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Why Nuclear Power Should Be Ramped Up · Merryn Talks Money

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Speaker 1: the podcast in which people who know the markets explain
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Speaker 1: the markets. I'm meren'sumset Web. This week, a conversation about
0:50
Speaker 1: the UK's future energy mix with Kafrinport and independent energy
0:53
Speaker 1: consultant at what Logic, and after my conversation with Catherine,
0:56
Speaker 1: stay tuned for a conversation with Bloomberg energy reporter John
1:00
Speaker 1: Morrison Yadron. Hello, thank you so much for joining yesterday.
1:04
Speaker 2: My pleasure.
1:04
Speaker 1: Okay, we're going to dive right in with a super
1:07
Speaker 1: easy question. Isn't it zero possible by twenty fifty?
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Speaker 2: Probably not?
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Speaker 1: Is it desirable?
1:12
Speaker 3: Now, that's a very interesting question. I think that we
1:16
Speaker 3: have been focusing very single mindedly on carbon dioxide, and
1:20
Speaker 3: some of the policies that we've been adopting in pursuit
1:22
Speaker 3: of that aim have caused other harms and are causing
1:25
Speaker 3: other harms that aren't really getting the attention that they need.
1:28
Speaker 3: I did some work recently looking at the critical minerals
1:31
Speaker 3: required for the energy transition and the huge increase in
1:34
Speaker 3: mining that's going to be needed. And the problem with
1:37
Speaker 3: mining is it's very environmentally harmful. It's often taking place
1:42
Speaker 3: in countries which are quite arid, so issues around water supply,
1:46
Speaker 3: keep maintaining clean water, availability of water for agriculture and
1:49
Speaker 3: human consumption are quite significant. Blasting and so on causes
1:53
Speaker 3: a lot of air pollution, and you have huge challenges
1:56
Speaker 3: with managing the rights of indigenous peoples on whose land
2:00
Speaker 3: or underneath whose land these resources are often found, and
2:03
Speaker 3: often that you have a lot of labor and human
2:07
Speaker 3: rights abuses associated with them.
2:09
Speaker 1: Can I just take you back and ask you about water.
2:11
Speaker 1: I think a lot of people won't understand quite how
2:13
Speaker 1: water intensive mining is.
2:15
Speaker 3: Yeah, So the issue with water comes up in a
2:17
Speaker 3: few different ways. One is that miners often deliberately remove
2:21
Speaker 3: water from the water table to reduce the risk of
2:24
Speaker 3: flooding in their minds. That have been studies in South
2:27
Speaker 3: Africa that have shown that water table levels might take
2:31
Speaker 3: more than a century to recover, and this affects mooreholes
2:35
Speaker 3: that are being used for local people's consumption and for agriculture.
2:39
Speaker 3: Water is also used quite extensively in the processing and
2:43
Speaker 3: extraction of the minerals from the rock, and so they're
2:47
Speaker 3: taking that water away is then unavailable for other uses.
2:50
Speaker 3: Then the third area where you have an impact is
2:53
Speaker 3: that there's a lot of waste material from mining and
2:56
Speaker 3: the extraction of metals from are and you get what's
3:00
Speaker 3: called tailings, and they're usually stored in these ponds and
3:04
Speaker 3: all sorts of contaminants can leach out of those ponds
3:08
Speaker 3: into local water sources, whether that's fresh water or seawater.
3:12
Speaker 3: And then that also gets into the food chain, both
3:16
Speaker 3: marine let's say, fish, and so on and then people
3:19
Speaker 3: eat the fish and get sick or just straightforward drinking
3:21
Speaker 3: the water, and so it has a really significant impact.
3:25
Speaker 3: And we've seen in South America there's been increasing social
3:29
Speaker 3: pressure against mining. So in Panama recently they closed a
3:32
Speaker 3: very large copper mine as a result of basically political pressure,
3:37
Speaker 3: and now it's a lot harder to open new mines.
3:40
Speaker 3: And so you have a population of people, particularly in
3:42
Speaker 3: South America and what's called the lithium triangle. I'm really
3:46
Speaker 3: objecting to new.
3:47
Speaker 1: Extraction in Pritus and Chile. You haven't there around lithium
3:50
Speaker 1: minds that.
3:51
Speaker 3: Exactly, they're objecting to mining. They're objecting to extraction that
3:55
Speaker 3: they say not unreasonably. Then they're not receiving a fair
3:59
Speaker 3: share of the economic benefits of all of this. But
4:02
Speaker 3: then on the other hand, you have populations in low
4:05
Speaker 3: lying Pacific islands and in the Indian Ocean i am,
4:09
Speaker 3: you know, clamoring for more action on climate change. So
4:11
Speaker 3: you have two populations in fairly sort of underdeveloped and
4:16
Speaker 3: more deprived parts of the world with very conflicting sets
4:21
Speaker 3: of interests, and so far there really hasn't been any
4:25
Speaker 3: effort to balance those and sitting here in the UK,
4:29
Speaker 3: or what right do we have anyway to say which
4:33
Speaker 3: rights are better than which are the rights and all
4:35
Speaker 3: the rest of it. So I think that we need
4:38
Speaker 3: to start thinking in a more holistic way about what
4:42
Speaker 3: we're doing. And you realize that common dioxide is only
4:46
Speaker 3: one part of the puzzle. If we don't have enough
4:49
Speaker 3: drinking water, then having clean air isn't going to be
4:51
Speaker 3: that much of a comfort.
4:52
Speaker 1: Yeah, I'm maintaining with agriculture and so on. So there's
4:55
Speaker 1: massive downsides to what we're trying to do exactly, Okay,
4:57
Speaker 1: So let's talk then about what the ideal energy mix
5:02
Speaker 1: would be.
5:03
Speaker 3: Right.
5:03
Speaker 1: So we spent a lot of time in the UK,
5:05
Speaker 1: in particular under wind energy and solar energy and trying
5:10
Speaker 1: to up the level of these particular renewables into our
5:13
Speaker 1: energy mix. So we reached a limit. Do you think
5:16
Speaker 1: of what we can do there?
5:17
Speaker 2: I think so.
5:19
Speaker 3: I think solar has some contribution, but it's very much
5:21
Speaker 3: at the margin because in our times with peak energy demand,
5:25
Speaker 3: it's just not sunny, you know, winter evenings, and we
5:30
Speaker 3: haven't found a way of seasonal storage for energy yet
5:33
Speaker 3: it's not one that works within Britain. We don't have
5:36
Speaker 3: seasonal hydro capability because of our geology, so until some
5:41
Speaker 3: other technology is developed, it allows us to store electricity
5:44
Speaker 3: from the summer to the winter. That is really not
5:47
Speaker 3: that useful.
5:47
Speaker 1: Okay, So so simply doesn't work for us beyond a
5:50
Speaker 1: certain Yeah, I mean it's.
5:52
Speaker 2: Nice to have.
5:53
Speaker 1: It feels a bit good as at the margin, but
5:55
Speaker 1: without a way to storage at least overnight, if not seasonally,
5:59
Speaker 1: it's kind of points you really need.
6:01
Speaker 3: To have seasonal storage to move your solar from the
6:03
Speaker 3: summer to the winter.
6:04
Speaker 1: Yeah. And we have a similar problem surely with wind
6:07
Speaker 1: and there's not so much seasonal but intermittent.
6:10
Speaker 2: Yeah.
6:10
Speaker 1: And intermittency is the big problem with renewables because our
6:13
Speaker 1: grid is not designed to deal with it, and because
6:15
Speaker 1: we need to create a constant backup system to deal
6:20
Speaker 1: with the intermittiency.
6:20
Speaker 3: That's exactly right. And so it's extremely expensive. And this
6:25
Speaker 3: notion that renewables are cheap because all the wind is
6:28
Speaker 3: free is extremely naive because you have to build at
6:32
Speaker 3: least the same capacity again either as alternative generation or
6:35
Speaker 3: as storage to bridge those gaps when it's not windy.
