Welcome to the ANU Energy Update 2020. We are happy to be co-hosting Energy Update with the Energy Research Institutes Council for Australia, otherwise known as Erika, this year for our event that we at the ANU Energy Change Institute are usually the hosts for. So, welcome to all our colleagues in Erika Institutes around the country. Today we're going to take a close look at the International Energy Agency's World Energy Outlook 2020, or as it's otherwise known, the WIO. My name is Professor Ken Baldwin and I'm Director of the ANU Energy Change Institute. I'd like to begin by acknowledging the traditional owners of the lands upon which we meet and pay our respects to their elders past, present and emerging. So please note today that this is a public forum and that media are present. I'll outline the proceedings in a minute, but in the meantime I'd encourage you to be familiar with the Q&A button on the screen and think about questions that you might want to ask during the question and answer session later in the presentation. You can use the Q&A session to either include your name or to ask questions anonymously, and we'll try and get through as many of these questions as we can today, but if there are some that we can't answer immediately, then we'll do our best to try and answer them via email. If you want, you can always email us at energy.change at anu.edu.au and we'll do our best to follow all those questions up. Okay, so it looks like we've got a fair few people joining, so I'd like to now officially get things underway by introducing our speaker, Ian Cronshaw. Ian is well known to many of us who've participated in Energy Update over the years. Ian is, of course, a contributor to 13 WIOs, World Energy Outlook reports for the IEA, and is, of course, a very experienced commentator in this area with an enormous body of knowledge. Once again, this year, Ian has volunteered to walk us through the World Energy Outlook for the year and to give some insights into some of the thinking behind the expert analysis that is already presented in the WIO. Later after Ian's presentation, we have a panel of experts from industry and academia who I'll introduce after Ian speaks, but for the present, I'd now like to welcome Ian to present the World Energy Outlook 2020 over to you, Ian. Thanks, Ken. Just starting with the official disclaimer, of course, I no longer have an official relationship with the IEA, but I was there for the first part of 15 years, and I'm pretty certain I've got a reasonable idea of what the thinking is behind the WIO. Just while we're lighting up the presentation, the timeframe for the WIO, as is normal, is around about 20 years ahead to 2040, but this year, I guess for obvious reasons, we've so this year, for obvious reasons, we've got a much stronger focus on 2030. I'll explain that in due course. The second caveat is, of course, that at some point, when you're drafting a report like this, you'd have to draw the line on new information, and that line was drawn in early to mid-August, and that's really quite an important point for our collection of reasons, which I'll go into along the way. And just a final point, of course, and I make this point every time I speak about the WIO, is that these are not forecasts, these are projections based on policies, and as such, they are not written in certainty. Ocontre, they are designed to inform policy makers and, if you like, to assess policy adequacy. Those of you who have been few of my talks know I always like to start with a little quiz just to keep people in the flow a bit. All these questions will be answered at the end of proceedings, or end of my proceedings anyway. They all do have serious implications. So first of all, and the best traditions of recycling, I just thought, when we look back over the last decade, the power sector, of course, was the biggest contributor to increase global greenhouse gas emissions, but the number two contributor was, and I've given you five choices there. So I'll be interested, people can enter their choices there, we'll get, as I said, we'll give the answers at the end of proceedings. I'll give just people five seconds to work their way through the choices. Aviation, heavy-tracks ACA vehicle, sport utility vehicles, staying, hopefully, familiar with that acronym. Yep, okay. So the second question, I'll just click on here. So the second question is a bit more interesting, just a little thought experiment. If tomorrow all new energy using equipment was to use zero emissions technology or electricity to be decarbonised, all cars to be decarbonised, where would we get in the longer term in terms of climate stabilisation? I'm giving four alternatives here. Stabilisation at current levels, increase 1.3, increase 1.5, increase 1.7. I guess in Australia, of course, we're already up and we're told in the 1.4 degree margin, but this is a global number. So again, I'll be interested to see what people are already getting some real polling. That's a very interesting real polling. We showed this polling at the end just for proceeding. So question three. Question three is about investment. If we stop investment in oil production tomorrow, over the next 20 years, where would oil output be? Again, five alternatives, slightly below today's levels. 80% of today's levels, half of today's, about 20% of today. That's one of my economists colleagues said, well, output will respond to demand. Good economist answer, I suppose. And a final question. Very interesting spread of questions already. And a final question. Australia, electricity provides what percentage of total final energy is? I think four alternatives, 15%, 20%, 40% and a half. And the final point, which is, I guess, the physicist in me saying, well, comparing electricity with coal or oil is like comparing apples to artichokes. And it's not a fair comparison. But we'll come back to that. So just give people a moment or two more to vote and get the results at the end. Is that the point? Okay. I can see them in real time. Okay. This is an educated audience too. Okay. I'm going to think I'll spare people the results because it's just more for your interest, but there are some serious points. So I'll move on to the presentation now. Okay. So obviously, without using the word unprecedented too often, COVID-19 has made 2020 a very interesting year. So we have two key questions that the WIO attempts to answer. Firstly, how does the pandemic in its aftermath reshape the energy sector as it's reshaping our economies? And secondly, how will this play out as countries individually and collectively respond to COVID and competing or maybe not competing, maybe complementary need for rapid energy transition? So as I said, we're looking at more heavily in the next 10 years. And of course, two key uncertainties, the duration and severity of the pandemic. Prime Minister this morning seems pretty comfortable. Australia is in a reasonably good place, but there are plenty of other countries that aren't. We look at China and the China's economy. You don't have to look at the iron ore price to see that China is recovering relatively quickly, both economically and many other ways. So the recovery is likely to be uneven. And of course, even now, its duration and severity remain quite unknown. And secondly, how will energy policy makers respond to that recovery? These are scenarios and as such that they are an artificial construct built heavily around the idea of policies. They are not forecasts as such, they are projections and have to be seen in that regard. Hopefully, I don't have to lay to that point. And finally, right at the end of the presentation, hopefully I've got enough time to give a reasonable discussion of net zero emissions, how that might happen, how quickly that might happen, and what's happening globally. And of course, as I said, these projections date from August. Quite a few things have happened since then. So four scenarios are in the book. The first we call steps and I'll use these acronyms right throughout. So please pay attention here. Steps is stated policies, ones that have been backed up with sound implementation measures, not simply announcements. In this scenario, the global economy recovers relatively quickly. Energy demand recovers by early 2023. Wouldn't quite call it a v-shaped recovery, but it's relatively quick. But of course, the 2040 economy is still quite a bit smaller than that projected last year. Emissions in this scenario lead to long-term temperature increase of 2.7 to 3 degrees. DRS, our delayed recovery scenario, in which case the damage to the global economy is more severe. The recovery is slower. And what that means for investment, energy, security, and the environment. Sustainable development scenario, a relatively artificial construct, in which we, the IEA, essentially get greenhouse gas emissions to fall to zero by 2070. And that brings about 50% probability of a 1.65 degree temperature increase. And the way that that happens, you can see by 2030, already power sector emissions have fallen dramatically. So electric cars now 40% of new car sales. And indeed 2019 would be a peak year for fossil fuel use 2019, that is. We would have already seen peak oil. And finally, the net zero emissions, and this is designed to produce zero emissions by within the next 30 years, a 50% chance of keeping global warming to 1.5 degrees. The true, both both SDS and net Z50 are essentially compatible with Paris, but of course, obviously, falling emissions in that time frame, much more ambitious. As you see there, the countries that have committed are essentially talking about a 50% fall over the next decade in emissions. But we'll discuss all of those four scenarios in a fair bit more detail. So looking at what happened in 2019 to 2020, we can see globally, obviously, fossil fuels hit very hard. Oil transport demand hit very hard. We saw oil demand in the month of April for something like 27 million barrels a day. And that is something I've never seen, and any of us have ever seen, I don't think in our professional careers, of course, with interesting price impacts. Gas, a fair bit less. So coal, quite a lot, 7% fall greenhouse gas emissions, as you can see, they're falling about 7%. Some countries had quite a bit higher. The US was down, well, was, is projected to be down about 10% in terms of emissions. And that's on the basis of a fall in coal, coal-based emissions by nearly 20%. And indeed, you can see almost everywhere coal was the fuel that took the biggest hit in terms of electricity demand, while renewables actually went up. And the renewable installation has continued very steadily throughout 2020, and indeed is projected to continue quite strongly. Energy investment, of course, took a very quick and dramatic tumble. And if I get time, I can talk about what that means in Australian terms, but certainly the global sense, the speed of that downturn in oil and gas investment in particular, but also coal and other sources with a notable exception of renewable electricity has been quite dramatic. Electric cars held up pretty well through 2020 as well. Electricity, one of the interesting things about electricity is that right through the last decade, we've seen electricity increase its share as a share of total energy. And indeed, when we see what happened in 2020, electricity fell only 2%. And indeed, in China actually went up. And again, as I said, I think I've got to look at that electricity number and the price of iron ore to tell you that the Chinese economy is back growing again. So you can see there, okay, 2019 was starting to come off trend, but we anticipate one of the key outcomes in all our projections are the increase in share of electricity. Price impacts were pretty impressive. I can wiggle this around. So oil, as I said, 27 million barrels a day. And volatile, this is in dollars per million BTU over here so that scales are normalized to energy content. You can see there's dramatic fall. And of course, in the case of West Texas, you can see the fall in that red line, West Texas actually went negative. That's a composite oil price. It's all right. I'll just keep talking. So the price of oil was the most dramatic outcome. Obviously, it's recovered to some extent around $50 mark, as we speak today. Prices of other fuels. Gas is an interesting one. Over on the left, over on the right-hand side, you've got three different gas prices. And they all show rather different, rather marching, or rather different fleet price of gas in the United States, down in the $2 range per million BTU. But it's interesting that dotted purple line up top is the gas price, is the contract gas price. And the contract gas price is what accounts for about 70% of the gas sold in Europe. So having spent the last year in Australia, I've heard a fair bit of discussion about $2 gas in Asia. Okay, we've got had a fair bit of discussion about $2 gas. And indeed the spot price in Asian gas was down in this region, in the US dollars, of course, per million BTU. But the contract price is up here. So in terms of gas sales from Australia to Asia, we've seen prices stay modest, well, higher than you would think from looking at the spot price. Of course, that, as indicated, is a lagged and averaged. But