- 1 day ago
"Global climate pledges are hitting a wall. While shifting policies and fluctuating investments tell part of the story, the fundamental drivers remain unchanged: the urgent mandate to decarbonize, the massive energy demands of a growing AI infrastructure, and the rising importance of energy as a pillar of national sovereignty.
Progress remains uneven. China dominates the renewable energy supply chain, Europe has made significant strides in scaling green power supply, while the United States remains a fragmented landscape. In this context, which strategies will actually scale? Which energy mixes offer the best ROI for both the planet and the economy? And ultimately, how can we balance reliability, sustainability and sovereignty?"
Progress remains uneven. China dominates the renewable energy supply chain, Europe has made significant strides in scaling green power supply, while the United States remains a fragmented landscape. In this context, which strategies will actually scale? Which energy mixes offer the best ROI for both the planet and the economy? And ultimately, how can we balance reliability, sustainability and sovereignty?"
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TechTranscript
00:00Hello, good afternoon everyone, and welcome to our panel, Survival of the Greenest, the Future of Sustainable Energy.
00:09I think the boys here are just swapping their seats for us.
00:13The global energy transition is entering a more difficult phase.
00:18Climate pledges remain urgent, but countries are also facing a much more complicated reality.
00:23They're coping with grid bottlenecks, pressure on public budgets, growing concerns on energy security, and last but not least, the
00:32AI-driven power demand.
00:34So today, we'll look at what it really makes to take sustainable energy to go to scale, not just as
00:41a climate goal, but as an economic priority.
00:45We'll ask which models are working, where the bottlenecks remain, and how companies and countries can work together.
00:52Now, to help us unpack this, we have three fantastic speakers with us, who will bring perspectives from different markets
00:59and different parts of the energy value chain.
01:02We have first, Clemence Fischer, Group Strategy VP at Engie.
01:06Clemence helps shape strategy for one of Europe's largest energy groups across renewables and decarbonization solutions.
01:14Next, Tim, Chief Strategy Officer at Octopus Energy.
01:18Tim leads corporate development and international expansion, and has played a key role in scaling Kraken, Octopus's energy tech platform.
01:27And last but not least, Li Wenxian, Chairman and CEO of PCG Power.
01:32Wenxian is a leading figure in China's distributed energy transition, with PCG Power operating nearly 2 gigawatts of grid-connected
01:40clean energy capacity.
01:41Thank you all for joining us, and let's begin with the current state of things.
01:46Could each of you briefly describe the power system and renewable energy progress in your main markets, and what has
01:54scaled successfully so far, and what are the bottlenecks?
01:58Clemence, could you kick us off?
01:59Thank you very much for having me.
02:02So what we see is that the energy transition is continuing, despite what some might say.
02:09And it takes different flavors.
02:12So, you know, we operate across 30 countries, so we see different, let's say, drivers of the energy transition.
02:18And it can be sovereignty.
02:21It can be affordability.
02:23It can be the demand growth, for instance, from data center that the previous panel discussed.
02:30It can be also, obviously, climate change.
02:33So we see those drivers ongoing, and, in fact, renewable energy is today the cheapest energy production mean.
02:42And I think at the end of 2025, it already answered to it was 50% of the installed capacity,
02:50so it's quite huge.
02:52Now, if we look at the different geographies, we see a little bit of some differences, let's say.
03:00In Europe, the fundamentals are here.
03:03We continue to install new renewable capacity.
03:07We continue to develop to go towards decarbonization.
03:11That being said, we have an energy which is higher than in other areas of the world.
03:18So we need more competitiveness in Europe.
03:21And also, we need to unlock some bottlenecks, for instance, the grid developments,
03:27but also permitting for some projects.
03:29It takes five to seven years to basically develop them.
03:33So we need more execution, in fact, in Europe.
03:37In the U.S., it's pretty different.
03:39We saw, let's say, a backlash and some, let's say, political changes in the U.S.
03:47And that being said, we talked about the hungry data center, so they are already driving the demand.
03:53And at the end of the day, if you need energy, the fastest way to get it online is through
03:58renewables.
03:59So half of the data center demand will be, at least half of it, in the U.S.
04:05And elsewhere, by the way, will be fed by renewables and storage and so on.
04:10We also operate, for instance, in Brazil, where here it's a bit different.
04:14The mix is already decarbonized.
04:17That being said, because of the demand growth industrialization, there is also a need to develop more transmission lines.
04:25And so we are also active on that.
04:26So basically, energy transition is ongoing.
04:29The fundamentals are here, but the flavors of it are different depending on the countries.
