The World's Preeminent Energy Economist - Ep133: Fatih Birol

Michael Liebreich  Fatih, thank you so much for giving us a bit of time today.

Fatih Birol  It's a great pleasure to see you in Paris, in our offices, Michael. Thank you very much for coming over.

ML  So, you were on episode 28 of Cleaning Up, and that was in January 2021. And it's extraordinary when we think about how much has happened since then.

FB  In energy, in politics in, foreign policy, climate change. You're right. More than two years, I guess.

ML  That's right, it's nearly two and a half years. At the time - this is how long ago it was - you had not produced your Net Zero Scenario. You were looking forward to releasing that.

FB  Exactly. I think a couple of months later, after we talked, we published this report.

ML  That's right. But lots more has happened, also. We'll come back to the net zero. You also, you were awarded Legion d'honneur

FB  Yes, just here.

ML  That's right, the certificate is up there on the wall, very impressive. But also in energy, in the world, there have been some quite traumatic occurrences. I mean, we saw... At the time, we were still in COVID. So, we saw the end of COVID. The back end, as it kind of receded. But then we saw this incredible inflation spike, followed by, of course, the invasion of Ukraine by Russia, which has been absolutely... has really turned the energy world on its head.

FB  Definitely. In fact, I don't know if you saw Michael, after the invasion, only a couple of weeks later, I came up with an op-ed in Financial Times saying that, I believe the invasion of Ukraine will in fact accelerate the clean energy transitions. Because there was a lot of discussion whether it would slow down or accelerate - I said it will accelerate. And what we are seeing now, there is... I'm sure you follow very closely, but there is a major acceleration of clean energy, very fast and faster than many people realize.

ML  It's been really interesting reading your op-eds, because I actually end up working on also writing

FB  You are much more hard-working than me. You write much better than me and much, much faster than me, by the way.

ML  Also, I have to put a lot more sweat into it - I don't have a big team to help on the data, I have a small team. But it's interesting that we do work - it seems to be - pretty much in parallel. Because I was writing about what I call the Great Clean Energy Acceleration around the same time, and it is clear that there has been a tremendous sort of focusing on the clean energy. But that's not all that's happened; there's also been a sort of friend-shoring of fossil fuels. So, we're seeing a lot of investment coming into fossil fuels, LNG terminals, and so on. So, it's not all in a sense, good news for the climate, is it?

FB  Yes. But what is surprising for me, is the clean energy. When I say clean energy, maybe I should say which of the technologies get the bigger push - solar, by far. We see a huge growth in solar. And I think what is happening in solar is not yet well understood, especially in China. Huge growth in solar. The second one is electric cars. Again, just to tell you, only two years ago - only two years ago - when we talked last time, one out of 25 cars sold in the world was an electric car. And this year, according to our numbers, one out of five cars sold is an electric car. And it's growing very strong. Solar, electric cars. And many countries are seeing a comeback for nuclear power. In Japan, in Korea, in many European countries, the Netherlands for example, or France where we speak. When President Macron was running for the first time for presidency, he was saying that he wants to see the share of nuclear coming down. And now the opposite, giving a big push to nuclear power - US and everywhere. So, we see nuclear, solar, wind of course, electric cars, batteries, they are growing very, very strongly. And you are right, fossil fuels are also enjoying still investments. But the gap between fossil fuels and clean energy investment is getting bigger and bigger in favour of the clean energy investments. Is it enough? No, but the trend is very clear.

ML  That's right, because they were sort of neck and neck for a while, at about 1 trillion each. And now suddenly clean energy in the last three, four years, five years, has actually opened up a lead over the fossil investment.

FB  Exactly. Our numbers show it was one to one - more or less - in 2015/16. Now, this year, still $1 trillion goes to fossil fuels altogether. And $1.7 trillion goes for clean energy. So, it is 1.7 to one. It is of course, good news if you're somebody who cares about the environment. Good news, but it is still not there to reach our climate targets.

ML  Can I just probe that number, because it's a very striking number $1.7 trillion for clean energy and $1 trillion for fossil. The 1.7... and I also ask the same questions about the Bloomberg figures. Does that include... is that including investment in electric vehicles?

FB  Yes, it does.

ML  But on the fossil side, it doesn't include all investment in new ICE vehicles?

FB  Electric cars, but electric car batteries, we are taking... The 1.7 includes the investment in electric car batteries. Not the vehicle itself...

