Up next in 10
Are you prepared for the next massive geopolitical shock to your energy bills? In this exclusive breakdown, we reveal exactly how the ongoing crisis in the Middle East is forcing a radical, €250 billion restructuring of Europe's power grid.
You will learn why ditching fossil fuels is no longer just an environmental pipe dream, but a critical national security mandate. We expose the hidden cost differences between importing volatile foreign gas and building sovereign, renewable infrastructure.
Discover the truth behind the rare earth metal supply chain, the threat of severe copper shortages, and whether relying on imported solar panels is just swapping one massive vulnerability for another. Plus, uncover the immediate, technology-driven steps—from smart building management to the inevitable electric vehicle takeover—that will slash your energy consumption and protect your bottom line in an increasingly unstable world. Don't get left in the dark.
00:00 Introduction
00:20 Geopolitical Energy Shocks & The Middle East
01:56 Energy Sovereignty: North Sea Oil vs. Electrification
04:38 Supply Chain Risks & Global Dependencies
06:03 How Europe Can Save €250 Billion Annually
08:40 Smart Buildings & Slashing Energy Waste 30%
11:06 The Roadmap to a Fully Renewable Grid
13:29 Solving the Copper & Rare Earth Metals Crisis
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0:00
So, I'm very lucky to be joined by Laura
0:02
Bataille, who is the European strategy
0:04
chief at the energy firm Schneider
0:06
Electric. Thank you for joining us this
0:07
morning.
0:08
>> Thank you, Matt, for having me. So,
0:10
Laura, I feel like the most topical
0:11
question on everyone's mind is what do
0:13
you make of the current geopolitical
0:15
situation, the war in the Middle East
0:18
that seems to be raging on for a fair
0:20
bit longer than maybe the US
0:22
administration might have implied at the
0:23
beginning. What what what do you make of
0:24
it so far? Well, you know, we we don't
0:27
know the outcome, the timeline, what's
0:29
going to happen. One thing that is
0:31
certain is it's creating a bit of a
0:33
of a question in the mind of many of the
0:36
energy decision-makers across the world
0:39
on a situation that for Europe was
0:42
clearly pre-existing. I there was
0:44
already a very compelling case for
0:46
Europe to accelerate electrification.
0:49
But, of course, if what you see is
0:51
actually prices and availability
0:54
of energy, primarily fossil energy,
0:57
becoming more complicated to manage for
1:00
the coming quarters, and if not longer,
1:03
of course, it's also a bit of a wake-up
1:05
call to go faster. Because what is clear
1:08
is we know on the electrification
1:09
transformation, Europe has stalled for
1:12
the past decade. I the electricity as
1:14
part of the general energy landscape in
1:17
Europe has not moved much, you know,
1:19
it's staying close to 21 to 23% in that
1:23
zone.
1:24
When we know we want to go beyond 30%
1:27
and probably closer to 50% across the
1:31
various countries of Europe by 2050, so
1:33
we really need to speed up.
1:35
Well, it certainly feels like energy
1:37
sovereignty has been a a massive con-
1:40
there's been a massive consensus that's
1:41
necessary. I suppose maybe the debate
1:43
we're seeing in UK politics at the
1:44
moment is do you take the Labour
1:46
government Ed Miliband view that that
1:48
means there needs to be huge
1:49
electrification, or do you take the more
1:51
sort of conservative reform view
1:54
um that actually the answer is to drill
1:56
for more North Sea oil, but actually
1:58
there's this huge resource in our
2:00
backyard we're not drilling for it. I
2:01
know that we had spokesperson from
2:03
Renewable UK told us quite recently that
2:05
they think there's a case to be made for
2:07
that. Which argument do you think should
2:09
and will win out here? But
2:11
I I think there's a there's a broader
2:13
question about the energy landscape. Um
2:16
which is really about, you know, what's
2:18
the right choice for Europe. We know in
2:20
general Europe is energy poor, you know,
2:23
in the sense that, you know, we don't
2:24
have so many fossil fuel resources. When
2:27
you have a look at the continent,
2:29
we import more than 2/3
2:32
of our fossil fuel energy.
2:34
Whereas electrification is actually a
2:36
way to invest in our own economy.
2:39
Why? Because when you electrify,
2:41
typically the new
2:43
production mix is going to be primarily
2:45
wind, solar, potentially nuclear, some
2:48
hydro. You know, there's a lot of
2:50
retrofit of a number of hydro dams in
2:53
order to create more storage
2:55
capabilities on on the electricity side.
