[SOUND] Looking at the sort of the range of things that you mentioned earlier in terms of the renewable solutions and selectification of transportation of transport solar storage etc. Where do you see the main sort policy leave us? The main policy tools to enable and up scaling of renewable energy. What do you think are the key things that need to happen to create this environment in which renewables can grow more? >> Well I think that the scientists and the entrepreneurs have done their job. We do have the technology today and the problem really is the momentum of the existing system and it does need government intervention, I mean government is the collectively, this is a collective problem of climate change, and so it does need some government intervention to insist in the transition from a fossil fuel economy to a renewable economy. >> In terms of the kinds of government intervention, that you think are key or the most important ones, where can government be most effective? >> Well if you look at historically where governments have been effective in pollution control, because this is a pollution control issue at the end of the day. So there is just, what they call regulatory forcing just interdiction. You can have mandates for a certain percentage of electric vehicles for each manufacturer's fleet, there's a whole series of regulatory, carbon taxation, is very praxis of carbon until to level the plain field with renewables. The renewables are becoming more and more competitive even without even without carbon taxation. I think that each country is different, each sector is different but there are a large number of regulatory tools that governments can use to assist in this transition. >> Well I think there's incredible range of tools available to policy makers. They range from demanding value has a specific percentage of renewable power. We have tax breaks. We have payments differential between the levelized cost of electricity and the solar generated electricity. These tools have been used in a number of places in the global north and we have seen massive drops in the cost of renewable power. We've seen huge increases in amounts of renewable power generated on a given day. Sometimes up to 60, 70% of a nation's needs. Obviously the intimacy can be some what of a challenge, but I think that with renewables the art is to find the right mix of generation technologies in the right place. Where these is a huge opportunity however is in the global south. One of the things in the global north is we've developed this incredibly centralized system of electricity generation, transmission and distribution. It's a very rigid system and introducing renewables onto that obviously can cause some problems. In the global south, you have areas where people have no access to electricity at all. You can actually build from scratch to completely distribute energy system which provides people without access to power, that access that they need. Without still mining through the fossil fuel reserves that we do have. >> The key policy levers you need are to level that playing field for renewables. There's a lot of indirect subsidies still being channeled into fossil fuel production, distribution, and use. Policy needs to deal with that somehow. On top of that, there are other things like, if you don't have carbon pricing in the system somehow, then you're always going to have this effect of it possible being cheaper or easier to use fossil fuels. Because the effects of a pollution in climate change are not paid by the people running the plant or necessarily by the people buying the electricity. So you need to have carbon pricing to make the global impact felt on a local scale on a person producing the fossil fuels. So I guess I would deal with subsides, you need to deal with carbon pricing, you need to have clear transparency and a long sight on what the tariffs would be for renewable energy investments. Finance needs to know where its return is going to come from and how that's going to work for a long time in the future renewable energy. Projects investment is a lot of upfront cost. And then you've gotta feed through, effectively very cheap power for 25 years on a PV plant, longer on hydro. So you need that transparency on tariff. Those, for me, are the three key points. And then maybe deregulation so that you can have disputed energy solutions, you can stop large utilities and monopolies on how energy is distributed and possibly even address the way they pay for by profit so they're not paying to produce more power but just pays at some other level and how efficiently they solar power or something like that. >> It's interesting to note that the supply chain and the underlying economics of renewable technology are doing a lot of the work for policy makers by dramatically falling order of magnitude over the course of the last numbers of years. I think that what policy makers need to do is find a way to embed renewable technology in the existing grid. It's by no means straight forward, there needs to be much broader investments in transformation and distributions technology. Something which in some cases is very, very difficult to push through areas of outstanding natural beauties, certain neighbourhoods, nobody really likes powerline in their back ordinance. One of the more intrusive aspects of the energy system you could argue but I think you need that kind of inter connection because the issues of intermittency are unlikely to go away in the short term. What government can do in a way some of the software solutions, if we consider the grid is the hardware then the software is the policy solution that sits within it. Capacity markets developing certain payments to keep back up on the system and available to address intermittency from the environmental standpoint decided the next I think I would come to be associated with such a system because it's the most inefficient oldest plants that are the ones that are getting these additional payments to stay on the system. So, as opposed to a more efficient, perhaps you could argue gas-based system. So, for me, capacity payments perhaps have a role to play, but they're not a winner in and of themselves. There needs to be this mix of software and hardware, and government has to play a role in, essentially, supporting both. Battery technology is the big bet that everybody is kind of placing right now. And we're expecting battery technology cost to decline on a similar path to what solar PV panels have done, over the next ten years. And that will create some extremely interesting opportunities. I mean you get utilities square battery storage or the residential level. Then consumers and network operators can make some very very different types of traces but above all governments need to be more consistent, far more consistent in what they have in racing with technology cost establishing the that's outdated. Because the technology cause of decline so rapidly is poorly designed policy so there needs to be the structure in this ability to give the investor a certain amount of confidence but I didn't needs to be able to move in a way which is sufficiently reflective of the underlying technology cost. >> Technology is like concentrated solar which concentrates the sun and make steam or molten salt which you can store. But you can only do this on a large scale. This is very interesting for industrial applications. And there's a role for that to play, there's a role for wind, there's a role for a lot of different technologies, it's not a single technology that wins the race, wind is becoming very very cheap now and in areas where they have a very high wind soars, and very high capacity factors. It really can replace fossil fuels. I think also we need to adapt our use of energy to when it's available. Everyone's saying, renewables are no good because they're intermittent. Well, if you have a very large grid of renewables, it's less intermittent because of the portfolio effect. The wind mind be blowing here, if it's not blowing there. And then if you have a global grid. There is a project to build a global grid. The sun is always shining somewhere on the planet. But we can also adapt our use of energy and run our washing machines during the day when there's lots of solar power for example. And there was demand response. And you can have tier pricing where industries pay a higher price when there's less electricity available. So there are solutions to the intermittency of renewables. Then you have technological solutions and also market structuring solutions. >> Again policy tools are very context specific. So why is Jonathan very well. They introduced one of the first renewable energy targets in the world. They are looking for 15% renewable energy by 2030. Which is very ambitious given the scale of consumption on the rising demand on China. So what they did is they supported industries too, they supported research and development, they gave positive tax incentives and loans. They didn't use these type of feeding tariffs that were used primarily in Europe. But the consequence has been a huge increase in the production and establishment of wind and solar in China. >> The role of regulatory authorities in energy markets is going to be absolutely critical in driving the low carbon energy transition. The pressure on companies in the short term is acute to say the least. The whole transformation of the utility business model in Europe where you have loss making thermal assets very very strongly supported renewables. These type of strategic re-orientations of business practice and new business models I think we're only seen the start of it. And there's going to be further developments in one energy company actually is. The technology sector is moving quite aggressively into energy production enhance the technology to also help downstream in a way which utilities are not going to be able to keep up with the way in which those, the Googles and so forth of this world have become wedded to our every choice and herein lies the problem, because they're probably going to have to be in order to deliver the kind of returns which they've enjoyed in the past. [MUSIC]