04:35I appreciate the nuance.
04:36Thank you, Clémence.
04:37And Tim, the market you're most familiar with, what's the progress like there?
04:42Well, first of all, I thought that was a fantastic summary because it is a different story in different markets
04:47around the world.
04:48So I'm from Octopus Energy.
04:50We're based in the U.K., but we operate in another seven countries, including Europe and Japan and New Zealand
04:56and Texas and the U.S.
04:58Maybe I'll talk a little bit about the U.K., which is our largest market and where I'm from.
05:04So I think, as Clémence said, the energy transition is going.
05:08It's happening.
05:08We can all see that.
05:10It's really a question now of how well we do it, how quickly we do it, and how much it
05:14costs, I think, and whether we can have efficient systems.
05:18I think that there are lots of things that are going well, particularly in the U.K.
05:22I think we've seen great EV adoption.
05:26We have done a lot around flexibility, energy flexibility in the U.K.
05:32And so, for example, our company manages a fleet of 400,000 electric vehicles,
05:38and we're able to control when each one of them charges individually on a totally automated basis,
05:44and we're able to take that resource into the energy markets and get value out of it and return that
05:49to customers.
05:50That's fantastic.
05:51That is the sort of demand-centric system we are moving to, so lots of great progress.
05:57I think, on the other hand, though, I would echo the points around grid connections are frustratingly slow,
06:04and actually no one seems to be figuring this out.
06:06It's not an easy problem to solve, but certainly in the U.K. and Europe and in developed markets, that
06:13continues to be a big challenge.
06:15I think the other thing that we all need to be very conscious about is the cost of energy,
06:21because a high cost creates lots of drags on the energy transition.
06:25You know, it slows the demand for energy or reduces the amount of energy we use.
06:31It creates a sort of voter and political backlash, and that can undermine the overall project.
06:38And thirdly, I think it encourages kind of decentralization, so for people to self-generate and store energy,
06:44which isn't a bad thing per se.
06:45I think it's something we need, but there is a risk that if we do that in the wrong way
06:50or too quickly,
06:51that actually we struggle to recover costs across the system itself.
06:54And so it's a really mixed picture.
06:57I think there's been loads of fantastic progress.
07:00I think we sort of know where we want to get to, but the challenge now is aligning the economic
07:03and regulatory models
07:04so we have a sustainable transition that's economic and also works for people.
07:12Fantastic. Thanks for the candid picture there.
07:15And Wenxian, what's the market like?
07:17Our main market is definitely China.
07:19So I think talking about China is definitely always the massive buildup of the renewable generation, you know, generation sides.
07:26So when the country raised up the 36 commissions, which is in 2019, that the 1,400 gigawatts was expected
07:37to build up in 2030.
07:40But actually, the number was built up five years earlier.
07:43So which is by end of 2025, that China is building up 1,400 gigawatts for the new renewable generations.
07:51So that the country raised up another pipeline for another 1,400 gigawatts, which is the pipeline was in 2035.
07:58So which means that several of the China cities already, the renewable generation covers 30 to 40% of the
08:06total generation.
08:07And several cities already covers 50, more than 50 of the total generation side, which bring up a definitely significant,
08:15you know, power price drop down.
08:18So even this year, so we are facing a global power price challenge of several, you know, mainly Chinese cities,
08:25you know, still experiencing around nine to 10 cents U.S. dollar kilowatts per hour cents, which is the, you
08:33know, power price for, you know, industrial and also around five to six U.S. dollar cents for the residential.
08:40So, but still, the challenges we are facing is for the mismatch because of the renewables are not predictable.
08:48And also that we are facing the fixed, you know, demand for the AI and also that, you know, residential
08:53that we are facing, you know, a very hot summer this year.
08:57So this will be, you know, still the mismatch about the renewables and between the fixed demands.
09:03So we're going to talk about all the solutions to all of that later.
09:07Now, understanding the broader picture, let's move to the company level and what you do.
09:13Tim, Octopus is often described not only as an energy retailer, but also a tech company through Kraken.
09:20How does Kraken change the way utilities operate and why do software, data, AI matter that much?
09:28Yeah, so it's hugely significant.
09:30So we have a business called Kraken that we developed inside Octopus Energy, which now provides billing and CRM and
09:41other solutions to large utilities globally.
09:44More than about 100 million customers now serve by Kraken and growing quickly.
09:48We're actually de-merging that business.
09:50So it's leaving the Octopus Energy business and sort of going off on its own journey now.
09:57That's really a story around customer centricity and efficiency and being able to do the basic job of actually understanding
10:03how much energy is being used and translate it through all the complex and operations and sort of high value
10:11meters cash ledger.
