No, solar didn’t collapse Spain's grid

Summary

Open Circuit Podcast Episode Summary Title: No, solar didn’t collapse Spain's grid
Host/Author: Latitude Media
Release Date: July 7, 2025

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1. Introduction

In this episode of Open Circuit, hosted by Stephen Lacy of Latitude Media, the focus is on debunking the misconception that renewable energy, specifically solar power, was responsible for a significant blackout in Spain and Portugal. Joining Stephen are his co-hosts, Kathryn Hamilton and Jigar Shah, along with special guests Laurent Seguelen and Gerard Reed, co-hosts of the Redefining Energy podcast. The discussion delves into the complexities of grid management, the role of renewables, and the broader implications for European energy security.

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2. The Spanish Blackout: Unraveling the Causes

On April 28, 2025, a major blackout affected the Iberian Peninsula, leaving 47 million people without power for nearly half a day. Initial reactions in the U.S. media attributed the blackout to excessive reliance on renewable energy sources like solar power. Prominent figures, including U.S. Energy Secretary Chris Wright, suggested that "when you hitch your wagon to the weather, it's a risky endeavor" ([07:01] Stephen Lacy).

Laurent Seguelen challenges this narrative, emphasizing the structural weaknesses in Spain's grid:

[07:31] Laurent Seguelen: "Contrary to other blackouts caused by weather events, Spain experienced this on a normal day. The real issue lies in the system's fragility due to inadequate battery storage and limited interconnection with the rest of Europe."

Gerard Reed further elaborates on the systemic issues:

[08:02] Gerard Reed: "Electricity is indispensable to our modern life. We cannot afford such blackouts, and this incident underscores the need to rethink and modernize grid management swiftly."

Jigar Shah provides a technical perspective, highlighting the outdated training and infrastructure:

[11:21] Jigar Shah: "The way people are trained to run the grid hasn't evolved since the 1980s. With the surge in solar capacity, we need modern solutions like grid-forming inverters and better data integration to manage the grid effectively."

Key Takeaways:

• The blackout was not directly caused by solar power but by inadequate grid management and lack of sufficient battery storage.
• Spain's heavy reliance on Combined Cycle Gas Turbines (CCGTs) as backup without proper grid modernization led to the failure.
• There's an urgent need for regulatory and technological reforms to enhance grid resilience.

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3. Europe’s Energy Security and the Shift Towards an Electrostate

The conversation transitions to a broader analysis of Europe's energy security amidst shifting global dynamics. The discussion references the Carlyle Group's report highlighting that Europe's clean energy investments are increasingly driven by security and localization rather than just decarbonization.

Laurent Seguelen remarks on the evolving ESG (Environmental, Social, Governance) framework:

[35:43] Laurent Seguelen: "ESG now encompasses economic security and geopolitics. The traditional focus on decarbonization is expanding to include securing supply chains and reducing dependency on volatile regions."

Gerard Reed discusses Europe's precarious position:

[36:14] Gerard Reed: "Europe outsourced its energy needs to Russia and tech to the U.S., now finding itself dependent on both and China. The imperative is clear: electrify to achieve energy independence, a path already exemplified by Nordic countries like Sweden."

Key Takeaways:

• Security has become a paramount driver for Europe's energy transition, overshadowing solely environmental motivations.
• Europe faces challenges in balancing relationships with global powers while striving for energy independence.
• The shift necessitates significant investment in local manufacturing, supply chain diversification, and technological innovation.

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4. Petrostate vs. Electrostate: Redefining Economic Models

A central theme of the episode is the contrast between petrostate and electrostate economic models. Petrostates, exemplified by the U.S., Saudi Arabia, and Russia, derive power from fossil fuel dominance. Electrostates, represented by China and potentially Europe, focus on manufacturing, technology, and innovation to create energy abundance.

Laurent Seguelen supports this framework:

[56:44] Laurent Seguelen: "The electrostate framework is valid. While countries like Canada and Norway also fit this model due to their hydroelectric resources, Europe has the potential to lead as an electrostate by leveraging its manufacturing and technological strengths."

Gerard Reed emphasizes Europe's competitive advantages:

[60:33] Gerard Reed: "Europe hosts numerous international leaders in wind technology, power control software, and utilities. This positions Europe well to emerge as a strong electrostate, driven by the necessity for energy security."

Key Takeaways:

• The electrostate model emphasizes technological innovation and manufacturing to achieve energy independence and security.
• Europe has inherent advantages in sectors like wind energy and power control systems, which can underpin its emergence as an electrostate.
• Transitioning from a petrostate to an electrostate requires strategic investments and policy support to foster innovation and local manufacturing.

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5. Recommendations for Enhancing Grid Resilience and Energy Security

The panelists propose several strategies to address the challenges highlighted by the Spanish blackout and Europe's broader energy security concerns:

• Investment in Battery Storage:
  Laurent Seguelen succinctly summarizes the essential components:

  [28:12] Laurent Seguelen: "Battery, battery, batteries, software, software, software, that's it. And forget about the regulation, just do the thing."

• Regulatory Reforms and Technological Integration:
  Kathryn Hamilton stresses the importance of holistic planning:

  [28:48] Kathryn Hamilton: "We need better planning. All resources must prove their reliability, integrate into holistic planning, and have mechanisms for accountability."

• Enhanced Data Management and Grid Management Technologies:
  Jigar Shah highlights the critical role of data and modern grid technologies:

  [27:32] Jigar Shah: "Energy systems must leverage data and software solutions to manage high renewable penetration effectively. Grid operators need to adopt advanced technologies to maintain stability."

• Supply Chain Diversification:
  Addressing dependence on a single supplier, especially China, is crucial:

  [53:38] Jigar Shah: "Europe must diversify its supply chains for critical components like solar panels and batteries to avoid over-reliance on China, ensuring energy security through diversification."

Key Takeaways:

• Battery storage and advanced software are pivotal in enhancing grid resilience.
• Regulatory frameworks must evolve to support high renewable integration and grid modernization.
• Diversifying supply chains ensures that Europe is not overly dependent on any single external supplier, bolstering energy security.

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6. Conclusion: Europe's Path Forward in the Global Energy Landscape

As the episode wraps up, the consensus among the panelists is optimistic yet cautious about Europe's potential to lead as an electrostate. While Europe possesses significant strengths in clean energy technologies and has the strategic imperative to enhance energy security, challenges such as supply chain dependencies and the need for greater private sector leadership remain.

Laurent Seguelen concludes with a positive outlook:

[58:44] Laurent Seguelen: "Leveraging local value chains and enhancing cybersecurity measures positions Europe well. We are bound to succeed together, despite challenges."

Gerard Reed echoes this sentiment, emphasizing Europe's competitive edge and geopolitical necessity:

[60:33] Gerard Reed: "With a geopolitical imperative and numerous industry leaders, Europe is well-positioned to emerge as a dominant electrostate in the global energy transition."

