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Foreign.
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Hello, and welcome to the Energy Gang, a discussion show from Wood Mackenzie about the fast changing world of energy. I'm Ed Crooks and this is the first in a short series of special episodes looking ahead to the ADIPEC Energy Conference in November. And in this show we're going to be talking about low carbon hydrogen, which has been widely proposed as a key part of the toolkit for decarbonization, but but also seems to be facing some very significant challenges at the moment. So to find out where low carbon hydrogen is today and where it's going in the future, I'm joined by two industry leaders. Pierre Etienne Frondt is the Chief Executive of Hi24. Hello, Pierre Etienne, welcome to the Energy Gang.
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C
Hello. Thank you for having me today.
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And Alex Tancock is the chief executive of Intercontinental Energy. Hi, Alex, welcome to the show.
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A
Hi, thanks for having me. It's a privilege to be here.
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B
Great talking to you. Thanks very much indeed. Adepec 2025, the world's largest energy event, returns to Abu Dhabi this November under the theme Energy Intelligence impact. More than 1800 speakers and 205,000 attendees come together to address a dual imperative, strengthening today's energy systems and scaling intelligent solutions. Join us in Abu Dhabi from the 3rd to the 6th of November to explore how the convergence of energy, AI investment and emerging economies is advancing global progress. Register now@adipec.com going to be talking about low carbon hydrogen. Just before we get into some of the wider issues around the industry, I think it'd be helpful to our listeners, some of whom may not be familiar with your companies, if you could just talk a little bit about High 24 and Intercontinental Energy and what it is that you do and where you fit into the hydrogen value chain. If you like, maybe. Pierre Etienne, start with you. So I see you call hi 24 the world's first and largest hydrogen private equity asset manager. What does that mean?
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So HY24 is an asset manager that we've created back in 2021 to basically deploy funds towards the energy transition with hydrogen. And we've raised first fund over 2 billion with both industrial players and financial players. And we are now deploying those into many verticals which in hydrogen to decarbonize, can be steel, can be methanol, ammonia, can be SAF, can be mobility, and we're invested into 10 different players, including ice. But Alex will tell about ICE in a minute.
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B
Yeah, I was going to say. So tell us about ice. You say ice, do you? For short, Alex?
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No, ICE is perfectly fine.
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So what you do, you're a project developer, you have three large green hydrogen projects under development, two in Australia, one in Oman. Some of the largest projects in the world, I think you say. And you also have a relationship with High 24, right? What is that?
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So High 24 is one of our institutional investors. They sit alongside other investors, including gic, the sovereign wealth fund of Singapore, and the three large projects that we've been developing. So we've been a pioneer in this space for over a decade. These are huge energy hubs, the size of small countries, and they all produce green electrons and green molecules for customers that are both local and export.
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So thanks for that. As I was saying at the beginning of the show, it feels like there's been a lot of negative news flow around low carbon hydrogen over the past year or so. We've had projects being cancelled, companies have been scaling back their ambitions, policy support has been curtailed or threatened in some countries, particularly in the United States, and the number of new low carbon hydrogen projects being announced has slowed very sharply. Do you think that does reflect more difficult times for the industry? I mean, maybe Pierretien, to start with you, do you think that does reflect more difficult times for the industry? And maybe Pierretien, to start with you, how do you see the state of the low carbon hydrogen industry today?
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So I think it's very interesting because people like to get news and bad or big buzz, but if you look at the facts, I know sometimes the facts are not to choose, but the facts are very aligned with the narrative and the fact that the sector in fact is very, very strongly deploying. If we take four topics, just four topics, very fast. First, the projects which are being built, which have passed decision level, have moved from a value of 10 billion to more than 100 billion in five years, which is double the rhythm of the renewable industry at its start, which is what hydrogen is today. Second, the level of consult rate, the ones that are making the news, if you count them as part of the overall bunch of projects that are continuing to grow, is only 3%. The attrition rate is 3%. The real attrition rate may be bigger than that, but it's not so huge because in fact we see many projects everywhere. Third, if you take at the technology side, back in 2020, when I was on the air liquid side, in my past world, we were starting the first largest electrolyzer project was far higher than anyone. It was 20 megawatt. Currently we've got every week the equivalent of 20 megawatt modules being deployed in the world. And the average size of the project is 100. So the technology scale up has been roughly 100 because most of the other projects were 1 megawatt in 2020, 100 in five years. I don't believe this is rogue. And the last element is that we have a view which is a bit western centric because if you look at the overall dynamic, Asia is by far leading the show with China and India at the top, Middle east being just behind. And US has a dynamic that is continuing from the Biden ira, but it's going to be decreasing because of the next wave. And Europe is still waiting for the regulations to be put in place, but when the regulation will be put in place, there are several millions of tons of agents that are going to be deployed. So no, the dynamic is not negative, it's just back to normal. People were overexcited and over promising and now we are only the serious players that are in the game. And by the way, the projects we're in are far better. They're stronger, simpler, faster, closer to FID with big players.
