Clean Energy in a Divided World: The Global Power Struggle!

0:00I have been with Rasmussen University since 2013. All virtual. All of my professors throughout the entire journey have been nothing but supportive of making me reach my dreams. Rasmussen professors, they want to see you grow so that you can be what you went to school to be. I'm so thankful for Rasmussen University for being able to make it so easy and seamless. Rasmussen University. Find your seat and start now at rasmussen.edu. I'm John Morgan of Morgan & Morgan. If you've been injured in a car accident, call America's largest injury law firm. For over 35 years, my mission has been to deliver more for our clients, to deliver more for you.

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1:19Our three free YouTube channels on EVs and cleantech are funded by our fun-packed, test-drivetastic events in Farnborough, London, the South West, the North, Melbourne and Sydney, and next up, Everything Electric, Melbourne. and new for UK viewers. You can now buy a battery EV and much more at everythingelectric.store. Now, back to the episode. That was embarrassing. Sorry. That was a good start. I walked on with a pen instead of a microphone. The microphone in the pen is quite good, if you're a lunatic. Ladies and gentlemen, welcome. And our first panel today is obviously very, very timely, and it's a very important topic.

2:03So it's the title, Tariffs, Tensions, and the Race to Electrify, How Global Politics is Shaping the Clean Energy Transition, is a topic that we internally discuss quite a lot because there's obviously a lot of positive and negative news in the news cycle. Obviously, the negative news obviously catches the editor's attention, and so they'll go with that. But every now and then, a little bit of positive stuff leaks in. And so I'm sure many of you will be aware of this, but there was a very recent report, I think, from the International Energy Agency that renewables produced more energy around the world than coal for the first time, which is a kind of fairly important tipping point.

2:44That actually got into mainstream news. It was mentioned on the BBC, Totally Impartial Broadcasting Channel, and they said all those things, but they added, obviously, not at night or when it isn't windy. Well, thank you for that, because none of us had ever worked that out. we all thought solar panels work really well when it's pitch black at night because we're complete morons sorry i'll move on so i'm joined thankfully by really nice people who actually understand things and are very intelligent uh right next to me is aj alawalia thank you very much who's head of supply chain at renewable uk next to aj is james court public policy director for octopus Electric Vehicles.

3:28Next to James is Tim Dexter, Vehicle Policy Manager at Transport and Environment. And next to Tim is a very, very sudden arrival, heads no slide because we had a bit of trouble with all our panels. This is Tanya Sinclair from Electric Vehicles UK. Please give them a welcoming round of applause. Thank you very much for joining us.

3:50so Aja can I start with you I mean uh what is what how do you feel the situation is at the moment are is we I think we are seeing a sort of kickback a pushback against you know being virtue signaling tree hugging renewable nonsense it's all garbage let's start fracking um thanks Robert um look I think um some of the key messages I wanted to get across recognize in terms of the context of things is how over the last 10 to 15 years we've all benefited from the the cost of energy or particularly things like solar pv or wind turbines and the whole supply chains have seen this massive reduction in cost and now what we've seen is since you know conflict in ukraine and other supply chains and commodity prices and cost of energy increasing as well in some parts is how the cost of that supply chain is increasing as well So this great and fantastic journey we've been on with particularly micro-renewables, if you think about people's homes from a domestic perspective, is that that cost profile has reduced and that's enabled this transition to happen.

4:54I come from that sort of larger offshore wind space. And now what we're seeing is the cost of some of these installations and these assets increasing now. And there are various different reasons in and all around that. But one of the other things to take into consideration is how, yes, we want low-cost energy to feed things like our batteries and our EVs. But we also want to make sure that there's positive stories of local supply chain content in the UK as well. And there's great evidence for those factories and facilities coming online at the moment in the UK. But also we want to see so much more and recognising the new government and understanding what their interests are in creating those things is something that's very much part of my role.

5:34Right, right. James I mean what what I feel is that if there has been any kind of negative PR or spin or kind of pushback against electric vehicles in particular it really hasn't worked I mean we're just seeing this constant increase in demand for electric vehicles you can just witness it on the on the roads I mean there's more of them on the roads than they were five years ago yeah and I think it has almost been sort of a constant line up. And I think we're now into, I think it's 36 months in a row that electric vehicle sales have gone up. We're nearly now one in four cars, new cars sold in the UK are electric.