having said that, obviously, receipts will fall from the $50 billion that we had last year. So just comparing last year's with this year's, we owe 2019 average GDP growth over the next 10 years. Obviously, that's energy demand growing at about 1% per annum. We've immediately seen a drop in projected GDP growth and with an immediate impact. But as I said, a v-shaped recovery, so things get back on track, energy demand is still relatively low. In the next scenario, the delayed recovery scenario, we see that energy demand growth is probably the lowest we've seen for the past part of 100 years. Very slow demand growth, very low GDP growth with some very important, important, just, yeah. That's energy demand would return around about 2023, but in a delayed recovery to take the past part of five years. So obviously, the shape of the recovery has a very dramatic and immediate impact on energy demand, a lot of GDP growth to start with. Just to have a look at what happened, this is just a little different portrayal of the early information. We saw oil, coal and gas demand fall over the year. If we look forward the next 10 years or so, we see oil demand recovering rather slowly. Coal continues to fall gas. For reasons I can talk about at length, gas stays still fairly strong, particularly pretty flat. Modern renewables, the big, big growth story. Particularly in the power sector, we see something like 60 to 70% of demand growth being met by modern renewables. When we look at the delayed recovery scenario, we see modern renewables almost immune from that, whereas the fossil fuels are not, and in particular coal takes a very large hit. And indeed, I'll talk about the overall shape for coal further on in proceedings. So there's a lot of talk in Australia about technology, and our technology is the key to bringing about greenhouse gas savings. I just wanted to make a little point about behaviour. And of course, this year has been a very interesting year for behavioural experiments. We've seen a number of things adopted, teleworking being the most obvious one for all of us, fuel flights, definitely that for me, a lot of other people as well. So those have reduced demand, but of course, some of the other behavioural impacts are having the opposite impact, low fleet turnover, less use of public transport. So on balance, 2020 behaviourally provide a lot of interesting insights, but not a lot of large contribution to curbing demand. So oil demand is favorite to talk about peak demand. And that's where we were last year. That's the steps. And you see a recovery, but a continuation on a growth path which might see oil demand flattening in the next decade. And even in DRS, we continue to see growing demand. If we are to achieve lower emissions, we need to do something like that, already start to turn that around and turn it around pretty quickly. Building on fall that we've seen in the last year. I might have to just, you notice here, we talk about how we might achieve that efficiency. Obvious, Australia sadly has no vehicle efficiency standards. Electrification again, Australia has no electric vehicle policy and recycling, because one of the biggest areas of oil demand is actually in plastics, petrochemical manufacture, rather the energy sector. So one of the key impacts of the fall in oil prices has been a fall in the value of oil and gas assets. I'll just turn my notes here. That's led to a rough drop in 25% in the value of those oil and gas assets. And that's had an immediate impact in terms of investment, as I said earlier. But also for countries that are heavily dependent on particularly on oil, it means some very tough decisions have to be made. Obviously those countries, the Middle East and Russia, have some very, very interesting decisions to make. If we do look at sustainable development scenario, we see much, much larger fall. Having said that, of course, those oil and gas assets still worth, on that graphic, about $12 trillion. That's a very significant sum, but it's roughly a halving of the value of those assets. So that puts some pretty severe pressure on everyone involved in the industry to think very hard about their strategies and business models. But just to take one example in the US, again, we've seen a rough halving of the drill count over the last year. And of course, that will have implications for production quite quickly, because depletion on a lot of the worlds in the US is quite rapid. I should add, of course, that the shale oil has represented something like two thirds. It's met about two thirds of the growth in oil demand over the last decade. So what happens in the US is actually quite important in terms of markets. Okay, this is quite an important slide and a very key message. I mentioned earlier that we spend a lot of time evaluating policy. And the point of that is to look at the adequacy of that policy. And of course, steps, the stated policies, is a very long way from putting emissions into a decisive decline. Yes, a little bit of a hiccup from the 36 gigatons we saw last year. As I said, down about 7%. And in some cases, like the US, down 10%. In Australia, only about 3%. We'll come back to that a bit later. That's where we need to be in the sustainable development scenario. And that's, as you can see, already a very ambitious target. Net zero by 27, you're there about. A number of countries have made 2050 net zero pledges. And we've highlighted there the EU, UK, and New Zealand. And of course, subsequent to the way I'm being published, that number has been joined by Japan and Korea to have our largest trading partners, China, with a 2060 goal. And hopefully, and almost certainly the United States. And all of those countries taken together probably account for should have worked this out before roughly two thirds of global emissions. So the full implementation of those pledges will go quite some way. We've made a rough stab at China. I'll come back to that. Of course, that was only a relatively recent announcement. The upcoming five year plan, I guess, what the 14th five year plan was very, very important to that implementation of that pledge. We've still got that to come, of course. And as I said, a couple of countries have joined in, which, you know, which will be out of model in due course. But of course, net zero takes us on this trajectory. And that's a very, very ambitious trajectory. I'll come back to that graph towards the end, but just keep that animation in mind. So just turning quickly to electricity. And one of the key things about electricity is it's important. It's growing importance as a share of total final consumption. And indeed, in any low emission strategy, low carbon electricity has to play an increasing role, not just decarbonizing existing grid, but an increasing volume. And already you notice that China already growing from seven or just shy of 7,000 terawatt hours to 11,000, I think 11 just shy of 11,000 terawatt hours. Just the information Australia on that scale is about 240. So 7,000 terawatt hour, China is approximately getting on towards 30 Australia's even as we speak. India as well, the US not so much growth, but certainly India and China, anywhere that's developing Southeast Asia, the need for electricity. And that's under steps. Solar PV, clearly when we look at the levelized cost of generation, solar PV is clearly the cheapest of form of electricity with one important caveat, which I'll come to in a second. If we look at growth, what's happened over the last decade, the gray bars. And again, at scale, thousands of terawatt hours is a massive unit. 4,000 terawatt hours is roughly the US total power use. This is global growth now. And of course, it's 16-odd Australia's. For the next 20 years, if we look, we can see coal-fired power declining. Again, I'll talk why that, why we think it's happening. Other low carbon, but wind and solar PV are clearly big growth areas. Gas is still there in the mix and still growing. And again, the flexibility that gas provides and flexibility is a key word in any energy transition. Under the sustainable scenario, coal-fired power, as I said, 8,000 terawatt hour decline over 20 years. It's a massive decline, certainly in steam coal use. Gas declines, but quite a bit more slowly. Other low carbon wind grows strongly, but solar PV is the key technology over the next 20 years. One of the key reasons why solar PV has become so cheap and technology has a lot to do with it and deployment has a lot to do with it. But when you look at the cost of capital to raise solar PV, we're seeing some of the lowest capital costs around. And that's partly, not partly, but heavily due to the fact that people have guarantees for the energy and that reduces risk. And of course, in the case of solar, it's all about the upfront capital. And if you can reduce the risk associated with the revenue and return on that, then you can reduce the cost of capital. And it's very important from a policy viewpoint that governments realise that and we've seen it in countries like India, a very low cost of capital because the relatively guaranteed returns for that electricity. So something to bear in mind from a policy viewpoint, yes, solar PV is cheap, but government policies can certainly make it cheaper and make it deploy faster. Okay, so as we look at the electricity grid and we see that increase in wind and solar in particular, we know that those sources are variable and they will need to be firmed up if electricity is to remain secure. And the way that flexibility is delivered for essentially four main techniques. One, existing flexibility in existing power plants. Secondly, increased transmission links. Thirdly, storage mechanisms, particularly batteries, pumped hydro in Australia, Andrew Blake has done a lot of good work on that. And finally, demand side response. Now, the response of how those four measures will be used depends heavily on where you are. In the case of the United States, gas plays a very important part. In the case of China, transmission is very important. In the case of India, it's batteries. And in all areas, transmission is a very, very important part, not just replacing but augmenting transmission links and building new ones to bring in plants that are not necessarily located where existing grids are. Which brings me to the point about grid expansion. And even in steps, we see the need for a dramatic global expansion in grids. The only drawback with that, of course, is that many policy environments are not well suited to deliver that investment. I might leave it to Nicola to reflect on the Australian policy environment, but certainly I think it's pretty clear now that the grid expansion and grid connections are now a major barrier to expanding solar and wind in Australia. She disagrees, I'm sure she'll say so. One of the problems we've seen globally is that operator revenue has dropped very sharply and just in the three countries we've seen. And of course, if these operators are to expand the grid as dramatically as we say, then this is a major issue. Certainly when I come to China, if I get time, I'll talk about the China grid issue as well, because that's a major barrier in that country. It's a major barrier in most of the countries we look at. Turning quickly to fuels. Every fuel, obviously, is heavily dependent on the rate at which we reduce emissions, fossil fuels. You can see there the steps in solid and dotted SDS. Oil and coal fall quickly. Natural gas quite a bit less so. It still has to fall over the next 20 years. You can see the peak in natural gas is further out in the decade. In the case of oil, it's the next few years. In the case of coal, it's already happened. And low carbon fuels, of course, growing rapidly. Just if we look at individual fuels, the case of oil, as I said before, without policy action, we will not see that decline in oil use. Steps doesn't get us there. On the right-hand side, you can see the areas where we need to make changes. Vehicles, obviously, high on the list, but long-distance transport and petrochemicals, quite a bit harder to do, at least at the moment with electricity. Let's move quickly on to gas. A lot of talk in this country about gas as a transition fuel. In the case of steps, that's certainly true. We see quite a bit of growth in that, but in the case of SDS, quite a bit less. Still quite important, certainly in the next decade. But you notice there, we've got CC US, a fairly large chunk of gas as well. I'll come back to that when we talk about net zero. Finally, to coal, coal looks increasingly challenged. And I think it's fair to say, when we look at, say, even under steps, we see coal demand declining and the global coal trade, a relatively small share of actual total global coal use, coal trade declines. And in SDS, of course, it declines quite dramatically by a factor of about a half. I should distinguish here between steaming and coking coal. Coking coal holds up quite a bit better than steaming coal. Just a nice little one on the question of methane, a lot of discussion around methane. We now have satellite ability to observe methane around the planet. Of course, it is very important if we're using fossil fuels and particularly gas that we keep methane leakage to small as possible. And