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- [00:01]
Amy Myers Jaffe
It is kind of like admitting that, well, if the United States isn't there leading, I'm not under pressure. I'm just going to go with my simplest, most straightforward NDC and not over commit myself, not stretch, not try to inspire others to come along the journey with me.
- [00:17]
David Sandalow
In 2023, there are about 217 gigawatts of solar, new solar deployed in China. Okay, by way of reference, that is more solar than had ever been deployed in the history of the United States at the time. That's in 2023. In 2024, Chinese deployed 277 or so gigawatts of solar and then this year so far 212 gigawatts of solar. There's now a little bit more than that in the United States. So the incremental additions in each of the past three years are more than exist in the United States. Let me say you know how to add drama to a podcast. That's very impressive.
- [00:52]
Ed Crookes
Got power? At Heifeum, we make sure the answer is always yes. Recognised seven times as a BNF Tier 1 best provider and ranked top two globally for battery shipments for 2025, Heum delivers safe, reliable and profitable energy solutions that keep the clean energy transition powering forward. Let green energy benefit all trusted worldwide. Built to last. Discover more at www.Hythium.com and let's talk energy that works for good. Hello and welcome to the Energy Gang, a discussion show about the fast moving world of energy from Wood Mackenzie. I'm Ed Crookes and welcome to a special edition of the Energy Gang which we're recording live in front of a class at NYU that's given by the Energy Gang's owner, Amy Myers Jaffe. Hi Amy. Welcome to the show and thanks very much for hosting us here today.
- [01:45]
Amy Myers Jaffe
Welcome to Clean Technologies, Opportunities, Trends and Innovations. We have some great master's students here with you today. Some of them are specialing in cyber terrorism and policy, some specializing on energy and environment and then we have some who are in economic development and humanitarian systems. So we have a good smattering of expertise here with us today in our student participants.
- [02:14]
Ed Crookes
Fantastic. Well, as I say, thanks very much for hosting us and very much looking forward to a great discussion today. It's also a pleasure to welcome joining the discussion, two very eminent energy experts from outside nyu. First of all we have David Sandalow who is the inaugural fellow of the center on Global Energy Policy at Columbia University. Hi David, welcome to the show.
- [02:34]
David Sandalow
Ed. Amy, it is great to be here. I'm a huge fan of the energy gang.
- [02:37]
Ed Crookes
Oh, that's very kind of you to say so. Thank you. Just so people know a little bit about your background and the route that took you to Colombia. You've had a role in government service various different places down the years. Do you want to talk a bit about the route that got you into energy and what you've done in that field?
- [02:52]
David Sandalow
It's my great privilege to work for a number of years in the US Federal government. I worked for the White House, the State Department, the U.S. department of Energy. Before that I really worked on two things on, on environmental and energy issues, had a strong passion for protecting the environment, and then on China issues. When I was young, just to go back, which was a long time ago, Americans literally could not travel to China. It was illegal, we didn't have diplomatic relations and it was prohibited. And I was always fascinated by China as a child. And then when I was in college, diplomatic relations were restored between our two countries and it started to be possible to travel there. And I managed to find my way onto one of the first exchange programs between the US and China in the early 1980s. And that bred a lifelong fascination with the country. And that's now converged with my interest on particularly climate change issues. Because China is the number one greenhouse gas emitter in the world, more than 30% of global greenhouse gas emissions. There's no solution to the climate change issue without China.
- [03:52]
Ed Crookes
Fantastic. Yeah. And that's what we're going to be talking about on the show today is China, its role in the global effort to address climate change, its role in the energy transition and, and what that means for the rest of the world. But also then talk about this. We're joined by Joe Webster, who is a senior fellow at the Atlantic Council. Genso, do you want to talk a little bit about your interest in China? And listeners to the show may remember you were on a few months ago talking about China's position in the energy transition and some of the issues around that in terms of essentially great power, competition and geopolitics and some of the issues again, that we're going to be exploring today. What's your route to following that issue at the Atlantic Council?
- [04:33]
Joe Webster
Well, just want to echo David's, I think, appreciation of the podcast. Been a huge fan of the podcast for a long time. So wonderful to be here again with both of you and also be here with you, David, as well. My route to energy was somewhat circuitous. I originally started work right after college and as a defense contractor looking at China related issues and so that's what sparked my interest in China, broadly speaking, and then graduated over time, and so started working more on Russia issues as well. So China and Russia issues, and energy is very important for the relations between the two countries, but also these systems within them. And so that's what really sparked my interest in China. And again, really wonderful to be here with all three of you. I have not taken a single energy class in my life, but I've learned from all three people on stage. And so it's wonderful to be here.
- [05:12]
Ed Crookes
So thank you. Well, thank you. Very kind of you and very good of you to join us. So there is an issue about this discussion we're about to have, which is that there's a kind of a crucial missing piece. Banquo's Ghost at the Feast, if you know the play Macbeth, which is the thing that we were expecting to be published during Climate Week, but has not yet appeared, is China's new ndc, its nationally determined contribution, which essentially is setting out China's plans for emissions reduction over the next decades to come. And this is something which all countries in the world essentially are meant to do. In the run up for COP 30, every country is supposed to come up with a new updated ndc. And we thought China's would come this week. It may still come this week, but we haven't seen it yet. David, start with you on this. In terms of your expectations for China's ndc, what do you think the country will be saying?
