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Everything Electric Podcast
Why the UK Energy Market Is Broken (and How to Fix It!) | Greg Jackson & Rory Sutherland
01:05:15
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Host
Hello and welcome to another episode of
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the Everything Electric podcast, where today we have a really special episode for you and it is a slightly different format so I just wanted to jump in and share a couple of details with you. So a couple of weekends ago we had the privilege of filming a live podcast on Oxford street. All thanks to Renault and we were joined by Greg Jackson and Rory Sutherland.
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That is what you're about to hear.
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However, we had a lovely live audience, so you will hear a little few smatterings from our live audience and this recording took place prior to the announcement from Ed Miliband.
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Ed Miliband.
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Ed Miliband earlier this week in which he announced the delinking of the cost of renewables from the cost of gas. So if we sound a little bit tone deaf on that particular subject, that is why that news hadn't yet happened. I as ever would be so delighted to hear what you think about this particular conversation. So do make sure to let us know in the comments. As ever, please do like and subscribe and enjoy the episode.
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Our three free YouTube channels on EVs and clean energy tech are funded by our fun packed test drivetastic events in the north west and Greater London and our events Down Under. Next up Everything Electric heads to Harrogate and then Cheltenham. All events include a B2B EV day and commercial vehicles too.
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This is really important context and I and I'm going to start with a
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slightly longer spiel than I would do
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otherwise, but I really want the set want to set the scene so that we get the absolute best from this discussion for all of you here, because let's face it, through virtue of being here and that little very scientific survey that we did, you're already familiar with the objective superiority of the electric vehicle, its unrivaled efficiency, its role as the gateway drug to the kilowatt hour. You're likely already playing Wolf of Wall street with your various apps that you have, showing your consumption, your generation, trading with the grid and a future in which you have almost zero energy bills seems like an inevitability vehicle to grid is your utopia. And so with that context, in this unprecedented weird environment in which we're living, where we're living through a industrial revolution in real time, and not just real time, but unfolding in double speed, things feel strange. Because yes, we can see the inevitability of these clean energy technologies, and yet we can also see the stupidity of a world that seems tethered to an oil based war and the greatest threat to global energy security in history that may come with it. That triple shock of energy scarcity, food inflation and GDP downturns, that freight train which promises to hit the global economy and potentially plunge 32 million people into poverty. Sounds bleak. I promise we'll lift the tone up. But the US Iran war starkly reveals that electrification is a fundamental pillar of national security. And yet we're in a bit of a bifurcated moment. I've definitely not said that word correctly. Bifurcated moment. You know what I mean. The US is gutting EV and clean energy subsidies, whilst Europe quietly retreats into sort of policy uncertainty. We're bracing for data centers to double their energy consumption by 2030, driving a desperate surge in both clean energy, but also fossil fuel as well. We're even debating sending that AI infrastructure into space. And yet half the world live without a flushing toilet. It's a very bizarre time and it almost feels as if this new global economy is not going to be based on oil and gas production, but in fact, how much compute power do you have? And the cost of that compute power as well. So whilst war is a brutal impetus for a paradigm shift, it is the history that we seem to find ourselves living. And here in the UK we have a lot of work to do. Nearly one in five households own a Loben low carbon technology, so EVs, solar panels, batteries, etc. But high income families are 1.6 times more likely to have made that leap. Heat pump adoption, we're going to have a discussion about this is stuck at a measly 1%, not least as our Spark gap. That price between electricity and gas is so high and that makes the maths tricky for the average family. For every heat pump sold, 15 gas boilers are still being bolted to walls. And today, 45% of British adults are worried about paying their energy bills. So we do risk this weird thermostatic divide where people who are a little bit more affluent can enjoy zero energy bills, whilst people who are less affluent could be crushed by them. But if the economics of this technology is this clear and the geopolitics this loud, why is this past still riddled with debate? Even on this panel I know that we have differing views on the relative merits of a heat pump and also potentially differing views on drilling in the North Sea. So how do we chart the path forward? Well, if you tuned out from this very long monologue that I seem to have done, we know the value of clean tech, but how on earth do we bloody well get on with it in a joined up kind of way? Well, that is what we are endeavoring to find out on this panel here. And I'm delighted to be joined by a frankly intimidating lineup. They need very little introduction. You know of course who these people are. But joining me we have Greg Jackson CBE, the founder and CEO of Octopus Energy Group, the UK's largest energy supplier and a global energy and technology company that's driving the affordable green energy system of the future. Your PR team gave me that. That was a little mouthful.
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Greg Jackson
They could really improve it, to be honest.
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Host
Rory Sutherland, these were your own words and I like these. Alchemist and behavioral science impresario, Accidental TikTok star, that's very much true. And founder of Ogilvy's behavioral science division. And last but by no means least, Robert Llewellyn, founder of the Fully Charged show Now Everything Electricity and lifelong actor, presenter and author, maybe the ultimate early adopter and definitely responsible for encouraging thousands of people to pursue careers in engineering thanks to Scrap Heap Challenge and thousands more to adopt clean energy technologies. You're looking rather sheepish there, but it's definitely true. And between them, they offer game changing solutions, a clear ability to see into the future, an unwavering love of logic to maximize the solutions that are benefit the most amount of people.
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And I think you all enjoy peppering
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a little bit of magic in there along the way as well. So in the rest of this panel, I promise to say as little as I can, but we're going to talk a little bit about the energy system at large. We're then going to get into some home energy technologies before going on to our favorite subject, electric vehicles. So, enough of me. But to kick off, I guess I think it would be useful to assess what personally motivates you to talk on the subject of clean energy technologies. And under that umbrella, I am, I'm referring of course to electric vehicles, solar heat pumps, etc. Etc. What personally motivates you in this space? And I'll start with you, Greg.
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Greg Jackson
Yeah, sure. Okay, cool. Look, I joined Greenpeace when I was 15. I was inspired by way I used to. Anyone who's roughly my age will remember when you used to watch the news in an evening and have Greenpeace dinghies up against oil rigs and people clap. And I almost thought if you joined Greenpeace, you got to do that. It was my first ever disappointing response to direct marketing when all you got was a quarterly newsletter. But the damage that each of us do to everyone else with our private decisions is something that really bothers me. And I don't think we should go back to the stone Ages. I think that technology has solutions to a lot of these problems. And so for me, the real driving passion for a lot of what you're talking about, electrification generally, is I think it lets us live the lives we want or even better ones, whilst doing less harm to the planet and everybody else. And we're now at a point where the economics of that have followed the science. It was inevitable. And now we're battling the really just the politics and the incumbent interest.
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Host
Robert it's always hard to follow, Greg. I really understand that.
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Robert Llewellyn
I think it was for me, I think it was my slow but steady understanding of what was happening in California in the early noughties. And it was just by chance and dint of working there and making the American version of scrap EAP junkyard wars, that I became aware of things like the California Air Resource Board, the American or Californian government's push to reduce the, you know, all those things. I went, oh, catalytic converters. Oh, California unleaded petrol. Oh, California, oh, hybrids, California electric cars, California. And it was so strange. Now they were way ahead of anywhere else in the world. Not now, but they were then. And that's where the home of that and understanding that that technology came out of Silicon Valley out of computers and nerds with computers, not Detroit, where the automotive industry was. There's going to be some corrections on this, but that was my understanding. That was my understanding at the time and that was fascinating because I then it just changed my attitude to internal combustion engines, which I grew up Adoring. And in fact, on the way here this afternoon, I walked around a quiet street, and I heard.