6:38
Speaker 3: So straightway that costs money. But then also you have
6:41
Speaker 3: a lot more expenditure on the grid because now this
6:45
Speaker 3: renewable generation is very distributed, so instead of having one
6:49
Speaker 3: big lump of generation in one place with one cable
6:52
Speaker 3: connecting it, now you need lots more cables. And then
6:56
Speaker 3: also you have to manage the moment by moment intermittency,
6:59
Speaker 3: so this is called balancing, and the balancing costs have
7:02
Speaker 3: gone up by billions of pounds a year recently. So
7:05
Speaker 3: all of these costs are added on to consumer bills,
7:08
Speaker 3: and it's why if you look at a chart of
7:11
Speaker 3: retail versus wholesale electricity prices since the beginning of the century,
7:15
Speaker 3: you see that retail prices have just gone up sharply,
7:18
Speaker 3: whereas wholesale prices sort of wiggled around and done some
7:21
Speaker 3: other path. And it wasn't really until September twenty twenty
7:25
Speaker 3: one that wholesale prices really drove the retail price, because
7:29
Speaker 3: they then rose very significantly. But otherwise that relationship hasn't
7:33
Speaker 3: been that strong because the retail price has contained all
7:36
Speaker 3: sorts of other elements, wind subsidies in particular.
7:40
Speaker 1: So when we'd hold that wind is cheap, it is
7:42
Speaker 1: not taking account of the backup power, the cost to
7:47
Speaker 1: expand the grid to figure out the balancing and possibly
7:51
Speaker 1: also the adding environmental cost of the rare earth metals, etc.
7:55
Speaker 1: That we need to create the components.
7:58
Speaker 3: Absolutely not and it doesn't so it doesn't include the
8:01
Speaker 3: direct costs that currently go on to consumer bills. So
8:04
Speaker 3: consumers don't see that rare earth environmental cost, but they
8:07
Speaker 3: definitely see the extra grid cost because the network component
8:10
Speaker 3: of bills has gone up.
8:11
Speaker 2: They see the.
8:12
Speaker 3: Extra balancing cost because that also comes in through the
8:15
Speaker 3: network component. Now, when I did this work on critical
8:18
Speaker 3: minerals recently, I went from being a little bit sort
8:20
Speaker 3: of neutral I think maybe we should pause the whole
8:23
Speaker 3: wind roll out while we upgrade our grid, to actually
8:27
Speaker 3: been quite negative because once you understand the huge amounts
8:31
Speaker 3: of additional copper and aluminium that are required to support
8:35
Speaker 3: that build out, and they are the two minerals that
8:38
Speaker 3: are going to be mostly required for the energy transition,
8:41
Speaker 3: the increase in aluminium and copper supply will have to
8:45
Speaker 3: be very significant, much bigger than everything else. I mean,
8:49
Speaker 3: it takes ten years and billions of pounds to develop
8:51
Speaker 3: a new mine, and all those other challenges we mentioned earlier,
8:56
Speaker 3: it starts to actually look morally questionable, and so I
8:59
Speaker 3: think more sensible strategy is to go for nuclear where
9:03
Speaker 3: it fits in with the way grids were designed and
9:06
Speaker 3: it doesn't have the intermittency problem. So yes, nuclear has
9:09
Speaker 3: very high capital costs. Once you've built it there, it
9:11
Speaker 3: can run for sixty years. It's extremely safe. Nuclear and
9:16
Speaker 3: solar have the lowest deaths by unit of electricity generation
9:19
Speaker 3: of all generation technologies.
9:21
Speaker 1: Okay, that's unexpected, and make sure for most people, I
9:24
Speaker 1: would say.
9:24
Speaker 3: Yes, it is unexpected, but that absent Chernobyl. Aside from Chernobyl,
9:29
Speaker 3: there have been no nuclear reated related deaths from any
9:32
Speaker 3: nuclear incident worldwide.
9:34
Speaker 1: Huma, for example, there were no death related to that.
9:37
Speaker 1: The deaths around that were related to the tsunami, not.
9:39
Speaker 3: Exactly so at the the consumer plant itself there were
9:44
Speaker 3: some fatalities, but this was because you know, things fell
9:48
Speaker 3: on people's heads during the earthquake and tsunami. That's not
9:51
Speaker 3: a nuclear incident. That's just an earthquake related incident. And
9:55
Speaker 3: so you get industrial accidents. And that's why even with solar,
9:59
Speaker 3: for example, non zero deaths associated with solar. Obviously solar
10:03
Speaker 3: panels themselves are completely inert. But then if you look
10:08
Speaker 3: in the mining industry. The mining industry is extremely dangerous,
10:11
Speaker 3: very high levels. In fact, all extraction industries oil and
10:14
Speaker 3: gas is the same, and coal and so on, so
10:17
Speaker 3: all of these other industries. And then of course if
10:20
Speaker 3: you're using those materials to build your generation, then that
10:24
Speaker 3: it's within that supply chain, and renewables wind in particularly
10:29
Speaker 3: you get working at height issues as well. So yeah,
10:32
Speaker 3: nuclear has a very strong is you're only.
10:34
Speaker 1: In mining, not as dangerous as some other kinds of mining, but.
10:37
Speaker 2: There's just less of that.
10:37
Speaker 1: You need so little, yes, that it doesn't make any difference. Yeah,
10:40
Speaker 1: I wrote about this reason. You're actually saying that you're
10:42
Speaker 1: only miss so interesting because it's the most price insensitive
10:45
Speaker 1: thing in the world because you only need a tiny
10:47
Speaker 1: bit of it in each nuclear plant. But without it
10:50
Speaker 1: you can't do anything, so you'll pay anything for it,
10:52
Speaker 1: so it's not to have to shut the thing down, right, Yeah, Okay,
10:56
Speaker 1: let's go back briefly. I want to come back to
10:57
Speaker 1: nuclear and how it's financed and how we should do that,
11:00
Speaker 1: but let's go back to the grid. So the grid
11:03
Speaker 1: is initially designed to have these big power stations in
11:06
Speaker 1: the middle of the country, is sending out constant power
11:10
Speaker 1: of heartbeat and never stops, etc. Even with nuclear, if
11:12
Speaker 1: we're going to have a lot more electrification, even with that,
11:15
Speaker 1: we'd still.
11:16
Speaker 2: Need to upgrade the grid.
11:17
Speaker 3: Right, Yes, you need to build more generation and you'd
11:20
Speaker 3: need to upgrade the grid, but it's a much smaller
11:23
Speaker 3: challenge if you're not doing it using a lot of
11:26
Speaker 3: intermittent generation. It's the fact that we're having all this
11:29
Speaker 3: intermittency which requires a doubling of capacity. So you need
11:33
Speaker 3: all of the reliable capacity that you can call on
11:36
Speaker 3: your thermal and nuclear generation as well as the wind,
11:41
Speaker 3: and it will be much more economically effective and a
11:44
Speaker 3: better use of resources to just have that and not
11:47
Speaker 3: have the wind. And obviously you're not going to want
11:49
Speaker 3: the thermal because of the the carbon emissions, but you
11:52
Speaker 3: can have the nuclear which doesn't have the emissions problem.
11:56
Speaker 1: Okay, again, I want to come back to Nikle. I'm
11:58
Speaker 1: gonna put that one side because I think you're I
12:00
Speaker 1: probably both agree that this is the answer, the only answer.
12:02
Speaker 1: Everyon want to move away from a fossil fueld. So
12:04
Speaker 1: let's go back and talk about fossil fuels a little.
12:06
Speaker 1: Because it's hard to imagine a world without them. Right,
12:09
Speaker 1: So when we have let's stop oil throwing souper around
12:12
Speaker 1: the place, et cetera. Even everybody's plans for net zero
12:16
Speaker 1: still have us using fossil fuels, right, Even in net
12:19
Speaker 1: zero plans, It don't go away, even in the most ambitious,
12:22
Speaker 1: ambitious plans that anybody has. And even now when the
12:25
Speaker 1: whole world of talking about reducing fossil fuel use, coal
12:30
Speaker 1: and oil and gas use is still rising. Right, we
12:32
Speaker 1: might be able to make them slightly fall as a
12:34
Speaker 1: percentage of use, but not much.