Key Takeaways:

• Private sector leadership is essential for driving innovation and scaling clean energy solutions in Europe.
• Collaboration and strategic partnerships will be vital in overcoming supply chain and technological challenges.
• Europe's collective action and leveraging of existing strengths can establish it as a formidable leader in the global clean energy transition.

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Notable Quotes with Timestamps

• Gerard Reed on Electricity's Importance:

  "[08:02] Gerard Reed: 'Electricity is indispensable to our modern life. We cannot afford such blackouts...'"

• Jigar Shah on Grid Management:

  "[11:21] Jigar Shah: 'The way people are trained to run the grid hasn't evolved since the 1980s...'"

• Laurent Seguelen on ESG Evolution:

  "[35:43] Laurent Seguelen: 'ESG now encompasses economic security and geopolitics...'"

• Gerard Reed on Europe's Competitive Advantage:

  "[60:33] Gerard Reed: 'Europe hosts numerous international leaders in wind technology...'"

• Laurent Seguelen's Closing Remarks:

  "[58:46] Laurent Seguelen: 'Whenever I buy a system of battery... I create 90% value...'"

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Final Thoughts

This episode of Open Circuit provides a nuanced analysis of the interplay between renewable energy integration and grid stability, using the Spanish blackout as a case study. It also explores the shifting dynamics of global energy leadership, positioning Europe on a potential path to becoming a leading electrostate. The discussions underscore the importance of technological innovation, regulatory reform, and strategic investment in ensuring a resilient and secure energy future.

For more insights into the energy transition and related policy shifts, subscribe to Open Circuit wherever you get your podcasts.

Transcript

[Latitude Media]

Latitude Media covering the new frontiers of the energy transition.

[Stephen Lacy]

Are votoramas in the Senate as fun as they sound?

[Kathryn Hamilton]

I know. Doesn't a votorama sound like a drinking game where every time you hear the word repeal, everybody has to take a shot?

[Stephen Lacy]

Gerard Laurent what is the word you would use to describe what's happening here in the US right now?

[Gerard Reed]

Chaos. That's the only word I would use is chaos.

[Laurent Seguelen]

I've got other Cs for you. Coercion, confusion, crypto, corruption, China, climate, culture, war, cruelty, capture, cluelessness, craziness, collapse, crony capitalism, complacency, coerceness, contempt, court of the medieval king these are all my C's.

[Stephen Lacy]

Did you just rattle that off the top of your head?

[Laurent Seguelen]

I prepared this for some weeks now.

[Stephen Lacy]

From Latitude Media. This is open circuit. When 47 million people lose power, who do you blame? In April, the lights went out across Spain and Portugal and without an immediate explanation, the finger pointing started. Too much renewable energy, declared the critics. Even the US Energy Secretary piled on the blame. There's just one problem with this narrative. It's completely wrong. Now we have the facts and they tell a very different story about voltage control, grid coordination and the urgency of grid modernization. Then we'll revisit the new jewel order with a European twist. As America dismantles the post World War.

[Natural Power]

II global security order and leans into.

[Stephen Lacy]

Its role as a petro state, how will Europe respond? We'll look at how security is reshaping the EU's role as an emerging electro state.

[Natural Power]

OpenCircuit is supported by Sungrow, a leading supplier of PV inverters and battery storage systems. For nearly three decades, Sungrow has provided reliable, affordable technology that meets your energy needs.

[Stephen Lacy]

How?

[Natural Power]

By building diverse, resilient supply chains. Today, Sungrow has a network of suppliers all over the world that ensures developers can get the technology they need to.

[Stephen Lacy]

Keep the lights on.

[Natural Power]

Learn [e-mail] or click the link in the show Notes Open Circuit is brought to you by Natural Power for nearly two decades, Natural Power has provided engineering and consulting services for renewables projects across the US Natural Power supports clients in wind, solar and battery storage with a focus on independent engineering, technical due diligence, energy estimation and developer support. With more than 245 gigawatts of project experience in North America and acceptance from major financiers, Natural Power is responsive, able to meet tight timelines and pragmatic Natural Power works with you to understand, quantify and mitigate risks. Learn [e-mail] or click the link in the show notes.

[Stephen Lacy]

I'm Stephen Lacy. I'm the executive editor at Latitude Media. Welcome. I'm joined as always by my two co hosts, Kathryn Hamilton and Jigar Shah. Katherine's the co founder and chair of 38 North Solutions. Hey, Katherine.

[Kathryn Hamilton]

Hey. So excited to be doing this.

[Stephen Lacy]

Indeed. Jigar is the co managing partner of Multiplier and former director of the DOE's Loan Programs Office. Hey, Jigger.

[Jigar Shah]

Hey.

[Stephen Lacy]

So before we bring in our guests and collaborators, I want to just timestamp this week's episode for our American listeners. We are recording on Wednesday, July 2, the Senate just passed its version of the reconciliation bill that makes changes to clean energy tax credits. It's going to go over to the House now. This is an ongoing situation. You're going to hear this episode on July 7th. So so much is going to probably change between now and then. Catherine, what's the state of play as we know it right now?

[Kathryn Hamilton]

Yeah, so the Senate passed the bill with some changes to the House bill that would make it slightly less horrible for solar and wind. Still not great, but slightly less worse. And then it went over to the House side. They're supposed to take it up this week. And again, you're gonna hear this after all of this. And with the President hoping to sign a Bill on the 4th of July, our independence Day too, with lots of fireworks, celebrate something that will turn us back in time not only from a lot of major social programs, but also in clean energy.

[Stephen Lacy]

Yeah. And we're going to have a more real time conversation on what it all means for us infrastructure later in the week. But this week we have a special treat. We have not one, but two leading European energy investment experts. Here with us, Laurent Segolen and Gerard Reed, the co hosts of the Redefining Energy podcast. Laurent Seguelen Philippines founded megawattx, a London based energy transition investment platform. He's been trading and investing billions of euros in clean energy for over two decades. Laurent, welcome.

[Laurent Seguelen]

Well, thank you so much for having us. You know, it's a very emotional moment for us because the energy gang, the original Energy gang, was our inspiration when we set up our podcast. And we, I mean, we. I'm getting very. I'm getting very emotional. So I just have to say one thing and then I let Gerard speak. Times have change and times are strange Here I come But I ain't the same Mama, I'm coming home.

[Stephen Lacy]

What a good way to start the show. I love it. Gerard, can you beat that?

[Gerard Reed]

Oh, my God. What can I Say after.

[Unknown]

Is Jarrod also going to sing?

[Gerard Reed]

Yes, I am definitely not going to sing, but I do want to say he's dead. Right. Because myself and Laurent, you know, were in a pub one night having some beer and we were talking about your podcast and we were thinking, fascist. We could do something similar, couldn't we? So we did. And it's so great to be with you guys here today. It's brilliant. Really looking forward to this exchange.

[Stephen Lacy]

Excellent. Well, Jared Read is a founding partner of Alexa Capital and an expert on commodities and energy and mobility transitions. It's really good to see you.