ML  Not the vehicle. Okay, because that's what I'm questioning, because it's very easy to get some very big numbers if you include the car on one side, and only... But still.... And for a long time, clean energy investment almost stalled. I mean, we saw about ten years where the renewable project stalled at about $300 billion.

FB  Exactly. But still, if you look at the numbers a bit more carefully, this $1.7 trillion, the problem I see, at least from where I stand, is the following: it increased from $1 trillion to $1.7 clean energy, but almost all the increase, Michael, came from  advanced economies and China. If you look at the investment in the developing countries - in India, Brazil, Africa and elsewhere - it is more or less flat, which is for me, the fault line of reaching our climate targets; is how we are going to accept financing clean energy in the emerging and developing world. So, this the key question for me.

ML  Yes. And you mentioned that in the episode two and a half years ago; you said your number one priority to see, the number one milestone, was investment in those developing countries. I just wanted to...

FB  At least I am consistent since two and a half years...

ML  Very consistent. But before we move on to the sort of challenges, or the problems bit, which, which is the interesting bit, I think we should sort of celebrate a bit more. I mean, this incredible increase in renewables, it always makes me smile, because it's an incredible... I don't want to say unforecasted increase, but you know...

FB  It's China.

ML  It is running ahead... even now, it runs ahead of forecast,

FB  Michael, when you look at this... We have to leave the politics aside when we look at the numbers. What fascinates me is what is happening in China. Today, when you look at the last ten years, the amount of renewable capacity additions coming from China is more than the US plus Europe plus Japan put together. In China, renewables are of course driven by many factors, but it is not driven by climate change and environment only; it is mainly for the industrial policy and energy security policy. And these are political decisions taken and pushed forward. It is not based on the economic assumption, GDP growth... And this policy, a surprise [that] China puts [it] in place. And again, as I'm saying, it is still not well understood [what] China's solar revolution will result, including the huge amount of surplus capacity in manufacturing. What will happen to that? Are they going to use it domestically? Or are they going to export - are they able to export - to other destinations? This is a big question mark, and more surprises may come from China, wait and see.

ML  Well, that's right. So, we've got... the manufacturing capacity - on the silicon side, not right the way through the value chain - is something like a terawatt of capacity now. And there is the famous chart where the IEA says, well, the capacity, the installations are going to grow to whatever, and then it goes 50% more within a couple of years.

FB  The reason is, we made that one based on the policy setting at that time; when China changed the policies, we changed the numbers...

ML  You are, implicitly, even now, you're saying, I think your forward curve on installations is about sort of 400 gigawatts of renewables in total. So, it's about 300 of solar.

FB  Depending on the scenario, yes.

ML  But you have a Chinese supply chain that can do a terawatt, that can do three times as much.

FB  Can do - can do.

ML  But you're saying it won't do in your output?

FB  I don't know if they will use their capacity by 100%. I still think that it will be significantly lower. And this is a question. Maybe an opportunity, maybe a challenge. What will China do with its huge solar manufacturing capacity? Are they going to export it? Are they going to be able to export it with the trade tariffs from here and there, and in North America, in Europe? We don't know.

ML  We don't know the answer, but history would suggest that they'll find a way. Maybe not 100%. But something that could easily be quite a bit more than we're expecting.

FB  And we should also acknowledge that China did good work for the benefit of the world, bringing the cost of clean energy technologies, not only for solar, but for also others, to bring it down.

ML  Let's come on to the other great success story that you mentioned, which is electric vehicles - one in 20 new cars being bought today. And that's around the world, that's not just in rich Western countries. That's China, but also even starting in emerging economies, the electric vehicle trend. What do you say to people who say this is a huge mistake, there aren't enough minerals; the batteries just end up in the landfill, and so on? There are plenty of people who are on the sidelines saying that this is a false start.

FB  So, at the IEA, we believe in numbers. And today, one out of five cars sold in the world is electric, and it'll grow very strongly. And when you talk with the car companies - I just listened to a talk with the top 20 CEOs of car companies around the world - 18 out of 20 said, they will basically... top priority for the new models is electric. And these companies are saying this not because they want to save the planet - they want to maximize the profits of their companies. And they must look at the both the supply side and demand side. And we also look at the supply and demand side, the critical minerals. Of course, there may be some tightness of this critical mineral, that critical mineral. But there is a huge amount of critical minerals available in the world. And if there's enough economic incentive, the price signal is given - maybe sometimes will take a year, sometimes two years’ delay, they will come to the market. So, I'm not worried about it. It's a challenge, and we take it very seriously, critical minerals, in terms of energy security, affordability and others. But it is not something that can stop or even slow down the major penetration of electric cars in the total car industry today. It is going very, very fast. In Europe, very soon coming quarters this big time. Of course, China is the leader and we will see in India, Indonesia, and as well.