6:14And we were so close last month. And I think it might happen in the next couple of months is that electric vehicles are going to overtake petrol. I think petrol was around 26, 27 % last month. This is new cars. These are new cars. So within the next couple of months, we could see that EVs overtake petrol in car sales, which is huge. And if you're trying to think back to sort of 2015, 2016, 2017, actually me and Tanya were still working around. Tanya at that point was sort of still, we were both these two. It was really new. It was like, and there was discussions going on about whether it was going to be electric or whether it was going to be hydrogen.

6:50And then you sort of fast forward to 2018 and there was a 2040 target and a 2050 target. And you think, God, those are ambitious. And then you even look at the EV target, the ZEV target, the targets that are in place for sales that were passed in 2019, 2020. But we're hitting these targets year on year. And I think the other thing to look at is the cost of cars. And we're seeing a lot of them. I'm not quite used to it. I've only been in corporate for a year. So I should probably say there is a lovely Octopus EV section where you can see a full range of cars. but names that you would not have heard of five years ago you look at byd and they are overtaking some really established brands and that's because they are now cheaper we are beginning to see now that equivalent cars from petrol to ev we're beginning to see the first time that evs are now cheaper than petrol and that is going to become the norm in two years time we'll probably hit price price priority around on average, and then the whole thing is going to kick off.

7:55Yeah. So probably I'll tempt sort of my thinking and some of my next answers is, if you see the pushback from OEMs and certain governments, the big question you have to ask is, do you think that EVs are just going to be the norm in 10, 15 years time? Do you really think there is going to be a market for petrol cars in 10 to 15 years time? If your answer like me is yes, that sorry no oh he's just been fired here's the ex electric vehicle man from octopus well i should say my new contract starts for yeah i'm starting for stalantis tomorrow i forgot which way i i've pondered the question there um yeah i believe that in 10 15 years time there will not be petrol cars there will not be a market for it if you think that too some of the moves coming out of the governments and the oems is mad you see the future of 10 or 15 years time and you're desperately trying to cling on to what is going to be a dead industry.

8:50It doesn't make any sense to me. I mean, just very quickly before we go on, when I was in China earlier this year, and I think I witnessed, in a sense, the future in many ways in terms of technology, not necessarily in terms of human rights and politics, I'll leave that there, but in terms of technology and the way that their logistics run and their infrastructure is extraordinary. But we were walking down a very busy street in the middle of Shanghai. All the vehicles were electric, the buses, is the rubbish vans, the delivery vans, the scooters, all of them 100 % electric, all the cars. And then we had...

9:26And it was a Ferrari. And what you saw was what will happen in the future is really, really wealthy people might buy petrol cars in 20 years' time. They'll be incredibly expensive. They'll be really difficult to refuel because there's only one refilling station per city. You know, because who's going to buy petrol by then? and it's the exact opposite of the beginning discussion around electric vehicles are there only for rich people who want to virtue signal and blah blah blah that's it that will be turned on its head only wealthy and slightly annoying people oh maybe they go together naturally not all of them um you know will buy petrol cars you know i think there will be a few left i think it will you will look a bit kooky you will look a bit kooky yeah yeah um uh tim you're what i mean Apart from cars and apart from the very localised UK, where do you see the big changes in electric ground transport?

10:22Is the UK and Europe ahead? It's very hard to tell. I've just been in Denmark and you go, oh my God, I'm just in traffic jams full of electric cars. That adoption has reached really high levels. How are we doing in Europe? I think across Europe, we probably have two different perspectives on this. One which is quite paternalistic in terms of we feel that we're probably a world leader in this and we should be and that we're far more modern than a lot of the rest of the world. I mean, we definitely are in terms of America. That's definitely without a doubt at the moment. And then one that's also complacent, which I think James was getting at as well, which is the fact that while we kind of have access to electric vehicles, there's no real sense of urgency from government or OEMs about making sure that we're driving this out as fast as possible.

