Energy Sovereignty: Accelerator or Obstacle to the Transition? What It Means for Investors

Candriam Academy

ESG Talk #19 - June 2026. Energy Sovereignty: Accelerator or Obstacle to the Transition? What It Means for Investors  As energy systems evolve under geopolitical pressure, understanding the balance between security, sustainability, and investment opportunity is becoming increasingly critical.  In the latest episode of ESG Talks, our experts — Alix Chosson, Lead ESG Analyst, Environmental Research & Investments, Candriam; Annabelle Livet, Researcher, Energy Security in Europe, Foundation for Strategic Research; and Ariane Khosrovchahi, Independent journalist and creator of the podcast Le Talk Finance Responsable — explore how investors can interpret these shifts and position their portfolios accordingly.

Transcript

00:00:02Hello and welcome to the 19th edition of Kondrium ESG Talks. My name is Ariane Kroshov-Shahy

00:00:09and I'm an independent journalist and I'd like to be your host today. So as you know, the Kondrium

00:00:15ESG Talks series brings together leading experts from a variety of fields to share their insights

00:00:21on key issues in sustainable investing. In today's webinar, we will explore whether the current

00:00:28energy crisis is accelerating or slowing down the energy transition and what this means for investors.

00:00:36Our discussion will focus on geopolitical and macro energy dynamics, infrastructure resilience,

00:00:41and the investment opportunities associated with the transition. To explore these issues,

00:00:47we are fortunate to be joined by two experts today. Annabelle Livet, researcher on energy security

00:00:53in Europe at the Foundation for Strategic Research and Alex Chausson, lead ESG analyst,

00:01:00environmental research and investments at Kondrium. Welcome to both of you.

00:01:05So before we begin, a quick note for our audience. You may submit your question at any time using the

00:01:12Q&A feature and we will do our best to address as many as possible at the end of the

00:01:18discussion.

00:01:19So before we dive into the energy transition itself, let's first take a step back and look at the

00:01:26growth of geopolitical environments. Over the past few years, energy has once again become a strategic

00:01:32issue shaped by conflicts, trade tensions, and growing concern around security of supply. Annabelle,

00:01:40maybe to begin, from your perspective, what are the main geopolitical impacts on energy sector today,

00:01:46and what are the key risks? Well, there are actually today plenty of them, I would say. It's not that

00:01:54easy,

00:01:54actually. It's a kind of complex world. We are entering it. But basically, I think if we try to

00:02:01assume a bit what is happening and try to see the impacts actually on the different energy systems or

00:02:07let's say the overall energy sector, you have a couple of them. So the first one is related actually to,

00:02:13let's say maritime security and the flow actually you have to transport the energy products. So it's

00:02:20basically, of course, impacting actually the fossil fuel imports, but also actually all the supply chains

00:02:28that you need also for the different technologies. So this is actually a first big part, let's say,

00:02:34especially targeting, I mean, it's for especially concerning for Europe, but also for Asia. And then

00:02:41you have as well, and this time more for Europe, let's say, the energy infrastructures are more and

00:02:50more systematically targeted, actually, for every kind of open or hybrid conflicts, you know. So we saw that

00:02:58in the Strait of Hormuz, but you would see that also in Ukraine. And even in Europe, you had a

00:03:03wave,

00:03:03actually, of sabotage on different energy infrastructures. So basically, what is happening

00:03:08is that energy is, let's say, the second biggest target, actually, behind the other ones, I mean,

00:03:16behind the military ones, actually, during a conflict. So we really have to take it into account,

00:03:20because we are a very critical sector. So those two aspects, let's say, are the biggest one, but also,

00:03:27actually, it's also related, because it's everything is more or less geopolitical.

00:03:31So the last one is related, actually, to the economic flow, let's say, the trade tensions,

00:03:38we can have that also have an impact, actually, on the different, on the manufacturing, on the supply

00:03:44chain, also on the way we can invest, you know, you try to project yourself, you know, as a business

00:03:51as

00:03:51well, and to see how, with whom you can actually have a partnership, and so on. So I would say,

00:03:57let's say, on commercial side, on the logistical side, and also on a purely geopolitical, let's say,

00:04:04as a result of kind of warfare, or let's say, geopolitical tensions, you can see that energy sector is really

00:04:12targeted.

00:04:13Thanks, Annabelle. So we can say that recent geopolitical tensions have exposed the risk of fossil

00:04:19field dependence, and highlight the strategic value of renewable energy. Alex, where do we stand today,

00:04:25globally, in terms of renewable energy deployment, and how does Europe compare with other regions?

00:04:32Yeah, yeah. So just to put a little bit things into context, following what Annabelle has just said,

00:04:38so, well, basically, we've moved from world of abundance, relatively cheap energy, mostly based on

00:04:43fossil fuel, to world where, as Annabelle said, we are facing supply constraints that are not just

00:04:47economic, but really physical. And what it means is that for the near term, and also future, we'll

00:04:53probably have much more instability, much more volatility on energy markets, and so, you know,

00:04:58in our economies as well. And so, of course, this reshuffles the way government think about energy. And

00:05:03just before going to renewable, just just to explain a little bit how government think about

00:05:08energy, we have this concept of energy trilemma, basically, where you try to conciliate three

00:05:14main objectives, which is affordability, decarbonisation, and security of supply. And

00:05:19depending on the period, basically, one of those objectives can be more important than the other.

00:05:23So for long, affordability, and of course, in the recent part, decarbonisation had taken prominence.

00:05:29And what has changed now is that there is, of course, a strong prioritisation of energy security,

00:05:35and of course, sovereignty, which are linked, although not totally the same. And in particular,

00:05:41in this trilemma, the positioning of gas that has been central to a lot of energy system has changed

00:05:47quite dramatically on those three objectives. So what it means for the transition in general,

00:05:52and for renewables in particular, it's still a little bit hard to predict, at least on the short term, but

00:05:58on the long term, we are seeing a much more stronger secular trend towards renewable, and renewables

00:06:05have seen their positioning reinforced in this energy trilemma. Why? On affordability, obviously,

00:06:10the economics have been the stronger driver for renewables over the past years, with costs

00:06:17constantly improving. Just to give you an idea, in the past 10 years, the cost of EV, battery, energy

00:06:21storage, solar PV have been cut by around 80% in 10 years, thanks to innovation and scale decarbonisation.

00:06:28Of course, renewables are performing very well on this objective. And now in terms of energy security

00:06:32and sovereignty, which is quite relative one energy to another, obviously, renewable in the current

00:06:37context are seen as a shield against energy shocks. And you've had a lot of studies showing basically how

00:06:45much renewable build out over the past years have been able to save in terms of fossil fuel costs. We've

00:06:49talked a lot about the fact that renewable were costing a lot. Now they enable enabling you to save a

00:06:54lot in

00:06:55terms of fossil fuel costs. So what is positive is that the drivers from renewable have switched from

00:07:01really policy based, which was the case 10 years ago, to then economics because of cost improvement.

00:07:07And now security is also adding as powerful and much more stable driver as well to this whole renewable

00:07:13kind of case. So in terms of renewable adoption, and what we are seeing on the ground,

00:07:19I'm sure you know, we have broken record every year in terms of renewable addition,

00:07:262026 could be a little bit slower, at least in terms of money on the table for a lot of

00:07:30factors.

00:07:30Some of them are temporary, the fact that you had tax credits that were coming to an end in the

00:07:34US,

00:07:35the fact that China as well is changing a little bit the way it's remunerating their renewable

00:07:38developers. So you had kind of a rush to finalize some projects. But what we are seeing in 2025 is

00:07:47basically 700 gigawatt installed on the ground, which is of course massive. So we have more than

00:07:545,000 gigawatts globally installed. And it accounted, renewable accounted for 85%, 85% of new power

00:08:01capacity installed in 2025. This will not change. Renewable capacity are now very, very close to make up

00:08:0850% of the global power capacity. So we are at 49% right now. Among the things that are

00:08:14really,

00:08:15really clear driver and that are going to stay, the solar PV revolution is unstoppable, as the IS said.

00:08:21So three quarters of new renewable capacity was solar, and mainly of course driven by China. And the second

00:08:27point that is linked is that China is definitely the main engine of the energy transition, both in terms of

00:08:33renewable capacity installation. So basically two thirds of new capacity every year come from China, but also

00:08:39supplying a lot of the equipment. What is projected from 2025 to 2030 is 4,600 gigawatts. So almost doubling

00:08:49what we already

00:08:49have on the ground. And it's double as well the rate of deployment that we had in the last five

00:08:54years. So really

00:08:55exponential growth. And this will make us quite close to this objective of tripling renewable capacity

00:09:04by 2030. That has been one of the objectives of COP28 in Dubai and one of the main objectives that

00:09:11the

00:09:11government have taken. Well, did this bring us to the question of energy sovereignty and the infrastructure

00:09:18need to reinforce it. Hannabelle, how should we define the pursuit of energy sovereignty today?