[Gerard Reed]

Great to be here. Great to be here.

[Stephen Lacy]

Well, we brought you both here to talk about this really critical moment for Europe. And we are going to start in Stock Spain, where on April 28, the entire Iberian Peninsula went dark for nearly half a day, crippling communications and transportation infrastructure. And the cause at first was a bit of a mystery. And almost immediately in the US we saw the usual suspects, people like Michael Shellenberger and Robert Bryce out there saying the cause was renewables. We saw Fox News featuring segments blaming solar. U.S. energy Secretary Chris Wright weighed in, telling CNBC, when you hitch your wagon to the weather, it's a risky endeavor. We decided to wait until we had an from Spain's grid operator and now we have it. And it paints a very different picture. So who wants to take a whack at explaining what happened in more detail?

[Laurent Seguelen]

The fascinating thing in Spain is that contrary to all other blackouts, South Australia 2016, or Storm Uri in Texas, or the heat waves, there was no weather event. It arrives on a kind of normal day. So you need to go much deeper into the structural route. And the fact that Spain has installed 30 gigs of solar in the past 10 years and there's hardly any batteries and there's hardly any connection with the rest of the continent. So they have created the system, has become more fragile. Now, in order to balance the system without batteries or interconnection, you know, you need to use your CCGTs as backup. And they have Spain has 30 gigawatt of CCGTs. But get what the whole system was not managed. That's how we see it. Gerald, maybe a bit more granular explanation.

[Gerard Reed]

Well, Laurent, I think actually I want to say something slightly different, which is the question is what can we learn from this? Right? And I tell you what I would say first and foremost is that electricity is indispensable to our modern life. Right? And you know, I had a, you know, one of the Portuguese, the Portuguese utility was speaking to one of the senior executives there and he made a point. He couldn't even get into his home when the power failure happened because guess what? He had an electric doorbell. And this is the biggest point that I would make. And by the way, this was only a blackout, right, for you know, a day, wasn't even a day. But can you imagine, you do this for three days, what happens to society? And so the learning that we would take all of it out is just how serious blackouts are. And we cannot afford for this type of thing to happen. And by the way, it's not just again about blackouts, it's also we need to think about resilience of the system in general, whether it's climate related, you know, storm damage, you know, fires, could even be terrorist attacks. We need to think about these in a day, in a way. So the learning that I think of it was we need to rethink the way the system works and the way it's managed. And we need to do this very quickly. That's the learning I take out of it. Right.

[Stephen Lacy]

Certainly Texans here know a lot about multi day blackouts and the consequences. Let me provide a really succinct explanation of what happened according to Red Electrica and then I want to get you all to weigh in on it. So it wasn't a necessarily a renewable energy failure. It started with, according to them, a solar plant sending frequency oscillations through the grid, which should have in theory been manageable. But then the conventional power plants that are paid to stabilize the grid did not do their jobs and instead of absorbing excess voltage, they pumped more in and the result was this 27 second cascade that turned off the lights for 47 million people. Catherine, what do you understand happened here? Was this an issue with conventional generators not doing their job? Was it solar's problem? Like how do you sort of think about the who's responsible here?

[Kathryn Hamilton]

Yeah, well, according to Red Electrica's report, they were completely not responsible. When, when I was reading it, it was super confusing because I tried to follow the TikTok of everything that happened because they went sort of minute by minute and you know, the voltage would drop, there would be an OSC and then they would say but that should have been manageable and this should have been manageable and this should have been manageable. And it just seemed like it was really a cascading set of events because there wasn't this overarching, as Gerard says, like this overarching systems thinking around what's really going on. Here it was very, very hard to actually decipher from that report what happened and if anybody was really to blame, other than maybe the utility in some way. But I would love to hear the folks who are actually living there.

[Stephen Lacy]

Yeah, well, I want to get your take jigger here. What do you take from this Red Electrica report on where the blame lies? Was it the fact that these conventional power plants that again were paid to stabilize the grid, were not providing those services?

[Unknown]

Yeah, I think when you look at the through line from Yuri to, you know, the Christmas surprise in, you know, 2022 to this project, you know, the challenge is, is that the way people are trained to run the grid is the same as they've been trained in the 1980s.

[Jigar Shah]

Right.

[Unknown]

So they absolutely rely on inertia, rely on other things. I think today we are in a new place because solar is so large that you need access to data. I mean, the big challenge that I see with all of these projects is that solar projects are just so new. And remember in the 1980s, we banned solar from providing all of these services. It's not that inverter based systems can't provide some of this VAR support or frequency support or other things. It's that they're banned from doing that. We updated IEEE 1547 recently to allow for some of these services to be provided. But many of the inverter systems that are installed today don't have these services. And so one, most of the independent system operators don't get the real time data on solar projects that they have from thermal projects. And so we need to correct some of the data pieces here because that allows for folks to curtail load or curtail generators, do all the things that they normally do when they have that data. But the second piece of it is, as we are reminded over and over again, solar is not capacity. Even though we want it to be capacity. Batteries are capacity. And so ultimately, as Laurent suggested, the Iberian Peninsula has to catch up to where the UK is, to where Germany is, to where the places are that have a far more healthy ratio of batteries to solar.

[Jigar Shah]

Right.

[Unknown]

I think when you think about where we are headed in a very high penetration grid, batteries is what you rely on for capacity. It's not the solar panels themselves.

[Stephen Lacy]

Yeah, so Laurent, you want to jump on that. You talked about the massive Spanish solar capacity, but very little battery storage and the lack of a integrated regional grid. Where do you put the blame here? Are you sort of pointing to the lack of storage as the big problem.

[Laurent Seguelen]

At the end of the day, it's up to Radio Electrica to manage the systems and they have to work with what they have. So the batteries are going to come. But that's true what Jigar said, it comes much later than in other countries. So if you don't have batteries, if you don't have interconnection, you need to work with your gas fleet. And the way they have managed with the gas fleet. Now of course I read the report from the next day, Albert Rola was putting another counter report saying sorry, it's not the gas plant, it's you. Now the trick is nobody needs to take the blame because the next day the insurance company are going to arrive and say sorry guys, I've got X billion billion of losses report says is on you. So now you're going to pay. So you're going to see a lot of reports coming blaming the other guys because nobody wants to be named responsible for financial reasons and at the end of the day they're just going to kick the can down the road. Now Gerard is right. Everybody know what needs to be done. Interconnection, that's going to take years. So batteries, yes. The short term or the medium term. And in the short term they need to manage better and as Jigart said, said maybe they have grid following inverters, they need to switch to grid forming inverters. But look, there are a lot of solutions short term if they manage better.

[Kathryn Hamilton]

Is there a regulatory solution?

[Unknown]

I think that's exactly right, Catherine, which is that I think that as the solar industry and the wind industry and the battery industry continue to scale, they need to be treated like infrastructure.

[Jigar Shah]

Right.