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So the hype cycle that you always see with new technology.
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Exactly.
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Alex, what's your view on this? How do you see the overall state of the industry?
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No, look, I totally agree with Pierre. You know, when you have any new industry that emerges, we've seen it time and time again with the Internet, you know, with previous energy technologies, you know, there's always the hype. You get a lot of explosion of creativity and then the market does what the market does best, which is creative destruction. And the strongest in the quality players come through and the quality projects come through and then, you know, the industry turns ambition into action and that's how we drive global progress. We've seen this story many times before. I think that the sort of the doom is, is greatly exaggerated.
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Right. Again, you have these three large projects, as I was saying, they're all still making progress. All of them.
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Oh yeah, absolutely. So I've been in renewable energy for more than 25 years and in that time I've seen three hiccups on our sort of inevitable pathway of renewables being cheaper and market share growing. We had the great financial crisis, we had the European crisis and most recently post Covid supply chain crisis where you've seen costs go up temporarily. But what we've seen in the last year, and we can talk about China a bit later, a big reason for this is that we've seen costs in our renewable energy supply chain and electrolyzer supply chain are Absolutely tumbling. And so we're sort of back on our normal trajectory of renewables getting cheaper, you know, deployment levels going up. So, you know, it's sort of business as usual as we see it. And we've always targeted projects that are going to come online at the end of this decade because that's when we believe the real demand is going to really start growing even more. And we're very much on track. So, yeah, all good, really.
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B
So, Pieratin, as you were saying, this is a very new industry, has been growing very fast. It seems like we've been learning a lot about it. And one of the things I'm very interested in is the question of what low carbon hydrogen is actually good for, in the sense that I think in the early days when, as we were saying, the hype cycle was very much kind of on the rise, when you were in the upswing of that cycle, there was a tendency to see hydrogen as kind of the opposite of everything. And you heard it called the Swiss army knife of energy or the silver bullet. And it would be decarbonizing industry and it would be a fuel, and it would be in agriculture and everywhere else. Transport, certainly, as we've learned more about the industry and other technologies have developed as well. What's your sense now of where low carbon hydrogen is going to be most competitive and actually realistically most effective as a solution for decarbonization?
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The question is a critical one, of course, but there are several aspects. So first on what are the markets which are the most obvious ones for moving into low carbon or green, green or clean hydrogen? Well, to be. There are three. Three types. There is. The first one is the one that are already using gray hydrogen. They need to shift. If you've got a regulation for it, they will shift. It's mostly refining fertilizers, and those ones are no brainer because you just change the color of your product. But the product is the same. So it's easy to shift the question of absorbing the cost. So if the regulation protects you, you can do it. And that's what is moving in Europe. And that's what's moving in Europe is mostly refining. In India and China, it's mostly fertilizers. The second big topic is certain markets for which if you want to decarbonize a process, you have not much other choices than to shift your use of natural gas or fuels by hydrogen. And the biggest play is steel making. This is moving slowly, but the first big projects are being built as we speak. They will start in the next 18 months. And the big players in China, India and Korea, Japan will probably follow the route if the route is successful. The biggest one is today in Sweden, as you know, Stegor will investor there and we think it's a very interesting play because the impact on the cost of green steel is basically 100 to €200 per ton. And that's something that you can swallow as a final end user. If you're selling typically cars. The cost of the added cost for a car is only a couple of percent of the car price. And then you've got a couple of markets that are going to come just next which are more driven by regulation or by the need to to change your energy mix. That's the market of use of ammonia as a green energy feedstock for coal substitution in coal power plants in Korea and Japan. That's moving. It's not too big, but it's moving steady. And you've got of course SAF everything related to synthetic fuel, because that's the driving force. It being e methanol e ammonia or SAF sustainable fuel is going to be critical for both maritime and aeronautics. And that's going to come next. And then we have transport hydrogen as a pure molecule for transport, either in classical engines or fuel cell that is not over. It's moving relatively steady in China, Korea, Japan. The issue is to get the OEM to basically get their acts together and move faster into deploying the technologies because the benefits are very good, they can complement very well batteries, but it's still a bit shaky to find the right business model.