12:38
Speaker 3: No, even in Britain, not coal use, but oil and
12:40
Speaker 3: gas use has increased in recent years.
12:43
Speaker 1: So when we talk about in the UK not not
12:47
Speaker 1: using the shell gas that we could get access to
12:51
Speaker 1: if we wanted to, and not producing any more licenses
12:54
Speaker 1: for exploration and production in the North Sea, this is
12:57
Speaker 1: just silly.
12:58
Speaker 2: It is.
12:58
Speaker 3: Yeah, So I think the shell questions a little bit
13:00
Speaker 3: different when it comes to the North Sea. We should
13:04
Speaker 3: really maximize the potential of the North Sea and guess
13:08
Speaker 3: as much out of it as we possibly can, because
13:10
Speaker 3: the alternative is just imports. And then people say, oh, yes,
13:13
Speaker 3: but you know it has to travel around anyway because
13:17
Speaker 3: we don't have all the refining capacity, but we still
13:19
Speaker 3: control the production emissions, and we do have some refining capacity,
13:22
Speaker 3: so that argument doesn't really stack up. As soon as
13:25
Speaker 3: you're importing, you really lose control of the supply chain.
13:28
Speaker 3: With shale, it's a little bit different because although given adeology,
13:32
Speaker 3: we're fairly confident that the gas is there, we can't
13:36
Speaker 3: be it's confident that it can be extracted economically. And
13:39
Speaker 3: if you look at Poland as an example, you know,
13:42
Speaker 3: the Polish would crawl over hot coals to avoid buying
13:45
Speaker 3: gas from Russia, and they looked at shale quite extensively,
13:49
Speaker 3: and in the end they concluded that L and G
13:51
Speaker 3: would be a better approach to get the more Russian gas,
13:54
Speaker 3: and so that's the route that they've taken. So it's
13:56
Speaker 3: not given that that can be economically.
13:59
Speaker 1: Extracted go back to the North Sea. So, if I
14:03
Speaker 1: understand you, rightly, is suggesting that there's really become of
14:05
Speaker 1: almost a moral imperative to continue to the extent that
14:09
Speaker 1: we can produce our own oil and gas, because at
14:12
Speaker 1: least we can control it, control its production, control the
14:16
Speaker 1: way it's taken out, control the way people who work
14:18
Speaker 1: on those rigs are treated, etc. So if we don't
14:21
Speaker 1: pull it out ourselves, we're going to be importing it,
14:24
Speaker 1: correct and we it's a huge sort of revenue for
14:27
Speaker 1: the treasury, So it's just crazy to import it when
14:31
Speaker 1: we could produce it ourselves. And the windfall tax terrible.
14:36
Speaker 3: I mean the windfall tax was introduced because of political
14:39
Speaker 3: outrage and public outrage around people like Shell and BP
14:43
Speaker 3: earning huge profits. Now I kind of object to that
14:46
Speaker 3: a little bit because nobody's giving them sympathy in years
14:49
Speaker 3: when they don't turn huge profits, and when they make losses,
14:52
Speaker 3: nobody compensates them when they drill a dry well for example,
14:55
Speaker 3: and you know you mentioned the people working in the
14:57
Speaker 3: North Sea. It is one of the most dangerous, strong
15:00
Speaker 3: jobs that you can do. So I do slightly get
15:03
Speaker 3: annoyed when people are throwing stones at these companies as
15:06
Speaker 3: if they're evil and terrible, when they're really not. They're
15:08
Speaker 3: providing goods and services which are essential to everyday life
15:12
Speaker 3: in which we all benefit.
15:14
Speaker 1: Than my living standards would collapse absolutely.
15:17
Speaker 3: But also BP and Shell only a tiny proportion of
15:21
Speaker 3: their global income comes from the UK, so really it's harmed.
15:26
Speaker 3: Companies like Harbor Energy. Well, most people have never heard
15:29
Speaker 3: of Horbor Energy. Harbor Energy making profits or losses is
15:32
Speaker 3: not headline news, and yet it's the biggest operator in
15:35
Speaker 3: the North Sea. It's taken a big hit to its
15:39
Speaker 3: finances as a result of the windfall tax and as
15:41
Speaker 3: a result is reprofiling activities away from the UK. And
15:45
Speaker 3: what we're seeing is that across the North Sea operators
15:49
Speaker 3: they're are scaling back their activities and we're seeing rigs
15:51
Speaker 3: moving out of the area. Now, once these rigs go,
15:54
Speaker 3: it'll be really hard to get them back. And obviously
15:56
Speaker 3: without rigs you're not going to do anything. So it's
15:59
Speaker 3: been really damaging and it needs to go. And this
16:03
Speaker 3: is politicians need to avoid these kinds of knee jerk reactions.
16:07
Speaker 3: The windfall tax has not achieved what it was intended
16:11
Speaker 3: to achieve. All it's done is harm companies that most
16:13
Speaker 3: people have never heard of and don't really care about.
16:15
Speaker 1: And the belief in the time was that it would
16:18
Speaker 1: raise large amounts of revenue without affecting production. Well was
16:23
Speaker 1: that the view? It must be?
16:24
Speaker 3: Well, I think yeah, And now the government is trying
16:26
Speaker 3: to sell we'll have these annual licensing rams as a
16:29
Speaker 3: way of signaling ongoing commitment to the region. But the
16:32
Speaker 3: best way to signal that commitment would be to get rid.
16:34
Speaker 2: Of the EPL.
16:35
Speaker 1: Where are the rigs going West Africa?
16:38
Speaker 2: West Africa?
16:39
Speaker 1: It is certainly not coming back, are they? No? No,
16:43
Speaker 1: There's one form of energy that I haven't asked you about,
16:45
Speaker 1: and that is bio mass. And one of the big
16:49
Speaker 1: conversations I know in the energy world is about drags.
16:52
Speaker 1: Is drags good or is drags bad? Right? And I
16:55
Speaker 1: think you might be on drags bad side. I think, well,
16:59
Speaker 1: first have a claim DRAGS does.
17:00
Speaker 3: So. The Drags used to be a coal fired power station,
17:04
Speaker 3: and because everyone got very squamish about coal, they decided
17:07
Speaker 3: that they would initially co fire with wood pellets and
17:11
Speaker 3: then convert to using wood pellets completely. And wood pellet
17:16
Speaker 3: biomass is considered and has this sort of very neutral
17:19
Speaker 3: cabin accounting, because the idea is that you plant new
17:23
Speaker 3: trees and then those trees grow and I absorbed common
17:26
Speaker 3: dioxide and that offsets the cobbon dioxide that you're emitting
17:29
Speaker 3: by burning the wood. And so DRAGS is a huge
17:32
Speaker 3: power station and it burns a lot of wood, and
17:35
Speaker 3: this wood is being sourced in the US, and they
17:39
Speaker 3: like to say it's mostly wastewood, but it would be
17:41
Speaker 3: hard to supply drags using just wastewood. I'm interrupting you
17:45
Speaker 3: because I've I've got their table here. I have a
17:48
Speaker 3: drag supporter who has sent it to me. Stormal and
17:51
Speaker 3: other wood industry residues nineteen point seven percent branches and
17:54
Speaker 3: tops three percent, sinning, thirteen point eight percent, low grade
17:57
Speaker 3: round wood twenty two percent. That seems pretty valid. Well,
18:03
Speaker 3: what they do next is they have to chop it
18:05
Speaker 3: all up, they have to dry it out, and they
18:07
Speaker 3: have to pelletize it. All of those steps take energy.