00:09:26I mean, first, it's also important to have, you know, a clear definition of what a sovereignty is.

00:09:32Basically, the sovereignty, the idea actually of sovereignty is to be able to decide and to be able to do

00:09:39or let's say to also to state you it's actually a state of exception. This is a bit the, let's

00:09:46say the

00:09:46classical definition of it. So when you start from it, what does it mean actually for energy? It means that

00:09:52actually, you want to be able to secure your energy supply actually basically having energy in every

00:10:00situation and being able to have a somehow some power of decision on this, but also basically a sort of

00:10:06management of actually to, to have it actually to organize your energy system and your energy flows,

00:10:12you know, your energy supply. So basically, what does it mean actually is that firstly, as Alex, very

00:10:20rightly mentioned, you know, this dilemma, security is one of the pillar of it, you know, of course,

00:10:27you need as well to the other ones, this is very important. But basically, without security, you cannot

00:10:32have any, or you cannot even pretend to any sort of sovereignty. This is the first part. The second

00:10:37one is also, when we are talking about energy security, in this context is also to say, okay,

00:10:44if we do import energy, energy supplies, as for the fossil fuel, for example, but you have logistic

00:10:51problems, as we can see in the Strait of Olmos, for example, you are not sovereign at all, because you

00:10:56don't have any power actually to, you can try to diversify, of course, but it's, let's say, it's kind

00:11:01of limited. So what you saw sovereignty in this case, and applied to energy would mean, you know,

00:11:08to building up actually energy production capacities in the territories, or at least in a more regional

00:11:15context, such as in Europe, for example, but also in Asia. So producing energy, in this case, if you're

00:11:22talking, you know, from the fossil fuels, it's basically, it's just depending on the resources

00:11:26you have in your souls. But like in Europe, you don't have that much, actually producing electricity

00:11:32makes sense, make completely sense on that. So I completely agree with Alex on this point, that

00:11:38basically, electrification is a key pillar for energy sovereignty, in this sense. And also, I would

00:11:46even add actually, you know, production of gas, of biogas, for example, is also can be also completely

00:11:52included in that. But basically, electrification is very important. And for that, then, if you are, you

00:11:58know, taking it a bit broader, in the sense, to produce electricity, you need energy technologies to

00:12:05produce it. And for that, it is once more the question about what kind of power of decision or what

00:12:11kind

00:12:11of, you know, sense of, what kind of why do you have actually in in the supply chain. And this

00:12:20is

00:12:20coming back, actually, to what Alex said, is that we are very dependent, actually, on China for many of

00:12:25this manufacturing, it doesn't mean we don't have anything in Europe. But it means at least that if you

00:12:30want to be sovereign, we need to have at least and especially for the critical components, the ability to

00:12:37decide and also to have in the territories, actually, the power, let's say, to manufacture those

00:12:43technologies that are needed, actually, to produce our own energy. So, you know, it's a, it's a kind of

00:12:48old chain you have to, to conceive, actually, within within this concept, actually, of energy sovereignty.

00:12:55Well, I have a question for both of you. Given the rise in geopolitical risk and concern around

00:13:00infrastructure security and sabotage, do this risk challenge the long-term outlook for low-carbon

00:13:06technologies or they actually reinforce their strategic importance?

00:13:12Well, if I may directly start, yes. I mean, for me, at least from my perspective, I mean, it's

00:13:18completely converging, you know, because what it's really, for me, the key word on that is

00:13:25electrification, you know, if we need to produce energy, then it's about electricity, especially in

00:13:31Europe. And if it's decarbonized, it's even better, you know. So, and basically, as Alex rightly

00:13:36mentioned, the deployment of renewable energies and also all the other kind of energy assets we have,

00:13:44for example, hydro, but also nuclear energies. And so, all of them are contributing to the

00:13:51decarbonization and they are actually contributed as well to energy security. So, this is very

00:13:56important, let's say, to put it this way, even if it's important to say that it's not perceived the

00:14:03same way, depending on the countries, even in Europe, but also otherwise. So, you know, now we are facing

00:14:11still energy crisis, especially for the energy prices. And you have also countries that are also

00:14:17an orientation that actually it's, let's say, the Green Deal was a nice way, you know, for climate

00:14:25people, the climate community, and so on and so on. But actually, when you are putting this way, that

00:14:30it is an answer to the geopolitical context we are facing, then you can actually involve much more

00:14:38people. But this is a process, actually, I think it's a change in the narrative as well, you know, from

00:14:43the decarbonization. It's not only for climate, it's also for energy security.

00:14:49Alex, what's your point of view on that?

00:14:52Yeah, no, exactly the same. I guess, really, basically, the stake you have in terms of energy

00:15:00security, and so your energy sovereignty depends on your local context in terms of resources. It

00:15:05depends a lot about what kind of domestic resources you have. And remember that Europe was basically

00:15:11based founded on the fact that we needed to coordinate in terms of energy. At that time,

00:15:16it was around coal, but like energy has always been at the heart of how Europe has been built. So

00:15:22basically, what has happened in Europe for quite some time is that we had cheap gas coming from

00:15:26Russia. And so we did not really ask ourselves the question about what could happen if like this

00:15:33abundance of cheap gas at the moment were coming to an end. So we were maybe a little bit slow,

00:15:39although still pioneer in trying to reduce this dependency on fossil fuel and on other countries.

00:15:48And now, of course, with everything that has happened, we've understood the type of dependency

00:15:53and the type of vulnerability, because we're talking about geopolitical vulnerability,

00:15:57that being so dependent rates. Maybe something that I would add that Annabelle touched on,

00:16:02and that is very important. We're not saying that moving to renewable will make us fully sovereign

00:16:06and then everything will go well ever after. I mean, renewable themselves, they have a lot of their own

00:16:13security vulnerability. Annabelle mentioned that China is central to everything in the clean tech

00:16:19supply chain. And when you assess your vulnerability or your dependence, it doesn't really matter the

00:16:24average dependency that you have. If you're 100% dependent on one part of the value chain, basically,

00:16:29it creates a lot of risk. So it's not really proportional to the percentage of dependence

00:16:33that you have. But just to give you an example, in 2025, in terms of investment, China accounted for 75

00:16:39%

00:16:40of total clean energy manufacturing investment, including 80% of the production supply chain capacity

00:16:46for lithium-ion batteries and 95%, 95% for PD wafers that are just critical for any solar PD. So

00:16:54they own,

00:16:55in terms of also, when we talk about the clean energy transition, basically, we are moving to a world

00:17:01of fossil fuel. So where the geopolitics of the world, geopolitics of energy were around fossil fuel,

00:17:06to now a world where the geopolitics are moving towards metals and critical minerals. And when we talk

00:17:11about those metals and critical minerals, China owns an average market share of 70%, 70, 7-0,

00:17:19for 19 out of the 20 prominent strategic minerals, including copper, lithium, cobalt, graphite, rare

00:17:26earth elements, a lot of strategic other metals, just basically because they do the refining and

00:17:31they do the smelting and all the capacities are there. It's not because they have in their ground

00:17:35more resources than others, some they have rare earth, for example, but it's just because the full

00:17:39value chain has been based on China. And so that's something that Europe has been thinking about,

00:17:44maybe not quickly enough. That's something to take into account. They have this objective of having

00:17:4940% of this whole critical mineral value chain coming from Europe. Recycling will be key. So here

00:17:56again, overlap of sovereignty and sustainability criteria. We need more recycling, we already have

00:18:02a lot of metals and minerals already in function, so we just need to recycle those and we'll be more

00:18:07sovereign. So all these are to be taken into account right now, if we are not moving from one particular

00:18:12issue of dependence to another basically. Well, the transition still faces significant practical

00:18:20challenges. Halix, in the short term, what are the main barriers to accelerating the transition?

00:18:27Yeah, yeah. So as I mentioned a little bit in the beginning, it's still hard to see and to assess

00:18:33and to

00:18:33determine what will happen on the ground, especially in the next two to three years. Obviously, it depends on

00:18:39the length of the crisis. It depends on a lot of things and basically on government decision. You

00:18:43could have a different world depending on government decision, even if the situation is the same. So

00:18:47it's still quite early on to determine what will be temporary and what will be more structural. We see

00:18:52some structural kind of, let's say, tailwinds on some technology, but we don't really know what will

00:18:58happen. And as I mentioned, and as Annabel also mentioned, it's very dependent on each country and to what

00:19:05extent, like how much imports exports in terms of energy and to what extent they have domestic

00:19:09resources. Very important in this crisis is to look at Asia, of course, because they are the most

00:19:15dependent on the Middle East gas. Basically, 20% of Asia's electricity supply, 20% relies on LNG from the

00:19:24Middle East. So when you don't have any more gas, basically, you cannot have any more electricity, you

00:19:29need to find alternative. So what we've seen on the ground is that some countries, India, Thailand,

00:19:34Vietnam, other, are now burning more coal because they have access to coal, especially India, they

00:19:39have domestic resources. And India, for example, they relaunched a coal power plant of four gigawatts,

00:19:45massive coal power plant that is called Mundra. And so after a month of shutdown, just because they

00:19:50need electricity. China, in 2025, it was the first time they reduced coal generation. It's likely that in

00:19:582026, this will be reversed just because of this LNG shortage and coal will help alleviate the shortage

00:20:06here. Japan and Korea as well, they have eased the rule to limit the use of coal to produce electricity,

00:20:14even in Europe, Italy that decided to push the coal exit from 2027 to 2038, Germany also thinking about

00:20:22it. Okay, so that's what we're seeing on the ground. But we're also seeing some positives happening

00:20:28right now, even in the short term, even in terms of crisis. If you look at Indonesia, it is accelerating

00:20:33its diesel to solar generation conversion program, while Indonesia has some coal and has access to

00:20:39coal as well. Vietnam, there was a massive swap in a big project of 4.3 gigawatts from LNG power

00:20:44to

00:20:45solar wind and storage. Thailand as well, they're investing much more in the energy transition.