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Right. And when you talk about complementing batteries, then how would that work? I mean, I've often heard it said that the issue for heavy transport is there's no very obvious best solution for decarbonization. Partly because if you're talking about battery EV for a heavy truck to carry around the weight of batteries that it would need would be a huge blow to efficiency. So that's not necessarily the right route to go down.
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So when I say it's a complementary that most of the solutions we move in the Chinese are very well understood. That's through hybridation of both batteries on other fuels which are clean, and the other fuel that's complementary battery will be hydrogen. And you're right, the three topics that are being an issue for full electric cars is the space of the batteries in the truck, the load, the weight and the time to charge, which goes with the autonomy. So those elements hydrogen brings something battery cannot match. The other issue, which is a systemic issue that we have, especially in Europe, if you go too fast, is that there is a risk of very huge congestion of the distribution on transmission networks. And the cost to replenish those and revamp those is estimated to be 800 billion in Europe. And you're not going to spend those 800 billion in 10 years. It's going to take 30 years. So if you want to be at pace, you need to mix the two. Hydrogen is bringing you a complementary source of energy which is not dependent from the grid deployment. And that's going to be the reason why we still believe there is a place for heavy duty, medium duty, light commercial vehicle intensive mobility, sourced and fueled by some parts of hydrogen.
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Alex, what's your take on this? What do you think are the most attractive markets and what are you targeting with your projects?
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Look, I don't want to sort of just repeat what Pitn said because he's absolutely right. If I just sort of summarize and then maybe give an interesting statistic to show the sort of level of the problem we've got to solve here. So I guess, you know, when we look at the off takers that we're currently negotiating with, they're sort of, they fall into five buckets. One would be steel, you know, green iron. One would be power, one would be fuels, one would be refineries and industrials, and one would be fertilizers. So, you know very much what Pierre Chen was saying. But I think an interesting statistic just to give you again, a wide perspective on this. If you take all of the renewable energy that's ever been installed on the planet to date from wind and solar energy, so every country's wind and solar energy combined and you turned it into green iron, you used all that energy to turn, you know, to make green iron. It would more or less match. So every wind farm and solar farm we've ever built would be enough to basically decarbonize the global steel industry. So that just shows you the magnitude of the challenge that we now face. And that's just one of those five buckets that we're talking about. One of our projects, the Australian renewable energy hub is in the Pilbara region of Australia, the world's largest iron ore exporting region. And this project, even though it's quite large at 26 km gigawatts of upstream renewables, it would decarbonize about 4% of the Pilbara's iron ore production. So again, the opportunity here is absolutely massive.
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Yeah, that is amazing. Those are kind of staggering statistics which I suppose Both kind of speak to the scale of the challenge, but also the scale of the opportunity. Right. And it's interesting to think about from both perspectives. So let's talk Alex, then a bit about from the production side and the business model side then. So as you're saying, you're developing these projects in Australia and Oman, presumably the reasons to be developing in those locations is because those are countries with fantastic renewable resource, fantastic solar resource in particular. Is that the main driver of where you want to locate or how did you come to pick on those sites?
