 Good morning everybody and welcome to this panel on China and the global energy transition This is probably a topic not just for one morning, but for several decades But in any case we're going to give it a stab this morning and hopefully you will have a few answers But maybe also a lot of questions and that's something that's perhaps very good My name is Ling Shui-Ling and I am an executive producer at Channel News Asia in Singapore I'm very honoured to be asked to moderate this session which has an extremely distinguished panel But first let me just seen set for you I'm sure all of you know that China is the greatest producer and consumer of energy in the world and What China decides what the Chinese people decide has ramifications Not just for those living in China, but for all the rest of us China at the moment already is investing incredibly in wind and solar power In fact, they're one of the biggest investors in terms of new investments for these two renewables But at the same time they do have a lot of legacy things that they struggle with and that is 60% of energy still comes from coal-fired power station Now the people I'm talking to today that we get to talk to Are ones who have a great deal of insight into it I'm very honoured that we have the president of the State Grid Corporation of China Which is the largest utility in the world and that is President Zhang Degang who is joining us from China President Zhang literally lights up the streets of China And also joining us from China is Professor Sun Yi He is the Chief Manufacturing Officer of COTL Now for those of you who don't know who what that is you should be ashamed because they are the largest producer of batteries for electric vehicles in the world and China has more than half of all the electric vehicles in the world So this is the person you want to pay attention to and this is also COTL also supplies a company that all of you I'm sure know and that is Tesla in Davos with us Also our very distinguished panel of Daniel Juergen Daniel Juergen is vice chairman at S&P Global But he is also a prolific writer extraordinarily erudite box But he doesn't just write and talk about it He has been a consultant to on energy policies for four American presidents And he has been honored by India for his Consultations with them for their energy policy as well. So this is the man who doesn't write about it He has also he knows he really knows what he's talking about Last but absolutely not least Elizabeth Gaines. I will be very biased to say that she's my favorite Elizabeth Gaines is the CEO of Fortescue Metals. Now Fortescue Metals Has is an absolute titan when it comes to iron ore mining and they have had Decades of connections with China decades of supplying Chinese manufacturing now they are shifting and they are also looking at decarbonization and Green hydro and green Hydrogen, but I I've promised Elizabeth Gaines that I will not steal her thunder and instead We will move towards talking about this panel now I'm going to kick off by talking about How China is going to manage this change into renewables when so much of it is really still anchored in Cold-based power stations. How is China going to achieve its climate change? Goals You know when this happens. So President Zhang is doing this on a scale That pretty much I think none of us can compare with in fact what he is doing is unprecedented so President Zhang would you like to tell us a little bit of how do you think that it's going to how you're going to handle all of this? Thank you, Ms. Ling Good morning First of all, I would like to thank the World Economic Forum for providing us this opportunity this platform to have this exchange So first of all, I'll talk about the basics on basic information of the SGCC State Grid Corporation of China So our corporate core operations are the construction and management of the power grid our Coverage our service coverage is up to 88 percent in China Providing electricity for more than 1.1 billion people in 2021 the company sold 5.17 trillion kilowatt hour of the electricity and Installed capacity of the company's operating area was 1844 gigawatts of which 272 gigawatt of wind power and 263 gigawatts of photovoltaic power generation So as we all know recently The same of China's energy and power industry has been green development and energy transition in particular in September 2020 President Xi Jinping made a commitment during the 75th session of UN General Assembly To say that China will have its carbon peak and by 2030 and carbon neutrality by 2060 recently We have a complete top-level design and policy around energy transition We feel that under the guidance of the government We have made important achievement. So some numbers for you from 2015 to 2021 Non-fossil energy consumption as a share of total energy consumption rose from 20 percent to 16 point five percent and The installed capacity of renewable energy grew to 1,030 gigawatts so With an average annual growth rate of 13.1 percent So recently for the last two years Mostly we focus on wind power and solar power We have a new installed capacity of more than 100 gigawatt per year the proportion of electric energy and energy consumption increased from 21 point four percent to 28 point two percent and The level of electrification of a terminal energy consumption ranked among the top in major countries in the world So the power grid let's talk about the power grid It is a platform for energy conversion Transmission and matching the supply and demand So we have a responsibility in this energy transition movement in recent years I just want to talk briefly about our work in recent years in Four different points the first point We are strengthening the interconnection of power grids. We want to Play out the full potential of our existing installed capacity We yeah, we just want to use that Existing capacity. Also. We're