2:58
All these, they're about
3:01
investments in our countries, you know,
3:03
labor, maintenance, civil works,
3:06
engineering, equipment that then gets
3:08
amortized over a long time, but it means
3:11
it's about investing in the European
3:13
economy, not actually importing on a
3:15
daily basis
3:17
billions of euros of fossil fuel energy.
3:20
So, it's it's also to a degree a kind of
3:22
Keynesian plan
3:24
for Europe to accelerate
3:25
electrification. Then there's a second
3:27
consideration which is quite important,
3:29
which is when you import fossil fuels,
3:32
you actually do that at a disadvantage
3:35
versus other geographies. So, we see
3:37
huge price gaps for instance on gas
3:40
between Europe and certain countries in
3:43
Asia or actually the US. Whereas on the
3:46
electricity side, almost everyone has
3:48
the same cost structure. We may not have
3:50
the same pricing, but we are very close
3:53
in terms of cost structure. We using the
3:55
same technology that again gets
3:56
amortized. You We all use the same solar
3:59
panels, the same cables, the same
4:01
transformers. So fundamentally, we think
4:04
there's going to be a homogenization
4:07
of the cost of energy through the
4:11
electrification across the world over a
4:13
long period of time. I suppose on that
4:15
point about the resources and the as you
4:18
say the solar panels. That's supply
4:20
chain that builds up a new renewable
4:22
network. I suppose to some extent yes,
4:25
at the moment we're seeing this conflict
4:26
in the Middle East. We're seeing um
4:28
definite flaws in the fossil fuel supply
4:31
chain being revealed.
4:32
But do you worry at all about some of
4:34
the the future instabilities we might
4:36
see for instance with reliance on China,
4:40
which produces a huge proportion of of
4:43
solar panels that and also the rare
4:45
earth and the rare earth metals that are
4:46
involved in the way How How How do you
4:48
How do we disentangle that that new
4:51
supply chain?
4:51
>> It's It's a very interesting question
4:53
because one of it is OPEC. So it's a
4:55
recurring dependence. Every day you have
4:57
to buy the you know the fuels etc. Every
5:01
day. Whereas on the other side it's
5:02
actually capex. It's a one-time
5:04
investment. When you install your solar
5:06
panels, for 30 years you won't buy any
5:09
other ones because you use the ones you
5:11
have.
5:12
So if you had any supply chain
5:14
disruption, which can happen, you know,
5:15
we had some during during the COVID
5:18
crisis. We can have some during
5:19
geopolitical crisis, but it doesn't
5:21
impact right away. It impacts new
5:24
projects that you can delay. But
5:26
fundamentally, the level of dependency
5:29
is very very different, you know. It's
5:31
not the same thing to say
5:33
I invest for 30 years versus every day I
5:36
need to come back and buy the
5:38
combustible, you know.
5:40
So I I've been reading into Schneider's
5:42
report on electrification. I think the
5:44
headline figure about is that
5:46
um
5:46
could save Europe 250 billion euros a
5:50
year. You you point here to the energy
5:52
trifecta, and that's on affordability,
5:53
security, and sustainability. On
5:56
affordability, this is still a point of,
5:58
as I mentioned earlier, massive
5:59
contention. I mean, it's a massive thing
6:01
in UK politics at the moment, having
6:02
been a big consensus before.
6:04
What is the road map to a renewable
6:07
energy future that is actually more
6:08
affordable? How does that work? So, it's
6:10
a very interesting question because
6:11
again, the cost of electricity and the
6:13
price of electricity are two separate
6:15
topics.
6:16
The price, you know, depends on fairly
6:18
complex mechanisms of, you know, what is
6:20
the marginal producer,
6:22
uh which currently, for instance, in the
6:24
in some of the European markets is
6:26
actually
6:27
gas turbines
6:29
uh that are impacted by gas prices
6:32
actually going up. And so, you might see
6:33
your electricity prices going up. Um but
6:36
actually, the cost structure of many of
6:39
the producing assets
6:41
in Europe and in the UK uh are not
6:44
dependent on gas. You know, it's about
6:46
uh nuclear, it's about hydro, etc. So,
6:48
fundamentally, their cost is not
6:50
evolving so much. So, you really see
6:52
potentially a decorrelation between
6:54
price and cost. So, that that's one
6:57
point that is important to dig into.
