Podcast

The Arctic Energy Pivot: EU and Russian opportunities and divisions — Natalie Dobson and Arild Moe (Ep. 52)

Arctic oil and gas

This week we speak with Professors Natalie Dobson an Assistant Professor at Utrecht University, Department of International and European Law and Professor Arild Moe, Senior research fellow at Fridtjof Nansen Institute. As usual, I’ll keep their long list of individual achievements short, but it is impressive as each is making a significant contribution to understanding relations in the Arctic.

This recording is from an online roundtable discussion held at Central European University, in our Energy Policy Research Group.  I’ve edited the discussion for the podcast. As you will hear, there’s a wealth of information to inform how we understand both the EU’s policy perspective toward oil and gas exploration in the Arctic area, and Russia’s ability to expand their own exploitation of the oil and gas wealth in the region. This discussion goes beyond geopolitical considerations, and delves into both the legal framing the EU is attempting to implement and also the strategic decision-making done by the Russian state.

Arctic oil and gas

The key topics that are covered in this discussion fall under three broad headings: EU Policies, Russian Policies and Climate Change and the Arctic. Specifically, nine questions are answered:

EU Policies

Why is EU policy towards the Arctic important?

How has EU Arctic policy changed over time?

How does the EU attempt to influence Arctic policy?

Russian Policies

What are Russian policies towards oil and gas exploration in the Arctic?

What is the impact of LNG on Russian gas policies?

What is the history of foreign investment into the Russian oil and gas sector in the Arctic?

Climate change and the Arctic

How important is the Arctic to combating climate change?

What is the impact of a warming climate on oil and gas exploration in the Arctic?

Should there be a global freeze on oil and gas extraction from the Arctic?

In addition to these questions we have a short discussion about the impact of sanctions and what a war in Ukraine could mean in terms of Western sanctions on the Russian oil sector.

And a final note for regular listeners. The past few episodes of the podcast were sparse, as I also came down with Covid – along with half the world. All I can say is thank goodness for the three shots.  Moving forward I’ll do my best to get back on the weekly schedule.

Episode transcript

The Clean Regulatory Transition Project — Jan Rosenow (47)

Jan Rosenow – Regulatory Transition Project

This week we speak with Jan Rosenow, the Director of European Programmes at the Regulatory Assistance Project. The word, ‘project’ as Jan tells us, was meant to be a project to assistant regulators to build better utility regulation. The project operates in China, Europe, India, and the United States.

From this episode, you’ll learn about the importance of regulation in the energy transition. Markets are not free, but depend on good (and bad) regulation to create market conditions that deliver outcomes that society wants. Of course, there is a heavy dose of politics in this mix, but the main thrust is to protect the consumer.

As Jan tells us, regulation is not just regulation implemented by energy regulators, but also comprises policies that shape the markets.

From a personal point of view, I love regulation. This will sound very odd, but one of the joys of living in the EU is we have so much regulation to study and understand the impact of both a multilateral institution, like the EU, but also the actions of governments and how they implement regulation is such diverse actions.

Jan Rosenow

I was really excited when Jan agreed to come onto the podcast to discuss what the Regulatory Assistance Project does, and to focus on regulation’s role in the energy transition. This episode delivers with both a general discussion on regulation in the first half and by the second half, we work our way through the role of regulation in the EU and the new Fit for 55 and Green Deal directives that are coming out.

However, I want to emphasize the eloquent way that Jan answers all my questions on regulation. Jan has a rare and true skill to be able to express the role of regulation plays in both abstract terms but also through examples. And I think what I’m saying here, doesn’t do justice to how he explains the importance and differences regulation plays in the energy transition. 

The energy transition requires forward-leaning regulations that both push and pull new technologies in the marketplace. In this episode, you’ll learn both how this is done and why it is done.

Transcript of our discussion

Weathering Risk: The climatology of energy markets — Aaron Perry (Ep 46)

Aaron Perry – Climatology of renewable energy

This week we speak with Aaron Perry, a senior associate in Valuation and Risk Analytics at Resurety. We discuss the role that long-term and short-term weather forecasting plays in reducing financial risks. Aaron is a climatologist and takes a long-term view on the impact weather has on renewable energy, like wind and solar.