[Unknown]

And so the regulator needs to start saying here are the additional costs that you need to incur to be able to manage a high penetration grid in a way that our grid operators are familiar with these tools. I think that there are a lot of ways for us to theoretically run a grid, frankly using computers and AI and all sorts of stuff.

[Jigar Shah]

Right.

[Unknown]

But today we are in a place where the grid operators run things the way that they're comfortable in running things and when things that are not familiar to them come forward, then you know, things get shaky.

[Jigar Shah]

Right.

[Unknown]

And I, I like, I just think that when you're 80% of all grid connections in the entire world, which is where solar and battery storage are today, we have to recognize that we need to bring everyone along with us. I don't think that solar was to blame directly for this blackout, but I do think that this is going to increasingly happen as there is a shift really to higher and higher penetrations of renewables. And the grid operators are not really set up to deal with that.

[Gerard Reed]

Yeah. The thing that I just want to add to it is, you know, when I hear a solar plant goes down, what was it, 300 megawatts? Now, that's nothing in the larger scheme of things. And I just give you a really simple example. I mean, we've had in the UK an interconnector going down 1.4 gigawatts. Well, guess what, there was no blackout. Why? Well, because batteries came in straight away, right? Immediately came in. And technology wise, it really what you need to have is grid forming inverters in there that can react much quicker than a synchronous generator can. So for me, there's a technology solution there. And you know, I want to say, and I understand why Red Electric don't put the hand up and say, listen, we made a mistake, but the reality is they did because there's just no way around it. But it's political now because the Spanish government is under pressure already and they don't want to take blame or responsibility for this. But that's why I go back to what can we learn from this? And what we can learn is that we really need to make sure that we have the technologies in place to make sure this type of thing doesn't happen again. And I will say, as we record, I just want to give you an idea what happened in the power markets in Europe this week. So what we had is massive heat waves across Europe, which means massive amounts of solar on the system and huge amounts of air conditioning. Okay? I mean, and then guess what? No wind across the whole continent, okay? And no wind means that you can imagine when the sun goes in, what happens. Power prices explode. Like they go from zero in some markets, €1,000amegawatt hour. But the system didn't fold over, right? Because it's got its incredible resilience within that system and the market worked. And that just to give, I want to give an example of it does work. The Spanish just did a really bad job. That's what I just want to say, right? Really bad job. That's what we take out of it. And it's not a European problem for me. It is a Spanish problem.

[Stephen Lacy]

Jigger, if I were to bring you on Fox, I just want to distill this down here. Jigger, if I were to bring you on Fox News and I asked you, solar power is to blame, right? What would be your short, pithy answer on how we place blame for this.

[Unknown]

Particular incident that all technologies basically have to be coordinated like an orchestra. And when the conductor fails to do their job, it's not the fault of any one section of the orchestra that the sound is not beautiful.

[Jigar Shah]

Right.

[Unknown]

It's the fault of the conductor. And so in this case it is again the fault of the conductor. Now does each section need to have its own, you know, session where they need to like tighten themselves up, they need to provide better, you know, leadership for the rest of the orchestra? Yes, but ultimately the conductor has to take the blame.

[Stephen Lacy]

So Spain now has this decree, this anti blackout decree. They are really leaning into renewables and distributed energy as part of their efforts to modernize the grid, strengthen the grid. What do they need to be doing as part of this decree to make sure that that expansion and those standards are meeting the right problem?

[Laurent Seguelen]

Look, there's been so much renewables put in the system that if you look at the load factor of the CCGTs, if you take a, you know, British or Texan, you're in the 45 to 50% load factor, so CGT can make a reasonable living. But in Spain you're down to 25%. So in fact those CCGTs are really fighting for relevance. On the top of that we don't have cheap gas, we need to import expensive gas. So they're really doing the minimum and there is this permanent stress between the gas operators and the system. So they want more money and they say, oh no, no, we don't have the budget to do that. So that's, that's the difficult situation. Which means that somehow maybe there is a temptation to organize mini crisis so they can be paid to solve those crises and whatever decrease that stress inside the gas or the balancing system in Spain is going to remain because frankly, you don't make any money by having to import expensive LNG and running only 24% of the time. So that's an economic reality.

[Kathryn Hamilton]

Yeah. I just wanted to give a couple of examples of times when we've had either blackouts or potential blackouts and what the technology solutions have been in the US and North America generally. So in 2003 I was in the Adirondacks expecting my fourth baby and we had the Northeast blackout, Remember it hit the US and Ontario. I just thought since I was in my cabin it was like the usual, which is we always get blackouts. But what it ended up being was a tree on a branch in Cleveland. It took them a year to figure out that that was the cause of it. This was in 2003. So it was a long time ago and since then of course, the US has invested in grid technologies like synchro phasers that are giving them more visibility to the grid. You Fast forward to 2017 when there was a solar eclipse, remember, and it was going to take out. It started in California, it was going to be worst in California. And I was actually sitting in the California ISO when they were preparing for it and trying to fig how are we going to manage the system as all these solar panels go down. And what happened was 750,000 Nest thermostats were able to pre cool homes so that they could turn air conditioning off as solar came off of the grid. And it managed 100 million solar panels and was able to take on over 5% of what was lost with solar just through nest thermostats. So that was in 2017. Fast forward to today where we have, as you know, all of the issues around bad weather, Hurricane Yuri and in Texas, the system operator ERCOT has just put out a report that says our blackout risk has reduced from 16% below 1%. And why is that? It's because we have almost 10 gigawatts of capacity, over half of it in solar and 4 gigawatts of batteries. And they are saying this is going to reduce our risk of blackout. So it's very interesting the way over time and it's been over decades, we've been able to come up with technology solutions that eventually the grid operators are realizing, ah, these are the tools that we can use. I think a lot of that has to do with innovation and more systems thinking, but it's hopeful for the grid, I would think in Europe as well.

[Unknown]

Well, and this is what I was suggesting before, around what it looks like to be a grown up industry that wants to be viewed as infrastructure and not just a bespoke solution that gets integrated into something. Like when you look at the way that California runs, they generally hate virtual power plants and distributed energy resources. They have 3,000 megawatts of behind the meter batteries and they haven't integrated the system.

[Jigar Shah]

Right.

[Unknown]

That's a choice that they make.

[Jigar Shah]

Right.

[Unknown]

They want, they pine for the past, they don't want to embrace the future. By the way, the same thing is true in China.

[Jigar Shah]

Right?

[Unknown]

China curtails so much of its renewables because it has a software integration problem which is largely being solved by startups in the US and Europe. Now those ISOs though need to embrace those software solutions like we've talked about, Pearl street for instance, and how they can do an interconnection study in 24 hours, that normally takes GE and Siemens engineers 22,000 hours to do.

[Jigar Shah]

Right?