of course, one of the nice things about the election that Joe Biden, the alumnus, certainly reversed one of the things that Barack Obama introduced were standards for methane release. And the incumbent president reversed those standards. In fact, he abolished them. We can look forward to them being reinstated. Because of course, the United States is the world's biggest gas producer, as we speak. And indeed, a fairly large oil producer as well, like the largest. So, turning to, okay, on time, we're using all here, turning to SDS, and particularly the net zero and 2050 scenarios, quite a bit to say here. So I guess the first thing to note is having an economy that gets knocked for six is not a sustainable way to reduce emissions. Yes, the US economy did reduce emissions by 10% over the course of the pandemic. And Australia said it was only 3%. But I think most people anticipate that energy demand and emissions will bounce back if and when the recovery happens. What we need is a sustainable recovery. And that can only happen with very significant policy changes, which we'll talk about in due course. Let's move forward. So that's just comparing the emission numbers. In the case of SDS, we have emissions falling from, well, from 36 gigatons last year from 33 current levels down about 27. So already in the next decade, that's a very substantial fall. That would require a fall pretty much equivalent to what we've seen in the last year. So say that 7% fall would need to be projected right through to 2020 every single year. Hopefully not at the cost of the economy, which would obviously be completely unimaginable, but using policy measures. And we just outlined the three key ones there, which are going to do a fair amount of detail. So 27 gigatons already reduced by a quarter from 2019 levels. It's not just about electricity. Spent a lot of time talking about electricity, but we need also to have different energy sources, liquid biofuels need to grow very sharply, biogas. Gas delivers some very important flexibility services, but obviously in the decarbonising or zero carbon economy, gas has no place, needs to be replaced with something if those flexibility services continue to be delivered by gas. And because biogas and hydrogen are two key measures, two key technologies, which we can see growing and growing very substantially, particularly in the case of hydrogen. Something that no one would like. Yeah, okay, we've got particularly in the sustainable scenario for hydrogen understated policies. We have some growth, but that's almost at the pilot level. Innovations are driven by deployment. This is a really significant point I want to make. We've got brown is the steps, SDS is the green. And one of the things we've learned in the last decade or so is how governments by setting targets, key targets, can drive deployment, and hence deployment drives economies of scale, drives learning by doing drives down costs. We've seen that already in solar panels for sure and technology. Yes, has made a big contribution that's been driven very heavily by government policy. We're starting to see it again in offshore wind, where what the British prime minister likes to call the coalition of the willing, Germany, Denmark, United Kingdom in particular, set very ambitious targets for offshore wind. And we've seen costs come down very dramatically in the case of increased deployment, learning by doing economies of scale. British prime minister set a target of 40 gigawatts of offshore wind, very ambitious target. Hydrogen is a really interesting one that you can see, but also heat pumps over on the side, obviously electric vehicle technology, electric technology, electric vehicles as well. But I think hydrogen is a really interesting one. So towards net zero, I skip rather quickly through that, but just to reiterate that slide that I had earlier, the world is not on a clear path to achieve decisive decline. The net zero, which we're seeing now an increasing number of countries and as I said joined very recently by Japan, Korea, China and hopefully the United States with the existing countries would provide a very, very powerful coalition. It would of course mean that the gray area will be quite a bit smaller and that gray area of countries would have to contribute their fair share as well if we are to get to net zero. So when you look at the graph by 2030, that implies reducing the steps, which is already quite an ambitious drop of 25% from 2019 levels. We're down to 20 gigatons. So we're down to about 40, about a 40 to 45% fall in emissions. And even some countries are actually talking about even doing that even quicker. Italy's got a 55% target and certainly a number of countries are talking about a 50% reduction. And the way we do that is relatively straightforward to say, one, we decarbonise the power sector. Two, we push the electricity use as much higher percentage of total final consumption through electric vehicles obviously in the transport sector in the low temperature heat. Thirdly, we must make energy use much more efficient. And of course electrification is very helpful in that regard. Both when I say energy efficiency, that means buildings. It means houses. It means everything that uses energy. It means industry and some of those industries called steel and cement are going to be really, really tough. So it's quite important to make upfront savings because those other sectors need technologies that we're only just starting to think about employing at scale. As I said, energy efficiency has to accelerate. It's already, it is coming down, but it needs to accelerate and in fact double in the next 10 years from where we thought it was realistic. And if we look over on the right hand side, the impact on demand, those bottom bars, respectively, something went wrong with my computer there, coal, oil and gas. You notice that coal obviously takes the biggest hit because electrification of the power sector, oil, electrification of transport, gas, quite a bit less so. And again, because it's such an important part of the flexibility services that I talked about earlier. Just as an aside in terms of energy, if we look at Northern Europe or America in the winter heating season, gas delivers more energy than electricity at the moment. And that's actually true in the ACT and in Victoria and Southern Australia in general. So replacing those flexibility services is really tough. We can do it with either biogas or hydrogen or we can do it with electricity, but of course that means electricity has to be able to deliver that peak service, which means we need more capacity and even more generation. Certainly, as I said, decarbonising electricity, you can see the track here for coal-fired power by 2030, subcritical and supercritical generators pretty much extinct. Over on the right-hand side, we've got some of the deployment numbers in gigawatts for solar power relative to the historical peaks. You can see China, which has done 50 gigawatts and that's really a big number. They essentially quadruple that and that goes for most countries as well. They're looking at some very, very significant increases in solar PV deployment rates. So I do want to compare and contrast Australia with one particular country and, well, the United Kingdom and the EU. So the United Kingdom, this is their power sector generation over the last 30 years. And of course that 30-year time table takes us out from now up to 2050, so it's good to look back over 30 years. And if you look back at 1990, you can see the dominance of coal and by 2019 coal has almost disappeared from the mix. If we compare emissions between 2008 and 2019, we see that on the basis of these structural changes and of course wind and solar down the bottom, they're quite important, but we can see that emissions have fallen by two-thirds. I guess the other important thing to note is demand has fallen from 400 terawatt hours, 400 thousand kilowatt hours, 400 down to about 320 on the basis of very strongly applied efficiency technologies, especially in housing. UK housing was generally regarded through poor quality. I spent a lot of time on housing, a lot of time on things like lighting. As you've been to Europe, well, no, it's pretty hard to find incandescent light glow these days. I've been pretty much replaced by LEDs. And the lighting is dramatically improved in quality and price, roughly one-tenth of the energy used for the same amount of lumens. And again, deployment policies have a very big driver effect on that. Just so looking to the future, we've got on the left-hand side 2008-2018, we can see in fact that coal at the bottom basically has already disappeared. And in fact, it's been replaced essentially by renewables, that green bar at the top, coal and renewables switched to percentages in the decade. Pretty important achievement. We looked at 2050 and we see a number of interesting things. We see that gases almost completely disappeared as well, still quite significant in 2018. We see nuclear is still around but quite a bit smaller and we see renewables. We also see at the top, natural gas with CCS. And that is actually designed to make some of the used biomass use will actually make the power sector in Britain actually emission negative. What that graph doesn't show, of course, is based to 100% is the fact that the electricity grid will go from producing around about 300, 300 terawatt hours, a little bit of imports at the moment, up to about 650 terawatt hours in the next 30 years. So a very dramatic expansion of the grid and a very dramatic decarbonisation, but one that the historical record gives some credence to. And if those of you who listen to Boris Johnson's statement, his 10-point plan to make that happen, including the famous 40 gigawatts of offshore wind, but also very significant energy efficiency initiatives. If we look at the EU and see what they are planning to do and they're quite advanced in their planning as well, first of all, we can see that again, decarbonisation has already advanced quite a way. We've got decarbonised technologies on the right, emitting technologies in the left oil, of course, pretty much disappeared from the power sector in most OVCD countries. Gas and coal, still fairly prominent, about 1,000 terawatt hours. By 2030, coal has disappeared and by, well, 2040 in fact, gas has almost disappeared as well, to be replaced by a whole suite of, well, essentially renewable technologies. Those first three bars, nuclear, bio and hydra, don't change a great deal. But offshore and onshore wind and solar PV definitely change a great deal. And as you can see, the grid, the EU grid expands from around about a 3,000 terawatt hour grid to about 4,800 in fact, over that time frame. And that of course implies a very significant amount of energy efficiency as well. So there are countries and groups of countries with very well-developed plans to make this transition happen, led by the power sector. When we look at what's happened in Australia, we have seen a very remarkable gain. Some of the work done here at the ANU, Professor Blakers, Matt Stokes, Ken Baldwin, on a per capita basis, that is a dramatic deployment of solar PV and wind. Just to take solar PV 2016 to 2019 and those numbers is a rough tripling of generation from solar. And as of basically as of now, we have about 33 terawatt hours of wind and solar from virtually nothing 15 years ago. Most of that has happened, as you can see from that graph in the last four years. And the clean energy regulator is very confident that that will continue, certainly driven by some of the state renewable energy targets that are out there, something towards 50% of the power sector by 2030. Solar rooftop, which I don't think is included in those numbers, stands at about 12 gigawatts and set to double over the next four to five years to about 24 gigawatts. Nice slogan there, 24 gigawatts by 2024. I'm sure our Prime Minister could pick that up if he was so of a mind. What is interesting when we put that on the same chart as we had before for the United Kingdom and that again is generation in our power sector. We can see that firstly, power demand has continued to rise and whether the share of coal has fallen from about 80% back in 2000 or thereabouts to around about 60% now. In fact, before any emissions from that sector, it's significant. It's about 5% per annum, at least it was last year. But it's nowhere near as significant as what we've seen in the United Kingdom. At the same time period, 2008, 2019, the falls have been about 15% to 2020, of course, rather a typical year, but still we have seen a fall in the power sector of around about 5%. Whether we see a rebound or not remains to be seen. But of course, that means that Australia, when we look at Australia's emissions, they're not seeing anywhere near the drop. And indeed, the projections that were done last year by the department show practically no drop or a very small drop, I think about 4% by 2030. Notwithstanding the fact that the projections that were done at the time include the 50% renewable power figure and they include a very significant number of electric vehicles as well, which were sales, which we are not seeing in Australia at the moment. It's happening to China