10:13So you can actually collect the money while delivering a fantastic customer experience, which underpins the retail, the competitive energy
10:21retail model.
10:22Kraken is also using lots of AI and things like flexibility and in its core operations and other kind of
10:27products and services.
10:28So it's a modern software business operating in energy where most of the software stacks that we are using are
10:36kind of much older and based on a sort of earlier version of technology.
10:41I think there are – but if you sort of zoom out a bit and you sort of say, why
10:47is software important for energy, I think, which was the question, I think it is because we are moving from
10:53this system where you could centrally dispatch a few hundred generators in order to meet the demand on the system
11:01to one we have tens of millions of endpoints that we need to control flexibly.
11:06So, you know, as I'm sure you know, in a renewable-led system where the sun and the wind is
11:11sort of going up and down, we can't control that.
11:14So we have to control demand as a set and we have to store.
11:16And that becomes a much more complex problem to solve.
11:20It needs optimization.
11:21It needs prediction.
11:22It needs, you know, sort of sophisticated manipulation of lots of different things.
11:27And that's not a problem you can solve from a central control room dispatching, you know, an individual battery from
11:32a house.
11:33You have to do that through software.
11:35And then the second thing I'd say is just this role on customer engagement.
11:39It is really critical that we bring people with us and that people experience the benefit of the energy transition.
11:46And, you know, one of the ways you reach millions of people are through good digital experiences.
11:51And so it's hard to sort of engage consumers if you're sending them a paper bill every, you know, month.
11:56Whereas if you're giving them sort of rich digital experiences that take them on an electrification journey, then that brings
12:02them into the system and brings those benefits back to them.
12:04And then obviously you need software to do that because it's, again, it's automation, it's digitized, et cetera, et cetera.
12:09Thank you for bringing the customer angle there.
12:14So, Wenxuan, PCG Power focuses on distributed clean energy for industrial and commercial users.
12:22You talked a bit about the challenges before.
12:25But in China, why has distributed energy become such an important part of the new power system now?
12:33Yes, definitely first, this is slow the, you know, first the problem of we slow part of the mismatch.
12:39Because when you're building up the CNI, you're actually building up the directly supply for the, you know, for the
12:45demands.
12:46So, you know, we use the word of the, you know, independent energy supply.
12:51And also that we use the word of the spare space.
12:53So, which means that we use most of the rooftop of the, you know, factories and then independence, you know,
13:00generated power and transforming to the factories or the other, you know, clients.
13:06So, in China, we call it the self-sufficient first, then exit power with cells through the grid.
13:12I will talk the cell through, not cell to later.
13:15So, which is definitely slow some of the problem of the mismatch.
13:19So, definitely, if you're talking about the whole China, that's, you know, when we catch up of the CNI, you
13:25know, speeds.
13:27So, in China, totally, within five years, that around 400 to 500 gigawatts was built up for the CNI.
13:36Which is that definitely you can see that the industrial demand is super aggressively growing up.
13:42So, for, you know, for, you know, PCG is a very new company.
13:45We just established our company in 2022.
13:49So, within three years that, just, you know, Chelsea, you mentioned that we have two gigawatts to be connected.
13:54So, we are expecting one point gigawatts to be built up within one year, which is this year.
13:59So, we are expecting the number to be double next year.
14:02So, we are catching up the speed in, you know, with the new grow up that we are catching up
14:06the new, we see the, you know, the aggressive demand from the customers.
14:11And then, when you're talking about that independent energy supply, which is an interesting topic.
14:16So, let's, you know, just raise one example that, you know, one China that is steel plant, which is very
14:24big, that we bring up, you know, use the spare space, the rooftop, and also some of the, you know,
14:31spare space on the ground.
14:32So, we're building up around 120 megawatts for independent supply for the, you know, for the steel plants.
14:39So, the steel plants do not use the power from the grid anymore.
14:43So, we use several of the energy battery and steel to, you know, to fulfill all the demand and all
14:50the supplies from our generation side and also the demand side.
14:53So, which is a hundred match.
14:54So, this is one example we raised that we are making more of the examples in China to building up
15:00the independent energy supply.
15:02So, basically helping industrial users gain a little bit of autonomy to have a reliable green supply.
15:09Yeah.
15:10Clomance, energy operates across renewables, flexibility, and decarbonization solutions.
15:16From a business perspective, where is the biggest growth opportunity now?
15:20Good question.
15:22In fact, we see our objective is to build the system that works.
15:27So, there's not only one opportunity.
15:29There are many opportunities.
