Ep80: Emma Pinchbeck 'Energy Security - Deflating the Gasbags'

Michael Liebreich: Before we start, if you're enjoying these conversations, please make sure that you like or subscribe to Cleaning Up, it really helps other people to find us. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation. Hello, I'm Michael Liebreich, and this is Cleaning Up. My guest today is Emma Pinchbeck. She's the CEO of Energy UK, the industry trade association, and before that she was Deputy CEO of Renewables UK. Please welcome Emma Pinchbeck to Cleaning Up. Mr. Welcome to Cleaning Up.

Emma Pinchbeck: Thanks very much for having me.

ML: It's a great pleasure. Thank you for making time. What I'd like to do if we could start with you just explaining to our audience what it is that Energy UK does, because obviously, you know, I would say all of our audience, I'm sure no one to remind them, they are an international audience.

EP: Now, way ahead of me if they know Energy UK does know we’re the trade body for the energy industry in the UK. So we have a variety of roles. We bring industry together to solve policy problems, to conduct advocacy campaigns with government to network so often to do kind of commercial deals or talk to each other about issues in the sector. We hold events, and we're the spokespeople, I suppose for the sector in the media, the range of members, we've got quite big and, unusually for a trade body, we have both retail and generation. So, infrastructure, but also the folks selling the products and services to consumers. We don't have upstream oil and gas production. And we don't have our district network operators, many of them, but we have almost everything else from EV charge points through to the biggest energy retailers. So, it's a good gig and trying to get consensus on policy is difficult. But when we get it right, there's such power behind that because of the breadth of the sector.

ML: And the sector, though, from what you've just said, it's not just the electricity sector. So, we had Kristian Ruby, who is the president or CEO of Eurelectric, everything, but it has to be electric, whereas you go across the traditional fossil and other sectors as well.

EP: Yeah, we go across the lot. So, I've got a bit everything. And I suppose that's interesting in the context of how I was appointed because my background is decarbonization. And so, you know, that in the UK means a substantial amount of electrification and a big shift away from fossil in general. And they wanted me as chief exec, partly because of that expertise. And so I speak for the gas generators, when I'm talking about gas transition, which is something that affects you troll me on Twitter about should remember that we are that broad voice. I think that's quite remarkable that we've got that consensus on net zero given that we're not just the electricity generators are not just working on electricity.

ML: Oh, that must cause some quite interesting conversations amongst your members, though, because their interests are not all always aligned.

EP: Well, yes. And now I'm sure we'll come on to this. I think the critical thing that's changed over the last five to 10 years, certainly since I've been working is it feels like the energy transition has gone from being driven by climate policy. So kind of driving out fossil fuels because we just carbonize to something where, yes, there's the lateralism involved for industry, but actually, the money is firmly on the side of these new technologies. So actually, most of my members agree where the energy transition is going into either transforming their businesses or getting into new businesses to do exactly that. So there's no real disagreement about what 2014 looks like. There's sometimes disagreements about the exact roadmap or the exact commercial model, but everyone will tell you that what the 2040 UK energy mix looks like more or less, and that's a, you know, that's a really straightforward thing, then work back to what we need for the next five years and the next 10 years of energy policy. And in that sense, but I know Kristian Ruby well, he and I don't disagree that often about what energy policy looks like, even though his members are a narrower range than mine.

ML: Right, now. I think we're going to come back to some of these questions, because that's all very sort of very diplomatic. You do have members who are, you know, simply threatened by all of the transition presumably who are really not involved on the on the net zero technologies. But let's come back to that. And you may be able to maintain the diplomatic response, I may be able to get you to admit that there is a bit of tension. But 2040 is a great sort of jumping off point for a really, really important topic at the moment. We are, as we record this, on day 12, of this Russian invasion of Ukraine, and it is roiling the energy markets. The European gas prices are at an enormous record. I mean, they're pretty much an order of magnitude higher than they've been for the last 20 years. And we're starting to see statements out of even this world, especially Germany, that has been, you know, has allowed itself to become very dependent on Russian gas. And there's been more movement on German energy policy and discussion in the last week than I've seen in probably 20 years. But the question is to you, what are the long term implications? Because that's today, but does 2040 now change because of Ukraine? Or will everybody forget it? And, you know, what are the implications also for the UK in particular?

EP: So, if the UK was a standalone market, which of course it isn't, we are ahead of the curve in the sense that the plan for the UK was to reduce our dependence on gas was to primarily actually the focus, next thing is really going off gas in our homes, the UK burns a lot of gas in homes. And that's where a lot of our exposure is the gas market, and on the power sector, really invest in hydrogen, carbon capture and gas transition there. And so, you know, both in terms of the reliance on gas overall, but also Russian gas, which is a very small amount of what we import, there was a plan and we just have to execute the plan and do it as well as possible. I think there are going to be some significant market consequences because other European countries are likely to speed up. So, it's not a problem on my desk for right now. It's what do we do about energy bills in October? How do we get the industry through this really challenging period? I have said to government, what happens when Germany, Germany's going to 2035 target now for 100%, renewables sounds really challenging. But what that means they'll have to do is hugely up their investment and go after all the jobs and skills and supply chain companies that we want in the UK to do the same thing here. So I do wonder whether to protect what we were already going to do, we need to go faster, because other markets are going to be competing for the for the skilled workforce, the products that we need to do that change. And there's other long-term impacts that I'm particularly worried about in the UK, which has to do with retail, our retail industry is very fragile. That's where we've seen the impact of high gas prices today, actually. And the retailers have got some of the most exciting innovative propositions for changing customers homes in the UK. And in fact, I think they could be the thing we've been missing today on our home energy efficiency and heating. I'm worried about what happens if our retail market isn't sustainable, or we lose players and there's less competition and they're not able to innovate. And that would have really big long-term consequences as well, because features a major challenge in the UK. So, there's those kinds of things percolating away? Honestly, Michael, I think there's a lot of speculation at the moment. Very little informed contribution. And I think wise people are trying to manage the immediate crisis. And then I've got like a kind of long list of medium risks in long term risks that change about every 24 hours at the moment.