supporting distant bases that develop in distant bases We're also facilitating the integration of new energy into the grid in the past five years an Average annual investment of four hundred and ten billion yuan in power grid infrastructure So as we can see the scale of our power grid is growing exponentially So that is my first point our second field of work is that we're developing advanced power transmission technology The reverse distribution of China's energy resources and low demand Requires a very wide range of resource allocation So we need To send electricity to far away areas. So that's why we have UHV transmission projects This is a very special kind of project for now We have 29 different UHV transmission projects with a lens total length of 39,000 kilometers So one of which Is more than 3,000 kilometers long so After the end of the Beijing Olympics We also constructed a flexible transmission project near Beijing in Zhangbei So as we can see with this project, it helps us to better optimal our power grid So that is our second field of work the third field of work is to improve the regulation capacity of the power system so as Miss Ling mentioned We have to better regulate our our our energy So we want to integrate new energy and by integrating new energy We have to know how to regulate how to integrate the whole power mix We believe that we have a very good storage technique For now We have a large capacity of storage at the same time We're also promoting flexible retrofitting of thermal power units by approximately 100 gigawatt and New energy storage We're still in the development stage. We have an ambition plan of having 100 gigawatts Storage capacity by 2030. We're also actively tapping the user site to adjust resources So then they can they can use of a different types of energy So that's the third field of work the fourth field of work is the digital transformation of the power grid Without a digital transformation, it's difficult difficult for us to step into the new era We have 8,000 smart substations There are like pure smart substations and we have 500 million smart meters So from households to companies to factories, they'll have smart meters And at the same time we have more than 90 percent of the distribution network has been automated Which they're easily observed and easily controlled at the same time From the supply side, we have the world's largest new energy cloud platform And we're providing Our service to a lot of people We have a one-stop full process online services for 2.67 million new energy stations and with 540 gigawatt of installed capacity We're trying to cut our cost and make our service more efficient For the demand side for our user where we have built a platform Intelligent vehicle networking platform. We have a lot of chargers Our number of chargers has exceeded 1.5 million So we're the power grid operation with the highest Voltage level Was the largest connection scale and we also have the strongest resource allocation capacity So I just mentioned four fields of work that we're We're continuing in order to start this energy transition. Thank you, Ms. Ling Be into only electric vehicles, but I think that President Zhang has already raised some very very interesting questions So I'm going to throw this immediately out to the audience and say How many of you are driving an electric vehicle at the moment? one two three four So I would say that probably constitutes less than five percent of the persons Sitting here in this room. So now I'm going to look at Professor Dundee Where CTATL produces So many of the batteries Do you think that we all ought to be driving many more electric vehicles and What would happen though if all of us Everybody in this room converted to driving electric vehicles because suddenly we would be all plugging in to a grid that is still fueled by Fossil fuels so Professor, what do you think should we all be driving electric vehicles? You're going to make a battery that is so incredible, but you know, it's going to be marvelous We'll be able to get you know days of running out of it Thank you, Ms. Ling for your question. Good morning. Good morning to all the participants today So first of all, I'll talk a little bit about CTATL CTATL is a company that is engaged in energy transition We're an innovative technology company We're a very young company CTL in the beginning stage we positioned ourselves Is to work in the field of new energy and make important contribution CTL operations include the replacement of fossil energy all types of energy storage So this is our position in the beginning in the beginning of our company and As we develop as we see the evolution in the market, we're also evolving so I heard that Maybe only 5% or less than 10% of the audience today have EVs but in China Because China is aiming for the dual carbon goals We're working on the new energy transition So from different aspects, you can see that China is developed developing very fast in a new energy field we have a Large number of cells in EVs especially in the first quarter of 2022 we also see Very stellar cells in EVs in new energy vehicles In China today We see that new energy vehicles Has reached 20% When we look at major markets around the world We can see that policies around new energy vehicles would believe that by 2030 or by 2035 We'll no longer see We'll no longer see the traditional cars running on the street So we know that the transition is happening. So concerning the question from Ms. Ling About the energy system the energy mix around the world We're still highly dependent on fossil energy So CATL Apart from working from the generation side, we're developing new products From we're also working on transmission and all alone all along the chain So I heard I heard Mr. Zhang mentioned that China is still dependent on fossil energy and where We're transitioning