15:31And the system that works to make the energy transition happen and be scalable, given the context you mentioned, Tim,
15:39that there is now more, both of you, actually, more complexity, more decentralization, and also more electrification.
15:45So, how can we make this system work and be scalable?
15:49So, first big opportunity for us are all the infrastructure.
15:54We need the grid.
15:55We have congestion in Europe, long delays.
15:59We have, yeah, many, let's say, the grid is really a key enabler, a backbone to make the energy transition
16:06happen.
16:06So, first and foremost, the power grids.
16:08So, we invest in transmission networks, for instance, in Brazil and Chile.
16:12Recently, in the UK, we acquired UK Power Networks, which is serving 8 million customers in London and other areas.
16:22So, it's 12 billion, you know, into that acquisition.
16:26So, it's a big commitment of energy.
16:28And, of course, we also have gas networks that we operate in France and that we want to decarbonize more
16:34and more.
16:35We also have local energy infrastructure, which are providing, for instance, supplying heat for cities.
16:42So, that's the network part.
16:43Then, you need the capacities, the production.
16:46And so, in our view, renewables combined with batteries in order to provide round-the-clock electricity or the right
16:54flexibility to the system are really the key solution.
16:58In fact, our strategy at ENG is to be the best energy transition utility.
17:03And we aim for 95 gigawatt renewables and batteries by 2030.
17:07And today, we are at 57 gigawatts, you know, across our 30 countries.
17:12So, it's really also a big commitment where we see a lot of potential, as we mentioned in the first
17:17question, is there.
17:19Then, we talked about electrification, which is definitely happening.
17:24And there are some sectors that we need also other solutions, for instance, high-temperature industry, etc.
17:31So, we need also the green gas, so biomethane, for instance.
17:35And so, we aim to have 50 terawatters connected to our gas network in 2030.
17:42So, it's steep growth.
17:43But also, other gases like hydrogen.
17:46It's more the beginning of the journey.
17:48E-molecules and so on.
17:50And they have a role to play to also increase our sovereignty, because those will be our produce locally.
17:57And also, to contribute to the resilience of the system.
18:01Because, for instance, in Europe, you need to manage the winter peaks.
18:04And, you know, we need both networks, in fact, to be able to answer to that demand.
18:10And last but not least, of course, the customer solutions.
18:14Demand-side flexibility.
18:17Also, decarbonization solution.
18:19On-site production for the industry, which is massively electrifying for those who can,
18:25are really key in order to support that decarbonization.
18:29So, it's really a system opportunity.
18:32And, basically, the point now is to orchestrate that.
18:35Thank you, Clemence.
18:37Now, a lot of potential opportunities right there for expansion.
18:42Now, the energy transition doesn't happen in a vacuum.
18:45It's, of course, driven by policy and demand, as we mentioned.
18:49Now, this question is for everybody.
18:51Looking ahead, how are government policy shifts and AI-driven power demand changing the renewable energy transition in your market?
19:01And what new challenges are these creating?
19:04Wenxuan, let's start with you.
19:05Yeah.
19:06So, for this question, China, I think, has the biggest shift of the policy.
19:11So, you know, last year, until last year, China didn't have the policy of the market transaction of power.
19:18So, that's, you know, even for the renewables, the policy is that when you generated the power, you sell to
19:27the grid, not sell through the grid.
19:29You don't have your own customers.
19:31So, when you sell to the grid, which is that the grid will give you a price, and, you know,
19:36every year you have a PPA.
19:37So, we call it.
19:38So, but, you know, especially for the AI, super aggressive demand, so which is that the grid itself actually cannot
19:51fulfill all the demand from the AI data center.
19:56So, because of the demands, its capacity, so even the, you know, the grids cannot giving approval that, oh, okay,
20:06you can build up a new data center.
20:07You know, the grid cannot offering a room for the demand room.
20:12So, which is just, you know, back to my first, you know, challenge for the China, you know, renewables, I
20:19mean, the policy, which is the mismatch.
20:21So, how to slope the problem, how to slope the challenge, the government making a big shift after that we
20:29finally open the market transaction for power trading, which that's all the renewables that you sell through the grids.
20:37So, you can find your customers, you can find your customers, so you, after that you will have the day
20:42ahead transaction, that you have the transaction day, and you can find your own customers, and you can match your
20:48customers.
20:48So, which that's, after this, all the, you know, the industrial changing to do three things.
20:55First, we do the demand prediction.
20:58So, even for AI, that we, we do the fixed demand prediction.
21:03Also, we do the flexible demand prediction.
21:06And second, we do the generation side prediction.