ML: Right. In fact, I've jumped over the near term. And in fact, maybe we should have started the other way around. But if I paraphrase that sort of 2040, what you're really saying is that this will accelerate a transition. Yeah, no number of countries that are finally going to sort of get much more serious and much nearer term. And then the which is sort of good from a climate perspective, potentially threatening from our jobs and supply chain perspective. But if we talk about that, that near term, I wrote a piece on LinkedIn, about how, you know, if we really wanted to be serious about sanctions, we would stop buying Russian oil and gas. And I don't see how we do that without very substantial disruption and behavior change and so on. I mean, we're not going to be able to pretend that nothing's happening domestically if we do that. But is that a conversation that you're involved in?

EP: Yeah, I mean it's on the list. So, the really complex thing for industry at the moment is their balance. I'm seeing a number of what I would call moral needs. So folks who can get out of contracts are doing it. We're seeing it already. So there aren't that many players that have long term gas contracts with the Russians in the UK. But a lot of the market has already divested where it can, there are some really complex moral questions about, for example, generators, who are active not just in the UK, but across Europe, who have gas contracts that are basically underpinning economies that you do not want to become fragile in the context of Russian aggression, and, or supplying what is an essential service and energy that that could cause real public opposition, if you cut it off, or much higher bills and bills already, at levels that were worried about cost of living in many markets. And so the industry is trying to weigh divestment, where it's in control of that against those other things that it has to do. And someone said to me, as you say, to put sanctions on or to really divest of Russian gas feels like the right thing to do in the context of Ukraine, to explain that and the consequences of that to publics across Europe, you would probably need the public to really understand the Russian invasion is just so horrendous, so grotesque, that they are willing to take higher energy bills, face disruption in their economies and everything else to cause that pain to Russia. And that is a political question that the industry is not in control of really, that's about how do you talk to the public about the right thing to do and make sure they can with you, if we do that? On the medium to long term? Yeah, we're very lucky in the UK that we're not as exposed to Russian gases, we could be but you're absolutely right, everyone's going to try and get out of it as fast as possible.

ML: I'm hoping because this interview will come out in about two weeks, and when it's filled, that's how long it normally takes. And we don't know how this is going to play out. I sincerely hope that it has not got to the point where it is abundantly clear to everybody that the highest priority thing is instantly shutting off those taps, you said that I'm finding it completely surreal. Because I think we're at that point already, I think that what is going on is already sufficiently horrendous to, you know, to take very dramatic action. And meanwhile, there's this surreal aspect of this, which is that we're still Europe, not so much the UK, but Europe is still buying Russian gas, which is flowing through Ukraine. And that is still going on today. And then the amount of sort of self-censorship and people, you know, stopping buying Russian oil, which is much more voluntary and lower, shorter-term contracts. But, you know, how can it make sense to be what sort of world do we live in where we're buying Russia gas, where we, you know, that we think that just removing Netflix from Russia is going to somehow sort of bring them to their knees whilst we still buy their gas? It just seems extraordinary.

EP: Yeah, highlights the say so good things that may come out of this. So, there's not much going about it at the moment. I think it highlights the volatility, the geopolitical complexity of fossil fuels, and how international that market is, and how little, you know, Western governments are really in control of it. And it's a nice bit of there's a lot of hindsight thinking going on about well, how did we get into the situation? And we should have come out of it. I agree with the with that kind of flow through of gas. Why are people still buying and why? Because they're dependent on it. And those economies, particularly in Eastern Europe, where the energy infrastructure is not as good, they don't have many alternatives. And there is that weighing up being done, I would imagine by politicians for the industry, they're going to stand by whatever sanctions the government puts forward, they've said that and you can see the traders already pricing in the risk of additional sanctions. That's partly why the prices are so sky high this week. So, you know, industry is going to do whatever governments want to do and fundamentally wants to do the right thing. It just is a pretty horrendous situation, as you say, and I agree with you, I think you look at it and think what we were doing in the long run the fights arguing to stay on gas or do more gas or kind of or that being the solution to what's going on, baffle me because it's obviously not that and most European governments going to do all they can to get out of Russian gas in the long run.

ML: Right, and we'll get on to the people the voices calling for more gas, but in terms of a short term, reduction of gas use, it just seems I draw the parallel with how Japan respond after Fukushima, all of the nuclear power stations were taken offline. And everybody was expecting power cuts. And there weren't any and there weren't any because politicians, industry consumers understood how important it was to reduce demand. And this debate has almost not happened in the UK. And I don't think it's happened in most of you are, in fact, you know, to the extent that LNG cargoes are global or traded globally, you know, it just feels to me like we are, you know, that we probably can't, we can't get off Russian gas fully without enormous disruption. But we want to take a huge bite out of it relatively easily, I believe.

EP: So I think there are two things. Firstly, a lot of people are saying to me, why is the UK government not prioritizing a big consumer messaging campaign. So, in the UK, a lot of our exposure to gases on heat and on domestic heating, in particular. So why not be talking to people about turning down the flow temps on their boilers, which is very neat, that would make it make a big difference.