now. This is obviously not an IEA slide because it happened after the we are, but this is from an IEA alumnus, which I couldn't say for you, Chen, who I know quite well is working back in Beijing these days. And he's put out some his thoughts on what the net zero might look like in China. First of all, coal peaked in China in 2013. When I say peak, it's been rather flat peak because it's only fallen about 3% or 4% since that time. But nevertheless, it is falling under the scenario that he's envisaged oil would peak quite soon. Gas would peak quite a bit later. Gas use in China has grown sixfold over the last 15 years and it's driven by a number of factors needed for diversification, but air quality considerations in cities. China is now a very big gas user in excess of 300 billion cubic metres. Electricity would have to double and I think you've seen that already in some of the slides presented. The 2050 would imply 15,000 terawatt hour grid in China, 15,000 terawatt hours. That's roughly 60 Australia's, improvement of the current in Australia and more than 90% of that would be decarbonised. Nuclear, hydro, IMS, solar and wind obviously very important, but with a very important caveat about the need for distribution and indeed the regulatory regime that will enable those distribution lines to be expanded at the rate required is a very big barrier. Again, I raised that earlier in the presentation. That's pretty much true in a number of countries, but the most important point which I've bolded is that energy efficiency is by far the most important contributor to decarbonisation. You won't argue that I have plenty of scope for that and you'd be too, but still that will require a very, very significant transformation. I might add in the case of oil, of course, the Chinese motors for wanting to reduce oil demand are very obvious. They are now the world's biggest oil importer and the heavily dependent on imports in the Middle East as is Australia, but the Chinese are very worried about energy security as Australia apparently is not and as a result of that, they are taking steps to reduce oil demand, electric vehicles being the most obvious one, electric two-wheelers, anyone who's been to China knows there's plenty of electric two-wheeler vehicles around as there is in Australia. It's not just about electricity of course, passenger cars have to accelerate and accelerate very dramatically in the mid-zero. Already electric vehicles would need to make up 60% of new car sales by the end of the decade. Similarly, it's not just about technology, behaviour will need to be important and the IA has analysed a whole range which I'm not going to go through there, but how that can save energy use and how some of the lessons we've learned in this last year might be applied in a longer term to reduce emissions while still maintaining economic activity. So just to quickly summarise, first of all, a whole collection of things have to happen by companies. In particular, we look at say just hydrogen over the next 10 years, we would need to increase by a factor of 100 hydrogen production. That would take it from being pilot stage to being pretty much a commercial technology. Case of electric vehicles would have to, as I said, accelerate to well over half the new cars sold globally. 2.5 million, China being the biggest contributor to the number, just to take one example. Thirdly, finance and we've seen some very, I haven't mentioned finance much at all, but we've already seen some very important moves by finance and indeed energy using companies to commit to net zero as well. Just in terms of investment, clean electricity investment, essentially solar and wind would need to more than quadruple over the next decade. That's annual investment, of course, and that is a pretty significant number. Just a key point here about, of course, companies, citizens and investors, but most of all, governments. So I think I've run my course pretty nicely, but just to conclude the quiz, I recycled that one from last year. Most people seem to have got that right, actually. SUVs are the biggest contributor in the last decade, or they're about to be emissions growth. In Australia, I can comfortably say as a world leader in SUV sales, SUV sales are more than half our new vehicle sales. Of course, that has not done good things for fuel economy. As I said repeatedly, we are an outlier in a number of aspects, and that's one of them. On energy efficiency, we have no vehicle efficiency standards. The government can ask me this last year, why aren't we doing that? Scott Morrison actually answered my question for me. He actually said the government wasn't going to tell people what vehicles to buy. I might add fuel efficiency standards can be a very powerful tool to promote electric vehicle purchases as well, cross subsidizing heavy fuel uses to low fuel uses. Secondly, so existing infrastructure. The last 20 years or so in particular, we've seen China, well globally we've seen 2000 gigawatts of coal-fired plant built, well over a billion tonnes of steel-making capacity built. Again, especially in China, the years 2000 to 2012 in particular. When we look at, if we replace them all, all the new equipment with zero emissions, those emissions would still be with us in the case of power. That's power at the bottom in industry than other. That emissions over the next 40 to 50 years or so would total 700 gigatons and would lead to an increase in temperature of, wait for it, 1.65 degrees. I think that was at the outer edge of what most people expected. So one of the issues we do need to address in the net zero, technique zero scenario is how do we cope with those assets? Those assets in particular things like coal-fired power stations, which need to be repurposed, retrofitted or retired because just operating the existing assets of course means climate goals are lost. It's an interesting one about demand and supply here. If we have no new investment at all in the case of oil, oil production capacity falls from just under 100 million barrels last year to around about 20 million barrels, falls by around about 80%. When we look at our various scenarios, you can see their steps. Oil demand is relatively flat, just increasing slightly. The next line down is the SDS demand curve. Even to meet the SDS demand curve, we would need new investment in existing fields, so-called brownfield investment. We'd need new field investment. In the case of steps, we'd need additional new fields, which we haven't really even discovered yet. So we need to invest continuously and we've seen that similar curve exist for the gas industry a bit less so for coal. But what that means is we need to have a pretty clear idea of where we're going, both globally, regionally and nationally. If people are going to invest they've got to be somewhere in that curve and how they invest, but we can't stop investing even in a net zero emissions. We still need particularly gas, oil and coal less so, but we're still going to need some new investment. So and lastly, a little over 21% comes in Australia and that's pretty much in line with the OECD average. It has been increasing over recent years and obviously in a decarbonising world that's share will need to increase. In the case of the EU from memory, it's got to go from about 21% to 38%. So it's probably not too bad a proxy for Australia. UK's pretty much the same, but of course highlights the point that it's not just about the electricity sector. A lot of journalists confuse energy electricity. Yes, electricity will deliver energy services more efficiently, certainly for vehicles. A lot of services, lighting and so on, we can make big energy efficiency gains, but it's not just about electricity. So to conclude, whether it's still an open book, some countries, some regions the EU, the good example, have used this as a catalyst, part of a very large part of their recovery plan will focus on green energy transition. Renewables are taking off, solar leading the way, but grids are very going to be a very big limiting factor and I'm sure Nicola will talk a little bit about that. Well and gas revenues have been squeezed and producers are going to have to make some adjustments to that. I'll talk a little bit about what that means for Australia, if you like. Going in net zero means a very, very sharp increase in a whole collection of technologies, not just low-carbon electricity, but innovation through hydrogen, other low-carbon fuels, battery, carbon capture and storage probably used with gas and with some industrial processes. And some of those technologies will take time, although I guess one of the good things about this year we've discovered that we can develop vaccines much quicker than we thought as well. No shortcuts, only very significant changes and those changes are not just technological, they're behavioural, they've got the way we do business for all of us citizens, investors, companies, but clearly most of all for governments. Clear policy roles, clear policy guidance, forming coalitions of the willing to borrow Boris Johnson's phrase from different contexts can make a very important change. So I think I've just about done my dash there, so at that point I shall sign off. Wonderful and thank you very much Ian for such a great exposition again at the WIO. Just noting that the aggregate scores in the poll show that our audience got a bad past today, two out of four questions right, they just were correct on the 1.7 degree question and also the percentage of Australia's electricity as a function of total energy use, but missed out on the SUV question and also on the question about oil production, although not by much on the oil production one, but the SUV one's a bit of an eye opener I think and Australia now leads the world in terms of percentage SUV ownership, so this is really a very interesting set of numbers. So now everyone has the opportunity to start putting their own questions in the Q&A box to Ian and to the panel and indeed the panel members will now present their own perspectives on the World Energy Outlook 2020. Just very briefly the panel members are Nicola Falcon who is the General Manager of Forecasting for the Australian Energy Market Operator, Professor Kylie Catchpall from the ANU Research School of Electrical Energy and Materials Engineering, Luke Menzel, CEO of the Energy Efficiency Council and Professor Stephen Wilson, Director of the University of Queensland Centre for Energy Futures. So the panelists will now have the opportunity to give their own viewpoints on the World Energy Outlook in different areas and I'd like to invite Nicola Falcon from AEMO to talk a little bit about potentially some of the impacts that this might have on AEMO's integrated system plan amongst other things. Happy to you Nicola. Thanks Ken and afternoon everybody. Thanks Ian for a fascinating presentation. Is it really a thought I would just open up with a few observations around how the Outlook really aligns with a lot of the observations we already make with the ISP. So I've got two or three points just to really cover off quite quickly before we go to board a discussion. The first one is really around the impact of the pandemic on the energy sector and in particular the electricity sector here in Australia. We're actually not seeing as much of a drop as we've probably anticipated at the beginning and you know we're all used to this word unprecedented times probably a lot more than anyone wants to again in the future but you know very very difficult obviously to forecast things when we haven't really got any sort of reference or experience to assess based on it but Australia's actually been holding up reasonably well in terms of its electricity demand at the moment probably for a number of obvious reasons including the fact that you know we've been somewhat lucky in being a continent that's relatively isolated from from a lot of the impact and also I note that in the we are some of the drop is due to sort of the reversal of electrification in developing countries which is not so much of an issue in Australia but the pandemic is far from over and we published just in our summer reading this report last week you know some store concerns are uncertainty of what demand will be this summer particularly as we're starting to see people working from home as well as people in offices and you could find that therefore you've got demand in both premises more than you would normally so we're certainly keeping an eye on just what the pandemic is going to do from a demand perspective but it could be that for us demand actually goes up particularly during peak demand times look scenarios are really important for assessing uncertainties and we have done a number of sensitivities around the impact of COVID but we've also used the scenarios more broadly to develop ISP future worlds that we've looked at for the 2020 ISP and in fact we're starting to look at it again now for the 2022 obviously when you've got such uncertainties and you're trying to plan and invest in grids for 20 40 60 years it becomes really really important to understand how that world might play out and how to build sort of a robust investment around that so we use scenarios not only to look at how the investment