into the new energy era Now we're talking about hydropower nuclear power solar and photovoltaic power So these are all new energy green energy So these new energy We're seeing rapid development of these energy It will have a shock on the traditional power grid We're talking about the security the stability of new energy so because of this These new energy sometimes they're intermittent We have to have a large storage capacity in order to ensure the stability of energy supply So as what miss mr. Zhang mentioned in the Chinese market We have all we most of the new energy are concentrating in the western part. However, the Demands is on the eastern coastal areas So we're also discussing how to How to how to send electricity from the west to the east? so from the perspective of CATL We're used we're working different products different on different products of EVs We're also working on different areas providing different products. We want to contribute to the new energy field Thank you very much. Yeah, that's will sometimes think that better, you know It's perfectly possible for all of us to have electric vehicles everywhere but I will just ask Elizabeth about her use of Electric vehicles by the way, oh, sir One of the things is that Fortescue metals uses a tremendous amount of energy for transportation But do you drive an electric vehicle Elizabeth? Well, I don't Lynn I must confess to that but mainly because in Western Australia, we don't have any charging Recharging infrastructure, and if I had an electric vehicle, I'd be plugging into a Grid that's fueled by fossil fuel So and we've just had a change of government in Australia over the weekend largely because of the lack of ambition on Climate policy and that's been a clear message from the people of Australia So hopefully we'll see more advancement and and that will encourage more of us to adopt electric vehicles But I think electric vehicles is one aspect of a dealing with emissions But more broadly enough if I look at it from a heavy transport those hard-to-abate sectors We strongly believe that green hydrogen will have a significant role to play in the future of the heavy transport sector We've we're investing in the in the decarbonisation of our mining operations And maybe just to give that some context our scope one and two emissions and we're the fourth largest producer of iron or globally Just over two million tons of co2 equivalent But our scope three emissions and we sell over 90% of our product to China At 252 million tons of co2 equivalent So we're tackling that decarbonisation both for our iron ore operations And we have a target to achieve carbon neutrality by 2030 But we have a very ambitious scope three target to achieve carbon neutrality by 2040 Now clearly China has a goal of 2060, but by setting a target of 2040 We're effectively saying that we see the steel industry in China Decarbonizing by 2040 and we're finding very strong engagement with our customers green hydrogen will be a vital element in that Because we can by producing green iron. We can bypass the sintering process We can produce green steel and we're working very closely on that technology and innovation with with our customers in China And the steel industry in China represents about 9% of total emissions in China So it's a very important part of the decarbonisation of China So whilst we obviously applaud setting a goal of 2060 We actually think there's a real opportunity to bring that forward and it could be as much as two decades earlier But getting back to that heavy transport sector We we're working on green fleet technology And we're looking at green ammonia green hydrogen Obviously solar and wind will have a part to play in the production of green hydrogen and green ammonia But if you think about the shipping industry and we ship obviously our product to China If shipping were a country it would be the eighth largest emitter in the world So we have to address some of these other Transport sectors that aren't going to be dealt with through batteries or an electrification And we're doing that through the advancement of technology both in green ammonia and green hydrogen a very important part To play in that decarbonisation globally, but we know China has ambitions for green hydrogen as well And already this year I think it's at a target to produce between 100 and 200,000 tons of green hydrogen But there are ambitions to grow that significantly Daniel, Daniel Jürgen, so what do you think we've had a whole series of threads of thoughts now going through electric vehicles Power grids that may not actually be able to supply it transport You're good at unraveling lots of spaghetti ideas Well, let me let me take on some of the spaghetti. I think that Since last October, which is when the global energy crisis really began has brought a kind of richness and a greater complexity to thinking about energy transition and of course it began in Asia And then in Europe well before the war in Ukraine And I think it's reflected in the 14th five-year plan Which on the one hand sets very ambitious goals to increase the annual increase in Renewables in China by 50 percent, but it also says against a backdrop of energy security and assuring supply and President Xi also had some comments in that in which he said Our energy needs must be controlled by us which points to the renewable But I think what we've seen and it's reflected in China and elsewhere is that the energy transition is going to be more complicated and Question that is this this crisis that began last October not necessarily well perceived But it was there is raising the question. Are we going to have a smooth transition or is it going to be a series of lurches? Not enough investment in your conventional energy while you make your transition to the new energy In terms of the people's will think the speed will come faster so I think there is as The 14th five-year plan said energy security is back on the table the amnesia about energy security has been put aside the second point that I would want it to make goes back to metals and What we've been looking at is the new supply chains for net zero carbon or net zero emissions and There are a lot of challenges there when you look at the scale and the size of the growth And we are at least looking at at least in a very granular way on Copper saying if you're going to achieve these goals out here What do you need into what's going to be the input that you need for metals and particularly copper and when you look at it? You see that there's a gap and the question how will that gap be closed will be closed by price Will it be closed by innovation will be closed by recycling or will it not be closed in other words? Is enough attention being given to what you need if this room instead of being five hands going up If a hundred hands went up and a typical electric car uses two and a half or three times more Copper than a conventional car so I think that's a very important dimension because to notion that you can just change a 90 trillion dollar global economy And it will all go smoothly and that but life is not really like a PowerPoint and I think we're At that at that point and that's what the lesson is and just to say is what we saw Over these last several months beginning last autumn a one-off or is it a signal that? We're gonna have to think further about how to assure that energy transition also comes with energy security I think that one of the very interesting things that Dan has pointed out in his books as well is about copper Putting up setting up a copper Factory takes what do you say 15 years copper mine the copper mining? Yes, those of you the copper mine It says we would talk about iron But the the International Energy Agency says 16 years 16 years some other people say actually longer And they say in some countries like the United States it may take forever So these these are always this is definitely a marathon. This is not a sprint If you think that it's a sprint then you're in the wrong room These are obviously things that are going to take a lot of thinking now Davos has always been known for being non-discriminatory So therefore we're going to take questions now from people who don't have electric vehicles so Does anyone want to ask our splendid panel rare opportunity a question and as I said we are always fair We will take questions for people with non-electric vehicles. We don't judge you No, are we are we good? Just on that last point around the length of time to develop a copper mine The 16 years is not the construction of a copper mine. The 16 years is the approvals pathway So if we actually want to address this issue and we want to have the supply of materials We actually need to have governments working with business business is getting on with it There is we're drilling for copper in South America in other parts of the world because we recognize this growing demand So we're not just focused on iron ore. We're focused on diversification in commodities as well as renewable energy But the approvals pathway without that government support then it's 16 years or to Daniel's point It could take longer or never So this is an agree with with Daniel We either have to find ways where we can have a smoother pathway to meeting this growing transition Or we're going to have a few missteps along the way because the supply won't be there We have a question here in the front from Norway the minister He is definitely allowed to speak because all his electricity comes from hydropower Yeah, that's correct actually hydropower and some wind but it's all it's all renewable And that's also one of the reasons why we now have a you know, China beats us on numbers But we beat them on per capita numbers because Which we always prefer when we compete with China, but our In the last quarter almost nine out of every ten new personal car sales was all electric not hybrid Electric and that's for many years of a very advanced tax policy plus very aggressive building of infrastructure charging infrastructure and that we should basically loves it and think it's a better product It's cheaper to use it's cheaper to repair and it's a it's a great product so if you it what it demonstrates is that if you if you want to you can transform but it took many years I mean it began with some very awkward vehicles for the special interested and it took a lot of time before it really got to This level and by the way, there's also a lot of Chinese car coming coming in now But my point is I Of course it was easier for us because electricity was already green because it only helps you partly if if your electricity is cold But I still think we should decouple the two because you should go for Changing the use Regardless of the energy source and then you should in parallel change the energy source So the argument this week because yes, your emissions are not going very much down on day one But maybe on year three your energy mix has changed and on year five is changed even further So so it's really important for energy transition that you think about Production distribution and usage at the same time And you don't let one wait for the other and that requires a very solid Public-private partnership in order to set the clear direction and that's our experience and the good news it it works Wonderful, um, can I put the question then in a way to President Zhang because one of the things I noticed that you've spoken about previously is that Companies in China need to do more and in a way from what Elizabeth is saying is that they're expecting actually The steel companies to do more and probably to do more quite quickly by a good few decades President Zhang, do you think that that's realistic in the sense that is that what you're seeing when you talk to companies and About their consumption and about the changes that they're making It's on our experience to achieve green transformation requires a whole system and It is reflected in Production of energy at the same time priority should be on the consumption and other aspects So it requires all industries and all actors including government and the businesses to work together and so regarding The question and that we actually feel the pressure But on the one hand, we need to ensure the security of energy supply But at the same time we should also look into the economical viability so From the perspective of China to achieve green transformation, it's an energy revolution So China actually has promulgated a new policy new energy policy It mentioned the four types of a revolution first revolution is on energy supply So it means that priorities will be on the development of a hydrogen energy by 2030 the installed capacity of new energy should the reach the 1200 gigawatts So currently we are confident about the energy security and we are confident that the goal will be achieved and The proportion of a non-fossil the energy actually Rich the 25% of the total energy consumption So from the perspective of businesses Businesses, so we are very confident in achieving our goal so far. We have done a lot of work So as a state of great we focused on the distributed energy Kind of a feeding And in we focused on some land area, which cannot be developed and utilized like deserts and the Gobi So we actually have developed a lot in those areas So and another one it's the another revolution is on consumption so in China first principle is to It's it's energy efficiency. We need to save energy So we need to control we have a dual control policy focusing on Tensity and energy intensity and the consumption in order to improve the energy efficiency so That's the first one, but at the same time we also fear that when we look at wind energy And we know that it had be converted into electricity so that the wind that can be better utilized So As a state-grade Corporation we focus on our end users and encourage them to replace coal and fuel by using electricity so that we can achieve a low carbon goal and by 2030 and We hope that the Proportion of electricity in final energy consumption will be 36 percent at the same time we should also focus on the technological innovation well because the energy transition requires innovation and So innovation is the key component here without Technological innovation it is difficult to achieve the transition So in the following ten following ten years we will invest the 30 billion R&B and At the same time we also put push forward the market Oranted operation and the bigger we think the market it's very important for the regulation and allocation of resources Just now I mentioned that it's a whole system Work, so it requires international cooperation as a business and we are very active in strengthening Operating with our international counterparts so that we can work together to achieve energy transition. Thank you Professor journey I'll pick up on something that president Zang was saying and that is about efficiency and about technology Because in the end isn't that going to be our saving grace? In fact, that's the one thing maybe where we can you know, we can Short-cut all of these things that are burdening us if we can make a change significant changes in efficiency of how we use energy in Even our batteries all of these things now that's something I know that you've spoken about very often Do you believe that that technology and innovation? Realistically can actually make things much better very shortly is that directed to me to professor Well, yes, I have two professors over here. So professor first with professor to knee and then we'll move on to to down here again. Yes Thank you we need to achieve energy transition and I Fully agree with what president John said and in that it is a systematic engine Engineering work and we need to have all round Kind of approach to that. So as a company we believe that the technology and the innovation Will play a very active role My company CAT L actually focuses on raw materials and Manufacturing and end user service, etc. And so we actually have done a lot in new materials for the last chair we Actually Developed kind of by sodium battery. It's kind of sodium. I am battery and At the same time one of our workshop and Also has a pioneer the green Manufacturing and that is the first to be recognized by the world economic forum So we hope that our products Can be easier for the users to be to utilize But at the same time we also focus on the upstream and the downstream Sectors so that we can use our advanced technology in order to reduce the carbon emission in e-bing workshop we actually have stopped the kind of energy efficient Logistics and we are also using green electricity So our workshop in e-bing because has become the first to be recognized as the zero Emission workshop so this these are the examples to Demonstrate how we can promote the green products so that our products can Contribute to green energy transition Doing have enough time to go into the technicals of that But if those of you have not been looking at the sodium batteries and the work that a CATL is doing Please do have a have a look at that It's a fascinating reuse of old technologies in some ways Daniel, what do you think well actually what first drew me to energy is as its area to study was energy Efficiency because it seemed to me that it was the energy resource that was getting the least attention and in a certain way It continues to get the least attention because it's not very visible There are no beautiful pictures of windmills or solar panels. It's very hard energy efficiency. It's very deep diffuse But in fact it is and I not not in the new map, but in my the previous book