18:11
Speaker 3: Then they load it onto ships and those ships are
18:13
Speaker 3: fueled with bunker fuel, which is the dirtiest bit at
18:16
Speaker 3: the bottom of the crack, and then they sail it
18:19
Speaker 3: halfway around the world to Yorkshire and then they set
18:22
Speaker 3: fire to it. And the emissions from the chimneys at
18:25
Speaker 3: Drax when burning wood pellets are higher than they were
18:28
Speaker 3: when they were burning coal. So not only is this
18:31
Speaker 3: bad for the people of Yorkshire because their air quality
18:33
Speaker 3: goes down, it is bad for all the people in
18:35
Speaker 3: between Yorkshire and the US because of all the emissions
18:37
Speaker 3: from the shipping, and it's bad for the people in
18:39
Speaker 3: the US because of all the emissions from drying, pelletizing
18:42
Speaker 3: and all the rest of it.
18:43
Speaker 1: Okay, how about this.
18:44
Speaker 2: Honestly, anybody can plant trees so you could be residual.
18:48
Speaker 1: Fiber depellot plants significantly improved the economics of timberland. This
18:52
Speaker 1: has contributed greatly to land owners making the eping economic
18:55
Speaker 1: decision to shift from let profitable land used like carbon
18:58
Speaker 1: nasty cotton in the US planting trees for lumber and biomass.
19:02
Speaker 1: Timberlands of the save Lee to the US are now
19:03
Speaker 1: growing in size, increasing carbon sequestrations and habitats for the
19:07
Speaker 1: nice animals.
19:08
Speaker 3: But what you're doing is no, because they're fast growing variety,
19:13
Speaker 3: So you're losing biodiversity by doing that.
19:16
Speaker 1: Okay, you're just not going to be convinced on this one.
19:18
Speaker 3: No, no, no, There are other forms of biomass energy,
19:22
Speaker 3: so I think it's always important to be specific that
19:24
Speaker 3: we're talking about wood pellet biomass in the context of drags.
19:27
Speaker 3: But when you look at the supply chain emissions and
19:30
Speaker 3: the fact that the stack emissions are higher than they
19:32
Speaker 3: are with coal, then really the best thing that dracts
19:34
Speaker 3: could do other than just closing. Would we go back
19:37
Speaker 3: to burning coal, and yes, you'll have some emissions ship
19:40
Speaker 3: in the coal, but you don't have to dry it
19:42
Speaker 3: and pelletize it and do all that other stuff.
19:45
Speaker 1: Okay, so it would really the best thing for us
19:46
Speaker 1: to do. Absolutely the best thing for us to do
19:49
Speaker 1: is to forget about the woodpellers, forget about everything, go
19:52
Speaker 1: back to coal and just open up our old coal
19:54
Speaker 1: mines again, dig up the coal sticking into drags, and
19:56
Speaker 1: then you've got a nice, constant efficient source of power
20:02
Speaker 1: that just goes directly into the grid without any of
20:05
Speaker 1: the environmental consequences for other countries. So or is that
20:08
Speaker 1: now really pushing it?
20:09
Speaker 3: I think that's pushing it because I don't think we're
20:11
Speaker 3: going to sustain a coal industry with two coal power stations,
20:14
Speaker 3: because we've got Drags and Ratcliffe and they're both getting
20:17
Speaker 3: quite old. So honestly, I would keep I would have
20:20
Speaker 3: them as coal because it's cleaner than woodpellers, and I
20:25
Speaker 3: wouldn't close them because I worry that we're going to
20:28
Speaker 3: run out of generating capacity come the end of this decade.
20:31
Speaker 3: So I think closing anything that isn't actually broken, shouldn't happen,
20:36
Speaker 3: and one or two coal power stations isn't going to
20:38
Speaker 3: destroy the planet. What's going on in China?
20:41
Speaker 1: Yes, and they create excellent backup exactly exactly. So that's
20:46
Speaker 1: what's going on in China being the increasing use of
20:48
Speaker 1: coal exactly. I mean, that's increase really interesting because their
20:52
Speaker 1: use of renewables is increasing massively, but so is their
20:55
Speaker 1: use of every fossil fuel known demand because.
20:58
Speaker 3: Their energy use is expanding sort of yeah, and it's
21:00
Speaker 3: orders of magnitude bigger than what we're doing. So one
21:03
Speaker 3: or two coal power stations in the UK not even
21:06
Speaker 3: running all the time, it's not really moving the dial
21:09
Speaker 3: up from a climate perspective. But if we have blackouts
21:14
Speaker 3: then that would have very serious consequences. If we had
21:17
Speaker 3: winter blackouts in the UK, people would die, that's highly likely.
21:23
Speaker 3: So to avoid that at a very bad outcome, running
21:27
Speaker 3: a couple of coal power stations doesn't seem like a
21:30
Speaker 3: bad trade off.
21:31
Speaker 1: Okay, so we leave Rags doing what it does, but
21:34
Speaker 1: we probably leave it doing what it does with biomass
21:36
Speaker 1: because it's not going back to coal. And as you say,
21:38
Speaker 1: if we don't have those backup generators, running. We are vulnerable,
21:43
Speaker 1: so we need drags and it's biomass. If we're not
21:45
Speaker 1: going back to coal, even if you don't strictly streaking
21:47
Speaker 1: improve of it and the way it does things, if
21:49
Speaker 1: we didn't have it, we've been putting ourselves at risk exactly.
21:52
Speaker 3: And I think it's unfortunate because it's received so many
21:54
Speaker 3: subsidies to do something that's far worse than it was
21:58
Speaker 3: doing previously. And I don't criticize Drugs for that. I
22:02
Speaker 3: mean their management team has done a bangup job. Really,
22:04
Speaker 3: if persuade incentivized exactly, they've persuaded governments to pay them
22:08
Speaker 3: lots of money to do something even worse than they
22:10
Speaker 3: were doing before and really give an obsolete business model
22:15
Speaker 3: new legs. So their management has done a brilliant job.
22:20
Speaker 3: I don't blame them. They're doing what they're supposed to
22:23
Speaker 3: do for their shareholders. Yeah, it's the government, not just
22:26
Speaker 3: our government. You know, the EU is in exactly the
22:28
Speaker 3: same boat with the way that it incentivizes by a mass.
22:32
Speaker 1: Yeah, so our governments have made a real massive the
22:34
Speaker 1: senergy business, haven't they incentivizing all the wrong things?
22:37
Speaker 2: They have.
22:37
Speaker 3: But this is not a political comment because the mainstream
22:41
Speaker 3: parties are all broadly in the same boat on these things.
22:44
Speaker 3: I think the Conservatives now are starting to see a
22:46
Speaker 3: route to maybe if they soften their commitments on net zero,
22:50
Speaker 3: that gives them, you know, a slight benefit in the polls,
22:54
Speaker 3: given that they're so far behind any to do the
22:57
Speaker 3: results of Uxbridge.
22:58
Speaker 1: But I mean, this is written into law.
23:00
Speaker 3: Well yeah, but laws can be changed quite tough, I
23:03
Speaker 3: don't think so. It depends if you have a decent
23:05
Speaker 3: sized majority then you can do it. And people say, oh, well,
23:09
Speaker 3: the net zero target is written into lots is definitely
23:11
Speaker 3: going to happen. Well, I completely disagree with that as
23:15
Speaker 3: an argument, because I think you'll get into the twenty forties,
23:18
Speaker 3: be remote from the target, be facing an enormous bill,
23:22
Speaker 3: and are dropping people's living standards to achieve it, and
23:25
Speaker 3: suddenly there will be a growing consensus to move or
23:28
Speaker 3: change the target. Okay, so it won't happen. It won't
23:32
Speaker 3: happen now, and it might not happen in the twenty thirties,
23:35
Speaker 3: but as you approach the twenty fifty day, it will
23:37
Speaker 3: happen exactly so, and you can't stop a future parliament
23:42
Speaker 3: passing different laws so a future parliament. Just because the
23:46
Speaker 3: law exists today does not mean it will exist tomorrow.
23:49
Speaker 3: Do you think that this is an off topic question
23:52
Speaker 3: that if Richard Sinec were to give one last gift
23:55
Speaker 3: to the nation before he's removed from office in the
23:58
Speaker 3: next election, it would be removed be that zero. Will
24:02
Speaker 3: there be a gift you g givers.