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Again, we have history as a guide, which is always helpful. And I like to sort of think of the LNG sector and the gas sector a little bit as an analogy. Not perfect, but helpful nonetheless. There are countries that are well endowed in energy that can produce for themselves. And in the hydrogen sector, I think China will be a standout. There are other countries that can produce a little and can use a little themselves. India is probably a good example. But if you want, you know, to export to markets where they can't produce themselves, you know, North Asian economies, Europe economies, where they just don't have the space, then, you know, you need to find countries that have that space that can then serve as an export platform, just like lng. And so you're looking for the same opportunity sets, you're looking for incredible resource. And again, solar is fantastic, but you've got to have wind through the night, otherwise you know, you've got eight hours of the day where you're producing. So solar on its own doesn't really work long term competitively. So you want sites where you have the world's best wind speeds through the night, the best solar resource through the day. And then you need markets where you can comfortably deploy billions of dollars in jurisdictions that have track records, where you can reliably deploy and where capital cost is low, because cost of capital is a huge driver, as we know, in the renewable energy industry, much bigger than the oil and gas sector. And then what you need is the partnerships between countries. You know, if you again think of lng, you know, you need those, you know, sources of demand and sources of supply to match up. And so, you know, that's where this sort of cross sector, cross border collaboration, that's what we're going to have to use to transform this industry at scale. So yeah, so you look at the Middle east and then you look at Australia, they're as good as it gets for producing.
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Right. And in terms of your business model then, so how are you thinking about it then? Are you thinking about producing hydrogen for export as liquid hydrogen or as ammonia? Or are you thinking about trying to use it locally as you say, you gave the example of Australia and Pabara region there, trying to find a local use that could then take that hydrogen, make some other kind of low carbon product from it, which then could be exported as that product, not as the hydrogen.
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It's going to be a mix. I think the most successful projects will play the markets and there's that level of optionality to optimize for your customers. So, you know, where customers want electrons, where customers want ammonia, or where customers want hydrogen or methanol. These are all products that we can produce from our energy hubs. The reason we went down this pathway. And if you think of the shale revolution in the United States, what you have there is these massive energy fields that can be developed in parcels. You insert a well, insert a second well, insert a third well so you can produce for customers. We have a very similar approach. So actually we don't have three projects. We have 60 projects. They're just in three locations. And so your first project is greenfield, but all the others are a brownfield expansion of your existing project. And in a way, think about it like a lego construction. It's three big areas, but we actually have 60 lego blocks and each block is a repetition of the same block that went before it, but optimized. So, you know, that's how we think you're going to produce these volumes that we need of green molecules at scale in a way that's affordable. Because if you do bespoke projects at scale, they can often be a disaster.
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This episode of the Energy Gang is brought to you by Adepec 2025, the world's largest energy event. Returning to Abu Dhabi from the 3rd to the 6th of November, under the theme Energy Intelligence Impact, ADEPEC brings together the entire energy ecosystem to address a dual imperative. Strengthening today's energy systems and scaling intelligent solutions that advance global Progress. More than 205,000 attendees and 2,250 exhibiting companies will gather to exchange ideas, forge partnerships and mobilize investment. Showcasing solutions that deliver energy to more people, more affordably and with lower carbon intensity. Across 380 sessions, over 1800 expert speakers will explore how the convergence of energy, AI, investment and emerging economies is reshaping markets and driving opportunity worldwide. Join us this November in Abu Dhabi, discover more and Register now@adipec.com so, Pierre Tian, I wanted to come back to something you said which I think is really important. You were talking about essentially the price premium for using low carbon hydrogen in an industrial process. It seems to me that that is very often going to be the critical point. And as you say, in a case like steel, if you can produce a low carbon steel where the price premium is kind of acceptable, is something that customers are prepared to pay over and above the price of the conventional product, then it's going to work. But there are other sectors on there. I mean sustainable aviation fuel I think is one of them. I think of where the low carbon product is many times as expensive as the conventional product. And there it feels to me like there's going to be a real problem and talk about regulation and regulation supporting adoption of these products and so on. But even with the best will in the world, governments that are trying to encourage decarbonization will have to face a reality check at some point. And if the low carbon product is so much more expensive than the conventional product, then the relations encouraging adoption of that product are not going to be sustainable. Do you think that's right? I mean, is that really kind of going to be the key to low carbon hydrogen adoption? Is as they getting that price premium above conventional product down to something that's really pretty small, certainly manageable.