6:59
Second point is when you have a look at
7:01
the price of electricity, it's not just
7:03
cost-driven. Fundamentally, you have the
7:05
cost of the electricity generated, you
7:08
have the grid,
7:09
and then you have taxes.
7:11
So, the reality is the cost of
7:13
electricity can be very competitive in
7:16
Europe. We see that in many geographies
7:19
that are actually installing renewables.
7:21
Um when you have a lot of wind or solar,
7:23
like in the south of uh of Spain, or
7:27
when you have a lot of hydro and wind,
7:30
uh like in the Nordics, you manage to
7:32
have very competitive electricity
7:35
prices. I'll give you an example, you
7:37
can be very close to 40 euro per
7:39
megawatt hour, which at industrial scale
7:43
is enabling uh some factories to be very
7:45
competitive in Europe. So, I don't think
7:47
there's any fundamental obstacle here.
7:50
It's about debottlenecking
7:52
the the grid. It's about putting more
7:55
renewable potentially with also some
7:57
batteries in order to smooth the the
8:00
generation curve. It's about creating
8:02
more flexibility in the usage in the on
8:04
the demand side, you know, through
8:06
storage that you have in EV or through
8:09
in offshore storage that you have when
8:11
you have a heat pump. So, we have really
8:13
a lot of solutions to tackle the problem
8:16
here.
8:17
And another thing you mentioned is that
8:19
as part of that saving package, one
8:21
thing would be to reduce 30% of energy
8:24
usage. For for sure. Yeah. So, that's
8:26
interesting. I suppose in the UK that
8:28
might all these conversations about that
8:30
I think for a lot of people will conjure
8:32
up these images of maybe the 1970s
8:35
energy rationing, the three-day week. Um
8:38
I mean, there was there was a report
8:39
from the IEA last week about how people
8:41
should be working from home more. They
8:42
shouldn't be flying. What what kind of
8:44
economies should people be making? Like
8:46
what what kind of energy usage do you
8:48
think we'll be looking at in the future?
8:49
You know, in any crisis and we had that
8:51
in
8:52
22, actually, you have a question which
8:54
is short-term behaviors. So, sobriety,
8:57
you know, you pay more attention, etc.
8:59
But what really sticks long-term is also
9:02
technology-enabled
9:04
energy efficiency. I take the example of
9:06
buildings. Today, many of our buildings
9:08
are huge waste of energy. By the way,
9:11
whether it's gas or electricity, huh,
9:12
because in Europe, the majority of
9:14
tertiary buildings, commercial
9:16
buildings, are still actually heated by
9:18
gas.
9:19
Um and when you put an intelligent
9:21
system like what we call a building
9:23
management system that actually makes
9:25
sure, you know, your lights go off after
9:27
a certain time, that you're not using
9:30
the air conditioning or heating during
9:32
weekends, etc. And does that
9:34
automatically, in many many buildings,
9:37
what we see is you drive up these
9:39
savings by 20%, 30%, 15%. So, all of
9:44
that, which is relatively quick to
9:46
implement, because these are not very
9:48
invasive technology, you don't have to
9:50
tear apart
9:52
walls, etc. It's really about putting
9:55
smart systems in the buildings will
9:57
drive energy efficiency in the high
10:00
proportions. Another way to drive energy
10:02
efficiency is as you electrify,
10:05
you use less energy.
10:06
Let's remember what happens when you go
10:08
from
10:09
from a
10:10
a normal car to actually an EV.
10:13
You know, in a in a thermal-powered
10:16
car,
10:17
2/3 or 3/4 of the energy, somewhere in
10:19
between, is actually wasted
10:22
under the form of heat,
10:24
not under kinetic
10:26
energy. But, you don't have these losses
10:29
with EV. So, as you electrify usages,
10:31
you're also needing less energy. Same
10:33
with heat pumps. A heat pump is actually
10:37
using typically three to four times less
10:39
kilowatt-hour energy than a gas boiler.
10:43
I suppose when you look at the next 10,
10:46
15, 20 years, what is the road map to a
10:49
sort of I suppose more sovereign, more
10:52
renewable future like? How quickly can
10:54
this be done? Can this be done in a way
10:56
which actually doesn't incur more short-
10:59
and medium-term losses?
11:01
And do you have confidence in in
11:03
European governments that they can
11:04
actually maintain a consistent energy
11:06
policy?
