How China’s Boom Year is Changing the Course of the Energy Transition
Horizons Podcast - Power Play: How China’s Boom Year is Changing the Course of the Energy Transition
In this episode of the Horizons podcast, host Dr. Liz Dennett is joined by Andy Klump, the founder and CEO of Clean Energy Associates, and Alex Whitworth, Head of Asia Pacific Power & Renewables Research at Wood Mackenzie.
China’s renewables manufacturers and project developers emerged from 2021 bigger and more competitive than ever before as power demand drive investment to record levels. But what has driven the growth in China’s renewables, how sustainable it is likely to prove and how can countries and companies respond?
Podcast Transcript
Dr. Liz Dennett:
The energy transition is complex and it can be hard to know where to turn for information. In 2022 we’re closer than ever to a cleaner future. But how do we get there? I'm Dr. Liz Dennett and you're listening to Horizons, a podcast from Wood Mackenzie that navigates the path to net zero. If you're a leader, a decision maker, or someone who has a stake in the future of energy and natural resources, then this is the show for you. Join us right here for, insights, bold forecasts and new perspectives.
You'll most likely have at least one piece of Ikea furniture in your home. The Swedish furniture manufacturer has almost monopolized the industry by building cheap, accessible products at a faster rate than anyone else. China is very much the Ikea of the energy transition. Off the back of a boom year China's production of renewables and investment in green projects has created a major headache for the rest of the world. Countries who announced more ambitious 2030 emissions targets on the promise of local jobs and prosperity are being squeezed by record commodity and transportation costs, raw material, supply constraints, and logistical bottlenecks. But it's not just these. To see the entire picture, we must look into China. In this episode of the Horizons podcast, we're exploring China's ever changing role in the global energy transition. I'll be joined by our expert guests to analyze it all. And we'll get the final word from our chief analyst, Simon Flowers, at the end of the show.
China's boom year has created challenges and opportunities for the rest of the world to compete in renewables. So let's dive into it.
So with that, it's truly my pleasure to introduce two amazing guests who are going to help us understand how China's boom year is changing the course of the energy transition. Now I'm especially delighted to be talking to both of them in February 2022. Where the winter Olympics in Beijing are in full swing and Chinese New Year is still going on, this topic could not be timelier. First up joining me today is Andy Klump, the Founder and CEO of Clean Energy Associates. He has over 20 years of high-tech and renewable energy sector experience, 18 of which are in solar PV. Before founding Clean Energy Associates in 2008, Andy was the VP of Business Development for Trina Solar Limited and has supported $500 billion of debt and equity financing through IPO and post public offerings. He has an MBA from Harvard Business School and a BA in Economics from Northwestern University. Andy, thank you so much for joining me today.
Andy Klump:
It's great to be here and thanks once again for the invitation. I look forward to our discussion.
China’s Role in the Energy Transition
Dr. Liz Dennett:
Me too. So I'm a big fan of bottom line up front, sometimes called BLUF, and getting right into it. So what is one thing that you think everyone should know about China and its role in the energy transition?
Andy Klump:
So I think one of the clear takeaways I'd like every listener to have is that China is absolutely a leader in energy transition. And most folks would assume, okay, I'm referring to manufacturing or the supply side, but it's actually not just that. And not only on the demand side, but also really from a technology point of view. And this has certainly been very evident in the solar energy industry, where I've been working for the last 16 years. But I think that same trend is also played out at wind and energy storage. And I think it's going to continue in other areas of energy transition, whether you're talking about green hydrogen, or other aspects of the energy transition.
So, I started my career working at Trina Solar and the analogy a lot of folks gave me was, well, this is like, solar thermal or what many are known as how water heaters, you know, China didn't become the world's largest manufacturer overnight, but they invested the time, the energy and supply chain. And they got there and also grew the demand side as well as the technology side. So that's, I think one of the key takeaways that hopefully folks can take.
Dr. Liz Dennett:
That's fascinating. I'm really looking forward to our conversation. All right. And next up we have Alex Whitworth. Alex is responsible for overall power and renewables research strategy in Asia at Wood Mackenzie. He and his team develop these insightful and high-impact analysis and reports. And he is also the co-author of February's Horizons report, which if you have not read it, you absolutely need to check it out. Alex has over 10 years experience in the energy industry in China and Asia, including roles at McKinsey, GE and IHS market. His work includes provincial level modeling of China's power, coal and gas markets, policy analysis, power, fuel price forecasting, power plant feasibility studies, and product strategy for power equipment, and more. Alex, thank you so much for joining us today.
