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The energy transition's 5 supervillains and 5 superheroes
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The energy transition's 5 supervillains and 5 superheroes

A conversation with Michael Liebreich.
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In this episode, longtime clean-energy analyst Michael Liebreich assesses five causes for pessimism about the net-zero transition, alongside five causes for optimism.

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Text transcript:

David Roberts

Michael Liebreich is one of those people who, at least in the clean energy space, needs no introduction. But I’m going to introduce him anyway.

Way back in the early 2000s, when he was working as a consultant and a venture capitalist, Liebreich noticed that alternative energy seemed to be on the verge of becoming a real thing, yet no one in the financial world was taking it particularly seriously. So he founded New Energy Finance to provide the industry with high-quality data and insights.

From its scrappy beginnings, Liebreich built the company into a market leader with a staff of hundreds. In 2009, Bloomberg came calling and the company became BloombergNEF, which remains today the premier source of clean energy data, modeling, and projection.

Michael Liebreich
Michael Liebreich

Liebreich now runs Liebreich Associates, which provides advice and consultation on clean energy. He also remains a top contributor to BloombergNEF, runs the growth equity investment firm EcoPragma Capital, serves on more boards and advisory panels than I could possibly list here, periodically lectures at Imperial College London, speaks at every clean energy event of note, wins awards, argues with people on social media, and, in his spare time, co-hosts the podcast Cleaning Up.

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I probably missed some stuff in there, but I can't introduce him all day. Anyway, Liebreich recently penned a pair of posts about the forces that are standing in the way of the net-zero transition (the supervillains) and the forces that are accelerating it (the superheroes). Those posts seemed like a good excuse to finally get him on the pod so we can talk about the state of the energy transition and the right balance of optimism and pessimism.

With no further ado, Michael Liebreich, welcome to Volts. Thank you so much for coming.

Michael Liebreich

David, it's always fantastic to speak with you, and it's great to be here on your pod.

David Roberts

This has been a long time coming. It's quite late night here, it's quite early morning there. You're in Switzerland, I'm in Seattle. We're at very different points on our caffeine journey. Actually, I guess I'm on my beer journey, technically. But I want to jump in, I want to start in a strange place, as you might think — you might view it as a little odd. Before we jump into the articles, I just kind of wondered if you would like to talk briefly about where you sit ideologically. I only ask because here in the US, things have gotten very boring and binary.

And my sense is that you're sort of orthogonal to some of those categories, which is a little bit of an anomaly in the clean energy and climate world. So, how do you describe yourself these days?

Michael Liebreich

A great starting point. Very interesting. I was not expecting that. But even at this early stage on my caffeine journey here in early morning Switzerland, that gave me a bit of a jolt. So, I am a conservative. Now, what that means, I have to sort of immediately segue into what that means because it's such a kind of, I mean, frankly —

David Roberts

Before you get cancelled, I'm sorry, I already cancelled you.

Michael Liebreich

You know, because in so many circles, it's just become this, you know, it's a rude word, and in a sense, rightly so. In the US, I'm a, I would say, a small c conservative. I happen to be a card-carrying member of the Conservative party in the UK. But we have in the UK a kind of green-blue wing to the party. So I'm in the part of the party that gave us Zach Goldsmith, Lord Goldsmith, who has done incredible work for the environment globally, particularly on oceans and fisheries and so on. And so there is a part of the party which is environmentally, you know, I don't know what to say. Aware, not, you know, not extreme, not absurd, right, that exists.

So, I would call myself center-right. And in a way, if it wasn't for planetary boundaries and externalities, I would be a pretty dry conservative. I wouldn't be a libertarian because I think that's kind of silliness. But I would be a dry conservative fiscally and so on. So, I try to bring a bit of that into the debate about clean energy and climate. And I break a few boundaries, I guess.

David Roberts

Yeah. Yeah. I think that's a welcome spice. You know, when things get too binary for too long, people get real stuck in their ruts. So, your first article is about — let's start with the pessimism. A couple of these, you know, I want to talk about somewhat more than others, but there's sort of five horsemen. The first one is economics. You know, I think people think these days, especially people listening to this pod, think these days that, like, "The economics are on our side, we're unstoppable," et cetera, et cetera, this kind of thing. Like the economic story about clean energy, has been quite positive lately.

But, you raise sort of three cautions about that. The first two are variations of a theme that I have been thinking about a lot, which is that things maybe have seemed a little cheaper and easier than they might thus far, because we've basically been installing wind and solar where there is none, which is kind of the easiest and cheapest stage of things. So, let's walk through those cautions.

Michael Liebreich

Let me just, if I might, just frame these two pieces, why I wrote them and what they do. If I might come back to that question, the point here is that there is an enormous amount of noise. It actually segues well from the point that I am politically, perhaps not aligned with the majority of people working on clean energy. And these tribes pick figures and facts and anecdotes that fit their narratives, and they do it very loudly, and they do it incessantly and tribally, and it's very hard to really get that sort of signal from noise.

And so, what I tried to do was to construct the two arguments as well as I could, to say, "Forget the transition, it's never going to happen." And then the other argument, that's the, I call it the five horsemen. You know, when you introduced, and you said, it's the five supervillains, and I thought, "Wow, I wish I'd thought of that." So I call it the five horsemen, if you're looking on Google. And I did that, and then I wrote these five superheroes. I hope we get, I hope you and I don't talk too much so we don't get onto the actual good news.

Now, the first of the problems is just the economics. It is so important that the transition does not drive up energy costs, particularly for the poor and vulnerable, but also for those who really just aren't that engaged. And there are a few reasons why I think that this easy narrative says, "Hey, wind got cheap, solar got cheap. Batteries got cheap, EVs got cheap." It's such a dangerous narrative. So the reasons why is that, first, now you led into it: Resilience really matters. If you're talking about a transition, not just adding a bit of clean energy or having a second car, which is electric, you've got to think about how you do the whole thing.

And that means keeping the lights on when it's not windy and it's not sunny, and the batteries have run down. What do you do then? It also means having transportation things like police cars, fire engines, and garbage trucks, even at the point where your grid may have gone down for whatever non-resilient flaw that it has had. That bit gets really expensive when you really start to provide resilient clean energy, fully, deeply resilient clean energy. It's much, much more expensive than if you're just sort of adding a bit and making yourself feel good about yourself.

David Roberts

Yeah, you make the point, and I think this has become sort of a bit of conventional wisdom, which I think is correct, that the first 90% is one thing, the last 10% is a very different thing. The last 10% is where you're taking out those last bits of fossil fuel that are just your backup, your sort of storage, your resilience piece, and you've got to replace all of that. And that stuff, as you say, is not as cheap as wind and solar.

Michael Liebreich

And I got a confession to make. You know, when I wrote these two pieces, it's clear that I fundamentally come down on the side of the superheroes. Right. I think the transition is going to happen. So, you know, if we really wanted to depress people, we would do half an hour on how, you know, just on the supervillains. But the issue with that last 10%, if I sort of, you know, jumping ahead of the superheroes, but responding to it, is we must not let the last 10% dominate the debate about the first 90%. I mean, frankly, if you and I could finish our careers with a 90% reduction in CO2, you know, shuffle off our mortal coils and leave the rest of the challenge to our kids, we'd be in a good place. Right?