the quest I described it as a fifth energy resource and it's going to be key And if you're looking for where the surprises will come from technology They may come from a very disaggregated form in terms of greater energy efficiency, which will take stress off the system Now I'm going to unfortunately We're already starting to run out of time But I'm going to go to one of the topics that tends not to be attended to We always look at supply because we have very powerful persons in this room and policy on a very large basis But what is it that we as individuals can also do and are we also partly to blame because of our energy? Uses so as just a little illustration to all of you. How many of you in this room have a phone that is over Can I ask you don't you don't maybe we shouldn't use the word blame? I mean that the leader makes people feel guilty. Oh, okay. They're not very good at all spirit No blame, but I do we also play a role. How many of you have a telephone that is over five years old? Wonderful, we have three persons who have and all the rest of us are going to feel very very guilty Why because we all changed our phones and we're all changing all our electrical Uses and I'm afraid we are increasing that's that's without doubt something that we cannot deny We are all increasing our uses of electricity So on a very fundamental level, I'd like to ask what is it that we as consumers can do? To make a difference to actually take a little bit of burden out Is it because we should just use less or should we just rely on everything becoming more efficient? So I'm going to I'm going to push that round the entire room, but I'll start off with the most beautiful lady beside me Well, look, I think from a personal level I think demand management will be something that may ultimately be mandated to each of us And it might be that we have to turn our heating down by two degrees over winter or we might see Change to speed Requirements on motorways and the like so I think that there will be and there will need to be some Change to consumer behavior, but I think at the business level Business is getting on with decarbonisation and we're not doing it because we're trying to tick a box from an ESG perspective We're doing it because it's a smart thing to do because if you if we modeled for our business a $200 a barrel oil price or the cost of carbon offsets if we're looking to reduce emissions skyrocketing The impact on our business is not sustainable So that's why we're so focused on decarbonizing our heavy mining business and we we're investing Significantly, but we're doing it because it's a smart thing to do. Yes, it's the right thing to do as well But it's absolutely the smart thing to do and we'll make sure we've got a very robust business for decades to come Daniel Juergen What are you doing to make things better? That's a very Writing books talking doing research communicating No, I try well. No, I would say trying to understand how the energy system works So the people are realistic about what the challenges are They're great opportunities, but they're great challenges and you don't want to have a misstep that causes economic turmoil Yellow vests on the streets of France and so forth. So I think Taking the the social dimensions together, but on the other hand, I think in terms of you know already a lot of people's energy consumption is regulated in terms of The appliances you buy and things like that or fuel efficiency standards, which are driving people to electric cars But I think from a business point of view, it's a dollar and sensing anybody's looking at energy prices today It's saying how do we reduce that? That's a cost. We don't need to pay that cost How do we bring it down? So I think markets are a very important source of information about what to do Professor Dune, what are you telling your people? What are you yourself doing that can make a big impact still on our energy consumption? So I believe that Each customer cost consumers should change their behavior in CATL We are Expanding we're having different products are using clean energy We're also providing our services to rural areas So that people living in those rural areas can use clean energy as well So what we're doing is that we're providing opportunity for people around China to use clean energy So I also agree with what Jurgen a professor Jurgen said Me personally I have an EV on using new energy. That's what I've been doing personally President Zhang, I'm going to ask you the possibly the most uncomfortable question and that is what do you say to your Grandchildren or children. What do you say to them? Do you say to them that China is going to still be an incredible producer and Consumer or do you say to them? No, we're going to have to make some changes in how we consume To achieve energy transition to use clean and new energy This is already a consensus in China me being someone working in the power grid Corporation I feel deeply about this topic. I heard several panelists talking about what we can do in an individual level. We should change our consumption behavior consumption habits to start from a from an individual level to help the Transition to our new energy in order to have a contribution to the society, but from a corporation perspective We're also using the power of our grid system being a company or being a consumption the whole Transition all changes in our consumption habit Well move toward the decarbonization the decarbonizing model and We're willing to work with everyone in order to accelerate the transition to clean energy. Thank you very much I would like to thank my excellent panel and I hope that all of you will do a very green thing with me now and to Give them to raise the temperature of this room not by an electrical thing But just by putting your hands together and clapping for this very excellent Thank you ladies and gentlemen