ML: I smile because I don't know if you know, but that's been one of I don't want to say it's one of my campaigns. It's some extremely good engineers who have been talking about it for and I actually had Nathan Gambling on this show. Beta Talk, his podcast. But you know, there are a lot of very, very smart engineers that have been absolutely banging their head against the wall trying to get the message about lower flow temperatures, because people think of reducing your heating bills, oh, well, you have to be cold. And yet, running the thermostats a bit colder would certainly help. But you can reduce the flow temperatures between the two, we ought to be able to cut our gas demand by 10%, 15%. Yeah, we've also got lots of empty offices because people are working from home, and I bet we're heating them all.

EP: Yeah, that kind of thing. So why is why is that not a message going? So there's a lot of focus on production, because that's how simple analysis tends to enter the energy market, but very little on demand reduction.

ML: So here's my question to you. You said, Oh, well, my members will do whatever the government tells them to do. Are your members, are you, camping in front of number 10 saying, we can immediately cut gas use by 15%, we need your help to communicate. But here's how you do it.

EP: Yes, we have been asking for them to take us on that. But the reason that we think is a government lead, or at least not just an industry lead, and this is with affection for my numbers, the folks who can do that best to the retailers, the people we pay our bills to the retailers are not usually the most trusted on energy bills. And at the moment in the UK, where energy bills are very, very high and retail has been unstable. There is a risk that when your supplier writes to you and says your energy bills really high or to deal with the situation in Ukraine, when you turn your boiler down that it looks glib or doesn't recognize how people feel about the retailers. So, we think it's a government lead with the industry supporting but the industry has been saying that.

ML: But let me let me push you on that because frankly, the industry has been promoting high boiler temperatures, the boiler bid of the industry…

EP: I don't know, the boiler. Yeah, they're not in my membership.

ML: That's good, because we can dump on them. Because it is incredible to me that these big companies that make boilers have you can go today you could go on the internet and you could see their instructions for setting up a boil the rest of it. None of them talk about keeping…

EP: I did mine last week and then and it's a new boiler. Something else that triggers bits of the internet because I have a boiler in my house. The manual said that I should be looking to run the flow temperature at 70… And then it had a little side note to say if you've got underfloor heating, you can run it at 45 And the reason is they're assuming a low and Ambien high efficiency system if you've got underfloor heating, but you can run, my house is very energy efficient. It's got brand new radiators, and it's basically heat pump ready my house and so I can run my boiler at sort of 45, 50 I've been trying it through the winter at different patches and it's fine.

ML: Right. And you know, our housing stock was very poorly insulated 20 years ago, but it's actually much better now. And I think that you know, we have a law that says we have to install condensing boilers and they do not condense if you've got…

EP: They're actually inefficient. Yeah, it's requiring me to run my boiler inefficiently and luckily, I know the industry so I wasn't particularly frightened about adjusting it. But for a lot of people that is very frightening and they're going to stick to what's in demand. Anyway, but my bit of the industry very up for a campaign.

ML: Right, but I'm going to I want to come back to you. Well, between us, we're allowing you to dodge the question. The retailers are the ones who could come in, they could send engineers in, they could run a proper campaign, which is going to require visits to houses to adjust your heating to help people because what you need to do is you turn down the flow temperature, but you need to then adjust the time, which the heating is on for. So you can’t just heat it with an hour here, an hour there. And now there, you're going to run it, but it's going to be cheaper, the retailers are not trusted, because they don't do that sort of thing. Surely?

EP: I don't know. I mean, I think some of them do it and do it well, but they tend to be newer brands that can set and some of them have already actually, I know there's the NoVo that that sort of scheme, for example, the I haven't actually spoken to the ones with really big installer fleets and asked what they're planning on doing. But most of them are thinking about consumer cons, they do tend to get smacked for it when they do this kind of thing. No, and I will tell you that if they there will be nervousness around it without some kind of government lead. But I think it, I think they will acknowledge that it'd be the right thing to do. Similarly, the other reason, Michael, and the thing that we are, again, maybe dodging is that most of them right now will either be focused on how the hell do we say business prices this high. But secondly, a lot of customers are just, it's just they've got to get through talking to them about why their bills are going up, you know, just the basic, the core volumes we've got going into call centers at the moment are five to 10 times higher than they normally be this time of year, they got a lot of vulnerable customers to help, you know, they've got limited resources because of the market so I think it often feels like what's the right thing to focus on first?

ML: What I mean, and I'm just listening to this game, what the people already calling asking for the solution, which is turn down your thermostat a bit and adjust your flow temperature. And if you need it, we'll send an engineer should be the response. And if anybody from OFGEM is listening or from government, and these retailers are saying, well, we can't do it, because we're a bit worried we might run into a bit of a regulatory brick wall. That has to be the sort of thing that Energy UK could help to fix, no?

EP: Yeah, it is. It's on the list of things that we're looking at doing. I mean, I think just back to your point, no, I think most of them if they said that to someone in a call center for most of people falling they'd be like, It's a bit like the government help that came out the £200, £300 for some customers that's not generous enough that they're giving it back to the to the people that really need it. Who are the kinds of people that phone call centers, none of these interventions are going to be enough now, particularly not with the prices we're seeing. So there's that kind of it's, there's a lot to do to get that right. But it should certainly be part of what we're saying to people that I'm finally agreeing. I mean, coming back to why I think it shouldn't necessarily be retailers, it's just to kind of that's the comms instincts on who, who we have seen people, particularly vulnerable people trust, and when. And I think there's a kind of acknowledgement in industry, that we're not always the right people for those kinds of messages that sometimes you do need to do it in partnership with consumer groups, or government or others.