ML  What do you say to the two CEOs who are not betting on electric?

FB  I didn't say anything, because it is their choice. And it was not the top priority, but one of the top priorities there. Some people look at other options, hydrogen or the other options. Of course, they will make money, not the IEA. But what I see when I look at the numbers, it is really going very, very fast. And I'm very happy to see that because, Michael, I said about seven or eight years ago, I remember when we had a board meeting, or in a ministerial meeting, I said, electricity is the future, for the entire energy world. It's not only transportation, but also when we look at the industrial sector, when you look at the household: electricity is the future, and we will see that.

ML  So, I want to touch on a few of the very challenging areas. And actually, you've just opened up one, which is - electricity is the future. So, we are going to go to a much more electrified economy. So, it's not just transport, it's also heating. And I think it's domestic and industrial. So, it's more electricity; it's coming from new places - deserts, offshore wind, big interconnections from neighbouring countries, and so on; and also, it's variable, because a lot of it is wind and solar, so the ratio between the peak, which is what you have to build for, and the average, is much higher. So, three huge drivers putting pressure on the transmission grids. And what I see around the world is in no way are these grids ready for the future - in no way, not close.

FB  As you said in the beginning, we agree on many things, and this is, in my view, one of the blind spots of the current clean energy transition. And the politicians, the policymakers, gave a lot of emphasis building the windmills, solar panels, but they didn't pay the same attention to grids - modernization and development of grids. There was a major offshore summit in Europe a couple of weeks ago, in Ostend in Belgium. Heads of States, President Macron, Chancellor Scholz, and others were there. And I told them in the speech, it is something like, you are building, manufacturing, the best car in the world -  electric car, very efficient and everything - but you forgot to build the roads, without getting grids. And this is the reason I have commissioned the IEA - my colleagues here - making a major study on grids, to ring the alarm bells for the policymakers, coming this fall. You will see that we may be risking a lot of losing money, and put energy security at risk and slowing down of decarbonization of the power sector if we don't pay attention to it. It is a European problem, Chinese, United States and everywhere.

ML  Absolutely everywhere, I agree. And the scale of it, I'm not sure. I mean... I look forward to that report.

FB  And please, if you have time, please review the report as you always do, and give us very good feedback all the time.

ML  Well, I would hope that it would be something that... Normally, I feel very comfortable amplifying the message. Because this one, it's not like we have to be 20% better, or 20% more focused on grids - I think it's kind of 200%, 300%.

FB  I completely agree. I completely agree.

ML  Since we're ticking off challenges: the last time you and I worked together, you invited me, very kindly, to be a commissioner, on the IEA's commission on urgent energy efficiency; and the goal was 3% energy productivity improvements year by year. And that didn't happen, did it?

FB  It didn't happen. But as we discussed, after the invasion of Ukraine by Russia, one of the areas where we have seen improvement was energy efficiency. We have seen energy efficiency improvements twice higher than the historical averages. But this is mainly driven by two factors: high energy prices; second, many governments took strong measures to save energy. Now, our numbers show that now, if we want to be in line with the net zero targets, global energy efficiency improvements need to increase by a factor of two. Which is about 2% today - it should be around 4%. But it is very, very challenging, to be honest with you.

ML  So the silver lining, or the silver bullet technology - if there is one, we always tell people there's no silver bullet - but the closest we've got is the heat pump, isn't it?

FB  I completely agree. Heat pumps [are]... Again, I forgot to mention, which technologies in the last one or two years get a big push, [inaudible] heat pumps. In many countries in Europe, the number of heat pumps sold is higher than gas boilers. In the United States, it took over. China stays the largest market of heat pumps. There is a huge, huge, huge move there on heat pumps. In the past heat pump manufacturers were complaining [to] us, we don't have enough interest and so on. They are now complaining that they aren't able to meet the demand, the orders coming from different parts of the world. So, it is going very well. There are some parties who are not convinced about heat pumps. Tomorrow I go to London, to have some discussions with some colleagues over there. But I think heat pumps [are] a very important technology, which will help us to make electricity, penetrating the domestic energy consumption.