Aaron explains the market impact of weather in an age of weather-dependent technologies impacts the price in power markets. There is a strong need to predict the output of renewable facilities. This means the owners can ride the peaks and troughs of power markets and weather conditions. In short, there is a great need to do portfolio management of assets to ensure these are profitable.

To be honest, it is a bit hard for me to summarize our discussion in some clear points. As you’ll hear, as the episode progresses, we get more and more exact in the language we use to describe the impact of weather on the power markets. There is a reason for this. The complexities behind financing renewable energy is not down to just money to build, but also to ensure long-term operations are profitable. Combine the finances with the complexities of the power market, and the complexities of weather prediction, and you get into the complexities of what we discuss today. It is just very complex. But it boils down to making sure renewables are producing at maximum output, and are also able to sell this power into the market.

Aaron Perry – Climatology of energy markets

Towards the end of the interview, we get into the role of hedging. Hedging, while it sounds like a risky term, as Aaron explains, actually just shifts risk exposure from those that don’t want it to those that do want it. I think you’ll find this informative to understand the complexities of renewable financing. In my interpretation, one of the biggest barriers to renewables, besides technological, is financial risks. This is why I find today’s episode so important. If we find ways to reduce financial risks, or even lower the cost of operations for renewables, more renewables can be deployed.

In short, the ability to ensure renewables are not-loss making means more fossil-free technologies can be deployed. Taking into account the impact of weather on the price of electricity means the energy transition can progress.

Transcript [done by AI]

The Virtual Power of a Polish Energy Entrepreneur — Bartosz Kwiatowski (Ep 45)

Episode 45: Bartosz Kwiatowski

This week we speak with Bartosz Kwiatowski the director of the Polish Liquid Gas Association. I’ve known Bartok for over a decade and he is always a well of knowledge on the Polish energy scene and broader developments in Europe. So why is today’s episode important to listen? You’ll gain a greater understanding of the role that nuclear power and hydrogen could play in the Polish energy mix. In our discussion, we provide both a historical account of why Poland is reliant on coal and how it can transition out from coal. As Bartok points out, the dramatic increase in solar PV use in the country, or the development of energy clusters in towns contrasts the national push for coal.

Bartok has also been active in the start-up scene, trying to get a virtual power plant operating with a range of businesses. Bartok recounts the difficulty of having a small energy company – it saves energy, but it does not attract money to expand, because of its ability to save energy. Listen in, and you’ll get the account of why attracting VC funding is hard at a small scale. Towards the end, we do cover the role of liquid gas fuels – this is important when we consider how we shift people cooking and heating to using gas produced from biofuels.

In this week’s episode, we take on a range of issues providing a broader perspective of developments in Poland, but also within the EU. You’ll learn of the complexities of decarbonizing the energy system in both large and small scale projects.

Beyond Oil? Carbon neutrality by 2050 — Adam Czyzewski (Ep 44)

Adam Czyzewski – Episode 44

This week we speak with Adam Czyzewski, the chief economist at PKN Orlen. I’ll describe PKN Orlen as a diversifying oil and gas firm.

I got the opportunity to sit down with Adam while I was in Warsaw and I’m extremely grateful for his time and his willingness to share his thoughts on the energy transition. It is possible that some listeners may object to my conversational style sit-down with a representative of the oil and gas world. I remember a conference I attended in 2019 when the Chief Economist for Equinor got not only a frosty reception but a hostile reception from the academic and policy audience at a conference on ‘Beyond Oil’.

My approach to understanding and assisting in the energy transition is to listen to a range of opinions. In this interview, you’ll learn that Adam – before he joined PKN Orlen 12 years ago, was an outsider himself. He shares his perspective and questioning of the sustainability around not just fossil fuels but global consumption of energy and materials. Even, as he points out – that plastic turned out to be too cheap and good for a consumer society. Nonetheless, the lightweight and durable properties of plastic make it useful for the energy transition.

Adam provides a pivotal acknowledgment and voice that says, yes, our present consumption patterns are not environmentally sustainable – but he also outlines how an oil and gas firm CAN make the transition to be carbon neutral by 2050. This seems unbelievable from an oil and gas firm. At least, I was highly skeptical before speaking to him. But as you’ll hear, more than what I thought, could actually be achievable. Particularly, when you consider how the firm is diversifying into wind farms and investing in developing new technologies.

Adam Czyzewski – Beyond oil

Depending on where you live and your background, you may be dismissive of what can we learn from a Polish oil and gas firm. As dedicated as the Polish government appears to be towards coal, it is important to understand the world, technology and firms are changing regardless of what is in the headlines. It may be a question of how fast we make the transition, or can we really believe fossil fuel firms will get rid of their fossil fuels? These are points for arguments. But at least from this interview, you’ll gain an understanding of the market forces at work that keep fossil fuels as petrochemical feedstocks in the near – if not distant – future.

One of the reasons I wanted to start a podcast was to share some of the interviews I have with experts while doing research. I’ve interviewed Adam in the past and I always found him very knowledgeable and holding a broad view of energy markets. In this episode, you’ll get more than an insight into the workings of oil and gas markets. You’ll get a thoughtful discussion on where companies are heading as they lower their carbon outputs and invest more into lower or zero-carbon technologies.

Transcript of episode

Prepare for Impact: The EU’s Energy Transition — Miroslav Lopour (Ep 42)

Episode 42 – Miroslav Lopour

This week we speak with Miroslav Lopour, he is a Senior Manager of the Energy and Resources team at Deloitte Czech Republic.

We have a wide-ranging discussion about how the Czech Republic is preparing for the energy transition.  What you’ll learn from our conversation is a unique perspective on the EU’s Eastern Member States. I found Miroslav has the ability to express in a precise manner both the social and political resistance and reluctance to participate in an energy transition. As you’ll hear in our discussion about the coming electric car revolution, Miroslav articulates why there is reluctance in the country, to move away from the internal combustion engine, and even coal.

He discusses an inherent conservatism in former communist countries which makes politicians and society reluctant to fully participate in a clean energy transition. I think our conversation provides an in-depth understanding of this reluctance to change, not just in the Czech Republic but in the broader region of Eastern Europe.

Miroslav Lopour – Deloitte

If I can think of one reason you should listen to our discussion today, it is to understand why certain countries are slow on the uptake and deployment of policies and technologies that deliver a clean energy. There is justifications for why countries move slow. Understanding the reasons can assist in developing policies and help us all transition to a cleaner future – not just a few countries.

As I mentioned we discuss a range of topics, but threaded through our conversation is the difficulty to change industry and technologies. Regardless of the reluctance, as Miroslav points out, the money from the EU is here – and ready to fund the transition. Therefore the Czech Republic is about to ramp up their activities and join the transition.

I think our conversation is an important milestone. We need to revisit the expectations expressed in this interview in a few years. Let’s see if what the EU is promising in retooling industry and assisting people and regions, to move away from coal, does have a positive impact.

The Carbon Storm of 2021: Energy shortages and high prices — Michael LaBelle (Ep. 39)

We can speak of the ‘Carbon Storm of 2021’ which reflects the new reality of Climate Capitalism, which Michael spoke about in episode 31. We are now paying the price of the energy transition, and how consumers, governments and industry react and work together to make this transition will also determine the price we pay in the short and the long-term.

Extracting value from a coal phase-out — Gireesh Shrimali (Ep. 38)

This week we speak with Gireesh Shrimali, Precourt Scholar at the Sustainable Finance Initiative at Stanford University. He is also an adjunct professor at Johns Hopkins University and involved in the Climate Investment Funds.

One of the key takeaways from our conversation is the idea of Value at Risk and the inter-relationship with transition risk. Gireesh’s examination of risk essential for understanding how we accelerate an energy transition. We begin to discuss this halfway through, and it is an essential concept for managers to understand when assess the value of their asset portfolio. It is also important to understand how established technologies, like solar and wind, are already undermining coal and gas.

We can view activists investors, like those from Engine Number One, which seated new members onto Exxon’s board, as radical energy pioneers, but Gireesh and his analysis underlines the importance of risk assessment as the energy transition speeds up. You’ll find our discussion worthwhile for understanding risk and how coal and gas are becoming stranded assets with companies unable to extract profits – thereby threatening the survivability of the companies themselves.

Links

World Bank. “Coal-Plant-Repurposing-for-Ageing-Coal-Fleets-in-Developing-Countries-Technical-Report.Pdf,” 2021. https://documents1.worldbank.org/curated/en/144181629878602689/pdf/Coal-Plant-Repurposing-for-Ageing-Coal-Fleets-in-Developing-Countries-Technical-Report.pdf.

Calculating climate financial risk: How to combine transition and physical risks? | by Gireesh Shrimali | Medium

Deploying batteries at scale in power sector: A case for battery targets complemented with DISCOM-controlled dispatch – The Economic Times (indiatimes.com)

Russia‘s Energy Chains of Value and Power — Margarita Balmaceda (Ep. 37)

This week we speak with Professor Margarita M. Balmaceda about her new book, Russian Energy Chains (2021), published by Columbia University Press, as part of the Woodrow Wilson Center series. She was on the My Energy 2050 podcast in episode 12. And we are very grateful for her to come back for launching her new book. We managed to meet in person during her visit to Budapest this week. But as you’ll hear, our conversation moves rapidly around the issues of fossil fuels and the value chains that extend from Russia all the way to Germany.

Margarita was born in Buenos Aires, Argentina, and as her profile at, Seton Hall University states,  “her professional life has centered in the USA and Eastern Europe.” But as we know from her previous publications, on Eastern Europe, including ‘Living the High Life in Minsk’ and ‘The Politics of Energy Dependency’, in addition to numerous journal articles, she is a leading scholar on Post Soviet issues and places involving the energy sector. She is also an Associate of the Davis Center for Russian and Eurasian Studies and of the Ukrainian Research Institute at Harvard University. Overall, because of her research and insight, she should be nominated as an honorary citizen of the Post-Soviet world.

Her book, Russian Energy Chains will be the leading and most authoritative book on the subject of post-Soviet energy relations. What does that mean and why is it important?

Margarita Balmaceda

This podcast is focused on the energy transition. By having Margarita document the value flows – that is who benefits and who doesn’t of the flow of oil, gas, and coal from the Russian heartland to Europe, she documents a way of life and of profits from fossil fuel extraction. And as we address toward the end of the interview, a way of life and means of governance will be under threat as the EU and other countries implement strong policies to move away from the fossil fuel era.

The point here is the topic of understanding the value created from fossil fuel extraction, shipping and usage demonstrate – as she outlines in chapter 1 – the role of power relations in the energy system. If we hope to phase out fossil fuels, we will need to address these power relations of the old (fossil fuel) order and the new (renewable) order. Russia – and the relations between EU Member States hold a strong rooting in energy – this relationship will need to be renegotiated and Margarita’s book lays down what these relations were built on, and the areas where they could change.

Links

Profile Margarita Balmaceda – Seton Hall University (shu.edu)

Amazon.com: Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (Woodrow Wilson Center Series) eBook : Balmaceda, Margarita M.: Kindle Store

Financing a Sustainable Economy — Linda Zeilina (Ep. 36)

This week our guest is Linda Zeilina, the CEO of the International Sustainable Finance Center.

The discussion, as the name implies, is about sustainable finance. But, from a very important perspective. Which is about expanding the circle for policy making, also means expanding the role of stakeholders in creating solutions where finance assists sustainability priorities, rather than simply profit opportunities.

The topic is how assisting people in governments and companies – expanding the perspectives of stakeholders, translates into better investment environments. This includes raising awareness of Environmental, Social and Governance ratings (ESGs), and the impact on investors within the EU. There is a clear connection between profits of companies and their ability to meet sustainability requirements from both the EU and – as we’ve discussed before on this podcast – from banks. There is now a clear connection between the ability of a company to make money – that is to generate profits, and the necessity to align their sustainability practices.

Linda Zeilina – Sustainable Finance

This episode is important because Linda highlights the inter-relationship between policy stability, predictability and risks. Policy and political risk are emerging as high in the Central European region. It is becoming clear that the politicians are unable or unwilling to adapt to the emerging financial penalties that exist in the EU. In the EU, defining ‘sustainability’ emerges as a clear accounting system. This is a topic for future episodes. Now is the time to develop regional and national ways to enhance sustainable business practices with the assistance of governments. 