21:10And then, within these two predictions, we match.
21:13We do the matching.
21:14We do the matching, and we remove the flexible demand, maybe AI center, to the noon, which is, you know,
21:21for the solar and for the wind, which is the big generation time.
21:25So, this is matching strategy.
21:28Definitely, there is a my partnership, which is Octopus Energy, that we're doing the matching system that we bring to
21:34China, that we also want to.
21:36So, this is the biggest, you know, policy shifting, and which is the biggest, I think, the business, biggest ever
21:43business change that happened to China, which is the biggest, you know, energy market in the world.
21:48And also, with the great, aggressive, still the aggressive, you know, growth for the generation and the demand side.
21:55Thank you, Wenxian.
21:56And Tim, policy shifts in AI demand, AI-driven power demand.
22:02Yeah, there's a lot, there's a lot to talk about here.
22:05So, I'll try and, I'll try and keep it brief.
22:08So, I think, let's, I'll just talk about the UK, because then the climate's going to cover Europe.
22:15The, so, the UK government has, had decided a number of years ago that it wanted to go kind of
22:21full, clean power, and launched an ambitious program called CP2030.
22:25And so, that has essentially taken care of building, you know, renewable generation and building out grids.
22:34The, the, so, that's the first bit.
22:36I think that's sort of underway.
22:38The second bit is, as I mentioned earlier, there is increasing focus in the UK now about the cost of
22:43energy.
22:43We have the second highest energy price in Europe, second only to Germany.
22:48And this is increasingly dominating the, sort of, agenda politically.
22:55And also, our, our, our, sort of, political state generally is quite uncertain and quite febrile.
23:01And so, you know, there are, there are questions about where that, that kind of leads you.
23:07And so, the, the, the government now came to power on a, you know, had an election pledge that was
23:15going to reduce the price of electricity.
23:16And that, that hasn't happened.
23:17So, they need to figure, they need to figure out how to do that as, as part of this journey.
23:22And then the third bit is around, I would guess, the efficiency of the system.
23:26And this is where you get to digitization and flexibility.
23:30As I said, we've, we've made some good progress here, but there's still a lot more to be done.
23:34Because the question, really, is how can we deliver this system where we've got a lot of renewable energy connected
23:39on the, the supply side, and we've got intelligent demand, and we can match the two things together to, to
23:44Wenchuan's point, and therefore better utilize the infrastructure that we already have to limit the amount of additional infrastructure that
23:52we need to build, which will, of course, have to be paid for by consumers through the energy bill or
23:58through taxation.
23:59And this is where we need to go much deeper on things like reform of the market, how flexibilities markets
24:05work, things like vehicle to grid, which can be a real game changer if we can get it right.
24:10But I think the, as a policy is moving too slowly on that.
24:13So, I think it's, it's really a sort of, you know, for me, it's kind of in three parts.
24:16I think the core agenda is, is, is, is going, the cost piece needs to be figured out, and that
24:23is in part enabled by the efficiency and digitalization of the system, which I think is still in, frankly, it's
24:29in quite early days.
24:32I think the UK government should really hear your proposal just now.
24:35We benefit from it.
24:36We have told them, yeah.
24:37Yeah.
24:39Fantastic.
24:40Clomance, what about Europe market?
24:42Yeah.
24:42So, as utility energy players, we like certainties, we like long-term stability, and we don't have, necessarily have it
24:54at the moment regarding some areas of the world.
24:57If I take the US, for instance, the one big, beautiful bill act, if I'm not wrong, has set an
25:06aid to some subsidies on the, the production tax credit, investment tax credit that the previous administration had put in
25:14place.
25:14So, we can still develop some projects, but we are moving to a system which was based on incentives, and
25:21now is based on, basically, market mechanism.
25:24That being said, as I mentioned quickly at the beginning, the fact that the demand of electricity is so high,
25:31especially for data centers, is driving energy additions massively, including, whether Trump likes it or not, your renewables.
25:41So, that's ongoing.
25:42In Europe, let's say, compared to the US, it's more stable, but obviously, there are things where we can be
25:52better.
25:53To manage, for instance, demand side flexibility, and also, there are some topics ongoing about market design, and so on.
26:02But let's say, overall, the system in Europe, I mean, the policies are, in our view, more favorable to continue
26:10to expand.
26:11Now, when it comes to AI, so this is a, in fact, this is a demand shock.
26:17I mean, we did not plan to have that, and our infrastructure are not really ready to host such a
26:26big demand in such a short time.
26:28And, again, you know, it takes time to develop infrastructure.