[Unknown]

These are all technologies that we've invented. When you look at ERCOT and how accurate their wind forecasts are now, they can predict an hour before exactly what's going to happen an hour in the future. Which matters because it takes that full hour to ramp up the natural gas engines, right? And so that technology all exists and it's all been proven in different independent system operators. But every independent system operator takes its own sweet time to figure out when it wants to pay for those software solutions, right? And then Laurent and his investment firm ends up being like, damn you, why do we need to raise more money for this company when they could get more revenue? Why can't we just get people to buy this software? Why can't we get them to implement these solutions faster? So I would suggest to you that again, this is a cultural problem, right? Which is that people are used to doing things that the way they've always done things, and they are trying really hard to say, how do you make your solution look exactly like what I'm familiar with? And unfortunately, we can only do that that most of the way. We can't do that all of the way. And so there are actual real changes that we have to make. But the beauty is we have all these solutions, as Catherine has suggested. But the challenge is in every single market, and I mean every market, whether it's the Northeast, United States, California, Illinois, the Midwest, Independent system Operator, pjm, the Iberian Peninsula, every one of them seems to have their blind spots. And that is the responsibility of the clean energy industry, to fund organizations that actually fill those blind spots, right? You have to pay more money at the national association of Regulatory Utility Commissioners Conferences, you have to pay more money at all these gatherings to educate people. And we have what you call been skimpy on those budgets.

[Gerard Reed]

What I'd add to you, Jigar, is I thought what you said is very interesting, which is a cultural problem. And be clear, if you were a grid operator, you're not paid to innovate. You've no incentive to innovate. What you've got is one incentive and one job, and that's to keep the grid up. That's all. And as long as you do that, you're happy. And you see what happens in the Spanish case. And even when they don't keep the grid up, they blame someone else.

[Unknown]

And the one thing I think we do need to keep in mind, which maybe I should have said earlier in this segment is that the reports that we've gotten so far are preliminary reports that are what you call political in nature, in my opinion. I think when you think about what Catherine suggested for the 2003 blackout, like that took a year to figure, really figure out. And this will also take a year to really figure out. And so I just want to make sure that people understand that the actual scientific report that we are waiting on will take a lot longer, probably in 2026, before we get that published.

[Stephen Lacy]

So we've walked through a bunch of different solutions. I want to wrap this part of the conversation up and go around the horn. If you were to make recommendations for any sort of regul. Change, technological change. Let's sort of distill this down for our listeners. What are the big changes we need to see?

[Gerard Reed]

Maybe I'll start with the sort of big picture. Right. Because for me, the big picture is energy security, and that is we cannot do without electricity. So we have to rethink. It's not about renewables or anything like that. As I said, there is a whole pile of other stresses that are in the power system in the 21st century. We have to recognize those stresses and those risks and change how we manage the grid. Because for me, it starts with the management of the grid and the future management of the grid is all about data.

[Laurent Seguelen]

Yeah. So Gerard is a big strategist. Me, I'm a very simple man. So I just say battery, battery, batteries, software, software, software, that's it. And forget about the regulation, Just do the thing.

[Stephen Lacy]

Katherine.

[Kathryn Hamilton]

Yeah, I would say better planning. We need a lot better planning. We need all of the resources to know and to prove what can they provide, when they can provide it, be called upon, be penalized if they're not there, and actually have that all built into a much more holistic planning scenario.

[Unknown]

Yeah, I agree. I mean, I think that I'd say that we actually have all the data that we need to meet the transmission system operator and distribution system operator's requirements. But we don't often send it. And when we do send it, they don't often read it. And so figuring out exactly how to do that is the software piece that I think Laurent was talking about. I think on the batteries piece. And to Catherine's point, I'm planning. I mean, there does just need to be a recognition that transmission will always be the bottleneck. It was clearly in the Iberian Peninsula case because of their interconnections to the rest of the grid being weak. But it will always be the bottleneck. And so when that is the case, the clean energy solutions and solar and wind have to be forced to use the the transmission system more efficiently. That means the ratio of batteries to renewables on each individual circuit needs to be managed. They can either be co located, they can be separated, but they actually have to be on the same circuit. And the same thing's true as on the demand side. You're going to start putting way more batteries in to optimize the transmission grid from that side. The transmission grid itself can actually transport double, triple the amount of power that we currently transmit with that system. But the problem is that when you think about exactly what the timing is of when everything gets used, you need a lot more batteries to manage the timing. And so that's why I think whether it's distributed capacity procurement that folks are doing in the US or whether it's virtual power plants or DERs, or whether it's just utility scale batteries, that planning function is something that is being done in a haphazard way today.

[Stephen Lacy]

And I guess I'll round this out by saying one thing that stood out for me in the Red Electrica report was that these conventional generators that tripped offline were supposed to provide voltage control. They were legally obligated to provide voltage control and they did not. So I don't know if that's a regulatory enforcement issue, if that's a communications issue, but certainly that is a big piece of what happened here. So what I take away from this conversation is they need to do a little bit or a lot of everything.

[Gerard Reed]

Well said.

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[Stephen Lacy]

Let'S move on to a much bigger story about European energy security. So back in April we had a conversation about a report from the investment firm Carlyle called the New Jewel Order, which argued that global investment flows in clean energy would be more influenced by security and localization of supply than decarbonization. And we asked, are we leaving the net zero era and into the energy security era? And one of the precipitating factors of all this was America's changing role on the global stage as the US leans into its role as a dominant petro state and pulls back on its post World War II security commitments to protect supply routes, countries are reevaluating their energy security and creating what Carlisle's Jeff Curry says is peak trade of fossil fuels. So a sequel to that report is out. It's focused squarely on Europe. It looks at Europe's defense imperative as America pulls away. And the plan argues that Europe needs to spend 9 trillion euros over the next decade to build a very different economy, one with electrons and local supply chains at the center, largely for security reasons. This pairs really nicely with another analysis from two Columbia University scholars arguing that we're in the middle of this split between two fundamentally different economic models, the petrostate versus the electro state. Petro states like America, Saudi Arabia, Russia control energy through scarcity, through dominance of choke points, power through barrels and pipelines and electrostates, particularly China and Europe build abundance through manufacturing advantages, through technology, and generate value through innovation Rather than extraction. It's a very simplified way of looking at things, but I think that's how you define the difference between petro states and electrostates. So America is now really leaning into, as I said, the petro state strategy. And the question is, can Europe join China as a leading electro state and increase both its security and competitiveness? And as it does, what can we learn from Europe's malinvestment Renewables that was clearly pioneering but also very, very costly. So firstly, Laurent, do you agree with the assertion that security is becoming a more powerful force for Europe's energy transition than decarbonization? How is that unfolding?

[Laurent Seguelen]

Yeah, everything changed. So nothing changes. It's still esg. Esg, except now, and I quote, Liam Denning from Bloomberg, ESG means economic security and geopolitics. So that's the new esg. The second is the Jeff Curry report was delivered in person by Vice President J.D. vance at the Munich conference. And Gerard, were you in Munich? I mean, the message was kind of loud and clear.

