Welcome to episode 301 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. We have a treat for you today. This is the first Energy Talks live event, and we're joined by Kingsmill Bond from the Rocky Mountain Institute. And he's gonna be talking.
In fact, he's going to be giving a presentation on the race to the top, a new report, that he and his team have authored. And after that, he's going to stick religiously to 30 minutes. He's promised me that that'll be the case. And then we're going to open it up for q and a with, the participants who have joined us, and we'll be recording this as well. That'll it'll be available on our YouTube channel. So welcome to our first energy talks live Kingsmail.
Thank you, Markham So, well, I feel very honored to be the, first on this first of many, I hope, on this, excellent show. And, so, folks, I'll, I'll share my screen. But before I plunge in, I, it turns out that all I'm doing is rehearsing, Markham's argument that he's made in the past. But I I hope I'd I'll do my best, Markham, to to to, do the pitch and and, summarize, should we say, the argument.
So the the this presentation is is about the race to the top, the clean tech competition between China, Europe, and the United States. And the just before I look at the facts, I mean, put yourself in go back, just over a century to 1900. Imagine, the the start you're in 1900. The starting gunner's just been fired on, the car and electricity revolutions. And all your money and all your expertise and all your friends have got, horses and gas lights.
And and that's kind of the situation we're currently in where people have just suddenly woken up that there is this massive opportunity out there. And and it's a race. It's a race at the top. And, the question really is who's winning it? So there are 4, 4 parts to this presentation to seek to keep Markham to time.
I'm gonna just set up set the scene. What are the key races? Because lots of ways we could look at we could cut the data, but just to explain why we've looked at these 4 particular areas. Then I'm going to talk about where we stand today, who's winning just the facts of the case, then have a, then do some analysis or or do some reflection on where we're heading, and then think through the implications of, of, of this race. And then stick to time.
I'll try and keep a little bit shorter than 30 minutes so that we have time for some conversation in the end. Okay. So we're looking at 3 regions, China, Europe, and the United States. Why do you see regions? And forgive me.
Canada is, Canada is not here. Of course, I I I possibly should have done North America. Forgive me. But, nevertheless, if if you look at the these three regions, it's basically 80 to 90% of clean technology sales. And if you look at at previous technology shifts, it always you always wanna focus on what's happening in the leaders because what happens is the leaders, make the technology work, get the prices down, and then it disseminates around the world.
And that's basically how, in our own experience, the Internet diffusion the Internet work, diffusion of, mobile phones also works. So it makes a lot of sense to look at the, the the the the leading markets. And this particular instance, sort of, 3 of them, that's quite easy. And and then we we've looked at a series of of of sectors. Basically, we're looking at the, the renewable story.
We're looking at the electrification story. And then we're looking at the, supply chain. And, again, the question would be, well, why why renewables? Why electrification? Why are they so important?
And and this this this little macro chart, I think, seeks to summarize. So in gray, you have the, you basically you you divide up the world of energy into electrons and molecules. And the electrons is mainly or 60% at the moment from fossil fuels and, the molecules are about 90% from fossil fuels, right now. But the point of me is those are the 2 great battles. In the electrons, it's the, solar and wind.
On on s curves in the, in the molecule space, it's electrification, which is squeezing the molecule. We This one is very well known. I mean, this is an IEA chart. You get the same chart from BNF. Everyone kinda knows this stuff that China dominates the, the the manufacturing supply chain.
But the the reason why is is because China's outspent the Europe and the US 10 to 1 in the last 5 years. And and and it's actually not just a question of spending. China's also getting 6 times as many clean energy patents. So 80% of the total clean energy patents now are from China. And and as a result of this, China's has become the supplier of renewable energy technology to the world.
And and I should say, you know, go back 10 years ago, it wasn't us. You know, 10 10 years ago, it was, 20 years ago, it was US, and then it was Australia, and then it was Japan. And and, you know, lots of people have played their parts in this. But at the moment, China is leading the supply chain. When you look at the 2nd race, which is the deployment of solar wind, actually, Europe's in the lead, but all three regions are pretty much doing the same thing.
They're all going very quickly up the s curve. So this is solar wind generation. John on the left has a share of total generation. You see US and China about 15%, Europe just over 20%. But interestingly, know, they're all in this absolutely classic s curve.
And it's always worthwhile marrying this in mind because, you know, all the way up the s curve, you have all these clever people telling you why it's suddenly gonna stop. But it hasn't stopped. It just keeps on going. That's what s curves do. Anyway, so that's, the second race.
The 3rd race, we're looking at is EV sales, where, China basically only overtook Europe a couple of years ago. But they're also moving up an absolutely classic s curve of deployments. Again, we we had about 6 months ago sorry. 2 months ago, everyone telling us the EV story was over. That's clearly incorrect.
And I see that the, the IEA this morning put out a was it yesterday morning? Put out a note, basically saying the EV story is totally intact. 35% growth last year, 25% growth this year. Anyway, the point in this, everyone's just keeping on going up the escrow. But in this instance, China is leading.
But so far so good. So you might well say, look. They're all about the same, you know, US bit behind in in in EV sales, but it's not that difference. But there is one really big difference, and it's this. It's electrification.
