Nat Bullard: Grounded in Data

0:00I think the only way to get a good coherent view of the future is to have an even better coherent view of the present. And I found in conversations really all over the world that you would walk into rooms with extremely senior and otherwise very well-informed people who were miles away from observed reality and anything happening in energy, climate, decarbonization, sustainability.

0:33Welcome to the Future in Sound podcast. I'm your host, Jen Wilson. This is a podcast where we discuss people, planet, and profit. In each episode, we'll learn from world-leading experts who can help us see the future we want and our role in it.

1:00This is episode 46, Grounded in Data.

1:08I'm delighted to be joined by Nat Bullard today. He's the co-founder of Halcyon, an AI-enabled energy information platform, and he's also one of the energy sector's most influential data storytellers. Prior to co-founding Halcyon, Nat spent 15 years at Bloomberg New Energy Finance. He joined New Energy Finance as a startup and worked there through its acquisition by Bloomberg, an expansion to cover every sector of global emissions. He finished his time at Bloomberg New Energy Finance as the group's chief content officer. One of the many reasons why Nat is a living legend in the energy field is his brilliant annual deck on decarbonization.

1:52His latest presentation was released in January 2026, and if you haven't flipped through it yet, you'll get a teaser today, and I strongly recommend that you do. Matt, welcome to the Future in Sound podcast. Jen, thank you for having me. It's a pleasure to be here, and I look forward as ever to having a chat about everything going on in our world, and with 200 slides that I put together as a frame for us to have a conversation.

2:21what's the story how did you get started with this annual presentation idea you know i'm going to start with something funny which is uh i i will tell you that my favorite anecdote about building this series and it tells you something about the demand that was there was that in the second year that i did it i had a load of people come up to me to make i read this thing every year i was like well by which you mean you read it this year now and you at the year prior. And I actually will do a quiz with people and ask them how often I've been doing it. And a lot of people have told me that I've been doing this since the middle of the last decade.

2:54I was like, no, I guarantee you I have not. I've only been doing it since 2023, in fact. So the reason that I do this is that I find that we collectively struggle with a kind of present moment stock take on where we are, much less a look into the deep future. And actually, there's a connection between those two, which is that I think the only way to get a good coherent view of the future is to have an even better coherent view of the present. And I found in conversations really all over the world in my 15 years at Bloomberg and prior to that in New Energy Finance, that you would walk into rooms with extremely senior and otherwise very well-informed people who were miles away from observed reality and anything happening in energy, climate, decarbonization, sustainability.

3:50And I realized over time that part of the challenge was that people tend to go in and do a presentation in those contexts that has a view of the future, which tends to bog people down in the metaphysics of projections and discount rates and things like that. And that begins without a firm grounding in the present moment, without a view of where we are right now. So that was sort of the prime mover. And that's for me too, was to make sure that I had a good coherent view of the present moment. That was the one. The other was that you often find presentations that capture a very deep look at one particular domain, transportation, electricity, liquefied natural gas, whatever.

4:35Expertise tends to be domain bound. Interest tends to be range bound. And as a result, you have all of these bits and pieces that don't necessarily talk to each other. They do tend to talk to each other in the form of an integrated general equilibrium model, let's say, but that's not really the way that most people think. So I also saw an opportunity to put this all into one frame. And then the third is that having done the work of making the song empirical and observational, I also thought that there was some value in a little bit of narration. And by that, I mean how I choose to group all of these things.

5:13Back in the day at Bloomberg, I used to do one that was an essentially descending order of emissions. And it was fine, but that's not a story. That's a rubric. It's not a story and it's not a narrative that helps you explain. And it doesn't speak to the way that businesses organize themselves. And you can see, as I've done this now since 2023, you can see across that time themes that sort of emerge, some of which become durable, some of which go away. And you can see areas in which large chunks of the business community coalesce around an idea, whether it's well-formed or not, and then run with it, whether it's robust or not.

5:57And so I wanted to sort of do a similar bit of storytelling, a lot of which is organized around making sure that stories make sense and incorporate as much observed reality as possible. I want to build on this idea of the two points that you made. One, building off of a grounded reality and also weaving together multiple different themes from your presentation. So as ever, what's being said significantly changes our experience of reality, which is, I guess, part of what your presentation is trying to level set us on. At Ricoh, we work with a lot of private equity clients. And I remember in 2021, our clients were being told, if you're talking to investors, just talk about ESG.

6:45Say that ESG is your top priority. And then fast forward to today, they're being advised by the same advisors, don't mention the word ESG. Don't mention it at all. You can't touch on it. You know, it just focus on, you know, core financial value creation, etc. So when I look at when I was looking through your presentation, again, that a couple of the what's being said slides stood out to me, you know, slide on ESG being dead. the fact that there are very few TED Talks focused on climate, you know, some of these versus, you know, previously where we had quite a bit of hysteria or ESG was sort of the zeitgeist.