Alex Whitworth:
Thanks Liz. It's a pleasure to be here.
Dr. Liz Dennett:
I have the same question for you. What is one thing you think everyone should know about China and its role in the energy transition?
Alex Whitworth:
Well, it's my view that the energy transition as we see it today would not be happening without China. And so in a similar vein to what Andy has just said, emphasizing the importance of China. And just to give an example on the cost of renewables, when I was at engineering school 20 years ago, I remember very clearly one of the professors was teaching us about solar power. At that time it was more than 20 times more expensive than fossil fuel power. He said it would never scale, it would never take off, but it was kind of interesting. And now 20 years later, I mean, China has done so much, I think, to really push the technology to scale it. And now, last year, we see China reducing the subsidies or removing subsidies, so that solar power is kind of competing head to head with coal power. So that's really amazing. Something that we've seen happen in our lifetimes.
Impact of China’s High Growth in Power Demand
Dr. Liz Dennett:
Alright, so getting right into it. The first question is, we've seen phenomenal power demand growth in 2021 in China at a 10% increase that was twice the average rate compared to the proceeding decade. Now, China's annual electricity output is twice that of the US. So how are they as a country coping with this? Alex, given what you just said, I'm going to kick this over to you first.
Alex Whitworth:
It's hard to get your head around how big the growth in China is for power, because 10% growth in a small developing country is one thing, but 10% growth in the largest market in the world is completely different. And I think the what's happening in China has really, it's caused ripples throughout the energy supply chain. It's caused a huge change in the landscape of renewables. You know, I think looking back on what's happened in the last decade or more. I remember in the global financial crisis, at that time, China’s power market was smaller than Europe, was smaller than the US. And what's happened since then, is that the Europe and US power markets pretty much stood still, Europe’s actually declined or shrunk a little bit. Despite all the stimulus, despite everything that’s happened. But in that same time, China's power market has grown 150%. So I think that's the kind of, that's why we see China is double the size of the US now, because it's seen this growth, and I think it's just beginning.
Dr. Liz Dennett:
That scale is just phenomenal. What impact do you think that has for the rest of the world?
Alex Whitworth:
Yeah, I think, first of all, it's a two way street, like why has China's power demand increased so much? And what impact does it have on the world? Firstly, it's the impact of the rest of the world on China. So last year we saw COVID, we saw a lot of stimulus going out, and it turned out a lot of that stimulus ended up as power demand in China. How did that happen? People bought iPhones, they bought treadmills, they bought TVs, all kinds of equipment. And this is kind of translated into, you know, over a trillion dollars worth of growth in China's exports. So this power demand, I mean, a large chunk of it is coming from the domestic market, which is also growing pretty strongly, but the export market as well last year, this was one of the things that pushed it up to that 10% level where it's been averaging a lot lower than that before.
What does it mean for the future? I think for the rest of the world, as I said, the European and US, and a lot of developed markets are pretty stable. But the China power market is very, very dynamic. So there's a lot of growth. There's a lot of opportunity. There's a lot of investment. There's a lot of new technologies. And I think this is what's kind of quite exciting, being in the China. As we see that growth, we see it continuing. We see a lot of new products and we see a lot of investment and manufacturing and kind of high-tech equipment, which is driving this part of my growth. And for me, it's quite exciting to see that there's a lot of energy going into the power sector, into electrification. And of course into renewables.
Dr. Liz Dennett:
Yeah. So speaking of renewables, last month on Horizons, we discussed that much of the economic impact of accelerating de-carbonization tends to be front-loaded, and the productivity of clean energy sectors tends to be lower than that of traditional sectors. So a more rapid energy transition would have a greater negative impact on China's near term economic growth. How does that play out in the long-term?
Alex Whitworth:
Well, it's true that the energy transition is very capital intensive. It's very expensive. Trillions of dollars. We’ve calculated that on Asia Pacific, there'll be over a trillion dollars of investment in the next 10 years alone, just for wind and solar and power generation. And I think this is also causing some challenges for traditional industries, for companies. Some of the grid operators are kind of struggling to keep up with investment and deal with intermittency. The power companies, some of their conventional assets like coal plants, gas plants are struggling because renewables are taking their business.