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Host
And I went, why do I know that sound?
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Robert Llewellyn
Why is that still with me? And it was an Aston Martin of whatever the one is. It's one. I can't remember the name of it, but I heard that exhaust tone, and I know it in my DNA, and I went, ah. And I can't appreciate it anymore, because what that's doing. That man's having fun. It was. A man is having fun in that car.
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Rory Sutherland
And it's.
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Robert Llewellyn
It's got an amazing throttle, you know, throaty roar. And I can't help thinking, we've got to breathe in the shit he's sticking out of his stupid exhaust pipes, the tosser. You know, it's kind of. I can't get beyond that anymore.
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Rory Sutherland
I cannot.
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Robert Llewellyn
You know? And I still think the human race should maintain lots of internal combustion engines for our great, great, great, great grandchildren to see that and go, you mean you had a thing, a metal box that were explosions in it? Well, it's like the thing you were saying, and then gas comes out. And it was the gas nice. No, no, it was poisonous. And if you breathed it, you died. You know, that is what we've all lived with, and that's what we've all grown up with. But so that it was very much clean air. And the efficiency. When I understood the efficiency of an electric motor and batteries, it just shot combustion engines in the head, and that was the end of it.
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Host
Shot combustion engines in the head. That's also. That's probably what we'll call this episode.
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Robert Llewellyn
Please don't.
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Host
Rory. I guess I'm. I feel like there's a few interesting things going on because you talk about so many different subjects, but you have a particular magic in the way that you talk about electric vehicles.
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Rory Sutherland
I'm very interested in the. Particularly when I write for the Spectator, and you read the comments. I'm very interested in the hostility that electric vehicles generate in certain people, by the way, which always fascinates me. Now, I often wonder whether the Prius did a disservice to the whole category, very likely because the Prius was driven by people who I think were. Were disapproving of other motorists and were floating around on a kind of smug cloud of moral superiority. And I suddenly realized that everybody who used to write hostile things in my Spectator articles when I praised electric cars. And my conversion to electric cars is actually just physics.
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Robert Llewellyn
Yes.
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Rory Sutherland
Okay. I mean, the elegance of the electric motor in Terms of efficiently effectively transforming energy from any source into motive power at an extraordinary level of efficiency is just too beautiful. So, I mean, in a sense, I suppose the internal combustion engine is loved because it's like a Swiss watch. It's an absurd way of telling the time. I mean, a 20 pound Casio is actually more reliable, but given that 150 years of craftsmanship have been poured into perfecting this thing, we have to love it. It's not as beautiful as a steam engine, by the way. A steam locomotive is more beautiful. It's still more beautiful. And the steam engine also has a beautiful. We were fun enough talking about this earlier. There is an attribute to the steam engine which the internal combustion engine doesn't have, which may become more and more relevant, which is a steam locomotive could run off any fuel source. So if you could produce heat, you could produce motive power. And the trains that went from the east coast of the United States to the west started off by running on coal, which was plentiful on the east. And as they neared the Rockies, they switched to wood and lumber. Now, one point that I don't think anybody thinks about in electric car world is the fact that you can run electric car by burning rubber tyres if you want to. I wouldn't recommend it, but it's still possible. Whereas, to quote Alan Partridge, the internal combustion engine is a picky, Is a fussy eater. Do you remember that? You're going to pay the price for being a fussy eater. Basically, unless it comes through the Straits of Hormuz, it's not really happy. And that strikes me as something that is fundamentally exciting. Now, the moral superiority problem, I think, is actually the result of a misunderstanding, because most people post Prius who bought electric cars genuinely bought them because they liked the technology or they thought they were better cars. And I don't spend any time driving my electric car disdaining the people who are driving internal combustion engines, except when they're too slow. To be honest, the only smug moment I do have, which I can't help, is that when you watch people filling up with petrol at a pump, you feel a bit like a primatologist watching bonobos poking at a termite mound with a stick. You know, it looks like a kind of primitive behavior which some people are still engaged in.
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Greg Jackson
Okay, but they are using a tool.
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Rory Sutherland
But apart from that, you know, I genuinely think they're good enough to sell on their own merits. We ought to be honest. As an advertising guy, I'd always say that there are. J.P. morgan said this for everything people do. There are two reasons. There's a good reason and there's the real reason. And a large part of why people want to own solar panels, I suspect, is not really to save money or to save the planet. It's for the geeky joy of knowing you're driving around on sunshine. Now, my argument is I think we should just amplify that, because one of my arguments is actually if people do the right thing for the wrong reasons, doesn't matter. And that's my great argument. I don't really mind why people do this, provided they do. And I'll be absolutely honest with you, I'm not that fond of polar bears. They look bloody dangerous if I'm being honest. Okay, but the idea of driving around knowing that the sun in the sky is actually powering my trip to the shops, apart from any other positive externalities, is just a great feeling. And we should try and amplify that as much as we can.
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Host
Well, we're going to pick up on
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so many of these things because I
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think that sense of getting a really
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good deal is something that motivates us. As much as we'd like to pretend
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that the environment is our primary motivator ultimately, if it's going to save us money as well, that's probably what forces us to act.
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Now.
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I want to just pause on the current energy crisis that we find ourselves in. Anne, Greg, I imagine that the last few weeks have been quite busy for you, so I wonder if you could just frame for us how whatever's going on in the Middle east has changed your immediate priorities at Octopus and how it's changed your day to day and some of the things of how you need to support your customers in the short term.
