 So we will have a couple of questions and then please make it brief and concise and then we get the speakers to address them. Okay, thank you, Mr Chair. My name is Hong. I am working at the CIM in Vietnam. I have two questions to address the Brazilian presenter. Mr Emilo Laros, right? I have two questions. First one is from your presentation and also from my experience. It seems that for developing countries the state plays a very important role in the energy sector development and also energy sector operation in general. So do you think that to implement the role of the state in developing countries the state usually plays a triple role including the role for formulating the law on the energy sector development and planning. The second role is to be as the owner of several energy companies and the third but not least the state is also the kind of the price regulator of the energy. So do you think that sometime it could lead to the kind of misleading and make the kind of distortion of the energy market in general? And what is your opinion about that particularly from the Brazilian case? The second question relating to the fiscal reform on the fossil fuels. In many developing countries as you know that the subsidies to the energy particularly the electricity is very huge including Vietnam also. And in the context of the development trend focusing on green growth. So I think that there is the debate about the removal of the energy subsidies. So what is your opinions about the removal of energy subsidy from the developing particularly the low income countries? My question goes to Douglas. That regards the notion of clean energy. One is whether you because we didn't release the statistics because of the technology failure. Whether you consider natural gas as one of the sources of clean energy. And secondly is whether you see the trend towards more emphasis on renewables as potentially replacing the demand for hydrocarbons. And what that means for the economies of hydrocarbon dependent countries. Can we have the next question? Thank you very much. Channing aren't with you and you wider. I have a couple of questions. One for Doug on increasing PV penetration. And you're getting power as you mentioned when the sun is out at low marginal cost but not necessarily when you need it. There's the issue of storage and meeting demand. I wonder if you could talk about that. You also mentioned electric cars. I was wondering if you could elaborate a little bit more on the timing potentially and the scope. How big is this in terms of electricity demand? And then Emilio, I didn't know Brazil had that high but hydro power output at 80%. Could you just talk briefly, is there seasonal variation? Or how do you handle like if it's been a dry year or whatever. Is that an upper limit? What are the scopes for dealing with that? Those were my couple. Can we have any other question? Maybe we address this once and then if you have any additional ones then we can take them later. So we can start from you. Emilio. Thank you very much for your questions. First I'll address the questions by our CIEM colleague. On the first question I think that actually there are always pros and cons of state involvement and I think the lessons that we learn not only from Brazil but other developing countries and also from the UK and other countries where the reform was done is that the important thing is to strike the right balance between state and market forces. And I think that for the first role you mentioned for the state, the formulating law and the planning given the specificity of this sector energy is well known for the invisibility of the investments and the long term construction times and returns on investments so very huge upfront costs. So these are difficulties for the private sector to handle it properly and the Brazilian case illustrated that dramatically. So I would say that there is for sure a strong role for the government in the long term planning of the energy system. The second role of the state you mentioned, owner of enterprise, I think this is not very specific to a state role. You have the property, the private ownership by the market, the business and the private sector. And the important thing is the regulation in this case. You have to enforce laws and regulation in order that the private sector can deliver the country's general goals. So for instance avoiding the predatory use of the natural resource. It was the case in Brazil due to the reform and living the market force alone to tap hydropower potentials in the water basins. This didn't work properly at all. And so the third role of price regulating, that's where maybe the experience has shown that the good balance is what was called in the previous presentation to be at arm's length. That means that independent experts in federal and regional regulatory boards because otherwise if you leave it entirely in the hands of the state you come to your second question, the temptation of artificially subsidizing electricity and fossil fuel prices which of course leads to a lot of distortions. So getting to your second question, I can't agree more with you that actually a number of reports have been shown in studies that have recently released a report by International Monetary Fund again quantifies the huge amount of subsidies to fossil fuels. In Brazil this is not very high actually compared with the average. In the country we have subsidies being very important for the penetration of renewables from sugar cane and also wind through a mix of feeding tariffs and tending system. But the important thing is that even the subsidies for renewables should be temporary and decreasing over time, otherwise you can't convey the right signals to the market. And so anyway we have for