ML  So, the UK is an oddity on heat pumps. I don't know quite why - there's lots of historical reasons, reliance on gas, and so on. But we are plumb last in the heat pump installation league tables per capita - absolutely last. And we're still having this discussion about whether they work, which is extraordinary. I fell in love with heat pumps when I was 19, as a mechanical engineering student. And of course, they work. And in fact, this building, and all the restaurants, they're all using them. So, it's just an incredible and very toxic discussion in the UK about heat pumps, I can't overemphasize that.

FB  I completely agree with you. Heat pumps can really help saving energy, saving also money, keep it in the pocket. And also, good for energy security, when you think about it... I don't have a romantic relationship with heat pumps, I don't fall in love with them. But I think this is very, very useful and a bit underrated when it comes to discussions around clean energy. The same discussion we have in Germany as well, whether or not it's a good idea or a bad idea. But I think it will grow stronger.

ML  That brings me to... You mentioned the word hydrogen, which is always dangerous in energy circles these days, because everybody has sort of passionate views on hydrogen. Your scenarios are quite hydrogen heavy, I would say. Not the heaviest - there are others who are even more bullish. But the last thing that I think the IEA produced was 520 million tonnes of hydrogen by 2050. Currently, it's 94 million. So, it's a 6x growth in hydrogen, 10% of final energy from hydrogen. My own... I don't have a big modelling team, but my gut tells me that that's probably out by a factor of three.

FB  So, in fact, the numbers you are mentioning from our Net Zero Scenario, when you look at it, many clean energy technologies need to increase by a factor of [inaudible]. But when it comes to hydrogen, I can tell you, I see two - in the debate - two extreme positions. One - when I talk with the government leaders - some people think hydrogen is tomorrow, and it will solve all of our problems. This is really impossible, and it is very misleading and risky to make the government leaders, the opinion leaders, to believe that hydrogen will come tomorrow and [be] affordable and solve for all of our problems. This is one extreme that I don't buy. The second extreme is that hydrogen will not be part of the energy mix - it will be, for us, but it will not be in the entire energy sector. For example, we think hydrogen might be - might be - a part of the game in the heavy industries, maybe even the long-haul transportation sector. But to think that hydrogen will dominate the energy sector, [that] energy economy will turn to a hydrogen economy, in my view, is something one should think twice before saying it. And the dangerous thing is, many people many government leaders, are believing in this. And this will also be risky because they are not paying enough attention to other solutions. Therefore, we have to be a bit realistic here in my view.

ML  So, I'm a known hydrogen skeptic. I think it's going to...

FB  I didn't know that. Really, are you?

ML  Well, so, I would call it a hydrogen realist. Right now, 94 million tonnes of polluting hydrogen, grey and black hydrogen, produces 2.3% of the global emissions from fossil fuels. And if we don't have a solution to that, why are we even talking about buses and trains and all the funky stuff - heating - which are very difficult? It's an industrial, difficult-to-handle gas. And instead of solving the problem, we think of it as a solution.

FB  The thing is many governments, companies, are thinking [mainly around] green hydrogen from renewable energies. Again, we have to see the cost come down. The cost has to be competitive, and it is the reason now many governments - I'm sure you know that - are providing handsome subsidies, incentives, to those; we will see where it goes. But again, my warning is to think - because I heard it a lot - to think that hydrogen... "we got to a hydrogen economy tomorrow," is very risky. I think it is not today, it is not tomorrow. It may be the day after tomorrow.

ML  But when you say day after, that's a sort of 2040-ish timeframe. Let's come back to nuclear, because you mention it as a sort of success of the policy response to Russia's invasion of Ukraine. But what you actually saw was French nuclear underperforming, with around half of the nuclear power stations offline - many of them unexpectedly offline with corrosion. We've seen repeated construction delays, whether it's Vogtle in the US, or whether it's Flamanville. Even Taishan, the new nuclear power station in China came online, went offline. Small modular reactors, we've seen NuScale has just announced that it's not going to be able to produce power for $58 per megawatt hour, it's going to be more like... they say $120, but that doesn't include some of the subsidies from the Inflation Reduction Act. So, it's actually probably $140 or $150 per megawatt hour. So, why the optimism about nuclear? Isn't the reality that nuclear cannot deliver in a timeframe that's useful?