- [06:13]
David Sandalow
You're quite right, Ed. This is hugely important document. I think the most important document related to climate change that will be released by any government. But this year, China, as I've already said, is almost a third of greenhouse gas emissions. So its plan is absolutely central to the fight against climate change. I can tell you what I'll be looking for and will be most interested to see. So first, there's a kind of headline number here, which is the percentage reduction to 2035, which is the relevant timeframe. And we've already had very high numbers put out by the European Union, by the United Kingdom, Japan, Brazil, Australia, in terms of their goals of reducing emissions. I think a lot of observers are hoping that the Chinese government will be somewhere in the 20 to 30% range in terms of reductions. But I think most observers are expecting the number to be significantly lower. We'll see. These are all rumors at this point. There are a couple of other important factors. One of them is the base year, that is the percentage reductions from what year. And there's a lot of Interest in whether the Chinese government thinks that emissions have already peaked. If they pick 2025 as a base year, that's probably a sign that they think it's already that their emissions have already peaked. If they pick, say, 2030 as a base year, it may leave them opportunity for headroom. I'll also be looking at any sectoral targets that might be here. For example, are there targets for renewable energy deployment? Are there targets for reductions in the steel sector? Then there's some subtleties of language also. Are they committing to reduce or are they striving to reduce or aiming to reduce? And then the people who speak both languages will be arguing about translation here. But these types of subtle verbs shifts can have important differences when they come out of the Chinese leadership.
- [08:04]
Amy Myers Jaffe
So let me weigh in for a minute, because they didn't announce their NDC yet, but Alibaba did announce that it has a $4 trillion plan to increase its spending on AI and data centers. And of course, as we'll discuss over the course of our discussion, there is this issue about whether or not I can commit to peaking carbon in my power sector, which the Chinese have put in a carbon market. I mean, it's not 100% got all the bugs out of it yet, but it exists. And there was the aspiration, but now that we're having to think about AI and how to provide the electricity for the AI, and you've got Alibaba saying $4 trillion of spending literally over the next five years. Does that matter? Does that mean they can't retire coal? Is coal not suitable for AI training? How does that look from the Chinese perspective?
- [09:03]
Joe Webster
So I'll in here a bit. So regarding the NDCs, I'm not watching those as closely as I am some of the other technologies that China's developing. So for instance, one is solid state batteries. And so I'm personally of two minds about this. On the one hand, this could have major and major dramatic positive implications for decarbonization, especially in the transportation sector, but also in the power sector. So for solid state batteries, those are potentially more suitable in extreme climates versus traditional lithium ion batteries. And so that could have major implications for North China, for Inner Mongolia, potentially even for Mongolia. And that could have major implications for coal development and for coal use in the world. So China constitutes over half of all global, global coal consumption. And so I'm looking. That's one of the things I'll be looking for from the NDC is what sort of language is there? And as David mentions, you know, we're Chinese language folks are going to parse out what these specific word means, what that one doesn't. And so I'll be looking for that as well. But I'd also pay attention to not just what emerges from the ndc, but also what sort of technological developments will we see perhaps from next year. And so as Amy mentioned, you know, Alibaba came out today and they said, I think it was a lot of money, right? A lot of money is going to be spent globally for AI development. And so we can talk today about some of the how coal may or may not be helpful for training versus inference. There are obviously some key distinctions there.
- [10:15]
David Sandalow
I think it's worth getting on the table the extraordinary clean energy deployment that's happening in China right now. I think people in the energy world are now more and more familiar with this, but it's still worth Saying so in 2023, there are about 217 gigawatts of solar, new solar deployed in China. Okay, by way of reference, that is more solar than had ever been deployed in the history of the United States at the time. That's in 2023. In 2024, Chinese deployed 277 or so gigawatts of solar. And then this year so far, 212 gigawatts of solar. There's now a little bit more than that in the United States. So the incremental additions in each of the past three years are more than exist in the United States. And that's a tremendous impact on what Amy's talking about in terms of powering data centers and other things. I mean, I think today most of the electricity for data centers in China is coming from coal, but it's more and more will be coming from renewables. And in particular the Chinese have something they call an Eastern data, Eastern data, Western Compute initiative, which is all about moving data centers out to the west where there is more clean energy and worth more of it will be provided by solar and wind. So I think to answer kind of Amy's question, the this is something certainly the Chinese energy planners are very attuned to.
- [11:33]
Ed Crookes
If you had someone from the current US Administration here, I think what they would say is, broadly speaking, the NDC is an empty document. Either, as you say, it's not making very significant commitments or it shouldn't be taken seriously. To the extent that it is making significant commitments, that would mean a change of direction in Chinese energy. And I think the crucial reason that people in the administration would say, don't look at the NDC don't take it seriously is precisely for the reason that Amy's talking about, which is that there is this huge investment going into new data centers, huge expansion of generation capacity, therefore, to support them, in part not solely to do with AI, but definitely in part to do with China's push to develop AI capabilities as rapidly as possible? And they would probably say, well, yes, all right, there is absolutely more renewable generation going in. You're absolutely right about that. There's more nuclear generation going in as well. But China is also adding significant amounts of new coal capacity. So when you talk about David, oh, is it possible that their emissions have already peaked? Some of the administration would say no, it's highly unlikely. They have done, in fact that because they're adding this extra coal capacity. And it feels like we've been here a few times in the past where people have said, maybe around sort of 2015 or so, maybe again around 2020. Oh, has China's coal consumption peaked? The answer was it never had. It kept on growing. Is there a possibility that we're here again now and that actually there'll be some sort of talk and nice warm words about capping the growth of coal, but in fact it is just going to keep ed.