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Greg Jackson
The irony is that while we're watching this happening on the news and look, there are so many levels of shit, right? Let's just be really clear. You basically got. I'm not going to be political, I mean, honestly. But the irony is that while this is happening, we're currently mailing millions of people largely saying energy costs are coming down, right? Because the government has started taking levies off electricity bills. A very good and important thing. And by the way, I cannot tell you the. Funnily enough, the customer satisfaction. Every time we send a price change email, it has a satisfaction rating like how do you rate the usefulness? How do you feel about this? And so on. Funnily enough, we're currently seeing the highest ever satisfaction ratings on price changes because costs are coming down because the government are finally taking Some of the structural costs out of electricity, there is so much more to go. To be absolutely clear, in France, electricity is twice the price of gas. In the UK it's four times. I mean, broadly speaking, in bits of Scandinavia, it's. By the way, there you go. That was your externality, wasn't it? That was actually. That was actually an electric one with this loudspeaker. But I've got to say, I've got an electric motorbike and the only thing I miss is not being able to rev in traffic to let people know you're there. But anyway, different. But yeah, back on this. In Scandinavia, electricity can be as little as 1.15 times more expensive than gas. And the UK it's four times. And the vast majority of that is policy cost and very bad market design. It's good that those things are being tackled in terms of what's going straight at Hormuz, because most energy is hedged in advance, is bought in advance. We will see the price rises as of July. For some people it's coming sooner, depending on what kind of tariffs on. But so far it is genuinely a fraction as bad as, as we saw when Russia invaded Ukraine. But it's a very, very different shape. So if it doesn't get oil and gas in ships moves at the same speed as a bicycle. So if the bicycle stopped leaving the Middle east about six weeks ago and some start now, it will still take six weeks for them to get here. In the meanwhile, there's an awful lot of kind of backend rewiring of where you get, where oil and gas are going to keep supply. But you are at a point where if it doesn't get resolved at some point, supply just stops coming, at which point you may see the uk, we're very well connected with a lot of sources, but some countries are already doing rationing and things like that, and it may affect different things like jet fuel and diesel, differently than petrol. The big, big picture, though, the big picture is I just sent a video to customers a couple of days ago saying, look, here we go again. Because it's only three years since the Russian invasion of Ukraine similarly caused this. And I think it is a shocking audacity of the fossil fuel industry to try and pretend that the answer is more fossil fuels, because the reality of fossil fuels is the great big oil and gas majors will not invest in production facilities unless they're going to get high utilization. There is never going to be spare capacity at any scale in the world of oil and gas. As soon as they get spare capacity, they start shutting stuff down, they restrict supply. And what that means is as long as you're dependent on oil and gas, you're always at risk of any part of the supply chain being strangled. And so the lie of oil and gas is that if we invest in more supply, then we'll stop these things happening in future. It's just not the case. We invest in more supply in the future, the prices will drop and then they'll stop producing and we'll be at their mercy again. I think one of the great discoveries of the world of electrification, you already heard it from Rory, is there are so many sources of electricity now, literally your rooftop, your neighbor's rooftop, a field outside your town or village, the North Sea, other bits of our coast interconnected to other countries. You've got so many layers. And gas, of course, as well, by the way, and biomass and hydro and French nuclear, because it comes through the interconnectors. We've got so much more resilience and electricity. So the biggest lesson has just got to be they only guess who. Like an abusive partner, they keep coming back saying, it's going to be different this time. It's never going to different. Right? I was born in 1971, and when I was 2 or 3, there's all these photos of our family with like candles, because fossil fuel crises never stop happening and we can now end them. And what you're really seeing, actually, and you mentioned the word bifurcation, there are some countries that are just not seeing this anymore. Norway, you know, its economy is so electric, I think. What was it? They sold 16 fossil fuel cars there last month. Was it like 97%? All cars being sold are electric. Right. Heat pumps are the majority heating source. Direct electric, another bunch. They're just not as affected by this stuff. Spain, huge investment in renewables. And by the way, not just wind, sorry, not just solar, tons of wind as a result, not seeing these cost increases that we do. So I think that of course, when the world's most powerful industry is threatened, they are seeing demand. You now have measurable demand reduction because of electric vehicles. And they are very threatened. And they're mobilizing an army that makes what the tobacco industry did look like child's play. This is an industry. It's so powerful, governments go to war. That's how powerful the fossil fuel industry is. And so when you talk earlier about the backlash, it's not necessarily people are cynically doing this, but if you look at every driver's group, where's the Funding ultimately coming from the people that try to somehow paint cyclists as the biggest problem on a road I cycled here today, I can tell you it was a lot quicker, easier and more pleasant. Anyway, point being, I think the big lesson is we have to electrify and you will hear more horseshit arguments against it, more horseshit promises and we have to be brutal now in responding to it.
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Host
Yeah, well, I think, yeah, I thought that might be coming.
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Well, I think there's some really interesting things that I want to pick up. Not least, I know that there'll be
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many questions about marginal pricing and getting our electricity not tied to the cost of natural gas.
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But I think the other thing that
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you mentioned there is that the oil and gas industry can exist because of supply and demand economics.
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And actually if we take something like
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the zero bills homes from Octopus as an example, customers can enjoy a zero bill home because Octopus is there thanks to Kraken, sort of gently trading those things as they sort of fluctuate throughout the day. So it's very possible that we're heading towards this world and we can see that on a totally distributed, decentralized system. Plus we've got, you know, larger scale solar generation, wind generation, battery storage, et cetera. Where actually the value of this energy market is not so much the supply and demand traditional economics we've seen, but
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is actually in trading the service.
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And so for people like bp, Shell, et cetera, et cetera, how do they make money in this future world?
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How do they make money?
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How will they survive?
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Greg Jackson
First of all, I mentioned the tobacco industry earlier. I think it's really analogous. When we first discovered that tobacco caused a lot of illnesses, the tobacco industry first denied it. There were literally adverts for flags that had doctors in them going, my doctor smokes Camel. Right? They then started acknowledging tacitly there was an issue. So they had low tar and filters because somehow this would prevent you getting cancer. Obviously it was, it was a marketing shtick. And then they started heading to poorer countries as life got harder in richer countries. The interesting thing is that when the tobacco industry stopped fighting it and just admitted, look, cigarettes may kill you, but they're quite fun. They had 30 years of being the highest return on the stock market as a sector because it's actually like honesty turns out to be a more profitable business than lying in the long run. And I think in the same way for the oil and gas industry, look, I fly a lot, we've got an international business, it's going to be a long time before we can replace long haul aviation with something that isn't fossil fuel based. They've got decades of business in that, frankly, they've got decades in businesses. There are plenty of trucks that have just been bought this year that are going to be running for another 10, 15 years, plenty of cars. So as a runoff business you can do very, very well. But the bigger picture thing really is it's not our problem. I don't remember Argos being able to campaign and say how are we going to survive in the world of Amazon? They just had to try and compete. And I think that if in every other sector we kind of let the competition happen, it is bizarre to me that suddenly it is a social requirement, a political need to maintain a sector that by the way is doing more damage to our planet. Right. And I'm not castigating the sector, you know, as I said, I fly, I use it, but it doesn't have a God given right to carry on as it is. I think, by the way, and really, I mean I know people at BPN Shoal very well, some really great people by the way. Unbelievably incredible businesses. I think one of the things that you guys sometimes talk about is if we lived in an electric world and someone came along and proposed the petrol car.
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Robert Llewellyn
Yeah, that's it, right?
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Greg Jackson
That's nonsense. You were talking there about the explosions or the little.
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Rory Sutherland
Can you charge it at home? No, don't be ridiculous. You can't keep it here, by the way.
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Greg Jackson
That's a great example. I'm talking about the nonsense, right? So all the time people get in me, ah, but not everyone can charge at home. I'm like, no one can charge a petrol car at home, right? But the science and engineering of the oil industry is amazing. They drill kilometers under the ground. Unbelievable stuff they do that divers go anyway, all that stuff. The point really being they're incredible companies. But what you've seen in almost any sector that goes through change is incumbent struggle. So we think about for example in the media sector when it started going online, Rupert Murdoch, unbelievably successful media baron, regardless of what you think of some of the output, bought MySpace and within two years it was dead.
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Rory Sutherland
Right.