But I think, you know, what's happened in China is that in the short term there is some challenge, but I really see that the Chinese policymakers, the companies see this as a big opportunity to really invest in the future. It’s quite hard going in the short term. Profits are not always as good as let's say, in the oil and gas industry or some other industries, but at the same time, you know, people see a lot of hope and a lot of potential in the future. And I think the government is also creating this market, creating this opportunity for companies and people are investing their time, their careers, and a lot of their time into this as well.
So I don't know if I'm too optimistic on this, Andy. You can put me right. But I really see a lot of potential here in the long-term.
Andy Klump:
No, there's absolutely a ton of opportunity in the long-term, but I think even in the short term, there still is a really positive outlook. And I think if one looks at the industry from the context of where it used to be, and I remember my early days at Trina Solar back in 2006 to 2008, and the market was highly dependent on European subsidies. And it was still a very, very niche market. I mean, literally the whole overall market's grown over 120X from the time I entered the sector back in 2006. And the reality is those subsidies no longer exist. They gradually pulled away. And there was a lot of shock and it challenged within the system, but the supply chain has reacted. And we've now seen this massive drop in overall costs. I'm speaking specifically on the solar side. But in the short term, yes, we have shifted to just natural energy demand that exists on a pure play basis without subsidies. And so one of the exciting things, if you look at the 53 gigawatts that was roughly installed in China last year, over half of that was actually on the distributed generation side. So effectively small scale power plants that did not require large government intervention, large subsidies, these were driven just by organic demand. And so I think the challenge and the opportunity in the short term, yes, there is this trouble with project finance in some market. But once again, it's really an opportunity for the overall financing market, for entrepreneurs and other business stakeholders to figure out how do we deploy a large amount of renewables in this project finance market. So there are definitely going to be some shifts, but I'm very, very optimistic on the long-term.
We see a lot of data and information about leading oil and gas majors who are shifting into this sector and other companies like Orsted, who's just made this rapid transition to become the leader in offshore wind. I think there's a lot of great examples. So, I’m very optimistic in the longterm, and I think on the short term, we'll overcome these negative obstacles.
Impact of Wind and Solar Manufacturing in China
Dr. Liz Dennett:
So with that, I want to talk about wind a little bit more. China's position as the world's dominant supplier of solar modules looks pretty secure. They have over 70% of global production for solar. Now, Chinese manufacturers have not made such significant inroads with wind turbines. They still have 50%, but it's not quite as much as with solar. What impact do you think this is going to have on the rest of the world? Andy, I'd love to hear your thoughts.
Andy Klump:
Absolutely. So look, I think it's very interesting, wind and solar are very different industries and different supply bases feed into those sectors. So to dissect the numbers a little bit more, the number on solar, roughly 70% of gold production of solar modules is accurate, but one actually has to look further upstream on the crystalline side of the value chain. And you can even see a higher concentration if you look all the way up to polysilicon, which is roughly 85 to 90%, and even wafering or ingoting, which is an important step, is 97% centralized in China.
And I can comment on this a little bit later, as we talk about how supply chains are diversifying in different markets globally. But once again, solar has been much more of a commodity driven business and it's a very fragmented industry. You don't have many manufacturers that are dominating.
While it's consolidated a little bit, it's very different on the wind side. Whereas you look at the wind turbine manufacturers, there's just a handful of large major international manufacturers who've had a much higher barrier to entry because of significant R&D spend. On the solar side, much smaller R&D spend is required. And so that fragmentation theme has played out in solar, but it's not been on the wind side. So, consequently, what you've seen is that most of the Chinese manufacturing, which is roughly 50% of wind turbines, is for domestic consumption. It's not really for the rest of the world.
So, the last part of your question about what is the implication? Well, I think it just, it's a broader question about where should the rest of the world compete in each of these sectors. And I think one of the key themes that policymakers and many business stakeholders need to think about is that business model innovation has many different facets, and the solar side drives a tremendous amount of job growth on the installation side And on the ancillary services related to the equipment. So the US and other markets shouldn't necessarily think they need to ramp up their manufacturing to the high double digit percentage, like 50% like China, but it's about how do we capitalize on the low cost base of manufacturing and move to other sectors.
Whereas I think on the wind side, certainly there are opportunities, I think, for the Chinese manufacturers to expand globally, but they may not necessarily have that same dominant share as they do on the solar side. But Alex, you may have a different point of view.