- [13:13]
David Sandalow
There's a lot there. Let me start with your points on the NDC and then maybe talk about some of your other points and what with respect to the ndc, I'm going to maybe half agree, half disagree with the points you attributed to the administration. First, I take quite seriously the Chinese ndc. I think it's an important document. In general, the Chinese government does not make commitments in a public setting like this globally that it doesn't plan to meet. It is quite serious about these pledges. That doesn't mean they always meet every pledge. By the way, there's one notable pledge in this area they haven't met. They pledged a number of years ago to reduce the carbon intensity of their economy by 60 to 65% by 2030. They're not on track to do that right now. But by and large, when the Chinese government makes a pledge like this internationally, they orient their processes towards meeting this goal and it's a serious pledge. That said, these NDCs are not policy drivers from the Chinese government. I don't think that the Chinese government starts with the NDC and then figures out what to do. They look at what's already happening and then they define what the NDC is going to be. So there's some ambition that comes out of the NDCs, but by and large. I think the Chinese government is not driving more ambition through its ndc.
- [14:27]
Ed Crookes
So what is driving policy then?
- [14:29]
David Sandalow
A number of different factors and I would point to the following. First, investment in strategic industries. And the Chinese government has for decades been committed to clean energy as a way of defining its economy for the 21st century. With electric vehicles dating back to the beginning of the century. I think the Chinese government looked at the Western internal combustion engine technology, decided the west had 100 year head start on this. It was never going to fully catch up. And so the Chinese government decided to invest in electric vehicles, including the entire supply chain with batteries. And boy are they ever seeing the results of that.
- [15:03]
Ed Crookes
Now that worked pretty well.
- [15:05]
David Sandalow
Unbelievable, right? I mean if we did not have tariff barriers against Chinese electric vehicle in the United States, our strategic would be filled with them. It's a huge issue in Europe which has lower tariffs for electric vehicles and there's more and more in the European market. I think it's astonishing for American consumers. I mean you can go to China and buy a pretty good electric vehicle for 10,000 to $15,000 or even less actually in some cases it's really quite cheap. And they've also had the same strategy for strategic industries in solar and have captured global markets there. We can talk more, there's lots to say about that. We can come back to that. So I think capturing strategic industries is one important goal. A second goal is fighting local air pollution. And that's a huge issue in China. For many years and particularly around 10 to 15 years ago, Air pollution in China was off the charts horrible in many northern cities and across China and some southern cities as well. That air pollution has improved dramatically in China. And today the dirtiest cities in the world typically are in India, not in China. And the data is actually quite clear on this. The data from the US embassies rooftop in Beijing shows that over the course of the past 10 or 15 years, the principal measure of air pollution, PM2.5 has gone down by about 2/3. That is a result of switching from coal to natural gas, promoting renewables, promoting electric vehicles and other factors. Another factor has been fighting global warming and I'm not aware of any climate deniers in the Chinese government. I have never seen anybody in the Chinese government contest the science of global warming. That doesn't mean it's the highest priority, but the Chinese government I think believes in the importance of decarbonization and is moving progressively in that direction.
- [16:42]
Ed Crookes
Joe, what do you think? Should the Chinese NDC be taken seriously?
- [16:46]
Joe Webster
Oh, absolutely. So I would, I would agree with everything David said. And just add another. Another small point to that is when we think about the technologies China's invested in over the years, some of those have. Some of those bets have paid off, some of them have not. With what they call the three new solar batteries, electric vehicles, those bets have paid off spectacularly. Well, candidly. And there are importantly some military applications to those bets. So with instance, for solar, it has lots of implications for artificial intelligence. You can site solar anywhere, you can build it very cheaply, very quickly. When we talk about speed to power, solar and batteries are the option. But also when it comes to batteries, there are all sorts of synergies with drones. So Ukraine is producing about 4.6 million first person view drones FPVs per year. Almost all those are battery powered. China can probably produce up to 10 times that. Some people say up to 100 million per year. That could have lots of military implications. But perhaps even more importantly are things like diesel electric submarines, which are powered with existing lithium ion batteries and lead acid batteries, which are less advanced chemistry. But as we move to more advanced chemistries, like solid state, like lithium sulfur, the energy density gets much more favorable. You can pack more capability onto a submarine. You can also have greater endurance and less need for snorkeling. And so that could have huge implications for submarine options, especially in the unmanned arena, where you could have these really large unmanned autonomous vehicles underwater operating. That could have major implications. So all to say is, I completely agree with David's points, but also too, there are going to be some military applications for some of the technologies that China has invested in. Whether that was strategic or not is another question. But the reality is that they are getting all sorts of strategic military benefits from these technologies.
- [18:20]
David Sandalow
Just add quickly to one point to Joe's really important points about the security benefits of these clean energy technologies. One of the biggest strategic vulnerabilities that China has today is its reliance on oil imports. And that's been a big driver, I believe, in its investment in electric vehicles, no question.