David Roberts

Yeah, yeah.

Michael Liebreich

But even the last, frankly, even the last 20% or 30%, does start to become more expensive, considerably more expensive than the first 70%.

David Roberts

Well, and you say, like, this sort of parallel point, like, it's one thing to reduce gas, it's another thing to eliminate gas. Right. Gas in industry, gas in furnaces and boilers, and, you know, all these clean energy has to get way, way cheaper to actually be cheaper than your industrial gas uses.

Michael Liebreich

That's right. And that's the second reason that I kind of led on costs, the first being the kind of resilience piece. The second is that gas is just — we're talking natural gas, not gas for vehicles, but natural gas — is just so darn cheap as a source of heat. Just to put it in perspective, today's Henry Hub gas price, that's the index that's used in the US to measure gas price as it's a wholesale gas price index, is at about $1.80. And if you said, "Okay, well, we use that gas to heat a kiln or a furnace or a process or a home or whatever, what price does electricity need to get to, to meet a $1.80 per, and this is per million British thermal units."

And the answer is $6 per megawatt hour. $6 per mega — now you're laughing. The audience may know that that is incredibly low. I mean, right now in Texas, which is generally kind of a low electricity price state, it's $20. Right, but it's $20 for, yeah, some of it's clean, but a lot of it is not. So to get 24/7 zero-carbon electricity for $6 a megawatt hour, if there's anybody out there who wants to tell me that that is going to happen anytime soon, I need to talk to them. Maybe I'll get them on my podcast because they know something that I don't. And I suspect, David, that you don't.

David Roberts

Yeah, yeah. And so, as you conclude, you get rid of that with a carbon price. Like, the utility of carrots runs out at some point, and in some areas, for some things, you're just going to need sticks. And I think we'll come back to that when we touch on politics later.

Michael Liebreich

100%, you're not going to bring clean electricity to the price of natural gas without a carbon price. Just as a quick aside, if you think that the answer is clean hydrogen, right, which is, you know, a huge topic of conversation everywhere around the world today, hydrogen. If you wanted to do it with hydrogen, your cost would need to be 20 cents per kilo. 20 cents. Now, people are finding it hard to deliver hydrogen at $3, $4, $5. And so, you've got to get it down to 20 cents. So, you know, if you like the supervillains, the horseman of the transition apocalypse, you can just say, "Forget it, we're just not getting there."

David Roberts

Right. Yeah, yeah, cheap gas is too cheap to overcome. And then the third piece, which I think is a really good intervention, is always worth mentioning because this podcast, at least, is so US-focused and Western-focused. But your third point is just there's cheap and there's cheap. And cheap in the West is not necessarily cheap in the developing world. These are capital intensive — clean energy is legendarily capital intensive and then cheap to operate. And capital itself is just much, much more expensive in the developing world, which is where we need the most of the stuff the fastest, right?

Michael Liebreich

Absolutely right. And so, the third of my kind of cost problems is that we think that you've got cheap wind, cheap solar, cheap energy efficiency when people can be bothered to do it, and so on. But of course, we have low capital costs. We've been awash with cash since the government reinflated our economies after the great financial crisis, particularly. But if we've got a cost of capital of, let's say, 6%, which is pretty common for a wind farm or a solar farm or something like that in the west, in Europe, Japan, the US, and South Korea, places like that.

But go to even South Africa, one of the top two economies in Africa, and you're going to have a cost of capital for the same thing that could be 15%. And so, this kind of myth of cheap, clean energy is just not the case in the global south. And, you know, on my pod, on Cleaning Up, I've spoken to some people who are really trying to crunch down that delta between the global south and the west. But it's really hard because there just is more risk. If you're investing from the west into the global south, there just is more risk, and you therefore demand more return.

That's kind of just the way that markets work or the way that finance works. The way the world works, frankly.

David Roberts

Well, even in the US, all I hear about these days are higher interest rates, which doesn't even get us close to what they're paying in South Africa. But even the recent crank up in interest rates is flummoxing a lot of developers and slowing things down.

Michael Liebreich

That's right. And what we've seen, you said it yourself, clean energy is almost all upfront capital, so it is more sensitive to a sudden spike in interest rates than the other stuff, than the fossil energy. And obviously, nuclear would be worst of all because it has such a long construction time. So when we've had this spike in interest rates, it has really thrown, particularly the wind industry has been thrown dramatically into turmoil.

David Roberts

All right, so that's the cost horseman. That's, I think, the main one and the one with the most sort of uncertainty around it. And we can get to the happy story on costs when we get to the superheroes. Your second horseman is something I think Volts listeners will be very familiar with at this point, which is just — and this is probably the problem I'm thinking about more these days than any other. You know, what they're calling the "electricity gauntlet," which is on the one side, you know, we're electrifying transport and heat, space heating. We're going to make hydrogen with clean electricity.

We're going to do steel, concrete with clean electricity. We're going to, you know, we're electrifying heavy industry now where we're going to like double, triple, quadruple AI data centers, just like everybody wants more electricity all of a sudden. And on the other side of that, we don't have enough grid and we have a lot of trouble building grid. And that is your second horseman is we need more grid and we suck at it. So maybe just, you know, we don't have to spend too much time on this one because I think it's familiar to our listeners, but maybe just give a few sort of reflections on the scale of this problem.

Michael Liebreich

Raoul, so you talked about how we're going to need more electricity. Electricity, of course, only meets about 20% of our energy needs today. Maybe a bit over that. And it's going to go up. I don't think anybody would argue that in a net-zero world it's going to be 70%, 80%, 90%. I mean, it's just going to be —

David Roberts

As a bookmark here, I'm so curious what that number ends up being like. Of all the numbers I'm curious about in 2050, I'm the most curious about that one. How far does electricity get?

Michael Liebreich

Well, my question will be, is that a 2050 net-zero, or is that a 2050 on any sort of reasonable trends? Because those are two different answers, sadly. But it's going to be whatever the number is, it has to be much, much higher. So you talked about we're just going to need more electricity. But actually, it's worse than that because the lines we've already got, the current transmission lines and so on, tend to come from where power stations are today or historically, and those are coastal areas or areas where there's lots of coal or maybe some gas, right?

Where we're going to get our electricity from is, for instance, offshore sea or, you know, along the coasts. We're going to get it from deserts. We're going to get it from places where land is really, really cheap and where it's really sunny. Maybe, you know, I'm an investor in XLinks, which is bringing solar and wind power from Morocco to the UK. So it's going to come from different places. There's more of it. It comes from different places. And of course, it's variable, which means that you also need redundancy of your grid because sometimes where you think the electricity might be coming from, it's not and you need it from somewhere else.

So, the build-out of transmission has to be humongous. So, BloombergNEF, the team that I built all those years ago, has estimated that we would need to double the size of all of the grids that we've built to date. And we'd need to spend something like $21 trillion. That's trillion with a T, $21 trillion to get there. And, you know, we just don't have the grid engineers. We don't have the cable. We don't have the substation technology, all of the equipment that goes into that. We are miles from being able to do that.