So so if you go back to my original framing in that Mekko chart, electrification is actually a bigger piece of the puzzle, than than than solar and wind, at least at the moment. And this is where there's a big difference. So, basically, the US and Europe, electricity share of total final energy consumption, the chart on the left, it's been flat for 15 years, at around just over 20%. And in that period, China has gone from about 15% to about 27% electricity, as a share of final energy consumption. So we we have a story where, where China is electrifying, and Europe and the US until now haven't been.
So this is the really big difference in the race, in in in all of the races, actually, so far. If I look a little bit more detailed, electrification is quite interesting. So in industry, again, so China leapfrogs United States, in about 2016, almost caught up with Europe now. And people often say, well, that's because we outsourced everything to China. It's all you know, it's not a fair comparison.
But, actually, if you look, in in detail that electricity is a share of final energy, and compare, China to the US, you see that, actually, Chinese industrial demand for electricity is a share of final demand is 6 percentage points higher both in light industry and in heavy industry. So there's clearly a really powerful central government led push to electrify the industrial sector. In the building sector, US is ahead, but but once more, it's been kind of stagnant for 15 years. And, China's been catching up very, very rapidly, basically now caught up with Europe. And, I I suspect what will now happen is that it's just quite hard for the US to change because they've got so much cheap gas.
But, of course, gas in both China and Europe is quite expensive, so it's much easier, to well, not easier, much more feasible to electrify. And we'll get on to the future in a minute. So in transport, again, as you would expect, electricity is a share of final demand. China's kind of, let ahead of the other 2. But it's, again, quite surprising to see that in spite of all the talk about electrification of, the transport sector, it's still only in 4% in China because it's still quite early days.
Anyway, so that's the second part of the pitch. Here you have a, you have 4 races. China's leading in 3 of them, but most importantly, the electrification story is what distinguishes China from the other from from the other 2. So let's now look at a little bit at the future. So in the future, the, you got a you got you got a big catch up going on right now.
So so, basically, Putin invades Ukraine February 2022, and, the US and Europe both look around them as they did, of course, famously in the 19 seventies. 19 seventies, the answer was nuclear. This time around, the answer, was or is renewables. But then they realized that China was dominating the renewable supply chain. They better get their better get a grip and and get their act together.
So as a result, we will see a 16 fold increase in, in supply chain CapEx in US and Europe, still far behind China for what it's worth. But but nevertheless, a massive surge enabling these countries to start to compete, start to have their own supply chains, start to produce some of their own goods. And I and I should also say, because people have kind of a few people have said to me, oh, well, it's game over. China's won. It's complete nonsense.
I mean, as I say, 10 years ago, China had won. And then put on them in it, and they're winning. And there are actually lots of different areas where, the US and Europe can lead. So I'm listening. What I think is energy management software, where the, the the the US is in the lead.
So you could have a situation a little bit like iPhones where, you know, China's making the kit, but Apple is is kind of right at the center of the process and makes all the money. So, you know, energy management software, for example. And then I think it's also important to say, we're at this is a this is a marathon, not a sprint. So, you know, this is a 30, 40 year shift. And we're we are in the fairly early stages of it.
We're only only only 20% of, final energy supply has been electrified. Only, 15% of electricity supply has been electrified. So sorry. It's up for coming from solar wind. So the point certainly is that we're still at a fairly early stage in the race.
When we look at this future of solar wind, again, these are the kind of the chart on the left is our own s curve that I mentioned being a better forecasting tool than than than, you know, detailed forecast. Shows all 3 countries, or regions still going up, an an s curve. With BNF forecasts, a little bit more optimistic on, on on Europe, but it's a similar story. So actually, in the in the solar and wind, future story, all three regions continue to, to to to move up the s curve. There's not a huge amount of differentiation there.
In the EV story, again, they're all moving in the escalator. Actually, China's moving a lot faster, US kind of dragging its feet. But I I I think they they will also continue up a kind of classic escalator. Again, on the left is our pure mathematical framing. On the right, it's the actual forecast from Robinette, but they're both telling a fairly similar story moving up an s curve.
But, again, the big difference is electrification where, China's just just on a roll. I mean, they're going to get to 30% electricity share of final energy by 2025, almost without question. And they're heading for 35 by 2030. But, you know, in the US and and Europe, just just just you you read the stuff that the the the opposition to change is just very, very powerful. And in the US, of course, because I say gas is so cheap, it's quite hard to imagine, that, it's gonna pick up electrification.
The one area where, of course, we will get electrification is in Europe because, we're not buying Russian gas anymore. Gas is incredibly cheap. So I would expect actually Europe to be the higher end of its forecast. But, again, we're actually falling quite a long way behind China in this electrification story. Okay.
So that's where we are heading. Let me think a little bit through the implications of all of this stuff. So, I mean, the first one is is kinda obvious, but I don't think well, with the exception of the great Malcolm Hislop, who, as he mentioned, called this a while ago. But it's not, I think, widely recognized that this is a China led revolution. And therefore, there are all kinds of consequences of that observation.
And and the main one is that we we we need to think a lot more about prices and deployment levels in China. And I'll give you one classic example. My my dear colleagues, RMI, are always telling me that I'm wrong because, US offshore wind prices have gone up a lot. And therefore, there is no energy transition. And and and, actually, that's just a very small piece of the puzzle.