- [18:37]
Amy Myers Jaffe
And take it a step further, just comparing us China, I think the Chinese became very acutely aware of how much their dependence on oil was going to go up after the mid 2000s. Then that was about the time we started to crack the shale puzzle. And so all of a sudden, the Chinese, when you get to 2010, 2012, you're looking at the United States having its own oil again and lots and lots of natural gas, and having China's natural gas and oil really faltering. And so There was a strategic disadvantage which they tried to plug by at least going to electric cars and so forth in their domestic market, I think it's panned out a lot better than maybe they might even have expected themselves. Because, Ed, when you talk about peak coal or peak emissions, I think there's still the jury out. But in terms of the impact of electric cars on China's oil use, and they've even shifted their trucks to lng, a lot of trucking to lng. So that is the one area that people feel pretty confident that their oil use actually in transportation could peak soon, if it hasn't already. It's an interesting question when you think about where are we going in modern warfare? We can talk a little bit about whose electricity systems better or worse in terms of supporting AI. But in terms of developing AVs, really, as Joe's pointing out, having really critical performing battery technology for AVs, having the number of chips on boarded in the AVs, I understand that the Chinese AVs, the new ones coming out, have something like three or four times more chips than a Tesla. When you think about modern warfare, for us here in the United States, to categorize something as clean in some polarized way, like they tried to almost ban the use of the word clean to go with technology, I mean, it's nonsensical because a lot of these technologies from just the strategic military point of view are critical technologies. And the United States can't afford to not participate in these technologies. I mean, unless we have some alternative technology, like we're going to hit fusion or something like that. I know there's some interest in those even further out technologies. But in the end, in the here and now, AVs, batteries, solar assisted backup, electricity, all these things are very important in even just the military race, right?
- [21:28]
Ed Crookes
So let's talk about some of those strategic national security and geopolitical issues as they relate to AI. Something you hear very often again from people in the administration. I heard Chris Wright talking about this the other day at the Council on Foreign Relations is the idea that the US essentially, and maybe the west more broadly, is in an existential race against China to develop the most advanced capabilities in AI. And I heard Chris Wright using the analogy of the Manhattan Project in World War II. It's like the race against Nazi Germany to develop the atomic bomb. Or you hear people talk about the space race against the Soviet Union in the 1950s and 60s. It's vitally important for civil reasons, but also for military reasons to be the first to develop these most powerful Types of AI Joe, come to you first on that. What do you think in terms of that kind of characterization you see from the administration about this great kind of global struggle? Do you think that's a fair way to look at it?
- [22:30]
Joe Webster
So there are some different approaches to AI and we'll call it AGI, Artificial General Intelligence, which we'll define here as intelligence equal to human being. That, that really is the crux of the US China AI competition is, you know, how, how fast do we get there and then what are the implications of getting to AGI? And so there's three different approaches to this, which we talked about a few months ago, but there's sprinters, marathoners, and then skeptics. So skeptics, you know, as your name implies, are, they don't think that we're going to get to AGI anytime soon, possibly never. And AI is probably going to be a bubble with very significant implications. Marathoners, which is, I think it's fair to say most folks in China, I think that we're going to have a. AI is going to be a powerful tool, but it's not going to be as transformative as some suspect. So AI will be adopted on a sector by sector basis. We are unlikely to get to AGI before 2030 and we might not ever get there. And then finally the sprinters are folks like folks like Elon Musk, other US tech CEOs especially, who think that we're going to get to AGI potentially in the next year or two, when we get there, it'll be a transformative technology. Those, those initial benefits will be self reinforcing such that the first person, the first country, the first company to get there will have astronomical amounts of power. And so that really informs it. I think most Chinese scholars would place themselves in the marathoner approach. There is potential for some sprinters in the US but all that's to say is that we have this very, I'd say incoherent approach in the US where we at least notionally talk about this as an existential race with China. But at the same time we, we are in many ways limiting our ability to get power to the grid quickly. On your show earlier today, you were talking about the, was it the power wall we potentially are reaching and we're essentially restraining ourselves. We're imposing, we're handcuffing ourselves by not being able, by really implacing all these restrictions on solar, on wind, and these are the fastest resources we can to get to the grid as quickly as possible. So all that's to say is that if we do regard this as an existential race, we should be looking at all forms of energy and not just obviously coal, natural gas, et cetera.
- [24:32]
David Sandalow
Amen. I can't agree more with what Joe just said. And I would add there's a lot of intellectual imprecision in this notion of winning the AI race. And the notion is somehow we are going to get to AGI first. But what exactly AGI is is not entirely clear. Some people adopt the definition Joe just had, which is being as smart as a human. But even that, it's not clear as smart as a human. You could debate what that means. Exactly. I think the comparison with the race in World War II to get an atomic bomb is not that good. For that reason, it was either you had the atomic bomb or you didn't. And in this case, it's much less clear. And then even beyond that, it's not just having AI that matters. It's how you deploy AI in your society and by the way, in your military also, from a force structure standpoint. And so we could have the most advanced AI, but if we're not adopting it in our companies and our education process and more in our military, it won't matter. So I think this we're going to win the AI race frame is pretty problematic and needs a lot more rigorous thought than it's getting.