11:10because this is a real risk. As James said, this is a question of, do we want to have automotive industries in the UK, in Europe in 10 to 15 years' time? Or do we want to see that all vanish and just be subject to a load of cheap imports from China? And that's great to have those cheap imports, and it's important for a lot of people. But unless we make sure that we've got something that's competitive across the UK, within Europe, then that's all going to disappear because there won't be a viable business model for those organizations to hold going forward. And then when it comes to that kind of paternalistic approach, we imagine that we're doing really well and maybe we're making so much progress.

11:49Do we need to be going so far so quickly? But you look at some of the emerging economies, the rate of progress there is astounding. Vietnam barely sold a single electric car in 2021. They're reaching almost 50 % of vehicle sales being electric at the moment. So they're almost... It's been almost overnight. Yeah, incredible change. Straight to electric. And that's because Chinese OEMs are coming in. It's a similar picture with Indonesia. We'll probably start to see it more with India soon. So there's a real risk that we start to fall behind, not just in terms of manufacturing, but also in terms of consumer markets too.

12:24I think it is the thing that really blew me away about China. I won't go on about China too much, but it was the scooters in a way. The cars, I've sort of seen them. They're still cars. It was the sheer number. So it's in the hundreds of millions globally of scooters. If you look at electric powered ground transport, the vast majority has two or three wheels. And then there's this sort of icing on top of the cake is the cars. And it was one time on the corner and it was not flash and it was not a tourist area. Bit of a scruffy shop on the corner of a street in Shanghai with a little battery exchange thing.

12:59And I was standing there with Elliot who presents some of our shows and people just come on their scooters. they get out, flitching, take their battery out, chug-chug. This is like a 70-year-old woman. She'd take a new one out, put it in, chug-pum, off she went. That was quicker than stopping at a garage, getting a... It was quicker. It was more convenient. What were you doing in this dodgy street corner in Shanghai? Elliot took me there. He said, you're like this. Very dodgy. No, it was a perfectly respectable street corner. Tanya, I mean, you're... This is an area that I find fascinating and terrifying is sort of the interaction between industry and government and the legislation that's going through.

13:37And then the kind of hints I've had at the force of the leverage that, for instance, the fossil fuel industry has over government. And that's what you're dealing with directly. I mean, are you still, in the middle of that maelstrom, are you still feeling overall optimistic about the shift to electric ground transport for just in that case? Yeah, this is a really interesting question because that terrifying space you describe, I've been working in it for 15 years. So I really would have thought in that time that we would have increased the education level of governments and people in positions of influence to be able to make policy in a way that understands kind of how quickly this industry is growing.

14:20That said, I think what we're actually having is due to, I'd say, misinformation and disinformation out there is a kind of backsliding of knowledge. And yes, amongst consumers generally, but also amongst politicians, counsellors and other people that are in positions of influence to shape our policy. So part of the work that we're doing at EVUK is going out there and addressing that misinformation head on and ensuring that we can all enjoy a market that's continuing to grow and continuing to prosper. Right. Do you mind if I jump in? Yeah, please do. I was going to turn to you. Yeah. And I guess if I can just build on what Tanya said there, I think certainly in the EV space or where people are expected at a local level to make decisions or see different things happen in their vicinity or their locality.

15:07For us, in terms of where does the power come from to charge your vehicles, we talk about this social mandate that we as a country have as well, which is, okay, well, if you do want to build these onshore wind farms or these offshore wind farms, if you do want to have these grid-connected energy storage systems and this massive amount of rewiring that we're going to see across the UK with regards to grid reinforcements, well, how is that also benefiting, not just in terms of clean power, but how is that actually benefiting us as a society? And one of the key messages, I'm going to keep coming back to it, which is that there's great opportunity in the UK to see new factories and new facilities which create those jobs for people in the UK as well.

15:50And there's already great examples of cable factories being built in Scotland or the north of England or new monopile factories being built in the northeast as well. It's a brilliant story that does exist, just to say that it's happening today. But in terms of all of that production and all of those things coming to the UK, we are seeing more and more of it as well. Right. Because I think that is a critical thing. I mean, my argument has always been, do we want to import the fuel? I mean, just importing fuel, which we do by the, well, it's billions of dollars a week that goes out of our economy to pay for the fuel that we burn once in combustion engines.

