208. AI vs. Energy: the cost of speed - dec25

Will artificial intelligence reshape the power grid, or will the inertia and complexity of today’s infrastructure slow progress—or even redefine how large language models, chips, and datacenters are designed and located?  To meet the exponential rise in energy demand, parts of the industry have taken shortcuts—rapidly adding behind-the-meter capacity through open-cycle gas turbines - OCGT (such as the Titan 350 from Caterpillar) with little regard for environmental regulations. The mantra seems to be speed at any cost.  Is the AI boom we are witnessing justified—or sustainable? From a technological standpoint, certainly yes: AI capability is roughly doubling every seven months. But from a financial perspective, it is harder to defend—given the sky-high valuations, credit fuelled growth and mounting losses at many of the sector’s biggest players.  The bigger question is what all this means for the energy system itself. How will AI be powered? What will it do to the cost of energy and the shape of our infrastructure? Will it accelerate—or hinder—the energy transition?  Hope is powerful—but it can also be blind. Between AI’s explosive growth and the traditional energy system’s entrenched realities, who will bear the cost?  These are the questions Laurent and Gerard pose to Andrew Perry, Director of the Energy Transition and Environment business unit at Faculty.ai, where he leads AI-driven innovation in the energy sector.   We have a heated debate, trying to honestly lay out the dilemmas in front of the industry. More insights in this excellent research by the FThttps://ig.ft.com/ai-power/Today’s show is supported by the BMW Foundation Herbert Quandt. The BMW Foundation unites leaders from diverse sectors to develop solutions that foster an innovative economy and a future-proof society. A key focus is "Energy Transition & Climate Change," where the Foundation drives "International collaboration to accelerate the energy transition." With rising energy demands from AI and data centers, new partnerships, effective collaboration, and the exchange of science-based solutions and strategies are essential. That’s why the BMW Foundation supports this podcast and brings these discussions to global stages by hosting the Energy Security Hub at the Munich Security Conference 2026, streaming live February 12–14. Learn more at www.bmw-foundation.org 

Gerard is on stage with Adele Zhao - Trina Solar and Thomas Raffeiner- The Mobility House at the Smarter E Conference.In a conversation hosted by Jonathan Gifford, they discuss about the future for the intersection of e-mobility and renewable energy.  The conversation has been released as an Episode of “Powering Through” entitled The Resilience of Renewables. Participants take a closer look at the power of the e-mobility revolution, and what is needed to continue to push it forward. The uptake of e-mobility in Europe and China is discussed, along with the implications for energy storage and industry.Ultimately, the promise of a vast, mobile fleet of batteries is presented – offering a hopeful vision for emissions-free mobility and energy provision.  Main topics:What is the status of e-mobility adoption and implications for car makersHow EVs can interact with the grid and the promise for energy securityWhat Global EV-Battery Cooperation Might Look LikeYou can watch it on Youtube https://www.youtube.com/watch?app=desktop&v=M2qM58Vz9Rc  

For much of the past two decades, renewable energy investment was viewed as a core infrastructure play—favoured by funds and long-term capital seeking predictable, government-backed cash flows. Yet the gradual phase-out of subsidies and the increasing exposure of renewables to wholesale power price volatility have eroded that stability.Are investors misreading the new market dynamics? And can renewable portfolios be optimized under a fundamentally different investment logic?FlexPower, founded in 2022 in Hamburg and, as of October 2025, fully owned by Citadel, the global hedge fund, represents this shift. The firm operates at the intersection of short-term power trading and battery optimization, deploying data-driven strategies across European markets.FlexPower exemplifies how agile, technology-led firms are reshaping power markets by leveraging algorithmic trading, high-frequency data analytics, and real-time dispatch optimization. Their approach contrasts sharply with traditional infrastructure investors who continue to rely on fixed offtake agreements and policy support.In conversation with FLexPower Managing Director Amani Joas, Laurent and Gerard examine how algorithmic trading and hedge fund participation are redefining price formation in grids increasingly dominated by intermittent renewables. The discussion highlights a structural divergence: while incumbents pursue regulatory certainty, new entrants monetize volatility itself—treating renewable assets as dynamic trading platforms rather than passive infrastructure.The energy transition is no longer just a technological revolution—it’s a financial one.