- [25:42]
Amy Myers Jaffe
And what are we going to use the AI to do? David, exactly to your point, because you've written this brilliant paper about how we could use the AI to lower carbon emissions, for example, and there'd be all kinds of other benefits that would go with that because we would need less fuel and that would mean less imports for other countries that would use those technologies. Here in the United States, we would be able to, again, reduce whatever imports we are having of different kinds of things. We could use it to do material science so that we would be able to do more recycling of metals and rare earth and all these different things. So we would be able to improve our own supply chain for doing some of the technologies and have distribution into the defense system. Let's unpack that a little bit, because I think making this distinction about some theoretical AI thing we think we're going to do and what it would mean. You see these billboards in the New York subway about books that explain that everyone will die if we get to AGI. I'm not even sure is it a desirable goal, but. But putting that aside, your point that what we really want to do is knuckle down on these really important uses of AI, where in energy it could be of critical importance to building efficiency, to electricity resilience. I mean, David, your paper is just extensively productive in going into depth in each of these different things that the AI could actually be used to do.
- [27:18]
David Sandalow
Well, thank you for your kind words and I'd love to talk about how long have you got? I mean, it's such an important opportunity we have here to use AI to both promote clean energy and to help reduce greenhouse gas emissions. I'll just pick one example which I think is compelling, which you referred to, which is in the area of materials innovation. Right now, in order to promote the clean energy economy, there are a variety of materials that we need to improve, but related to battery chemistry, for example, related to geothermal drilling. So we have equipment that can handle the hot saline conditions underground in order to promote nuclear power and more. We need materials and we need innovation in materials. And famously, 150 years ago, when Thomas Edison was trying to come up with a material for the light bulb, he spent a year running electricity through different filaments to find out how much light and heat would be produced. Today, we can do that type of thing in a second a million times using AI tools. So AI offers the opportunity to accelerate the pace of innovation in really important ways. And I think we need to capture the ability to do that in order to advance this clean energy revolution. And by the way, we talk about this a lot on my AI Energy and Climate podcast. It's a great opportunity to plug the podcast. I love your podcast, but if you're interested in this topic, come listen to the AI Energy and Climate podcast too. And we have a lot of detail on this.
- [28:40]
Ed Crookes
Yeah, no, it's a great podcast, you're right. Really a lot of interesting stuff there. I do just want to go back though, to this point about international competition. I absolutely hear what you say about the analogy with the Manhattan Project or the atomic bomb is kind of over simplistic and it doesn't really reflect what's going on in AI. It does seem to me there's one crucial area where this rivalry between the US and China really matters. And it relates to this idea about the power wall. In case people didn't hear the earlier show where we were talking about this, this is the idea that basically the development of AI in the US will be constrained by the inability to find enough power to supply all the data centers that are going to be needed for advances in AI. That is a problem, isn't it, for the us the fact that China has this tremendous momentum and growth in capabilities, what they can do in energy in many sectors. The fact that China has a complete dominance of the supply chains of so many crucial areas. Battery, raw materials, everything that goes into a battery, then that goes into an EV and so on. Solar modules, very significant position in wind turbines and so on. The fact that the US is apparently being left behind in a lot of these sectors, that's not good surely for long term future of the us. What do you think?
- [30:05]
David Sandalow
Totally agree. And it's one reason that we need an all of the above energy policy, as Joe has already said. And I really regret the fact that we don't have that now and we should be promoting solar and wind, which is the fastest way to bring new power to these data centers instead of discouraging them. I think with respect to China and its energy system, you're directionally correct, but I wouldn't overstate it. There's no question that there are fewer constraints in China on the development of new power than there are here. But it's not that there are no constraints. First, although there's not a democratic political system in China, there are still political forces. And there have been a lot of stories over the years, for example in China about local villagers protesting against the placement of ultra high voltage transmission lines and that actually affecting the placement of the lines. And, and there have been stories in the past year I've seen about provincial officials who've been unwilling to build new power because of energy conservation or energy efficiency goals that they felt they had to meet.
- [31:10]
Amy Myers Jaffe
And then I would take it a step further because even in the coal sector you have a lot of places in the country where the coal is being way underutilized for the plants. They already have 30% utilization, 40% utilization. What that means is that all these coal plants around China are uncommercial. Somebody subsidizing that and they don't have real pricing signals. There's some question about whether they really have modernized their grid and are they having the same kind of problems that we might have in terms of manning all these data centers and the fluctuating different inference training and other kinds of uses and keeping the cloud on. They have the same kind of weather risk that we have, maybe even worse in a lot of places they got the same heat waves that can knock out electricity, they got typhoons. So are they really actually better off?
- [32:06]
David Sandalow
Yes, I think they are. Although I don't think that it's a world in which there are no constraints to the building of additional Power. There are material constraints, but in terms of Ed's framing of is there a competitive advantage in China, 100%.
- [32:19]
Ed Crookes
You mentioned, Amy, Chinese coal plants that are running at below full capacity. That seems to be one very interesting development that's going on in China right now, which is that although new coal generation capacity is being added, there's a lot of pressure to make those plants more flexible so they run less often. And I guess partly just to match variable demand through the day, but also crucially then to support renewables and to be able to pair them with wind and with solar so that you can ramp your coal generation up and down at times when renewable generation is low. Do you think, Joe, I mean, is that what's going on? Do you think what is the significance of more flexible coal coal plants?