ML: And one final thing. And the problem with doing it from government is the government is packed full of very, very wonderful, very brilliant people. They tend to be PPE grads from Oxford, if you expect them to create really detailed regulations around flow temperatures all around…

EP: They overengineer.

ML: They overengineer or they just get it wrong and tell everybody to have a piece of kit X, you know, as opposed anyway, we should move on to that, because I've given you a bit of a hard time and hopefully, hopefully, that, by the time this episode comes out, there probably be all sorts of initiatives. But you're right, of course, it has to be done in coordination with government, because it should be, you know, TV advertising where people…

EP: That's the kind of thing I'm thinking of that kind of like, campaign where you see it.

ML: But let's talk about the people who sort of say, Oh, listen to those two wittering on about and they're going to be talking about heat pumps for the rest of this. I can't bear this, because the answer is so obviously, gas. Yes. And the reason we've got a problem is because it's people like Emma and people like Michael, who haven't let us Although, to be honest, I was actually in favors of fracking..

EP: Oh were you?

ML: But it's people like us, or it's the green blob or whoever who has failed to block the UK from sorting out the supply side, which is the only possible answer to this. So what do you say to them?

EP: Well it's wrong. They say there's no issue with the supply of gas. It's not a production problem that's causing these prices and even if it Were unless they're planning to nationalize the industry which curiously, I don't ever hear these guys calling for. It's not nationalize the oil industry and somehow target the profits that way, or let's tax it really, really heavily. And I don't know hypothecate the profits to something like green measures which would make a difference the bills, there's no link between increased production here and bill reduction, right.

ML: Let's explore that. Because they're what they're saying is that look at America, it's flooded with gas, gas prices are cheap, because they've got so much of it. We've got the gas, right, we've done the geology, it is underground, we should be flooding the market with gas. And that would be the best way to help householders because they'd have cheap gas. Flood the market, forget nationalizing whatever course we're not talking about that, because we'll just flood the market and make it cheap.

EP: So I think the maximum like by the industry's own estimates, the maximum they thought they could get out of shale was enough to be about 5% of UK gas demand. And that was after 10 years of ramp up. So getting the sights, right, assuming that they get every planning application improve, they don't face public opposition. Of course, it's fact in the UK that the public hate it. Second, that's a challenge. It's one of the genuine obstacles to getting the development away in the UK. On top of which, it is unlikely every planning application will succeed, because unlike in the US, were much more populated where the shale is. So, it's difficult to extract it, but then also to move it and get the infrastructure around it. So there's loads of reasons to think that 5% figure is toppy anyway, and that's in 10 years time after you've managed to scale up the industry. I mean, you can go faster, we've seen technology transition so fast and when you want but it's not going to be the solution space. That's the that's the first thing. Second thing I'd say is I was working on shale in 2015. And what was said to me at the time is they can't get the volume out of the ground at a price that's high enough to make it worth doing. So, investors are not going to touch it. And by the time they do renewables will be so obviously more attractive investment, that you'll go that way. And that proved to be absolutely true at the time. But a lot of smart economists made fun of me when I was giving evidence, the Select Committee that said that, but in short, it's been a market failure. So, I just don't think you would ever get it away at the scale of volume that you need, and then be able to target it enough to make a big difference either security of supply or prices. So, everyone in the sector has been clear on that. And you know, I think, again, coming back to previous conversations, so much focus on production, it's a bit it's the energy economics of like 1974. And actually demand feels like it's a thing. And anyway, even if you're looking at production, and resilience and security of supply and kind of big key going to do renewables, not gas now, that's the way it's going to be the complementary technologies around it.

ML: But again, I could push back and say, Well, you know, the only reason economically it hasn't made sense is because you have to stop drilling. When there's a 0.5…

EP: The limits in the UK.

ML: It's like somebody sitting heavily on a chair in the next room. I mean, and then they have to stop drilling and filling all these reports and so on. And of course, you can't make money like that. So is there any merit to the argument that this could be even… 5%? It's not nothing, right?

EP: Yeah. But it's still only 5%. And by the time you prove that, I mean, my thing is technology trajectories, right, followed by time you prove that we're 10 years on probably from where we are now. If you invested that so. So that's good for the Hypothecation model. That's someone who keeps pointing out that we could maybe bring pencil profits and using…

ML: John Baldwin, is that right? He wants to have two companies one that fracks and the other one that takes a special sort of dividend or special royalty from that, and uses it to reduce gas demand. And there's some elegance to that solution.

EP: There is some there is some elegance to it. And I've got a lot more time for junk. John is not in the category of people that are just like screaming about production without knowing about gas, right. He's knowledgeable. And it's not a terrible idea in many ways. But my sense is if you look across the range of technologies that I looked across and the markets across by the time that he's got his gas out of the ground with his first company, and hit the volumes that you need to make it profitable and interesting to do something with the second company on energy efficiency and insulation. You could have spent these 10 years doing energy efficiency and insulation and the reason was just simply the macro economic level, it makes sense for our buildings to be more energy efficient in the UK, you get the savings back from literally the government funding it without having to need a share industry to do it. So just crack on with the green measures that fit.

ML: But when you say crack on with the green measures, you know, then there's another sort of body of people on Twitter very vocal, who sort of say, the solution to Ukraine and the price spike is wind or wind and solar. And frankly, even if it's efficiency and heat pumps, I mean, how long is that going to take? Yeah, we know, we started off by talking about 2040. And I think, you know, there's no question we could have largely solved the problem by then if we were really I mean, we, you know, in this country, we went from no central heating to everybody having central heating over about a 20 year period around the 70s. But there, you know, that those who are arguing for clean solutions seem to be saying, well, let's just leave the energy prices high for the next 5, 10, 15 years, until we've solved the problem. Yeah. And is that what a just transition looks like?