Running a power market isn’t just about generating electricity—it’s about making sure every kilowatt is accounted for. Someone has to calculate who owes what, make sure the rules are fair, and keep the system balanced in real time. Think of it as being an accountant, a banker, and a referee—all rolled into one. In the UK, that vital but largely invisible role is handled by Elexon.Elexon is the Balancing and Settlement Code Company (BSCCo) for Great Britain. They are the neutral heartbeat of the electricity market, making sure the lights stay on and energy imbalances are accurately billed. They provide the transparency, fairness, and precision that keeps the whole system running—and prevent anyone from gaming the market. Formerly part of National Grid, Elexon has always been independent and is owned by the 13 largest market participants.In this episode, Laurent and Gerard sit down with Peter Stanley, CEO of Elexon, to dive deep into the nuts and bolts of the balancing market. They break down why system costs have quintupled in recent years, hitting £8 billion a year, how settlement processes are being modernized, and the surprising ways AI is starting to shape the market.Elexon isn’t just about numbers—it’s the backbone of the UK’s Clean Power by 2030 plan (CP30). By keeping the system balanced and efficient, Elexon is helping drive the near-total elimination of fossil fuels from the power grid, making a cleaner, greener future possible.Get ready for a technical—but fascinating—ride behind the scenes of the UK electricity market.

Laurent sits down with Bruce Douglas, CEO of the Global Renewable Alliance, for a live conversation from COP30 in Belém, Brazil.They explore how COP30 is structured, the role of the Global Renewable Alliance, and the dynamics among participants. The 800-pound gorilla in the room—the United States—hasn’t derailed the negotiations, but one might ask: does it really matter? The real action, Bruce explains, takes place in the Blue Zone and the Green Zone, rather than in the endless debates over whether the final text will call to “phase out,” “phase down,” or “phase up” fossil fuels.With investments in clean technologies now triple those in fossil fuels, the global momentum toward renewables seems unstoppable.The COP text, increasingly, feels symbolic—if not irrelevant. Together, Laurent and Bruce celebrate the ongoing success of bottom-up implementation and the steady deployment of proven technologies, rather than top-down grand initiatives.They also touch on a new forestry initiative, TFFF—dubbed “WTF-FF” by Laurent—which, they suspect, may fade away like tears in the rain. Packed with anecdotes about the Amazon rainforest, chaotic logistics, Saudi Arabia’s surprising investments in boxing, and other quirky insights, this episode strikes an optimistic tone.Whatever COP30’s final declaration may say, one thing is clear: renewables have already won.

Solar energy has experienced explosive growth over the past five years — doubling in capacity outside of China and quadrupling within China. But with this rapid expansion come new concerns: Are we scaling too quickly? And is the proliferation of solar now starting to strain power grids, creating more problems than solutions?Enter the concept of the “3 Cs” — Congestion, Curtailment, and Cannibalization — a term coined by Richard Sverisson at Montel. It captures the growing pains of an energy system being transformed at unprecedented speed.To unpack this, Laurent and Gerard welcome one of the world’s leading voices in solar energy: Sam Wilkinson, Head of Renewables at S&P Global Commodity Insights. Sam leads a team of 20 global experts focused on analysing and forecasting trends across renewable energy markets, policy, and infrastructure. Their insights, developed in close collaboration with industry stakeholders, are critical for understanding where the solar market is heading.Notably, Sam and his team are forecasting a 100GW decline in new solar capacity in 2026 compared to 2025 — introducing the idea of "Peak Solar."In this conversation, we explore what “peak solar” really means: its causes, how it might unfold, and the ripple effects on the global supply chain. But it’s not all bad news. Market consolidation, geographic diversification, and ongoing innovation in solar technology are helping the industry navigate challenges. As costs continue to fall and accessibility improves, solar remains a cornerstone of the global energy transition.Expect a technical yet insightful discussion on the current headwinds — and future opportunities — in the solar energy sector.