David Roberts

We don't have, and this is what I was sort of pounding the table about on Twitter today: we do not yet have anything like, I think, the sense of national mission that would be required to coordinate all those things at the speed we're talking about. Like, we're just futzing around on the edges with reforms, regulatory. You know, we're like futzing with FERC rules and we're pleading with utilities and rate cases. We're just, it's all kind of small ball. I don't see anybody. I mean, tell me if I'm wrong. I don't see anybody, you know, any government with sort of the grid vision that we're talking about.

Michael Liebreich

Well, no. I mean, the exception might be China. Certainly as I travel around the world, places I go, every country has got a problem. And I will just sort of raise my hand as a small c conservative and just say, well, hang on a second. A lot of this, we can also laugh at NIMBYs, "Oh, they're going to just slow all this down on principle" and so on. But remember that this is intrusive stuff. I mean, pylons, grid. It is truly not something that you want running through your back garden. And so unless you want to kind of do eminent domain with no warning and then immediately start construction China-style, this is going to remain a really, really difficult problem for the next many decades, frankly.

David Roberts

Yeah. Okay, well, we'll leave that there since I think it's more or less self-evident at this point to everyone who's given it some thought. Your third horseman is the rising demand for clean minerals, which we've also discussed here on the pod. It's been discussed quite a bit in the clean energy world lately. I think maybe we'll just skip this one since you directly address it. You answer it in your superheroes. So we'll just put a place marker here: Yes, it is true, the demand for these minerals is going to sharply rise, and we do not currently know where it's all going to come from.

Michael Liebreich

Right. I mean, there's, look, there's Simon Michaux, professor in Finland, who has said there are not enough minerals in the currently reported global reserves to build just one generation of battery for all EVs and stationary power storage. And I think we can come back to why he's just simply, categorically, foolishly wrong.

David Roberts

Yeah, there's a lot of foolishness on this subject floating around.

Michael Liebreich

Exactly. We'll come back to it.

David Roberts

And then fourth, politics. Always a good horseman, always a good source of dread these days. So this kind of touches back a little bit on, and I'll say this from a US perspective, there's been a lot made lately of sort of like, "Oh, the public's coming around, they're starting to believe in climate, they're starting to care about climate change, they're rating it higher on polls," etcetera, etcetera, etcetera. But I think it's important to remember that, like we said, for the most part, what we've been doing so far is just building out a bunch of super cheap wind and solar, which is just like, everybody wins, nobody is really been hurt.

Now, it's all carrots thus far. And as you say, that can't go on forever. There's going to be some more politically difficult stuff coming. And it's an open question whether the depth of support is there to carry through choppier waters. Is that a fair summary?

Michael Liebreich

Yes, I mean, around the world, even in the countries that have declared climate emergency, and they're trying as hard as possible, in places like Denmark or the UK, they still don't have the set of policies in place would actually get them to net-zero in line with the pledges that they made in — actually go back to Glasgow COP26, where all those countries lined up, and 90% of the world has committed to net-zero by 2072, two thirds of it by 2050. But when it really comes to the sort of policy and the regulatory sausage-making, we are nowhere close to that. And if anything, the last couple of years, I think, in a number of countries have been moving back from that.

Obviously, the US is in a special case, because those years have been Biden years, and you may be staring down the barrel of another Trump administration, but even in the EU, which is, I think, in many ways seen as the region with the most longstanding commitment to this stuff, even there. In fact, what we're seeing is a dialing back of ambition, a realization that the money is not there, and also the rise of contrarian parties, parties that actually will use the climate issue as a way of building a constituency. And they're becoming pretty popular.

David Roberts

Yeah, there's that sort of reactionary backlash that climate policy and clean energy is getting swept up in a lot of countries. This is like, what do you even say about politics? If Biden wins, you know, the IRA continues to go into effect, more EPA rules, the things sink in, constituencies are created, the whole world goes in one direction and the other road is God knows what. And it's such a sharp disjunct. And that's true in more and more places. It seems like just two very contrary forces pulling at one another. And which one — it's such a binary in so many places and so hard to predict.

Michael Liebreich

Right. And this is probably a good moment to point out that, you know, we did that little spiel at the beginning about how I'm a conservative. "Oh, how cute and different." I also should point out I'm a never Trumper, just to be absolutely clear. So, you know, in US politics, I would probably be something like a blue dog Democrat, just to be absolutely clear. But, you know, it is very stark. And I think that it comes back to partly to do this with this question of cost, that there is a point where this stuff simply costs more.

And there's no point trying to delude ourselves or hide that because that's the worst thing, because then you're not even authentic. And that's death in today's politics. But also, when you look at politics, when you ask the question, it really matters how you ask. If you say to people, "Is the planet warming? Are we responsible? Should we do something?" Most, 65%, say, "Yeah, we really need to do something." But if you say, "Would you pay more to fill your car? Right. Would you pay more to heat your home? Do you want to pay a surcharge when you fly?"

Then, most people, not all, but most say " Absolutely, categorically, not." And there's this one statistic that if you look at Republicans in the US, age 65 and older, right, and these are the people who go out to vote most reliably, 98% of them are against eliminating the use of oil, coal, and gas. They vote and they give money to candidates. Right. So if anybody thinks that the politics is settled, we've now got IRA, it's pouring money into red states. So they'll kind of come and see the light. Forget it. Not happening.

David Roberts

That's a horseman, all right. Let's move on to the fifth horseman, which is corruption, predatory delay, and regulatory capture. This is hardly a newer — you know what I mean? This is a feature of the world, but it definitely is working against the transition. And, you know, and I'll just say, and tell me if you think this is right, that people have it in their heads that big oil is sort of the source of denialism and they deny climate all this time. I think that trying to elbow gas out of the way is going to be a bigger propaganda battle and probably even more fierce resistance. What do you think about that?

Michael Liebreich

I'm not sure I agree with that. I tell you why. Partly because big oil actually got a bloody nose in the end on this stuff, right? And so, for instance, there's all this discovery going on in thousands now of lawsuits. So even if they tried to do the same playbook, which they are doing, and we caught them doing it in the UK on gas, which is an extraordinary story, it's just harder to be that explicit. It's just the playing field has become a tougher one for them. But no, absolutely, it's a huge issue. It's not a new issue at all.

You know, Naomi Oreskes, who was on — actually my co-host on Cleaning Up, Baroness Bryony Worthington, you know, did a great podcast — she wrote the book on the predatory delay of the big US oil companies over decades.

David Roberts

Oh, that's funny. I had her co-author of that book on my pod.

Michael Liebreich

Oh, not an episode I've listened to, but one I definitely will. I made it a separate horseman, or supervillain, as you call it, from just political inertia. I think there's a difference between inertia and these problems are legitimately difficult to navigate politically. And then this one is, there are bad actors who are trying to slow it down. And, you know, there's. In the UK, you've got something called the Energy Utilities Alliance. I always give a shout out to because the PR company working for them was bragging about how well it had done at "sparking outrage." I'm doing air quotes here.