00:20:50Pakistan, which has been very much impacted. We are seeing an acceleration of the solar boom,

00:20:56and especially for small scale solar infrastructure. So we are seeing a lot of things in terms of

00:21:03numbers. Very interesting report released from the IEA a couple of days ago about the world energy

00:21:10investment outlook. In terms of sales on some of the very key building block of the transition

00:21:17from Q1 2025 to Q1 2026. So the first quarter of each year, so in one year, what we have

00:21:25seen is in

00:21:26Europe, plus 17% in heat pump. EV sales in Europe, plus 30%. EV sales in Latin America, plus 75%.

00:21:35EV sales in

00:21:36Asia Pacific, where it's already quite well penetrated, especially in China, plus 80%, 8-0. Solar PV export to

00:21:45Africa from China, plus 120%. Solar PV exports to Southeast Asia from China, plus 150%. Induction

00:21:54cookstove sales in India, times 10 times 15. So we are seeing on the ground that even in a time

00:22:00of

00:22:01crisis, governments are thinking a little bit in the long term about how do we, not how do we move

00:22:07from

00:22:08gas to coal and change the type of dependency, but how do we really ease this dependency of fossil fuel,

00:22:14and how do we invest in the future. So that's the positive signal that we are also seeing on the

00:22:19ground. So some contradictory things are happening. On the long term, we see a stronger secular trend

00:22:24for renewable and for the transition. Well, this requires significant capital and long-term planning.

00:22:31What are the areas and teams that investors are focusing on today?

00:22:39So I guess it's for me again. I'll start and maybe Annabelle, if you want to compliment her,

00:22:43feel free. Of course, the current context, in the current context, basically what has happened

00:22:51is no matter the energy crisis, we have this AI boom, which of course is changing a lot and having

00:22:57a lot of

00:22:58influence on our energy and especially electricity markets. What has changed is that for quite some time,

00:23:03basically you had electricity demand that stagnated in advanced economies in Europe, in the U.S.

00:23:10This is changing. So we are seeing now an increase in terms of electricity demand because of AI,

00:23:15because of other factors like air conditioning, for example, as well. So we are entering in a period

00:23:21where electricity demand will increase in Europe as well. And we are talking a lot about the U.S. where

00:23:26we are expecting 2% increase year on year until 2030. In Europe, it's an additional 300 terawatt

00:23:34hour of electricity demand by 2030 because of electrification that Annabelle talked about,

00:23:39because of EV, because of heat pumps, because of cooling, and because of course of industry and

00:23:43data centers. So we will need more power generation capacity in order to cope with this increase. So power

00:23:50generation is definitely a theme. And if we want to conciliate, of course, this with decarbonization

00:23:56and with the security, as we explained, renewable are one of the best kind of theme to invest in.

00:24:04And as I mentioned, it is projected that we will need, and this is the IES central scenario, 4,600

00:24:11gigawatts. One gigawatt is one nuclear reactor, just to give you an idea, between 2025 and 2030. And as I

00:24:19mentioned, it is now pushed by economics, geopolitics, and the demand. And renewable are very, very fast to

00:24:24deploy as well. So it's very interesting for hyperscalers that wants their data centers to be deployed

00:24:31very, very rapidly. Nuclear will be helped as well, especially in countries that already have nuclear. It's

00:24:37very difficult to start a nuclear program from scratch. But we're seeing some, at least in terms of

00:24:42intention and investment, some more investment in nuclear. Nuclear faces some other issues in terms of cost,

00:24:46in terms of economics, in terms of the time to be deployed, but definitely something that is

00:24:51positive for nuclear. What is very important as well is the grid, the networks. As Annabel mentioned,

00:24:58also because of security reason, but also because you need digitalized modern grid if you want to

00:25:04integrate more renewables. And if you want to integrate more data centers, by the way, as well.

00:25:08And the number that we usually have in mind is that for every dollar investing in renewable, you need

00:25:14$1 invested in grid. We are not at that type of ratio yet. We are getting to it because in

00:25:212026,

00:25:22in terms of investment projection, grid will be the part that will see the most increase.

00:25:27100 billion will be invested in grid in terms of projection, but we're pretty sure about that

00:25:32in 2026, especially in Europe and the US. So we see that grid now, we probably are close to this,

00:25:39what we call a new capex super cycle, which will be positive for a lot of companies that are investing

00:25:45in grid. And the other technology that is very central and getting even more importance in terms of

00:25:51in times of energy crisis and also in times of AI boom is storage, and especially battery storage.

00:25:58Not only because you want to couple that with renewable to basically compensate for the

00:26:04intermittency, but also because of ancillary services. So basically, the power system balance

00:26:10and flexibility that you want to have, and to cope for current variation. And I don't know if you know,

00:26:14but in the data centers ecosystem, there is this kind of thinking about moving from alternative to

00:26:20direct currents, because it's much more energy efficient. But here, it means that you will need

00:26:24much more stabilization of the grid. And so you will need much more of the storage system that will have.

00:26:30And we've seen a very, very massive increase in the interest of storage, utility scales, batteries,

00:26:36especially for power system. The costs between 2022 and now have declined by almost 30%.

00:26:4530%. So that's something that is very important. And they will continue to push for that. And the last

00:26:52but not least, I already mentioned that is EV, electric mobility. And again, this is something that we've

00:26:58seen directly after the crisis, the type of interest, not only in the new EV, but also in secondhand

00:27:04markets that has been growing quite a lot, especially in Southeast Asia, it has more than doubled

00:27:11time in one year. And we are moving from like this concept of range anxiety, when you have an EV,

00:27:17basically, the fact that your battery can be very low at some point to pump anxiety, the fact that you

00:27:22go,

00:27:22you have an IC, you go to the fueling station, and it costs too much, and you cannot basically

00:27:29refill your tanks. So that's all the things that we are seeing on the market right now. And that will

00:27:34be

00:27:34quite positive for all the technology that I mentioned.

00:27:38Thanks Alex. Another important dimension of the transition is industrial policy. Across the world

00:27:44governments are becoming more active in shaping strategic sectors and supply chains. Annabelle,

00:27:51how are you witnessing a renewed and more assertive industrial policy in Europe today?

00:27:57Well, currently, it's not very well coordinating. I think it's quite fair to say that. But still,

00:28:02it's there. I mean, still there is an impulse, still there is an awareness, actually, that is

00:28:06growing up. And I would even say, actually, once more, if you're zooming a bit, it's still converging as well.

00:28:12So what we have is that the first step, let's say, and I'm not talking for France, I'm really talking

00:28:19for every country in Europe. The first step was really to acknowledge that actually, the energy

00:28:26sector is a critical one, you know, and from this perspective, then addressing it in a proper way,

00:28:32you know, in order to say, okay, then innovation, for example, in the energy sector, are quite

00:28:39specific, specific, let's say, and also, maybe to say that actually, all the knowledge we can have,

00:28:45the technological manufacturing as well, and so on, have a specific values, you know, because it's

00:28:51strategic. So this is, let's say, your first step, we can notice right now. And it's still also

00:28:56gathering, you know, attention as well, at the EU side, you have different packages, the Industrial

00:29:03Accelerator Act, for example, but also now you have, we are talking a bit more about technological

00:29:09sovereignty. So this is actually, you know, going in this direction to really mention that actually,

00:29:14right now, we are not talking about just one or another technology, those are critical, actually.

00:29:20So this is the first step, let's say to say that one that has been said, actually, the political side,

00:29:26it's a bit, okay, what, what do we do now, actually, how we should process it. So this is now

00:29:32a bit

00:29:33difficult, because the EU has some competencies, let's say to for trade relations as well abroad.