Laurent and Gerard have an explosive conversation with Bryan Long, Executive Director in JPMorgan’s Commodities Group.They explore why U.S. energy market signals are failing to support new capacity investments, despite soaring demand (especially from datacenters).  Key issues include misaligned pricing, liquidity constraints, and hedging challenges, all of which deter long-term private capital.Key Takeaways: Current price signals don’t support investment in new generation, even as large load growth (e.g., datacenters) is accelerating. Market structures must evolve to better reflect long-term price signals and attract private capital. Supply-side issues: New natural gas peakers and battery storage (BESS) face fragmented development, rising CAPEX, procurement delays, and tariff risks. Industry response: Major consolidation in the IPP space—private equity-backed assets are being acquired by integrated players seeking scale for hyperscaler deals.Possible solutions may include Repricing of forward curves, Government-backed long-term contracts, Regulatory reforms, Technological advancements Bottom line: Something must shift—be it policy, pricing, or tech—to align investment incentives with future demand growth. The next several years should be great for traders in the middle of the action.Conclusion: Between the Large Load Growth and the Investment Capital, who will blink first?   ------------  Bryan Long is an Executive Director in JPMorgan’s Commodities Group, focused on wholesale power & renewable energy transactions. With 20yrs+ experience across various U.S. Power trading, origination and management roles, he has deep understandings of electricity market structures.    

We are in the middle of a battery boom, for EVs and even more for BESS. What's really happening in the electric vehicle (EV) market? Is China dominating the field, or are serious alternatives emerging? What roles are Europe, the U.S., and other global regions playing? Which chemistries are winning out, and how are prices trending?  These are the questions we ask ourselves every day — and today, Gerard and Laurent are thrilled to have someone who can help us answer them. Laurent and Gerard are joined by the brilliant Iola Hughes, Head of Research at Benchmark Mineral Intelligence, following its acquisition of Rho Motion.  Iola leads research across the battery demand spectrum — from EVs to stationary storage — managing forecasts, tracking battery chemistries, and analyzing the impact of everything from regulation to OEM strategies and technology roadmaps.   According to Benchmark Mineral Intelligence and Rho Motion, as of 2025:The Battery Energy Storage Systems (BESS) sector is growing at 40% year-over-yearThe EV market is expanding by 25% year-over-year But perhaps the most surprising trend is that forecasts made just 18 months ago are being exceeded — in nearly every region except the United States. There, the current administration appears to be kneecapped the industry by rolling back both incentives (like tax credits) and regulations (such as CAFE and emissions standards). Nissan in the US is moving back from EVs to hybrids while GM passes billions of impairments.  On the industrial side, it’s increasingly a case of China versus the world. China now has the capacity to manufacture a staggering 50 million vehicles per year, far outpacing domestic demand and sparking concerns about overcapacity.  In summary: we are witnessing a growing divide in the global battery and EV space. China is clearly in the lead. Europe and others are racing to catch up. And the U.S.? It’s at risk of falling further behind — not for lack of potential, but because of political and policy choices.https://www.benchmarkminerals.com/  https://www.linkedin.com/in/iolahughes/  https://x.com/RhoMoIola  Stunning visuals from FT on the development of batteries (most of the sources came from Benchmark)  https://ig.ft.com/mega-batteries