EP: No, also that right? So like, I again, I'm not, I mean, I have strong views on technologies, because I've got a background as a climate campaigner, but that’s sort of irrelevant for my job in Energy UK. Okay, this when I'm thinking about things like increased gas production, it is in the context of keeping built people's bills as low as possible, making sure that the UK economy isn't totally ruined by what we're seeing on the global gas market. And by missing out on the opportunities of a technology transition, and then also climate change. And, and so I think you're right, I think renewables is the long-term answer. That is so obvious for everyone. It's why the Secretary of State is repeating it, you know, we pursue net zero as fast as possible. That is very, very clearly the way that we reduce, I guess, dependence. You do big renewables and offshore wind in the UK and integrate and then kind of all the big kit stuff, but you also do demand reduction. And you do that largely over the next 10, 20 years. It's very clear. What is not clear is how do we get through the next year, two years, however long there is disruption in the gas markets? And how do we transition gas in the UK? Because you're right, actually, in the UK system, we think we're going to need a bit of a mix, nuclear and renewables, and a bit of unabated innovative gas. Those are real market challenges. They're real affordability challenges. And now we also need to find some extra help people like right now, that's much less easy than the long term. And, and the renewables folks are thinking long term because it takes 10 years to build a wind farm, but like, there's the how do we business stuff right now? That's the stuff that's worrying me.

ML: Right. And, you know, when you say it takes 10 years to build a wind farm, we also need to remember that…

EP: It should take one I should say, a lot of that is government stuff. But you know, it does currently take eight to 10.

ML: Right, and even if it takes only a year or two to build a solar farm, right, and you know, so we can do things fast with renewables. But I don't know the figures for the UK, you might well know that globally. Wind and solar are 14% of electricity supply. But electricity is only 20% of energy use total energy use, because you've got industry heating, we've talked a lot about and transport. And so right now, actually wind and solar after an incredible 20-year run, which I never forecast, I didn't think that the sectors I was sort of aligning with would be as successful as they've been when I started New Energy Finance, because that's what we were doing a lot of wind and solar analysis. But 14% of 20% is 2.8%. So, in my view, and I'm an engineer, I look at the supply chains that are needed, the planning, consents, all of the things that are needed the interconnections, the new technologies to manage variability, none of it's impossible. But the idea that we would go from that sort of 2.8% of energy needs to 70% you know, within five years, because we want to because of climate and because of Ukraine, and because we're finally going to sort of break the stranglehold of the fossil mafia and whatever, we're not going to do it in five years. We're going to do it in 2535 45 years is the honest answer surely.

ML: So the thing that I used to say often to my good friends in the climate movement, look, I you know, that hasn't been able, we should have moved earlier, we should go faster, not enough, it frightens the hell out of me. However, this is about a massive economic shift and you for a second climate change is basically got two routes either I genuinely think that 8 billion people are going to really curtail their lifestyles or stop being stop being humans on Instagram buy the next stupidly large car because that's what they marketed as them you have to either think that you can kind of change the behavior of 8 billion people and rewire the globe economy in 10 years. So collapse capitalism and find another model, or you have to lean into a lot of climate mitigation being about technology change, an economy change. And therefore, you have to lean into how long that takes. And, and I can, I can as if I do, my members can only build a wind farm so fast, they can only turn off coal as fast as they've got public permission to do it, because they don't want the lights to go out. If the lights go out, ever, in any of these markets, the first thing that will happen is people point the finger at renewables, when bills are high, they've got to balance, you know, the moral imperative to get bills down for an essential public service versus the moral imperative to tackle climate change is actually the reason I took the Energy UK job is to wrestle with those complexities, and just the final thought on this, many of the really big barriers to that transition and our non market, they are, I mean, there's a market stuff that will happen as a consequence of the technology shift. But they're things like planning, consenting grid connection, the sheer flipping physics of trying to get everything changing in the right order. They are, you know, they're not things that are easy to solve. And they're complex system interactions. And so again, another reason I took the job is just trying to move those chess pieces around. Intellectually, it's fascinating. And the emotional level is often really, really, really frightening.

ML: So I think anytime anybody, you know, on my twitter threads, or LinkedIn sort of intimated that we should just do X Y Z, because it's simple and obvious. I think I'm going to end up providing a link to this episode Cleaning Up because it just isn't, it's just…

EP: It’s really difficult whole system thinking.

ML: I think that one thing that I would suggest is changing because of the energy price spike, and because of Ukraine, is that certainly for me, the emphasis on affordability is much more front and center than it has been in my work over the past, you know, let's call it 15, 20 years, it's just if we can't do this, whilst keeping energy affordable, the social costs, not, you know, the economic cost of course, but the social costs will be enormous. And also, the pushback, because all that will happen is that there's this kind of fertile territory for all sorts of people to step in and say, all that people care about is energy bills, and they can push whatever craft solutions they want. And there will be it will be very fertile; they will be very successful. It's my worry.

EP: Yeah. So we actually just this week, having are having a little organized campaign against our net zero target from very small group of folks who've done it before. So this, I mean, this is what I'm saying to journalists, and because they're writing to me and asking what I think of it as a new campaign, and it's not a new campaign is every single time the energy price spikes or energy bills are going to go up, the same group of people roll out the same playbook because they expect the public to walk away from climate action when bills go up. I don't know whether in this particular instance, that playbook works, because it's so obviously about gas. And I think on a common sense level, the first time the public might see gases, not the best thing for energy security, as opposed to the thing for energy security and low bills. But nevertheless, yeah, of course, we worry about that. And I think the affordability question, actually, the distributional impacts of the transition, I think one of the biggest things we have to get right. So not affordability overall, because the economics are clear. Net zero is a good way to go. The distributional impacts of paying for it and when.