might unfold under different scenarios but also what decisions do we need to make now and how will we be able to adapt those decisions over time if any one of these different sort of futures unfold so really important from a decision making perspective to build flexibility into the system given there is just so much uncertainty in the 2020 ISP we had five scenarios that were really built around two key dimensions one was decarbonisation and one was decentralisation and feedback we received during the course of those scenarios and then also after we've published the 2020 ISP was to now push at least one scenario beyond the decarbonisation objectives that we had in the step change and I think again that's quite consistent with the feedback that IEA had received in developing their scenarios this year so we're looking at a scenario that does not only focus on decarbonisation of the energy sector or the electricity sector but also some of the decarbonisation of other sectors and how that might lead to increased electrification so very very similar to what Ian was sort of flaking there about a doubling of energy demand and how's that going to impact on the NEM and what the role hydrogen might have in that as well if we get to the sorts of future worlds of hydrogen being a super power for export and other things we're looking at and our scenarios are around things like the gas lead recovery that's been talked about what would happen if we were able to achieve lower gas prices would that make gas a transition fuel more than what we currently have been forecasting in the ISP so again quite similar to some of the stuff that Ian covered off on but it's been really quite timey to get these WIO scenarios coming out I have to say because it means that we can link our scenario developments to global narratives and look at some of the alignment about what would be driving technologies from a global perspective a couple of other insights just very quickly one is more generally about decarbonising the energy sector and certainly in our 2020 ISP we saw that the most economically efficient way to replace up to 63% of our coal fleet in the next 20 years was with a portfolio of renewable generation both grid scale and behind the meter dispatchable storage and really have that complemented by transmission and certainly we saw again very similar to the WIO that transmission played an even greater role in scenarios where you've got more decarbonisation and Marinus link which is interconnected between Tasmania and the mainland but it was a case in point it is great to see that it's entirely consistent with the IA's own findings about renewable energy and storage and that they continued declining costs of them and you know the commons around solar becoming the new king of electricity agree that we definitely need flexibility in such a power system and we've seen transmission and distribution playing a large role in that as Ian was sort of alluding to but one of the things that I found quite interesting was that there was a comment in the report around in the networks becoming a weak link in the chain and some concerns around some of the regulatory arrangements that will need to be in place to make sure that transmission and generation can be coordinated or enabled and play a key role in this energy transition you know we are grappling with something very similar here in Australia we noticed you may or may not be aware that just recently Electronet and Transgrid actually submitted a finance ability rule change to the AMC to consider to help sort of manage some of their risks around financing ISP projects and and being able to maintain their credit ratings now those sorts of things that are real genuine concerns the ISP might outline the best way to deliver a transmission and generation to meet energy transitions but if at the end of the day the risks for financing are too high then you know that is also going to be a weak link from a regulatory point of view you'll probably all know the ESB and the market bodies are looking at ways that we can put market designs and reforms in place so that we can actually support that energy transition but but those things are going to be really really important you might also be aware that transmission costs in Australia are going up or at least the estimates of costs that have been going out quite considerably in the last year unless we can keep those costs and check we might actually find ourselves in a position where some of those large transmission investments that we'd identified as delivering benefits of diversity and so forth may not actually end up being in the best interest of consumers in which case we're not going to see it as stronger interconnected names and we might need to start relying more on technology to be able to deliver the reliable and secure supply in each region so that's also something that we need to really be working on to try and keep transmission costs down so that they can actually act as a neighbours and make benefit of the geographic diversity that we have in this country so they were probably the main observations and connections to the we are I think you know as we go into our 2020 ISP or 2022 ISP we are going to need to see what things like this decarbonisation and electrification is going to mean for transmission in our system but it's going to be really interesting to see the analysis as it comes out Great, thank you very much for that perspective and interesting to hear that the next ISP is looking at beyond the step change scenario because the latest clean energy regulator data shows that indeed installation of renewables is heading on a track that's above that so be interesting to see your next analysis in that regard so thank you very much and we'll now move to Professor Kali Khajpal from ANU. Kali is going to look into some aspects of technology trends solar PV and hydrogen for us. So thank you Ken so I'll just share my screen because I just have a few slides to show about this yeah so we're talking about technology trends in renewable energy so we have seen from in and this has come out of AMO of course as well that now the variable renewables wind and solar are the cheapest forms of new energy and that is even that the case when you include several hours storage which could be from pumped hydro or from batteries and this leads to this trend of electrification so we have the case where electric cars are cheaper to run than petrol cars and they can be now cheaper using renewable electricity as soon as the cost comes down the capital costs come down then the case for electric cars is is clear for everyone and so we would expect to get that rapid take up and similarly reverse cycle air conditioning which is a type of heat pump can be cheaper than than gas and now it can also be cheaper than renewable electricity so we change then we get this massive electrification through transport light duty transport and through heating applications these are the very kind of natural trends that will tend to to happen I think with without much push and this is all driven by this reduction in in costs so Ian was was talking about the how deployment can reduce the costs of technologies and this just illustrates this trend for a range of different technologies here so here we have electrolyzers we have fuel cells we have solar we have battery we have wind and what we're showing here is the cost relative to the initial cost as you install the technology so every time you double the installation of the technology you reduce the cost by a certain fraction the fraction depends on that technology but that's the learning curve that we talk about for all of these technologies and that means as you deploy them they continue to come down in price and we've seen that very dramatically especially for solar and now also for batteries and so if you look globally you know where are we actually producing emissions from you can see that a large fraction of that is is coming from power and but and also from from other sectors as well but we're going to see this decarbonization of all the power sector through all of these trends especially renewable energy we will also tend to see this decarbonization of that that light transport through electric vehicles we have the possibility for electrification of heating and cooling and buildings but you do also have these sectors of the economy as as Ian referred to that are hard to decarbonize and that includes a fair bit of industry and it also includes heavy duty freight so those are the industries that are a little bit harder to deal with they don't at the moment they don't have any economical decarbonization option so if you're looking further into the future you have to say okay once we've done all this electrification and as we're doing all this electrification what happens to these other sectors so one of the things that people have been talking about for these other sectors is the use of hydrogen and when you're thinking about hydrogen it's super important to remember that it's an energy carrier it's not an energy source so it's like electricity in that it moves energy around but it's not actually a source of energy so you have to produce it from somewhere you can produce it from electrochemical means so essentially using electricity and then in that case you're going to produce it from renewables or you can produce it from fossil fuels which is the way that it gets produced at the moment so it's not inherently clean it depends how you produce it and then you have a range of choices of where you can use it the things that are particularly interesting are the applications in in high temperature heat and also in chemical reactions for example for reducing iron or to produce iron when you think about where we actually might use hydrogen you have to think about what it's competing against and as I said for transport we already have battery electric vehicles for low temperature heat as in houses and offices we have heat pumps these are economically attractive options already they're easy to install so that seems like the place that they will go the cases where we don't have good low carbon options are high temperature heat and feedstock so those are those hard sectors of the quantity to carbonize and that's where things like hydrogen looks interesting an important point when you're thinking about renewable hydrogen again i said is where does it come from and in terms of the cost of hydrogen about half of your cost of renewable hydrogen is actually your cost of the electricity so this is really important to remember that if you want to reduce the cost of hydrogen you have to keep bringing down the cost of the electricity so there's other things including the electrolyser but about half of your cost is the actual electricity and so the projections are that by 2050 we get to a point where hydrogen is competitive with hydrogen produced from fossil fuels may well happen faster than that but it's important to note that this is depending on continued reductions in the cost of solar energy in particular so this will come about through continuing development of solar energy continuing deployment of solar energy and that is one of the major reasons that you can produce this low-cost hydrogen so overall not only does the electrification of the whole energy sector depend on solar but also future options such as hydrogen also depend heavily on solar so just to conclude there is this pathway or renewable electricity for everything that you can electrify easily and that means the current demand extending that to light transport extending that also to low temperature heat you can decarbonize other sectors using hydrogen but we are currently developing those technologies so that will take some time and that includes heavy transport and high temperature heat and feedstock but if we want to actually do this we need to keep going down this path of reducing the cost of solar electricity further through that technology development and deployment. David Cowey, thank you very much for that presentation and for the relevance particularly on the hydrogen aspects as an energy vector for future decarbonisation. So now we welcome Luke Menzel from the Energy Efficiency Council and he'll be talking to us obviously about energy efficiency measures as they relate to the various scenarios presented by the WIO. Over to you Luke. Did you just almost introduce me as the CEO of the Clean Energy Council Ken? There's a faux pas. No, delighted to be here and thank you to ANU, to Ken and obviously to Erica for the invitation. There was one line that stood out to me from the WIO this year and it's that there is no single storyline about the future and it reminded me that I've always thought of the WIO as a bit of a choose your own adventure book. Books that I was obsessed about as a child and I don't know if you remember them, there's a decision point every three or four pages and in one of my personal favourites, the Cave of Time, you sort of plunged into a cave in a place called Snake Canyon. There's two passageways, there's one heading towards the past and one heading towards the future and the path you choose determines the trajectory for the rest of the story. Of course, I always cheated