For our 200th episode, we had the pleasure and privilege of speaking with Nat Bullard, one of the sharpest minds in the energy world. A leading analyst in climate and energy, Nat is known for his clear insights on clean energy, decarbonization, and the global energy transition. Formerly Chief Content Officer at BloombergNEF, he is now also a co-founder of the AI company Halcyon.  Nat is perhaps best known for his annual 200-slide deck, a rich compilation of global data and charts that paints a clear, fact-based picture of where the energy sector is heading.  Our conversation spans major shifts shaping the future: the electrification of the Global South, the rise of AI and datacenters, the unravelling of ESG, and the evolving geopolitics of energy through the lens of "Electrostates vs. Petrostates"—and how investment flows are responding.  We also explore the dominant narratives in the energy space, many of which, we agree, are self-serving and unhelpful.  Ultimately, the energy transition is being held back less by technology and more by entrenched interests and a lack of curiosity. But the world is changing fast—and there is reason for hope.   We thank AFRY for supporting the show.  Reference for reports quoted during the showThe Electrotech Revolution – Ember and Kingsmill Bond   https://ember-energy.org/latest-insights/the-electrotech-revolution/  Afry: Market and regulatory overview of the North Atlantic Transmission One -Link project https://afry.com/en/exploring-nato-l-project-and-transatlantic-power-exchange-decarbonised-future   "AFRY provides engineering, design, digital and advisory services to accelerate the transition towards a sustainable society. At AFRY, we are 19,000 devoted experts in industry, energy and infrastructure sectors, creating impact for generations to come. Best example of AFRY expertise is the report they just released on the Regulatory and Revenue Models for the North Atlantic Transmission One – Link."   

The oil and gas industry is clinging to the narrative that we're entering a "Golden Age of Gas" — especially when it comes to LNG. Riding this assumption, companies have been pouring in investments at an aggressive pace, with plans to double LNG export capacity by the end of the decade.US LNG FIDs are breaking all records in 2025, with 55 mtpa of liquefaction capacity sanctioned since the start of the year. This is the second-best year for global LNG FIDs (Final Investment Decision), second only to 2019, when over 70 mtpa of FIDs .The latest example is the 14bnUSD FID for Sempra’s Port Arthur 2 in Texas in September 2025, mostly financed by large funds Blackstone, KKR, Apollo, Goldman Sachs.Currently, LNG exports make up about 16% of U.S. gas consumption. Projections suggest that figure could rise to 30% by 2030. But two major uncertainties loom large:Demand: Will international markets absorb this flood of LNG? China's pivot toward Russian and Central Asian pipelines, Qatar’s own ramp-up in production, and Europe’s push to reduce reliance on expensive imported gas all cast doubt on future demand.Supply: Will the U.S. have enough cheap gas to meet this export surge — especially as the AI boom is expected to drive up domestic gas use, while the federal government places increasing restrictions on renewable energy development?To unpack these critical questions, we’ve invited Justin Mikulka to explore what he calls the “LNG Mirage.” He’ll walk us through hard-hitting facts and trends that investors are currently overlooking. At events like CERAWeek and Gastech, the fossil fuel industry often seems to talk only to itself — echoing reassurances while ignoring warning signs. But winter is coming.About the Speaker:Justin Mikulka has spent the past decade investigating and reporting on the energy sector, with a particular focus on the shifting economics between fossil fuels and emerging clean technologies. He publishes regular insights at Powering the Planet and currently serves as the Communications Director at Oilfield Witness, a U.S.-based nonprofit that uses optical gas imaging to document methane emissions from the oil and gas industry.Reports in reference: Global Gas Flaring Tracker Report from World Bank https://thedocs.worldbank.org/en/doc/bd2432bbb0e514986f382f61b14b2608-0400072025/original/Global-Gas-Flaring-Tracker-Report-July-2025.pdf    We thank Abloco Energy for supporting the show. www.abloco.energy----Epilog post recording:"Venture Global shares plunged more than 20% on Friday following its loss in an arbitration case against BP, which accused the US liquefied natural gas producer of breaching contracts to profit from higher prices at the start of Russia’s full-scale invasion of Ukraine.The case was one of several pursued by Venture Global’s customers alleging it failed to deliver shipments under long-term supply contracts and instead sold them for higher prices on the spot market when gas prices soared in early 2022.BP’s victory is a major blow to one of the largest US LNG exporters, which now faces a separate hearing to determine damages in the case. The UK oil group is seeking damages in excess of $1bn, as well as interest, costs and attorneys’ fees."