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Greg Jackson
And it took News group like maybe 20 years to learn how to make money online. Shell and BP will get there in this world probably. But the more pressure comes on them from actually forcing change, the more they'll have to do it in the ways that will actually be beneficial. At the same time there are enormous new industries. I think you mentioned there that for example, optimization is an industry doesn't really exist in fossil fuel, hugely important in electricity. There are loads of companies big and small and Britain's been a real breeding ground for them that are now taking optimization services around the world. If you get the U.S. the companies that are working past utilities to try and optimize electrification, often very British because we've had. Because we've got high energy costs. Optimization is more important here. The skills you learn here then work really well elsewhere.
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Host
I know that when we've had a conversation previously, you. Because maybe I shouldn't be saying this, maybe we'll edit this out, we'll find out. You had to do some work with
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the
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cigarette industry many, many decades ago.
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Rory Sutherland
I've only worked on vaping campaigns. So one of the things I think is important is the concept of harm reduction. Okay. Which is sometimes where I would criticize either idealists or sometimes scientists is they design for perfect and anything less than that is considered a compromise. And I remember talking to someone, it was an academic actually. So my influence in the vaping world was going to the government's Behavioral Insights Team team, crikey back in the 90s and saying there's this new technology called electronic cigarettes. I had two predictions. One, it might be the biggest thing in helping people quit smoking. Well, in ever. Okay. My second prediction was that everybody conventional in the anti smoking campaign groups would try and ban it because they'd see it as an inferior substitute for quitting altogether. And my argument was funnily enough, which Asch also adopted, who are a fanatical anti smoking group, they simply said our job is to stop people dying, it's not to stop people consuming nicotine. They're two different things. And one thing I've noticed in this world is that people tend to plan for this sort of perfectionism. I'm pretty comfortable with a degree, I don't know with a degree of gas generation picking up a bit of load from time to time doesn't seem to be that problematic. I would prefer it if the money we made was, was put into innovation and scientific research because we have a greater comparative advantage in the UK in terms of being able to come up with really good inventions than we do in being able to reduce the world's carbon output. We're only 1% of carbon output. We're probably over 150 years, 25% of meaningful world changing inventions. If you go to the Royal Institution about quarter of a mile away in the basement, I don't know why it's in the basement is Faraday's first electric motor, which should be a source of pilgrimage to people. Okay, so there is a bit of me which goes, I don't particularly want a country that produces 1% of the world's carbon to get involved in this symbolic hair shirted act which damages our economy. Moves manufacturing offshore to places where they're using even dirtier energy just so ed's metrics can look cute. Okay, so, you know that metric of your own carbon emissions which don't account for imported gas strikes me as just a total nonsense. I mean, you know, I mean, the Norwegians are to some extent buying all those electric cars on our dollar. You know, okay, we're buying their gas and they're swanning around in some electric car at our expense.
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Robert Llewellyn
Can I just say one thing? I presented two times the Norwegian EV association annual meeting thing when I was on stage introducing the speakers and I. The second time I went, I did. I thought of an amusing skit about the fact that I. We all hate Norwegians because we give you so much money for your oil and gas while you ponce around in your electric cars. And interestingly, I was never invited back.
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Host
I think it's taking place.
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Robert Llewellyn
They laughed at the time.
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Host
Yes. Was it a. Ha ha.
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This episode is brought to you by Hankook. The Hankook ion tyre is built exclusively for electric vehicles, engineered to deliver what EV drivers need most confident grip, quietness, energy efficiency and long mileage. As the official tire partner of Formula E, HongKook proves its EV technology is at the highest level of performance and brings that same innovation to every ion tyre on the road.
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Rory Sutherland
You know that person who said if I came back, I'd come back as the bond market because you can do anything you like. If I came back, I'd come back as a country of about 3 to 4 million people in the 21st century because no one beats up on you. Because it's a bad look. You see what I mean? You know, if you're Ireland with tax evasion or you're Norway with fossil fuel
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Robert Llewellyn
production, everyone loves you.
- [33:13]
Rory Sutherland
Everyone loves you because there are only 3 million of you who look really, really mean to get nasty. And so we do actually let them off the hook to a remarkable extent. I think my point would be, I'm not sure I wouldn't rather burn our own gas and then tax it and then put the money towards innovation. Because the other problem which I do accept from people like Martin Wolff is that we've set quite a bad example because other countries have looked at what we've attempted to do in reducing our carbon emissions, we've ended up with very high energy costs. So not many people are going to follow our lead. So if our hope was that we're going to set a precedent, my other. I suppose my. What would my other question be? I mean, I think. No, but I'll leave it at that. It's not a great precedent to set. And actually, innovation is probably a better use of the money than purely self sacrifice, I think.
- [34:04]
Host
Greg, I can. I can see your mind whirring and any thoughts, by the way.
- [34:07]
Rory Sutherland
I mean, the way we charge for electricity is the stupid thing, which we could change really quickly, which you know much more about than me. So it seems to be a system where you go out to the pub and if nine of you order a pint of beer and one of you orders a bottle of Chateau Petrus, everybody pays for a bottle of Chateau Petrus. That's more or less how it works.
- [34:24]
Greg Jackson
Worse than that, it makes it up and down.
- [34:26]
Rory Sutherland
It's marginal pricing. Yeah.
- [34:27]
Host
I think that is the most elegant description of marginal pricing I've ever heard. I tried to tell it with fruit.
- [34:32]
Yours is better.
- [34:32]
Greg Jackson
Yeah, Greg, well, look, first of all, I couldn't agree more on the gasp point. Right?
- [34:37]
Rory Sutherland
Yeah.
- [34:37]
Greg Jackson
The light really came on for me a few years ago. We talked earlier about the efficiency of EVs. If all of the electricity that powers an EV is coming from gas generation, it still has lower emissions than a petrol car. Even more amazing, if all of the electricity powers a heat pump comes from gas, it has lower emissions than a gas boiler, it uses less gas than a gas boiler. That's how efficient electricity is.
- [35:02]
Rory Sutherland
Yes.
- [35:03]
Greg Jackson
So at the margin, honestly, if having. Like when people always say, your point about perfection is so important. All right, Everything that's a new technology in this space, you get held to a standard of perfection that doesn't apply elsewhere.
- [35:18]
Rory Sutherland
Yes, you're right.
- [35:18]
Greg Jackson
They always go like, ah, but no, everyone can afford an ev. It's like, I grew up in a family that couldn't afford a fucking car, right? I didn't hear that objection from the car industry, from the force.
- [35:27]
Rory Sutherland
It's unfair if you can't afford a car. By the way, can I just say to everybody listening, because I learned this the hard way, everybody who tries to get a home charger installed at home, someone comes along, goes, no way. This wiring will take 7 kilowatts, but you go, oh, I can't have a charger. Eventually, I rang up my brother, who's an astrophysicist. Who just goes, you don't need 7kW for most normal people, to be honest, if you've got four to be 3.5 is okay. Right. It's enough for most practical purposes, but the people turn up and go, no, no, no, it's got to be 7kW, otherwise it's not a proper car charge.
- [35:58]
Greg Jackson
I'm just going to phone a ROPS director.
- [36:00]
Rory Sutherland
Exactly. Yeah.
- [36:01]
Greg Jackson
We have roughly 1,000 people doing that every day anyway.