"Sparking outrage" about heat pumps. So this energy utilities alliance is the gas industry. It's the gas heating industry spinning fables about hydrogen boilers and sparking outrage about heat pumps. I mean, extraordinary, because you'd think we're still back in the 1980s or 1990s or whatever, but that is predatory delay and it is happening. And by the way, you've also got, just before COP28 in Dubai, there was a leak. And it was revealed that Saudi Arabia had an explicit program called the "sustainable demand support" or something like that, where they were going around the developing world and saying, "Look, you guys need cheap cars, you need supersonic travel. Gas is the answer and we're here to help." Or "Oil and gas is the answer, we're here to help." And so there are bad actors within that COP process. And I think you're right. It's all going to focus now on gas because I think oil is largely going to take care of itself via electricity vehicles, as we'll probably talk about.

David Roberts

Yeah. And one other final, final note on this. One of the things that we've been arguing about over here is whether the industry is using CCS and CDR, carbon capture and sequestration, and carbon dioxide removal generally as a tool of predatory delay. Do you think that's a real thing? Do you think that's a problem?

Michael Liebreich

It's kind of hard to separate all of the motivations behind things because generally there's a mix.

David Roberts

Right. I think everybody acknowledges we are going to need some. I don't think everybody's denying that we will need some.

Michael Liebreich

Right, exactly. So it's nuanced because, for instance, you talk about CDR. If you're talking about CDR, carbon dioxide removal, biogenic carbon, they call it also BECCS. So using it for bioenergy with carbon capture and storage, we're going to need it. And I think it's actually could be a great part of the solution. If you're talking about direct air capture, most of what they're talking about is actually just some version of stock market hysteria and fantasy thinking. Whether it's motivated by a desire to just sort of pour energy and focus people's attention on something that's plainly not going to work, you'd have to ask them their motivations.

I don't know. I have worked with oil and gas companies who are entirely in good faith, I believe, trying their hardest, but perhaps still placing foolish bets.

David Roberts

Yeah, well, it's easy to bet on what you want to happen for all of us. Okay, well, so that's the horseman. If people want to go out and make the case that this transition is never going to happen, this is probably the way to do it. Costs that maybe are going to rise soon. Difficulty building the grid we need, difficulty finding the materials we need, difficulty organizing the political will we need, and difficulty overcoming extremely powerful incumbents. Those are our horsemen. So let's turn then to a happier, the happier story, your five superheroes. And then we can, at the end, maybe, I'd like to say a few things about how you think it all balances out.

So, your first superhero is exponential growth. And I think this is a fascinating topic. Let me just frame it this way — I'd love to get your thoughts on this. So, you have this sort of argument. People will say, "Clean energy is growing exponentially," and then someone else will say, "No, it's an S curve. It's logarithmic, blah, blah, blah. It's an S curve. What's happening is it's going to grow real fast for a while, and then it's going to plateau."

This is what we see technologies doing: They grow fast for a while and then plateau. You make the case against plateau thinking, S curve thinking, and I don't know that I've ever heard it put quite that way. So, talk a little bit about why you think growth has even more potential than you might think from looking at a modeled S curve of these things.

Michael Liebreich

Okay, so first of all, all of these physical technologies, of course, they can't grow exponentially forever. That does break the laws of mass balance physics. But what I argue strongly against in superhero one is what I call "saturation theory."

David Roberts

Yeah, yeah. That's what I was going for.

Michael Liebreich

So, saturation theory is this idea that sort of, as soon as you see, acknowledge that something's an S curve, you immediately postulate a saturation level. And then you kind of adjust your models. And if you look at IEA models, EIA models, all of the models hidden in there somewhere is this kind of "Yeah, but it can't go on forever." And so they'll put in some manual checks, and they actually kind of end up with solar saturating. You know, it's kind of nudging up all the time. But it was, you know, solar saturating at 10% or 5%, 20%, 30% of current electricity supply.

And of course, current is only 20% of energy needs. And I guess I'm just saying, look — I had a very interesting experience early in my career around cellulose film packaging, film being replaced by oriented polypropylene. And I built a gorgeous model. Oh, my God, David, it was beautiful. You know, we'd only just invented the spreadsheet those days, but it was like, it was the best. And, you know, and it said, you know, over this time period, cellulose goes away and oriented polypropylene takes its place. The problem was oriented polypropylene was so much better and so much cheaper and had such interesting characteristics, and there was so much research going into its barrier, you know, properties and so on.

It just blew away cellulose as a packaging material by, you know, order of magnitude. And that was my lesson. And solar is doing the same thing.

David Roberts

Right. So the difference here is between saturating a fixed market and creating, by virtue of your performance and cost, creating new markets, creating new places, to go.

Michael Liebreich

Right. And then, you'll ultimately, of course, there's an S curve, and you will saturate all those conceivable markets that you'll think of in ten years for — And this is not, you know, it is actually, you know, in the superhero one I go through, it's not just solar. It's solar, it's wind, it's batteries.

David Roberts

Yeah. To me, batteries are the paradigmatic case here of a technology that is going to create uses for itself, create new markets for itself as it gets cheaper.

Michael Liebreich

That's right. And in fact, batteries right now are moving along their learning curve faster even than photovoltaic solar did.

David Roberts

That's crazy.

Michael Liebreich

There's this concept I've called the solar singularity in the past, and based on Ray Kurzweil's work, obviously, doublings really matter because it's the doubling of cumulative experience that drives down the cost. So, solar has doubled ten times in the last 20 years, which is incredibly fast growth. I mean, it's super good. It's microchip style growth. Not quite, but close. But, it's actually faster than that for batteries.

They've gone through five doublings in eight years. And so, we are absolutely going to see battery costs continue to come down to levels that even the real kind of supporters and boosters, in all honesty, didn't believe. And we're going to see that. In fact, we're seeing them already. We're seeing $72 per kilowatt hour. It was $1,000 ten years ago, and we're already hearing stories about $50 per kilowatt hour and so on. So, very, very cheap solar, wind batteries, and other things, electrolyzers come to mind, but other industrial processors, heat pumps.

David Roberts

You made the great point, which I love, which is that the reason all these models, all these years, people sneak in these sort of limiting assumptions, these kind of ceilings and floors on these things, is that if you don't, if you just let growth continue the way it looks like it's going, you end up with results that feel absurd, right? That feel almost vaguely embarrassing, which is why people have been doing all this limiting. And I think we should start taking seriously the fact that unconstrained models show ludicrously cheap stuff in our future. And maybe we should stop trying to make up those limiters.

Maybe we should stop second-guessing what's happening.

Michael Liebreich

Absolutely. This would be like sitting in, let's say, 1995 and running the model on digital telephony, on smartphones, and saying, "You know, David, I don't get it: My model here is saying that there's going to be 1.1 smartphones per person in the world." And then you'd be my boss and you'd be saying, "Well, go fix the model. That's ridiculous!" And so in there, I'll go and put a limiter. Now, actually, one of the things I've argued for in the past, and I've used a hashtag, #freethemodels, is open data and open modeling. Because what happens is these saturation theory-driven interventions are buried very, very deep in models.

