Khush: 0:00

Welcome to the curiosity crisis, we challenge ourselves to explore the world of business tech, investing in science, get curious and be part of the journey, as we discussed, challenge and learn.

Luke: 0:10

Today, we're talking about renewables and the energy transition, a bit of a net 0101. So, yeah, let's kick it off with what's keeping you curious.

Khush: 0:19

Mate. What's keeping me curious is actually on the back of a couple conversations out on the weekend. I'm sort of trying to, in my mind toying with the, with the idea of when are you competent enough to do something and try something new? Or when do you just dive in, sort of headfirst and figure it out and learn to kick and swim once you're in the water? So it's a bit of a philosophical one. But um, yeah, I think it's an interesting challenge. What's really new curious.

Luke: 0:46

Yeah, so I, I bought this book recently. It's called the fabric of reality. It's written by a British physicist. And it's quite interesting. It comes from a real first principles perspective, and talks from like explanations and the idea of an explanation and moves all the way up in terms of reality and how things work. Anyway, I haven't actually started reading it, but I'm quite interested to. So that's why I bought it. And I'm very excited.

Khush: 1:13

That's unreal, unity, USA an update?

Luke: 1:16

I will I will, once I've finished it. I've got another book that I'm trying to finish first. But yeah, I will. Yes, yeah. So I guess starting off with the main issue, what are what are we actually trying to achieve here? What's the end goal? Can you break it down for us in terms of renewables and the energy transition? Yeah, absolutely.

Khush: 1:34

That's obviously the most important thing to understand. And it, you know, the renewables, the energy transition is defined in a lot of ways. Net Zero, there's a lot of jargon thrown around. But I did a bit of reading. And the one thing that absolutely stuck with me, is the whole problem. And the whole challenge that we're trying to solve equates to 51 billion. And basically, that means that at the moment, we roughly emit 51 billion tons of carbon dioxide equivalents annually as a world. So essentially, if we're going to get to net zero, we pretty much need to get that number to zero, and then eventually start, you know, sequestering carbon back into whatever sources we can put them into. So that's what we have to get to zero. And that's a big problem.

Luke: 2:25

So you're talking about, you know, where does the problem stem from? It stems from 51 billion per year? What, tons per year? So how does that break down? Like, where does where's that mostly coming from?

Khush: 2:39

Yeah, okay, cool. That's probably not widely known. And I think, hopefully, when we're trying to understand the challenge, it gets a netzero. It does get better understood. So there's five main ways that we emit carbon. And it's broken down into how we make things, how we power things, how we grow things, how we get around, and how we stay warm and cool. So the biggest one, have a guess where it is?

Luke: 3:06

I assume production? Production,

Khush: 3:08

correct? Yes. So how we make things. So essentially, it's broken down into like, the major components of steel, cement and plastic, that's 31% of global emissions. Next is how we power things. So I think in the initial question, you mentioned renewables. And that's what's front of mind for everyone, you know, need to replace everything with renewables. But how we power things currently is 27% of global emissions. Then, surprisingly, I had no idea but how we grow things. So literally how we how we feed ourselves is 19% of global emissions nearly a fifth, how we get around another really front of mine, one with the whole electric vehicle charge is 16%. But that also includes not just electric vehicles, but longer form transportation, like shipping and trucks. And then how we warm and cool is finally 7%.

Luke: 4:02

Yeah, okay. Now, I don't know about you, but I perceive most of this kind of being not necessarily solved, but a large chunk of this coming out from innovation. So right no carbon capture technologies or new ways of manufacturing or, you know, transitioning to renewables or EVs or whatever it is it do you agree with that? Do you think that it's also going to be an innovation kind of transition that that's, that's really going to be the catalyst?

Khush: 4:32

I think that's such a such a big question. Yes, I agree. It's, it's an it's going to be an innovation problem. But I also think and we'll probably talk about this as we go on in the episode, but I think innovation comes from many different things. So the front of mind and biggest one and it's going to be literally I think it's gonna be a majority of the solution is, is technological innovation. So new technologies to do processes differently or the existing one system that we have just a lot better, a lot more efficient and greener. But I think innovation comes in other ways as well. So like innovation in markets, innovation and policy. There's a lot that has to come together to solve this extremely complex problem. Yeah, there's some easy solutions as part of it, but then there's some really hard ones. So yeah, it's gonna be a big challenge.