00:29:39And you know, for the EU, it's also, let's say, at the EU level, it's a bit sort of new

00:29:44world,

00:29:44because normally, it was all about trying to integrate even more the market, you know, free trade,

00:29:50things growing up actually, in where the world order was quite stable, and so on. And now we are

00:29:57actually in a completely volatile geopolitical context, where with coercive, well, let's say,

00:30:02aggressive behaviors as well, from different parts of the world. So what is happening right now is that

00:30:11concepts that were not very, you know, pleased or used at the EU level, such as the strategic

00:30:17autonomy, you know, it was a big world, actually, at the time in the at the EU level, because it

00:30:21was

00:30:21more or less seen as a sort of protectionism. Now it's becoming clear that actually, we need some

00:30:27at some point, some of this strategic autonomy. So what does it mean as well, is that, basically,

00:30:33you you need as well to, I mean, at the EU level, let's say once more, it's, it's becoming, you

00:30:39know,

00:30:39it's happening, actually, that it's emerging. So now you have, you still have at the level,

00:30:45actually, at the national levels of the European countries, very various way to see things. For

00:30:52example, you, you have some countries that will try to say, okay, then we will very, we will be very

00:30:58open to, to bring up, to reassure some manufacturers in, in our territories. It's not really important,

00:31:05where does it come from? Most importantly, is that those infrastructures are on the territory. So this

00:31:10is the first part, then you have other countries, for example, that are more focusing on the

00:31:16securitization, let's say, of the innovation process, and try to also to focus on the fact that we are

00:31:22still in a very innovative, actually, in Europe, despite sometimes, you know, very pessimistic views

00:31:28on that, we are very innovative, but we have many difficulties actually to ramp up to go to an

00:31:34industrial scale. So then for other countries, the focus will remain much more on this security of

00:31:41the innovation and try to preserve it in order to not to have, you know, the startups actually that

00:31:47are leaving, because, because of many economical reasons in Europe. So this is the second part,

00:31:53actually, we, some countries are working on. And then you have also the last part is also about

00:31:58preserving or even growing up, and competencies we already have actually in Europe, and then trying

00:32:05to, to, to, to raise it, for example, in the wind sector, but also in, in some battery sectors as

00:32:13well are very innovative in Europe, but also in the nuclear, but also in, in geothermie, for example.

00:32:19So all of the sectors actually are emerging. And right now, you know, also in hydrogen, sorry,

00:32:24I'll almost forget it, but it's very important as well. So I think, you know, there is a sort of,

00:32:30now that countries are converging on the fact that those sectors are strategic, they might bring,

00:32:37bring more attention as well to it and try to, to contribute, actually to ramp it, and also not to,

00:32:43to leave some competencies as we had actually with the solar panel, because it's exactly what happened.

00:32:49Last but not least, some, some ideas as well, it's not very clear for the moment, is also trying to,

00:32:57when, when we are talking about energy partnerships, especially at the EU level, it's also to think

00:33:02about strategic partnerships, it means as well, trying to consolidate the supply chains, and it's

00:33:10mostly actually targeting the raw materials. So trying to not having just, you know, just a trade partnership,

00:33:17actually with partners, but the sort of strategic partnerships, which is, which should be a bit more

00:33:22consolidated, you know, so it's also the idea is also to deepen the ties actually with the different

00:33:28countries outside of the EU. So this is also happening, you know, but as always at the EU level,

00:33:34you know, we have, we are facing actually many crises at, at every corner, let's say the political

00:33:40sides are not always united. We have also, you know, as I said, for many, many, it's actually a new

00:33:48world, we are entering it. So they have also, it's a process actually to digest it. And also to really

00:33:55understand in what, what is the new reality, actually, it's not a crisis anymore, actually,

00:34:01it's more a new reality, we have to deal with it. And so I think it's coming up. But we,

00:34:07we need to

00:34:07follow it up. And I really think as well, the private sector can be very pragmatic in this way.

00:34:13And where the political, the politicians are fearing, I guess the private sector can really

00:34:17help actually, what does make sense, actually, for that. So I was to just stop there for the moment.

00:34:23Sorry. Alex, which sector do you believe will stand to gain the most from beneficial, from

00:34:30industrial reshoring in Europe? Sorry.

00:34:33Yeah, and maybe, again, to put things into context to second what Annabelle just said,

00:34:38and the fact that, I mean, in Europe, we, we, you know, you hear a lot that we are at

00:34:44a disadvantage

00:34:45to China because of labor costs, and we are at a disadvantage to the US because of energy prices,

00:34:50right? Well, this is a very much P&L type of approach, what would like we are, we have been,

00:34:57and we are at a disadvantage to China, just because China has had an industrial policy for decades.

00:35:03And everything, their own banks, everything has been kind of going into the right direction. And

00:35:09they knew from the beginning, that they wanted to be leader in this type of clean tech supply chain,

00:35:14because it was the most important for the future. They knew that they needed to secure access to

00:35:19minerals. And so the Belt and Road, for example, program was also a way of securing that and

00:35:24outside China, securing access to a lot of things that were going to be strategic. So

00:35:28they've had one clear industrial vision, and they've kind of built around that. So something

00:35:34that's in Europe, of course, as Annabelle mentioned, we have lacked quite a bit. Why? Because we've,

00:35:40in Europe, we've lived in a little bit on this fantasy. So we've been, we've lived on the cheap

00:35:46Russian gas fantasy for quite some time. But we've also lived on this fantasy that,

00:35:49because we are very big consumer markets, we could kind of go in orient towards one direction,

00:35:57and everything will follow. And so the market will just regulate everything, and it will come to the

00:36:01best outcome. Well, apparently, in a world that is no longer based on free trade, it's no longer the

00:36:07case in the in a world that is based on geopolitical battle, it is no longer the case, you need

00:36:11some very

00:36:12clear industrial strategy, if you want to be able to cope with that. And what it means as well,

00:36:17is that cost is no longer the main aspect, you don't need to be the more, the cheapest for your

00:36:25industry to thrive. If you if it's a matter of sovereignty of energy security, you might want

00:36:31to invest a little bit more, and to support some industry that are yes, more expensive than when

00:36:36it's happening in China. But just because you want to secure access that is that is tragic. Look at

00:36:41what we've done for the auto industry. That's something that is very much telling. So we were

00:36:46the first one, basically, Europe was the first one in a lot of clean tech, as Annabelle mentioned,

00:36:51solar PV, we're the first one in the battery chemistry, we were the first one in EV. So we

00:36:56were the first one in a lot of those clean technologies. And what happened in the auto

00:37:00sector is very much telling. Basically, Europe has said yes, you need to develop EV. So this is going to

00:37:06be

00:37:06the future. So we will put very strong regulation, you know, saying that by 2035, you can no longer

00:37:12sell any thermal engine vehicle, right. So all the automakers invested a lot in order to basically

00:37:19transform their factories, their manufacturing facility for EV. And then you change the rule of

00:37:26the game. And then basically, you had all the automakers that are kind of rolling back their

00:37:32investment plan. And now basically, what is happening is that EV are strong again, in terms

00:37:39of sales, and everybody wants now to have an EV car in order to cope with the new energy crisis.

00:37:45And now basically, China has taken the lead. And it is very likely that yes, we will have a lot

00:37:50of

00:37:51of Chinese EV vehicle on the market. And it will accelerate basically the EV transition as well in Europe.

00:37:58But look at all the movement that we've had in one direction, then changing the rule of the game,

00:38:03and now it's coming back. So this type of movement, this type of change in regulation,

00:38:08the issue is not too much regulation. Well, of course, if you have too much administrative regulation,

00:38:13it's an issue. But regulation that is properly thought through and especially for the long term

00:38:19is not a problem if you support your industry in order to cope with this regulation. And if you kind

00:38:24of

00:38:24keep this the same direction, what investors what companies don't like is those changes that we have

00:38:31all the time, just because now yeah, of course, a lot of the European decision on our political game,

00:38:35and so it go in one direction, and then the other. So just to say, in Europe, we need a

00:38:40very clear

00:38:40industrial policy. Now to come back to your question about the sectors that will benefit that will benefit

00:38:47the most from reshoring. Well, some sectors, they are still local by nature, utilities, for example,

00:38:56you need to produce electricity usually locally, so they will benefit a lot from any reshoring,

00:39:01because we will need more electricity, because of this also revolution in the industry. Of course,

00:39:07if we want the European industry to be less dependent on fossil, we need to electrify, and we need then

00:39:12to

00:39:12have local production of electricity. So utilities will benefit a lot from the reshoring, and we have

00:39:19a lot of very important and quite leading companies in the semiconductor space as well, for example,

00:39:26that is very central to AI, that is very central to clean tech, that is very central to defense. So

00:39:32we have

00:39:33some sector leader, if you think about a company like ISML, which is the clear leader in lithography

00:39:38throughout the world. So basically, every chip has been through some kind of ISML machine at some point.