- [36:03]
Rory Sutherland
Right, thank you.
- [36:04]
Greg Jackson
Please do. Because great charges though.
- [36:06]
Robert Llewellyn
Anyway.
- [36:07]
Rory Sutherland
Right.
- [36:08]
Greg Jackson
But this standard perfects that everything's held to. Right? No, not everyone can have solar panels. One of my favorites, you know, like, it's not always windy. We kind of worked this out.
- [36:18]
Rory Sutherland
Right.
- [36:19]
Greg Jackson
But you flip it around and it's like every turn of a wind turbine turbine means we use less gas. That's great. It's cheaper, it doesn't need maintenance. It's not trashing the planet. But when it's not windy, until we have other solutions, gas as a backup is absolutely fine. And you know, for me, another light that came on was. I think I might actually, I might have learned this from you, Robert.
- [36:41]
Robert Llewellyn
Oh, my God.
- [36:41]
Greg Jackson
You did an incredible video on the end to end emissions of the fossil fuel industry.
- [36:46]
Robert Llewellyn
Oh, yes, yes, yes.
- [36:48]
Greg Jackson
How much waste? It's not just what happens when you burn it in a car or in a boiler.
- [36:52]
Rory Sutherland
No.
- [36:53]
Greg Jackson
It's from the point of production right through to getting it here, the amount of like 40% of the world's fuel is used. Shipping fuel.
- [37:03]
Robert Llewellyn
Shipping fuel.
- [37:05]
Greg Jackson
So when you see that and you look at the liquid natural gas industry, and by the way, we've now got satellites that can spot leaky methane. You realize that it's brutally inefficient to be shipping gas from Qatar, the US and Australia to here. So to the extent we've got to
- [37:24]
Rory Sutherland
use gas, use the nearby one, use
- [37:26]
Greg Jackson
the stuff nearby, it's genuinely miles lower emissions. And you can tax it, and you can use that tax to reduce energy costs. Invest in the future, do what Norway did, which is go electric. Right. But I think our current policies really don't serve us well in bringing people what we need, which is super cheap electricity. The biggest barrier to heat pumps is electricity is too expensive. The biggest barrier. I mean, I think we've moved on, on EVs now public charging. EVs are too expensive at home charging at the moment, thanks to the government's reduction on levies. I think it's currently seven or eight times cheaper just to charge An EV at home, never mind the fact that you never get through. I've never needed new brake pads, maybe I don't drive hard enough, I don't know. But there's just no consumables in an ev. I had a Tesla for three or four years and I think the total I spent on service was 120quid. So all those costs, I think people are now becoming aware of it. And just last week or this week, Autotrader has said the average cost of an electric vehicle that they advertise is now for the first time ever lower than the average cost of a fossil fuel vehicle to buy. So I think that's working well. But the big thing here is just relentlessly focusing on how do we make doing the right thing cheap. And you mentioned the marginal price of electricity. Look, it's not even just the marginal price. I mean, I've spent a long time banging on this. I'm worried about being boring. But so far this year the UK spent about 400 million pounds paying wind farms to turn off and paying gas to replace it, instead of just having cheap electricity near wind farms. In energy, in electricity, we've got two markets. You've got the wholesale market. It now only accounts for maybe 35% of a typical bill because we're spending so much on inefficient infrastructure and the plans mean that even if the wholesale price goes to zero, there's every chance that by 2030, electricity bills will be higher than they are now. So it's not only how you set the price which matters, that's the margin cost, but it's actually the entire system, design and management was designed around fossil fuels. And there's a real risk that we end up making electricity expensive, not just now, but for the next 20. Every decision we're making, that's locking in costs. These are all 10, 20 year costs.
- [39:47]
Host
So if we were to hand you a magic wand and you can just wish, let's cap it at three wishes to kind of resolve some of these things, what would you do?
- [39:57]
Greg Jackson
Yeah, I mean, look, so I would reform the electricity market. I've talked about zonal pricing a lot, by the way. It doesn't need to even affect consumer prices in terms of every region could be the same if you wanted.
- [40:08]
Rory Sutherland
Why?
- [40:08]
Greg Jackson
Why? I'm not saying by agreeing with that.
- [40:11]
Rory Sutherland
As a Welshman, where Wales is a net exporter of energy, I don't see why the Welsh shouldn't get cheaper power than.
- [40:18]
Greg Jackson
Ironically, right now, Wales is an expensive area because the fixed cost of the system vary by region and because there's a lower population density, there's more kilometers of cable per person than for example in London. So London has very low fixed costs. Wales and Scotland are very high. So in Scotland and Wales, you can't pay more for your electricity than London, even though you generate more than you use. Scotland generates three times more than it uses and has among the highest prices in the uk.
- [40:50]
Rory Sutherland
That's a grid cost. Effectively. It's nothing to do with the actual cost of energy itself.
- [40:54]
Greg Jackson
Yeah. It's just the infrastructure cost being divided by the number of people.
- [40:57]
Rory Sutherland
Got it.
- [40:58]
Greg Jackson
By the way. It's crazy, just to be really clear. And what we don't have is the wholesale cost balancing the other way, which is saying Scotland's generating shed loads. So when it's windy in Scotland, I mean, you literally turn off a turbine, a wind turbine. However, you probably at least get the electricity and use it for something. So right now I speak to one of the biggest data centers. There's always talk about AI data centers. You mentioned it at the beginning. I speak to one of the biggest builders of AI data centers in the world. And they said, look, we've got to be within 100km of London. And I said, well, there's for latency. By the way, it turns out data moves very, very quickly. Because when I said to him if the electricity in Scotland was half price, he goes, we're going to Scotland, right?
- [41:41]
Rory Sutherland
Yes.
- [41:41]
Greg Jackson
And the thing is at the moment, because we don't have. We don't give them that option. They either don't build in the UK at all. So TikTok have just built their biggest AI data center in the world, announced it in Norway because it's got cheap electricity. It's not as a big population. Right. They're there for the cheap power. Scotland could have some of the cheapest power in Europe and you could. The point really been there how you pass the huge savings on to consumers. Savings will be 6, 8 billion a year you could pass on to consumers. You could flatten the prices for consumers still have it variable for industry. There's a ton of things you could do. It would just be good to reduce the waste. So number one would be market reform. That's one example. There may be others. The second one I do is more onshore wind. So we're told often the myth is that we built loads of offshore wind in Scotland because it's windy and it is, but because it cost a lot of money to build grid, the cost per unit electricity delivered is something like 1 1/2 to 2 and a half times more expensive if you build offshore wind in Scotland than if you build onshore wind in England, where you've already got grid. So if you wanted a cheap electricity system, you wouldn't just be building this. I always think of it like if the wind farms weighed something, Britain would be tilted, like, yes, Scotland will be going, sinking. And I think we really have to understand that in a renewable world or clean energy in an electricity world, distributed stuff is really important. And the third thing I do is use long distance interconnectors. If I look at what's happening in place like China, they ship huge amounts of electricity at very, very high voltage from one end of the country to the other. Our equivalent is connecting us to other bits of Europe, to Africa, and it is happening. So if you look in Saudi Arabia, they're currently building four interconnectors because they know that one day fossil fuel is numbered. So Saudi Arabia's currently got a plan to build 70 gigawatts of solar power. By the way, the UK as a whole is a 50 gigawatt system across all our power. So for the next five years, Saudi is building one and a half times the UK just in solar and then interconnectors into four different regions of the world to be selling that cheap electricity. So I think something we really miss in the UK is we don't have enough global perspective to see what's happening. And specifically, really the Middle East, China and then pockets of the world. Who knew that Nepal is one of the biggest adopters of electric vehicles. Ethiopia, massive penetration of electric vehicles. And of course we talk about China all the time. Classic fourth fossil fuel nonsense. They say, oh, it's all coal plants. China's currently building nearly 80% of all the 75% of all of the renewables being built in the world right now being built in China. The US President said China builds wind farms and sells them to everyone else, but they use coal themselves. That's changing so fast, it's unbelievable. I guess I should also whinge that we're not allowed to buy Chinese wind turbines here because they're 30 or 40% cheaper than European ones. But anyway, we'll talk about. The point is we should be focusing relentlessly on cost.
