Sponsored by: KPMG
The Statistical Review of World Energy, which is compiled by the Energy Institute, offers a comprehensive look at global energy production, consumption, trade and emissions. Energy Institute Chief Executive Nick Wayth joins the show to discuss some of the key takeaways from the most recent edition of the review, including region- and country-specific growth of renewables and how the industry is navigating a ‘Triple Crises’ spawned by the pandemic and geopolitics. Wayth also outlines the progress on the energy transition that he hopes will materialize at COP28.
More resources from KPMG
Energy Institute 2023 Statistical Review of World Energy
The Hydrogen Horizon
Energy & Chemicals
Highlights from Nick Wayth
Background info about the Energy Institute – (2:47)
The history of the Statistical Review of World Energy – (3:47)
Key takeaways from this year’s review – (4:59)
Specifics about the growth of renewables – (6:34)
Data related to key minerals – (10:05)
Headwinds for offshore wind – (12:34)
Geopolitics and the ‘Triple Crises’ – (15:34)
Under-the-radar nuggets of info from the review – (19:07)
The regional outlook for Africa – (22:43)
What to expect from COP28 – (28:33)
Nick’s bold predictions about changes to the energy landscape – (30:03)
(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)
Sean McMahon 00:00
This episode of the Renewable Energy SmartPod is brought to you by KPMG.
Despite record growth of solar and wind power, global energy related emissions have increased. What does this mean for businesses? With a team of more than 1400 energy professionals in the United States, KPMG is committed to delivering results for the oil and gas, chemicals, and power and utilities industries. Visit the KPMG website, or click on the link in today’s show notes to learn more.
What’s up everyone and welcome to the Renewable Energy SmartPod. I’m your host Sean McMahon. And today, we’re gonna pull back a little bit and take a wide angle look at the global energy landscape. Nick Wayth is the chief executive of the Energy Institute. And that organization recently took over the annual publishing of the statistical review of world energy. The statistical review provides a comprehensive and free, high level view of the global energy system. It reveals how global markets are faring under pressure from things like wars and other crises. And perhaps most importantly, for this podcast. The statistical review also tracks how the energy transition is evolving. There’s a link to the most recent review in today’s show notes. And Nick is here to walk us through some of the key takeaways. But before that, I just want to remind you to make sure you don’t miss a couple of recent episodes of this show. On our last episode, I talked with Patrick Gruber from Gevo to get his take on trends in the sustainable fuels market. And before that, I spoke with Adithya Bhashyam from BloombergNEF to get his insights on the looming guidance from the US government related to hydrogen production. That guidance stands to have a huge impact on how the hydrogen industry develops. So I think you’ll appreciate the Adithya’s viewpoint on the best path forward.
Looking ahead on this show, our next episode will focus on what’s going on in the energy storage industry. Mike Wietecki, Senior Vice President of Strategy and Regulatory Affairs at Powin, is going to stop by to talk about how things like the Inflation Reduction Act are having a big impact on the energy storage market.
So that’s a quick recap of the past and the future of this podcast. But right now, let’s focus on the present and get things started with Nick Wayth from the Energy Institute.
Hello, everyone, and thank you for joining me today. My guest is Nick Wayth, the chief executive of the Energy Institute. Nick, how you doing today?
Nick Wayth 02:44
Doing great. It’s really good to be here, Sean, thank you for having me.
Sean McMahon 02:47
Yeah, it’s great to have you join us here. We’re here to talk about the statistical review of world energy that the energy has to puts out every year. So before we get into the report, let’s talk about the Energy Institute. What do you in the team that I do?
Nick Wayth 02:59
Thanks, Sean. So the Energy Institute has got over 100 years of history, we’re the chartered professional body for people in energy based here in the UK, but global in our outlook and global in our reach. So anybody listening today can find out more about us. And if they’re interested sign up, we’ve got a clear purpose, which is to create a better energy future by accelerating a just transition to net zero. And we do that through helping attract professionals to the industry, bringing people together and working with many industry players in a very practical way to develop standards on how the industry operates. So the closest analogue is probably in the US is probably the Society of Petroleum Engineers, but we have the beauty of having members from all forms of energy around the world.