11:06
>> What is sometimes difficult, and and you
11:08
have a point here, is actually to find
11:10
the right incentives so that we
11:12
accelerate the adoption of core
11:14
technology. Today, the fundamental
11:16
question is on the demand side.
11:18
It's to make sure we switch the way
11:21
people use energy. It's not about
11:23
production.
11:24
Why? Because as people embrace EVs, as
11:26
they embrace electrical heating and heat
11:29
pumps,
11:30
you know, the production will follow.
11:31
You know, we can add solar panels, we
11:33
can add wind, we can add we can add
11:35
storage. The fundamental thing is the
11:37
speed at which European countries switch
11:40
to electricity and for that sometimes
11:42
you need to have, you know, smart
11:44
incentive programs. Uh some of them
11:46
exist on EV for instance, it's very
11:48
interesting to see a number of European
11:50
countries embracing now a a number of
11:53
tax breaks on EV fleet and so it
11:56
accelerates the speed at which corporate
11:58
and companies move to EV with a lot of
12:02
success. And once the these technology,
12:05
you know, go on the accelerate
12:06
acceleration phase of the S curve, then
12:10
you know actually the switch is going to
12:11
happen. So, what I would encourage
12:13
European governments to to do is have a
12:16
look at the three main usage we need to
12:18
switch. Some industrial usage typically
12:21
temperature below 300° C, combustion can
12:24
be electrified, EV
12:26
where we see the dynamics already on
12:29
momentum already on the way. In the UK,
12:32
currently you're close to 25% of uh EV
12:36
out of the full, you know, new car
12:38
market. Um and and of course heat pumps,
12:42
uh which have been more of a question in
12:44
in European countries uh with a lot of
12:47
push back to stay on gas boiler. So,
12:48
maybe need more incentives like bonus
12:51
malus for people to switch. But I think
12:53
if we have a consistent policy on these
12:55
three usage, we will change the speed
12:58
and get back on track to electrify much
13:01
faster by 20
13:03
30 and then towards 2050.
13:06
I just one one more question for me just
13:08
on exactly how this uh this sort of
13:10
proposed fully renewable future looks.
13:12
It and I sort of I think I touched on
13:14
this earlier, but the idea of I suppose
13:16
the resources behind that grid. So much
13:19
for it relies on it. Rare earth metals,
13:20
so much relies on resources. How how How
13:23
do you troubleshoot that kind of supply?
13:26
Cuz a lot of that could present
13:28
geopolitical problems. That How do you
13:31
make sure that there actually is a
13:32
concern? Cuz I I mean you you mentioned
13:34
earlier that like, yeah, you put put a
13:35
solar panel in, that goes for a while,
13:37
but then what happens if we just have
13:40
shortages in a few years time? What
13:41
happens to EVs at that point?
13:43
>> it's a it's a it's a fair question and a
13:44
question that the industries are having
13:46
a look at. You know, I would say one of
13:47
the points of tension today is is copper
13:51
that is anticipated because copper is a
13:53
very good conductor. So, you you see
13:55
copper everywhere where you have
13:56
electrification. And and it's clear
13:58
that, you know, we need to actually open
14:00
capacity on new mines on the copper
14:03
side. But what I would say is in
14:05
general, when you see, for instance,
14:06
battery technology, the speed at which
14:08
there is progress in eliminating a
14:11
number of rare uh
14:13
uh or or or problematic metals and
14:16
substitute with others where we have
14:18
more capacity, I think there's a lot of
14:20
innovation here that will help us avoid
14:23
having a big obstacle. I think in
14:26
instead of maybe, you know, sometimes
14:27
thinking about oh, there's going to be
14:30
too many obstacles as a way for us to
14:32
justify not moving, we should get on the
14:35
train, you know, move, accelerate. And I
14:38
I am very confident that on the
14:40
technology side, we will make a lot of
14:41
progress. One of the clear areas we're
14:44
having a look at as an industrial
14:45
company, and Schneider manufactures a
14:47
lot, is actually
14:49
um
14:50
repairing products
14:52
or recouping some of the copper from all
14:55
the products to reuse in new products.
14:57
So, there's going to be a lot of work on
14:59
recycling.
15:01
Um but I think it's actually going to be
15:02
good again for local industries.
15:05
Brilliant. Laurent, thank you so much
15:06
for joining us.
15:07
>> Thank you, Matt. Sure we'll have you
15:08
back soon in the studio.
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