and sort of stuck my finger in the pages and went back and read all the stories I've missed once I've chosen a particular path. Unfortunately, we don't have that available to us with the energy transition that we're working through but I think it underlines the fact that we are at an inflection point and that's really the underlying message from the IA in the WIO this year. We're at a very consequential moment in the midst of a global pandemic. Governments are making absolutely eye-watering investments which have potentially transformative effects on the global economy and on infrastructure that's going to be baked in for decades to come. So the message from the IA has been to align recovery efforts with our goals around climate change and energy efficiency and electrification, fuel switching has been right at the core of that. So I've been asked to speak on the energy efficiency elements of the WIO and for WIO fans out there that you won't be surprised that energy efficiency is crucial to the SDS. It sort of bounces around 40 something percent of the heavy lifting for decarbonising energy sector has to come from the WIO. And the IA's has been raising their focus on energy efficiency for a number of years now. They've got a dedicated energy efficiency office. They release the energy efficiency market report every year which is a dedicated report actually coming out this evening for those of you that are interested. But while they've been ramping up those efforts, they're rhetoric around energy efficiency. The amount of focus they're putting on energy efficiency has reached an absolute crescendo in 2020. We already had them convene a global commission for urgent action on energy efficiency in 2019 that reported in June in 2020 with a raft of recommendations for governments around the world to increase the rate of energy efficiency improvements around around 3% a year. And then they also had the WIO report on sustainable recovery which was released by the IA and the IMF in June. And that had at its core a recommendation for governments to focus on a range of clean energy investments, but energy efficiency absolutely first among equals. And you see that reflected in the in the formal WIO as well. But a lot of the a lot of what is in the WIO was actually stated previously in June. And it was done so in an effort from the IA to provide advice to governments as early as possible while they were starting to craft their recovery plans. So why energy efficiency? First and foremost, job creation machine. When you look at all the range of clean energy investments that are available, energy efficiency, particularly building upgrades tops the charts. I think it's around 15 jobs per million of United States dollars that's invested in recovery in their good local jobs. It's obviously productivity enhancing, something which governments always think about when they're making stimulatory investments. We've had a few speakers talk to the fact that there's cheap direct emissions cuts, but there is also a benefit in terms of lowering the cost of supply side transition. So if we can bank some of those cost effective energy efficiency upgrades, it means that the cost of transitioning the supply side of the market goes down as well. There's a stimulatory effect for the manufacturing sector because you if you're upgrading buildings, you're obviously, you know, needing more building products. And I think it was Kylie that said that by taking some of the sensible things we know how to do like building upgrades and electrification, it buys us time to work through some of the trickier problems we have in other sectors like steel and cement and other places. So there's another reason to invest in energy efficiency, which it's been particularly hit hard by the pandemic. And that's another theme that you see in the we owe this year. Our willingness speaking as I am here in Victoria in the midst of lockdown and the midst of pandemic to have tradies around to fix your insulation or fix your lights is relatively low, especially if it's not an essential upgrade. A poor economy means that the normal rate of appliance upgrades and other capital investments the business might normally be making actually actually goes down. Electricity and fuel costs are generally down, which means the business case for energy efficiency upgrades is is lowered. And so the what we've seen is a clear message from the IA is like you could you could fill books with the reasons why why government should be investing in energy efficiency in particular at this moment. So how's the world responded to this call? We've pretty well in some of the in some of the countries that we would normally compare ourselves to the 7 billion euros in that's been allocated in France in France around four and a half billion pounds in the UK, two billion euros in Germany, two billion in Canada. And President-elect Biden has energy efficiency at the center of his green recovery plan. And the plan is to create one million energy efficiency jobs. We'll see how it goes with the Senate in terms of how much is that's going to that is going to be implemented. Then at the at the federal level, if we look at Australia, for example, we haven't seen that echoed in an Australian context, there's opportunities for the federal government to do a lot more, but we have seen a lot of activity at the state level. So in New South Wales, South Australia in Queensland, a collectively a bit over 200 million between those states invested in public building upgrades. But then what we've seen is that the Victorian government has taken this guidance to heart and made a massive investment in energy efficiency nearly 800 million for upgrading the homes of vulnerable Victorians and another 200 billion for community groups and government building upgrades and businesses. And interestingly, if you dig into the Victorian investments that were announced over the last couple of weeks, there is a strong electrification agenda. And maybe we can we can dig into what that electrification piece means in the Q&A session in the context of energy efficiency and in Australia in particular, as we sort of grapple with what the energy transition looks like in different sectors of the economy. Put it all together, Australian has invested somewhere in the vicinity of 1.2, 1.3 billion energy efficiency, the bulk of that in Victoria. So can a big opportunity for Australian governments to build on the momentum that's been created in Victoria in the next round of budgets and really get behind energy efficiency to kickstart the economy and the upgrades that we know we're going to need to make on the demand side to work our way through the energy transition. Great. Thanks very much, Luke. And as you say, pointing out the central pillar of the WIO, which is energy efficiency. So now we will have our final panelist present. And that's Professor Stephen Wilson from the University of Queensland. And Stephen will talk a bit about the sort of big picture issues and technologies that we don't yet have. Have you, Stephen? Thanks, Ken. And also thanks to Ian for an excellent presentation up to all the usual standards, which I think is remarkable in a year like we've just been through. The slides that Ian shared with net zero 2050 pathways on them, pretty daunting, I think in the magnitude of the challenge that's in front of us. And I think even before we start to drill into the hard to decarbonise emission sectors. But I think one of the really helpful things actually about the net zero discussion is that no one gets to put anything in the too hard basket anymore once we start talking about net zero. So we can't just kind of focus on the easy stuff or the first things that we naturally look to. Eliminating or even even reducing CO2 emissions, it's a really difficult technical challenge for the cement industry, for the iron and steel industry and for others. They're big energy users, but it's not just about the energy. So I think CO2 from iron and steel is on the order of about 7% of global emissions. And as Bill Gates says in this discussion, what's your plan for steel? So as Ken said, I've been asked to talk about how we develop transition technologies that we don't yet have, such as green steel. So I think as we think about this and ideas like net zero emissions, it's worth keeping in mind that all decarbonisation strategies involve capital intensification. So investing more capital than the thing that we're replacing. But I don't think we should think about that just in terms of monetary dollar abstract terms because that capital gets manifest in physical assets, including metals. And steel obviously is one big example of that. It's energy intensive, it's emissions intensive, and it's carbon intensive. But it's actually a lot more complex than most other emissions and carbon intensive parts of the energy sector. So supplying the, as most people will know, supplying the iron ore for the steel industry has been the number one export contributor for Australia's economic prosperity for more than a decade now. And it contributes the lion's share of the profits in our two largest companies in Australia, or two of our largest companies, I should say, Rio Tinto and BHP, and with FMG also now a pretty serious third player. So just a couple of numbers. World crude steel production is now approaching 2 billion tonnes per annum. I think it was 1.87 in 2019. And just for perspective, China accounts for over half of that. So 996 million tonnes or 53% last year in 2019. And of course, iron and steel are very much at the heart of the Australia China story on multiple levels. So the thing that we're faced with here is that blast furnace technology is actually thousands of years old, the basic technology. And I think that tells us that it's actually quite hard to displace. And during the golden decade of the China boom, the Chinese steel industry achieved economies of scale, you know, beyond anyone else so far, perhaps with a few exceptions, you know, with furnaces up to 5,000 cubic metres or larger. So they've built this very large fleet of this technology. But having said that it's thousands of years old technology, of course, it keeps evolving and improving incrementally, which is one of the reasons it's hard to displace. So for example, decades ago, you needed about 1,000 kilograms of reductant per tonne of hot metal. But now they've got that number down to about five, I think, under 500 kilograms. So there's this constant improvement going on. And the other thing I think to keep in mind with this example, and you'll find this in the other hard to displace examples as well, is that carbon in the form of metallurgical coal in this instance is actually doing three really big jobs in the blast furnace. That's providing structural support. That's providing chemical reduction. And it's providing energy. So energy actually is not even secondary. It's really the third priority in that equation. And it's the easiest thing to substitute. So the industry's been playing with substituting on the energy side for decades to try and as part of their cost strategy. And now they're starting to look at things like hydrogen injection. But this is really just a variant on those long-term trends. It's just a partial substitute at the margin. And it doesn't really sort of address that question from Bill Gates. So in terms of there are alternative new iron and steel making technologies that are emerging. But just keep in mind that most of the alternate new technologies that have been tried in past decades have either failed or they've been marginal technical successes, but hopelessly uneconomic. And there are sort of relatively few plants. And the challenge with the new wave of technologies is that they're trying to do something even more technically difficult, which is to completely decarbonize the value chain. So there is work underway on this, including at UQ. These technologies are currently experimental and they're at laboratory scale. If it all goes well, they might be ready for industrial scale deployment in probably about 25 years would be a sort of pretty conventional experience, you know, industry person's view on that, I think. Technical experts have warned me that all the alternative technologies to date, and those were not trying to decarbonize the sector, they probably made the performance worse on the how much reductant you need per tonne of hot metal point of view. So just to wrap it up, when you start thinking about green steel and net zero by 2050, I think you need to sort of keep these key points in mind. You've got a basic technology that's more than 2000 years old that we're trying to displace. Half the global industry is in China. That industry is largely supplying domestic demand in China. There's a large incumbent installed base of blast furnaces. Serious companies have been looking at alternative technologies for decades and they've been largely unsuccessful. And what we're trying to do now is even more technically challenging. So I think it's fair to say that finding an answer for steel in the sort of the answer to Bill Gates is a simple question. And I think we will find similar things in other hard to decarbonize technologies and sectors, you know, like