Sean McMahon 03:47
Okay, we’re here to talk about the statistical review of world energy that you and the team publish every year. So tell our listeners a little bit more about that review. And its history.
Nick Wayth 03:56
So the statistical review of world energy up until this year was actually run by BP, the history of the product goes back to 1952. So over 70 years of history, and actually, if you go on BPS website, you can find the very first addition of it, which was literally one sheet of paper, all it talked about was oil, it divided the world into east and west. It was tight, written with a few handwritten notes. And then over the following 70 plus years BP evolved that product to be the most timely, the broadest and fundamentally a free resource for people to track the production, the consumption, the trade of all forms of energy. And earlier this year, we had the opportunity to take that product on working with our partners KPMG, Kearney, and with Heriot Watt University in Scotland, who do an amazing job of compiling the data for us. And we’re really looking forward to seeing how we can evolve the product into the future.
Sean McMahon 04:59
Okay, So let’s talk about the most recent addition. You know, what were some of the key takeaways?
Nick Wayth 05:04
Yeah. So, you know, it was a, it was an incredible year to take on this product. Obviously, we were in the midst of what we’ve framed as the triple energy crisis. And really, there are five key stories that came from this year’s data. And of course, I’m talking about 2022 here. So number one was the post COVID bounce back. So continuing the trend that we saw in 2021, with a huge pickup in demand for transportation fuel in particular, but very strong regional variances, which I can I can talk about in more detail. Secondly, the conflict in Ukraine upended previous assumptions around energy security. And so we saw unprecedented changes in trade flows, particularly in natural gas, but also of oil and coal, to ensure that the lights remained on. Thirdly, we saw record deployment of renewables equivalent to 84% of net additions into the power sector. Fourthly, you know, despite all these big movements, energy increased by about 1% primary energy globally, but the mix of fossil fuels of coal, oil and gas remained barely dented at 82% of the overall mix. And lastly, emissions. Although emissions grew slightly slower than the growth in energy, we still saw emissions growing by about point 8%. So continuing to move in the wrong direction in terms of where we’re trying to get to a netzero terms.
Sean McMahon 06:34
Okay. And then speaking specifically to renewables right for this audience. You mentioned the the growth of you said 82, or 84%. Was it?
Nick Wayth 06:41
So yeah, so I 84% of net power additions. So if you think about all of the power added globally, last year, power grew by about 2%. Globally, renewables accounted for 84% of the growth, and I’ll come back to that. But in absolute terms, renewables made up about 7% of primary energy, excluding hydro, then if you add in hydro, it was around 14%. But that net addition in power is really interesting, because we’re getting closer and closer to 100%. And that is the point at which renewables are providing not only all of the new growth, but they’re denting into existing fossil generation. So we’re not quite there, but we’re moving at pace. And we saw some phenomenal figures around the world, in terms of, you know, the pace of renewables growing in many geographies.
Sean McMahon 07:35
Okay, so what were some of the key takeaways for renewables? You mentioned, you know, there’s some phenomenal growth in regions or countries. What were some of those?
Nick Wayth 07:42
I mean, the really big stories were China and India, which probably shouldn’t surprise anybody. But both of those countries saw 20% growth in renewable generation. And for the first time, China saw over 100 terawatt hour increase in solar generation alone, which was 30% higher than 2021. India saw only 40% increase in solar generation with with 30 terawatt hours of additions. So huge uptick in those key geographies. But also, as you look around the world, you know, virtually every country we track saw growth in North America was around 14%. And then in some countries, admittedly, starting from a small base, we saw countries like Amman increasing by two thirds, we saw cat are going up by 280%. Now, you know, these are starting from a low base, but this trend is happening everywhere. And going back to that sort of 84% figure. You know, at this rate, we shouldn’t be surprised in future years where we, you know, we see all of the net additions coming from renewables. But then we see some of that generation going into fossil. The only thing I’d caveat that with Shawn, is that actually we also saw a fossil generation in power increasing last year and making up some of the shortfalls we saw in nuclear generation, particularly in France and Germany.