You know, sometimes they're like, "Well, the learning rate can't continue forever." Or sometimes, "Oh, well, we're going to put in a maximum of 20%." Or sometimes they'll be like, "Oh, well, you can have that cheap, cheap, cheap, cheap solar and wind, but the price of everything that balances it is going to remain really, really expensive." There's all these places you can hide your saturation theory, and the only way we can get over that is shine a light on the modeling on every line of code in the model. So, if you're listening, IEA, EIA, all of you, if you want to inform the public debate, free the models, make them open source, and let people crawl over them, find the saturation limiters, remove them, and see what happens.

David Roberts

Well, I'll just ask you point blank then. Like, do you believe that what an unconstrained model shows is what's going to happen? In other words, do you believe that we are, I don't know, 10, 20 years out from true historic energy abundance, the likes of which humanity has never seen?

Michael Liebreich

That is such a great question because it also ties back to the discussion about the last two, the kind of political inertia and the bad actors piece. Right? Because if you unconstrain, you can unconstrain a spreadsheet or a model relatively easily, you just go find the saturation limiter and remove it. But of course, what you're going to have in some sectors, absolutely, yes. So if you look at, for instance, mining operations in very sunny countries where you'll just put in solar and batteries and the mining — there's this thing, "Oh, you can't do mining without diesel." It's like, "Hold my beer."

And so, in those sort of situations, because you've got private companies that are unconstrained. But in other situations, of course, if you started to get solar really going down that route, you would then have public utility commissioners going, "Oh, there's something wrong here, and this can't be allowed." And so, in parts of the political economy or parts of the energy system controlled by the political economy, then you will see constraints. They're not physical constraints or even economic constraints, but you'll get those two horsemen of the transition apocalypse cut in and slow down.

David Roberts

Those are your limiters, probably?

Michael Liebreich

Those will be the limiters. Yeah, that's how I see it playing out.

David Roberts

Interesting. So, second superhero is also a beloved topic of mine, which you refer to as "system solutions." So, I think it's so true that people think too much about individual technologies and their performance characteristics and too little about systems and how they all fit together. And this, as I think you'll agree, is particularly important as we move into a world where everything is electrified, because everything being on the grid means quite literally everything is going to be a part of the same system. So, we got to start thinking in system terms. So, talk a little bit about what you mean by these system solutions.

Michael Liebreich

So, my starting point here was to find a hook to try to just explicitly address this idea that because it's not — by the way, did you know, David, that it's not sunny at night? Sorry, I just thought I'd ask, because —

David Roberts

We did a, I did a whole podcast on that subject with Jesse Jenkins. We did, literally, just about that.

Michael Liebreich

A lot of people think that, you know, anybody who is okay with renewable energy hasn't thought this through, because the sun doesn't shine at night. And then there are — and of course, wind is much more problematic from a systems perspective, because when it disappears, it doesn't disappear overnight in a predictable way. It could go away for a couple of weeks, and it could do it after a bad month, and it could do the bad month after a bad year or after a bad two or three years. So it's a genuine problem. The system, you know, that we talked about, it's the resilience problem, the first horseman.

It's expensive to deal with, but the idea that batteries are the only way of dealing with it. And this is actually —

David Roberts

This is how people model this stuff: "What if I just added enough batteries to overcome this problem?" Well, like, of course, that's going to break the bank.

Michael Liebreich

Well, so I read out Simon Michaux, Professor Michaux's statement about how there's "No way you can make enough batteries." Well, of course not. What he's done is he said that every renewable project has to have four weeks of dedicated battery storage. Well, I mean, you know, you can laugh, but people are out there. There are people who have taken him seriously. Now, so it's not the battery. So what we're going, the way we're going to deal with that variability is a system, and it's a system that consists of, first of all, the cheapest thing to do is demand response, right?

Don't charge your EV in the evening when there's no sun and maybe at a time when there's a wind lull and everybody else is charging, right, or checking their Facebook or Snap or whatever they're using these days. So, shifting demand, and by the way, when you start to get into things like electrified heating, heat pumps, then of course you've got a big slug. You've got heating and vehicles, EVs, which can be shifted easily by a few hours and probably in many cases by a few days.

David Roberts

You're just getting more controllable load. The more you electrify stuff, the more controllable load you're ending up with.

Michael Liebreich

Absolutely. And the cost of shifting that demand, that's just bits, right? Those bits are always cheaper than kit. So, the cheapest thing is demand response. But, you know, the whole portfolio, there will be more interconnections. We will solve that grid problem, we'll come on to that. No doubt there will be more interconnections. We will have excess capacity. The funny thing is, another canard or another myth here is that renewable energy has to solve its big problem, which is what to do with excess, with curtailed power. Sorry, why? Why? People's cars sit unused 96% of the time.

Your bed is used 28% of the time, or whatever it is, right? A gas peaking plant is used 10% of the time, hydro is used 38% of the time. Even nuclear is only used 90% of the time, not 100%. People say it's fully reliable, of course, it's not. Coal-fired power, the utilization rates are dropping around the world, and they're somewhere between sort of 40% of the time and maybe 55% of the time. So the idea that, "No, no, as soon as you talk about wind and solar, we've got to use 100% of their output." No, we haven't.

We're going to have excess capacity. Now, we need a regulatory environment that enables that. And we need investors not to go bankrupt because they think they're going to get paid for every kilowatt hour, and then they aren't. Anyway, so then you've got pumped storage, you've got nuclear where — I'm okay with nuclear, I'm, you know, the economics are very challenged. We talked about carbon capture and storage, which I think we will have.

David Roberts

Geothermal.

Michael Liebreich

Oh, absolutely. And I'm actually an advisor to a company called Eavor, which is closed-loop advanced geothermal. I mean, all of these things you're going to put together, all of this stuff. Hydrogen will play a role. Biogas, long-duration storage of various sorts. There will be a need for long-duration storage. It'll be much, much, much smaller than the naysayers would postulate.

David Roberts

I think so, too.

Michael Liebreich

And the other thing, all of this is going to be digitized. Right? So, we think this is a huge problem to create a system like that. But, you know, then along comes a large language model and it kind of changes your views on what actually you could automate. Right? This is going to be a lot easier than we think.

David Roberts

Yeah, and I think demand response in particular, once everything is digitized and talking to everything else, is just a way bigger resource than we've figured out thus far. I think that's my dark horse.

Michael Liebreich

I agree. A few years ago, I actually went public. This was in the time when anybody was actually on X or Twitter, and I said that I believe that something like 80% of electricity demand by 2040 would be demand responsive. 80%. And of course, that's enormously more than anything we are at currently. But by the time you add EVs and heat pumps and you fiddle around with your freezers and a few other things, and a lot of, obviously, industry, I don't know that that's a bad number.

David Roberts

That'll be another interesting number to follow. All right, superhero three. And this is also something that I think is some of the things you're citing in both lists are sort of permanent features of the landscape. Some are quite recent. And this, to me, is one of the most interesting recent trends, which is the incredible momentum behind solutions in "hard to abate" sectors. It really seemed like collectively, at least, the clean energy world kind of woke up to that a few years ago and just, like, went for it, and now all kinds of stuff is happening.