ML: Right and you know, let's be explicit about these people who are, you know, organizing their campaign? I mean, this is the Global Warming Policy Foundation. Yeah. I mean, travel, travel. They've now you know, morphed into this thing called Net Zero Watch. And the most recent thing was Nigel Farage has decided that we have to have a referendum on net zero because it's not enough. You know, actually, I want to come back to the question of how seriously we should take threats. Because I do think that, you know, mockery is a good defense against certain sorts of I think if President Trump, you know, former, you know, when he was cut if candidate Trump had been mocked and laughed, that we maybe wouldn't be quite where we are in the US maybe agree on for him, instead of taking his every utterance seriously and analyzing it as though it had any truth value or value as a concept, conceptual value, but the so you've got Nigel Farage that wants to have a referendum on that zero because, according to him, there's no different no democratic mandate. I mean, the fact that, that, you know, the Conservatives stood on that as a massive amount of aspirin in 2019 strikes me as being quite a good democratic mandate. But I guess, you know it, I suppose the question is how seriously, we should take him and you very publicly on Twitter sort of didn't write? Do you want to try read the tweets, or do you want?

EP: I mean, I had explain this to my press office this morning. Right, so just what we do the theory of change on this is exactly the one that you're describing. I think that people take what is a very small group of cranks, like relative to where both are the UK population is, and our parliamentarians as a whole are, Oh, actually, it was also lovely the energy industry is and they write reams and reams of articles about them, they kind of self-perpetuate into a movement. So, I just thought, I'm just going to not write a serious tweet.

ML: So what you wrote and this is about Nigel Farage, just call for a referendum was not seen a cry for attention. This desperate since my toddler, pair of my husband's boxer shorts on our head last week and shouted, look at my hat.

EP: Oh, sorry. Yes,

ML: This is referendum on net zero as boxer shorts on head moment for Mr. Farage.

EP: Yeah, it feels that silly.

ML: Let me challenge you on that. And I actually done. I'm going to challenge you because I think it's worth exploring, not because I disagree. I think the idea of mockery as a political tool is underused, as I've already said. But when you say when you know that these are cranks, and you know, nobody takes it, you know, they're a small minority. So that is a, you know, it's known that I was a Brexit voter, I am still to this day a Brexiter. So people were saying the exact same things about Brexit.

EP: Oh, no one sensible was saying that about Brexit, though. And that in the beginning.

ML: There was a there was a small group of people, they were called cranks, we were called cranks. People said, Oh, the banking industry is all realized how absurd so the industry was, you know, said it was ridiculous, etc, etc. And you say it's the same playbook. And you know, my own, you know, on this one, I think that they are. I don't think the word is cranks. I tell you, why not? For me, the issue is that this question of energy bills is absolutely central. And when you call them cranks, what they're doing is they're mining a very real social problem. And when you marginalize them, I think it's incumbent on you particularly in your role, but also me as a commentator, to really take this question of energy affordability seriously, but yeah, part of what we do.

EP: I think it's about exposing the fact that they're not on the side of the comrade so coming back to… I thought about this as well, before actually I decided to kind of step up on engaging with them. Because there is a choice just to ignore it, plenty of people in my sort of role words, and there's an argument that is sort of, you know, not my core responsibility, but there's a real risk to the industry into investment if they are successful, and they were in 2015. So, I think there's a reason to take them. What's that expression? Literally, not seriously, you know that? So, I'm not under estimating. Seriously, not literally.

EP: Yeah. So, here's what I think. I don't think it's like Brexit because firstly, when you pull people on the question of Europe and UK, there wasn't a clear democratic mandate for it, either. In opinion polls or in manifestos, it was always a question of uncertainty. Secondly, most smart people before it became a really entrenched political debate, especially back at the start of the referendum debate, the UK wasn't always that happy with the EU. And there were very good reasons for, you know, certainly strong some policy changes, certainly, you know, a more complex discussion about trade and the economy than then we ended up having. So, I don't think it's the same as on net zero. It's most of the analysis tends in the same direction. It's very, very obvious what the correct answer is, and this feels a little bit like they've underestimated that bit. I think the risk is, for me and for anyone in industry, we cannot be glib about the fact that ordinary people do not understand where their energy comes from, why it's the price that is what's causing the price hikes and nor can we be factors and in compassionate about the fact that we have to pay for this somehow and those costs need to fall fairly and justly on people. And a lot of the time the strongest proponents for climate action, they're middle class or thoughtless, about costs or dismiss concerns about costs as being cranky. Now, I think this group of guys, because it is mostly guys are being horribly disingenuous, and one of the things I dislike most about it is that they seem to be self interested, it seems to be an exercise not in worrying about affordability of net zero. But political power. To me. affordability of Net Zero is a central question. Taking down a group of people who would prevent the growth of the economy, affordability of bills in the long run, you know, a valuable economic transition for their own short term political ends is important. But I shouldn't let go of the affordability question. We should own that that was a really rambley concept.