Sean McMahon 09:08
So then, when it comes to renewables themselves, and are there any specific sources, whether it’s solar wind, I mean, you mentioned hydro, what sources are you seeing the most growth? Or is it kind of location specific?
Nick Wayth 09:18
I mean, there are location differences. I already talked about China and India, that wind and solar are making up the vast, vast majority of the growth hydro was broadly flat. It grew by about 1%. Last year, it’s still a very significant part of the mix. It’s around half of the overall renewable energy generation. But we saw issues particularly in Europe, where climate change is already affecting rainfall and therefore having a pretty serious knock on effect, particularly in countries like Spain, in terms of generation. So this is really at the moment, a wind and solar story, the other forms of renewables that they’re out there, but they’re not yet met. Making a material enough impact are really kind of, you know, hit the radar at this stage.
Sean McMahon 10:05
The report also features a pretty lengthy section on key minerals, which is obviously important to the renewable sector and you know, all kinds of battery technologies and things like that. So what trends are underway in those areas,
Nick Wayth 10:17
It’s always important to say that this report is a backward looking report. So it’s an it’s not a forecast. But like every other commodity in 2022, we saw continued pressure on pricing. So for example, lithium carbonate increased by 335%, hitting a record high of $47,000 a ton. So we’ve seen the reality of some supply squeezes. But the data we show also tracks the current reserve levels. And these vary across the key minerals from lithium to cobalt. But we continue to see reserves to production ratios of around, you know, 50 100 years depending on the on the specific mineral. But it’s important to say, of course, that when production is growing so fast, you’ve got to keep the reserve level up with that. But at the moment, at the moment, this is largely a case of the pace of extraction being the limiting factor rather than the resources in the ground. And the other thing that’s worth mentioning, of course, is that the chemistry of batteries is continuing to evolve. So what is a critical mineral today may be less critical tomorrow, as new minerals play into the sort of chemistry makeup of batteries. But you know, let’s be honest, this is this is going to be a constraint, we’re seeing the impact of inflation coming through these commodities in the cost of offshore wind, for the first time, we’ve seen that sort of that very dramatic cost fall each year, no longer falling and in some instances, reversing somewhat. So there is pressure on the supply chain, but from a sort of, you know, technical viewpoint, at the moment that the level of reserves remains healthy. And it’s more of a sort of a supply chain, it’s getting the stuff out of the ground quick enough, rather than how much is in the ground.
Sean McMahon 12:07
Okay, we’ve talked about key minerals, and wind and solar and things like that. But another key part of the renewables landscape these days is battery storage. So what is the Energy Institute doing on that front in terms of incorporating that into the review?
Nick Wayth 12:18
So, at the moment, Sean, we don’t track battery storage. If we did, it would be a very small level compared to the overall energy mix. But it’s certainly something we will add into the future. And I would imagine doing that in the next one or two years.
Sean McMahon 12:34
Okay, I know you mentioned that the review is backward looking. But you mentioned at the top of wind and some supply chain issues, and we’re kind of seeing a lot of deals, particularly in the US seem like they’re in jeopardy. Any insights on whether that’s a global thing as well.