Luke: 5:25

Yeah, I'm interested in the significance of energy storage in renewable systems, and how, how does that solve the intermittency problem of renewable sources like solar and wind? Yeah,

Khush: 5:39

absolutely. Like, I suppose, you know, back in the day, or, you know, where we're probably at now is we generate electricity just to meet the demand. So we had all these sources that either always running or could be turned on whenever we wanted. And it became really scalable and economic to do that with fossil fuels. So we were able to power our lives with fossil fuels, obviously, we're moving towards renewables, solar and wind being the obvious ones, but they only generate, you know, when the sun's shining in the winds blowing. So the challenge end is either to make a demand of electricity match with when there's tons of supply. So in the middle of the day, when it's really hot and sunny, or it's to make sure we can capture that energy, because obviously, energy is never created nor destroyed, it only changes forms. So we either store that energy in the form of some sort of potential energy, and then use it release it to and move it into electrical energy when we need it, like right now.

Luke: 6:42

So I guess, on this whole journey of trying to get to a netzero. Future, what what should we be focusing on at the moment? Like, where should we be putting all of our energy into? Is there anything that stands out to you in what we should be aiming for?

Khush: 6:57

Yeah, absolutely. You know, and I'd love to get your thoughts on this as well. So like, I think the, the real challenge here is obviously, you know, we're probably all a lot of us are on the same team that we want to help, you know, the world get to that low carbon netzero future, and reduce emissions and stuff. But I think the issue is, in some ways, the real definition of sustainability varies. And in some cases, just, you know, do whatever it takes to have a zero carbon solution. But I think the real definition of sustainability in my eyes is when that dream or low carbon solution is also able to stand on its own two feet. So that basically means it's just economically sustainable as well. And that'll help to absolutely know and like, look at what solar power has done, you know, that now it's on 1/3 of most of the developed world's rubes. I know it is at least in Australia, electric vehicles are starting to take off and and that only happens when they reach price parity with other without, like our fossil fuel equivalents, or they get really short, like five to seven year payback periods for adopting these technologies. So yeah, I think there's, there's a good concept that I read about, and it's green premiums. So really, how much more do you have to pay to go for the green option? And basically, you know, we'll make massive strides towards getting to that net zero future when those green green premiums are really small or non existent, you know, when when the green solution is economically viable, just just upfront. So I think that's, that's the biggest challenge. And I think innovation, like we said, in this many forms is needed to bring down those those green premiums. So we'll be able to decarbonize everything.

Luke: 8:44

Yeah, I think you're as a really interesting point around, I guess, a self sustaining system, because I guess most of the carbon emissions are not actually coming from countries necessarily, that are able to throw an excessive amount of economic energy towards reducing that. So it's often coming from, you know, like Scandinavian countries, for example, a famous having very low emissions and a very far ahead of the curve, but they're also not really the countries that are producing the most. So yeah, I think it's quite interesting to try and break down that problem into Okay, well, how do we actually make this financially incentivized as well, where it doesn't have to be a subsidy from a government but it can be something that yeah, it stands on its own because it's actually profitable.

Khush: 9:31

Yeah. 100% I think as well, like when we talk about when we broke down that problem, probably the two things that people sent stare at sent out to people the most is how we power things and how we how we get around. So renewables in electric vehicles, they sort of stand out as the known easy solutions, but might be the solutions that people look to for what decarbonisation looks like, but, you know, when when we say that there's not really solutions to a large portion of our emissions in the in the form of Manufacturing, so steel, concrete and plastic, so producing those at really low carbon, or even getting around like, so aviation, obviously, is a very high emitter, and there's not really any solutions. At the moment, what I sort of mean by that is they're, they aren't really economically sound and scalable solutions that are on the scale of something like electric vehicles, or solar power or wind, because those, those technologies have brought down their green premium to either be equivalent or cheaper than the fossil fuel counterparts. But, you know, the rest of our our economy hasn't. So those that that's really what we need to bring down.

Luke: 10:39

Yeah, I think I've seen a thing as well, where they'll end up operating within a niche. So for example, in the aerospace area, they you know, they have electric planes, but they only operate within like small ski towns, where they can charge a significant premium for the same service as anything else, which means they also have limited range, and they, they only operate within that small niche. And so it doesn't become economically viable to scale it to a larger a larger audience. And that's kind of just the way that it is. Until you get innovations. We have breakthroughs in other problems that kind of come from physics and chemistry. But yeah, I guess another question is, how does, like how can industries transition from fossil fuel based processes to electrified processes, and one of the challenges they face? So coming from an industry perspective?