Alex Whitworth:
Yeah, but I agree completely that wind and solar are very different animals. And so solar in China really developed on the export market, whereas wind was completely developed on the domestic market. And, I think it's also because of the nature of the huge wind turbines, these hundred meter long blades. It’s very hard to send them around the world on a boat or anything like that. And the gearbox is extremely heavy, the turbines are extremely large piece of equipment, very materials intensive. And also they have a lot more individualization for different markets. Different wind speeds and different patterns need different kinds of machines. So the Chinese turbine manufacturers are producing quite different machines to the ones that are used in Europe. So as Andy said, it's not really so much of a commodity.
Now, what we've seen happening in the last 10 years is the whole global wind market is split into two. One half is in China. The other half is in the rest of the world. The part in China is dominated by the Chinese manufacturers. The rest of the world's dominated by Vestas, by Siemens and GE and these big international players. So there's always the question we get from clients. Is this going to be sustainable? Is it going to be the situation forever, or are the Chinese manufacturers going to break out at some point and do better? And we have seen kind of signs of that in the last couple of years, Goldwind going to Brazil, some bits from Chinese manufacturers going to Vietnam, and some others. But I think it's still quite a small share of the pie. But I think, I've been looking at the wind market in China. We're impressed every year by the incredible innovation, the advances made, the fall of costs of turbines by about 20% last year, continues to amaze us, just how much the costs are going down and the technologies developing.
China’s Primary Competitive Advantage
Dr. Liz Dennett:
Absolutely fascinating. It's not even like apples and oranges. It's more like heirloom tomatoes that you grow locally and bananas, which are shipped green around the world and then propelled with gas to mature on demand. That's absolutely fascinating. So helicoptering up a little bit, what do each of you see as China's primary competitive advantage? Andy, I'd like to hear your thoughts on this first.
Andy Klump:
Sure. So I think one of the key questions that I used to always get this from my early days in the solar industry, that, oh, it's a low cost of labor advantage, and that's not the answer at all. China's primary competitive advantage is absolutely in the supply chain and technology, and I really kind of group and bundle those two advantages together.
First of all, in my role, formally as Vice President Business Development at Trina Solar, I was part of the IPO deal team on the New York stock exchange back in 2006. And I saw many different facets of the capital markets, but I was really, my primary role was on the supply chain side. And so I helped Trina establish a supplier co-location program where different suppliers were invited to set up their facilities right next to Trina Solar. At the time was still an emerging player with less than a gigawatt of capacity, but by having different suppliers, co-located, effectively, you eliminated a significant amount of costs, just the transportation cost alone. But once again, the cost of capital to transporting products from one step to the other is significant when you look at other countries. And so what China has built is these amazing clusters around different core manufacturers and they do this not just in solar, but also in wind, also an energy storage and many other facets. And as I’ve now helped and worked with other companies that are expanding globally and looking at different manufacturing facilities, it is absolutely not the same. And the US is a very large country as well, but it just does not mobilize as quickly to get to that scale. And I think that that feeds into the technology side, because the reality is that all the equipment manufacturers, which were initially in Europe, they came to China and they partnered with the Chinese manufacturers. So China really has the best in class technology really throughout the whole value chain, but many folks wanted to partner with Chinese companies and help them grow and expand. And so maybe you have given a lot of the equipment advantage now to China. And the technology is absolutely cutting edge here as well.
Dr. Liz Dennett:
Alex, what are your thoughts on this?
Alex Whitworth:
Yeah, it is fascinating. And sometimes I also ask myself the same question. How did China really get such a big competitive advantage in such a short time? I think now we can see the economies of scale in the domestic market give China a huge advantage, but I mean it didn't start that way. So I think the government at the start was trying to provide as high quality as possible solar panels for export. But I think the government kind of management of the value chain, the setting up of industrial parks and then putting all of the pieces together, from logistics to low power prices, to kind of getting the different companies to coordinate. And then also I think what Andy mentioned is getting these international companies to come in and compete in the domestic market to really, in some ways competing for market share, but otherwise it's training up the workforce here. And so, one statistic that I’m always amazed at is the cost of an experienced engineer in China is less than 20% of what it would be in the States. So you can get extremely good engineers for the power sector for power equipment working at a fraction of the cost of what it costs in other markets. This is also a big benefit.