7:27We also, if we step back, this wasn't in your presentation, but, you know, often you have narratives around, particularly in the U.S., this backlash against renewables or that we can't decarbonize if developing countries, you know, also don't decarbonize. Yet when we look at what's happening in your presentation, second warmest year in 2025, to be sure, climate change is a serious issue. Lots of headlines about ESG being dead. However, I should also say outflows from US sustainability funds since 2022. So those, you know, those areas you covered. But we know that in January 2026, there's a record number of science-based targets validated.

8:12And one of your slides pointed out that only in the US and Australia did respondents to a Morningstar questionnaire say that they are, well, basically that they're less likely to say yes to fiduciary duty and ESG are aligned. And so I guess my question, this is, and for everybody listening, this is a tiny snippet of a wealth of knowledge in this presentation that you've got to read. but just at a very high level, Nat, I guess my question for you is ESG dead. And based on your answer to that question, what are the implications for our global energy system? So, um, I love this question and you, you, for those of you who are imagine the two of us giggling here at each other about it, I have to step back a year because last year's deck, I had an entire section called it's a 2021 thing.

9:02And what I did is this sort of cross-asset correlation, if you will, of all of these different sectors that launched all of these different initiatives about decarbonization, which I think were in many ways rhetoric in front of action. And part of my conclusion, which was profoundly unsatisfying, mind you, and downright, I think, potentially insulting to plenty of people, according to what they told me, was that this is a whole bunch of stuff that got decided during COVID when we weren't at work, when people were sort of left largely to their solo devices, and I think very prone to building narratives and to narrative creation.

9:40And that's why we saw all these things sort of like hit their peak and then come off the boil, be it a TED Talk or a new commitment to net zero or whatever it is. Regarding ESG, indulge me and your audience, and I will read the headlines that I popped into my, actually one of my very favorite slides, which is called ESG is dead or it's not. I have eight headlines, and I'm going to read them from left to right and top to bottom. Is ESG dead? ESG is dead. ESG's death will only make its ideas stronger. Is ESG dead or just evolving? question mark. ESG in Australia isn't dead. It's just growing up.

10:21Issues for boards 2025. Is ESG dead? Question mark. Far from it. And then finally, ESG is dead, comma, long live ESG, exclamation point. So what you can see in this is that we're very prone to stories. And I think we're very prone to a whole bunch of local maxima. What I don't have in here is all of the different places. What I didn't narrate rather is all the different places these come from. Some of this is from SockGen. Some of it is from Barron. Some is from Linklaters. Some is from First Advisors. Some is from Saeed Business School. So each one of these places is taking a sort of different bite at the same apple.

10:58What I will say is that actually what you alluded to earlier, go back to your fund managers and your allocators and just say, this is really about fundamentals of finance and about either alpha or beta, or it's about good governance or whatever it is, is actually, I think, correct. I will say that ESG is such a broad umbrella that it's very challenging to enact. And this is something that I've been on record as saying for almost 10 years, which is you could go to a company that has, and there are legion companies in this category that have fantastic environmental records and very poor corporate governance.

11:38That doesn't mean that they're bad companies, but if they have, for instance, a board run entirely by preferential shareholder founders, that doesn't really necessarily count to me as great corporate governance. So I think we do see it stepping back into just being better parts of business. And I think you also see in particular in Europe that for the largest asset managers' broader sustainability focuses in asset allocation haven't changed at all. And there's a disproportion here between the amount of noise about ESG being dead, North America and Australia, and the relatively tiny role that these two markets play in sustainable finance.

12:17Another way to put it is, go right ahead, Australia. Go right ahead, US. Like Europe and its tens of trillions of dollars are going to continue to allocate accordingly. Do I also think that there is need for a great deal of simplification and rationalization? I will give you a take from one of the last things that I did at Bloomberg. So this is now about four years ago. It was post-COVID, just. So we're just getting people back in the office. And I, for some reason, was dragooned into moderating a panel about some extremely EU-related bit of sustainable finance. And my first thing that I said when I walked in there is I said, you all know me, I'm familiar with all of your work, but I'm not an expert.

13:00So my challenge is we're going to have this discussion without a single acronym. And if you use an acronym, you have to define it on first measure for everyone. And what alarmed me, frankly, was how difficult it was to do that, how difficult it was to have a kind of informational principles-based conversation. and it was just a lot of what to my mind was was argle-bargle stuff I had no idea about and also I found that practitioners had a hard time stepping back and explaining it in fundamental financial terms as opposed to things that were being driven by the minutiae of particular packages of something or other and I found that frustrating and also a bit worrisome in terms of what to me was the fragility that it then set up for exactly what we've observed.