ML: That was a brilliant answer. That was a brilliant answer, and was the right answer. And I think that I think that's exactly right, what you're looking at, you're somebody who has spent the better part of 20 years explaining that we can have a high performing low cost resilient, clean energy system. That is the goal. And that has to remain front and center of our vision, however, I guess what I've said is that, I think for me, we've got to think much more about how we protect energy prices along the way, because these are weather serious, not literal, and so on there, there's the opposition is tapping into a real issue. And I raised I got into trouble with a tweet that I sent out last week, saying that, you know, it was a sort of message to activists, I saw that I think A to Z of what you're doing is making it hard to invest in fossil and I was thinking about people who are, you know, every pipeline has to be blocked, fracking has to be blocked, every element of you know, maintaining the output from oil fields by investment. You're making it impossible for Shell to even maintain a headquarters in Holland. Yeah, that's all good stuff. But if that's all you have in mind, and all you celebrate, then expect a price spike and expect Mr. Putin to have more power. And of course, people got outraged is that you're blaming the activists? I'm not, I'm saying they have some responsibility. And we all have a responsibility to think about this affordability question.

EP: Yeah. And I actually, this is actually good as well, I think there's some times so I think extinction, rebellion, and others might, you know, I come from the environmental movement, I've done my fair share of activism into my fair share of protests. And I think it's incredibly valuable for moving the Overton window which we talk about a lot. The UK has a net zero target. Partly because the original Extinction Rebellion protests were really well received really well done very broad, brought in a section of public they don't normally get, and they kind of created this political window for action that's really good protests working really well. And activism is important, and I will fight to protect it. However, having come from an NGO where we balance campaigning, and then things like technical expertise, there's often a bit of a gap, because the technical answers to the question are often more tedious and more complex than the ones you can campaigned on. So, to give you an example, we spend a lot of time trying to convince the brilliant campaigns team at WWF to focus on energy efficiency and loft insulation rather than wind turbines because that because heat in the UK is a massive issue. Wind turbines at that point. Well, we wanted to try and see if these brilliant campaigning minds could be creative about the boring stuff, as well as the really sexy stuff that that they can they can fairly easily bring the public with the model get hits on and I’d love to see more of that in activism.

ML: And, and of course, what we got was Insulate Britain, which of course was probably a response to that exact…

EP: maybe it was my fault.

ML: But of course, what's fascinating there is that they want to talk about insulate Britain, but I'll bet you that most of them have probably not insulated, then certainly not moved to heat pumps because we know the numbers. So, the number of people protesting is much bigger than the number of people with heat pumps. And they almost guarantee you they haven't looked at their flow temperature and their boilers. So, what you've got is a bunch of people who have not taken basic actions themselves and they are generally middle class and perfectly able to either them or their parents do those things. But what they really want to do is to try to bring down capitalism or do some other things and not really be serious about a solution set. And then when they talk solutions, it says oh, we've campaigned for solar on the roofs. You're not you know this, you're not going to heat the UK. By putting solar panels on your roof. There is no sun in winter to do that. That is just not there. And so, you know, I love by the way, by the time this comes out the week before, so the episode that will come out the week before you is Rhian- Mari Thomas is great.

EP: This is just the list of people, I think you're great.

ML: But what I love about the conversation with her about her approach to what she's doing, is she's working on the solutions. So sustainable finance? Yeah, largely, as I see it is about stopping people from doing things making it harder increasing the cost of capital for fossil. Yeah, what she's doing is down there with, you know, with the hood up in the engine compartment, trying to figure out how to finance clean heat, and clean…

EP: we've had conversations about doing stuff together for that reason, because the energy industry, I mean, this is probably a spoiler alert, I don't know whether Rhian and I will find time to pull it off. But we were talking about exactly that, you know, you need to find, you need to find the financing model for energy efficiency, maybe you know that. And so one of the one of the problems is a lack of, you know, access to green finance for people, that's a very basic one, my green mortgages and things like that, but up the chain, some of the things I talked about as being a problem. So, say the 40 gigawatts of offshore wind and stuff, like being able to do really imaginative things for communities. So we're going to be hosting our substations, which is basically a finance decision. That's the investors saying, all right, you can make we'll take slightly less margin in return for you to be able to spend the money in this bit in this place and the economy that's going to take the infrastructure burden. You know, there's got there's some really interesting trade offs. And it comes back to your point again, about where the distributional impacts about how we will people for taking on these technologies and acknowledging that for some people, they're gonna, they're gonna lose some stuff to gain some stuff. So yeah, she and I talked about doing some work.

ML: So that's opening up a couple of really important things, we won't have time to deal with fully. One of them you just mentioned, which is kind of place-based solutions, where communities solve things. I'm going to have to not go down that rabbit hole right now or we'll be here for another hour. But the other one on financing of energy efficiency. We had an amazing extraordinary expert Peter Sweetman. I think he was just before Christmas, if I'm not wrong, we'll put it we can put a link into the show notes. Yeah, but he is really the kind of encyclopedic knowledgeable person on energy efficiency, investment. So, he was he was on Cleaning Up. I want to finish though, unless you want to comment on…

EP: I really want to go down and centralize the decentralized energy system and rabbit hole, but maybe not because we wouldn't be here for now.

ML: Maybe what maybe we'll find a time to bring you back to talk about that, particularly if you've worked with Rhian-Mari, then maybe we'll do something creative and get both of you on. But I wanted to finish by talking about one other thing, which is that you actually had your first child whilst you were already CEO of Energy UK, is that correct?

EP: Sort of. I was, I interviewed for this job when she was three weeks old. And I'm pregnant again now. So yeah, so they had the, you know, they had a decision to make about hiring someone who's on maternity leave, who wants to work? Yeah, I recall

ML: You were on maternity leave, whilst you did the interview for the role. Is that right? Yeah,

EP: That's right. Yeah. Yeah.