So things are normalizing a little bit now, but I think that's kind of really, we see a lot of energy and then literally tens of thousands, hundreds of thousands of people, even millions of people in China being trained up in these areas. There's also a lot of government support in different areas, so that the market really is there and people know it's there and they can really invest into it.
Dr. Liz Dennett:
My mind is just being blown. I'm over here, like where are we? I'm just listening, this is fascinating. It is breaking down so many assumptions I think that people in general have about the Chinese economy.
Andy Klump:
Absolutely. No, the point on the technology side I think is meaningful. And a lot of folks think of China as being backwards on the technology and forwards on low costs. But I can assure you, labor force isn’t as low cost, as you might think. We have a lot, we have about 85 folks in China. So I know very clearly that costs have gone up dramatically om the last two decades I’ve been here.
China’s Competitive Advantage in Newer Clean Technologies
Dr. Liz Dennett:
So we're looking to the energy transition. I'm speaking of China's competitive advantage. What about these new technologies? Things like battery storage, offshore wind, even things that are currently in the R&D stages. How do you think that's gonna play out in terms of China's competitive advantages that you just talked about?
Andy Klump:
Well, on the battery storage side, it's very clear, China already dominates in this sector and we've seen a massive ramp up of capacity. But if you think about battery storage, you really just have to think about it as the gnat on the back of an elephant. Right? And the electric vehicle market is really what drives the sector and the core chemistry. The core manufacturers like CATL are just massive companies now. And so CATL, BYD, there’s a handful of others, but that market has grown incredibly quickly. And that is what's really driving for this large scale adoption of energy storage, is because costs have come down in a very large way.
Alex, I'll turn over to you on the offshore wind side. So go right ahead.
Alex Whitworth:
Yeah. I’ve also seen that the electric vehicle market is driving the battery storage market. Over 90% of the batteries are going into vehicles. And it's amazing what China's done with electric vehicles in the last few years. I think last year, the share of electric vehicles was up, I think close to 20% or 15, at least over 15% of the total of new vehicles, which is I think 4 million vehicles or something like that. So that's a huge number of vehicles and it's giving scale to the battery storage manufacturers.
And then, you know, the power sector is a lot harder. Actually, it's quite interesting because China actually is investing more at the moment in pumped hydro storage to connect to the grid than it is in battery storage. But that's just an example of another technology that China's dominating in, hydro power, pumped hydro, this is a much more mature energy storage technology, which China is dominating in.
And they have a target for 120 GW by 2030, 120 GW is larger than the capacity of most medium-sized countries. So that's the kind of scale that China's investing in energy storage. But to hit their renewables targets, they've also come out with a 1,200 GW renewable target by 2030. They need this kind of energy storage and kind of, including batteries, including pumped hydro, including other technologies. And so to reach those targets and probably to exceed them, China's doing all of the above and more. So there's a lot more technologies where those ones are also falling behind
Andy Klump:
If I could add one more, just on the green hydrogen sector, because this is getting a lot of attention right now. We have a team that's involved in green hydrogen. And, for those not familiar, green hydrogen will actually be produced locally in many different markets. But if you look at the core CapEx driver, which is electrolyzers, that's where I think there's a massive amount of scale that is in the ramp up stage. I was just at an electrolyzer facility recently. And it reminded me of solar circa, 2005 or 2006. So it's still very early stages. But as electrolyzers grow in scale, I think costs are going to come down on the CapEx side. I think that equipment will be sent to many different parts of the world. China, as many of you know, is really primarily using alkaline technologies, but there absolutely is going to be a shift towards PEM at some point. And a lot of the PEM-based manufacturers are in different parts of the world, but I think there is absolutely a marriage about how to use the China supply chain advantage, the lower cost, and once again, it's the same story of just, how do you lower the upfront CapEx, lower the project finance requirements, and that's what will allow the market to grow in.
Impact of Inflation on Renewables
Dr. Liz Dennett:
So speaking of cost, inflation is everywhere. There's been inflation of literally everything I can think about these days from going down to the grocery store, to energy, renewables, fossil fuels, everything. How do you think this is going to impact renewables in general, especially with an eye towards China?
Andy Klump:
Absolutely, there's an impact. It’s not just in China, but also the rest of the world. And, we've seen this firsthand, if you look at some of the raw components, once again, one of the core crystalline inputs is polysilicon, and we've seen pricing triple over the last year. That's part of the big portion of the reason that we've seen module prices rising, from 15% to 25%, but the impact of greater demand has shifted the focus from this ongoing cost reduction to now, how do you adapt and reprice your projects? How do you refinance projects that were already penciled at assumptions of ongoing price decline?