- [44:47]
Host
I want to pivot for this last section to electric vehicles because as we have painted very eloquently on this panel, the pursuit of doing less harm, the pursuit of the beautiful elegance of electric vehicles that can be fueled by anything and just how efficient they are. Without wasting energy as well, has become very, very clear. But for whatever reason, and I think you can tell by how impassioned this panel is, they're still quite politicized.
- [45:14]
There's still quite a divide in the
- [45:15]
perception of EVs, even though we start to see the economics stack up. And I wonder in this last section if we can iron out a few things, a few bits that are missing from how electric vehicles are currently being marketed and what we can do to fix it. And I know that you, Rory, in
- [45:32]
particular, will have some thoughts.
- [45:34]
Rory Sutherland
I mean, there's one fantastic bit of good news, by the way, which is by no means universal in many, many categories, which is no. 1 who. Well, not quite. Very, very few people who make the transition ever revert. There is a tiny minority. I think it's less than 10%, isn't it? Probably 5% less than that. I mean, the only real guide in human behavior, I would argue, is repeat purchase, because it's based on what you have experienced yourself. Do you do it again? And that's, you know, now there are lots and lots here on Oxford street, about 50 yards away. I used a mobile phone in 1989 on the street, and two people shouted abuse at me from passing cars. Okay, so this, this isn't new, by the way. I mean, most of you are too young in the room to remember the stage when people would say, I don't want a mobile phone. Why would I want to make phone calls on the street? Which was a standard phrase. And so it's not uncommon for new technologies to be met with disproportionate skepticism and hostility because we don't like changing our behavior fundamentally. If you just bought a gasoline car a year ago and you're effectively being told you were wrong, it's hardly surprising that people react to that. It's a kind of cognitive dissonance, if you like. You know, there's natural reactance to that kind of thing. What is really interesting about human behavior, which is where I'm really optimistic, is just as in a digital camera, you have a default mode. You know, it's shutter speed priority. And it, you know, after we first fiddled around with our new digital camera for a bit, we basically leave it on auto, don't we? The human brain's two automatic behavioral things are basically habit and social copying. Do what I've done before and do what everybody else does. So when you come up with something that's genuinely new, you're asking someone to go against both of those defaults. You're asking to do something they haven't done before and which not many people they know are currently doing. And that's why you always get this sigmoid curve in the adoption of any new technology. It's slow at first, then it reaches an inflection point and gets faster and faster. So one of the most interesting thoughts. I work with a company called Herdify who look for herd effects, social contagion in buying behavior. And Tom Ridges made a brilliant point. He said, if I sold solar panels, I'd rather sell. To the despair of my finance director, I'd rather sell five solar panels to five people who live on the same street than 12 solar panels to 12 people who live 20 miles apart. Because fundamentally, the way in which human behavior goes is, is that we are massively comfortable doing things that other people are doing because we're a herd species, basically. You know, we're comfortable doing things that lots of our friends do. I'll be honest with you. People ask me, why did you buy your first electric car? And I came up with a load of bullshit answers. The real reason was my brother had bought an electric car first, and therefore he knew all the physics stuff. So I was comfortable enough to do it myself. Had my brother not bought an electric car, would I have bought an electric car five years ago? No, probably not. Didn't know enough people. Simple as that. And actually, the most important advertising medium is each other to a large extent. And so one of the things you'll see is that the whole thing will become easier and easier and easier. And that sort of natural mobile phone reactance. I mean, literally, I was making a call. It was a thing like a brick. I didn't ring anybody because it was too embarrassing in 1989, but someone had rung me, put the phone to my ear. Someone pulls down the back window of a London taxi. Wanker. It could have been unrelated to the phone, I suppose, but, I mean, we shouldn't be surprised by this. And also the great thing. But the great thing is that people. Now, actually, I'm going to be a little bit naughty here. The fact that it's a bit of a pain in the ass transitioning to electric is actually a loyalty mechanism. It's like the IKEA effect, because I've invested all this time and effort becoming proficient in using six charging apps and, you know, knowing what a kilowatt hour is. And I've wired up my house now I'm actually disproportionately inclined.
- [49:42]
Robert Llewellyn
Invested in it.
- [49:43]
Rory Sutherland
Yeah, okay. Invested in the thing. And I'M reluctant to go back. It's called the Ikea effect, because once you've been to Ikea and you've driven to Croydon and you've gone and walked through a serpentine corridor, you've got to at least buy a set of tea lights because otherwise you'd feel your whole journey was totally wasted. Okay. It's sunk cost. So one of the other things is that electric car buyers, once they've actually owned, overcome the hump of adoption, will become disproportionately loyal because actually it's a bias, but we're happy to exploit it because of their sunk cost in terms of effort and mental investment. So you won't see much reversion, which is the main thing. It's like air fryers, basically. Once you have one, there's no going back.
- [50:23]
Host
Oh, I finally transitioned to an air fryer.
- [50:26]
I resisted it.
- [50:26]
Rory Sutherland
You saw the light, why did you resist it? I'm trained.
- [50:31]
Host
I think you'll be like, oh, of course it takes up room on the side.
- [50:36]
Greg Jackson
It's only a matter of time before it's a Chinese EV with a built in air fryer.
- [50:40]
Rory Sutherland
Exactly.
- [50:42]
Greg Jackson
You don't even need to stop for a snack.
- [50:44]
Rory Sutherland
Don't bother with vehicle to loads, just vehicle to airfare. But this is, by the way, bizarre because the world is being. I work a bit with John Roberts at AO and I think female territorial ownership of kitchen surfaces is holding back the consumer electronics industry. Okay, seriously, you go, where would you put it? Right? And you go, well, maybe on those six acres over there.
- [51:09]
Greg Jackson
The interesting for me was when I got a heat pump, the last thing left that I had that was not there was gas, was the hob. And an induction hob was the greatest life change. I actually phoned my mum while I was cooking.
- [51:21]
Rory Sutherland
Interesting.
- [51:22]
Greg Jackson
And she said, I've got one too. And we were swapping notes. So I'm like, how easy? But honestly, I think the induction hob is actually one of the greatest benefits of electrification.