Nick Wayth 12:46
Yeah, it is a global thing. We’ve, we’ve seen similar things here in the UK. So in a recent contract for difference CFD auction here in the UK, it was a successful round overall, but offshore wind received precisely zero bid. So nobody was willing to come in at the maximum strike price that the government had set out which which is clearly a setback. But it also allows the industry to reset, it allows government to kind of review. And you know, we were on an incredible price trajectory. Here in the UK, we’ve seen offshore wind come down from over 150 pounds a megawatt hour, that’s getting close to $200, to under 40 pounds per megawatt hour. And the reality was that’s been underpinned by rapid improvements in the technology, the growth in the economies of scale of the industry, but also supported by a world of zero interest rates we’ve had for most of the last decade, we’ve been in a zero interest rate world, we’re clearly no longer in that world. And this business was always going to be vulnerable to a an increase in interest rates, I just don’t think anybody has sort of forecast the the level of increases we’ve seen over the last two years. But I think this is a bump in the road. But I don’t think it’s a structural undermining of the sector, the sector needs to consolidate, to kind of think about how it drives efficiency, we may be at the point where, you know, constantly doing bigger and bigger turbines may no longer actually bring costs down. I think there’s huge opportunity for standardization across the industry. But there’s also a reality that, you know, global energy prices have increased as a consequence, not have renewables but as a consequence of what’s been happening geopolitically. And, you know, we now need to sort of adjust and recalibrate to that this is no different from the cycle we see in the oil and gas sector, and we always have done. I think it’s just you know, that it’s the first time it’s happening in a materially impactful way for the renewable sector.
Sean McMahon 14:53
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And now back to my conversation with Nick Wayth from the Energy Institute.
And you mentioned geopolitics, kind of the triple crises we’re dealing with. So, you know, since this report has been preached for decades, how have you seen geopolitics change the energy landscape in recent years, I mean, I don’t wanna go back too far. But we are seeing both domestic politics and international politics weigh on supply chains. You know, here in the US, there’s the Department of Commerce is looking into supply chain for solar panels. And there’s other issues all around the world. So our country is shifting their focus to generate energy domestically or with close allies. And do you think that’s just gonna be a short term solution for crises like Ukraine, and now even you know, the Gaza situation is kind of cropped up? Or is that going to be kind of a long term pivot around the world?
Nick Wayth 16:20
So I think my answer is that is a bit of both. And I think we were in a paradigm where, frankly, we had become somewhat complacent. I mean, the reality is, is that gas had flowed from Russia, for the last, you know, several decades, even in the darkest days of the Cold War, the gas taps from Russia had never been turned off, or the former Soviet Union had never been turned off to the to Europe. And in 2022, we saw that play out for the first time where those gas tax were turned off around the middle of the year. And, you know, this is a huge wake up call for Europe, it’s it’s not only affected Europe, it’s have knock on effects to the rest of the world, as gas prices increased dramatically. There was a massive rebalancing in the trade of liquid natural gas in particular, and pipe gas. So we saw huge shifts of, for example, the US LNG being diverted to Europe. But the knock on effect was elsewhere in the world where gas was priced out, we saw coal picking up demand as the cheaper alternative to natural gas. So this is a major reframing of the paradigm we’ve had for the last three, four decades. That said, I think the notion of sort of energy independence, you know, is what needs to be careful when using that sort of term. Yeah, the US is now a net exporter of energy for many decades, it wasn’t. But even with that said, the US is still massively reliant on imports and exports to make sure it has the right flows of energy. So whilst any geography can balance on a net basis, you still have the exports and the imports that ensure you have all the right products going to the right places. But I think, to me, this has reinforced the need to accelerate the transition, there is a, you know, an element that’s being played out right now of sort of trying to use this to reinforce the role of fossil fuels. And whilst you know, there is a necessary necessity of getting energy to where it’s needed in Europe. And you know, energy markets have served that purpose and served it very effectively, albeit at a very, very high price. I think when we enter a world of greater renewable greater electrification, we actually become less dependent on energy traveling around the world, it doesn’t mean that imports and exports cease anytime soon. But in my view, we can have a world that is more affordable, is more secure, and is low carbon, and that predominantly comes from electrification, and from the growth and renewables that we’ve seen him expect to see in the coming years and decades. Okay, now,
Sean McMahon 19:07
getting back to the report. It’s lengthy. It’s It’s It’s incredible resource, like I said, and we’re going to have a link to it in the show notes for this episode. But someone in your position, who’s just, you know, you live and breathe this stuff all the time. I can’t imagine that you look at something like that. And you might spot something that, you know, others won’t. So is there one nugget of information from the review that you found particularly interesting?