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C
So I think it's back to what does it take on? What do you want to do to make this energy transition work? Nobody never said and if somebody does, it was wrong that the energy transition would be costless and will be simple for everyone. There are some markets where shifting from gray to green has an impact to the end product which remains very limited. That's the case of steel or that the case even of ammonia. If you look at the end bread, piece of bread or a pint of beer, the impact of the cost will be a couple of percent. So that's a no brainer. But it needs to be protected properly if you want to avoid imports of downstream product within the value chain that basically circumvent the regulations. So those things should be managed when you move to transportation, in fact, because, because we have the same kind of issue for cars than for planes is that yes, the price of a green solution for transportation, especially for heavy transportation, makes it more expensive. Sustainable aviation fuel is the ultimate solution to eventually decarbonize aviation, it's going to come next to biofuels, which is a bit cheaper and today it's indeed five to six times more expensive than Kyrozen. But there are three elements. First, if you put in place a regulation that is basically imposing everybody to move to that, you're basically changing the level playing field of the whole aviation industry. And that's the only way to make everybody playing on the same level. That's what the IMO is trying to do on the maritime, on the regulation is going to push everybody to shift to higher cost fuels which are going to be green. The impact on the cost of transportation will not be the same for Merkel, but for aviation that's the first thing. The second one is that we are still at the start of the cycle of the maturity of those technologies. So I think we will never go back to the level of kerosene, but we should manage to get the price difference a bit down. And the third element is that we need also to be a bit consistent. All of the economic models on the transition are showing that we're going to have basically globally to consume less energy. And in fact most of the reduction will be on the countries which emit the more per capita the countries which you've got the richest people. And part of that is aviation. So I think it will generate indeed some kind of a slowdown of some of the people who wanted to fly everywhere. That's going to have an impact there. It's going to increase the cost of traveling. Some will afford it, some will not. And that's going to be a big political debate. But we cannot continue to say we're going to save the world and just not take action by increasing the cost to do things which are using a lot of energy and mixing a lot. So regulation, reduction of crisis and behavior will make that stuff. We'll have a play. It's not going to be the changing everything, but you will have a play.
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B
Right, got it. Thank you. Alex, how do you think about this? When you think about the economics of low carbon hydrogen, clearly then it's going to be very important to get the cost down as low as you can. Even accepting everything Pierre Giensk has been talking about, still cost is going to be important. I know there's often been a lot of talk in the industry about a dollar per kilogram of production as being the sort of the ultimate goal that you would really like to get to to make low carbon hydrogen competitive. Is that a sensible target to aim for? And if it is, how close to it are you?
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A
I think it's not at all a target that we need to reach to make this industry competitive at all. You know, when you look at the price points that, you know, people are signing offtakes at today and when you look at the price points that we're Discussing with potential off takers for projects in the early2030s. You know, $1 is not remotely needed to get these projects off the ground. The question of whether we'll ever reach a dollar, is it real dollars, nominal dollars? You know, we could talk about this all day, but at the end of the day, you know, again I just sort of look at history and you know, 25 years ago, you know, very few people had ever seen a wind farm or a utility scale solar farm. And since then they're now ubiquitous because we've driven the cost down relentlessly. And so as I look forward, it's very inconceivable that we won't be able to do the same with technology driven solutions like green molecules. So I think it's a mix of technology driving ultimately with scale. But it is true that in the early days all industries get a bit of help. We wouldn't have wind, solar, nuclear, LNG where they are today if there hadn't been a kickstart from the governments. And I think one of the mistakes we've made globally, you know, in our sector and as policymakers is I think everybody just assumed the private sector would do it. You know, there was this kind of view that, you know, the PRTNs of the world could, could, you know, would, they'd all show up, it all get done. And, and you know, what we've now learned is no matter how good funds like High24 are, it takes a bit of help to begin with. Right? And you know, this help was there in all energy sectors through history. So I think we just need to accept that initially you need a bit of help. But we're already looking at our projects and we know that phase two, phase three, phase four, phase five will be cost competitive for our clients. So there are pathways to be subsidy free in the early 2000-30s which would be much quicker than many of the other sectors have done historically.
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C
I still believe that. I think there are figures for that, that the fossil industry is still getting far more subsidies than the manual trades. So you know, we substitutes. When you get them, you don't let them go.
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B
Yes, no, that does definitely seem to be the case. So purity. And I want to pick up on something else you said earlier. You talked about the industry facing issues and you said you would acknowledge that the challenges are there. What are the most important ones as you see it, you know, what are the issues that need to be solved for the low carbon hydrogen industry to succeed?