So once again, I will definitely say on the China side, we've seen this massive expansion in the solar market within China. If you look back on the 2017 back when the market hit a peak of 53 GW, then slowed down, it had an impact from COVID in 2020. But last year, finally in 2021, it reached 53 GW again. And it was in this inflationary environment where the costs rose, but a lot of the end buyers accepting that price increase. So it was counterintuitive that you'd see a larger market with a higher price, but the demand for renewables is so strong that it's really driven a massive interest. So, the inflationary pressures are very real, but both China as well as other markets have been able to accept that for now. I think on a longterm basis that trend will change, but I still think in ’22 and to some extent ‘23, we'll still see slightly higher pricing than we had anticipated.
Global Impact of China’s Dominance in Manufacturing
Dr. Liz Dennett:
I have two questions left. One of these is, how does or is China's dominance in manufacturing - we've learned a lot about what that actually means - how is that causing problems for the rest of the world? Or is it causing problems for the rest of the world? Andy, I'd like to start with you.
Andy Klump:
Sure. So I think there's two different ways to look at this. It's an opportunity or a threat. And so once again, we talked about the manufacturing dominance of China, in particular for solar. But, as I alluded to before, is that there's also a massive job growth trend that can happen for the installations side, and engineering and other ancillary services. Ourselves as a company with over 185 team members globally, we actually, if I look back five years ago, we just had a 10 or 12 person team in the US, and now we have 55, and most of those are engineers and technicians.
And so, there is a lot of job growth in our space around technical advisory work that can happen in downstream markets, where these markets are now enabled by having a low cost base in manufacturing.
On the flip side, the threat or the concern that some have is that, with too much concentration, too much risk around supply chain shocks or large logistics spikes, what does that mean for a build out in manufacturing capacity? And one thing I've seen is very clear. There's a very strong demand to have domestic manufacturing of various solar components, not just in the US but also in other markets. So India is going through a massive rebirth of manufacturing right now. We've seen a number of new facilities. We actually have 15 folks there now, that team was much smaller five years ago as well. But we have a lot of inspectors that are looking at these new manufacturing facilities. So, I do see there being opportunities for other investors and other players who want to have local manufacturing.
And if I had to make a comparison, I'd really kind of liken it to the automotive sector in the 1980s, when a lot of the Japanese manufacturers realize they need to set up manufacturing in the US to be close to the end markets. And that's exactly what happened. So I do see the very likely trend that more and more manufacturers, some of which are Chinese, will move to the US and produce locally. So I do see that trend playing out.
Dr. Liz Dennett:
Alex, what are your thoughts on this?
Alex Whitworth:
Well, I mean, it’s part of what they call the great game of competition. I think in the past it was oil, it was a mining, it was gas. I'm really seeing this as a competition of great powers to develop technologies that will be the future of the energy industry. So all of the major countries want to have a piece of this kind of the future. You know, if you're investing billions or trillions of dollars in your energy infrastructure, you want to make sure as much of that is going to your domestic economy as possible and creating local jobs.
And of course, equipments, as Andy said, it's not the only part that is up for play here. There's kind of operations and maintenance, there's construction. There's a lot of other services that go into kind of rebuilding the power and renewable sector. But I think the equipment is a big part. And in the power sector, we see most of power sectors around the world are really domestic focused. A lot of them are dominated by domestic, kind of diversified companies. But it's the equipment. It's like, I used to work at General Electric. General Electric and Siemens, Mitsubishi, these three kind of companies dominate the global gas turbine market. And, I think we see something like that happening in the wind turbine market now, and the battery storage is also kind of a more concentration and economies of scale. And we see that a lot of governments are now getting involved in the industry to support their champions, to support and bring out more policies to really make sure that they're kind of thinking about this strategically and not seeding too much of this benefit to Chinese companies. But I think it's going to be a long and interesting competition in the next few decades.
Thoughts on 2022 Winter Olympics
Dr. Liz Dennett:
Alright. The last question, I don't know if you guys have been following the Olympics closely or if any of the listeners have, but I got to know, how do you think the 2022 winter Olympics in Beijing have been impacting either China's economy or their perception within the world economy?