00:39:44So we have developed, because of innovation that Annabelle just mentioned, we have developed some

00:39:50very interesting innovation capabilities, and we have some European champions that will be pushed. And

00:39:56the last sector that is very important to everything is chemicals. Chemicals will be everywhere in the clean

00:40:01transition. You need chemicals, basically hydrogen, batteries, it's all about chemicals. And so we have a lot of

00:40:07interesting chemical companies in Europe. But again, those chemical companies, they face higher energy

00:40:12costs. So we need to kind of help them, but help them so that they can help as well for

00:40:16the energy

00:40:17transition and for the decarbonization of other sectors. So yeah, so those are the kind of industries

00:40:23that we believe, and then you have, of course, the industry like cement, like steel that are local also

00:40:29by nature. Well, cement more than steel that will also be helped by any European industrial strategy,

00:40:37just because also it's a matter of energy sovereignty and of security.

00:40:43You mentioned it before, but Europe's approach is achieved by the diversity of its member states,

00:40:50issue with its own energy mix, industrial priorities and political consideration. Annabelle,

00:40:58is the current geopolitical context helping to bring national energy policy visions closer together,

00:41:04or do national differences remain a differing factor? Well, I would answer with a yes and no,

00:41:12you know, because no, basically, it's for when if I start with the no, it's because, you know,

00:41:18the reaction can be different, actually, from a country to another, because it's also a cultural

00:41:22thing. You will see that, for example, with the rise, actually, of the prices for fossil fuels,

00:41:28for example, you know, so that you have countries that are subsiding, it's massively, and some other

00:41:35are saying, No, no, we want actually to much more electrify. So, you know, you have those different,

00:41:40actually, of reactions that are still there, actually, but, and therefore, I would still say

00:41:45that actually, it's a bigger yes than a no, let's say, it's because, still, what is happening right

00:41:52now. And it's a bit, you know, I think, when we're talking about energy sovereignty, and so on,

00:41:58it's a bit of translation of this convergence, in a sense of, right now, what we observe in Europe,

00:42:03is that this question of security is very important. It is the matter of every European

00:42:10countries, even if some of them are still, you know, thinking that they're, they're very, you know,

00:42:14on the western part, let's say, of the EU, and so not really concerned about what is happening on

00:42:19the eastern side. But still, actually, security is the matter of everyone. And what is happening

00:42:25right now is that security is also very transversal, in a way. So, it's about how we should

00:42:31securize, you know, how we should protect the energy infrastructures from any sort of sabotage.

00:42:37And then the question is not really where do the sabotage come from, but actually, where can it happen

00:42:43on the energy system. So, this is a very different vision of it. So, you know, for example,

00:42:49when we were talking, I mean, Alex very rightly mentioned, actually, the question, actually,

00:42:54of the different components, and also from the grids, in this case, you know, it really doesn't

00:42:59really matter, actually, what kind of energy you want or not, you, everybody agrees on the fact that

00:43:04it should be secured, you know, and to be secured, you have to be able to map, actually, what are

00:43:10the

00:43:10critical components, what can be used, actually, as a backdoor, or what can be a vulnerability, let's say,

00:43:16for cyber domain, or even for any kind of sabotage. So, you know, this kind of situation creates,

00:43:22de facto, some convergences, actually, between the countries, where there are the most, let's say,

00:43:30differences is more about the intensity of the perception of risks, you know, this is actually,

00:43:36some countries are still, you know, underestimating those kind of risks, where others actually are

00:43:42really taking it very seriously, it's not because of the geography, actually, it's really not about

00:43:48that, it's much more about cultural aspect, and also, once more, about how critical is the energy

00:43:54sector, is seen, actually, the critical, the energy sector, sorry. So, this is actually, I would say, a

00:44:01very key point, and as I mentioned, I mean, you know, I was talking about the grids as a very

00:44:07physical

00:44:08aspect, you know, of security, but security can be transposed, as we mentioned already with Alex,

00:44:14I mean, in the innovation side, but also in the industrial part, and also, you know, trying to

00:44:20really understand that, and you, we are already, I mean, and it's not a new thing, actually, it was

00:44:25already the case before, even for gas and other. We, in Europe, it's quite usual that countries are facing,

00:44:33actually, pressure from external countries to, you know, to, to sell some, some technologies,

00:44:39or maybe to make some deals, and so on, and so on, on very different aspects, and right now, that

00:44:46actually, those countries are understanding that it's not about, you know, being bad, or let's say,

00:44:52against free trade mentality, and so on, but it's about security for their own country, and also the

00:44:58European Union, then it's creating de facto convergences, so it is what I see, even if it's

00:45:04not perfect, it's not that smooth, neither, I mean, it's of course, and, but you see the process, but

00:45:09actually, at the end of the day, honestly, I mean, when we are talking about security, everywhere,

00:45:14everybody do understand, actually. Well, the perception of, from international investors also

00:45:21matters. Halix, do international investors view Europe as a credible leader in their energy transition,

00:45:28and what are the key advantages and obstacles they see today?

00:45:38I think we cannot hear you.

00:45:40Yeah, the microphone is out for a second.

00:45:43Yeah, sorry, sorry, the mute button. So, yeah, so, no, first thing, of course, when we see international

00:45:49investors, it can be a lot of, a lot of different investors, a lot of different countries, and a lot

00:45:55of different perception, but in general, and of course, we talk a lot as well with international

00:46:02companies, for example, and so what they see is that, yes, in Europe, there is this very strong,

00:46:09at least intention, there is this very strong intention, very strong commitment, we've been one of the

00:46:14very rare regions to keep all of our climate objectives, and just to remind everybody, and by 2030,

00:46:21it's minus 55% of emission, which is quite ambitious, and by 2040, minus 90%, and of course,

00:46:29then being net zero by 2050 or before. So, we've kept all those commitments, and then, of course,

00:46:34European regulation, what we're seeing around, you know, the Green Deal that Annabel mentioned,

00:46:39and other piece of regulation are supposed to support those type of commitments. So,

00:46:44international investors and international companies still see Europe as being a region where

00:46:51we still have this very strong direction and commitment. At the same time, we also, as I mentioned,

00:46:56a very big consumer market, and they also see Europe as a market where environmental considerations do

00:47:02matter to consumers. So, that's something that is very important for international companies, because

00:47:07they know that if they want to sell to Europe, there is regulation, and there is also some market

00:47:11preferences for something that takes into account the environment. And that's something that is very

00:47:15important, and that makes us at least part of a leader in the energy transition. But we are no longer

00:47:26the main engine of the transition. As I mentioned, China is throughout the whole value chain in terms of

00:47:31renewable deployment, in terms of, of course, the whole supply chain, in terms of any kind of clean tech

00:47:38equipment. So, we are no longer the main engine of the transition China is. And also, in this context,

00:47:45with the AI boom, and the kind of importance that technology companies are taking, of course, we have,

00:47:51we are lagging by some quite some ground. The US, while this will also redefine the world, the impact on

00:47:59the

00:47:59energy transition is still hard to gauge at the moment. But this is a new reality in the evolution of

00:48:05our electricity systems. And in that case, we are lagging. Where we are leaders still, as well, as

00:48:12Annabel mentioned, is in terms of innovation. Because, again, in Europe, environment and climate matters. So,

00:48:18most companies that we will have in Europe, will have a share of the R&D budgets to a green

00:48:24innovation,

00:48:25to, we mentioned green hydrogen, where Europe is still the main market for green hydrogen.

00:48:31Because we have very good renewable condition in some countries. Because, also, there is clear

00:48:37subsidy for that from Europe in order to advance in that direction. Biogas, as Annabel mentioned as well,

00:48:44very clear building block as well. Europe is still putting some money on the table. And when I say

00:48:48money on the table, it's actually quite a lot of money on projects like CCUS, like green hydrogen,

00:48:54Europe is putting half of the money on the table, basically. So, half of the project is financed

00:48:59directly by subsidies at the moment. Because those innovations are not competitive yet, although they

00:49:04are important for the future and for our sovereignty. So, we are ready to put some money on the table

00:49:09in

00:49:10order to support that. So, green innovation and all companies or European companies are innovating a lot

00:49:16in green. But then, this is what Annabel mentioned. Then, you need the scale-up. Then, you need, of course,

00:49:21to invest to create those industrial conglomerate, industrial cluster, where you can take those

00:49:28innovations that are not competitive yet and bring them to being economically sound. And that's a little

00:49:38bit the part that is missing. Because, yeah, you need scale. And we are very good at innovating,

00:49:44we are not that good at bringing the scale aspect. And the last part that is missing, that I already

00:49:50mentioned, and is the almost absence. I would not say absence, but let's say a very limited long-term

00:49:57industrial vision about where do we want to go. Maybe we are starting to have it on defense,

00:50:03and maybe energy should be taken into account the same way as defense, because this is sovereignty,

00:50:09because this is our security. So, maybe we should put like all inferences on the side and see energy

00:50:17as defense, whatever it takes, and we build a very sound and secure energy system. And this part,

00:50:23you know that the electricity market in Europe is still very much kind of in a free market type of

00:50:28thing. Maybe we need to rethink that in the world where we are going to renewable, where it will be

00:50:33based on capacity, where you can no longer have an electricity prices based on gas or based on that.