- [33:00]
Joe Webster
Yeah. So as you mentioned and as we were talking a little bit before the show started, so coal plants are not necessarily most suitable for artificial intelligence, especially potentially for inference needs where you could see ramping and you could see very sharp fluctuations in demand for, for inference applications. So if China had natural gas, they would use it because it's much easier to ramp up natural gas than it is for coal. And the same is also true for batteries. Batteries are extraordinarily responsive. And so that's another advantage potentially where China could have some advantage over the US with its massive battery deployment. One thing I would note on, so David's been just to add, one thing David said was we talked about the number of gigawatts that China's deploying. It's, it's about 450 gigawatts. Last year the U.S. was about 50 gigawatts. And I did go through the numbers for China for a second time. And so China added about 450 gigawatts of power in 2024, about 10 gigawatts. That is biomass. I've candidly never thought about biomass before, but what's a rounding air for China was about 20% of total capacity in the US because we added only 50 gigawatts of total incremental capacity. So it's a pretty, pretty astonishing the amount of work we need to do in order to really, really build out the electricity system here. And we haven't really touched too much on. And then there's been some discussion about ultra high voltage direct current lines, UHVDC lines. China also builds lots of other high voltage lines like alternating current lines. That's also an underappreciated part of China's buildout is most of their Generation sources for wind and solar are in the northern or western parts of the country. The demand is on the sea, is on the coast. And so they have to connect these demand centers with the generation source. So they're building lots and lots of transmission lines. And in the US we are building none when it comes to long distance transmission. So a lot of work to do in the US to really catch up.
- [34:41]
Ed Crookes
So I want to talk a bit about China's global impact as well. As you were saying earlier, David, China is the manufacturing powerhouse for a lot of low carbon technologies and is exporting them to the world. A country that's come up quite a lot in discussions in Climate week here over the past couple of days has been Pakistan, where they had a power system that has been very reliant on natural gas. Interestingly, if you talk to people in Pakistan about it, they were very much encouraged to go down that route to base their system on natural gas because of encouragement from the United States and from people who said, you can be able to import US LNG and that'll be great. And then in the aftermath of Russia's invasion of Ukraine, when Russian gas exports to Europe got disrupted and Europe basically went out there and outbid everybody else for gas so they could get LNG imports to keep their lights on. The consequence of that was that the price of LNG soared. That became very expensive to the extent it was very damaging to Pakistan's economy having to pay so much for gas. And also there were times when they just couldn't get the cargoes at all, they couldn't get the imports and they suffered from blackouts and so on. In the wake of that, one of the things that's happened in Pakistan has been a huge boom in imports of solar panels, particularly very low cost Chinese solar panels. And this is now a big thing across the country, people buying low cost panels, putting them on roofs. And it's having a huge impact apparently on Pakistan's power industry. It's having a huge impact on Pakistan's fuel consumption. I think someone gave me the number that Pakistan's demand for diesel fuel used in generators down by 35% this year. I think it was this year or last anyway. But recent times, it feels to me like that is a story which can be and will be replicated all over the world. There's a whole lot of countries that are like Pakistan that need low cost energy, probably have great solar resource that are not oil producers themselves, not gas producers themselves. So they have to import it and so they don't have any particular strategic or economic interest domestically in remaining wedded to fossil fuels. And it just makes overwhelming sense for them to shift away from fossil fuels to move to renewables and probably particularly solar. And China is there to supply the product they need to make that possible.
- [37:10]
Amy Myers Jaffe
And to electrify their transportation fleet. Because remember, you know, I'm waking up in the morning and there's an oil supply shock because of some geopolitical event and now all of a sudden my economy's GDP gets crunched down because I'm either subsidizing fuel because I have to keep people have to be able to get to work or something else like that puts a burden on the sovereign debt situation. So EVs, Chinese EVs, pilot paired with solar panels you're going to have your car could be a bi directional battery resource. I mean there's all kinds of things coming that would make sense for a middle income or lower income country now. And the United States is not going to be in that trade.
- [37:55]
Ed Crookes
Right. So what's your expectation then for the future of this? I mean Joe, what do you think?
- [37:59]
Joe Webster
One quick point on that is Saudi Arabia. So as you mentioned, Pakistan is importing lots of solar panels. Saudi Arabia interestingly also is importing lots of solar panels and lots of batteries. So their battery imports are some of the lowest costs in the world. And that's because they have such a good, astonishingly good solar resource there as well. What's unique about Saudi Arabia is obviously they consume lots of oil in the power sector. At peak about 1.4 million barrels per day. Total global demand is a little bit over 100 million barrels per day. Oil is obviously very inelastically priced. So any sort of reduction in Saudi oil demand could have lots of consequences for global oil markets as I'm sure Amy is interested in. So that's one facet I'd mention about just this, this, this change we're seeing.
- [38:43]
Ed Crookes
Yeah, and that's really fascinating. I mean obviously when you think about Petro States, there's no example of that more iconic than Saudi Arabia. But as you say, even they have a strong interest in boosting renewable generation, in using EVs, in using batteries to the extent that they can. Because as you say, that then frees up hydrocarbons which they would otherwise be using to serve the domestic market. And this then frees up resources that they can export to the world and earn revenue from.