13:53A bit of rhetorical backlash against something that I think leaves itself semiotically open to criticism because of its absolute complexity.

14:07Hey, it's Jen. I just wanted to take a quick moment to let you know a bit about RICO and what we do. We're a tech-enabled advisory firm that helps private market investors and companies measure sustainability metrics using our software platform. We also help you to set targets and focus your efforts on sustainability areas that really matter for your business. And finally, we help clients to translate all of this work into your core value creation strategy or your business model. Check us out at reed.co.com to get in touch. All right, now back to our conversation.

14:46Let's get into a very specific aspect of ESG then. Sustainability, as it's often now called in our fields. At the beginning of our conversation, we were talking about 2025, you know, being the second warmest year on record since industrialization. I guess when you're telling people or sharing, you know, your research and summaries around renewable energy and the state of renewable energy, those of us who are caught up in the headlines of what's happening in the U.S., many projects being canceled or paused, etc. et cetera. If you take a step back from that and just share the story of renewables, battery storage, wind, solar, where are we not?

15:30Is it all doom and gloom? Or how do you see where we are right now when it comes to renewables? That's not at all. And in fact, we should begin that. You referenced the US. Let's begin with a massive narrative violation, which is found in the data, which is that natural gas is losing share in the US power market. And it's not losing, its absolute generation. It is losing share. I'll give you one guess what it's losing share to, which is wind and solar power. There are some marginal bumps that happen in coal. But to your point, you have a story which is political and to some extent policy-driven, and then you have reality, which is power dispatch-driven.

16:10If you look around the world, yet another record year of deployment for pretty much all of the generation technologies and renewables, plus a massive year for battery energy storage build, a real rebirth of large-scale nuclear power being led largely, frankly, by China. At the same time that you have record coal burn, you have record gas burn, you have record emissions, but you also have China total emissions flat for about the last 18 months. You've got India's power sector emissions that actually tipped a little bit. So I would say you have all the instrumentation in place to change the shape of the sector using renewable energy.

16:54You also have markets that I think are fascinating to look at and easy to discount because of their relative scale, which is quite small, which is the power market, for instance, in Africa, which to put it more accurately is not a power market. It is woefully, in fact, fundamentally and existentially undersupplied with electrons. But not surprisingly, after the kind of stuff that was part of very much development finance and development policy action years and years ago, get a bunch of renewable energy in there, is now actually happening on an almost entirely commercial basis of tens of gigawatts of solar modules being sold the year into Africa, into markets that I really do believe will start to develop around those as their prime movers of power.

17:48Now, there's all kinds of big questions that come up around that in terms of what the eventual fundamental grid looks like. But the most important thing to think about is that they're effectively permissionless by comparison to what it would have taken to have the World Bank or the IFC finance some sort of megaproject equivalent. And so I want us to recognize the speed and the suppleness with which all of these sorts of things are happening. So no, it is as ever, I think, mixed. We do not have a market, even within markets, the markets themselves are not monoliths. And so we should, again, as ever be very data-driven in terms of what's happening and where.

18:30There are particular places where you see the economics, where you see particular economics in place, like the US power sector and its relationship to gas-fired power is both acute and different for most parts of the rest of the world. But you can also see in the case of the world's biggest and most demanding electricity consumers, some interest in gas and a great deal of interest, again, in renewables. So there's a kind of like, Who do you want to believe? Like, you know, me or your lying eyes sort of thing at play here. But if you observe the data, you can see that there's still a great deal of momentum in renewable power.

19:10It is, I will say, largely nobsided towards China in terms of the role that China plays against that, compared to everything else. But atmospherically, this is of no consequence whatsoever. Whether China decides to deploy 300 gigawatts a year of solar does not materially impact any other country. It will do so on its own devices and on its own recognizance. But it does in no way prevents other countries from doing something. I tend to be fascinated in that regard about talking about winning, you know, countries winning the race and doing this, that or the other in the power sector. Well, one country's development of its power sector does not necessarily impair or impinge another country's ability to do so.

19:55It's interesting, and often it's interlinked. We remember the days of significant subsidies in Germany for solar. Yes, we do. Which certainly has supported a drastic reduction in cost, adoption and then reduction in cost, sort of getting us into the virtuous cycle of innovation and cost coming down. Speaking of that particular topic, I was in Singapore. I understand that you're based in Singapore. I am indeed. And I was talking to a private equity investor and he said, look, John, I don't care at all about carbon emissions. It's just like, I'm investing in India. I need security to supply. It's taking way too long to get a natural gas turbine.