00:50:39There are a lot of things that need to change in order to have a proper industrial vision on the

00:50:43long

00:50:43term. And to be able to put the right money on the table, especially in the current context where,

00:50:47of course, finance are a little bit difficult, we need to think through and we need to act in that

00:50:51direction. And that is the part that is missing.

00:50:54Anadelle, you agree with that? I see you wanted maybe to react.

00:50:59Absolutely. No, no, I can only fully agree and unlike what Alex just said. I think maybe if I may

00:51:06add on that, it's really, really important, I think, to have in mind how connected are all those,

00:51:13you know, those sectors, actually, the industry sectors is depending actually on the energy sectors,

00:51:19but it's also contributing to the defense sector and the defense sector cannot do anything without

00:51:24the industry and the energy. So it's also sort of trinema, we can also see how appearing. So and what

00:51:30is also quite interesting is to see that, you know, maybe in Europe, we were in a time of optimization,

00:51:38you know, and but in a separate way of everything. But actually, when you are comparing to other big

00:51:45countries such as the US, but also China, they are integrating everything, actually. So it's not that

00:51:51new, you know, in the US, I mean, energy sector is also very related, actually, to the defense and to

00:51:56the industry policy. Same for China, actually. And so this is, you know, they have a very

00:52:03integrated holistic view. And I think in in in you in the EU, and also at the national levels,

00:52:09it has been a bit forgotten, you know, for some countries very much for some other bit less, you

00:52:15know, but still, and at the EU level, it was never let's say the plan, let's say to have such

00:52:20an integrated

00:52:20project at the EU level, it was more about market integration, that has been done quite successfully,

00:52:26not perfectly, but still successfully. And now it's much more about, okay, how we should coordinate

00:52:31everything. And so I would just, you know, stay on this phrase, because I think it's quite worth

00:52:37to say, it's not about optimization anymore, it's about being robust, you know, and this is a very

00:52:43different mindset, actually, to have in mind, I wouldn't be pessimistic on that. But it's because I

00:52:50think actually, it's really in our hands, actually, we have the assets to do that, but it won't be easy,

00:52:55this is for sure. But at least, I think, with this kind of new mindset, it would take a bit

00:53:04time,

00:53:04of course, to change it and to be systematically, to have a systematical approach on that. But I'm

00:53:10really thinking that actually, this can create a long standing goal, actually, for Europe, including,

00:53:18I mean, and when I say that, it's not without forgetting, of course, the decarbonization process,

00:53:23and so on, because I think it's really part of the values in Europe. So I don't see, you know,

00:53:30going back completely, you know, like forgetting about it anymore. But I think it's more about

00:53:35trying to structure everything together, and to find our own way as well. So but this is a tough,

00:53:41of course, this is a, this is tough, but not impossible.

00:53:45So we discussed geopolitics infrastructure, industrial policy, and competitiveness. To

00:53:52conclude, maybe, I'd like to end by coming back to the central question of the today's webinar.

00:53:58Maybe I know what you were going to say, but in the current geopolitical context accelerating,

00:54:04sorry, I refer to it. Is the current geopolitical context accelerating or delaying the transitions?

00:54:10Maybe Hadix, you want to start?

00:54:14Yeah, I can start. I think, well, let's say, as I mentioned, on the short term, quite difficult to

00:54:22see and will have contradictory moving parts. On the long term, definitely, it creates a stronger

00:54:28driver and stronger case, as I mentioned, for renewable and for a lot of the other kind of clean

00:54:35technologies as well, because, because renewables and clean tech are no longer just a matter of climate

00:54:43and basically saving the world and good feelings. They are matter of first economics, and it has been

00:54:48the case for quite some time. Even with the regulation that was less positive for for some clean tech,

00:54:56it has continued. And now the geopolitical reason, the security sovereignty reason, which is probably the

00:55:02stronger driver that you could have when something becomes sovereignty and geopolitical matter. It's

00:55:07basically, basically whatever it takes. So that's, that's something that is very, very positive. At the

00:55:13same time, I would say that for me, the main obstacle and the main thing on which I would be

00:55:18a little bit

00:55:19more worried, it's not the comeback of coal. I think this will not happen. It will kind of continue a

00:55:26little

00:55:26bit on the same trend. And then the economics and, and the improvement that we have on other parts of

00:55:31the electricity system, I think will can take a little bit more time that we won't have a coal

00:55:36revival, coal comeback or whatever. For me, the main issue and main risk is the macroeconomic context.

00:55:42Because in a context where countries are facing more costs, basically more energy costs, tougher

00:55:49financing conditions, potentially, yeah, higher interest rates and everything. Well, and with a

00:55:55lot of competing as well, objectives in terms of defense, security, social as well, security and all

00:56:02that, it can create just a way of just deciding in the short term in a crisis mode that, yeah,

00:56:09well,

00:56:10defense is more important at the moment than the energy transition. While as we mentioned, the energy

00:56:14transition is also part of your defense and part of your security. And especially for some countries,

00:56:21and especially in emerging markets in developing countries where it's already very tough in terms

00:56:30of financing conditions, in terms of borrowing condition for them to accelerate the energy transition.

00:56:36So if the context is even tougher, it can be it can be quite difficult, in which case we will

00:56:43need some

00:56:43kind of solidarity and we will need to find and it has been a subject for in all COPs, all

00:56:49COPs that

00:56:50we've had, how can also more advanced economies help to provide some interesting financing condition for

00:56:58also developing economies to accelerate their own transition. So for me, the main risk is more on

00:57:04this kind of macroeconomic side than on the specific kind of part of the energy value chain.

00:57:15I would completely agree also with Alex on the fact that there are many competing, you know, topics actually for

00:57:24the politicians.

00:57:25So it's quite difficult, let's say, to make everything possible in the same time. And with this volume of money,

00:57:32we would like to put it on the table. So this is a very first aspect to take into account.

00:57:37And I really think it will happen for everyone. I mean, it's a very very important thing.

00:57:40In Europe, obviously, but also actually in Asia, for example, so you have this sort of tension between energy security

00:57:47and affordability as well that we, you know, be even bigger and bigger. And it might have as well impacts

00:57:54on the political side of different countries, you know, so this is the first aspect I see.

00:57:59The second one more related to the energy systems is also, you know, just as complementary to what Alex very

00:58:07rightly said is about the grids for me. Because what we observe is once more, when you are deploying renewables

00:58:15and new energy sources or basically electrifying your society, you need grids. And for that you need as well to

00:58:21have a good functioning grid system.

00:58:23And this is most of the time what we're seeing lacking behind because, you know, sometimes it's better to have,

00:58:30let's say, your wind turbines and everything. But if the grid is not following up in a proper way, it

00:58:37will remain dysfunctioning.

00:58:38So I really think it's something those are two key aspects, you know, and the last one is, it's all

00:58:45related is actually when you have a volatile system, you know, in your energy system, but also, you know, not

00:58:53very much, let's say, I mean, basically, if your energy system is not very robust, you might have as well

00:59:01directly an impact on the industries.

00:59:03And I'm really under the impression that right now, even the industries will be facing a change of mentality between

00:59:10within their own existence, you know, or business model, because then you really have to, to think about, okay, you,

00:59:17I am producing something that would be needed in the future.

00:59:21And you should it take should I take the risk actually to keep producing things in such a volatile context

00:59:27for many things, as Alex rightly said, for manufacturing, let's say for energy infrastructures, but also for technology, sorry, but

00:59:36also for chemicals for heavy industries, and so on, and so on.

00:59:40And this is not the question at all, it's, it's, it's, it's useful, and it will remain completely remain useful,

00:59:45what might be a bit more tricky, let's say is for maybe the innovative industries, or maybe other ones that

00:59:53can really face actually some can be struggling actually to, to really understand in which kind of landscape they are

00:59:59evolving, you know, because in energy supply will be changing, and maybe the macro economical situations as well, you know,

01:00:08so I'm really under the pressure

01:00:10and it's sort of a sort of new equilibrium to find for those sectors mostly.

01:00:15Maybe one last word each, what would you like the audience to take away today?

01:00:23Okay, I started, I'll let you think then.

01:00:28I think the takeaway is, is maybe some hope, I would, I would hope in this, in this world and,

01:00:34and context where we have not a lot of matter for hope.

01:00:37I think there is a very clear matter for hope in everything that we say that, well, climate and the

01:00:44energy transition is now moving in the geopolitical security arena.

01:00:48And again, this is much more stronger, much more stable than only a kind of political aspect that that can

01:00:55get that can change all the time.

01:00:56So we are really moving in a direction where we make things quite unstoppable.

01:01:02You know, when we say that the, the solar PV revolution is unstoppable, well, the edge of electricity is coming,

01:01:08probably the electrification will go faster than what we thought before, just because of this crisis.

01:01:13And also renewable will be a massive part of that.

01:01:17Then of course, one thing that maybe there will be some question about is like the impact of AI, which

01:01:22is very important in terms of electric system, how it will play.