Andy Klump:
Alex, I'll let you comment first.
Alex Whitworth:
Well, unfortunately for me, personally, because I like Beijing a lot and I would have loved to go to visit Beijing. And unfortunately I can't visit Beijing recently because China really wants to ensure that the Olympics goes smoothly, make sure there's no outbreak of Coronavirus. And so they've really restricted the number of people traveling domestically, especially around Beijing. So that's a personal impact, but I think in terms of the external image, I've really been enjoying the Olympics. And I think there's been a lot of attention on the Chinese athletes and also, the competition with Chinese athletes, I think it's the best medal count that China's got ever. You know, most Chinese people don't have that much opportunity to do winter sports, but it's kind of changed the image and it's something that I've been seeing in China in the last five years or so, is that more and more people are taking up hobbies. They’re running marathons, they're going skiing. They're doing all of these different kinds of activities. And I think that's, you know, a diversification of the kind of, it used to be just work, work, work, but now people are doing all sorts of other things and have a lot of interests. So I think that's a positive thing.
Andy Klump:
Well, I’ll definitely comment from my personal experience. I had the good fortune to go to the 2008 summer Olympics. And it was a phenomenal experience, it was my first Olympics I ever went to. And it was just incredible, the international nature of the games and all the different folks who are together.
So once again, in today's environment with travel restrictions being quite severe, it is disheartening that I couldn't go this year with my family, but I will say one of the things that's interesting is that it's not necessarily getting there. It's the problem of quarantine after return.
So everyone who is in the Olympics and is in China, they have to quarantine for three weeks before they go back to their hometown. That's part of the headache of a process, but once again, I think the Olympics bring attention to sports and I think China has placed a much higher emphasis on athletic achievement and also just broader emphasis on physical health, and so I think that's been a big positive.
But I think there's also two sides of the Olympics. As a lot of folks know, and a lot of the winter Olympic activities, it's the question of what is the impact on the environment? And I think that's one of the things that I know China's tried to promote the the green games, but Beijing is still a very dry environment. And so they've had to import a lot of water to create the snow. And so there's not enough natural snow and so that’s just one of the downsides. But I think it's great to see that the 2021 summer Olympics in Japan were the first kind of green games, and I know the winter Olympics in China have also been claimed to be green games. So, I think there is still an attention to the importance of combatting climate change and the energy transition. So I think this is a theme that we'll see in all future Olympics going forward. So I think it's important to talk about and understand those impacts as well.
And timely question, Liz, so thanks for bringing that up.
Conclusion
Dr. Liz Dennett:
Thank you both for a very insightful conversation today. Andy, first off, is there anyone you'd like to give a special thank you or shout out to today? Yes, I would absolutely like to give a special shout out to my wife, Lindsay. We’re celebrating our 15th wedding anniversary this year and she helps with a lot of things in my life, but one of it is taking care of our four daughters. So they're a handful and I was away for four months last year, traveling in the US meeting with clients and team members. And it was a long time for her. So I just want to give a big shout out and say, thank you to my wife Lindsay.
Dr. Liz Dennett:
Aw, thank you Lindsay. That's incredible. Where can listeners learn more about the work you and your team are doing?
Andy Klump:
I always direct folks to our website – cea3.com. But we are also very active on LinkedIn. So, Clean Energy Associates is present in 13 countries with over 185 professionals. And so we're very active in the solar PV and energy storage industry, and also expanding into green hydrogen and EV charging. So very happy to connect with anyone who reaches out to me on LinkedIn.
Dr. Liz Dennett:
Fantastic. And again, thank you so much for your insights today. Alex, is there anyone you would like to give a thank you or shout out to today?
Alex Whitworth:
Yeah, I'd like to also give a big thanks to my wife, Helen, and also a shout out to my son Zain and remind him to do as Chinese.
Dr. Liz Dennett:
Spectacular. Where can listeners learn more about the work you and your team are doing to deliver these amazing high-impact analyses and reports?
Alex Whitworth:
Yeah, I'm also active on LinkedIn, but I think the best place to go is to the Wood Mackenzie Horizons. It’s available publicly, so welcome anyone to go and look at the Horizons website and download the report.
Dr. Liz Dennett:
Thank you both for your time and the conversation today, I personally learned a lot and had some myths dispelled about what I thought I knew about China and its economy. And I'm sure our listeners did too. So thank you very much.