We have a, deployment of 500 gigawatts of, renewables last year. So the fact that 1 gigawatt of of offshore wind in the United States went up in price is completely irrelevant to the energy transition. And the reason the mistake that people are making is they are focusing not unreasonably on their own home markets. So what we want to do, you wanna focus on the leading market. Leading market, this particular instance, is China.
So so we need to focus more on what's happening in China and therefore less worry less about the, you know, the apparent barriers to change in the west and more about the solutions that are materializing in the leading market. And it's exactly the same thing. So if you had, you know, if you'd thought about the, the Internet revolution and and, you know, and ask my friends and neighbors in in in Oxford in in the year 2000, would there ever be an Internet revolution? They would have been like, no. There's no chance because the Internet's so slow.
But in reality, you know, people figure that thing out in in the US. It happened there first, then it rolled out to places like here. So, it it it is kind of fairly classic way of looking at technology shifts. The the second corollary of that is that this technology will spread to the global south. So, again, there's a lot of chat at the moment about, you know, we're not spending enough money in the global south.
We're not doing enough of the global south. You know, it's not happening, I read everywhere. And, of course, the point is you wouldn't expect it to happen in 2024. You would expect cost to fall very quickly. And then when they fall, you would expect deployment to happen.
And and, actually, that is now starting to happen. So my dear friend and colleague, David Gums in Caribbean, tells he's he's being offered solar panels today at $66 per panel, or a $120 per per kilowatt. And and, you know, you've got a payback of a year. So that actually was always the answer for the global south to get prices low enough. And then, of course, you do have to do support from, from from the banking sector.
You have to do, in a technology transfer, expertise transfer, training, which, again, RMI is very heavily involved in. But, we can expect this technology to spread to the global south. The the third observation is that because of Chinese leadership, the US and Europe will have to get their act together. So look, for example, on the left, share of global power. You know, they're falling.
China's rising. If if these two regions wish to compete at all, they're gonna have to, get their heads around the renewable sector both in terms of the supply chain, which we've seen, but also deployment. So I expect to see more initiatives to, deploy SolarWind more quickly, to solve the various grid problems, solve the permitting problems, change pricing structures, all the stuff we know needs to happen but is currently being blocked by incumbents is gonna have to change, if these regions wish to compete. So a couple of other points, couple of final points, and I'm gonna be sticking well to time here, Malcolm. So, well, as I mentioned, this is a marathon, not a sprint.
There's still everything to play for. I mean, you know, we've got, as I mentioned, early 20% of the way there in final energy. There's plenty of other reasons apart from, saving the planet to get involved in industrial leadership, jobs, equity, geopolitical influence, energy independence. Then you've got lower pollution, efficiency, greater resilience, lower cost, low emission, all this stuff. So there's a lot of reasons why these countries will get behind change.
And and as I say, the battle for the top end of the value chain software and services is still clearly wide open. And and there's there is a lot of work to be done. So so rising capex that we've just seen in in in Europe and the US is just the start. I mean, this is this this chart is is showing permitting times in years. You see in red China.
You see in, blue European Union and gray United States. And, you know, basically, it's taking a very long time outside China to do stuff. So, again, if people want to compete, they're gonna have to change their permitting, system. So we do need industrial policy. We need to tackle vested interests.
We need to to to cut the price of electricity. Probably the most important thing that needs to happen everywhere across the world is you need intelligent regulation to cut electricity prices or else we're not gonna get electrification. And, and then finally, and I've got some more slides in the appendix if necessary. But, you know, finally, I think we have to realize that peak China means peak fossil fuels. So the very, very rapid growth of this stuff in China, means that peak demand for fossil fuels in China is coming very shortly.
So debate whether or not, as Doreen Minerva says it was last year, the IEA is kind of saying next couple of years. DMV this morning said it was 2026. The, the Chinese government says 2030, but they always beat their targets. But the point is it's coming pretty soon. And, the moment you get peak fossil fuel demand in China, you then have 2 thirds of the global system that is to see the OECD and China with falling fossil fuel demand.
That means the global south is not big enough to sustain, a growth in fossil fuels. And this kind of, charts, it is is making that point. It's it's data from, from the IEA APS scenario. So China is the pivot nation as it as it, as it shifts, thanks to these extraordinary exponentials from, into decline of fossil fuel demand. So, I'm gonna stop there, Malcolm. And I think I've kept time, and I'm happy to, to debate what this means and where we're going.
Well, that was quite remarkable, Kingsmill. And I'm I'm referring, of course, to your keeping to time.
How was my summary of your argument?
I, you you did a fine job. You did a fine job, but but I have a question for you. And, before I I ask you the question, I'll everybody who's listening, if you would like to ask Kingsmill a question, please go down into your reactions at the bottom of the screen and click put your hand up, and then MC or I will, call upon you to, open your mic and ask Kingsmill a question. But I'm gonna ask the first one. Kingsmill, one of the things that the International Energy Agency has said is that as much a such a tremendous amount of capital that China has invested in clean energy manufacturing, now the e both the EU and the US have committed literally trillions to try to catch up in the next 10 years, but China is not taking its foot off the its foot off the pedal.
It's continuing to invest. There's a lot of concern about in the west about overcapacity is is how it's being described. My theory here, and I'd be curious to to know what you think about it, is that China is gearing up to go into the global south in a big way. That those are the markets where it it it's wide open, it's now cheap enough, and it will use the Belt and Road Initiative. It'll use some other kinds of mechanisms, to export and to help, those countries build out with its technology.