Michael Liebreich

So, this superhero, I've called it "great power competition," but I also flip-flop between calling it "no more hard to abate sectors," because I think the two are very closely linked. The hard-to-abate sectors are things like aviation, cement, steel, glass, and they are clearly more difficult to abate than just adding a bunch of wind and solar and doing some EVs. So, about 2018, I wrote a piece about pathways to deep decarbonization. I just said, okay, yeah, wind, solar, renewables, yes. Electric transportation, yes. Energy efficiency, fine. But that's not going to get us there. That is going to get us to peak emissions.

And basically, broadly speaking, it has, but it won't get us all the way. And I started to think about these things, which started to be called hard to abate sectors. And at the time, we really didn't have a good line of sight to how to do them. And what's really striking, five or six years later, we now do have a line of sight on cement and steel — aviation fuels, still very difficult, but we do have a number of pathways. And coming back to that point about, yeah, we're going to need a carbon price, but six years ago, if I'd have asked you "What is the carbon price that drives the last gigatonne of emissions out of the system?" You'd have said, "You know what, the last gigaton, that's going to be like $1,000. That's going to be really high to get that last bit." Now I look at it and I go, "Do you know what, I reckon a couple of hundred bucks does it." Because everywhere we look, we see these pathways.

David Roberts

What about agriculture? Does agriculture haunt you at all?

Michael Liebreich

Agriculture does haunt me, and I'm just going to put my hand up and say, I have not done enough work on agriculture.

David Roberts

This has been my approach, too.

Michael Liebreich

I mean, the machinery will all go clean, right? I've got no doubt about it. If you look at three sources of emissions from agriculture, you've basically got land use, so chopping down trees obviously has to stop and reverse. You've got the machinery, obviously goes clean, not a problem. And then you've got the kind of the digestive, the ruminants that produce the methane, and that feels really hard. Precision fermentation — I need to do more work. But let me come back to, why do I call it "great power competition"? Because on these kind of industrial sectors — and the reason is that those sectors are absolutely key to national economies and steel, cement, glass and things like that, no country, no serious industrialized country can walk away from that.

And so, we've moved into, clearly, an era of great power competition. A lot of people in the climate space hate the word competition, and they think that the way to do this is all sort of Kumbaya and global cooperation — global problem, therefore we must have global cooperation to solve it. Well, guess what? The history of space, the US and the Soviet Union did not do Kumbaya "We must have a satellite," right? They did competition and bingo, we got satellites and then we got a man on the moon and we got GPS and so on.

So, the competition era that we are in and possibly going deeper into, combined with the centrality of these industrial sectors, I think, is driving now, and you see it in the IRA really explicitly, that — the IRA is not an Inflation Reduction Act, it's a "competing with China act", and it's driving a huge amount of innovation into these so-called formerly hard to abate sectors.

David Roberts

Yeah. Yeah. That's a fascinating area to watch these days. Fourth superhero, another one that's really interesting to me: Disappearing demand. And there's like a million sub-stories you could tell here, but which ones were sort of on your mind when you think about this?

Michael Liebreich

Well, so I grouped together in this superhero four, two things, which is one, addressing the minerals issue around recycling, and the other is that an enormous amount of our current minerals demand, also energy demand, is actually driven by the energy system itself. Now, I think, David, you will know that I'm not a big fan of energy return on energy invested as a metric for anything. I have a long-running battle with people who use that metric and think it delivers enormous insight. But if you do look at it, then what you see is that fossil fuels are becoming sort of more and more — they are absorbing more and more of the energy flows in our economy, and that is everything from extraction, removing the amount of water that's produced, shipping them around the world.

David Roberts

Shipping, what is it, 40% of ocean shipping?

Michael Liebreich

That's right: 40% of ocean shipping is coal, oil, and gas. Well, so if you see a future where those are enormously reduced, then those ships what happens to them ? Well, they get repurposed or they get scrapped, or when they reach the end of their life, they don't get replaced. The same goes for hundreds of thousands, actually, millions of miles of pipelines around the world, all going from the wrong place to the wrong place. They are not going to get repurposed for hydrogen. Kiss that idea goodbye. There's a whole lot of material — of course, those people who say, "Oh, you couldn't possibly mine all the critical minerals, all the lithium, and all of the copper, and all of the nickel, and all of the rare earths for clean energy."

And what they don't look at is the sheer volume of stuff that is mined, particularly obviously, for coal, but also for the steel that goes along with the fossil fuel system, which is an order of magnitude. In fact, it's two and a half orders of magnitude more volume being shifted for fossil fuels than anybody is thinking of shifting for the clean energy resources. And of course, what happens with it is it doesn't just get kind of dumped on the side. It's either inert rock or it goes into tailing ponds, which are horrible things, but on a global scale, relatively small.

That stuff gets burnt and ends up in the coal, and the CO2 ends up in the atmosphere, doing enormous and ongoing damage for decades and centuries. So, disappearing demand from fossil fuel is absolutely — and there's a nuance there also, it's not just fossil fuel. I think we are going to see — we don't talk about it a lot because it's scary — deindustrialization, it's called in the west, but growth in manufacturing in the global south, near to where the cheap, clean energy resources are. So, we're going to ship a lot less iron ore around. We'll be shipping finished steel or at least a semi-finished product.

And that's also going to reduce demand for a whole load of resources.

David Roberts

I think, until I talked to Saul Griffith, I read his book, I did not appreciate just what an enormous chunk of energy demand and emissions is just the fossil fuel. It's just the background infrastructure of the fossil fuel economy. All of which goes away. Well, not all of it.

Michael Liebreich

But in so many of these kind of lifecycle assessments, which purport, which pretend to show that diesel is cleaner than an electric vehicle, they kind of ignore upstream emissions. Right. 15% of the oil extracted gets involved in transporting it around and refining it. And they don't count that because that's kind of not in the car. Even then, by the way, EVs are better, not perfect. But you've got to understand the scale of resources. And one that I actually also talk about is talent. Think of how many brilliant scientists and engineers are trying to squeeze the last little ounce of whatever out of gas and oil resources.

And again, all that talent is going to be freed up. It's going to be fantastic. We should talk about the recycling piece as well.

David Roberts

Yeah, quickly.

Michael Liebreich

Right. So, you refine some lithium carbonate or whatever, and you turn it into what you need, and you put it in a battery, and then you do a lifecycle assessment, you're like, "Whoa, that battery required a lot of energy." But in those models, they have not yet put in recycling. And there's this myth that, well, that's kind of to the first order approximation, that's right, because only 5% or 10% of lithium-ion batteries are recycled and the rest go to landfill. And it's endlessly repeated. It is simply not true. We've traced it all the way back. There's a guy called Hans Eric Melin who traced it all the way back to a report from 2011 by Friends of the Earth.

And what they did is they said in 2010, "How many batteries were made?" Well, you know, they were already doing Nissan Leafs and, you know, and Teslas and so on. And how many batteries are being recycled? "Well, look at that. Almost none."

David Roberts

That's not fair.