24:04
Speaker 2: So I don't.
24:04
Speaker 3: I think that's possibly too abstract as a gift. I
24:08
Speaker 3: think that what he would need to do is to
24:10
Speaker 3: phrase it in ways that where people could see a
24:13
Speaker 3: benefit to them in the short term, because that's really
24:16
Speaker 3: what's hurting people right now is the high cost of living.
24:19
Speaker 3: So that zero people are starting to realize that's going
24:23
Speaker 3: to make energy.
24:25
Speaker 2: And goods more expensive, you know, just.
24:27
Speaker 3: Starting to talk about carb and border adjustment mechanisms and
24:30
Speaker 3: things like that. That's going to make stuff more expensive.
24:33
Speaker 3: It will be inflationary.
24:36
Speaker 1: So well, let's let's look at the answer. Then we
24:38
Speaker 1: can come back to it to assume act gift, because
24:40
Speaker 1: the gift give us around this to come back to
24:42
Speaker 1: nuclear which I think you believe is the answer for
24:45
Speaker 1: doing to our energy problems. Right first, explain going to
24:47
Speaker 1: be why there isn't the expense extent which it's feasible
24:50
Speaker 1: inside the timeframe that we need.
24:52
Speaker 3: So I think nuclear ticks all the boxes because, as
24:55
Speaker 3: I said before, it fits in perfectly with the way
24:57
Speaker 3: the grid was designed. It's not intermitted, and it produces
25:01
Speaker 3: huge amounts of energy from a very small site. And
25:05
Speaker 3: once you've built it for the last decades, you know,
25:08
Speaker 3: now you're really looking at sixty years operating lifetime for
25:12
Speaker 3: these reactors, and they are very safe. So what's not
25:16
Speaker 3: to like? The high upfront cost and the wist those
25:19
Speaker 3: are the two things not to like, whereas the wast
25:22
Speaker 3: is actually very manageable. Volumes of waste involved are extremely small.
25:27
Speaker 3: The problem we have with waste these at the moment
25:29
Speaker 3: is a legacy issue. It's dealing with all the stuff
25:32
Speaker 3: at cellar Field from back in the day when waste
25:35
Speaker 3: wasn't handled properly. But the waste that comes out of
25:37
Speaker 3: power stations now, although we haven't identified a long term
25:42
Speaker 3: disposal site, it's all being stored in a perfectly safe way.
25:46
Speaker 3: The volumes are small. It's all very manageable.
25:48
Speaker 1: Can you see volume small? What do you mean like.
25:50
Speaker 2: A coke can's worth a year? All that kind of.
25:54
Speaker 3: Small, okay, But compared and compared with all the other
25:59
Speaker 3: toxic waste that we generate from all of the other
26:01
Speaker 3: industries that we have going on, it's really smart.
26:04
Speaker 2: And people forget that.
26:05
Speaker 3: They think nuclear as being unusually bad, but actually other
26:09
Speaker 3: industries both produce more toxic waste and are actually far
26:12
Speaker 3: more dangerous. The biggest industrial accident ever was Boparl. Nobody
26:17
Speaker 3: wants to stop making pesticides as a result of.
26:20
Speaker 1: That, okay, But how do we get a buy in
26:22
Speaker 1: for this in that you know, to get some power
26:26
Speaker 1: stations up using nuclear reasonably quickly in the timepime that
26:30
Speaker 1: is required. Given you already concerned about having about us
26:33
Speaker 1: having blackouts towards the end of the decade, right well, Steton.
26:35
Speaker 3: Number one is don't prematurely close the advanced gas called reactors,
26:39
Speaker 3: which on the current schedule would all be shut by
26:42
Speaker 3: March twenty twenty eight. They could continue running into the
26:45
Speaker 3: twenty thirties, and they need to, and that requires the
26:48
Speaker 3: Office for Nuclear Regulation to soften its approach in certain
26:52
Speaker 3: areas where it's really taking much too.
26:55
Speaker 1: We're really bad at softening regulation in the UK, well,
26:59
Speaker 1: really bad at that's so that to keep those running
27:01
Speaker 1: requires a regulation shift at and to build new ones
27:05
Speaker 1: inside the time frame. In the next sort of thing,
27:07
Speaker 1: I would personally disband and replace it with something else
27:11
Speaker 1: because I think it's it's it's got a little bit
27:14
Speaker 1: out of control and the structures around it, so it
27:18
Speaker 1: sits under DEFRA. It's not connected with the Department for
27:22
Speaker 1: Energy in any way, so it's and how much of
27:25
Speaker 1: a priority is it for DEFRO, you know, looking after
27:28
Speaker 1: nuclear safety, I think we need to we need to
27:32
Speaker 1: do better. So step number one is don't close the
27:36
Speaker 1: ADR's step number two we need to start quickly building
27:40
Speaker 1: new reactors.
27:41
Speaker 3: Now. There are various sites around the country, Wilvera being
27:44
Speaker 3: the most obvious, where there's not just local buy in,
27:48
Speaker 3: there's an actual, active local desire to have a new
27:53
Speaker 3: reactor put on that site. They want it, they would
27:57
Speaker 3: they would crawl over broken glass to get it. The
27:59
Speaker 3: low is known as atomic Kitten because she's pushing for
28:03
Speaker 3: getting a new reactor at Wilver. This is, you know,
28:08
Speaker 3: it's like the perfect storm of everybody wanting it in
28:11
Speaker 3: that area, so we need you know, it's pushing it
28:14
Speaker 3: an open door.
28:14
Speaker 2: Let's let's do it now.
28:17
Speaker 3: The most credible route to delivery at the moment is
28:20
Speaker 3: with KEPKO, the Korean Electric Power Company. They are about
28:23
Speaker 3: to open their eighth APR fourteen hundred. They've got four
28:28
Speaker 3: open in South Korea. There's a fourth one about to
28:30
Speaker 3: open in UAE America. They're delivering these reactors in eight years,
28:35
Speaker 3: on time and on budget. No one else at the
28:37
Speaker 3: moment can come close. Neither EDF nor Westinghouse. Who are
28:40
Speaker 3: the other competitors in the Western world, if you like,
28:45
Speaker 3: are anywhere near that?
28:46
Speaker 1: Do we order now? We can have them by the
28:48
Speaker 1: early thirties correct.
28:50
Speaker 3: KEPKO, I think is estimating about a tenure delivery for
28:53
Speaker 3: the UK, given sort of UK specifics. Now, their reactor
28:57
Speaker 3: is not certified in the UK, but it is certified
29:00
Speaker 3: in the US, and there's a virgin that's been certified
29:02
Speaker 3: by the EU. Now the government has said it wants
29:05
Speaker 3: to cooperate with trusted country regulators. This is a perfect
29:09
Speaker 3: opportunity to do that. If this technology is good enough
29:13
Speaker 3: for the NRC in the US, it should be good
29:15
Speaker 3: enough for US. Like the NRC is a perfectly credible regulator.
29:19
Speaker 3: It's not some Mickey Mouse outfit. They will you know,
29:21
Speaker 3: they have high standards, So we shouldn't be reinventing the
29:24
Speaker 3: wheel to get that certified.
29:26
Speaker 2: Here, okay, what about the and we should pay for it?
29:30
Speaker 1: Okay, that's what I was gonna ask. So who's going
29:32
Speaker 1: to pay for it? It's so to me that my
29:34
Speaker 1: view yep, okay, tell me your you. My view is
29:36
Speaker 1: not tell me the.
29:37
Speaker 3: Government should at least for the first So I think
29:39
Speaker 3: we need to sign a contract with Capcove for maybe
29:41
Speaker 3: five reactors and not all once, you know, come up
29:45
Speaker 3: with some sensible delivery schedule, and at least the first
29:47
Speaker 3: couple need to be paid for with public money on
29:50
Speaker 3: the public balance sheet.