Indeed. And, so so so to be to be, yeah, I mean, that's what's gonna happen is that China China now dominates this space. It's got overcapacity.
You've got the global self, doesn't have the protectionist instincts, needs energy, needs growth. China's gonna supply it. So it's gonna be a Chinese led world, and we just gotta deal with it. That, I a very succinct, summary of, where I was going with that. Let's get into, talk to some with the folks who have their hands up. Laurie Frisky, you have the hands up. I'll let you you have the floor.
Thank you. Excellent presentation. I'm wondering if you can say, how much of China's electricity is generated by burning fossil fuels. The reason I asked that question is that in Canada, we are often sold the story that our oil is ethical and therefore more, you know, needs the whole world needs our oil And our LNG, particularly in British Columbia, is cleaner than anything they burn in China to to generate electricity. I'm wondering how true that is and what the trajectory of that looks like.
Thank you. Sure. No. It's a very good question. So, you see, I haven't made in this entire presentation a moral debate because it's it's very easy to subvert moral arguments. You know? Our oil is cleaner than their oil. You know, our our what is it? It reminds me of Borat. Our potassium is better than their potassium.
Whatever. I mean, it it's just a question of, ultimately, of cost. Right? You know, when you've got all of this new efficient, cheap, re renewable, electricity coming into the system and being harnessed through electrification, you're just not gonna need to buy, imported fossil fuels in such volumes anymore. So, I mean, to answer your question specifically on China share of electricity generation coming from fossil fuels, it's still giant.
I mean, it's still about 70%. But that's not the point. The point to me is the the growth of the new is so quick that it's going that we think and actually not just we, but, now the IEA as well also thinks that Chinese fossil fuel demand for electricity, generations peaked in 2023. And then when you do the math, it's not difficult. You you've got growth couple you've got growth coming through a lot at a 100% last year for solar of of deployment, you know, and and this year, I don't know, maybe another 20%.
I mean, they're gonna add, what, 300 gigawatts of solar wind this year? A bit more maybe. And that'll be another 4 100, 4 50 terawatt hours. That's that's as much as as as they could expect to, to get of incremental demand. So that means, you know, peak coal demand.
That means whoever's selling them coal better watch out because, you know, another 2 or 3 years of 20% growth and suddenly you don't need to import coal in. Anyway, yeah. Sorry. So that that I hope that's answering your question. So, you know, the the the ethics is neither here nor there with all due respect. I mean, it's just just, it's just demand.
I wanna chime in here, Kingsmill, because I've done it on a number of interviews on this question. In 2020, China passed the Xuantang policy, the 2 carbons policy. Xuantang policy, the 2 carbons policy. And and the the goal here, as I understand it, is to build up renewables to the point where the capacity in the coal plants can be reduced. Eventually, coal will become the backup to renewables.
So in Canada, in Alberta in particular, we talk about natural gas being a backup. China, where natural gas is only 2% of, power generation, they want coal to be the backup. And I think so when we talk a lot about, you know, why are they building these plants all over the place, it's because they're strategic, because eventually, they will be relegated to a backup role.
Yeah. I mean, it's in the same way as we we we, across the west, have got gas peakers. China China's, you know, gonna run with with coal peakers. But I mean, the really interesting thing will be the the proof will be in the pudding and and very, very shortly. I mean, you know, I'm making a classic analyst error of making a prediction and a time frame.
But, you know, the the amount of growth they're getting out of solar and wind means that they will be in a position to significantly curtail, coal demand, by the end of this decade. And, I mean, as you know, you have the 2 government targets of 2020, 2030, 2060, but, I mean, they also have this peak cold target 2025. So, you know, it's all basically right in front of us. This is what I always find strange in this debate is is, you know, people absolutely confronted with the facts every day. And and if the Chinese government said they'll do this, and they're doing it, and then they're beating their targets year after year after year.
So, you know, it's not rocket science.
Just another quick comment. We discussed this in the presentation, prior to, this event, and the point was made that Canada is the land of incumbents. And Alberta is absolutely ruled by oil and gas and electrical utility incumbents, and incumbents gatekeep the the information. And so the kind of things that we're you're talking about and, never get discussed publicly, and Canadians had just don't have a clue that this is happening. And Albertans, in particular, don't have a clue that it's happening.
So how you can't have a conversation about things of which you know nothing. And that's that's a major problem. It's not only just that people see and don't understand, but they also don't see if the conversation isn't happening in the media and amongst the politicians. Anyway, we'll go on to the to the next question. Wanda Lauren, you have the floor.
Thank you. So I you know, Alberta, again, the nuclear thing has come up. And I just think, with the feds also supporting nuclear, saying it's part of our green switch, I just think it's so slow. It'll be so slow. It won't even be a starter.
And I kinda wonder if, are are is the province putting any money into nuclear, or are they just talking? Because I I think it's just gonna be so bloody slow that it's not even gonna get off the off the ground. Can't. I mean, with solar and wind price dropping so fantastically. Yeah.
Well, Biggsville, maybe why don't you why don't you take a a crack at that, and, then I'll I'll add a few words.
Sure. Sure.