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C
So there are fundamentally three issues beyond one, which needs to be Always in the minds of people, which is safety. We need to make sure the safety of managing producing distributed hydrogen is well managed, but so far so good. The first one of course, is cost. Even though we're getting back to more normal cost base, it's true that we cannot decarbonize several segments if we don't manage to get the cost of green or clean hydrogen to be in the range of €3 to €4 and eventually below later. And so that requires scale effects of series effects, and it requires that we move back to low interest rates, financial modeling and financial environment, because this is fundamentally a CAPEX environment. So the cost of capital is driving everything. Now, thanks to the reduction of inflation and the pausing of the interest rate dynamic, which was up, the cost of renewable has decreased and the cost of hydrogen is decreasing again. The last element is the EPC cost and the cost of the, I would say the CapEx of electrolyzers or all other equipment. And for that the big elephant in the room, as always, is China. China is basically already achieving a lot in reducing costs. And the question is how much of that can be absorbed and taken into the regions which are going to need to decrease their cost to get access to those energies, namely Europe, but also probably Northeast Asia. And so I think the way China will play and then the way we will play with China to make it a win win move is fundamental. That's also valuable for the Middle east, by the way, which is probably one of the most appealing regions for the resource potential. But we'll need to transform them into low cost competitiveness by deploying a CAPEX management strategy when you do the project which is efficient and fast. So that's not a hydrogen topic, it's rather regional administration and the whole dynamic of competence that you need to build in those countries. I would say last point, the last element which is critical is of course that those things work. If the regulation moves the industries towards moving into buying clean products. And in Europe the regulation has been very long to be put in place, they're still not properly transposed. And this is why Europe is lagging behind. If they would be in place, we would have far more projects and the dynamic of the industry would be far better. So that's back to the political determination and courage to do things. And the rest of the world is waiting for that because basically the two major hubs for energy in terms of imports are Europe and China. And so if they're not clear on what they want, then the rest of.
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B
The world is bugged and going back To China then. So China, Chinese government did a big deal in low carbon hydrogen earlier this year. I've seen that described as the most significant development in the global low carbon hydrogen industry all year. How do you interpret China's ambitions here? And I mean, as you said, you know, it seems as though there ought to be a kind of cooperative solution where the industry and the rest of the world can work with China. But what might that look like? And as I say, what you think Chinese companies want to do because in terms of analogies with renewable energy, we have seen China come to absolutely dominate many of those sectors on a global scale. Do you think it's possible they want to do the same in hydrogen?
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C
I think there are a couple of things that have changed since the world of the solar and wind. First is that the level of automation that is in place now in manufacturing schemes made that for China, putting a plant in China or elsewhere is the same. The thing that making difference in China is the access of all the value chain. Rare earths and other key materials are critical metals. Given this level of automation, the differentiation by the cost of labor is not exactly the same. We have probably a play to do with China which is a bit the reverse of what China played with us 30 years ago, which is basically get them in but negotiate the sharing of the value, the ownership and the technologies that they've developed so that it benefits to both parties. And I think for China the, the message is that this industry doesn't work in a winner takes it all. It's only work if you share to win. And they will not get access to the European market by just exporting things they need to relocalize because if they don't have a wealthy market to sell to, then they sell to nobody. I think it's a bit different for that than solar on wind. It's a multi local manufacturing play. While I think for solar on wind the benefits of scale are so huge that they have a more local production to sell to the rest of the world.
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B
That is very interesting and fascinating to see again that sort of flip from the way things were 30 years ago. Where back then China was trying to learn from the rest of the world and now the rest of the world is trying to learn from China. Alex, in terms of your perspective on the challenges the industry faces and what you need to succeed, what are the big issues for you?