26:32So, how can we basically absorb this demand shock without creating, let's say, a side effect that we don't want,
26:41like an increase of electricity prices that we saw in Virginia?
26:44Yeah. So, for instance, at NG, we work a lot on co-locating some data centers with our existing assets,
26:52because basically, the grid is already there, the assets, the production is already there, and we target to have three
26:59to four gigawatts co-located by 2030.
27:02And also, we work on basically supplying green energy on a 24-7 basis.
27:10It means that we want to match the early consumption with the early production, 100% green.
27:17And so, this requires a little bit of energy management and, you know, battery storage and so on in order
27:24to match that, so that we can make sure, I mean, AI growth and demand is happening.
27:31But, in our view, it has to be under, let's say, certain conditions and basically continuing to push, basically, the
27:41energy transition through this energy addition.
27:44Very important points there.
27:46Now, let's also continue with more solutions.
27:50If renewable deployment is becoming more complex, then what are the practical pathways?
27:55Let's talk about that.
27:56Clemence, I'm still sticking with you for this round.
27:59Many companies are, of course, now under pressure to cut emissions while remaining globally competitive.
28:07In fact, China just released a three-year plan for nine heavy industries to cut energy use and reduce carbon
28:17and decarbonize.
28:18So, for heavy industry and large energy users, what is the best pathway to do that?
28:24Yeah, so, not an easy pathway, not the easiest one.
28:28So, first of all, when electrification can happen, that's what we see with industrials, it's the easiest path.
28:36And if you can basically have new assets based on electricity that match your needs for your process and the
28:46temperatures that you need, that's the fastest solution.
28:50That being said, that being said, they are hard, so bad sector, we know them, cement, siderurgie, sorry, I missed
28:58the word in French, but basically all the industry, which is the energy, the high energy consumers.
29:08And so, for those sectors, and also for transportation like aviation and maritime sector, the solution on electrification won't work.
29:19So, what can we do for those and to match their temperature demand and so on?
29:26It's a bit what I mentioned at the beginning.
29:29Then it comes to green gases, it comes to biomethane, it comes to hydrogen, it comes and so on and
29:35so forth.
29:36And in our view, therefore, there is a need to prioritize some of, I mean, those energies for those sectors
29:44which don't have alternatives in order to match their demand.
29:49And that requires also to work as an ecosystem, because if you need basically to have all players around the
29:59table, if you want to decarbonize a refinery and for them to use hydrogen, but then where's the value chain?
30:05So, this needs also to work in ecosystem in order to make it happen and support the decarbonization of those
30:11sectors.
30:12Thank you, Clamance.
30:15That gives us the industrial and large user perspective.
30:20Tim, as you mentioned, the customer level, it's actually central to Octopus's model.
30:26So, how can consumers actually play a role in driving a sustainable future power system?
30:33Yeah, so the key here is, as already mentioned, electrification, which does a few different things.
30:42So, first of all, you know, we move from using fossil fuels at the point of consumption to using electricity,
30:48which is cleaner.
30:49So, you know, in the UK, that would be swapping a gas boiler for a heat pump.
30:54That immediately takes an enormous amount of carbon out of the system in relative terms.
30:59But, of course, what it also does is it increases the demand for electricity, and that means we have more
31:04units to recover costs.
31:06So, it's kind of economically better.
31:11And then there's a phenomenon that people in energy like to talk about.
31:16It's sort of an energy nerd thing, and it's called the primary energy effect.
31:18And this is because electricity, when used in applications, converts into useful work more efficiently.
31:26So, you know, you can get, if you put electricity into an electric vehicle, you get more miles out of
31:32that than you do the equivalent amount of chemical energy in petrol,
31:34because a lot of that in a petrol engine, a lot of that is lost as heat.
31:39And so, we actually get this economic uplift by electrifying as well.
31:45We get more useful energy out of successful electrifying demand, particularly for some applications like in consumers.
31:53So, realistically, what that means is we need to, you know, we need to swap our industrial combustion engines with
31:58EVs,
31:59and we need to replace heating with, you know, gas heating with electrified heating.
32:08And it's kind of that simple, really.
32:10The challenge is the consumer adoption for this and the economics and the cost.
32:15And so, there is a big investment to take a whole society from one technology through to another one,
32:20and it has to be made relevant for customers, and it has to bring those benefits.
32:24We're not in a market economy where we can just tell consumers what to do.
32:28They need to choose to do these things.
32:31And so, at Octopus, we spend a lot of time and effort sort of figuring out how to make these
32:37and craft these propositions into things that deliver value for consumers,
32:41either economically or in some other way.