Well, I I defer to Malcolm obviously on the, on nuclear in Canada. But, I mean, at a global level, the the nuclear actually, nuclear is a very easy story. Nuclear provides 3,000 terawatt hours of electricity a year roughly, same as it did 30 years ago. In the meantime, solar wind have gone from nothing to 4,000, and they're going to 20,000. So it's just like nuclear, whatever, 3,000, could be 4,000, might be 2,000, probably a little bit more, but it doesn't really matter to the global debate because it's just, you know, it's a fraction of what's going on in in, you know, with the adults in the room.
So for certain countries like France, it matters. You know, for other countries at the margin, of course, it matters. But but a global level, nuclear is just not it's just not interesting at all. And and sorry. The other final point, no, I don't know the market is, you know, just about cost.
I mean, as you say, sort of went on these learning curves. The cost get lower every year. It's at $40 per megawatt hour at the moment. And it you know, it's it's heading towards 20 or 30. And then nuclear is still messing about at a 100. And, you know, in the UK, it's like 200 or something. So, you know, it's just not it's not it's not a it's not even worth talking about, to be honest.
One of the problems with an incumbency culture, Kingsmail, is that, people are looking for drop in replacements so the existing system can be preserved. You can't, wind and solar are not drop in replacements for thermal, for coal and gas. Once you begin to adopt significant quantities of wind and solar as Alberta has, it already it's already 14% of our generation, you have to begin to reengineer the grid. But if you drop in nuclear in place of coal or or or, gas, then you don't have to reengineer the grid. And, of course, the powers that be in Alberta, both the, the system operator, the government, and the utilities don't wanna see the system change at all if possible.
So the best case scenario from their point of view is wait for solar or wait for the small modular reactors to become economic and then start replacing thermal plants with them. And the problem there is timing and the uncertainty of of nuclear tech of SMR technology. So that's where some of the pushback comes on, against the criticism of SMRs.
Wow. Amazing. I mean, as you know, even China's given up on SMRs. And, you know, it yeah. But why why didn't you just do wind, but it works? You've got lots of space.
Well, that's grist for another webinar. We'll have you well, we'll have you back for that one. Doug Joe Doug Joss, you are up, so you have the floor, sir.
Yes. Good afternoon. Calling in from, listening in, from Quebec. Wanna thank both of you, first of all, for just providing excellent information, to the I just consider myself a layperson in this field, but incredibly interesting. So I I was watching Oppenheimer finally last night, and, one of the it dawned me that with this topic here that I've always been aware that and there's certain an author's written a book basically here in Canada about, like, taking a wartime approach, essentially, the World War 2 approach to, climate change.
Right? So Oppenheimer obviously marshaling $2,000,000,000 to make an atomic bomb with, you know, no expense spared. I'm wondering, are market forces in the United States and Europe, enough right now with the IRA, all the regulations and and, incentives in Europe, are they enough for, those 2 entities to catch up to China, which is obviously way, way ahead? Or could there be an f an a a case made for, like, a I wanna say, like, a ministry for the future, but I don't wanna say that. I wanna say something like, okay.
This is what we're doing. Either Biden makes it a national, emergency, which then frees up resources for this to be tackled. Is is essentially, is is Market Forces right now with everything, is that gonna be enough to catch up and or meet goals, or do we need something more, like and it's tougher democracies to do this because we don't like to do this, but when there's an existential threat like climate change affecting us right now and and getting in even worse in the future, is that something? Has has any modeling been done to compare the 2?
Well, yeah, there've been lots of modeling on on on this issue, and you're completely right. I mean, market forces will get us to will get us a decarbonized system eventually, in a 21100 or something. But by then, things may have spun out of control. So and if we wanna get there without destroying the planet, then we certainly do need industrial policy. And and and furthermore, I need more obviously, China has got an industrial policy.
So if we want to compete in, in in Europe and US, you know, we cannot just leave this to market forces and and and and continuity. And I I would really stress incidentally for what it's worth. The key issue now that regulators need to to get on with is to retool their, their their regulatory systems, their pricing systems, for renewables at scale. And sounds really simple. And I don't think it's actually that hard, but people are just still not doing it.
So, you know, it it it's detailed stuff like time of use pricing, you know, re re removing, structures which favor, fossil fuels over any competition, and all kinds of really detailed structural, changes. And the absolutely core number that I think we should all be laser focused on is what is the price of electricity per per megawatt hour? Well, sorry. Retail price of electricity, should we say, per kilowatt hour? You know, at the moment, it's 10¢ in United States, 10¢ in, at least last time I looked, 10¢ in China, and and basically 20¢ in, in in Europe.
Actually, I'm not talking about the wholesale price. But, anyway, the point to me is it's far too high in in Europe for peep specifically, and and and people need to be laser focused on sorting that out. Anyway yeah. But you're right. We do need industrial policy if we're gonna compete.
I I wanna frame that a little differently, Kingsmill, because I think I know where Doug is coming from. In Canada, we have a long history of public ownership, Crown corporations, particularly on the electricity side. Most of the public utilities in Canada are actually owned by provincial governments. In so the question then becomes, do we use public ownership as a policy tool to advance the pace of the energy transition to electrify quicker on the supply side, and to, increase adoption of electric tech technologies on the demand side? In terms of industrial policy, I'm not sure, that there is a serious country on the planet that doesn't have an indust clean energy industrial policy now.