16:26You know, there is that argument, which I think crosses a lot of the political spectrum. It's not tree hugging. It's like, that doesn't make any economic sense if we can produce the fuel we need in this country and employ people to make that possible. That is a very... I mean, it's one of the biggest geopolitical reasons why you want to move to electrification and why you want to move to EVs. It is sort of, I actually remember, God, this is going back in time. Sort of, this was 2006, 2007, so still sort of Iraqi, George Bush, sort of war in the Middle East. Yeah. Thank God we've put all that behind us.

17:02And I remember this big, scary sort of five-star general coming over, a proper neocon American general. And he came over and he addressed a green sort of environment conference. And he just said, every time you fill up your car, I'm not going to do the accent because I know this is being recorded. Every time you fill up your car, you are funding terrorism. And it's like, wow. Wow, I've never dared say that. But it did begin to see, so you can see. and this sort of brings a new political dynamic in, but it is a reason why a lot of countries are moving towards electrification and EVs is because they want to break that reliance.

17:39From that to sort of another point that we also really need to crack though, is that if we are going to be asking people to electrify, we need to make sure that electricity is cheaper. Yes. And that is the biggest thing because we are beginning to see policy costs come on. Electricity is still getting more expensive. And I think for things like, especially public charging, if you're like me and you haven't got a charge, a driveway and you haven't got your own charger, there is always going to be that premium. Now, if you're on a low-cost overnight EV tariff from, let's say, Octopus... It's so unfair.

18:09In a sense, you're very privileged. I'm getting into the corporate speak. That's like 8p, where if you are on a public charger like mine, even through Electroverse, it is still about 48p. That's a big old jump. And that gap for the 40 % of people that don't have a driveway, That is always going to be there. But there are so many things that we can do, both trying to reform the electricity sector. So NAJ's beautiful wind turbines are blowing and nobody wants to use it. Well, how can the electricity sector, how can the EVs suck up all of that during the night? Can we get an electricity system that really benefits and really promotes flexibility?

18:49When it comes to charging, can we get some of these tariffs and some of these taxes off of electricity and onto things that we don't want people using? There are lots of things I think that we need to see the government do. because it's always going to be there if we don't address that. And it's an unfair thing to make people move into if you're not doing everything you can to make it as cheap as possible. I mean, I don't know. I'm going to ask you, AJ, but if anyone else can explain this, why our wholesale electricity price is dictated by gas, by the cost of gas, because that does seem like that would...

19:19I just feel like that's wrong. I don't want that to be the case. But is that the case? That is definitely what made electricity prices rise after the Ukraine invasion. Yeah, absolutely. And I think just to shine a light on it, for the vast proportion of the audience and people who may be listening on the podcast, I think this is one of the key things that we do need to demystify or debunk, which is that people often reflect on the cost of energy, of cost of electricity to be specific. And for some reason, perhaps it's in various media outlets, believe that that cost is a direct resultant of the clean transition in terms of the electrification of our energy system through renewable generation.

19:57But as you've said, Robert, as well, it's just that actually the price increase that we're seeing in electricity is a direct resultant of the volatile cost of gas. And how gas sets the price in terms of when you burn the gas to set the price of electricity. So first and big message I want to get across is that the cost of your electricity isn't increasing because of renewable energy. It's predominantly based on the volatile cost of gas. So that's message number one. But yes, there is this question, this ongoing question of how can we potentially decouple? And that's where a lot of policy thinkers are at in terms of how do we try to make sure that this cheaper renewable energy is actually being recognized rather than the perception being that it's still based on renewables rather than in gas.

20:43Yeah. Yeah, just to come in on that. So a few weeks ago, I must have been subject to some kind of disciplinary action because I was made to go to a Reform Party conference, which was a new place to go. And it was very interesting. But kind of tying it back to this thing about where are we at in terms of global politics? There is a huge narrative change here, not just about kind of is it the right time? Are we doing it at the right pace? But there is a huge push about the fact that the kind of the push towards green energy is being, well, in words of one other speaker, that it's being artificially manipulated by somebody sat in a cave somewhere stroking a white cat.

21:19Right. This is what we're up against. And this is what's causing a push towards another form of energy security. Because that side of the debate do see the need for energy security, but they see it through shale fracking, through North Sea oil extraction. And there's a huge push on this at the moment. And they're utilising the fact of high energy costs at the moment to try and drive this political wedge and see it as a massive opportunity. I mean, just before Tanya, I mean, it's so much easier. I could easily make the argument against renewables, against electric. It's so much easier to do. It's all nonsense.