cement, for example, is going to require a very, very sustained multi decade R&D effort. And I think just I think we will find that one of the arrows in the quiver will need to be CCS. But my final sort of optimistic thought, since it was just mentioned that, you know, we've done amazingly accelerated R&D development on vaccines this year. I mean, vaccine development is a multi-billion dollar game. But the games that we're talking about here over the whole economy, net zero by 2050, that will be a multi-trillion dollar game. So that's my final thought. Thanks, Kent. Great. Thank you, Stephen, for taking us a little bit up the fruit tree from the low hanging fruit of energy efficiency talk to about by Luke to the, maybe the fruit out of reach in some of these other difficult to address sectors. So now I'll invite the panelists back and I'll invite Ian back as well. And we'll move to questions from the audience. So we've had a number of questions here, and we'll try and get through all of them. But as I said, if we don't, we'll try and answer them by email afterwards. So first off the rank question about hydrogen. And I think this is a hydrogen vector question. So I think this one's for Ian, building on what Collie was saying. What role will a hydrogen vector play versus HVDC interconnections in terms of the scenarios that you're outlining, Ian? Well, I think probably the shorter answer is if we're serious about doing this, we need all of them. Hydrogens, hydrogen's got obviously got uses in a whole collection of areas that are going to be very tough to decarbonise. In the case of steel, maybe we can use more electricity, electric arc furnaces. Certainly the Chinese want to do that, but they're talking a 30 to 40 year timeframe to do it. But the short answer is we need everything. We need energy efficiency. We need dramatically increased production in our net zero scenario. Hydrogen has to increase by factors of 100 compared to now. Transmission investment has to double, including high-voltage DC, including everything. As I said, the investment conditions for most of those things remain poor. So everything's got to be louder than everything else, as the rock and roll were it used to say. Good. Thanks, Ian. That question was from Changlong Wang. We now move to a question from an anonymous attendee just noting the graphs that you had there for the UK, Ian. This person asks, is nuclear being regarded as a transition fuel as well as gas in the UK? Nuclear is still there. You'd be aware that a new large-scale station, at least one, is being built in the United Kingdom as a share of, I think it declined slightly in terms of its share. So it's definitely still there and it's seen certainly for the longer term. But yeah, getting new nuclear stations built in Europe in the last decade, decade and a half, hasn't been a happy experience for a whole variety of reasons. Oloquo Alto in Finland and Flomendville has become a French press call at Koshmodesk. It's a nightmare scenario. We'll see how well the new sizeable plant goes. Interesting, of course, we've got a little bit of Chinese involvement, which has raised a few interesting issues. But yeah, the nuclear is there. It's not a growing share of energy, but it's still there. And look, it is a very important low-carbon technology at a global level. We phase it out tomorrow, then it puts a huge extra burden on other low-carbon technologies. Okay. We've now got a question this time around steel. We've already had a bit of a discussion about steel and perhaps Stephen might like to weigh in on this one. It's really about alternatives to steel. In other words, from Chris Baker is a question, do you see any potential to de-steal rather than decarbonise the steel itself? Yeah. Can I think my short answer to this would be yes. And I would see that as part of, it's like a sort of cousin of the energy efficiency story. And I think it's, it is something that if you go into the data, you'll probably see that there are trends in improved efficiency of steel use over time as part of the big underlying trend of dematerialisation, like weighting. Car panel thicknesses today, for example, they're much thinner than they would have been in my grandfather's time and grandfather's time. So that's happening. The challenge is, as is the case right across the energy sector is that the other factors are kind of more than cancelling that out at the moment. So the growth of global steel demand driven by the urbanisation and the mobilisation and the industrialisation of China has meant that the total has kept going up. And of course, to get to the sort of long-distant place where you have a lot of electric arc furnaces in China, that's the time when you're sort of into the scrap wave in a really big way. But for turning Virgin iron into steel, which is sort of still the phase that China is very much in and Africa has hardly begun to develop yet, it's still going to be challenging. So it's kind of yes with an asterisk, I'd say. Okay. Thank you, Stephen. The next question is addressing this observation of the ends that solar is now becoming king. So this is from Grant Davis and it's probably a question in Nicola's domain, which is that if so much solar is being generated in the middle of the day and the grid can't accept it, what's going to happen? And maybe we can talk a little bit about two-way flows and technology here, but also maybe about policy. Nicola? Yeah, look, thanks. And it's certainly something that we are quite concerned about, not just in the case of having not enough grid demand to be able to absorb it, but more generally, even before you get sort of negative grid demand, so to speak, we can see some challenges in the past, that's what we're going to need to deal with. Look, we're looking at a number of things to your point, Ken, it's about trying to find ways to be able to soak up that solar and use it another time. So energy storage obviously can play a really large role in doing that and being able to make better, more efficient use of that solar rather than just wasting it. There's also things, operationally that we're looking at around standards and ability to control the PV in those rare situations where you might actually find you've got too much solar on the system, being able to actually dial it down or curtail the solar in the homes under those rare situations is going to be something that we see being necessary. In the same way that today, if we find that we don't have enough supply to meet demand on very extreme high demand periods, then you might need to shed load. You don't want to do it, but it's something that you might need to have as a last resort. So there are means and ways to be able to get more controllability of PV and the flip reverse of that where you actually don't have enough demand to be able to absorb all the solar and have to dial that down. So I think there's going to be work on standards. I think there's going to be work on policy and encouraging things like energy storage and flexible loads and so forth to be able to actually accommodate those solar sites. Okay, thank you for that response, Nicola. We now have a question for Kylie, which is not so much about electrification but about railwayification of transport. And the question is, is there going to be an increased transport roll for railways to move heavy goods as opposed to trucks? And that's what Denise Fisher. Yeah, I guess there could be an increased roll for rail transport. We would face the same structural issues for rail that we've had over recent decades in that it's just easier to use trucks and cheaper and especially, of course, while governments are subsidising roads and while trucks don't pay for the damage that they produce for their roads. So it's more or less like building the railway and saying to the railway company, you only have to supply the trains and the railway comes for free. So this is what we're doing with the roads essentially and while ever we have that unequal playing field then I think the emphasis will be on trucks and while we have this existing industry for trucks there will be a push towards developing either electrification for trucks, battery trucks or hydrogen powered trucks. And there's this big move in both of those directions at the moment. We don't know which will win it. It depends on the development of the technologies but definitely that's the way that things are moving at the moment. Yes, and I think this plays into this discussion around the exercise on fuel that is currently the front of mind of various agencies and governments where they're going to lose income because people are transitioning away from fossil fuels and they argue quite wrongly that this is what pays for the roads. It doesn't. It goes in consolidated revenue and then you pay that from the roads. But anyway, so now they're looking at different schemes to be able to relate road usage or road damage to the actual vehicle that uses it or causes the damage. And this could in some policy sense shift the discussion around as you say to the true cost of using the roads in a way that may even shift things through electrification because the cost of the damage to the road from trucks becomes too much to bear for long distance transport. So it's an interesting discussion that's happening right now. Stephen wants to weigh in on this. Just a very small comment here. I think it's worth keeping in mind that when businesses choose between trucks and rail it's not only an energy choice and actually it's not only a cost choice. I used trucking as a simple example to teach the discounted cash flow model to some students and in gathering up the data I discovered that the cost of the per tonne kilometre cost of rail is sort of roughly on the order of half the tonne kilometre cost of trucking and so there's other factors in the equation around logistics and speed and convenience and all sorts of things that are coming into play here and I think as energy people we need to just keep in mind that energy is not the only part of the story and even the simple sort of cost metric is not the whole story. Maybe Ian has to deal with this stuff when dealing with scenarios I don't know. Okay, I'll add one more point on that and thinking more broadly about infrastructure. We also have to think about the possibilities for railways now that a lot of us are changing where we want to live actually and that a lot more people are going to want to live outside the major cities and those sorts of things can make railways also more attractive. So it's not only about freight. Agree, completely agree. Okay, thanks everyone. A question now for Ian about the scenarios and this comes from Yorga Advaris Romero. It's around technological innovation policy and behaviour change driving the shifts that we are seeing. So to what extent are those elements seen as drivers in the four alternative scenarios and with the idea that identifying the drivers of the scenarios as opposed to the scenarios themselves can give us key information about how to push towards the more desirable scenarios. Okay, I get all the easy questions. I guess a couple of things to say, we don't in these scenarios assume major technical breakthroughs. We do model costs and for example we did model the cases that go back 10 years. We did model the fact that if the deployment of solar was accelerated then we can anticipate cost dropping and that's come to pass as it happened. In other cases we've modelled cost of hydrogen dropping and it hasn't come to pass. I guess you are correct though in the sense that we identify particular behavioural issues where they give us some clues. Well, technology and behaviour at SUVs are a really good example. The fact that globally the whole passenger fleet is becoming heavier and larger because people have a preference for SUVs tells us something about how difficult behavioural change can be. Another example is the issue of plastics. One of the biggest areas of Audiman the analysis shows is plastics and petrochemicals which leads to the obvious conclusion. Well, maybe one of the best ways is to cut down plastic use or to recycle plastics wherever possible. Another really simple example is packaging and how much material goes into packaging. The EU some years ago decided that all packaging should be recyclable. So if you get a fridge delivered in France for example the guys everything's packed in either cardboard which is taken away and repulped or aluminium banding around it. There's no polyurethane foam, there's no plastics there at all. I just had washing machines delivered this week this week covered in plastic, covered in polyurethane foam, covered in steel which none of which gets recycled. So all of those insights inform potential policy changes and that's basically the idea we're doing and the whole idea of these projections is not to predict the future, it's to change policy. Great, thank you Ian. So we have another question here. This is about residential heating from Zayn Elakluk. So Zayn asks, for residential heating is there a clear choice between electrification and replacing natural gas with hydrogen and I think this is a question the ACT government is asking itself very closely at the moment. Yeah look at you know again