Michael Liebreich

They were all coming out of phones. Exactly. It was just from phones. Phones and computers, and they were not being recycled. So it's a completely trash number.

David Roberts

Yeah. I mean, the funny thing in the recycling segment now is that there is more lithium ion recycling capacity now than there is lithium ion batteries to go into it. That's why they're all using scrap.

Michael Liebreich

That's right. Because what's happening is that the batteries are lasting longer. They're finding reuses, which is kind of maybe to be expected if anybody actually understood what happened with internal combustion vehicles. A lot of them get exported to countries that, don't mind driving a 15-year-old car. But what's really fascinating, why does this really give cause for optimism, is electric vehicles, 99% of them are going to enter the recycling chain. And the modern recycling companies, these ones with overcapacity that you mention, they are actually recovering, they can recover, they've proven it, more than 95% of the critical minerals.

So, let's say you've got a battery, you run it for 15 years, and then you recycle and you get, let's call it, 90% of the critical minerals back, and you then make another battery. In that intervening time, technology has improved by more than 10% in terms of your energy density, the amount of storage that you get out of a kilo of stuff. And so, although you've lost 10%, the next time you make a battery with that material, it delivers more energy services, more storage, more power than it did 15 years before. And in another 15 years, it does it again.

And then it does it again, and then it does it again. So, the critical minerals that we mine today and we put into batteries will still be delivering the same or more energy services in the very long, distant future. Until such time as those improvement rates kind of bottom out and slow down as the experience curve kind of slows, as doublings slow. Not the experience, not the learning rate, but the doublings. So, these are forever minerals. They're forever minerals. And that's just not in any of the thinking. It's not in any of the modeling.

David Roberts

Which at least opens up the possibility someday of a truly circular economy. An economy where you're, you know, where you've dug up all the minerals and now you're just cycling them around, you know, or at least you're digging up a tiny, tiny, tiny fraction of what you once did. If you were a prognosticator, a futurist, as I think they're called, when, say, in the US, do we have, call it a 90% circular economy? Say we've reduced the amount of raw mineral input we need, fresh mineral input w e need, to be 10% of what it was.

How long away is that point, do you think? Because there's still a lot of new batteries to be built for a long time.

Michael Liebreich

I don't like the name futurist. It's been given a bad name by people like Tony Sieber and Jeremy Rifkin being sort of serially wrong. So, I hope I'm an analyst, but there we go. But it's a great question. It's a great, great question. Now, if you look at something like steel, we are already very, very close to the 90% mark. I think 87% of all the steel that is end of life gets recycled. Actually, I think that's a global figure. We don't throw away a lot of steel anymore. Of the new steel that we require, it's probably around 70%.

That's the electric arc furnace trend that we're just using so much scrap. I would guess that it's going to be in the US, it's hard 2050, something like — because we are going to need these forever minerals that we need in clean energy and forever steel that goes into the wind turbine foundations and so on. But we are going to need a lot of it. So as long as that transition is still kind of climbing this side of the S curve, I think so for 20 or 30 years, we're going to have to keep feeding the system before we can expect it to sort of coast off into circularity. But it's absolutely the right conversation.

David Roberts

Yeah, okay. So, I feel like we have saved the best for last year. This is, to me, the most striking thing about the clean energy transition that fewest people understand. Like, if there's one thing I could broadcast into the public's head, it would be this one: which is what you call the "primary energy fallacy." And this is something we've discussed on Volts before a number of times. Saul Griffith, who you've also had on your pod, is sort of the gospel on this. But the basic insight is just: we're wasting two-thirds of the raw energy that comes into our economy.

It's only a third of that energy that is actually producing energy services. So, we do not have to replace all the primary energy on those charts that comes from fossil fuels. We only have to replace about a third of that because electricity is just phenomenally more efficient. But how do you, like, if you're talking to a general-purpose audience at a random conference and you're trying to convey this, what's your sort of, like, elevator pitch? Like, how do you convey this to people who might not have thought about this as much as we do?

Michael Liebreich

That's a great question as well, because it's really hard. Those of us who are in the depths of the beast, and we deal with this every day, this drives us crazy. Now, hopefully, by calling it the primary energy fallacy and going as big as I can with the platform I've got, to highlight exactly this issue. Hopefully, you know, that is, you know, how we'll get the debate going. The best arguments that I come up with is the Sankey diagram that shows what happens to energy, which shows — and the Sankey diagram, I'm sure your audience would know, but in case there are any new listeners out there, it's the flow of energy through the economy.

David Roberts

The spaghetti, it looks like spaghetti. Spaghetti graph, they call it.

Michael Liebreich

The spaghetti graph goes from digging up coal to what you do with it: lighting. And along that way, if it's the case of coal, there's something like 70%, possibly even more, because, in fact, there is more. In fact, I know there's more because I got the number in the superhero five piece that I did, which is for lighting. I give the example: It's 95% loss. So —

David Roberts

On the way from coal to lighting?

Michael Liebreich

That's right. So, I give the example, in fact, what I do — Okay, so let me back up. The answer is, you can talk about the Sankey diagram and how much loss there is. You can give examples. And people are kind of incredulous because they don't believe that if the International Energy Agency calls something primary energy demand and has been calling it that for 50 years, that it is impossible that that is actually supply of not primary energy. But it's just how we happen to meet our energy needs. It's a supply measure, and it's a bad way of meeting our energy needs. And yet it's called primary energy demand, put on a pedestal, and they don't believe that. And that's the challenge.

David Roberts

People are incredulous that we waste two-thirds of energy. Like, you know, I can imagine people thinking like, "Oh, I'm sure there's waste. I'm sure we're inefficient, whatever, 10%, 15%." But to find out that most of the energy value of all that fossil fuel we're digging up just wafts into the atmosphere is really mind-blowing, I feel like, for people.

Michael Liebreich

And I think part of the problem is, it didn't used to be thought of as waste, because we didn't have an alternative. It was just, you know, it was kind of, that's what, you know, if you wanted to power your — in 1973, 1974, the first oil shock, the question was, "How do we power our economies?" And the answer is, we shovel coal, oil. We didn't really have gas. We weren't using gas. We shoveled coal and oil in. And how do we measure if we've got enough of those resources? Well, we need to make sure we've grabbed the primary energy.

That's the demand the economy has. We just didn't have in our heads at that point the idea that what we really need is energy services. Let me give the example of the lighting, right? Because I said it's 95%. So, I go through this in the superheroes piece. Let's say you've got one light in your hallway, and it's 75 watts. It lights the hallway 2000 hours, and you can then calculate what it uses per year. It's 150 kilowatt-hours. And if you power it with coal at a 35% efficiency and a bit of grid loss, then you've got a certain energy demand, right?

And it is actually about half a megawatt hour. It's just under half a megawatt hour. And what the transition enables us to do, the progress we've made already, is the same amount of light, the same lumens, comes out of a ten-watt LED bulb, right? And so now you can power that with solar on your roof. Maybe you might need a battery, and you'll have a little bit of either grid loss or battery loss, but you are now doing that same job with 22 kilowatt hours. Half a megawatt hour. 22 kilowatt hours. And that is a 95% reduction.