- [39:13]
Joe Webster
Exactly. That's the Norway approach and that's what Saudi is doing. And that's maybe ideally what the US Will do eventually, but we're obviously not there yet.
- [39:19]
Ed Crookes
Thanks. So let's throw it over to the class then. Has someone got a question? You had one, I think. Yeah.
- [39:23]
Bill
Hello, my name is Bill. I'm trying to take a holistic look at sustainability management and hopefully focus on corporations. I know we talked a lot about maybe the limitations that renewable energy markets have in the US but are there any, like, promising, like clean technologies that are. Have promising markets in the US we did sort of an assignment last week that sort of had to do with this. So I'm just curious.
- [39:48]
Joe Webster
I would say one technology I'm pretty excited about in the US Is advanced batteries. So there's. Even though China right now has an overwhelming advantage with existing chemistries, with lithium ion chemistries, there's a potential to leapfrog to different, different chemistries. Solid state, but perhaps more likely is lithium sulfur. For a variety of reasons, the US Is probably, perhaps more likely to go to lithium sulfur. There's some complementarities with the oil industry, which makes it a little more palatable. It also has lots of military applications. And so this I'm particularly excited about lithium sulfur battery chemistries, which could be used for EVs. They have. So just taking a step back, lithium sulfur has very high energy density and so is enormously useful for things like electric vehicles. And so in addition to the military application. So maybe don't tell your senator or congressman that it's also useful for electric vehicles, but it'll be very helpful for, for military applications. So I'm very excited about that technology.
- [40:37]
David Sandalow
Agree strongly. And I would add geothermal, I think there's a lot of opportunity there. It actually has support from the current administration. There's good technical advances. I think we have a lot of potential for increasing geothermal power in the United States in the years ahead.
- [40:50]
Ed Crookes
Yeah, geothermal was the one that I was going to mention as well. It's very interesting because it builds on the capabilities of the U.S. oil and gas industry, which are the most advanced in the world in terms of things like hydraulic fracturing and horizontal drilling. And geothermal also, if it can be made to work on a large scale, this kind of advanced geothermal has the great advantage of providing dispatchable power. Again, so unlike wind and solar, you're not subject to the time of day and the conditions.
- [41:17]
Amy Myers Jaffe
Even in an urban setting, you can use a different kind of geothermal where you're just bringing your pipes, your water system underground, and you're using it the cool floorboards or using that to heat floorboards and then you don't even need the grid for some level of building services.
- [41:37]
Ed Crookes
Yeah. So as I say, a lot of these advanced geothermal technologies are at quite an early stage. We're just seeing the first few projects start to get going and I think we're going to see a lot more over the next couple of years and we'll learn a lot more about how effective and how workable the technology really is. But certainly a lot of potential there. I think the potential is exciting. Right. Well, I'm not going to take any more questions, I'm afraid, because we have breaking news. Stop press. Hold the front page, as they used to say, because this ndc, the nationally determined contribution from China that we were talking about earlier in the show, has now been published, or at least the headlines have been published. It seems like President Xi Jinping has been talking at the UN General assembly here in New York. And I'm looking here at something from our old friend Simon Evans, past guest on the Energy Gang from Carbon Brief, which is a new service on climate issues. And he's got what he says is an unofficial transcript of remarks delivered by Chinese President Xi jinping to the UN Climate Action Summit, including the outlines of China's 2035 climate pledge. And so he's got a few of the key points here, but probably the biggest one is in terms of China's overall commitment to reduce greenhouse gas emissions. And they're talking about planning to reduce economy wide net greenhouse gas emissions by 7 to 10% from peak levels by 2035, while striving to do better. So, David, in the context of what you were talking about earlier, about what you expected there might be in this ndc. I mean, that sounds like a relatively modest commitment. Right? There was talk earlier on, I think the Biden administration was pushing China to go for a 30% reduction. They stopped well short of that. Does that fit this general picture then, of a relatively unambitious move from Chinese government?
- [43:29]
David Sandalow
That's correct, Ed. And let me say, you know how to add drama to a podcast. That's very impressive. I'll give some hot takes. And hot takes are dangerous. As you just said this, we're just seeing this NDC which has just come out and I'm just looking at this unofficial transcript. As you just said, I think this commitment to reduce 7 to 10% from a peak year is going to be disappointing to a lot of climate activists, a lot of the diplomats who have worked on the Paris agreement. I think the hope was for a much more ambitious target. The Biden administration, I guess, as you also just said, Ed was looking for a 30% reduction from actually 2025. I think one notable element of this statement, at least in this unofficial transcript, is that there's no peak year stated. It's just presumably by 2030 or whenever Greenhouse gas emissions might peak in China. There's some other interesting elements that I'm seeing here. One of them is to, quote, expand the installed capacity of wind and power solar, wind and solar power to over six times the 2020 level, striving to bring the level to 3,600 gigawatts. Now, at one level, that really underscores how much clean energy deployment is happening in China right now. There's some other interesting elements here that I think are worth highlighting. One of the most interesting is the commitment to, quote, expand the installed capacity of wind and solar power to over six times the 2020 level, striving to bring the total to 3,600 gigawatts. Now, that statement underscores the extraordinary deployment of solar and wind in China today. Six times the 2020 levels by 2035 is obviously a lot. 3,600 gigawatts is an enormous amount of power as well to have in solar and wind. I've seen some analysis. One of the analysts I respect on this a lot, Laurie Miliverta, said a couple days ago that, that he thought the most ambitious target here, or unambitious target, would be around 4,500 gigawatts. So this is less than that. But still the fact that China's increasing its solar wind power by six times is pretty striking over the course of just 15 years. There's also a commitment here to make new energy vehicles the mainstream in the sale of new vehicles that's happening today. The predictions are that more than half of new vehicles in China sold this year will be electric vehicles or new energy vehicles, they call them in China. So I don't think that needs to wait for 2035. This is something that's happening right now. And then another statement here which is interesting is expand the national carbon emissions trading market to cover major high emission sectors. That's actually also already happening. This emissions trading program in China started in the power sector, but is now, they've already announced before this an intent to increase it to eight other sectors. So bottom line, I think there's a lot of statements here of things that are already happening and a commitment that's, I think, going to be seen as relatively weak.