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A
Our obsession is reducing the cost of the product for customers. And as I've mentioned before, you know, we think scale does a lot of that, enabling costs for A project can be anywhere from a quarter to half of a project's cost. So if you build 10 projects and each one of them is a small project somewhere different, you know, you've got to do 25 to 50% cost for every single project. If you put 10 phases in one place, you do that once and every other project is then 25 to 50% cheaper than everybody else's. So scale's going to drive a lot of things on its own. The other thing is, you know, and I think Pierre Tien made the point very well, is that China really does change things as it's done in other industries. You know, I did a lot of renewable energy projects in China 20 years ago and I visited many factories and you saw lots of people in those factories and often the quality, you know, I think you could fairly say was below the West. Last couple of months ago I was in China visiting some new factories and they had to turn the lights on so I could see all the robots because these are factories without people and they are spotless and they are way ahead of anything I've seen in the West. So if you do not have a China supply chain strategy, I don't know how you survive in the future. Now different markets will approach that differently. We're in markets where there isn't local protectionism for an existing industry. So we're fortunate that we can come up with a China strategy which is a bit more flexible than some other markets. So it's that combination of supply chain, it's a combination of scale and it's a combination of automation, not just in the factory but on the site itself. So what we're now seeing is solar farms that are being installed by robots. We're now seeing logistic chains, trucks and cranes that have no people. And it's taking all of that together at scale is how we're going to drive down the cost of projects.
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B
It is amazing. It's incredible how fast the world and how this industry in particular is changing. As I was saying, we're looking ahead to ADIPEC in November. You're both going to be there. I know in terms of what you're going to be interested to talk to people about, the conversations you want to have, the messages you want to deliver to people. What do you think are going to be your priorities there, prtm? What's yours?
- [36:13]
C
Well, first it's an occasion for me to catch up a bit with the dynamic of the region because it's a key place for delivering low cost sources of either hydrogen or Derivatives. From there, of course we have playful intercontinental energy, but the world dynamic of the big players, Saudi Arabia, even a bit Qatar and also Franc Aman. Are they continuing, are they pausing, are they accelerating? What's their off tech strategy? Where is the market is for me very important to understand. And then in terms of message, I think we as investors, we are there to accompany the best project. So message always the same, we're ready to invest there. We believe the case for hydrogen remains very critical and you need to be part of the people saying, well, it's not because there is a US administration currently trying to shift everyone to fossil that the rest of the world follows. I don't think it's the case. I think the rest of the world continues steady in renewable because it's a way to be more in charge and control of your energy than depending from others. Because renewable can be done everywhere, more or less cheap hydrogen is part of the vector to enable that. And so I guess for the Middle east they're a bit agnostic because whatever the trajectory, they win. But I think if they want to win the Bosch trajectory, they already have the fossil one, they need to build the new one. And so it's a message I'm going to pass.
- [37:43]
B
Yeah, I do agree and I think that's, as you say, fascinating in terms of the future of the Middle east and how that energy industry evolves is really interesting to watch and very important for the world. Alex, what about you? What are you going to be talking about?
- [37:56]
A
I went to ADIPEC for the first time a few years ago and what I found quite surprising was the scale of the event and the interconnectedness of the world in the energy sector that comes to Abu Dhabi. And so for me, you know, going to ADIPEC is an opportunity to check not just the regional pulse, but the global pulse. The big decision makers are all there and it's an, it's a really exciting forum to hear what everybody's thinking. So, so the first thing about going to ADIPEC is to be quite open minded and listen to what people are saying because, you know, there's a lot to learn. For me, the two themes this year when it comes to green molecules and the energy transition, I think it's really about turning ambition into action to drive global progress. And then the second one I think is really this emphasis on cross border, cross sector collaboration because it's just like in earlier energy transitions, we've got to work together with those partnerships and they're going to be global in almost all cases.
- [38:56]
B
Yes, I definitely think that's right. And as you say, one of the very striking things about ADEPEC is the way you do get people from all over the world there, and that does make it a really interesting event to attend. So, unfortunately, we do have to leave it there. But it's been fantastic talking to you both. Thanks very much indeed. Pierre Tien, thank you.
- [39:15]
C
Was a pleasure.
- [39:16]
B
Thank you. Alex.
- [39:17]
A
No, thanks, Ed. Look forward to seeing you in Abu Dhabi.
- [39:19]
C
Absolutely.
- [39:20]
B
Absolutely. Great. Great talking to you both and certainly hope to see you very soon. And above all, as ever, many thanks to all of you for listening. We really do appreciate value your feedback. So please do keep that coming. And we'll be back soon with all the latest news and views on the future of energy. Until then, goodbye.