32:43And you offer incentives to customers to pursue that adoption?
32:49Well, I mean, it's maybe less of an incentive.
32:51I mean, the point is, you know, it's just cheaper and better to drive an EV.
32:54If anyone here is...
32:56Who here has driven an EV or has an EV or has had that experience?
32:59You could put your hand up.
33:02And of these, the people who put their hands up,
33:04who would then go back to driving a fossil fuel car?
33:08So, this is the typical story, right?
33:11Once people switch over, they stay because it's better.
33:14We just have to help people understand that.
33:17It's more difficult with residential heating.
33:18It takes more creativity and more sort of good ideas to get that switch to happen.
33:25But yes, it's a mixture of consumer propositions, incentives, economics, all sorts of things.
33:30Thank you, Tim.
33:32Now, Wenxuan, let's turn to international expansion a little bit.
33:35So, we know China has a great build-out of renewable energy.
33:39So, when you scale your projects overseas, what can be replicated and what needs to be fully localized?
33:46Yes.
33:47So, starting from last year, so, PCG actively stepping into the global markets.
33:53So, definitely, we're building up more of the renewable assets in Indonesia, Southeast Asia, and also Middle East,
34:02and definitely New Zealand as well, Oceania as well.
34:06So, yeah.
34:07So, when we're talking about renewables, we're always talking about renewables premium before.
34:12But actually, now it's the renewable budget.
34:16So, actually, when you're talking about renewable budget, so we can talk about some of the costs.
34:20So, when the massive build-up, and also the technology of the building-up, and also about the standardized of
34:29the assets.
34:30So, you can actually reduce the kilowatts per hour.
34:34We always use the word of the LCOE, which means that every kilowatts per hour for 25 years that you're
34:42building up the assets,
34:44that how much the cost for kilowatts per hour.
34:46So, currently, that for PCG itself, we can reduce the kilowatts per hour, which is the LCOE, to maybe two
34:53to three U.S. dollar cents.
34:55So, actually, this is the, we see a renewable budget.
34:58So, when we go to the, you know, the emerging market, that we definitely can bring this, you know, renewable
35:04budget to the, you know,
35:06grow up the demand of the industries of the AI data center as well.
35:10So, definitely, Indonesia, Southeast Asia is a super demand of the new growth of the industries, and also for the
35:17AI data center.
35:19So, recently, we're just building up, you know, in Badang Island, which is in Indonesia, which is 50 miles away
35:27from Singapore.
35:28So, we're building up the renewables on the ground, and also the batteries, and to fulfill the demands from Singapore
35:36for the data center.
35:37But, definitely, we use the cable on the sea and to sell through from, you know, Indonesia to Singapore.
35:45So, it's not the grid following structure.
35:49It's the grid forming structure.
35:51So, there's no grid at all and no grid structure at all.
35:55So, you're starting from the ground with the battery and with the cable and with the demand and with the
36:01supply.
36:02So, I think this is, you know, that's how, you know, we see the China experience can go out, you
36:09know,
36:09especially to this kind of customer's demands that we can supply.
36:15So, definitely, this is, you know, when we're talking about energy, or when we're talking about the energy triangles,
36:23that we always say that affordability, security, and sustainability cannot appear at the same time.
36:30But, I think with the renewables that we definitely, with the building up, with the assets standardized,
36:35we can slope the two problems, which is the sustainability and also the security, the affordability and the sustainability.
36:44But, for the security, I think, still, that we, there's a lot of room to do, which is, you know,
36:50we use AI to slow the energy AI problem, which is that we do a lot of the, you know,
36:57work to do the matching.
37:00Still, I always want to raise this topic for matching, which is match from the renewables and the demands.
37:06So, I think there's a lot of room to do that.
37:08But, I think that all the, you know, industries should be moving together at the same time that we can,
37:13we can slope the final matching problem.
37:16How many years do you think, like, all three of them can?
37:19I think that, you know, technology, you know, moves very fast.
37:23I think within two two sprays that we can have a good solution on that.
37:26Great. Thank you.
37:28So, for our final round, I'd like to zoom back out on collaboration.
37:33So, no country can solve climate change alone, of course.
37:37And where do you see the most practical areas for cooperation between companies and countries?
37:45Let's start with Tim first.
37:47Yeah, this is a, this is a really important point.
37:49Something that we sort of talk about, but then, of course, you then have to go and do it.
37:52And that's the, that's the key point.
37:55So, Wenchuan mentioned a partnership between PCG and Octopus Energy.
37:58And I think maybe I'll use this as an example, because I think it's a great example of how, in
38:04the UK and Europe, we can partner with China.