01:01:26It will probably also accelerate the electrification, not sure in terms of energy transition, what will be the, the, the,

01:01:33the results.

01:01:33But longer term, clearly, renewables are now have three boosters, politics, which is quite weak at the moment, economics, which

01:01:43is super strong and geopolitical, which is getting super strong.

01:01:46So quite positive for the future.

01:01:50Well, maybe, thank you.

01:01:52And thank you, Alex, for that is very inspiring.

01:01:54You know, well, both on the fact that, as you, you said, it's actually more an acceleration of Latin dynamic

01:02:04for me, at least more than, you know, so of course you have this crisis effect, but actually we knew

01:02:09already that we were going to this direction.

01:02:11No, there's not a big new U-turn, you know, of everything.

01:02:15So this is their first thing to have in mind.

01:02:17The second one, I think it's, if I may be a bit philosophical, if you allow me, I would say

01:02:23that embracing the chaos might be sometimes quite useful as well, because, you know, from this perspective, you are trying

01:02:31to navigate, you know, in uncertainty.

01:02:34And for that, you need to know exactly what you have, what are your vulnerabilities, how you should be robust,

01:02:41what are you doing, is it essential or not.

01:02:44And if so, actually, if you can answer yes to everything, basically, you still can survive and you still can

01:02:50navigate actually in this context.

01:02:52So I'm really, you know, thinking that fear won't help in this case, but actually, you know, trying to take

01:03:00your sleeve up and to say, okay, now I will have to go to work.

01:03:04And these security matters too, that are important, I need to secure everything, I need to be robust, I really

01:03:12think actually might help to have our clear direction actually in this foggy times.

01:03:19Well, thank you Annabelle, thank you Alex for your insight. We will now move to the Q&A session. So

01:03:27we already received a number of questions from the audience. So maybe start with the first one.

01:03:34How permanent inflation and rising yields can prevent the clean thematics to develop properly? How bad is that and a

01:03:44serious headwind?

01:03:47I can start on that in the macroeconomic context because I already touched on that a bit. So yeah, I

01:03:53mean, of course, as I mentioned, for me, it's the main risk and the macroeconomic context and the fact that

01:03:58if we go into a general slowdown with high inflation at the same time, potentially higher interest rates.

01:04:07Well, we've seen in the past that basically, like the energy transition and the clean tech are usually very capital

01:04:15intensive, so very much dependent as well on how the financing condition that you can find.

01:04:21So I think that's the main issue. And especially as I mentioned, in developing economies outside China, because it's a

01:04:29little bit in the middle, but you need to attract additional capital if you want the energy transition to happen

01:04:35in these countries.

01:04:38Currently, emerging countries outside China, they account for only 10% of the growth in energy investment on the past

01:04:45decade.

01:04:47This share needs to go to 50% over the next 10 years, according to the IEA in its scenario,

01:04:52in its kind of central scenario about what it takes to actually accelerate the transition.

01:04:56But at the moment, a lot of companies in those markets, their financing costs can be double or triple the

01:05:03cost you have in advanced economies.

01:05:06It means it costs two or three times to develop the same kind of projects. So that's a massive issue.

01:05:13At the same time, something interesting to take into account is the fact that in the clean tech supply chain,

01:05:20you've had a lot of moving parts.

01:05:21You've had a lot of inflation in some parts of the supply chain. So the cost of some equipment has

01:05:26increased quite a lot.

01:05:26But in other parts of the supply chain, actually it has decreased. And what we've seen in terms of energy

01:05:31investment and the fact that the investment in renewable has been reduced a little bit in 2026 is mostly due

01:05:39to the fact that in China, the cost of solar panels has again decreased.

01:05:44And so of course, then it's less investment. So if the improvement that we are seeing in some clean technology

01:05:52can also compensate for the inflation that we see in other and for potentially tougher macro condition, it could continue.

01:05:59But yes, the macro economic aspect, especially in developing economies is one of the main risks for the transition in

01:06:10my point of view. I don't know, Annabelle, if you want to compliment.

01:06:13Well, I think, yeah, absolutely. I mean, I fully agree on that. And I really under the impression, I mean,

01:06:18you know, it's it would be a bit clean energy or cool, but only for the region that do have

01:06:25cool, you know, for the other ones, actually, that would be stuck.

01:06:28This is actually the what would be happening, I guess, for for this country. So there is a sort of

01:06:33what we want to do and also what we can do or not in this case.

01:06:37And I think it's it might be, you know, in the worst case scenario, it might be actually a situation

01:06:43when it's either it's clean energy or it would be demand destruction, actually.

01:06:49So basically trying to structurally consume less energy and it can be impacting actually the industries, but also the consumption

01:06:57behaviors within the countries and so on.

01:07:00So I'm really under the impression once more, it's really depending on the geography and the different countries, their situation,

01:07:06their energy supply organization and so on.

01:07:10But I'm under the impression if this could happen, actually.

01:07:16A second question would be how the US administration is ending the decarbonization policies.

01:07:24Well, the US handling decarbonization. Annabelle, do you want to start or I start?

01:07:28Yeah, I couldn't start, actually, because I got some very interesting interviews a couple of weeks ago, actually, exactly on

01:07:36that.

01:07:36And what I would say is very interestingly, even if they are not talking about decarbonization, they haven't actually forgotten

01:07:45about the clean energies.

01:07:46It's just it's sometimes it's also about label, you know, so it's quite interesting to see that, you know, between

01:07:53the political framing actually about energy policies and so on.

01:07:59And actually, the reality is that when we are talking about clean energy, obviously, there is a strong interest from

01:08:06the US in nuclear energies.

01:08:08This is, of course, very obvious, let's say, but actually there is not, I mean, there is on the political

01:08:15side and also with all this framing about climate policy, those have been completely targeted.

01:08:21That's true. But actually, from an industrial aspect, actually, it's not completely out of the run, you know.

01:08:28So this is interesting as well to see that, let's say, solar energy are still interesting, wind energy are still

01:08:37interesting.

01:08:38And so on and so on. But it's really about narratives. And I think it's a perfect example to show

01:08:42how politicization of such matters such as energy can bring, you know, some very paradox situation,

01:08:50because actually, at the end of the day, it doesn't make any sense. You know, it's ideology. It's only about

01:08:56ideology, sorry.

01:08:58That's all. So once more, of course, they are, they are great. I mean, there are impacts. But at the

01:09:06end of the day, they are also pragmatic.

01:09:08That's what I can say. I know, Alex, if you had other, I mean, other things on that.

01:09:14Exactly the same that you said. And, you know, when Trump got elected the second time, we did a little

01:09:20bit of a little exercise to just assess what has been the decarbonization trends of Obama, Trump, Biden and everything.

01:09:29And actually, in the first friend Monday, you were decarbonizing even faster than in the second Obama Monday, basically.

01:09:34So just because of one thing that one U.S. president said, it's the economy, stupid. I mean, from an

01:09:40economical point of view, basically renewables in a lot of states.

01:09:43I mean, the main state to develop renewables is Texas. Texas is not the most climate committed state on this

01:09:49planet.

01:09:50It's just because of economics. And it's just because of the fact that they need more energy.

01:09:56It creates a lot of jobs as well. And so, of course, all politicians are quite sensitive to job creation.

01:10:02So, yes, there are a lot of symbols and there are a lot of things, you know, wind is ugly,

01:10:06blah, blah, blah, blah, blah, blah.

01:10:07But what we are seeing on the ground is still a very strong deployment of renewables, despite the fact that

01:10:14the Trump administration removed some tax credit, ITC, PTC and all that.

01:10:19Despite that, we've seen on the ground that they are still a lot of investment in renewable and also supported

01:10:24and obviously fueled by this AI boom.

01:10:27When you want power generation capacity developed very rapidly, renewable is the best option.

01:10:32And also something very important in the U.S. is that the grid, the networks that we said is very

01:10:37central to this transition.

01:10:38The quality is very poor. The quality of energy infrastructure and especially the network and the grid in the U

01:10:43.S. is very, very poor.

01:10:45They need very much. They need a lot of investment. They've been under invested for quite some time.

01:10:50And now what we're seeing in the U.S. is the fact that, of course, grid congestion and bottlenecks is

01:10:56one of the main obstacles to the deployment of AI.

01:10:58And you have a lot of data centers that are at risk. And we've seen companies more recently, Microsoft, OpenAI

01:11:04ready to pay for basically whatever it costs on the grid upgrade.

01:11:08So paying for the grid upgrade in order to plug their data centers to the grid.

01:11:12So this AI boom can also bring a new kind of cycle of also of capex in the U.S.

01:11:17grid that will then help again to include more renewables.

01:11:21So what we're seeing on the ground is very different from the political speeches that we hear around.

01:11:29Maybe another question. So for securing energy in Europe, you are suggesting to rely on renewable sources such as nuclear,

01:11:38solar, wind, but the raw material for these sources are limited in Europe.