Nick Wayth 19:30
I think, I mean, there are many nuggets and many fascinating bits of information. So I’ll share a couple with you if I mention. I think the first one was a surprise. And the data was there. So it shouldn’t be a surprise, but I was still surprised at the regional differences in the post COVID bounce back. Yeah, we saw Europe, the US on most measures broadly getting back to where they were in 2019 pre COVID China, on the other hand, because of the zero COVID restrictions, continue to see a decline, particularly in kerosene for aviation, with a with a decline of around 1/3, in 2022, and so 2022. So China use roughly half the amount of kerosene, it would have used pre COVID. And so the scale of that sort of response, you know, and I mentioned before, you know, we’ve seen fossil fuels sort of remain slightly lower 80% of the mix, had China come out of its restrictions, at the same pace as the US, and there’s Europe, we globally would have seen another million barrels or so of crude demand, and that 82% would have been somewhat higher. So I think, you know, that was the first surprise which the data was there. But until you see the hard facts and the numbers in front of you, you haven’t really thought about the scale of it. And that trend, by the way, you know, we would expect and numbers are already out there indicating that, you know, 2023 will be reversing back to the sort of pre COVID levels in China. I think the other interesting observation I would make is that globally, you could argue that we’ve yet to really enter the energy transition. The reality was in 2022, despite the record growth in renewables, despite renewables, making up 84% of power additions, and actually, if you look at on a primary energy basis, about 80% of all the energy added to the world in 2022, came from renewables in some form or another. But there was still more growth. And that growth came from fossils, and emissions continue to grow emissions reached record highs in 2022. So we haven’t turned the corner on emissions, that’s on a global level. When you look at it sort of country by country, it gets more nuanced. And there are some interesting sort of stories playing out in that. So for example, where I’m sitting today, in the UK, actually, renewables added more than the overall additions of energy. So I renewables were at the margin, eating into fossil generation, a tiny amount, but for last year, at least crossed that threshold. We saw, for example, coal being backed out in the US by natural gas. So the energy intensity, or their energy demand increased in the US, the mix of that energy was was less carbon intense than it would have been otherwise. So you’ve got to look at this globally, because ultimately, that’s what matters in terms of co2 emissions. But when you look at the regional stories, you get some quite interesting stories coming out.
Sean McMahon 22:43
What’s the regional story looking like in Africa?
Nick Wayth 22:45
Now, the reality is, is that Africa is still a very small part of the overall global demand. And it doesn’t really show up in the numbers in a material way. But population wise, you know, it’s a massive population. And we know the scale of that population going out to 2050. And beyond. countries like Nigeria, are expected to reach the numbers of five 600 million people, so become massive, massive population centers. And I guess the story in Africa and I do travel to Africa, as part of my role, we’ve got very active members in Nigeria in particular, is, on the one hand, they’ve got abundant renewable resources and an opportunity, some would argue to kind of leapfrog a bit like the mobile phone has done, you know, there’s, you don’t even have landlines you go straight to a mobile. So one school of thought would say you can kind of jump the whole fossil bet in a material way and go straight to renewables. On the other hand, others would argue, well, you know, the rest of the world has developed its natural resources and fossil fuels, the US reached record production levels, and continues to grow in terms of its fossil fuel generation. So why on earth should Africa not generate its natural fossil resources? So there’s an interesting sort of paradox there? And, you know, in my view, the answer will realistically lie somewhere in between those, but there’s a huge opportunity for a continent like Africa to do this energy transition in a very different way, without the, you know, being encumbered by, you know, the legacy that we have in Europe in the US in particular.
Sean McMahon 24:25
You mentioned Nigeria, I’ve also spoken to folks about Morocco, you know, the wind resources in Morocco. I know Namibia is working on green hydrogen. So are there any countries like that, that you feel like might not be a huge player in a particular market, whether it’s hydrogen or wind, but have all the potential and maybe are already laying down the foundation to get there?