ML: And, you know, I've had quite a few women leaders on Cleaning Up, I'm proud to say we're about 40%. Could be somewhere around that. And we're actually recording this just one day before International Women's Day. And in fact, the last by the time this episode comes out, the last four episodes will have been women. So that's great. But most of them are not there. Many of them have got children, but they're a bit older than yours. What is it like to be a younger woman, a woman who's actively you know, got a toddler, and now you're presumably going to take a bit more maternity leave? Or maybe not, but you know, you're right, in that process? What is that? Like? Are you finding the industry supportive? Is social media supportive of people being helped, you know, is it is it just irrelevant, which it shouldn't be?

EP: It’s highly relevant, which is what anyone would say to you if they came if they're doing things differently, right. The point the point about all the initiatives and diversity inclusion is acknowledging that if you if you're coming from a non-stereotypical experience, we tend to bring that to your work whether you like it or not, and in my case, it's been a real car crash of both logistics and identity getting used to being a mother at the same time is taking on the biggest of I've had I wasn't I haven't done the chief exec role before. I'll tell you that my husband actually took a took a different job after I was which this one He says that we thought I'd probably get fired quite quickly, it's very normal. And he's finally able to kind of think about what he wants to do, because it doesn't look like I am going to get fired. Unless that tweet about Farage really gets me into trouble. The, um, when I think about it is this is a car crash. And that should be okay. So I think since having a child, it is astonishing how many of the bosses of the industry before who tend not wholly, but usually to be, you know, middle aged bikes and slightly grown up children, for whom my young children are a lightning rod to talk about what they missed, and how they wish they'd been able to have a bit more balance, or how a lot of sleep in their car at lunchtime. And it's not that it's not that my tiredness, forgetful, this occasional incompetence that my role is new to any parent in the workplace is just visible because my baby has been literally on me for many of those meetings and a much more visible part of what I do. So, I've just decided to not hide her. But I don't think that's unhealthy, I think we need to find a new model of leadership that that acknowledges a richer take on what we bring to these roles on Twitter is an issue for people and I and for that reason I talk about her we don't I never use her name, because I actually get quite a lot of hate mail about my family, or my husband or my or my child actually is just coming down the stairs you might be able to hear. And for that reason, I think it's really important to be visible and to stand up for that sort of ability to do both roles.

ML: Can you hear her? Absolutely. Fantastic. She has fantastic timing.

EP: She might come in and say hello, because she's quite miserable, that she's not being allowed to see mommy. So yeah, so I don't know, I've got mixed feelings, I've got mixed feelings about it, I think everyone should be allowed to be private about their family life if they want, if that makes it easier to do the role for me. By partly took the job because I was terrified once I had children that will would offer me a two year old before because I knew that I would want to work slightly differently and be slightly different. As a mom, I didn't want to compromise. And because it's so visible when you have children as a woman relative to having them as a man said, and women still do most of the caregiving. And so I think it's really important to show women and men coming up behind me that you can have a family and do these jobs that it might be slightly less good at your job sometimes. But that's okay.

ML: There's only one thing again, it's a brilliant answer, there's only one thing that I would push back on, which is your characterization of it as car crash or being less good at your job or whatever. Because I just wonder that you may be setting the bar too high. There are plenty of times when I have messed up, nothing to do with young children. And I think if anybody watching or listening to this says, Well, gosh, she's incredibly good. But imagine how much better she would be if she didn't have kids. I think they need to look at themselves in the mirror and ask whether they whether they you know, I don't know. I mean, I suppose I'm challenging whether you aren't being too harsh on yourself. But looking at this with the same point of view, I think they're being too harsh. I think that's absurd. None of us are perfect.

EP: I think that's right. But I think it's sometimes I think there's been a real change in corporate culture acknowledging that, that you don't have to be perfect, right? So I talk about children, because that's the thing that's really distracted me from my job a lot of the time, but for people it's other things. So no one's perfect. And even if that's not true, you do screw up sometimes I think the reason I talk about that is one of the things that I often hear, particularly from women or from people who come from diverse backgrounds is they wait until they feel perfect at something to do the job. And, or they don't feel qualified or they don't feel ready. And I think exposing that actually you can do these jobs and not be on top of them or to or to acknowledge that yes, having children has changed my priorities actually is enabling. And there was a whole trend of feminism when I was in my early 20s about leaning in, like do more do more than the guys, you know, go further than your predecessors. Work harder, be fitter, be stronger, be smarter. I just want to be I want to have as much chance as getting promoted as the average mediocre Blake's that makes me that's what I want. That's the That's the That's what true Legion is.

ML: Also, yeah, and I think you know, with all of us, we're all allowed to screw up as long as we don't screw up in such a major way that we don't deliver the main deliverables of our jobs. And you're right. You know, a lot of a lot of guys myself included, we just never got the imposter syndrome mold years old. And that's the main difference which is posture issues as Any woman or as most guys, but they're just some of us never kind of see it in that way. We just don't know what can I do I apologies. But I think anybody listen to this is going to is going to conclude that you are doing a fantastic job. I'd like to really just thank you for the time you spent with me here today on Cleaning Up and I suspect this is going to be a very popular episode. So thank you.

EP: Oh, you're very welcome. And sorry, sorry for the wailing toddler in the back.

ML: Perfectly on message. I don't know how we organized it, but it was spot on.

EP: All right. Thank you. Okay. Thank you. Bye, bye.

ML: So that was Emma Pinchbeck, Chief Executive of Energy UK. My guest next week on Cleaning Up is Tom Steyer. He's the CO Executive Chair of Galvanized Climate Solutions, and in 2020, he sought the Democratic nomination to run for President of the United States. Please join me at this time next week for a conversation with Tom Steyer. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation.