarily make money. 499 00:52:02,100 --> 00:52:06,600 They're more interested in being philanthropic and society if they have excess energy. 500 00:52:06,600 --> 00:52:11,730 I'd rather have my neighbour have the access or my local hospital have and then access rather than that. 501 00:52:11,730 --> 00:52:19,320 And what's really interesting, it's really taking off in the indigenous communities in New Zealand because of that, that sense of community. 502 00:52:19,320 --> 00:52:26,700 So what I'm saying is that I think one has to look through the lens of what all the appropriate said business models, 503 00:52:26,700 --> 00:52:32,580 but ways of selling and trading energy and how do those play to the different sectors within the group so that 504 00:52:32,580 --> 00:52:41,160 we can ensure that every person has an equitable solution to to provide the energy requirements that they have? 505 00:52:41,160 --> 00:52:47,370 Yes. So that's I think it's it becomes a complex answer is what are we going to do? 506 00:52:47,370 --> 00:52:51,670 But hopefully a better answer than the one we've got at the moment. Thank you. 507 00:52:51,670 --> 00:52:58,900 Some. Right, the beginning, you can find renewables basically to wind power and solar power, 508 00:52:58,900 --> 00:53:03,490 and you didn't talk about anything like, for example, wave power or tidal. 509 00:53:03,490 --> 00:53:09,790 Is that because you don't think it has a viable or significant role to play in future? 510 00:53:09,790 --> 00:53:17,050 So if you can look at my cost, you'll see that I've done a lot of work in Tidal. 511 00:53:17,050 --> 00:53:18,580 So. 512 00:53:18,580 --> 00:53:29,880 So if I go back to wave power, that the challenge with wave power is that there's no device that's been in the sea for more than a year and survived. 513 00:53:29,880 --> 00:53:33,370 And that's that's that's been a real challenge. 514 00:53:33,370 --> 00:53:43,520 As one of my colleagues put it, is that the one in 100 year event, one of the 100 year wave comes and usually often it's not one to 100 with wave. 515 00:53:43,520 --> 00:53:48,220 So that's a real challenge. I mean, that marine environment is extremely challenging to work in. 516 00:53:48,220 --> 00:53:57,710 If we look at tidal, what's interesting in that space is I do think that there is a quite a significant resource in localised areas. 517 00:53:57,710 --> 00:54:02,990 So around the UK is a fantastic tidal resource off the coast of Canada. 518 00:54:02,990 --> 00:54:06,610 Newfoundland is an interesting resource that places around Korea. 519 00:54:06,610 --> 00:54:10,900 There's again a great resource there in some parts of the South China Seas and some great resource there. 520 00:54:10,900 --> 00:54:16,510 And things like the straits between the two islands and New Zealand again is a very good resource. 521 00:54:16,510 --> 00:54:21,670 So the resources that are the awesome, fantastic resources, but they are not going to, you know, 522 00:54:21,670 --> 00:54:26,320 at the end of the day, they can at best they'll provide some 95 percent of the world's energy. 523 00:54:26,320 --> 00:54:33,790 So they are very significant in the local context, but small in the global context, which is which is a challenge for them. 524 00:54:33,790 --> 00:54:39,730 When how are you going to do big plays? 525 00:54:39,730 --> 00:54:49,120 You know, if you look at the UK context, I think Tidal has a really strong possibility of coming forward if we can get all the things right. 526 00:54:49,120 --> 00:54:53,800 One of the nice things is if you look around the coast, we get a delay of something like three hours. 527 00:54:53,800 --> 00:54:57,590 If you look at various places around the coast, you get a three hour delay inbound with the high tide. 528 00:54:57,590 --> 00:55:02,750 And the low tide is, which means that you can virtually get continuous power throughout the day and you don't get those troughs. 529 00:55:02,750 --> 00:55:08,590 So and that will be a game changer in terms of the storage situation to the UK context. 