Nick Wayth 24:44
I think there’s some really interesting you mentioned Morocco. Morocco has an incredible solar resource. It has an incredible wind resource and actually, on a daily basis, and on a seasonal basis. The two are sort of counter cyclical, so when the sun goes down that way and comes up. And actually, there’s a project that’s being developed at the moment called X Lynx, which is planning to bring a high voltage DC cable all the way from Morocco, to the UK look on your map, that’s a really long cable to provide wind and solar firmed up with a bit of battery storage to Europe. And that project is arguing that it can undercut fossil generation. And it can broadly compete with offshore wind. Now, you know, I can’t tell you, you know, whether those numbers are correct, go look at the project. But that gives you an example of the ability to kind of take energy from, you know, abundant resource, like Morocco and take it to somewhere like the UK. The other dimension is there’s a lot of focus right now on green hydrogen. And, you know, a perspective out there that, you know, we may see the equivalent of an LNG business playing out in green hydrogen, sort of naturally resource rich, renewable players in Africa, North Africa, East Africa, West Africa, little parts of the Middle East. I think the and that that may happen, but there’s also the opportunity that I think global supply chains probably need to kind of move to where the energy is. So does it make sense to ship green hydrogen from Africa to Europe? Or do you actually move heavy industry, from Europe to Africa, and to closer proximity to where the energy sets and you don’t have to go through the conversion. So interesting dynamics playing out in that, and obviously, they’re sort of, you know, countries that have got strong industrial bases, seeking to maintain them, but also an opportunity for a whole continent like Africa, to really shift how it sort of plays down the value chain. And it’s not just, it’s not just producing the energy, but it’s also taking that into products and services,
Sean McMahon 26:53
essentially, perspective, I’ve talked to so many people about bringing the energy from places like Africa, the Middle East, to where it’s being consumed. But I like your perspective on like, maybe relocating the consumption focused to those areas,
Nick Wayth 27:06
what it’s a lot easier to shift, you know, bits of steel than it is, you know, gas or electricity and whatever form it comes. So I think it’s important to look at, you know, the whole system. And I think countries need to recognize, you know, that countries that are energy, Paul, that have strong industrial bases, are faced with a challenge as to whether they can be competitive, and they have strong motivations to get access to energy. But equally those African countries and elsewhere, Middle East, which have abundant resources should be thinking, well, how can I sort of not just have the energy side but but create jobs, I mean, energy as an industry doesn’t create a massive amount of jobs, compared to some of the other industries out there. So there’s an opportunity there for value creation?
Sean McMahon 27:56
Yeah, it also seems like there is some domestic political concerns I’ve heard about in terms of, you know, countries generating a bunch of green hydrogen shipping it elsewhere, while some of their own citizens Central, keeping the lights on, you know, so it’s, that’s a problem.
Nick Wayth 28:08
Exactly. And that’s the resource curse. We’ve seen that play out with oil and gas and other commodities in the past over many decades in many countries. How can those countries with you know these renewable resources, avoid the resource curse and actually have something that really benefits the whole economy, the people and creates new exciting businesses?
Sean McMahon 28:33
And now one other topic I want to discuss with you, you know, coming up, we’ve got COP28. A lot of folks watching for different things to take place during that annual gathering. Again, someone like you, what are you looking for from that?
Nick Wayth 28:44
Yeah, well, I think COP28 Is is going to be really important. It’s the global stocktake. So we’ll we’ll see the progress against the Paris agreements. And I think just as fundamentally, there’s been a lot of debate around, it’s being held in a Petro state. The president is also the CEO of a large national oil company. And people often don’t remember that he also played a pivotal role in the formation of Masdar, one of the world’s super renewable companies. But I think it’s really important to bring the world together today, as you saw, you know, 82% of our energy comes from coal, oil or gas, and we need to have those industries at the table, and we need to work to decarbonize that so you know, as much as we accelerate the growth in renewables, our ability to accelerate the decarbonisation of oil and gas in particular, is going to be absolutely critical. And as one headline, you know, and the Energy Institute is very active in how we reduce methane emissions, fugitive methane emissions from oil and gas production, and that is a really material area that we can have a significant impact out to 2030 So I really hope that COP28 is successful and looking forward to being there. And hoping that The industry can work together to find solutions.