- [51:31]
Rory Sutherland
Right. It's extraordinarily efficient, of course, so easy
- [51:34]
Greg Jackson
to clean and you can't even burn yourself if you try. It's genuinely brilliant.
- [51:38]
Host
Well, I want to.
- [51:39]
Greg Jackson
Well, also, apart from the controllers, which
- [51:40]
Robert Llewellyn
the heat pump problem, though, induction hob with knobs. And these knobs would be quite good.
- [51:46]
Greg Jackson
It's a German interface. I'm not saying they're about German design,
- [51:49]
Rory Sutherland
but I mean, the heat pump thing is interesting because I'm absolutely convinced that there's a wonderful reframing here, which is you allow people to access their pensions to create, effectively, an energy pension. Okay, Right. Now, if you think about it, one of the daft things they do with solar panels is they say it pays back in nine years. Okay? That's typically what they say, the payback time.
- [52:14]
Host
And it's always the question that we get on our videos.
- [52:17]
Rory Sutherland
The point is I'm getting an 11% return return, which is a lot better than I'm getting from a bank. So actually, taking some money out of your pension and punting it into a heat pump or a solar panel, I'm
- [52:26]
Greg Jackson
literally opening my app. Not my app, my phone. Because yesterday one of the guys in charge of helping customers finance heat pumps, solar panels and EV chargers sent me a chart. And then actually, let's have a quick. 7% of our customers who install solar panels say they pay for it from their pension and 3% their heat pumps. And they're just doing that organically without any push. You bang onto a point.
- [52:52]
Rory Sutherland
And actually, then if you've got people to reframe it, as I'm buying a source of income, which you are, you're effectively protecting your retirement by investing this money.
- [53:01]
Greg Jackson
Well, you mentioned the Spectator earlier. And the interesting thing is, again, I have to work with all major and all politicians. I genuinely. And by the way, surprises happen all the time. There's always surprises. One of the surprises is the Telegraph, which, look, our team always get really upset about the way they cover heat pumps and to a degree, electric vehicles and the spectators in the same world. But the interesting bit is they love solar panels on roofs because they've got so many customers, readers who are living on a fixed income, on a pension, for whom exactly what you say applies. And I think the interesting bit for me is I think the EV may be the next thing, because if, as a retired solicitor reading the Telegraph, you're now proudly the owner of solar panels, the ability to fill a car cheap, the price going forward is fixed as well, is really powerful. But I think you do get these surprises when you look at what the behavioral drivers are for different people.
- [53:55]
Rory Sutherland
There's no correlation between EV ownership and concern for the environment, apparently.
- [54:00]
Greg Jackson
In fact, it's slightly reverse. It's slightly reverse. You ask that question, would you do marketing EVs, right? I think there were two very quick thoughts for me. The first one is we've got a business in Texas and we got them to do massive billboards promoting EVs as freedom cars, Right? Because I think the whole prepper world, right, like the most kind of. I don't know, I'M assuming largely going to be quite right wing, quite, you know, anti liberal.
- [54:33]
Rory Sutherland
Yeah.
- [54:34]
Greg Jackson
For them, solar panels get their, whatever they call sort of their back garden in America. Fill it with solar panels, get a cybertruck. It's got vehicle to grid basically. Right. You go off grid, you're self reliant, you're self reliant, you're prep like it goes with your cans of beans. Right. So I think that there's a genuinely, there's a really interesting case for people who distrust authority, distrust the man, distrust governments. They should all be fully solar and fully ev. We've been genuinely, playfully trying this idea because I think it's got legs.
- [55:11]
Host
Well, very interestingly we've got Mike Murphy coming back on the podcast in a couple of weeks time. If you're not familiar with Mike Murphy, he runs a campaign which is Republicans for EVs. And it's so fascinating how not just with EVs but I think clean energy as well. The opposite ends of the political spectrum are definitely coming full circle. Robert, I feel like we can do a little, we can do a little live show plug because the success of our vehicle test drives, electric vehicle test drives, has been pretty profound, phenomenal.
- [55:41]
Robert Llewellyn
I think we've passed 145,000 test drives that we've facilitated around, I can say around the world, but that is amazing because I had no idea because I'm usually at the other end of whatever we're doing. So there's some stuff, the test drives are down there. I don't see it. But that is an incredible number of people have been in electric very often
- [56:02]
Host
for the first time and can test things back to back, speak to the experts, make those side by side comparisons to different models. And we've done them. We can never say it without going into voiceover mode, but in Harrogate, Twickenham, Cheltenham, Netherlands, Vancouver, and our shows down under in Sydney.
- [56:22]
Anyway.
- [56:24]
But also Robert, I just coming back to the point around, actually it's about your, the people that you know who have EVs. And I think there's two things here actually. All of you now need to move to the same street, but secondly, your wife's book club.
- [56:37]
Robert Llewellyn
Okay.
- [56:38]
Host
They have all adopted electric vehicles as a concept.
- [56:40]
Robert Llewellyn
No, not all of them.
- [56:41]
Rory Sutherland
No, because some of them don't drive out.
- [56:42]
Robert Llewellyn
But no. So there's eight. So it's very briefly, there's eight women in my wife in the same book group, including her. And just a completely cross section of very amazing women. And I never heard any of this until Every year or two years, some of the husbands who are still hanging on are allowed to have dinner. We all meet up, you know, so. And one of them women said to
- [57:09]
Host
me, you know, we love our Tesla,
- [57:12]
Robert Llewellyn
they got our Tesla, it's a few years ago.
- [57:13]
Host
And she said, we couldn't believe it.
- [57:15]
Robert Llewellyn
And every time we saw Judy, she
- [57:17]
Host
would, she'd say, was that one of Robert's special cars?
- [57:20]
Robert Llewellyn
And she'd say, I'm not here to talk about cars. You just plug it in like a phone. I don't want to talk about it. Four of those women have now got electric cars. So that when I went of the hours I've spent going, maybe you should consider it.
- [57:33]
Host
And I mean, think about the environment and what it says about you.
- [57:36]
Robert Llewellyn
And all you need to say is, it's just like a phone, shut up.
- [57:39]
Rory Sutherland
There's more to which is that obviously current electric cars look very much like conventional cars because you have to manage people across that transition. But the real, I mean, the real excitement might be in micro mobility of all sorts of kinds, because you can miniaturize an electric motor and also you can have self driving and autonomous vehicles and the Heathrow pod and everything else with electricity in a way you can't do with an internal combustion engine. So, I mean, I'm quite pleased to see Renault deciding basically to have fun with the whole thing because you will eventually be able to be much more experimental with the vehicle you buy. Much more eccentric, actually, with the design. It's almost like the Swatch rescuing the Swiss watch industry. I think it will go highly eccentric and there'll be a kind of Cambrian explosion in terms of different kinds of mobility. And there is that place on Kensington High street, the Microlino place, and I'm not allowed to go to Kensington High street drunk because my wife's convinced I just wander in and buy one on impulse. But, but actually, I mean, one of the most exciting things, I mean, we should mention scooters and bikes. We haven't mentioned them. I mean, in large parts of the uk, the dirty secret of a bicycle is that going uphill, it's not much faster than walking a conventional manual bike. Okay? Now, if you live in Bath or any of those places which are just deeply hilly, okay, the electric bike is a complete game changer suddenly, because it's not really a very effective mode of transportation in anywhere, you know, any anywhere remotely mountainous. And now suddenly, everything changes. Very, very interesting. And so the very small modes of transport are just as exciting.
