00:00Dan Walker is principal at Ember, a leading think tank on the future of energy.
00:05Thanks ever so much for coming on Global Business Europe.
00:07Now look, we've seen big swings in oil prices.
00:10Does that actually change the trajectory of electrification, of renewables,
00:15or has the direction already been locked in?
00:20So of course before this crisis started, we already saw across the world a rapid move
00:24towards this new generation of electric technologies, wind and solar on the supply side,
00:28electric vehicles, heat pumps on the demand side, batteries in between.
00:32So this was already a movement that was gaining steam across the world.
00:35And I think this is just yet another reminder that this new generation of electric technologies
00:40comes with this additional benefit of granting independence to its user.
00:44Once imported, a solar panel installed can deliver electricity for 30 years.
00:49No blockade can block you from getting that sunlight and therefore getting your energy.
00:53And so I think we should definitely see this as an accelerant for the global energy transition.
00:57So when it comes to handling that oil and gas price volatility,
01:01does China's more long-term planned energy strategy give it a structural advantage
01:06over other places like Europe?
01:09Yes, for sure.
01:10So I think the way that we should see this crisis is there's the immediate impact of prices right now
01:15and the curving that needs to happen of oil demand across the world
01:18to make sure that this 20 million barrels a day gap that started to exist
01:24because of the blockade of Hormuz gets filled in.
01:26That's a huge challenge in the immediate term.
01:28But of course, for most people that are thinking long-term planning for their energy systems
01:32and not just across Europe, but across emerging economies,
01:34people that are planning for growth planning for their economy over the next decade,
01:38now see once more that if you rely on fossil imports to fuel your economic growth,
01:43someone can suddenly pull the plug.
01:45And this is what puts, for instance, at the moment China in a stronger position,
01:48but many other Asian economies as well that are leaning forward on electrotech,
01:52is they can keep growing their economy with even despite there being an oil and gas crisis,
01:57yet another oil and gas crisis, I have to say, going on right now in the world.
02:01They can keep growing at least part of their economy that can grow with electrotech.
02:05You talk about electrotech, which sounds quite all-encompassing.
02:08Where do you think China is accelerating the fastest?
02:11Is it in power? Is it in transport? Is it something else?
02:15So I would say globally, the most unique, the most outstanding accelerant happening in China
02:22is on electric vehicles.
02:24Last year, more than 50% of car sales in China were electric vehicles.
02:27By our estimates, China in this crisis already, because of these electric vehicle sales,
02:31are probably avoiding some $30 billion per year in fossil imports.
02:35That's already coming to tremendous benefit.
02:37But of course, they're powering these new electric vehicles,
02:40and by the way, also the electrification of industry with this new supply.
02:44Like over the past couple of years, the rise of wind and solar has been tremendous across China.
02:48And so I do think we need to really see this as a system approach that China is taking.
02:52So I think where they excel in the world compared to the peers as electric vehicles,
02:56but across this new electrotech value chain,
02:59they're just ahead of many other countries in the world.
03:02They're ahead in terms of clean energy, but does it mean that oil is becoming less relevant to China's growth
03:09story,
03:09or is it still a key variable?
03:12It remains, of course, a key variable.
03:14So when we think about transitioning a major economy like the Chinese economy of fossil fuels,
03:20this is a decadal, multi-decadal plan.
03:23China started on this much more comprehensively and earlier than many other countries in Asia,
03:28but actually across the world.
03:30And so China might be ahead, but it doesn't mean that we can sort of flip a switch right now
03:34and quickly over the next 18 months get off fossil fuels.
03:37This remains a decadal track that China needs to get on
03:41and many other countries also in the world need to get on
03:43to actually make sure that the next crisis, the inevitable next fossil crisis that will hit
03:48will lead to less exposure and less exposure until you hit maybe not net zero emissions,
03:53but at least net zero imports as a nation.
03:56Great insights. Thanks so much.
03:58Dan Walter from EMBA.
Comments