29:51
Speaker 1: Because energy security is as important as any other great, yeah.
29:54
Speaker 3: So I when we don't outsource funding the military or
29:57
Speaker 3: the police to the private sector, and that's our physical
30:00
Speaker 3: called security is a nation, so we shouldn't necessarily take
30:02
Speaker 3: a different view for energy security. But I believe security
30:06
Speaker 3: then there, well we'll come, but we don't. But we're
30:09
Speaker 3: not in the same boat with food security. So I
30:12
Speaker 3: believe that one of the challenges at the moment with
30:15
Speaker 3: securing private investment is there's a concern, well, there are
30:20
Speaker 3: two issues. One is kind of easily overcome investors have
30:24
Speaker 3: something of a blind spot around nuclear that's similar to
30:26
Speaker 3: their blind spot about AI. They sort of put it in, oh,
30:29
Speaker 3: this is quite complicated and scary bucket, and then they're
30:32
Speaker 3: just not doing the normal risk analysis.
30:34
Speaker 2: So it's sort of like, just work.
30:35
Speaker 3: The problem like you would any other problem. Your risk professionals,
30:38
Speaker 3: for goodness sake, just do your job. The other aspect
30:41
Speaker 3: is a genuine concern over regulatory consistency and the stability
30:47
Speaker 3: or otherwise of the policy and regulatory environment, and those
30:51
Speaker 3: are legitimate concerns, and I think that the government needs
30:54
Speaker 3: to do more to de risk the construction phase. So
30:59
Speaker 3: if it just simply put its own money down, and
31:01
Speaker 3: of course the government can borrow more cheaply than any
31:03
Speaker 3: of the other potential investors, so this would also reduce
31:06
Speaker 3: cost of consumers. I'm fairly confident that after construction they
31:10
Speaker 3: could refinance and probably at a profit as well, because
31:13
Speaker 3: these will be long term profitable assets. So once you've
31:17
Speaker 3: de risked construction, these are going to be a very
31:19
Speaker 3: different and more attractive investment prospect. And also once you've
31:23
Speaker 3: demonstrated the commitment, you started rebuilding supply chains, you started
31:28
Speaker 3: building up work for skills and the confidence on delivery,
31:31
Speaker 3: then actually you probably find more investor interest even before
31:35
Speaker 3: the operating phase that you might get people coming into
31:37
Speaker 3: finance construction.
31:39
Speaker 1: As long as the bill costs didn't get out of
31:40
Speaker 1: control as they seemed to on everything we try and build.
31:42
Speaker 3: Well, no, but Capco's has been keeping its costs under control.
31:45
Speaker 3: So we need to just bring them in and give
31:48
Speaker 3: them the ability to deliver in the UK in the
31:50
Speaker 3: way they've delivered in South Korea.
31:52
Speaker 2: And ue, what.
31:53
Speaker 1: About small modular reactors. I mean these we've been building
31:57
Speaker 1: these for years and sticking them on submarines, right, so yeah.
31:59
Speaker 3: Unfortunately we can't just put the same ones on land
32:01
Speaker 3: because well, because they use a much more enriched type
32:05
Speaker 3: of fuel, it's not actually licensed for use in civil applications.
32:09
Speaker 3: So the idea with nuclear submarines is they can stay
32:12
Speaker 3: under the sea for years on end. You know, they
32:16
Speaker 3: resurface because the people need to exactly and they need
32:19
Speaker 3: feeding and stuff, but the you don't need to refuel them.
32:24
Speaker 3: That type of fuel can't currently be I mean, why
32:30
Speaker 3: it's not considered as safe. That's why, I mean there
32:32
Speaker 3: are concerns over the safety. Well, yeah, but if you're
32:37
Speaker 3: a nuclear submarine operator in the Navy, then you have
32:42
Speaker 3: other safety concerns. I mean, yeah, that's already part of
32:45
Speaker 3: the deal. Okay, so we can't just transfer this to land,
32:47
Speaker 3: so that at the moment, none of the this type
32:51
Speaker 3: of fuel is not it's just not licensed. Now they're
32:53
Speaker 3: starting to increase the concentrations of fuel allowed in civil applications,
32:59
Speaker 3: but it's very much a softly softly approach. So maybe
33:04
Speaker 3: in some point in the future they would be able
33:06
Speaker 3: to do it, but it's not at the moment now.
33:08
Speaker 3: I think small modular reactors have great potential, but it's
33:12
Speaker 3: they're more a twenty mid twenty thirties onwards conversation, and
33:17
Speaker 3: we just can't afford to wait. The most promising ones
33:20
Speaker 3: are a couple of boiling water react to technologies that
33:25
Speaker 3: are being developed in Canada, and if they work, that
33:31
Speaker 3: will be very promising. But they're essentially a scale down
33:34
Speaker 3: version of large scale reactor technology.
33:37
Speaker 1: Okay, is it possible that all our problems will go
33:42
Speaker 1: away once we can mirror solar energy from space.
33:47
Speaker 2: Hull?
33:48
Speaker 3: All our problems could go away. If we invented nuclear fusion,
33:51
Speaker 3: all our problems could go away. If we could capture
33:53
Speaker 3: unicorn tears and harness them trying to end on atmistice gather.
34:00
Speaker 1: Now we don't me try something else.
34:01
Speaker 2: You can come up with an optimistic answer to.
34:04
Speaker 1: How confident are you that we will get our energy
34:09
Speaker 1: makes sorted out before we end up having power cuts?
34:11
Speaker 1: The real question being should I buy candles?
34:15
Speaker 3: Well, I actually advise people with elderly relatives to buy
34:18
Speaker 3: tortures and have them sort of secreted around their houses
34:20
Speaker 3: because if they had power cuts and you know, navigating
34:25
Speaker 3: stairs and stuff, it's that's kind of dangerous. So if
34:31
Speaker 3: the longer we leave it to act, the narrower our
34:33
Speaker 3: choices become. So we're rapidly approaching at a stage where
34:38
Speaker 3: the government's going to have to hugely increase the procurement
34:40
Speaker 3: target for the capacity market and build more gas unabated
34:43
Speaker 3: gas fired generation, which will be expensive because there's uncertainty
34:47
Speaker 3: about how they will operate post twenty thres can be
34:50
Speaker 3: reasonably quick, but they can be delivered in under two years,
34:53
Speaker 3: so that could be done to fill the gap. If
34:57
Speaker 3: that isn't done, then you're really looking a demand catailment.
35:01
Speaker 3: So if you're expecting a blackout because of a shortage,
35:06
Speaker 3: and you can see that shortage coming, then you have
35:08
Speaker 3: to tell your industrial demand to turn itself off so
35:12
Speaker 3: you can potentially avoid blackouts that way. Of course, you're
35:16
Speaker 3: greatly reducing system stability and increasing the risk of widespread
35:20
Speaker 3: blackouts when you're doing that, and damaging your economy. But
35:22
Speaker 3: it's hugely damaging. It'll be politically and economically damaging to
35:26
Speaker 3: do that, So we do currently have the tools to
35:29
Speaker 3: avoid blackouts. Don't close the ADRs, don't close anything else
35:33
Speaker 3: unless it's actually broken. And look at building new gas
35:38
Speaker 3: because if you don't, you know you're running out of time.
35:41
Speaker 3: And try and accelerate the build of new nuclear so
35:44
Speaker 3: that when you do have to close the ADRs in
35:46
Speaker 3: the beginning of the next decade, you've got something coming on.
35:49
Speaker 2: To replace it.
35:50
Speaker 1: Yeah, I'm bang handles.
35:51
Speaker 3: And then you've got electrification to consider as well.
35:54
Speaker 2: Yeah.
35:55
Speaker 1: Okay, Catherine, thank you so much. I will just ask
35:57
Speaker 1: you one last question, which you'd have to take stab at,
35:59
Speaker 1: even though not your area, because I ask everybody, and
36:01
Speaker 1: I can't let you off. If I was going to
36:05
Speaker 1: lock you up somewhere for ten years, somewhere nice by
36:07
Speaker 1: the way, and before I did that I asked you
36:10
Speaker 1: to make one investment and one investment only. And I
36:12
Speaker 1: normally say to people they have a choice between bitcoin
36:16
Speaker 1: or gold, but in okay, I'm going to add on uranium.