[Gerard Reed]

Well, the message was loud and clear, which is the future is fossil fuels. Right? That's what we got from the US And I think what I would say is Europe's in a sort of difficult situation because at the end of the day, we outsourced our energy future to Russia. That hasn't worked out. And now we're very dependent on the United States, but we're also dependent on Saudi Arabia, et cetera, et cetera. And with sort of the geopolitical situation at present, you sort of say, oh, what can we do? Well, there's only one thing we can do and that's move towards energy independence. And the only way you can do that is to electrify. Now that's the big picture, Stephen. So I think we're all clear. That's what we have to do. It's not clear whether Europe is going to do that or not. That's what I just want to say to you. It is clear that China is going that route and we do need to go that route. But geopolitics are difficult. And what I mean by that is the geopolitical situation is that Europe's very, very tied into the United States. And to break away from the United States means also breaking away from fossil fuels. Is that really going to happen? I'm not 100% sure. I hope it does. And what I would add though is that the way forward is definitely we have examples of the way forward in Europe and it's called the Nordic countries because if you're in Norway, Denmark, Sweden. These countries have electrified their economies already. Right. France to a certain extent as well, but particularly the case of Sweden. Sweden was totally unimpacted by what happened with the, with the Russians cutting off the gas to Europe. The reason was because they don't use gas. Right. They use minimum amounts of it. So it's very clear that is the way going forward. But I would say the bottleneck in all of this is Germany, because Germany's strategy was always to, you know, integrate close to the Russians. And industry has been really badly impacted by the fact that they're now taking expensive LNG in. And I've got your German economics minister who wants to go and build more gas power stations, which sort of doesn't break the addiction. So, as I said, definitely we know the path forward and we hope that Europe goes down this road, but it's not clear where we're going to go down there. Now, Lauren might have a different opinion on this, but I certainly don't think it's clear.

[Laurent Seguelen]

Yeah, look, it's a change of paradigm. And if you look 20 years ago, the energy situation in the US and Europe was absolutely the same. We were literally importing molecules. And if you look at the price of power in the US 20 years ago, it was above Europe. When people say, oh, the price is crazy now in Europe up. No, if you just take the price of power 20 years ago, you add inflation. This is the price you get now. So the price has kind of followed inflation, but in the US, air quote was at above $60 20 years ago. If you add inflation, that's $100. Now the price is around below 30. So in fact, in the US the price of power has gone down a factor of three. The reality is, and it's all because of fracking and the Permian and everything, there's been an energy divergence. And of course the politics follow. And the politics is, the reality is now our interests are not aligned anymore because you enjoy energy dominance and we are left holding the bucket like morons. And yeah, of course we're going to do something about it. Now, the alliance with China, yeah, we take a lot of Chinese batteries, Chinese solar panels. There's no tariff, no problem. Look, at some point you need to bring answers. They're not pretty, but, you know, that's what it is.

[Stephen Lacy]

Certainly historically, Europe more than in the US has been motivated in its energy transition for environmental reasons. And I'm wondering how you think security plays into Europe's motivations now compared to environmentalism and Climate action. So are we seeing security urgency and ownership of supply chains becoming the dominant force like this report suggests?

[Laurent Seguelen]

Oh, yeah. I mean, security after, you know, the invasion of Ukraine by Russia. Yeah, of course. You know, it's changed everything all of a sudden. Change everything. And then you add AI and all those type of things. I mean, the two twenties are harder, they are more digital, they are more disruptive, and people who stick on their 210s software view of the world with Kumbaya, let's go to cop, let's decarbonize, let's all be friends. This area is done. Gone. It's gone. The whole ESG thing, which was basically you build a portfolio of shares, you go long tech, short oil, and then you say, oh, look, ESG is so profitable. That was not true. So we had a bit of a series of shock, and we're adapting to those shocks.

[Unknown]

I think the part of the story that people miss is that the United States coming out of World War II really had extraordinary amounts of manufacturing capacity. And we were able to use a lot of that manufacturing capacity to make planes and tanks and all sorts of other stuff. And then when peacetime came, we turned it into an engine for the world. The reason our defense was so strong though, was it was less than 5% of the supply chain, right? So most of it was used to make civilian equipment and 5% of it was used to make defense equipment. Today, our defense supply chains are used only for defense, and they are horribly mismanaged today. I'm not even sure we could make a carrier if we wanted to. That is how bad our ports are and our shipbuilding capacities.

[Jigar Shah]

Right?

[Unknown]

And so one of the things that Europe has to figure out how to do is to avoid some of the problems that the United States is in today. So it needs to make sure that when it increases its budgets to 5% of GDP to defense, which many European countries have done, that it is based upon civilian supply chains, not based on defense supply chains, because defense supply chains are horribly corrupt and horribly inefficient.

[Jigar Shah]

Right?

[Unknown]

And so it's just one of those things that you just cannot build a modern society on pure defense supply chains. And the US is falling off a cliff because we've ended up there. And so, like, that takes real planning. And that's the part that scares me the most, right? Is that when you look at what Japan has done around its industrial strategy, it has done things through these Koretsus, right? In Korea, it's through the Kaebols. And these are major industrial powerhouses that play both roles. So you start to. They see conversations around VW taking some of their factories and turning them into defense facilities. That makes tons of sense. They know how to manufacture stuff at scale, at very low cost. But if VW starts getting 80% of its revenues from defense, you will see VW become sclerotic, which is what's happened to many of the supply chains in the United States.

[Jigar Shah]

Right.

[Unknown]

And so I just think that people have to be careful. We have this extraordinary opportunity in front of us to use technology that has largely been invented in the west and scale them up in these places. The other thing I would say is the European experiment, which is this sort of EU hybrid, but each country sort of runs itself, has sort of led to the fact that you don't have this transfer capacity, for instance, between countries on the transmission grid. It has led to a lot of these other challenges. But one of the other opportunities that it presents is there are many low cost areas of Europe. So whether it's Hungary or Serbia or some of these other places, you can manufacture stuff really dirt cheap there even today.

[Jigar Shah]

Right.

[Unknown]

So the question becomes, how do you get the political consensus across all of these countries to actually manufacture things in places of low cost in Europe? Because right now, Europe really still operates as if France needs to manufacture its own stuff and Germany needs to manufacture its own stuff, and other people need to have their own, like, sort of companies that are dominant in their countries. And that's not really the lowest cost approach. That's one of the benefits of the United States is that you don't need a passport to cross state lines.

[Jigar Shah]

Right.

[Unknown]

You have this ability to just do stuff in Georgia or do stuff in Florida or do stuff in Wyoming. And so I think one of the big challenges with the EU experiment in this moment is that they're going to need to figure out whether this moment is the time where they tighten up the coordination across all of the countries or they still operate as a confederation of independent countries.

[Stephen Lacy]

Gerard Laurent, what are Europe's advantages or disadvantages in scaling up manufacturing, specifically in energy and clean energy? What do you make of that?