The main takeaway in this episode was how the Central European region is representative of other developing regions. The push for more jobs and company profits can’t be done at the expense of the environment and society. It is time to create opportunities for a broad range of stakeholders to find effective ways for businesses to do business in environmentally and socially sustainable ways.

The Value of Climate Accounting — Martin Wainstein (Ep. 35)

Martin recounts his experience working for clients on energy projects and then framing his experience through research on the theories of energy transitions. Michael and Martin do a slow walk-through of the limits of current energy companies and how they lock-in our present energy system through profit motives.

Beyond Paris: IRENA delivers 2050 pathway — Gorini and Prakas (Ep. 34)

This week we speak with Ricardo Gorini and  Gayathri Prakas from the ReMap team at the International Renewable Energy Agency (IRENA). IRENA published this summer the World Energy Transitions Outlook: 1.5 degree Celsius Pathway. Our conversation today is about the report. Yes, we get technical, but we also learn about the REASON for the report. This is not your usual climate and death report – rather it’s an ambitious challenge to world leaders to actually deliver the goods by 2050. As the report makes clear, business as usual – even in a Paris scenario – doesn’t deliver the goods.  The perspective we gain by having a conversation with members of the team, that put the report together, makes us – or at least me, appreciate the importance of the findings even more.

We learn from Gayathri that the reason for the report is not just to demonstrate that renewables are the cheapest and smartest way to save the planet. We know – or at least many of you listening to this podcast do. What we find out is that the recent youth pressure for countries to do more, to fulfill the Paris Climate Agreement was the reason to push for a 1.5 Celsius scenario. Because as the report states,

Current plans fall woefully short of a 1.5°C goal. Based on existing government energy plans and targets, including the first round of Nationally Determined Contributions (NDCs) under the Paris Agreement, the policies in place will do no more than stabilise global emissions, with a slight drop as 2050 approaches. Despite clear evidence of human-caused climate change, widespread support for the Paris Agreement, and the prevalence of clean, economical, and sustainable energy options, energy-related CO2 emissions increased by 1.3% annually, on average, between 2014 and 2019.” pg 20

The basis of the report starts with the knowledge that governments are not doing enough and we need to be more ambitious to make it happen.

Gayathri Prakash

The report I really like because it maps out the measurable progress we need to make each year to realize a profound shift in technologies and practices. Personally, and professionally speaking, the report delivers a clear path forward. As Gayathri states, every day counts, and she is NOT exaggerating.

As I state in each episode of the My Energy 2050 Podcast, the purpose of this podcast is to highlight the people spreading the knowledge about the energy transition. This episode delivers a homerun on this account. We get a bit technical at times, so on the surface some of our discussion is, well, technical, but as you will hear throughout the episode, the justification and understanding of what technological and policy solutions are on the short term horizon – such as green hydrogen, can deliver a rapid and affordable energy transition.

A big thanks go to IRENA for approving this interview. And it follows episode 11, where I speak with Luis Janiero and Sean Collins about their roadmap for Central and Southeast Europe.

In short, this episode delivers an in-depth discussion on the pace of change, but also the path of technological developments and the tremendous potential we still have to unlock. Because renewables are ALREADY cheaper than fossil fuels. So let’s start working on the transition and leave fossil fuels for the fossils.

Ricardo Gorini – IRENA

” Innovations in technology, policy and markets are being implemented worldwide (IRENA, 2019a). Significant progress has been made in electric mobility, battery storage, digital technologies and artificial intelligence, among others. These shifts are also drawing greater attention to the need for sustainable exploitation and management of rare earths and other minerals, and investment in the circular economy. New and smart grids, ranging from mini to super grids, bolstered by facilitative policies and markets, are enhancing the power sector’s ability to cope with the variability of renewables. Direct uses of renewables – including bioenergy – and green hydrogen are bringing much-needed solutions in transport, buildings and industry.” World Energy Transitions Outlook: 15 degree Celsius Pathway, IRENA, pg 18

World Energy Transitions Outlook: 1.5°C Pathway (irena.org)

Links

World Energy Transitions Outlook: 1.5°C Pathway (irena.org)

Time to Build Green in Central and Southwest Europe – IRENA’s Renewable Roadmaps Team – MyEnergy2050

Gayathri Prakash | LinkedIn

Ricardo Gorini | LinkedIn

Show transcript – unedited

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