36:21
Speaker 2: Well, sume bitcoin or gold. I do gold. I am
36:24
Speaker 2: between gold and uranium.
36:27
Speaker 3: That's interesting. Yeah, I'll probably do uranium. Yeah, of course
36:31
Speaker 3: if you go for the gold, you can always wear
36:32
Speaker 3: it afterwards, you can.
36:33
Speaker 1: Yeah, uranium, I.
36:37
Speaker 3: Just make something pretty and bitcoin you're not convinced by
36:41
Speaker 3: not really, no, wonderful.
36:43
Speaker 1: That was very kind of you to answer that question.
36:45
Speaker 1: Thank you so much for joining us today. That was fascinating.
36:48
Speaker 2: Thank you.
36:55
Speaker 1: With me now to reflect on what we just heard
36:56
Speaker 1: from Catherine porter Is Bloomberg Energy reporter Rachel Morra and Rachel,
37:00
Speaker 1: thank you so much for joining me today.
37:02
Speaker 2: Hugely appreciated.
37:03
Speaker 1: That was an interesting conversation, and I wanted to start
37:07
Speaker 1: by asking you what you thought about Rachel's thoughts on
37:11
Speaker 1: net zero. She says probably not possible by twenty fifty,
37:16
Speaker 1: which seems to be a growing concernsuscietally, and she's also
37:19
Speaker 1: not convinced it's desirable either. So do you from your work,
37:24
Speaker 1: do you think that it's possible by twenty to fifty
37:27
Speaker 1: on our current projectory.
37:29
Speaker 4: I think when we are thinking about it, we're thinking
37:32
Speaker 4: about the word net within that and how much emphasis
37:35
Speaker 4: is going to be on that net. So there's new
37:37
Speaker 4: technologies where you can capture carbon from the air and
37:40
Speaker 4: so you can remove carbon. So can we be offset
37:43
Speaker 4: that against some of the emissions that we haven't been
37:44
Speaker 4: able to prevent. So I think within that we could
37:48
Speaker 4: probably get close by twenty fifty. It's very hard at
37:52
Speaker 4: this point because it's so far away. I think we're
37:54
Speaker 4: looking at some of the twenty thirty goals, particularly in
37:57
Speaker 4: the UK, the clean grid by twenty thirty five under
38:00
Speaker 4: the Conservatives or twenty thirty under Labor and people are
38:04
Speaker 4: saying that that looks very difficult. That's just too soon
38:06
Speaker 4: for some of those technologies like carbon capture and storage
38:09
Speaker 4: or hydrogen.
38:10
Speaker 1: Yeah, okay, So it's really meeting it at the moment
38:13
Speaker 1: based on what we can do at the moment. It's
38:15
Speaker 1: more about carbon capture than anything else.
38:17
Speaker 4: That I think we're at a crossroads where we sort
38:20
Speaker 4: of have to see which becomes more successful and more
38:23
Speaker 4: widely used, and that's on a global basis. Carbon capture
38:26
Speaker 4: or hydrogen both, especially if it's green. Hydrogen can solve
38:31
Speaker 4: some of the problem in the places that are difficult
38:33
Speaker 4: to decarbonize, such as industry.
38:35
Speaker 1: And then when we moved on to talk about desirable
38:38
Speaker 1: this is when it all got pretty interesting with Catherine,
38:41
Speaker 1: because she looked at it very much through the prism
38:43
Speaker 1: of cost, and not just financial cost, but also environmental
38:48
Speaker 1: costs that not everyone looks at. So we talked a
38:50
Speaker 1: bit about water supply and the massive amount of water
38:52
Speaker 1: used in mining for the critical minerals that we need
38:54
Speaker 1: for transition, and talked about the general environmental harms and
38:58
Speaker 1: also social harms that that mining might might have in
39:03
Speaker 1: the kind of countries where lithium, etc. Is And that
39:06
Speaker 1: was quite an interesting way to look at it. This
39:08
Speaker 1: is not something you heard about that much. That that
39:11
Speaker 1: a this focus on financial cost, which is gathering speed, right,
39:15
Speaker 1: and b this focus on the environmental cost of the minerals.
39:18
Speaker 1: What did you think about her take on all that?
39:22
Speaker 4: Yeah, I think you're right. A lot of the focus
39:25
Speaker 4: tends to be on the kind of sustainability from the
39:28
Speaker 4: kind of labor involved in some of those minds, and
39:32
Speaker 4: the availability of the critical minerals needed for making batteries,
39:38
Speaker 4: and the water aspect is interesting because you know, it
39:41
Speaker 4: seems like almost every solution we find has some other
39:45
Speaker 4: strain on the environment and on the planet. When it
39:49
Speaker 4: comes to cost, I think it's quite difficult calculation to make,
39:52
Speaker 4: particularly for renewable energy. And yeah, the conversation was focused
39:57
Speaker 4: very much on the lowest cost of consumer and there
40:01
Speaker 4: is this idea of the trilemma, which is an idea
40:04
Speaker 4: that sort of come back into fashion, where you have cost,
40:07
Speaker 4: you have security of supply, and you have environment and
40:11
Speaker 4: at one time only one of those things can be
40:13
Speaker 4: at the apex of the triangle, so at the detriment
40:15
Speaker 4: of the other two. So if you put cost at
40:17
Speaker 4: the top, then obviously that might mean using fossil fuels
40:20
Speaker 4: for longer because it might be cheaper. But if you
40:23
Speaker 4: put the environment or sustainability at the top, then you know,
40:26
Speaker 4: perhaps one of those things it has to give is
40:28
Speaker 4: that we have to pay more. And I think what
40:31
Speaker 4: she didn't mention is that having huge amounts of renewable
40:35
Speaker 4: energy which feeds into the grid at a low cost,
40:38
Speaker 4: does lower the price of energy for consumers. So we
40:42
Speaker 4: do have that bill lowering impact of having lots of
40:45
Speaker 4: renewable energy. Yes, we have to pay for it. We
40:48
Speaker 4: have to subsidize those technologies at the moment, but the
40:50
Speaker 4: cost has come down significantly. You know, you kind of
40:53
Speaker 4: are weighing up that you pay to build it now
40:56
Speaker 4: and it operates for decades into the future, giving us
40:58
Speaker 4: a source of clean and low cost electricity versus just
41:04
Speaker 4: sticking with fossil fuels and not building anything new.
41:06
Speaker 1: Yeah, but when you say it brings down costs, you
41:08
Speaker 1: are talking about the future, right, I mean it's more
41:11
Speaker 1: expensive now.
41:12
Speaker 2: We have to rebuild.
41:13
Speaker 1: We've put up all this infrastructure, and we have to
41:15
Speaker 1: pretty much rebuild the grid from scratch and make it
41:18
Speaker 1: much much bigger and develop it in a very different
41:21
Speaker 1: way to take on many, many, many tens of thousands
41:23
Speaker 1: of different sources of energy as opposed to the small
41:26
Speaker 1: number of energy sources we used to have in terms
41:28
Speaker 1: of big power stations in the middle of the country,
41:30
Speaker 1: et cetera. So we have to do that, and then
41:32
Speaker 1: we have to pay for the backup power, the intermittency,
41:35
Speaker 1: et cetera. So in the short term, that doesn't reduce builds,
41:38
Speaker 1: and I when we see that do not build. It doesn't
41:40
Speaker 1: reduce bills. But the hope is that it does over
41:42
Speaker 1: the medium to longer term. Right, well, it does.
41:46
Speaker 4: You can see it on your bills. If you have
41:48
Speaker 4: one of the kind of flexible or agile tariffs and
41:51
Speaker 4: it's a super windy day, then you can see that
41:55
Speaker 4: you get exposure to a price that is much much
41:57
Speaker 4: lower than usual. So you can not everybody has that.