it's a really good question and not just hydrogen of course biomethane as well and I mean one of the one of the policy options which we were knocking around with the ACT government was some sort of renewable gas obligation a bit like a renewable electricity obligation where biogas could be produced not just in the ACT but all over the vast plains of Australia and feeding the grid and obviously anywhere that's close to the grid can produce biogas that's an established technology the costs again could certainly come down if deployment was to go up. I mean again I come back to that point about deployment if there is widespread deployment of technology you can definitely expect costs to drop and governments have a key role in doing that. So the actions that governments take and let's say Europe, Europeans are certainly very interested in biogas okay they may have a slight agricultural agenda here but fine you know widespread adoption and can certainly drive down costs. Look the Danes had this issue that actually had a pollution problem with large amounts of to be blunt animal waste associated with their intensive raising of pigs and that you know led to a biogas agenda which is pretty very successful in terms of meeting their very high flexibility demands for for winter heating. So governments can certainly drive that agenda. The winner is by no means clear you have a very large investment in gas infrastructure and you know if we're looking again there's a transition taking that gas away from methane you know is obviously one important way of doing it maybe it's just maybe it'll work out more economic but there are policy approaches which can drive any one of those solutions in different directions certainly hydrogen has got to be pretty high on the agenda but how quickly we can drive down hydrogen costs that's that's the trick. Luke did you want to weigh in on this? Yeah look this is something which there's a huge amount of conversation around in the Australian context particularly in the building space and if you talk to most property developers whether they're developing commercial or resi they're already just going or pushing towards all electric because the technology is available now and they've the the Australian property sector is leading the world in many respects in terms of adopting quite aggressive net zero targets. So from their perspective if you talk to some of those groups they don't have time to wait for the hydrogen story to play out. They say well look we've got you know heat pumps and the like that we can roll out we just need to for our sector we just need to get on with it. I think when with hydrogen I think the conversation around hydrogen in Australia you know not not not casting nasturtiums at the people on this call who I'm sure are very well well informed but the you know the general political debate around hydrogen is isn't very nuanced in terms of its role in different sectors of the economy. There's been a really interesting piece up to really interesting pieces of work on this point over in 2020. The first was commissioned by the California Energy Commission who commissioned E3 economics and research to do a report on different scenarios for decarbonizing the gas grid in California. They've of course got very aggressive targets around net zero and renewable penetration alike and the clear guidance from that was well you would just when the California needs to get on with the electrifying the buildings sector as much as anything else because they need the renewable gas which is how the umbrella term for hydrogen and biomethane and the like they need it in other sectors of the economy and you know there's an opportunity cost from not banking those carbon savings as the grid decarbonizes noting that we want to keep cumulative emissions as low as possible. The other piece of research I'd point to people too that are interested in this topic is obviously the report authored by Tony Wooden and Guy Dundas for the Gratton Institute. It was released a couple of weeks ago and sort of set the hairs running but fascinating read and very some provocative thinking but I think pretty well founded thinking if you take the time to look through it and in terms of you know what the implications are of you know our aspirations around climate for the role of gas in the Australian energy system I think it's been characterised as anti-gas I don't think it is anti-gas I think it's just realistic about the role of gas in different parts of the economy and interestingly in terms of that heating load they saw that they took a look at you know the additional load if you pursued an electrification agenda in different states of states of Australia and it was pretty much a wash in every state except for Victoria and in Victoria they saw that well you might end up needing to spend around 40 percent more on grid infrastructure between now and 2050 if you electrify all that all that heating load that's currently covered off by gas however they didn't account for energy efficiency and they didn't account for you know the flexibility opportunities that electrification opens up noting of course that you know as as new air conditioners and and pool pumps and the like get get rolled out there's there's a clear agenda in Australia for making sure they're all dread enabled so you can actually you can actually and which I think Nicola was pointing to you can actually start to solve some of those issues around you know excess solar generation in certain parts of the day at the same time as you know making sure that you're not you're using any you're using energy at the times of day without generating peaks so a lot to unpack there really fascinating stuff but the thing I'd say is that there's these there's these tracks of conversation around hydrogen electrification hydrogen and gas they're kind of treated in Australia as if they're they're different stories they're actually the same story and we need to start thinking in an integrated way about how all those things are going to play off each other and governments at some point in I would argue not too distant future again I may have to make some choices about what those decarbonisation pathways are in different sectors of the economy. Yes and I think the other argument that's playing out it relates to this you know property developers question about you know timeliness so it's certainly the case in a lot of jurisdictions they're thinking about whether they mothball the gas network when finally gas gets phased out and then maybe at some point hydrogen comes online you get then got still the infrastructures are sitting there to tap into and then of course there's a question to new suburbs do you bother putting in a gas network for new suburbs so these are all live issues. Indeed and that's that's one of the more provocative revolutions that Tony and Guy make which is that there should just be a moratorium on new connections to new suburbs because you're effectively you're effectively creating connections that we could regard as legacy infrastructure within just you know a few years. Okay another question that maybe we could throw into the panel what is the panelist's view on taxing EVs in Australia who'd like to take that up. I'm happy to have a go I'm happy to have a go so I think that it's a it's the reaction of the and this is not it this is not my constituency I'm an interested citizen and I suppose interested in the role of EVs in the broader energy transition I think there is a the the the the folk that are rightly passionate about the the role of electrification in that part of the transport sector and I think there's a huge opportunity there I already feel like they're kind of starting from behind the eight ball because of the lack of government support relative to some of our peers around the world. The point that's been made when you start to raise some some countries around the world that have these types of charges in place is like well yes they do but they've also been you know aggressively supporting our industry for you know 10 or 15 years or whatever it is and so I feel like I feel like you know the EV sector already feels like it's sort of you know there's there's plenty of Australian politicians and quite happy to give them a kick on the way past and now here's the latest injustice but what I would say is that these type of charges are not crazy like it's and there's an argument that you want to put them in place earlier rather than later when you don't have a large constituency of people that are going to be crying foul when when the EV sector inevitably inevitably expands and I think if you if you chatted to some folk over a beer rather than trying to engage with them on Twitter they'd probably admit that this is part of the trajectory over time it's kind of about timing for me and you know maybe there's an argument given the lack of support more broadly that maybe it's coming a little bit early but I don't think there's I don't think there's any fundamental anything fundamentally unjust about them in and of themselves good Stephen yeah I'll just I just want to say briefly I think what this is really about is how do we price things and and you know what are our models because it's definitely the case that if if we get to a world where there's no internal combustion engine vehicles and all EVs then governments will probably feel like they've got a bit of a revenue problem and so I think it's really it's really a question around things like road pricing and how do we price things and you know what you know what should be privatized what should be socialized you know I think I think having a very sort of pointy narrowly focused debate about tax is maybe not the place to start I think we should step back take a deep breath and have a bigger conversation because these kind of conversations are the sort of things we're going to have to have about how do we price electricity and lots of other things between now and 2050 probably between now and 2030 even I'm happy to jump in as well there I mean to pick up Luke's point where we've seen this sort of charging internationally of course we have seen very significant government policy support over literally decades now in terms of fuel use of charge a few fuel efficiency standards which effectively allow cross subsidization between heavier and more profitable vehicles and more economical and the zero carbon vehicles is one way it's been done straight out cash grants subsidies for the networks all of those things that happen internationally and none of those things have happened here so you might argue that secondly I mean excise excise it's a big number when you look at the dollars it's around about 4% of federal revenue from memory you know it's not the end of the world we had a proper road user charging system that certainly had some sort of tonne kilometer component to it and I feel quite a bit happier about it because money would encourage people to drive less to charge people who actually do cause the damage being heavier cars or whatever and that includes SUVs not just trucks so yeah there's a fair bit to go in terms of the way we charge the way we charge for road use and the way we raise revenue in general I do have quite a lot of confidence the governments will find a way to raise revenue there and do you support the suggestion that we should tax tyres instead well that's that's certainly one proxy and I mean you know taxes can be simple taxes are good ones and simple market performs the good ones it's certainly you know that's one proxy of doing it because of course you'll still have electric vehicles still wear out tyres and they'll still wear out brake linings they'll still cause that sort of pollution but you know the the externality value of electric vehicles in terms of their benefits to urban pollution and noise I think one of again one of the things with the pandemic we've realised just how noisy and polluted our streets can be and you know in vehicle traffic stops suddenly you know the sky is blue and it's so much more quieter so the electric vehicle value proposition at a societal level is very strong and you know I don't think we're really recognising that certainly not in Australia but even internationally but yeah it's you know simple simple taxes are good you know it's one proxy not the perfect one but you know proxies are proxies are good and maybe what we'll see is B double trucks with single big fat tyres on the back just to get around that. Maybe we should be taxing rubber instead. Yeah rubber it's a price right? Yeah indeed absolutely well on that slightly humorous note we'll finish up the discussion and thank again our panellists Nicola Falcon, Carly Cashpole, Luke Menzel and Stephen Wilson and of course our presenter Ian Cornshaw who has returned many times to tell us about the wheel and hopefully we'll be able to do that into the future. We recommend that you check the ANU Energy Change Institute website for our future events including energy update again next year. We will try and answer as many real questions as possible in the coming day or so offline and we welcome you to join us for future events and future discussions on energy topics more broadly and thank you all for contributing.