01:11:43There are local sources such as geothermal energy, but development of this source is slow and not widely adopted in

01:11:52Europe due to the costly investments.

01:11:55What do you think about these situations?

01:11:59I can start if you want, Annabelle, on geothermal.

01:12:05Well, first, on renewables, so nuclear is not renewable. Renewable is low carbon, it's thermal, and then renewables is more

01:12:11wind and solar.

01:12:13On wind and solar, we got the resources because the resources is the wind and the sun.

01:12:18So basically, we've got the resources, then it's just where you put your project in order to get the most

01:12:22of resources.

01:12:23But in offshore wind, you can have load factor close to 40% now in some projects in the North

01:12:29Sea and everything.

01:12:31So that's the interesting point with renewable is that you've got the resources, you just need the equipment.

01:12:36Basically, it's a capex type of thinking and not an opex.

01:12:39And it's basically you're dependent one time when you build the projects, but then you're not dependent while fossil fuel.

01:12:45You're dependent all the time if you want to fuel your gas power plant or your coal power plant.

01:12:50So renewable, that's why we already have the resources. On geothermal, yes, it's something that is interesting.

01:12:56The only question for geothermal is the cost. It's first having the right, of course, situation and the right potential,

01:13:05and especially for very much deep geothermal, which is the most interesting from an energy point of view.

01:13:11But then it's the cost and geothermal right now, yes, it will develop.

01:13:14And we see that in the US, especially you have a lot of interesting things.

01:13:18But you have also one company, Australian company that I won't name, that has a very massive objective in Europe

01:13:24in terms of geothermal energy.

01:13:26It will develop, but compared to geothermal compared to wind and solar at the moment in terms just of cost.

01:13:33It's not it's not competitive enough. But yes, I mean, basically, sovereignty means diversification as well.

01:13:39So we need to diversify as much as possible. Joe, tell me at the moment, it's interesting.

01:13:44It has been interesting for years. It's very interesting in countries like Indonesia, where you have very good condition and

01:13:48where then can be done with cost structure that is interesting.

01:13:52In Europe in general, currently, the costs are not sufficiently advantageous, I would say.

01:14:02But maybe, Annabelle, you have a different view on that. I don't know.

01:14:05Well, no, I mean, I would be more in a complementary way, because as you rightly mentioned, I mean, it's

01:14:11really about diversification.

01:14:13And I'm really under the impression that basically in Europe, it is what was a bit lacking at some point

01:14:19as well at the political level, because it was a bit, you know, it's always good, let's say from the

01:14:24political side to find the one good solution actually for everything.

01:14:28But actually, for energy, it's clear that it's not even safe, let's say, to only rely on one type of

01:14:37energy, actually.

01:14:38So I'm really under the impression that now the idea is really to enlarge the scope.

01:14:45As in the question, it was rightly mentioned about the question that relates to raw materials.

01:14:50So I would just say that maybe for nuclear is less dramatic because uranium is not very it's you can

01:15:00find it actually in a big quite biggest volumes, you know, also with countries like in Canada or in Australia

01:15:06and so on.

01:15:07So it's not that's a huge problem about the supply of uranium.

01:15:11But for the rest, actually, this is true that actually because it's not only about the access about raw materials,

01:15:17but it's also all the the all refinery process.

01:15:21But actually, it's it's it goes even beyond the energy sectors because it's also, you know, impacting actually all the

01:15:28digital sectors, but also the space defense sectors and so on and so on.

01:15:33So I would say this is definitely something to address, but I was mentioning it a bit, you know, it's

01:15:40also in the way to frame actually the energy or let's say the partnerships with other countries that do have

01:15:46those resources.

01:15:47And by the way, maybe also to mention that actually you have also some countries including France that are willing

01:15:53right now to reopen some some mining.

01:15:56So, of course, it won't it won't save, you know, it won't secure everything, obviously not, but still giving some

01:16:03space as well to, you know, at least for the very critical components that need actually some lithium, for example,

01:16:11or for uranium and so on.

01:16:12In France, this this willingness to to extract it actually on our own cells, especially if we need it.

01:16:19So this is one aspect as well to mention that France is not the only example in this case in

01:16:24Europe.

01:16:24And also maybe just to add on on the question about Geothermie.

01:16:31I really under the impression because it's very true about the cost.

01:16:35It's very true as well that actually obviously you had other options that were more that have more advantages.

01:16:42But in the same case, once more in the context we are and especially for gas and and heat actually,

01:16:51which is not the same.

01:16:52I mean, of course, you can electrify for heated purposes, but actually you can also I mean gas is actually

01:16:58not that bad as well to use it actually for heat purposes, especially for the industries.

01:17:03But also if you have already cities that have been bought actually with both sorry on on pipeline systems, you

01:17:12know, for gas, sometimes it can be very costly as well to electrify everything and you need to adapt all

01:17:18the grids and so on.

01:17:19So in those cases Geothermie can be actually interesting because it contributes as well to the ramping up actually of

01:17:26building, you know, production and energy production capacities in the European territories.

01:17:33So I'm really under in depression, you know, from not very viable or quite costly options.

01:17:40It can be actually useful, not the best one still not saying it's, you know, the easiest one, but it

01:17:47could be very useful in those cases.

01:17:49And I'm under the impression, you know, that if not Geothermie, I guess biomass, for example, or biomethan, or even

01:17:57the valorization of wastes, for example, can be projects, very concrete projects that could actually be ramping up actually.

01:18:06And it's not maybe the most, you know, it's not necessarily the sexiest, let's say, to sell to the EU

01:18:13Parliament, but actually right now in this context, it might be, you know, they might have even more voices actually.

01:18:20And I really think it's a good thing in this case.

01:18:24So maybe really shortly, because we already mentioned that a bit, what should the European country need to prioritize to

01:18:31ensure energy secure at medium and long term, in your point of view?

01:18:38Alex, would I like to have the last word?

01:18:42Well, prioritize, as we say, if it's in terms of mindset, we mentioned already, I mean, and something that is

01:18:51important is, you know, sovereignty.

01:18:53We've talked a lot about sovereignty in Europe, but it was kind of national sovereignty to say, this is national

01:18:58sovereignty.

01:18:59This topic is for countries to decide and not for Europe.

01:19:01So now we need to think about the European sovereignty.

01:19:05We need to think as a group, as European countries about the sovereignty we'll build together.

01:19:09So it's really a change of mindset.

01:19:11So for me, the main priority is to think those type of issues and especially, well, energy, you know, energy

01:19:17needs in this long term industrial vision,

01:19:20having now sovereignty as a clear booster that's OK, it's not going to variate.

01:19:26It's not about costs.

01:19:27It's about one clear direction that we have.

01:19:30And we are all kind of going together, banks, investors, companies, obviously governments, citizens, all together in that direction.

01:19:38That is what is very important.

01:19:40And then, of course, in terms of technologies and what we should prioritize, as we already mentioned, of course, renewables,

01:19:47grids, storage,

01:19:48and then all the type of technologies around green hydrogen, EVs as well, EVs, that's the electrification of transport in

01:19:58general.

01:19:58All that will need to be priorities because they will all be very important in order to decrease our dependency

01:20:04on fossil fuel.

01:20:06And Annabelle, if you have anything to add.

01:20:09Actually, it's fully on this line, so it's perfect.

01:20:12But no, I would say maybe just because it's basically what you say that I think what is absolutely needed

01:20:18and crucial,

01:20:19and this is in our hands, it's about consistency, trying to, you know, thinking long term and also trying to

01:20:27stick to the efforts and to the roadmaps we had in mind.

01:20:32And it's not only about just, you know, having objectives of deployments of this specific kind of technologies or not.

01:20:40I think it's more about this kind of mindset, you know, if you know your project is contributing to energy

01:20:48security, it is in a decarbonized way.

01:20:51And you are actually, it is also related to this industrial policies and so on, it will survive everything, every

01:20:58context, you know.

01:20:58So I'm really under the impression that actually consistency from the investment side, from the political side, from, you know,

01:21:05everyone, actually,

01:21:06it's, it's also maybe believing that, you know, it's, as I mentioned just before, it's not, we are not only

01:21:14in a time of crisis, we are in this reality.

01:21:17And we have to accept it. And the, the, the fastest you, you accept it, the better you can then,

01:21:24you know, try to, to get your roadmap actually in this, in this landscape, because this won't change.

01:21:29As we mentioned, it's, it was already there as a latent trajectory, or let's say dynamics. Now it's just accelerating.

01:21:36So it's just so, you know, coming up with a good rhythm on that. Easier to say than to do.

01:21:42I agree on that. This is true.

01:21:45Well, thank you. We don't have any more questions. So I think we can just close the webinar. So thank

01:21:56you, Annabelle.

01:21:56Thank you, Alex, for your insight. And thank you to the audience for all your questions. And have a nice

01:22:02day.

01:22:04Thank you. Thank you very much. Thank you so much. Bye-bye.

01:22:07.

Category

Transcript

Comments

Recommended