- [46:31]
Ed Crookes
Yeah, that's very interesting. I mean, as you say, Even if it is somewhat on the disappointing side. For people who hope that China will be more ambitious in its climate action, some of the numbers are mind blowing. Still the 3,600 gigawatts of, of wind and solar capacity, I think I'm right in saying what is total US power generation capacity? At maximum it's about 1.2 terawatts, right? So let's say 1200, 1400, it's in that order of magnitude total power generation capacity in the US So China is aiming for three times that just in wind and solar alone. Now obviously it's not entirely an apples to apples comparison because you get a lot more power from your coal plants and your nuclear plants and your natural gas plants than you do from your wind farms and your solar farms. But even so, that is a very, very striking number. So Joe, what's your reaction then to these numbers and the plan that we're seeing out of China now? What do you make of it?
- [47:31]
Joe Webster
Yeah, well, I would just, I would just echo what David said. The one. So with new energy vehicles, as David mentioned, that's already occurring, their battery, like pure battery electric vehicles are already probably over half of all sales in China at this point. So that's, that's a pretty, we'll call it achievable target. Regarding the installed wind capacity, I think there's an energy interesting synergy here between the, the share of non fossil fuels and total energy consumption. So that's, that's the targets being set for over 30%. Currently it's about 10%. We're doing this on the fly. So renewables are about 6 or 7% of all primary energy consumption according to the EIA. And about 3% is for nuclear. So that's a tripling of, of non fossil fuels and total energy consumption within just a little over 12 years from that statistic. So that's pretty interesting. And also too, I'm going to be very curious to see not just how many wind farms and solar farms are deployed, but also where they are within China. So China, the best resources within China for wind and solar are in the west and northern parts of the country. And so for a lot of complicated reasons, but owing in part to political commuth in China, much of the wind and solar capacity has been deployed in less than optimal locations. So it'd be like in the US if we deploy lots of wind farms to say Montana something. Montana probably has probably as good wind resources, maybe like, I don't know, Wisconsin or something. Right. Or Ohio. So those are not necessarily the best locations for setting wind. That's also what China's done. So I'm looking forward to seeing where that's deployed. And the devil's going to be in the details on implementation on this, right?
- [49:05]
Ed Crookes
Yeah, good point, Amy. What do you make of it?
- [49:07]
Amy Myers Jaffe
I mean, I think it's interesting because there was this sort of in the hope community, this feeling that China was going to take over a global leadership role in climate policy. And I think that this sort of conservative NDC where I'm just really being sure that I'm going to be able to meet my target. I'm not doing anything ambitious. I'm not inspiring anybody to raise their ndc. It is kind of like admitting that, well, if the United States isn't there leading, I'm not under pressure. I'm just gonna go with my simplest, most straightforward NDC and not over commit myself, not stretch, not try to inspire others to come along the journey with me. Which is a little surprising given all the discussions we've had because their economy can so benefit from other countries improving and having ambitious ndc. Right. That it does seem a little bit counterproductive from the point of view of their own economy.
- [50:10]
Ed Crookes
Yeah, that is a very interesting question, but one unfortunately that we'll definitely have to come back to on another future show because we are out of time now and we're going to have to wrap it up. Been great talking to you all. David, thanks very much for joining us.
- [50:22]
David Sandalow
Thanks again, Ed. It's tremendous.
- [50:24]
Ed Crookes
Joe, it'd be great to see you again.
- [50:25]
Joe Webster
Likewise. Thank you.
- [50:26]
Ed Crookes
Very glad to be able to share this moment of late drama with you. It's been fantastic. Very glad that we were here when it happened, as it were. Amy, thank you very much indeed. Thanks particularly for hosting us in your class. It's been really wonderful having this discussion here.
- [50:40]
Amy Myers Jaffe
Great to have all of you here and to benefit with my wonderful students.
- [50:45]
Ed Crookes
Absolutely. Yeah. It'd be great hearing from you all. Thanks for your very interesting questions. Thanks for much to NYU for hosting us and above all, thanks to all of you for listening wherever you may be. We really value your feedback. Please do keep that coming. Leave us a review on YouTube, where we are now or on your podcast platforms. And we'll be back very soon with all the latest news and views on the energy transition. Until then, goodbye.