21:52The environment's fine. Don't worry about it. Don't even think about it. It's absolutely fine. Buy a diesel SUV. It's brilliant. It's fantastic. It's fine. That's so much easier than to go. Let's think about this incredibly complex problem that will take ages to try and work through and explain is much, much harder, which is what we've been doing. But Tanya, you said. Yeah, I just wanted to bring all of that context, that global geopolitical context, right down to this room and think about what that means for people thinking about buying an electric vehicle and what that means when they read information or hear information at party conferences without any critical thinking about whether that's a reliable source or whether that information is accurate.

22:30That puts them off buying an electric car. that they might have otherwise been thinking about buying. Or that puts them off thinking about an electric car that they might have been thinking about in two years. And so, yes, the line is going up. And yes, we're on the brink of some real record-breaking numbers. But there's a huge population out there that are at risk of being put off because their understanding of the energy crisis and the world is something that makes them nervous about transitioning into a new technology. Yeah. And also, just as well, bringing that back down to kind of every individual.

23:04This is why things like access to affordable charging is so important because the stories that are going to influence these people aren't necessarily the big ones that kind of land in the Guardian or land on the BBC. It's the fact that they know someone on their street that's got an electric vehicle and they're saving money. If they know someone that's got an electric vehicle, wasn't able to access the kind of charging on the driveway, but have to end up paying more than they do possibly for fuel from the fuel pump, then they're going to say, why have they wasted all this money? And it's a negative story.

23:29And that has far more of an impact from hearing that from someone that you know than hearing the kind of, let's talk about it in generic terms. And if I may, I think someone talked about how we've regressed before. And I think for me, that's one of the saddest things is, I'm a big fan of this event and I've been coming for several years, but it feels like historically we had won the argument. This concept of not only is clean energy good for the environment in terms of climate change, but also recognizing that as a consumer, the costs are going to decrease. And do you know what? There'll be other things like job creation as well.

24:04Unfortunately, I worry and we can probably all see it is that we've perhaps regressed from that point of view. So we've got to get back onto that front foot, telling people those reasons. Sometimes evidence, facts and statistics aren't necessarily the right way, but it's perhaps some of those empirical cases where someone on, you're all advocates in this audience as well, by the way. If you've got solar panels and EV and you're seeing your costs reduce, tell your neighbor who's sort of curious about why you're doing those things and explain why it's cheaper. So we're all in this together. And that's one of the things I like to communicate people is just the opportunity there is.

24:39We need to give people those facts. We need to give them the evidence. And we need to really explain to them why it's benefiting them, not just on a personal level, but why it will help the country as well. Yeah, no, very good point. I've been very remiss, I usually do remember actually, to say at the beginning, if anyone has a question they'd like to ask the panel, there is a microphone in the middle. So I'm doing it now, and we haven't got very long left. So if anyone has a burning question that they want to ask, please do go ahead in your own time. We haven't got very long, though, so do go there quickly.

25:15Can I ask you, Tanya, about the motoring industry, the arrival of Chinese cars? I've been talking about it probably for 10 years because I could sense something was happening, but I didn't know how long it would take. but I mean, it's become such a big thing that it's a general knowledge now that there are Chinese electric vehicles for sale in this country. What is the reaction to that amongst European manufacturers, amongst British manufacturers? Yeah, I mean, can you... I'd love to ask this of all of you. I mean, how that's being received. Considering it's been coming for over a decade, like you say, and before that, the components of the vehicles were Chinese, before the vehicles themselves, when the brands, they've been caught off guard.

26:01Their electrification programs are, you know, it's like trying to retrofit onto a, you know, not just a combustion engine factory, but a mentality, a corporate mentality of building combustion engine cars, trying to retrofit electrification onto that. And it's showing now that it's not possible to keep up in terms of market share, in terms of price competitiveness, in terms of technology and specification comparison. It's, you know, irrespective of where the other car's from, the companies that are built to deliver EVs en masse for the global market are going to win this market out. Yeah, and just on that, I'm going to actually steal a point that James normally makes so passionately, which is the fact that the zero emission vehicle mandate that's in place for manufacturers is the UK's largest decarbonisation policy.