38:07We, because we liberalized our markets some time ago, and because we built out our energy markets in a certain
38:13way,
38:14we have a set of capabilities and technologies that are very relevant at the moment, as China opens up its
38:20energy markets.
38:20And that can accelerate efficient integration of renewables and assets into the system.
38:26And so, we can really help on that, because we built, you know, understanding, we built sort of technologies, we
38:31built optimization methods, etc., etc.
38:35Similarly, I think what China is doing in electrifying and greening its country is just sort of off the charts.
38:43You can't even get your head around the scale of it.
38:44Whenever you see the numbers, they're just, they're just kind of unbelievable.
38:47And I think that that drive and that vision and determination should be a source of inspiration for many of
38:54us.
38:55Practically speaking, we work with a lot of Chinese OEMs, whether they're, you know, EV manufacturers or batteries or solar,
39:04because it's the combination of quality and cost is too good to ignore.
39:09And so, finding kind of alliances, whether it's an exchange of value and a reciprocity and a sort of mutual
39:16benefit is really critical there.
39:18But I think in this case, there is a clear place for collaboration.
39:24A great example, Tim.
39:25And Wenxuan?
39:26Yes, the time is limited.
39:28I maybe raised two, just two points.
39:30First thing, you know, last year, you know, one, you know, when another panel asked me the question,
39:36what is the biggest misunderstanding about the Chinese, you know, energy market?
39:41I said, you know, you know, maybe past the two, 20 years, that misunderstanding is about that the energy market
39:50is exclusive.
39:51It's all about SOEs.
39:53But actually, you know, it's widely, not widely open, but open, you know, space by space.
40:00So that, which means that with the two PMs within this, we have the partnership with Octopus.
40:05So I think, you know, especially the, still, the exclusive markets is opening up, you know, for newcomers.
40:12So this is first.
40:13Second, you know, I think, I don't think it's the right time or right space to raise.
40:17Still, the problem is the tariff, still the tariff.
40:20You know, when you're talking about tariff, that we're moving things out, that's the price where we go up.
40:25So tariff still is always a political or economic, you know, topic that we should, you know, working together to
40:32slope,
40:33which we can enjoy more sustainable and economic power price.
40:40And Clemence on collaboration.
40:43Yeah, in terms of collaboration, so I see very, three areas which are very important.
40:47First of all, with the public authorities, energy is a highly regulated market.
40:52They design the framework.
40:54We deliver.
40:55We have the operations and so on, you know, the expertise.
40:58And really, it's a continuous dialogue in order to make it happen in a smooth, smooth manner.
41:04The second one, which is very important when you talk about large infrastructures,
41:09are the cross-border collaboration, whether it's from transmission line,
41:13is for new gases networks, et cetera.
41:16This requires a lot of collaboration between the countries.
41:20So we have several examples in Europe of that.
41:23And the last one is the industrial collaboration.
41:27Because when we want to develop a new ecosystem for hydrogen,
41:32or when we want to invest in very large projects,
41:34like, for instance, we have a joint venture with EDP, Ocean Wind,
41:38focused on offshore wind.
41:40And so this is an example of two utilities collaborating strongly together.
41:45And also, of course, collaboration with our supply chain,
41:48with our key suppliers, you know, working together towards new innovation,
41:53towards new projects, more massive for some of them,
41:56more decentralized for others, is also key.
41:58So these three areas, in my view, are very important to make the energy system,
42:03the energy transition happen with a safe and sound energy system.
42:08Very positive examples there on collaboration.
42:11And a great conversation overall on the challenges of shaping today,
42:15energy transition across different markets, you know, Europe, UK, China, and Indonesia, actually.
42:20And how we can tackle the growing tension between climate ambition
42:25and energy economic reality, as well as energy security and rising power demand.
42:32You know, Clermont's reminded us the best way for large energy companies
42:36is, you know, a combination of electrification
42:39and to balance decarbonization and reliability.
42:44Tim pointed to economic uplifting by electrification
42:50and bringing the consumer angle.
42:52And Wenxian highlighted China's renewable build-out experience
42:55and its policy shifts and how that's affecting the whole energy transition.
43:00So a really great set of examples and a playbook there for everybody.
43:05So whether you're a founder scaling your own clean energy company,
43:09a large company looking to incorporate more renewables into your operations,
43:13or just a consumer like me trying to understand
43:17how we can play a role in a greener transition,
43:19I hope this session has been helpful to you.
43:21Thank you so much for joining us,
43:23and enjoy the rest of Viva Tech.
43:26Thank you very much.
43:26Thank you very much.
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