[Gerard Reed]

Well, let's maybe talk about the difficulties that we have, right? And then we can talk about the advantages. So the difficulties that we have are really geopolitical, which is, remember, we outsourced our energy to Russia, we've outsourced our tech to the US and we've now exported our industrial technology base to China. And we're stuck in the middle between these three nations or these three countries that we've precarious relationships with each of them. And that's the real big challenge for us going forward is how do we manage the relationships between these three, three countries going forward? I don't know what the answer to that is, but it is, it's the critical challenge because we don't have the technology. You know, we rely on Microsoft, Google, et cetera, et cetera. If you want to talk about, you know, electric vehicles, for example, sorry, the best electric vehicles in the world are Chinese. They're byd, without a doubt, Right. That's a challenge for the automobile industry in Europe, right? So that's the, that's the challenging environment we have. Now let me talk about the advantages. What we have is in certain industries, we are still world leaders, right? So if you take the case of wind, right, Vestas is still the biggest wind turbine manufacturer in the world, right. We've got incredible grid companies across Europe, right. Whether it's a Siemens or an ABB or if you want to build power cables or something like this, again, Prismium, all these words. So we've got great advantages there. And I think the other area that we've very great strength is the whole area of power is control. And actually power controls, whether they be semiconductors or whether they be software, that's the strength that Europe has. And so we have to build on that. But that requires us to change our attitude a little bit to realize that, listen, we're not necessarily going to be the biggest in the world at something and maybe we need to partner up with China, maybe we need to partner up with the US So there's a thinking change that's also needed in Europe. But we definitely still have industries in the energy space where we're leading. And that's the advantage we still have.

[Laurent Seguelen]

We were absolutely amazed when the IRA came out. And this is really rich people luxury. And analyzing the IRA, probably from a European point of view, 40% made absolutely no sense because you were so. How do you call that? Profiligate, which unfortunately we can't do. And now you're back to reality. And they're going to take all the subsidies and that's it. We're a mature industry. So rip the Band Aid and do it in one go and go with it. And the price of power is going to go up in the US It's a very tough moment. But look, I count on your animal spirit and you'll get through it. So, yeah, a lot of things going to be done by reaction. I take an example, Rare Earth, everybody's Complaining about the rare earth. Well, in France, there's a plant, we used to do half of the rare earth processing in the world. 20 years ago it closed because of China. But the plant's still there. You can switch it back on boats. Yeah, we do a lot of cruise ships. Okay, are we going to do some submarines tomorrow? Yeah, maybe it's there. And the advantage we have compared to the US Is we are much more compact. Everything is two hours flight from where we are. And people speak different language, but they think the same way. And when we see Russia, we see your administration, we see China, I can tell you people understand very fast whether interesting. So, yeah, we'll muddle through that. Not brilliantly, but we'll get through it.

[Stephen Lacy]

Catherine, we've talked in multiple episodes, in our most recent episode with Kim Zhu about how a lot of investors from around the world and in the US are looking to Europe. How do you think Europe might benefit from America's current retrenchment in clean energy?

[Kathryn Hamilton]

Well, I don't think anybody in the globe benefits from retrenchment from clean energy, but I would say that the U.S. spends 13% of our federal budget on the military. And that sounds terrifying, except that the military is also the source of a lot of innovation that has big impacts on civilians and not just from a military standpoint. So, for example, darpa, the Defense Advanced Research Projects Agency, of course, famously help inspired ARPA either, which is at the Department of Energy. And that's kind of like startup technologies, because the Department of Defense can take a little more risk. They can say, we're willing to try this experiment if it's gonna help us somehow deploy what we need to deploy, and if it has other benefits, that's great. We also, of course, have a system where the private sector is very, very involved. So it's not like state owned technologies, state owned resources. But the other big piece piece is the Defense Production Act. And so this is a fund that can go to, well, does go to private sector companies based on national defense, emergency response, essential goals and services that are declared by any president as being a crisis. And it doesn't have to be a wartime crisis. It can be any crisis. So for example, during the Biden administration, he said, we have a climate crisis, so what are we going to fund through the Department of Defense Defense. So they funded critical minerals, heat pumps, electronics, components. They're still funding like workforce, mining, geological, environmental, engineering, metallurgical, all this workforce that we need because we need so many critical minerals right now, no matter what we do fabrics, they've done aluminum battery materials has been a big thing. Now President Trump now has said we are our emergency is for energy supply and infrastructure. Well, that could mean transmission. It doesn't necessarily have to mean coal plants. I think he would like for it to mean coal plants, but supply chains, et cetera. So we can put our Department of Defense to work on things that are considered important from a national security standpoint, that are also from an energy security standpoint, and work our innovation through that. So we see, my company sees, sees the folks that we work with that are really always interested in non dilutive funding and programs through the federal government, but they see them drying up on the civilian side in a lot of ways. But then on the defense side they see those growing. And I think that's something to keep in mind is like our Department of Defense does a lot more on innovation than we necessarily think about when we think about security.

[Unknown]

The one thing I would say that the Carlyle piece focuses on is supply chains. And I feel like that is something that Europeans never care about and it's something that they're going to have to care a lot about. I'll give you an example. The Europeans love getting solar panels for 9 cents a watt right now from China. There are so many solar panel manufacturers that can manufacture in Turkey, in Jordan, in Ethiopia, in India, and at 13 cents a watt instead of 9 cents a watt.

[Jigar Shah]

Right.

[Unknown]

And that is more expensive. I get it. But they should want the diversification of the supply chain for a technology that they depend on to decarbonize their grid. And I think that they will need to be very vigilant around not getting addicted to China.

[Jigar Shah]

Right.

[Unknown]

Like it is not good for them to have 80% of their supply chain coming from one country. It is important for them to strategically invest in other in the world, especially where USAID has taken a step back out of the United States. And the Europeans can play this critical role in being the offtake agreement for other countries, building up their manufacturing base in their countries. And the Europeans have all of the expertise that they can share with those countries and help them to industrialize their countries. But I think we're in this weird spot where the US has always been focused on this and I think even the Trump administration is focused on this, this. But it's not clear to me that the Europeans are focused on this. And that, I think is what scares me the most around. What the Carlyle group has talked about is if, if the Europeans decide to just say, you know what China's so good at scaling this stuff up. Like let's just do that and we'll do the finished products over here in Hungary or some other place like that would be a huge mistake on their part.

[Gerard Reed]

So I, I, I'm going to say it's game over in solar. So I'm not even going to try and compete with the Chinese in solar. Makes zero sense. They're technology leaders. They have the scale. Complete waste of capital. However, there's one area which is not and that is batteries. Because batteries is critical not just for our power system but to the future of the automobile industry, which is critical for Europe. But there's an issue there as well, which is China is leading in the technology as well. The biggest battery manufacturers and technology leaders are all in China. So how do you compete? I actually think you cannot compete by trying to go it alone. We've tried this in Europe. We have Northvolt complete and utter disaster. 10 billion put into it and nothing out of it. So we have no choice but to compete with the Chinese. You probably go, okay, if we're going to do that then we really need to cooperate intensely with the South Koreans and the Japanese. That's one possibility. Or the second possibility is you say fact that we're going to go and compete, we're going to actually cooperate with the Chinese in a different way where what we did with them 30 years ago, where we went and did joint ventures with them, you do the exact same thing here. So my view would be very, very different. You have to, if you're going to try and beat the Chinese, you have to beat them at their game and that means cooperate with them firstly and then learn from them and then see if you can leapfrog them.