Khush: 11:35

Yeah, like, obviously, a very good question. And it's a massive challenge. So again, you know, industrial processes 31, or more percent of our global emissions, that unfortunately, for denuncia are challenge and sort of, for the planet, I suppose the processes that exists with with fossil fuels do so because we've worked out how to move fossil fuels around really, really easily. They're very, very energy dense. So gas and coal are incredibly energy dense. And there's not too many losses in the in the conversion of that energy. So from the potential energy to boiling things and 20 turbines, yes, there's losses, but there the capacity factors of those are a lot higher than, for example, solar, or wind. So the challenge is, I suppose how to make the electrified processes that are obviously very energy intensive, I suppose. cheaper, but also efficient enough for them to make sense. Because solar wind, yes, they're free sources once once they are up and running. But the amount of solar wind, for example, in terms of land, in terms of capital, in terms of materials that go into the, into those sources to produce the same amount of energy as old fossil fuel based processes, is a hell of a lot. So you need a lot to do the same thing. But there is there is promise, I suppose there's biofuels as electro fuels, that that are being produced. And they are, you know, producing similar energy densities, and hopefully getting to similar efficiencies, it's just the cost is higher. And there's also like, sort of picky battle type processes, for example, low level industrial grade heating and stuff like that can be done through electric arc furnaces and using, ideally renewable energy to power them. It's just like some of those really, really high energy dense, really hot industrial processes that fossil fuels do currently, are very hard to replace at the moment with electrical and processes. So yeah, sorry, long, long answer. But yeah, it's a big job.

Luke: 13:44

It's good. I saw an image recently kind of outlining the different amounts of of landmass in square meters required per megawatt of different energy sources. That's quite interesting. Looking at everything's kind of like, you know, everything has pros and cons. Yes. And, you know, some, some require significant amount of landmass per megawatt, and some don't, but then they have other risks and other rewards. And it was really interesting. And you you touched on energy density just then as well. And I guess looking at the most energy dense material on the planet hydrogen, I guess, what are your thoughts on the potential of green hydrogen, and kind of as an energy carrier and its applications in sectors like transportation and industrial purposes? You know, both of us have have a history and some experience in the renewable energy sector. So I guess yeah, what's your what's your opinion on how that fits in to the bigger picture?

Khush: 14:44

Yeah, good question. I'm gonna throw this on back at you as well for sure. Because I know you know, but um, well, from my understanding, at least green hydrogen produced like through electrolyzers that are powered by renewable energy and then use for some sort of industrial process. As, for me, unfortunately, from a purely scientific point of view that it's very, very energy intensive to produce. So to split the molecules, and there's loss along the path and transporting hydrogen, because it, you know, it can leak so easily has its own, it has its own challenges, although, you know, it's getting a lot of attention and money thrown out like so there'll be a bit more r&d around the hydrogen, ideally, green hydrogen space, but then also things like green methanol are being used and getting some traction in in shipping, which is really, really awesome. And then hydrogen fuel cells in longer form transportation, which is obviously you know, that I think was 16% of world emissions come from transportation, and only a portion of that is from light vehicles, which electric vehicles can deal with. So just the hydrogen making progress in those those areas is pretty exciting. But yeah, what do you what are your thoughts on on hydrogen? And what pirate plays?

Luke: 16:00

Yeah, I think my understanding is quite similar. I mean, from an engineering and scientific standpoint, it's an extremely difficult material to store, just because the atoms are so small, you know, they they squeezed through anything and everything. Yeah. So it's extremely difficult to actually be able to store this stuff. And a lot of people don't know that it's actually corrosive to metal. So that doesn't help. Either, it makes it really difficult. And then I guess you have this whole efficiency problem where, yes, it is the most energy dense element on the planet. But that doesn't necessarily help you if it's inefficient to make, for example, so that electrolysis process is extremely inefficient. And so you can say, well, we'll use excess solar or excess wind to create it, which is, which is true. That's, that's a good idea. But But then the question becomes what, what's, what's the difference between doing that or pumping water up a hill or electrons into a battery? So then you have these other storage solutions, which, on paper are more efficient. And so I guess it comes back to that economic problem where you need to find the area where it fits best. And I think at the moment that comes down to shipping and transportation. The the advantage with with the shipping is that I'm pretty sure there's only 16 Enormous cargo ships in the whole world. So you could probably target those massive ones and try and switch them off that diesel. But they're extremely large, they need to be reliable. So there's other challenges there. But yeah, I think there's it has potential, but it's it's a difficult problem. And it's probably better suited for industrial purposes.