20:40So we go to renewables. We've got to get moving and building infrastructure. And you have a great slide on this particular topic. I'm wondering if you can share with the audience. Basically, there's a push to book natural gas turbines, and there's a significant leg in being able to order and install. Certainly. Well, we're likely to be, well, not likely, we are, structurally undersupplied. Demand for turbines is well in excess of the supply capacity that the handful of global manufacturers of gas turbines can do. They're also, they will expand capacity, but they have institutional memory, for good reason, of expanding right into the teeth of what turned out to be a massive decline in demand.

21:25So that's one factor in terms of sort of preventing supply from fully rising to what demand might be The other is cost The cost of a combined cycle gas plant in the U.S. has doubled in the last couple of years And there's no evidence to be found that that trend is going anywhere but up for the time being This is one of those things we uncovered Halcyon all the time We're really not in a situation where that's going to reverse at any time soon And so if you think from the perspective, as your private equity investor was alluding to, of security of supply and time to power, then you will find that many people will be going renewables plus storage to meet almost all or all of the demand that they have on an asset by asset basis.

22:12And that's the other thing that I think is important is to think about this as a disaggregated set of collective decisions. Individually, people are going to make the decision that I can't get it. If I, great, good luck to me to try to get a gas turbine tomorrow. Maybe I can get one in 2032 and I'll be paying half of its cost of deposit right now. So why would I do that? Why would I not go elsewhere to get myself power right now and act accordingly? And the speed and sort of suppleness of supply for renewables and storage is, I think, underrated in that sense and something that should be made, I think, much more clear as part of the value proposition for these technologies in many of the markets around the world.

22:57Pivoting a little bit to one of my favorite slides, and I'm going to ask you soon about some of your favorite slides or slides that deserve potentially a little bit more attention than they necessarily get in terms of the analysis or the story that they tell. But let's start with one of my favorite slides, which is a slide about the GDP, percentage GDP being spent on data centers. I know everybody loves to talk about this particular slide. I don't have the slide in front of me, but I believe it's around 2 % of US GDP. And it dwarfs the amount that was spent on other large infrastructure buildouts or getting to the moon or these kinds of things in the 20th century.

23:43um again we're talking to a lot of uh private equity investors and they're excited about data centers and you know they want to invest and they want to be part of this big boom and so i guess my question for you is when you look at this information and you look at the reality and the scale of what's happening you know what are your initial you know reactions to that do you think that i mean everybody wants to know is this going to continue is it's not it's very difficult to predict, but what's your reaction to the scale of spend? And then I guess the only other question that I have following that is, if you're a private equity investor, how would you proceed when it comes to the build-out?

24:25What would you be thinking about when it comes to the build-out of data centers, given this real pile-on to this direction? So this is another case where it's actually very empirical. It's very dramatic, but it's very empirical, the work that you're discussing, just slide 32 of my deck, is entirely borrowed from Michael Sembalest's team at J.P. Morgan Asset Management, or Wealth Management. And there are similar sources for all of this stuff. And in fact, actually, in the beginning of this year, after I published my deck, I did some more of my own calculations to verify things such as broadband and to update the tech capex and to add in some things such as like the exploration and production CapEx in North America in the 2014 range.

25:13And the main thing is that, yes, we actually don't have anything that is of this scale, including building broadband, including drilling for oil and natural gas a dozen years ago, that is anything like where we are right now. This is being led by a small number of companies. They're all playing essentially the same game in direct competition with each other to secure, compute, build foundation models to one way or another be the major player in artificial intelligence. They're big, well-capitalized companies. They have historically done all of this sort of thing on balance sheet out of free cash flow.

25:53Now they're turning to pretty much every corner of the capital market that you can think of to help fund it. And to be honest, that's about the extent of my opinion on it. In the same way that you could venture an opinion about building broadband in the year 2000 and where that was going to go. I think it was very evident in that case that the capacity was being built in excessive demand. We had years of dark fiber. We are not likely to have years of dark data centers. I don't think that anybody is building any of this stuff with the intention of not running it. You could always have some discontinuity come along technologically or economically that makes that happen.

26:35But I would wager that there's a sort of analog to Parkinson's law. Your Parkinson's law is that work expands to fill the time you allocate to it. And I would argue that computation will expand to fill the energy allocated to it. If you had something come along and somehow you had a data center that was being built and kept dark, I don't think that would actually stay that case for very long. I think something will come along to fill that void. The other thing that's important to think about, and this is a bit outside the realm that we're discussing here, is all of the things that happened downstream from all of this.