It has just become accepted. It's the IRA, and it's the Green New Deal industrial deal in, in Europe, and it's everything China does, has an industrial policy component. Canada has its own industrial policy. That's the table stakes to play in this game is industrial policy. And then the question I think that Doug was asking was, what about, what about public ownership as one of the part of an industrial policy?
I don't think you need ownership. I mean, you know, first of all, the government has neither the expertise nor the knowledge sorry, neither the expertise nor the capital to do everything. But what they do have is a regulatory, and and and rule setting, knowledge and capacity, and they need to do that and then let the market go on with it.
Okay. Let's go, Chris Wolfe. You were you did have your hand raised, but, Dave Patterson, you do have yours. So Sorry.
I can I can chip in here? Sorry.
It's just Okay.
Chris? Couple of comments. Yeah. It was, interesting to hear from Kingsman that Kingsman that, China's given up on the small modular reactors. I thought that would be the only place where they could do it, cost effectively.
But I guess the point is that, wind's so much cheaper. Some some information about fission and fusion. I understand that the fission based SMR in in Idaho was canceled because it was too expensive. And now, the US is looking at commercializing fusion, and there's a couple of probably 3 or 4 fusion companies that, are promising to deliver fusion power, you know, in the next 5 to 10 years. Do you think fusion has, is is there on the horizon, or is it still 10 years away?
Well, I hope so.
I mean, I hope it works. Hope it's close. Yeah.
I mean, I I live I live, just outside Oxford, in fact, next to Carlisle, which which is probably the global center of of, nuclear fusion, research and several companies doing it there. Not that I have any insight into the particularly, but anyway, it's great. I love it. If I hope it works. You know? Let's see.
And and one of the things
to get on with it. We can't just sit around waiting for it to work.
Absolutely. There there's a a technology out there that's a little controversial, LENR, low energy nuclear reactions, specifically a company called SunCell. They purport to have, developed a product over 30 years kind of, having its genesis around the whole cold fusion, thing back in the nineties. And they they say they're about to put out a product that'll put out electricity over the life of its service at a tenth of a cent per kilowatt hour. Brilliant.
And bring Bring it on. Bring it on. Yeah. The more
the more energy you've talked on too. Goodness, I guess. Kingsmill, I I wanna bring you up to speed on a a little company in, Calgary called Ever Technologies, which is advanced geothermal, and it, is undertaking its first commercial project just south of Munich, Germany. And it has what it plans to do is not well, it plans to license its techno its technology, its IP, so that drilling companies in particular, excuse me, can scale up using their ideas and their and their, and their, their tech their technology. And so one of the when it comes to SMRs, my answer is always the same.
Have at it. If you can if you can produce 1 and and it can do it at an economic price, go build them. I mean, we'd be happy to see them. In the meantime, there are other competitors, new emerging technologies like advanced geothermal, that are working in the field now, and I think that's, better the the, bird in the hand and the, the 2 in the bush. Anyway, let's get to Dave Patterson. Dave, the, floor is yours.
Okay. I did, unmute myself. Sure. So I just wanted to highlight the, you know, the sort of the the really the too expensive, too slow reality of nuclear in Canada. We haven't built anything really since, what, the eighties?
And now we're refurbishing Darlington and Bruce nuclear power plants, and I think it's like 13,000,000,000 each, so that's 26,000,000,000, and it's it's gonna take, what, 10 years plus or more? And they're now, I think, Hydro 1 is talking about refurbishing, pickering. I think they're gonna just decommission picking, but they're, I think, they're talk thinking thinking about rebuilding Pickering. It's gonna be another, you know, 13, 14, $15,000,000,000. So, yeah, it's basically, if there was any really big potential there, we would have had, you know, can little can do reactors everywhere across Canada in the last 40 years, and but there's none.
So that's really that's my thoughts on it.
Fair enough. And, James Bell, I will point out that this is the parade of the engineers. It's one of the strengths of the energy circle is that we have so many, technical people, like Dave and Chris are both engineers. Roy, who's coming up, is a de facto engineer, and there's a lot of, technical expertise that gets shared in the meetups and other, campaigns that we're we're working on. Do you wanna address the the CANDU? Anything any comments to make?
No. No. I mean, you're right clearly on this this nuclear point. I mean, it's just all this stuff is just quite slow. I mean, I should say I do also love geothermal like you, Markham. And, but but again, it's just a question of numbers. Right? You know, last year, we installed 444 gigawatts of of solar and, you know, a 100 and whatever is a 120 gigawatts of wind. And, you know, what was it? A couple of gigs of of of geothermal.
I might get it runs more often, and it's it's fabulous potential. But and if and and I don't anything anything against it and all the rest of it. But I, you know, I'm just trying to model what I can see.
Exactly. Roy, you're up, so the floor is yours, sir.
K. Nice presentation, Kingsmill. Thank you. Yeah. I a couple of things.
Nuclear, I do have an issue with nuclear, and yet I'm in favor of it now because the alternative of having the planet turn into Fiji Bay Coven is is is not good. But, I mean, fusion is a pipe dream right now. We the cold fusion guys managed to get everybody excited for no reason. Efficient, unfortunately, we still have not come to grips with, as the oil and gas and fossil fuel people haven't come to grips with their waste, neither has the nuclear industry. It is the most poisonous substance mankind has ever made.