Sean McMahon 30:03
Absolutely. Alright. So, you know, like I mentioned earlier, someone like us, it’s in a position where you can kind of see the whole board. Do you have any bold predictions for how the energy landscape might change in the next five or 10 years? And I asked that, specifically, that timeframe of five to 10 years, because a lot of goals out there set at 2030. Right, and people forget, like, that’s coming up pretty quick. So I’ve absolutely seen.
Nick Wayth 30:26
So, as I mentioned before, that, you know, the report looks backwards, not forwards. But I think I mean, let me talk about three kind of big trends in energy that I would encourage your listeners to pay attention to. Because on the one hand, I’ve talked about this energy transition not really yet happening on a global level. But if let’s look at the sort of energy demand in key geographies, if you look at Europe, Europe has gone past peak energy, it’s been in decline for you know, it’d been flat or in decline for much of the last decade, or even two decades, depending how you look at it. And so Europe’s economy has effectively decoupled from energy. And that’s the sort of key point where you can continue to grow economic growth. But your energy consumption is moving in a downward direction, I would say the US is probably at sort of plateau right now. It may go above, it may go below. And that sort of played out last year through the data. But but look at that, countries like China are still seeing significant growth in energy, India some way behind it. But all of these countries at some point, reach a point where their economies continue to grow, the energy demand does not as a combination of both sort of moving away from industrial industries, but also energy efficiency more broadly. The second trend is around how we consume energy as consumers and as industries. If you look at an electric vehicle versus an Ice Vehicle, an Eevee uses roughly a third of the energy of internal combustion engine vehicle, you look at a heat pump, and it uses 20% 25%, of an energy of a fossil boiler. And so as we get these new technologies at the consumer level, those will begin to have a material impact at the moment, the numbers are too small to really play out in the consumption data. But the IEA have come out with their recently come out with their latest forecast or scenarios. And one of their numbers is a 10 fold increase in EVs, which would get us to somewhere north of quarter of a billion EVs in the planet by 2030, that will have a material impact on demand for energy. So it’s not just a displacement, it’s also that you’re using less energy. And then thirdly, you know, the pace of renewables. I mean, you look at that growth, renewables have roughly doubled, every five or so years, globally, you can sort of run that back. And although we’ve had a bit of a bump in the road, actually, you know, all the numbers coming through this year, and you can look at the numbers from IEA. And other sources will indicate that 2023 will be another record year for renewables, it may have gone slightly slower than it would have done had interest rates stayed at 0%. And had we not seen the levels of inflation. But that growth is going to continue. And when you get those three trends at some point, you know, hitting the inflection points where you know that 84% goes over 100%. I think some of these things and remember, you know, it’s taken us a very long time to get there, because Global Energy has continued to grow faster than the pace of renewables. But at some point, you come around the curve. And all three of those trends begin to play out now, you know, does that happen by 2030? I don’t know. But when we crossed that point, you begin to see an acceleration happening on the energy transition. And that’s what keeps me very optimistic about the future.
Sean McMahon 33:58
Well, I appreciate your optimism, Nick, and I appreciate your insights today. Thank you very much.
Nick Wayth 34:03
It’s been a real pleasure show. And thank you.
Sean McMahon 34:10
That’s our show for today. But before we get out of here, I want to say one final thank you to the exclusive sponsor of today’s episode KPMG.
Thank you all for listening. And if you haven’t already, please subscribe or follow this show on Apple, Spotify, Google, or wherever you listen to your podcasts. And as always, please be sure to share it with your friends and colleagues. Have a great day.