This year at AEF2022 in Brussels, Our CEO, Tony had a conversation with Dan Kammen, a distinguished Professor of Sustainability at California, Berkeley University. As you’ll discovered a very interesting conversation where Dan shares his more practical approach of looking at decarbonisation and many other points. A glimpse of the chat are as follows:
- Conferences are vehicles for shared learning
- The Promise of the Paris Climate Accords
- Decarbonisation Plans
- Advice to Emerging Markets ahead of COP27
- The Youth Summit
TT: We are here at aef and with me is Daniel Kammen. Dan, you do go to many conferences, right?
DK: Yeah, unfortunately.
TT: Do we really need the conferences or are they really necessary?
DK: I don’t know if we need conferences, but it’s pretty clear to me we do need vehicles for shared learning because from experience, utilities around the world are incredibly varied. Some are well on the way to unbundling and ending their kind of vertical integration and having a much bigger opportunity for renewables to come online, whether it’s their own investments, whether it is merchant plants, PPPs or a variety of structures. By utility experience I mean, not just the big traditional investor-owned utilities, I mean, municipal utilities, local mini grids that might be small as a health clinic or as big as the city of Goma in DRC. Those experiences are varied. But there’s a common thread that requires learning. The common thread for me is whether you liked or didn’t like the utility in the past, it was almost certainly a baseload power unidirectional flow where they send energy to their clients and their clients sent money and sometimes complaints were made. That world is over. There are certainly traditionally structured utilities, but they’re increasingly dealing with difficult challenges; how to blend the investments they’ve made either a long time ago or very recently in fossil fuels, with new investments in renewables, and how do they do the mix of projects so that they can utilize and give a good return on their existing thermal projects or large hydro, but increasingly be a player in clean energy that requires something that not all utilities have the capacity for, not all utilities have their own modelling teams.
So, the more that we have conferences or meetings that bring these stories together, the more we can actually accelerate that. I think that’s a critical part of the story. I haven’t even gotten to what’s going to happen with floating solar, electric vehicles and use of hydrogen. They’re all these challenges coming that will require what these conferences at their best supply, that’s a chance to learn across the platforms.
TT: So, you are saying that we need to share experiences…………
DK: We need to share best practices, working business models, technical stories around energy storage, where we are energy access. So, I don’t know whether we physically need conferences, but we need to share and if we lost some of that during COVID conferences aren’t the worst way to get back.
TT: I think there’s also this different human element where we actually can physically meet, connect, bond together and get something done. Since we have established that you’ve been attending many conferences, do you actually see anything changing?
DK: There’s a long answer to that. The short answer is yes, I do think see things changing. But mainly the promise of the Paris Climate Accords was that this $100 billion a year fund would be available for developing countries. That would be the ongoing commitment. Paris was now seven years ago, and only this past year, in cop 26 did the world collectively tick over 100 billion in commitments for the gear we’re in right now. A lot of Western governments champion the fact that we got to the 100-billion-dollar point, developing nations are saying, but this was an annual commitment and no one is saying that there’s another 100 billion this year, another 100 billion next year. We all know that even if we did that 100 billion a year for industrializing countries is only a down payment on what needs to be spent overall. Nigeria needs at least 10 billion a year. South Africa needs at least 10 billion a year as ongoing flows of external capital to convince conservative ministers to show that we’re really addressing the just transition and the jobs issues. I don’t know of anyone who has a viable portfolio in their mind that we will be able to do 100 billion as the floor, not the ceiling going forward. So, I think that tracking and holding donors accountable and holding countries accountable to their own climate plans, their NDCs are the needed thing and it’s the thing that’s changing because the power imbalance between industrializing and industrial nations is still very much there, but the industrializing nations, negotiators and business leaders are much savvier than they were 10 years ago.
There’s a lot more knowledge of what it takes. There are questions being asked about smart grids. If you go to Kenya, they are just as sophisticated as they are in California and Denmark. That still doesn’t solve the financial on the power imbalance, but it says this is a competition among peers. Therefore, I think that what we do at meetings, like powering Africa, etcetera, is to really keep that dialogue going and come up with bankable projects so that at the annual climate meetings; Glasgow and now Egypt, we move that along and to my mind, that’s the difference whether that difference ends up being enough money and enough commitment, I’m not sure. I think there’s a lot of reasons why industrialized nations are and shouldn’t be sceptical of what industrialized nations are saying. But it’s at least the dialogue now and I would say 10 years ago it wasn’t.