Oh. It's gonna last a 100000 years, and they're talking about storing it somewhere. There's never been a government on the planet that's lasted a 1000 years. Well, maybe some of the early ones. So that's an issue, but I'm not saying no.
We need all hands on deck. That's the problem. So if nuclear can help get us out of this mess, that's great. But, you know, the oil companies have convinced us for years that they're the only alternative. And here we are looking at geothermal, which has been known probably way before any kind of oil and gas.
People were finding hot springs and doing things with them. Hydro power, all that is is important. We need it all. But what I wanted to say is that, you know, Doug made the comment about the existential problem. Unfortunately, we have a whole bunch of people on this planet who still deny that there's a problem at all.
And I had a interesting discussion, if you wanna call it that, recently with some of these people who were ex oil and gas executives. And make no mistake, they're into it up to their eyeballs. These oil and gas people have been spreading the disinformation about everything from EVs to, you know, that's not gonna work. And and the point is, how do the I think there's gotta be an important, effort to try and and for once and all, convince people this is a serious existential problem. It's so difficult when you look at people driving here on Vancouver Island, pickup trucks the size of my house almost nowadays.
Right? They're huge. And they idle them. They sit there and idle them, you know, to run-in an air conditioner on a hot day and generate fumes and smoke and all this. They don't care. And I and it's
Roy Roy, is there a question there? Is there a question in there?
There is a question in there. Where is the where is the effort to try and, you know, we're we're coming up with all these technical issues. Right? Technical things. What group where who is trying to to do this political you know? I mean, face it. If if Biden gets booted out on the next election, so much of what's happened is blown away. So where do we where do we get an initiative started or continue to build to stop these people from basically trying to stop everything we're trying to do?
Well, I guess I have 2 two answers to this, if if I may. If if I may. So so the first is the the, I guess, this framing of this, as a as a as a race to the top. And, again, we kind of deliberately have not talked very much about, carbon and the planet, but we talked about technology leadership. And I think that resonates in certain quarters that this is a technology right to the top, and you don't wanna be left, you know, swinging swinging sticks and spears at somebody when they come with the machine guns.
So that is to say, trying to compete, with China when it's got a much more efficient electricity, driven, system. And and anyway, so I think the race to the top is a framing which will certainly appeal to, a a different range of people, should we say. And then the second argument, and we didn't actually address it in this piece because we're actually doing a separate piece about it, is efficiency. And that, you know, that, Roy, is a very large part of the answer to to channel the great Amory Lovins. There's massive efficiency gains coming as solar and wind go up the s curve, as EVs go up the s curve.
Just the mass of the way that that the energy gets counted means that you're gonna actually get a a very significant leap in efficiency gains, which massively curtails the the pressure that that that we're under. So it's not it's not in and of itself sufficient. You need both efficiency and renewables. But, yeah, it's gonna help a lot.
I'm gonna just chime in on here a little bit, Roy. And, when I get back next week, you and I are gonna disagree a bit on this one, and you can come over to my backyard. We'll have a coffee and discuss it at at greater length. But my point is that I rarely emphasize greenhouse gases and climate change because that takes us down something that, Kingsmill addressed earlier, which is the moral argument, which can be then just be dismissed. Whereas if we're talking about the energy transition and disruption in in existing, energy systems, the rise of a new energy system that will force the will eventually displace the other one, what policies are required, it's an economic argument.
It's a pocketbook argument. It's a jobs argument. There are it's it's a a harder thing to dismiss. And, frankly, if climate change is the side of the coin that is the problem, the energy transition is the solution. That's the other side of the coin.
So I prefer to focus on that one as opposed to, you know, what's been what's been done previously, why, you know, climate change and greenhouse gas emissions and so on. Anyway, enough of my blathering. James, you're up next, so you have the mic, please.
Thanks, Mark. Kingsville, really interested to know what's happening on the demand side of the marketplace in the way of analysis and how values are changing, especially younger generations, and to what extent those that that shift or whatever shifts are happening are actually being included in the modeling. So shifts in demand basically associated with shifts and values and so on. So over to you. Thanks.
Sure. So, I mean, in in terms of demand, the, so electricity demand at a global level is growing at at between 2 a half and 3 percent a year. So that's, at the moment, what most people have got penciled into their models, and and it seems to me fairly reasonable. Well, although, again, Aimery will probably say it might be less than that because or should be less than that because of efficiency gains. We're leaving that aside, because of electrification ongoing, changes to get 2 and a half 2 and a half 3%.
There is a very live debate about whether or not sorry. And then the second point is that useful energy services will also continue to grow as they have done for many years at around 1% per annum. But but the really interesting and and slightly complex thing to seek to explain is that primary energy itself is gonna peak, quite soon because you get these efficiency benefits coming through. And, so, yeah, I mean, when when we when we model this out, what I found it fascinating is that your global GDP growth is basically slowing down because you've got lower population growth and you've got, a shift. Sorry.
And China's and China's not growing so quickly, well, those are your 2 key factors. And then at the same time, your efficiency gains are going up. And what's happening is those two lines are getting really, really close to each other. And what that means is the primary energy demand is is is is also quite likely to peak. And and for what it's worth, the IEA's central oh, it's it's not central.