Now, here's the really, really interesting and important thing. Your hallway is still as light, right? So this is not — when people say energy efficiency —

David Roberts

The demand is satisfied.

Michael Liebreich

The demand is for lighting. The demand is not for coal. A lot of people, particularly my colleagues on the right of the political divide, are like, "Energy efficiency means giving up things. It means having to wear a nasty sweater when I don't want to and not switching the light on." No, this is a 95% reduction in demand. It is completely clean if it's solar, there is no CO2 emissions, and the same amount of lighting. And, you know, I then go through examples of an electric car, which is a 75% reduction in primary energy demand because internal combustion is so inefficient. And heating - you go to a heat pump, and it's a 78% reduction in primary energy demand because you're using a bit of work, a bit of electricity, rather than lots of chemicals, fossil fuels and so on. And you can do this across the economy.

David Roberts

Saul's figure is basically, if we switch everything over to electricity today, we lop about 50% off the amount of energy we need right at a stroke. And that's with the exact same energy services, the same cars that get us around, same heat, same everything we're doing now. I mean, we can think of a lot of ways we could reduce demand from how we're doing it now. But even if we just do everything how we're doing it now, that's 50% right off the front. The biggest efficiency policy in the world is just electrification in and of itself.

Michael Liebreich

Absolutely. And, in fact, I just had Saul on Cleaning Up, and his number is a 58% reduction, which is. So the real demand is 42, which for fans of Hitchhiker's Guide to the Galaxy is a very special number. So the answer to the world's question is 42. Just do the same things we're doing today, but electrified. And the answer will be 42.

David Roberts

Oh, so he's refined it a bit, I wondered. I wondered if that would happen. Yeah, people do not get that. I think the public does not get that. I really think policymakers do not get that. But to me, this is like the skeleton key to the whole thing. The electrification in and of itself does a ton of the work you want from efficiency. It does a ton of work you want from savings."

Michael Liebreich

And you've used a key word there, which is work. And this just sort of opens the door to another bugbear of mine, which is that when we talk about all of this public debate and most policymakers, a lot of the civic society people, how can I put this very nicely? They don't have the engineering background, the physics background, to understand that exergy, the ability to do work, it's a technical term, really, really matters. Right. You have a solar panel. It produces electricity. Electricity can do a lot of work. You know, joule for joule, electricity is better than fuel.

Electricity is better than heat, and high-temperature heat is better than low-temperature heat. So, energy has quality as well as quantity. Engineers understand this, and it drives us mad when you have discussions with people who don't understand that and they postulate things like, "Oh, well, you know, we'll just make hydrogen out of electricity, and then we'll just turn it back into electricity." It's like, "No, this is a crime against exergy. It's a crime against thermodynamics." And then some non-engineers look at you and go, "Have you lost the plot? What do you mean, a crime?"

I mean, you know, this is a — they think we're having an emotional reaction when actually we're having an entirely rational engineer's reaction.

David Roberts

Well, I feel good emotions about electricity. It's an emotional reaction for me, too. Okay, to wrap up, you've told the negative story here, and you've told the positive story, but you've kind of cheated in that you have not done the sum, you know, subtracted the negative from the positive and told us what the remainder is. Where does this all leave you in your personal sort of optimism-pessimism meter?

Michael Liebreich

Where I come out is both optimistic and pessimistic, if I'm honest. I'm pessimistic, in fact, I'm not pessimistic — I've given up on net-zero 2050, I gave up on a decade ago to be honest.

David Roberts

Oh, really?

Michael Liebreich

Oh, yeah. We are not getting to net-zero globally, 2050. I do think, though, I am optimistic, because I think we will get to net-zero 2070, something like that. I think that's eminently doable. I'm a Paris fundamentalist. I think that we shouldn't be kidding ourselves about one and a half. We should be doing everything possible to be, you know, we can still try to get there, which is what Paris says. But the real sort of binding one ought to be well below two degrees, which is net-zero 2070. So, I am optimistic that we're on track for that.

Translating it into supervillains and superheroes, essentially, we know how to deal with all of the villains. They are problems, to a certain extent, in and of the time, t he point we are in the transition. We haven't yet built lots of transmission. We haven't yet got the carbon prices in place. We haven't yet opened the mines or the mineral refining. We haven't yet completely kind of kicked the legs out from underneath the bad actors and so on. But we kind of know how to do that. Whereas the superheroes, these are forces that kind of — they have a positive feedback on themselves, so they become more powerful over time, and the supervillains become less powerful over time, just kind of structurally.

And so, that's my way of saying that I think that the superheroes win, but it won't be fast enough for 2050. And in my piece and in the podcast on Cleaning Up, I also kind of cheat. And I list a sixth superhero, which is that, you know, the era that saw fossil fuel use and local pollution emissions as a necessary evil, that generation is actually just going to cede control. They're just becoming older. They are losing control of assets. The young generation, in many cases, simply sees pollution emissions as unacceptable, like smoking in a public place or dumping your sewage in the street.

David Roberts

It's like you said earlier, everything looks very different when there's an alternative. A lot of things that you just accepted as the way of the world. If there's a different way of doing it, all of a sudden you're like, "Well, why in the world would we keep doing it this way?" You know, like, I think that's harder for old people to make that switch and young people coming up, you know, internalize it much sooner.

Michael Liebreich

Right. Frankly, I'm one of the older, I'm 60, right? So, I'm one of those people. And I started my career. I was an engineer. I could not see how clean energy, how you could get rid. I just thought oil and gas was, you know, they had all sorts of evils, by the way, evil effects on the political system, the Dutch disease on the economy. But there was no way, you know, I looked at wind and I looked at Salter's duck, you know, wave energy when I was at Cambridge in the eighties. You just dismiss it and just say, "Forget it."

So, I'm kind of a rarity, not just politically, perhaps, because I actually have made the journey to say, "Yeah, there are alternatives," but the next generation is not just going to say there are alternatives. They're going to say, "And the old way of doing it is unacceptable."

David Roberts

Right.

Michael Liebreich

Is unacceptable. And that is a sort of superhero in itself, because it's uncompromising. As we've seen with the activism from the younger generation, it's uncompromising, and it will push funding, talent, innovation into parts of the economy where they're still kind of holding out.

David Roberts

Yeah, well, that's a wonderfully optimistic note to finish on. So, thanks so much for coming on and walking through all this. I think it's great to get a global 30,000-foot view like this periodically, especially when things are moving so fast. So, thanks for coming on.

Michael Liebreich

David, thank you very much for having me, and thanks for all the work you do.

David Roberts

Thank you for listening to the Volts podcast. It is ad-free, powered entirely by listeners like you. If you value conversations like this, please consider becoming a paid Volts subscriber at volts.wtf. Yes, that's volts.wtf. So that I can continue doing this work. Thank you so much, and I'll see you next time.

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Volts
Volts
Volts is a podcast about leaving fossil fuels behind. I've been reporting on and explaining clean-energy topics for almost 20 years, and I love talking to politicians, analysts, innovators, and activists about the latest progress in the world's most important fight. (Volts is entirely subscriber-supported. Sign up!)