- [59:21]
Greg Jackson
I think, I think an incredible thing when you visit China now, and I
- [59:24]
Host
think,
- [59:26]
Greg Jackson
by the way, the government in January did a visit with the Prime Minister to China and I thought one outcome we should have done that is we should have agreed that we'll do like 10,000 students or school kids going both ways on research visits because you learn so much. But one thing that you experience now is on the streets of Beijing and Shenzhen and Shanghai, all of the two wheel vehicles are now electric.
- [59:50]
Robert Llewellyn
Yeah, they all are, aren't they?
- [59:51]
Greg Jackson
They all are. So there are, you know, the streets are still thick with them in places with two wheel vehicles and yet you'll hear more noise in London from mopeds and delivery vehicles and stuff like that and in any UK town and city than you do in China because they're silent and it is an absolute pleasure. The change in road noise. Of course, by the way, all the buses are electric. Pretty much all the taxis, pretty much 25% of the HGVs sold in China so far this year. Incredible.
- [60:22]
Robert Llewellyn
25% of trucks.
- [60:23]
Greg Jackson
That's the pace of change there, specifically electrification of transport. And I think we need to take a global view because we have these little arguments in Britain and you forget other people are doing it and we can just see how it works and learn from them.
- [60:38]
Robert Llewellyn
One thing I just wanted to say because it's very relevant to all the things we've been saying and it's a piece of news, so I don't know how well researched it is, but effectively the report I think it was in Electrek originally and then it got picked up a lot, is that the total number of electric vehicles in the world, which is now well over 100 million, which includes two wheels, very importantly because they all used to use, they all used to use petrol and they don't anymore. And in two strikes, yeah, really bad. But what it's done is displace the equivalent of 70% of Iran's fossil fuel output in total in the world. So, so there's. The world now consumes that that much less. And, and I think this is what we're harking back to what you said that has. There's some alarm bells ringing in some boardrooms of some fossil fuel companies because they've actually witnessed for the first time, not a, not a pandemic or a war or anything else, it's people are using less of their product and they're going to get nasty.
- [61:37]
Greg Jackson
Yeah, I think they are getting nasty. I think when you talked earlier about their sort of hysteresis curve, their adoption curve, it gets Steeper. And I think a lot of time Silicon Valley kind of taught us about it's not where you are today. It's not even the rate of change, it's the rate of change of the rate of change. And the acceleration in the electrification in many countries really is causing those problems. If you look at Latin America now, if you look at Southeast Asia, huge explosion in electric vehicles.
- [62:08]
Robert Llewellyn
And the other report that has come out is about lng, the long term decisions of China and Asian countries that had said, we're going to be using LNG a lot because it's cleaner than coal. And they've gone, oh shit, we're not going to use that. It's not going to come here. So let's reinvest in renewables to a hugely greater degree, which makes economic sense.
- [62:29]
Host
Well, also, just reminds me that you did a podcast this week with the wonderful Jan Rosenau, who many of you may be familiar with, that is coming out on Monday. And for anyone listening to this podcast,
- [62:39]
it is already out.
- [62:42]
And the fact is is that, you know, if we have a world which is about 70, 70% electrified, then we halve the overall energy requirement. I think that's something that's become abundantly clear.
- [62:53]
Greg Jackson
One really quick thing on this, you'll hear this a lot now. What happens is each time each defense layer of the arguments placed by the sort of fossil fuel lobby, as each layer gets demolished, they come up with new ones. Right now you will see a lot of people saying, well, only 20% of our energy uses electricity. Maybe 25%. Right. First of all, by the way, in China it's north of 30%. It's happening. But the interesting bit is that as you electrify, you just reduce your total energy use. So every percentage point the electricity increases, it takes down the fossil fuel percentage point percentage by maybe two or three points. That is, if you don't look at the amount of energy consumed but look at the amount of work being done by the energy, then you would see electricity as a much higher proportion of the work. The work of movement or the work of lighting.
- [63:44]
Rory Sutherland
Obviously. Yeah, if you take lighting. Okay, how much? I mean, the whole oil industry started with lighting, didn't it? Okay, now if you take. So there's a brilliant podcast, Saul Griffiths, Australian guy, if you come across him on the Cleaning up podcast, his basic bike, trying to electrify everything. And by the way, one thing I will have a dig at government for is dicking around with symbolic actions which just irritate people for no real benefit. So the Classic example of that is making vacuum cleaners a bit rubbish. Okay? I just bought one of these coffee machines and Whip said it's terrible for energy consumption, I'm going, it's on for like three minutes a day, okay? A vacuum cleaner, if it's an industrial vacuum cleaner being used all the time, there is a significant benefit to, you know, increasing energy efficiency or whatever. But those things which simply irritated people by, you know, by effectively and, you know, by just imposing. I don't really understand the eco setting on my dishwasher because it basically says, you know, it says it's going to take five hours to wash your dishes and it'll use a bit less water. And I go, I live in the UK and it's December, for God's sake, Right? And I think there's an awful lot of. Just as there's greenwashing, which is bogus green activity, which don't really mean a damn thing. What I used to call planting a flower bed on the Death Star. You know, you're a huge oil company, but you do this one cute little thing and talk about it all the time. There's also the opposite, which is symbolic.
- [65:10]
Greg Jackson
It's like when you read press releases about how much carbon emissions come from your email, not deleting emails.
- [65:16]
Rory Sutherland
Yes, that's right.
- [65:17]
Greg Jackson
Utter horseshit, right? The things that use, like, energy are the things that move big weights, vehicles and heat.
- [65:25]
Rory Sutherland
Yeah, yeah.
- [65:25]
Greg Jackson
Pretty much everything else is irrelevant.
- [65:27]
Rory Sutherland
Yeah.
- [65:28]
Host
Well, I am super aware that we are desperately running out of time, that some of you need to catch trains, that there are probably questions, which I'm afraid we don't have time for. However you can approach these guys as we sort of turn the cameras off and enjoy a couple of drinks. So, honestly, I can't believe how much time has blown. Thank you so much for joining us for this discussion. Thank you so much to. To everyone here in the audience and for those who are listening on Spotify or Apple podcasts or whatever, thank you for listening. So what do we say at the end of these? Please do like and subscribe.
- [66:00]
Robert Llewellyn
Yes. And tell your friends about it. And particularly your annoying uncle or aunt.
- [66:04]
Host
Yes.
- [66:06]
Rory Sutherland
And Daily Telegraph journalists in general.
- [66:08]
Robert Llewellyn
The odd Daily Telegraph journalists. It's worth doing it just for the laughs.
- [66:12]
Host
And if you have been.
- [66:14]
Rory Sutherland
Thank you for watching.
- [66:16]
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