It's the APS scenario. I think it's their central scenario. That has exactly this going on where efficiency gains overtake, GDP growth. So so therefore, primary energy demand growth stops, and therefore, you have renewable energy coming into a kind of stagnant system, and and and that's when you get real change coming through.
Paul, you're up next. You have the mic, sir.
Thank you very much. I was going to ask you also a little bit about energy management. You mentioned something about software that's coming about. What kind of technology are you seeing in that area? And combined with that is also on transmission.
I'm wondering if you if if you if you're seeing anything in the way of new technologies or actually trying to link markets using long, transmission lines to do that. So some of it might be intercontinental, Certainly, you say within Europe that you might see that or even say in North America that you might see longer transmission lines to bring areas where there is a surplus to areas where there's a demand and vice versa. And also some of the technology that's being used to to move more electricity on existing transmission lines?
Yeah. I mean, the the the short answer to your question is, yes. All of this stuff is happening, and it's absolutely fabulous. And I, I'm very excited about it. And the reason I didn't really, I didn't centralize in this piece, I guess, is because everyone is trying to do it.
But yeah. I mean, look. The the the the software is as as everyone on the call, I'm sure, knows software is coming along now to, in all these grid enhancing technologies to enable you, to use dynamic line management in order to send a lot more power down lines. You've got battery storage coming in, also enabling you to have a much more intelligent way of of of of using, power lines, getting a lot more, more more out of less. You've got better power line technologies coming through, which also enabled you to carry more electricity on the same right of way.
And then at the same time, you've got new software coming through. You know, mine supply, for example, Octopus, in in in the UK is is now basically selling me cheap electricity in the middle of the night and charging stuff up, and they control the entire process. So there's loads of fabulous stuff coming on, in in in the software and services and, grid enhancing technology businesses. And then finally, another technology I'm extremely excited about is, subsea cables. I think subsea cables will change the world.
I mean, the the most exciting project at the moment is well, the longest project in the world has just been completed between, the UK and Norway. But there's there's this Xlinx project from Morocco, to the UK. And if it's not the UK, then to Germany. If that thing gets off the ground, it's just gonna unleash a massive cornucopia of projects, you know, because you could then link loads of places which are 3,000 kilometers apart. So, you know, it's really, really exciting, and it's one of one of the issues that will help solve the, you know, inter the intermittency problem.
Paul, I'll just quickly, direct you to episode 269 of the Energy Talks podcast in which I interviewed, Gerhard Schlage, who is the chief technology officer for Hitachi Energy. And he talked about all all of the various digital technologies, digital controls, power electronics, and there's a bunch more that I've I've since forgotten about that are re basically reengineering the grid. And how when you reengineer the grid with those technologies, then you actually, when you incorporate wind and solar, even though they're intermittent and inverter based resources, you wind up with a better grid, more flexible, more resilient, and and at much lower cost. So I'd I'd recommend go have a listen to that or read the transcript. And, because it's a if you're have a technical bent, Gerhard provided a lot of information.
Okay, Jeff. Maybe maybe
as a
maybe as a follow-up, could I ask, does China have the lead on that, or is it more Europe and, North America?
So so, in terms of, high voltage direct current lines, I think, well, not I think China does have the lead at the moment. And I think I'm not correct if I'm wrong, but it's something like 80% of all, HVDC lines in the world that are are currently in China. But, you know, but they are being built elsewhere as well now. Thanks. Yeah. Sorry.
Okay. I gave, Kingsmill a lot of static about finishing on time, and he's done a very good job of keeping his answers short. So we're gonna, have one more, and then we'll be in, we'll be pretty much right on our hour limit. Jeff, if you wanna open your mic, you've got the floor.
Great. Thank you. I I just wanted to say that whatever we end up using, is gonna have to be economically viable, and and there's lots of technologies that that will be. The United States, if they choose not to continue along this, green energy path, they'll just become irrelevant. We already see the Middle East, making huge investments in renewable energy.
What I want to mention is, I don't know if you're familiar with ocean thermal energy conversion, but my book is all about doing that in the Arctic and using the, the warmth the relative warmth of the Arctic and and southern oceans to generate electricity. And, basically, the idea is if the problem is global warming, then shouldn't be we'd be maximizing global cooling. Any thoughts?
Brilliant. I'll re I'll buy it. I'll read it. Thank you. Thank you, Jeff.
I sent you an invitation on LinkedIn.
Thank you. Brilliant. Great. Thank you, Jeff. Everybody, we've reached the end of our hour. Wanna thank our guest, Kingsmill Bonthe. Again, sir, always stimulating conversation, and I especially appreciate you, citing your sources.
My pleasure. Oh, yeah. Sorry. You you indeed. Yeah.
There you go. It was it was a joke. It took you a while. That's okay. I get there in
the end. Sorry, It's quite
late here. Anyway, thank you very much, everybody. We'll, and our apologies to anybody who had trouble logging in. It was a Zoom problem. We're gonna have to check into that, but, we will be having another live event.
And for anybody who's interested in becoming active in some of these issues, furthering the conversation in Canada, please join our energy circle. You can find us on, on Facebook and also talk to MC Breadner, who's here. She's our organizer. And, thank you very much. We really appreciate it. We'll see you next time.