Khush: 17:34

Yeah, absolutely. Mate. We're getting close to time, but just on the on the on the aspect of like, you know, solutions and technologies. Obviously, we, we both a pretty pro using technology to try and solve the problem. I suppose anything that solves a problem is good, but what are some of your favorite ones? For example, we just talked about hydrogen without emissions. I love you know, like grid storage. So Susan, long grid storage, what are some of your favorites?

Luke: 18:03

At the moment, I'm really interested in geothermal, right? I think that that has some huge potential simply because if you get down low enough into the Earth's crust, it doesn't matter where you are, you can use it. And what interests me a lot about it is that it's not an intermittent energy source, it can replace baseload. So you can directly replace your baseload gas, diesel, coal, even nuclear, if you if you wanted to get away from that for whatever reason. But yeah, I think that it's actually a fantastic solution. And there's, there's a few companies that are working on some pretty interesting ways of like vaporizing rock to get all the way down so that you can get to the, to the close to the core, and get that that heat and Inspirato. Why?

Khush: 18:47

Yeah, well listen, I mean, some of the other ones that I know, that we will probably need in some shape, or form, carbon capture and storage. So that's kind of a little bit of heat, because it could be seen potentially as a cop out. But at the end of the day, we need to be taking carbon out of the atmosphere, if we're ever gonna get to net zero and start to, you know, wind that back a little bit. And then one of the interesting things like, obviously, my, my favorites, and where we're both probably a little bit, we have a bit of knowledge, like, you know, electric vehicles and renewables. They're sort of obvious, done a bit of work in them. But I think one of the really interesting things that caught my eyes is farming innovation, so your drought and flood tolerant food crops, and they'll do work really, really well obviously, in developing countries, if we can get them up and running. And then obviously, in some way, shape or form, some form of lower lower emission meat or alternatives to that because again, agriculture and growing things 19% of our global emissions, which is which is wild that we got to eat, you know, I mean,

Luke: 19:49

yeah, yeah. No, I love that. I think there are definitely some areas that are gonna have some amazing innovation for sure. And it'll be interesting to see what developments there are The future. Yeah. Okay. So if you had one key takeaway, from this episode, this discussion around netzero, transitions, renewables, what would be the big thing? What's the thing to walk away with?

Khush: 20:13

Yeah, okay, cool. I'll, again, I'm gonna put this back on, you see it ready. But I think my mind, my big one is there is no one solution, like, there's just going to be there's going to have to be a large combination of different solutions of all the different forms, you know, technological, societal, regulatory, political, and all of which are different in difficulty scale, you know, feasibility, cost, willingness and readiness right now. So, I mean, it's like, you can call that a bit of a cop out answer. But that's, that's the that's the reality. It's a very, very complex problem, and needs a massive and diverse solution. What do you reckon?

Luke: 20:50

Yeah, I think I think it's a difficult problem. But I guess if I had one key takeaway, it's, it's look for the things that doing the most, in terms of big ambition, I think, is kind of a good thing. So whether it's a company trying to do something enormous in the energy sector, or trying to have net zero manufacturing, or whatever it is, I think, follow the stuff that's extremely ambitious, because we have to be if you're if you're looking at the small stuff, it can only do so much. And given that there is a green premium, you never know whether something's greenwashing unless you look into it. So I think, look, look for the stuff with extreme ambition. And it's a good place to stop.

Khush: 21:33

Man, I absolutely love that the way we started as a way to finish like we contextualize the problem as 51 billion. And and a good way to literally just put numbers to what you just said is sort of if there's going to be a solution, you can literally do the math, like how much carbon does this solution emit in relation to 51 million, and then you can scale and understand how important and material the solution is. So yeah, great. No, I love that. Awesome. Thanks for listening. Find us at QRC crisis.com and the QRC crisis on Instagram. We're in all major streaming services so you can listen how you like catching the next episode.