[Stephen Lacy]

I want to wrap up with this petro state vs electro state framing once again and revisit this. Laurent, you flagged this piece for us on this dynamic and this split between electrostates and petro states. Do you think this is a helpful framework for looking at the world and do you think Europe will emerge as a powerful electro state?

[Laurent Seguelen]

So first of all let's give credit to who coined the term electro state. That's our friend Kings Mill Bond. I think it's a very valid framework to have a different view and sometimes you need those meta systems. And I remember the first time I read the prize by Jurgen when he was the great Jorgen. Now today I'm not that sure. Probably it's past due date. But when I read the Price is the first time I understood that oil you Know at defined the 20th century. So that framework is very useful. Now you can come and say, oh, what about Canada, what about Brazil, what about Norway? Which are both exporting fossil fuels and are big on hydro. And you'll be absolutely right. But generally speaking, it's a very interesting framework. Now Europe will tag along. I disagree with Ggar and I give you example, I give you three examples. Charles and I have invested in a company who was installing solar rooftop in Germany. Yeah, we bought all our panels from Jinko or GA Solar, but that was only 2,000 Euro per roof. The rest of the value, say 20,000 Euro was all European value. It was our vans, it was our systems, it was our inverters, it was our workers, the job we created. Right now I'm investing in batteries. I use Catl, LFP cells, but just the cells. The rest, all the battery is made in Europe. And by the way, the Chinese can't snoop in. There's no kill switch because there is a cyber security law in Europe. So all the software are done in Europe.

[Jigar Shah]

Europe.

[Laurent Seguelen]

So whenever I buy a system of battery, let's say $300,000 a piece, the value of Chinese equipment is less than 10%. So I create 90% value. My third example, and that's something somebody want to salute here is Greg Jackson. So Greg Jackson has created an empire in less than 10 years. Octopus energy based on digital is now the biggest retail in the uk starting from zero and is the first person who has done a bundle retail power and vehicle to grid. But he has done it with byd and so it's a full package. Your car power zero. And then when people charge at home, he has access to the the BYD batteries and he does demand response with all those batteries. So these are three examples where we leverage on the part of the supply chain where Chinese are really good and we build value locally around it. Okay, so these are three examples. So I don't make big theories. That's what I do.

[Stephen Lacy]

Well, let's wrap up and get each of your quick takes on the role of Europe as a counterbalance to the United States. So we are seeing more investor interest in Europe. Europe is starting to talk about taking supply chains more seriously. The US's role in the energy transition is shifting and we are increasingly focused on fossil fuels. So will Europe emerge as a strong counterbalance to the US in the clean energy transition? Gerard, you want to start without a.

[Gerard Reed]

Doubt, because we have no choice. In the United States you have a choice and the choice is you've got lots of fossil fuels already. So you can actually just stay with them. We have a geopolitical imperative, simple as that. And we also have businesses in this area where we have a competitive advantage. And if I do look at the United States in the energy space, there's only a handful of businesses that I can think of that are actually international leaders in the space. If I look at Europe, I go, whole pile of leaders. And I'd also go and actually look at our utilities as well because again, I don't see there's not one US utility in Europe. There's a whole pile of European utilities in there. So we've got a lot of competitive advantage in the space and we have to change, simple as that. So I'd be very positive about our future because the imperative is there.

[Unknown]

I think the Europeans have a golden opportunity today, as Catherine suggested. I think we've spent the better part of 15 years spending a ton of money on innovation. And all of that money has resulted in 1600 companies that Kim Zhao and others are tracking out of London. And so we actually know exactly which companies they are and which ones need saving and how to save them and all that stuff. But one of the big challenges of Europe is that a lot of these programs have been led by government regulation, feed in tariff, top down sort of approaches. I think that for Europe to succeed in this moment, they're going to need a lot more large corporates to step up and actually say that they want these things to be in Europe. And so we'll see whether they do that. But right now we are in a critical moment where it can't be the governments that lead, it has to be the private sector that leads.

[Kathryn Hamilton]

Yeah, I'm not really willing to, to cede clean energy to fossil fuels in the United States. I'm just, I'm still pretty bullish on clean energy. You know, we put, we've already started a lot of manufacturing here, we have deployed like mad. And my biggest concern is that we are isolating ourselves so that such that Europeans do not want to invest anymore here. And you know, we're looking to what happens in Europe. I do think it's an opportunity for Europe. I just would hate to seed everything in the US that we've tried to get done. So I'm going to keep fighting to make sure that we stay on the clean energy train and that we continue to try to do business with Europe as we can.

[Laurent Seguelen]

So yeah, I started by a song. I'm going to close by a song. Katy, I said as we boarded a Greyhound In Pittsburgh. Michigan seems like a dream to me now. It took me four days to hitch out from Saginaw and I've come to look for America. America. This is, I mean, for European America. These are cousins, our brethren. And seeing America at the UN Security Council voting with Iran and North Korea and Russia against us. Where have you gone?

[Stephen Lacy]

Many of us ask that question every day.

[Laurent Seguelen]

Russia is our enemy, you know, so, yeah, I don't want to secede from America. This is, you know, North Atlantic. This is our mare nostrum. This is who we are. And I hope you'll come back to census. And of course we need to take more responsibility and not rely on other people. But we're in it together. We only represent 25% of the world population at best, but who have the best universities, the best research center. We are bound to do that together. So that's my final words.

[Kathryn Hamilton]

Amen, brother.

[Stephen Lacy]

Yes. I think the three of us feel that very deeply and a lot of Americans do as well. And that's part of the reason we wanted to have this conversation. Thanks to both of you. This was a lot of fun. Thanks for your podcast and also keeping us informed. And Gerard Reed and Laurent Hagelen are the co hosts of Redefining Energy. You can find there show the same way you find this one anywhere you download podcasts or you can click the link in the show notes and you can get to their page. Gerard, really good to talk to you. Likewise, Laurent, a pleasure.

[Laurent Seguelen]

Thank you guys. We love you.

[Kathryn Hamilton]

Thank you all. This has been so much fun.

[Unknown]

In it to Win it.

[Stephen Lacy]

Open Circuit is produced by Latitude Media. Chigarh Shah, Kathryn Hamilton are my co hosts. The show is edited by me. Sean Marquand is our technical director and he wrote our theme song. Anne Bailey is our senior podcast editor. You can find all of our show notes at Latitude Media and we have transcripts as well if you want to reference those. And of course you can find this show anywhere you get your podcasts. Thank you so much for being here. Thanks to Gerard and Laurent. We will catch you next week.