42:00
Speaker 4: I mean, it makes more sense if you have something
42:01
Speaker 4: like an electric vehicle, but it is possible for the
42:04
Speaker 4: consumer to get exposed to that decrease in price when
42:07
Speaker 4: renewables are plentiful. I think what you're describing is the
42:11
Speaker 4: shift from this big centralized system where we have big
42:14
Speaker 4: power stations and big centers of demand to much more
42:17
Speaker 4: decentralized lots of input points along the grid for your
42:21
Speaker 4: heat pump, your electric vehicle. And yes, that requires a lot,
42:23
Speaker 4: a lot of investment. But on the other hand, the
42:26
Speaker 4: power stations we have don't last forever. A lot of
42:27
Speaker 4: them are going to close. We have old nuclear plants
42:30
Speaker 4: that are going to close, gas plants that will closed
42:32
Speaker 4: they reach the end of their life. So whatever we
42:34
Speaker 4: would have to build something new, we can't just use
42:38
Speaker 4: things that are sixty seventy years old, so there would
42:42
Speaker 4: be some kind of rebuilding no matter what we did.
42:45
Speaker 4: And I think when you look at some of the research,
42:48
Speaker 4: you can find that the status quo and continuing to
42:51
Speaker 4: use fossil fuels that are subject to big price swings
42:55
Speaker 4: like the war in Ukraine ends up being more expensive
42:58
Speaker 4: than investing and receiving the benefit of that cheaper, cleaner power.
43:03
Speaker 1: Well, it seems like I mean that the efficiency and
43:08
Speaker 1: cost base of renewables such as solar and wind is
43:10
Speaker 1: always going to cause arguments, partly because there's the arguments
43:13
Speaker 1: around land used efficiency, etc. But fossil fuels, of course
43:16
Speaker 1: are always going to cause arguments. But there does seem
43:19
Speaker 1: to be this one thing in the middle that I
43:20
Speaker 1: talked about a lot with Catherine, which is nuclear power,
43:23
Speaker 1: which seems like an increasingly obvious solution. If we just
43:28
Speaker 1: really focus on building out nuclear you don't really need
43:31
Speaker 1: anything else. You can you can stop with relying on
43:34
Speaker 1: China for solar, you can stop with worrying about where
43:36
Speaker 1: the minerals come from. We can so arguing about whether
43:39
Speaker 1: we have to colonize the Moon together the lithium, et cetera.
43:41
Speaker 1: We can just get on with it, and that seemed
43:44
Speaker 1: the way she described it and the way that I've
43:46
Speaker 1: heard other people talk about it incredibly compelling. It takes
43:49
Speaker 1: away all the other problems. Do you think she's been
43:52
Speaker 1: too simplistic about that?
43:54
Speaker 4: I think that. I mean, it depends which country. But
43:57
Speaker 4: you know, in the UK, for example, we are sportive
44:00
Speaker 4: of nuclear. Here the government, both on both sides, supports
44:04
Speaker 4: a build out of nuclear. The problem is it takes
44:06
Speaker 4: so long. The big stations that like Hinkley Points see
44:11
Speaker 4: size well see that are Hinkley's being built. It's taking
44:15
Speaker 4: much longer and costing more. And there's been several examples
44:20
Speaker 4: throughout Europe. There's one project in France that EDF is
44:22
Speaker 4: also working on, Flamonbilee, that's been incredibly delayed. And so
44:27
Speaker 4: if we if we could rely on nuclear to be
44:30
Speaker 4: built quickly and not cost a lot more than we
44:34
Speaker 4: were thinking, you know, perhaps it could play a bigger role.
44:36
Speaker 4: And I think most people sort of think yes in part,
44:41
Speaker 4: but maybe it's not the full solution for those reasons.
44:43
Speaker 4: And the small modular reactors are interesting too, but we
44:46
Speaker 4: haven't got a working example of those yet. You know,
44:48
Speaker 4: they're still in their infancy. Of development, so it's sort
44:53
Speaker 4: of a leap to rely on them too much at
44:54
Speaker 4: this point.
44:55
Speaker 1: Although she did say, I mean I found at the
44:57
Speaker 1: very end of the conversation that that that we just
44:59
Speaker 1: closed on. We were to talking about the Korean Electrical
45:02
Speaker 1: Power Company KEPCO and how they're just opening these things
45:05
Speaker 1: all over the place. They've got four open in South Korea.
45:08
Speaker 1: They're opening them all over the place, and they're delivering
45:10
Speaker 1: them in eight years, on time, on budget in a
45:13
Speaker 1: way that nobody else is. And I said to it,
45:15
Speaker 1: so if we order them now, we can have them
45:17
Speaker 1: by the early thirties and years like, yeah, absolutely, and
45:19
Speaker 1: we should do that.
45:20
Speaker 4: I think the nuclear sector would respond by saying that
45:24
Speaker 4: our kind of safety standards are so high here. I mean,
45:28
Speaker 4: I know that getting a reactive design approved takes a
45:30
Speaker 4: very long time, and I've visited the Hinckley site, and
45:35
Speaker 4: even though we're not likely to have a tsunami, they
45:38
Speaker 4: have to build walls that would protect the power plant
45:41
Speaker 4: from the impact of a tsunami. You remember Focushinger, you
45:44
Speaker 4: talk about it in the interview, and there's just trying
45:49
Speaker 4: to protect against that. I think would mean it would
45:52
Speaker 4: be difficult to loosen the regulations and allow nuclear to
45:55
Speaker 4: move faster. But often it's actually the construction and the
45:58
Speaker 4: people that takes a long time, the supply chains. It's
46:02
Speaker 4: not necessarily just the regulation.
46:04
Speaker 1: Okay, I mean there there is or she suggests that
46:08
Speaker 1: there's a case for not being quite so so safety conscious.
46:14
Speaker 1: Obviously very safety conscious, but she does suggest that we
46:17
Speaker 1: go a little ott with us in that. I mean,
46:19
Speaker 1: for example, for Coushuma that was not actually a nuclear accident.
46:23
Speaker 1: There was a tsunami, but it didn't cause any any
46:27
Speaker 1: deaths from the nuclear station itself, just from you know,
46:30
Speaker 1: the kind of physical damage of a tsunami.
46:33
Speaker 4: Yeah, I think it's just such a high risk. And
46:36
Speaker 4: I'm sure you remember from some of the worst points
46:40
Speaker 4: in the war in Ukraine that there were worries about
46:43
Speaker 4: a nuclear plant there. And if you know, if there's
46:46
Speaker 4: an attack on a nuclear plant and the wind blows
46:48
Speaker 4: towards Europe, you know, we could all be impacted too,
46:51
Speaker 4: and it's impossible to contain and stop, and so it
46:54
Speaker 4: just you know, policy makers just cannot risk that, even
46:58
Speaker 4: if it's unlikely. Still, the Fakashima incident impacted how you
47:03
Speaker 4: build nuclear all over the world. Regardless of the likelihood
47:07
Speaker 4: of it actually happening.
47:09
Speaker 1: Okay, I'm getting that you're just not quite as keen
47:11
Speaker 1: as as Catherine was and don't see it just quite
47:15
Speaker 1: sort of straightforward way out of the whole thing.
47:18
Speaker 4: I think it's part of the solution, but I think
47:20
Speaker 4: a huge amount of capacity would just be very difficult
47:25
Speaker 4: to do.
47:26
Speaker 1: Okay, thank you, Thank you very much, thanks for listening
47:32
Speaker 1: to this week's Maren Talks Money. We'll be back next week.
47:34
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47:36
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47:39
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47:42
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47:44
Speaker 1: Money at Bloomberg dot net. This episode was hosted by
47:47
Speaker 1: me Maren sumset Web. It was produced by Someasadi, additional
47:50
Speaker 1: editing by Blake Maples. Special thanks to Katherine Porter and
47:53
Speaker 1: of course to Rachel Morrison.