instance now an election in Brazil and to illustrate your point to the presidential election you have now the inverse policy of subsidizing gasoline prices to curb down inflation. And this is of course means distortions and hopefully after the election things will go back to normal that means reflecting the true price of international oil barrel. And in terms of your question Channing about hydropower in Brazil why is it able to deliver 80% of overall electricity demand because still counts upon a lot of huge reservoirs that were built in the hydropower plants built in the 70s and in the 80s. And at that time there was even a pluriannual capacity of water storage that means that you could keep water and this would be the buffer point of the system to have the seasonal fluctuation. You have a dry season and you have a wet season. Of course the country is huge and the grid is being extended so you have an inter-connected system so there are complementary season abilities as well between the Amazon and the south of Brazil. So this also helps. Now with wind we have a huge problem because wind is much more intermittent than hydro. In Northeastern region there is complementary between wind seasonality and hydropower but not in other parts of the country. And the big problem now is that due to environment concern the remaining hydropower potential to be tapped is in the Amazon and Brazilian society does not allow anymore the power sector to build very large reservoirs. They are simply not accepted. There are no environmental licenses to that. So we keep doing very large hydropower plants and actually run off the river with bulk turbines and this has considerably affected this capacity of hydropower to deliver and to overcome the seasonal variation of supply. So we count upon some thermal complementary. So we are in a transition from a hydro system to a hydro thermal that means that natural gas will provide 20 to 30 percent in the future and that's more or less the prospects. Thank you. I'll try to get the last two. But let me also comment on the first question. I think because there are many different institutional approaches toward the development of power and or the broad energy sector that are applicable in developing countries that can be learned elsewhere. So for example, the U.S. took a very different approach than a state-owned enterprise. They offered monopoly service districts that were then regulated. Those monopolies became quasi, well, fundamentally private companies but they were guaranteed service revenues and rate of return returns and therefore could go to the private capital markets to raise money which many consumers, residential investors actually invested in through bonds. That was a very different model than a state-owned model. It was a regulated model with a monopolized service territory. The ability, I think frankly today, of rethinking what that paradigm is or multiple paradigms is I think very important because there is ample private sector money that's interested and willing to be put toward investment in infrastructure and particularly energy infrastructure as long as there is appropriate rule of law and a surety of the revenue streams that could come back to them over many decades and that's proven out now much more substantially than I'll call it the prior paradigm of a state-owned enterprise that had to invest in that infrastructure. So I think that's worth some definitive rethinking. Let me come to the other questions really quickly. Natural gas is not included in the definition I was using before. That's all renewable energy technologies, maybe energy smart technologies as well so smart grid and things like that as well. Natural gas would be considered part of the fossil part of that equation. So the 53% that I talked about in terms of market share is mostly wind and solar, a little bit of hydro, a little bit of biomass, a little geothermal. Natural gas and coal are in the other 47% with a little nuclear. There is a really interesting question that you did pose about the implications for hydrocarbon countries and export countries. And I think one has to look at probably two perspectives. The first is kind of related to Channing's question about electric vehicles is what happens in the transport sector. Even if you look at a massive expansion of the electric vehicle markets over some length of time, it's still from a very, very small base and very likely to get to substantial amounts of the overall new car market. And the new car market is a very small part of the overall automobile, medium heavy-duty truck market, etc. So there is a very long tail for liquid hydrocarbons going out for many, many decades going forward, even in the most optimistic set of assumptions for electrification of light-duty vehicles. That's a different set of equations in the power sector where coal and gas have frankly now near-term competitive options in many countries, not every country in many countries. And it bodes to the other part of that equation around sustainability, water and climate change. And therefore there's a real imperative, I think, for those exporting countries and those companies which are in those fossil fuel industries to really think about what does their future look like in a carbon constrained world and whether or not they should be investing more vertically rather than just thinking about them as a pure BTU or kilojoule supply country or company. That's one piece of it. And then on the intermittency, if I can just go to Channing's question at the end, as mentioned, wind and solar, foldable tacks in particular, both very intermittent, we have done hundreds of studies, not only ourselves and our colleagues around the world, about how the system itself, power system in particular, balances out when you think, even with much more intermittency in it, because of the natural variability in load and the ability to control load, but also the geospatial diversification of sources. So sometimes the sun is shining in one place but not in another. That smooths it out. The wind tends to counterbalance the sun sometimes, et cetera. It very, very high penetrations of variable renewables or intermittent renewables. One does need more flexibility from the thermal or hydro generators as well as more flexible load. And it's really more about ramp rates and more technical details in terms of how the system operates versus it being, quote, infeasible. Again, it's just a change in paradigm, I think, from always supply, meeting load to perhaps load and supply being much more dynamically balanced. Thank you very much. Any other question? Okay, as you think, let me use the privilege as a chair to ask Emilio perhaps one question. When I look at the statistics that you posted on the pre-reform and the post-reform, one sees that the average per capital consumption, I think, was 442 kilowatts per year during the pre-reform and it became 499. And then when you also look at the percentage assets, it doesn't look like there was that big change. However, the tariffs had changed significantly from $98.16, $98 to about $178 or $179 if I'm right. So how would I, when it comes to renewable energy, developing countries are very fascinated about the achievements of Brazil. Suppose I want to sell this to the government of a developing country that while everything else will not change significantly but there will be a big increase in the tariffs, wouldn't this be a very hard sell? If not, could you please throw some light on it? Yes, you rightly point out to the insufficient progress of the reform in extending access of electricity to rural areas and also the heavy financial burden of the reform on the low income classes. And that was why the following government that was more socially oriented has changed that and the reform of the reform, the other figures, you see that this access of rural households has jumped from 74% in the year 2000 to 90% of household access in rural areas and urban areas is nearly 100% already. So makes Brazil compared with other upper income class countries by far the most electrified today. Now, in terms of the affordability, the reform of the reform has taken the approach of actually finding who are the real poor and this was done in the context not only of energy poverty but also of a number of other indicators and using local authorities. And now there is kind of negative taxes that go direct to the household chief, normally the woman. And so they have this so-called fellowship, it's called the Family Fellowship Program and the secret is based on you have really the record of who is who and who is really poor and there is social control over there. So instead of subsidizing, for instance, LPG for the rural women to cook, you now have true prices of LPG and putting an end to distortions because also in cities some taxes were running on LPG which is very dangerous because LPG was cheap. So this kind of distortion does not exist anymore. LPG has a real price but the rural households have access to lump sums of money, lump payments that go straight into the woman because she knows better where to spend the money for the family. So this coupled with a very strong enforcement of utilities that they have to connect their households up to next year universal access, that's the law. And of course huge also public funding that makes life easier for utilities to meet that target. This was then the result of this reform of the reform, making it possible to strongly improve the performance that you just mentioned that was the performance of the reform in the 90s with just privatization and the market forces alone. Thank you very much. I wanted to give the opportunity to... Okay, then let me give you the... Sorry, I just want to make a very quick comment relative to the last question and I think it's really important to recognize that the question or the answer to the question does not reside in the fact that Brazil has a significant amount of renewable energy technologies in their generation mix because predominantly it's mostly hydro. And the situation from their reforms through the reform of reforms to today, it's a very different question in most countries outside of the fossil fuel subsidies that may exist. Renewable energy technologies as our competitive option to build infrastructure and to supply power today when they weren't necessarily five or ten years ago. It's a very different infrastructure. It's a very different equation. The companies, the banks, the multilateral banks and the private sector are also very familiar with them, much more familiar today, and comfortable lending into those technologies, into those infrastructure projects. And there's still a challenge, I think, thinking through who invests and owns the distribution of power, i.e. the wires. Is that a monopoly in a private sector-owned company or is that some kind of government entity, again, that's regulated and overseen? I think that's where there's some really deep thought that needs to be put in place in terms of what is the role of a system operator and a regulator, but not necessarily the generator and how that comes to be, and that takes some other questions. Okay, I think we've come to the end of this session and you will all agree with me that this has been very excellent and brilliant talks given by these renowned researchers who have been working on this in this area extensively. So join me in giving them a hand of applause for the excellent presentation. Thank you very much. So we bring this session to a close.