530 00:55:08,590 --> 00:55:20,100 So I do think there's some real possibilities there tidal more so than than than wave, but it's a globally it's a relatively small resource. 531 00:55:20,100 --> 00:55:26,710 Front. Thanks very much. 532 00:55:26,710 --> 00:55:30,910 You're talking about the market structure, that kind of being really badly set up for funding renewables. 533 00:55:30,910 --> 00:55:37,240 Yes. Do you have kind of your own way of doing that would be different and say if, like the CEO of Tesco came to you and said, 534 00:55:37,240 --> 00:55:45,470 I want to switch to renewables, should I build on my own or should I say it's a bunch of people's, what would your advice be to him? 535 00:55:45,470 --> 00:55:51,470 OK, so let's just look at a potential market structures. 536 00:55:51,470 --> 00:56:03,080 So one of the things is that we need to set up a market mechanism which addresses the long term model cost, not the short run marginal cost. 537 00:56:03,080 --> 00:56:08,520 And that means how do you so in that kind of says comes back to leasing a leasing solar panel. 538 00:56:08,520 --> 00:56:14,330 Buying solar panels is kind of the thing that you really need to be doing. Not the kilowatt hour. 539 00:56:14,330 --> 00:56:19,940 And so one of the and the the one challenge that if I just shoot myself in the foot at the same 540 00:56:19,940 --> 00:56:25,790 time is to say the one challenge of just leasing sort of leasing solar panel is that in the end, 541 00:56:25,790 --> 00:56:33,530 user takes the risk of the weather conditions, which is we need to be able to manage that that place. 542 00:56:33,530 --> 00:56:41,960 If I were so that's issue one. The second issue is that if you look at the cost of solar remembers that they're coming down to sort of like, 543 00:56:41,960 --> 00:56:47,300 you know, they'll be sub 20 cents a watch this year. 544 00:56:47,300 --> 00:56:57,550 That's dramatic. That means that effectively you can get solar at below two cents a kilowatt hour if you were to look at in the UK. 545 00:56:57,550 --> 00:57:03,390 The challenges in the UK, we will never get a decision to pull around because of all the other challenges. 546 00:57:03,390 --> 00:57:07,900 You know, you've got to get planning permission, you've got two Connexions, you've got to get a people set in place. 547 00:57:07,900 --> 00:57:11,200 All these other things create a huge amount of risk. 548 00:57:11,200 --> 00:57:18,400 So one of the interesting things that I'm working with is to say, can we look at a system where actually this might be a governance role, 549 00:57:18,400 --> 00:57:23,050 where we basically de-risk all those big issues and actually then enable the 550 00:57:23,050 --> 00:57:26,480 private sector to play a role in actually just delivering the solar panels? 551 00:57:26,480 --> 00:57:31,940 And if you get to that kind of space, then I think we then I think if we could. 552 00:57:31,940 --> 00:57:39,150 I think we could buy 20, 30, 20, 30, five, we could be easily zero if we can deal with that because the numbers, 553 00:57:39,150 --> 00:57:41,990 the finances make sense if you can get the risk out. 554 00:57:41,990 --> 00:57:49,500 So the answer to your CEO, yes, but lobby hard to make sure that you got the governance structures right first. 555 00:57:49,500 --> 00:57:56,130 Now, I know there are a few more hands still going up, but we're going to have to close there in closing, 556 00:57:56,130 --> 00:58:07,080 I do want to bring your attention first to our election next week, which is tackling a very different major environmental problem. 557 00:58:07,080 --> 00:58:09,300 We have Professor Charlotte Williams. 558 00:58:09,300 --> 00:58:18,690 Charlotte is a professor of inorganic chemistry, and she will be talking on future options for making plastics more sustainable. 559 00:58:18,690 --> 00:58:24,360 And I would just like to, if we could thank Malcolm once I knew this would be a very good talk. 560 00:58:24,360 --> 00:58:32,760 I didn't know he was so far on the cutting edge of science communication that his concluding remarks would be delivered in emojis. 561 00:58:32,760 --> 00:58:43,930 So thank you very much, Timothy.