TT: I was present for the cop 26 and there was a kind of commitment were nations promised to come up with a plan.
DK: Yeah. On the US government side. I feel like it is a plan now. Whether it’s funded or not, one can be sceptical, but the plan that emerged highlighted by the special presidential climate envoy, John Kerry and by Secretary of Energy Jennifer Granholm, is that we are going to work through the net zero world process. Five countries, two of them in Africa; Nigeria and Egypt, are the African parts of this group of five, Argentina and Chile in Latin America and Indonesia, with Ukraine, for obvious reasons on hold as the sixth. Those five countries are the first ones that the US government is partnering with to develop decarbonisation plans and to work with the ministries in those countries to come up with a priority list of fundable projects and more or less the template is what South Africa got; eight and a half billion as this year’s funding, but no promise for next year or the year after. I think that what I was saying before is that what really needs to happen is to make an annual commitment. No one seems to have the money or the interest to do that. But I think that has to be one of the areas of pushback. How do we get to that level of support? It’s actually good for businesses in the north. This is not charity. This is investing in clean energy. Hopefully it will rise up Nigerian and South African, Egyptian and other companies and it will be good for the donors because they will see the partnerships around investing in the economies whose demand is growing.
TT: Okay, that was great. The 100 billion is definitely the floor and not the ceiling. Earlier this year, I read a report by McKinsey suggesting that 9 trillion is needed each year.
DK: Yeah, that’s for the whole world. But if you break it down to country level, Nigeria and Kenya each did their own internal assessments and they used companies like McKinsey and Deloitte to do the math. I don’t think the reports are unique and thoughtfully separate. They’re kind of a little bit tailored for each country. But the Nigerian assessment is that they’re going to have to spend over the coming two decades, something like $1.6 trillion and they probably need 400 billion beyond what they would have needed just to evolve the energy system to decarbonize it. So, take that 400 billion and let’s say we’re talking over 20 years, they’d be likely to get this done. So, we’re talking about over 10 billion a year but going on for year after year and nobody has a plan or realistic path to do that. You can’t walk them all, you have to start with the first step. 10 billion to each of those Net Zero World countries. I think that should be the starting demand from the partner countries and then you build out from there. You then find successful bankable projects and build from there and if that happens, then I will feel like these dialogues and these climate conferences and flying around we’ll have done their thing.
That doesn’t let developing countries off the hook. They still are going to have to find finances at home and insist on domestic manufacturing. We don’t want to go from petroleum colonialism to clean energy colonialism where all the products are being bought from China, US and the EU. But it’s a start of a process to decarbonize and I think that’s where we have to accelerate it.
TT: That’s the very nice condition. I was going to ask you the question; What is it that developing nations or emerging markets should do more?
KD: No matter how much money and how successful a given country is in signing partnerships, and getting money out of the north, ultimately, these are domestic features. When the eye of world interests shifts, and let’s say there’s reasonable reason to think that the next global crisis will be around food; where we are seeing food instability, food production issues, because we are very hungry planet. Ukraine issues shifts all attention to other issues. I hate to say it, but you know, Africa and Southeast Asia, they’re going to get forgotten in terms of investing in energy because whatever is most urgent to the rich countries is where they’re going to focus their attention. So, no one is off the hook. Industrializing nations are going to have to recognize that no matter what level of funding and partnership and wherever you want to call it, you’re going to have to do more of it at home. If I’m president or the Minister of Energy in an African country, my unemployment rates are high, my fuel costs are high, imported food is going to get more expensive, and what I need to put together is a package of clean energy investments that are attractive to partners in the north, but domestic manufacture.
If I’m Kenya, I’d say look, I really want help building new wind farms, but I want this to be part of an effort to do on site in the country. Maybe doing assembly and then manufacturing, and building that capacity because ultimately, if you don’t do that, you are just as dependent on the North for solar panels and batteries as you were in the fossil fuel and that’s not a good deal. That’s the hard reality for industrialized nations. To be honest, that’s actually the reality that will produce the most domestic jobs. I think it’s actually hard medicine, but it’s actually good medicine.
TT: I have wo last questions for you. The first question is, are we going towards cop 27 in Egypt?
DK: We’re almost there.
TT: You are absolutely right. What is your advice to African leaders in their efforts to clearly formalise their preposition so that its more understandable on what Africa wants to achieve and how they intend to do it?
DK: One is that, even if you get the best deal from the north, it still has to be a domestic agenda that even if your donors dry up, you as the president in whatever African country are still committed to. You need help, you need financing to get there. But this has to be a pro domestic agenda. I understand that gas is going to be part of the equation in every single head of state and every single utility in Africa says not only is it not fair for the North tell me to get rid of gas, but look what you’re doing in response to Ukraine. Germany is restarting coal plants but I hate to say it, there is a role for gas today. A gas you currently have because it’s valuable not only for generation needs, but it can be a low-cost battery. In the long term. There is not a role for gas because not only is the funding going to dry up for gas, but spare parts and technical expertise are also going to go to dry up and not only is it going to go away but also, it’s going to get more and more expensive to import. For me, the agenda is not going to be popular with all countries in Africa and that is use the gas infrastructure you have. But think about how you’re going to use it to enable what comes next. What I see as the most attractive route is you start to build up renewables both on grid and off grid although that line is blurring, but you insist on investments in industrial zones. Namibia wants to massively build out solar, but specifically to produce electricity and green hydrogen and they want to use it domestically and to sell it. Ghana is interested in the same thing. Senegal is really well positioned to have coastal green hydrogen hubs powered by solar and electrolysis. Kenya could do this and so partnerships with companies and with Northern governments around new clean generation capacity and industrial centers is the way to go. UK is doing it domestically. They’re taking their biggest industrial hub in the whole country.
Hamburg is going to be all hydrogen. Chile while not considered a northern country are well industrialized. Chile is converting its biggest mining operations to be all run-on hydrogen and batteries. They want to do very large solar plants in the Atacama Desert, some of the best sun in the world. That’s the same thing that could happen in Africa. Getting investments that aren’t just in generation capacity, but are also investments in Africa as people, training centers, industrial hubs, university partnerships that are more applied and more tailored to train African needs. Capacity building is what Morocco is doing right now to generate a whole new generation of young clean energy engineers to diversify it and more women more formerly excluded tribal, ethnic groups. Those are ways to build capacity where you can get northern investment, but you’re ultimately doing it for yourself.
TT: Excellent response. The last question. You kind of alluded to it a little bit. That was the particularity of this summit; the yes summit for the youth. I know you’ve been participating in some of the sessions, and I know you hold strong feelings about it. Are you hopeful for the younger generation of Africa?
DK: I’m certainly hopeful because they’re incredibly bright and energetic and they’re much savvy than my generation was. I come from a time that was not interdisciplinary, and they are now very interdisciplinary. But as much as we should want for the youth to have not just a seat at the table in terms of a photo op, but a real legitimate seat, the kind of thing that Greta Thunberg and Vanessa Nakate are arguing for. They ultimately need old people’s help in building it. So, how do you make the opportunity for youth leaders to be empowered is something that all people are struggling with? You know, it’s easy to have a youth leader on your high-level panel on the stage and then you rush to the side. It’s harder to find a way to build those partnerships. I’m incredibly hopeful because the youth are energetic, and they’re much more engaged and smarter than I feel like my generation was, but they need a legitimate position in Parliament. In the United States, we had a 26-year-old activist woman from New York City, being elected to Congress; Acacio Cortes. Africa needs a seat at the table in Parliament’s, on boards of companies and African leaders are no more or less ageist than our American leaders and we don’t give up the reins of power very easily and so finding ways in for youth, companies, universities, public service, that’s going to be tricky. I think that’s a place where we have to find ways to build new partnerships, train training programs entrepreneurial opportunities, policy advisors to heads of state, heads of companies; those are ways to build youth capacity and to assist them to displace the old people.
TT: Excellent. Thank was a wonderful interview. Thank you very much for giving up a bit of you time. I am sure that our listeners will love it.
DK: Thank you as well.