FB  So, when I say nuclear is making a comeback, I see three important segments here. Number one, in some countries, they said they don't want to use their nuclear capacity anymore, they're turning back - Japan, Korea, just to give two examples. They have their nuclear power plants already, but for some reason, mainly public perception, they were not using them and they are not restarting them. This is one group. Second group is existing nuclear power plants lifetime extension. So, as you know, a nuclear power plant has a normal lifetime of 50 years or so. Many countries are now extending the lifetime of the existing nuclear power plants; this is a comeback as well. And the third one is building new nuclear power plants. Either the traditional ones, or the new technologies. I believe, Michael, we will see a that in Europe, in United States, Canada, Japan, and also in India, China - China's already doing, and some Middle East countries - we will see lots of new nuclear construction starting. But whether or not they will be all cost competitive in the engineering sense is a different question. But nuclear power plants are very important for energy security of a country, the system security of a country. I think we will see them coming despite the challenges you mentioned. But here, nuclear industry, they have to deliver on time and on cost. They didn't give a good test in the past. They were pushing the nuclear to come back, nuclear to come back. It is coming back, but now the ball is in their court; they should be able to deliver on time and on cost.

ML  We had a fantastic episode, number 128, with an academic called Bent Flyvbjerg, who wrote a book called How Big Things Get Done. And according to him... he has this huge database of projects, all sorts of projects. Solar projects come in 1% over budget; wind 8%; transmission grids 13%, something like that; nuclear, 120% over budget, and of course late as well. And it's a global database

FB  I completely I agree. I don't know the numbers, but it seems to be, it seems to be reasonable. But it doesn't mean that we forget nuclear power. The nuclear industry has to behave well, work hard, and they were pushing all the time nuclear to come back; it is coming back nuclear, but now they have to deliver on time and on cost. I have to

ML  I have to be bit careful, because then everybody will say, oh, Michael, you are so anti-nuclear. I'm actually in favour. No, I studied nuclear back in the day. So, I'm actually in favour, exactly what you described. I am in favour of that, but you're right, they have to deliver their projects on time, on budget. And if they're a bit more expensive, it's still good for diversity. That's an important role.

FB  For the climate change as well, it's also one of the areas. I believe the future of the power sector will be 80% / 90% renewables, but there may be room for nuclear as well.

ML  I agree entirely with that. But what do you say to Germany, which is shutting down... These are some of the best nuclear power stations in the world, the highest performing. They shut them down, they do more coal. And even today, when the German public is now much more open to nuclear, there's still these fights going on at the EU, where Germany is trying to say, well, hydrogen can't be produced by nuclear, and fuels can't be produced. And it's kind of... I don't know, what do you say in those environments?

FB  So, Michael, when I look at Europe... The last few years in Europe, we went through many challenges when it comes to the energy sector, including Russia's invasion of Ukraine. I think Europe, when we look at European countries, including the UK, made three historical strategic mistakes. And this has implications for European economy, European energy security, European climate. Number one: you may remember this, we talked about solar. In fact, Europe started solar first - did lots of subsidies, lots of money, Germany, Spain, Italy. But after a while they dropped the ball, and China took it over. A marathon is 42 kilometres - you don't give the gold medal to somebody who finished the first ten kilometres, you have to finish 42 kilometres to get the medal. China gets the gold medal now. So, with solar, we missed the train. Second, in terms of natural gas, over-dependence on one single country was a big mistake, whoever this country is - on top of that, it was Russia. And the third mistake was also, in my view, turning our shoulder, back, to nuclear power. So, solar missed the train; over-reliance on one single country for natural gas; and turn its back to nuclear power. These three major historical mistakes ended up as being in a difficult stage in terms of competitiveness of our economies, energy security and climate change. I hope we will draw some lessons from that.

ML  Indeed, I entirely agree. And you know, you could say that those three mistakes are because people are not analytical enough. These were analytically obvious, in a sense.

FB  Exactly. Exactly, exactly. It was more maybe emotional, ideological, or whatever, but for me, they are not good reasons to make these huge mistakes.

ML  I want to finish by talking about the net-zero process. So, your analysis, but also the process as we go through to the COP28 in Abu Dhabi, and so on. I will actually, if I might, open up that that discussion by asking, could you clarify what you did and what you didn't say about new fossil fuel investment? Because out there... I know exactly the words you used. But a lot of people say, the IEA says we must not invest a penny more in fossil fuels.

FB  So, Michael, we are, in fact, we are a small organization. We have only 400 people here, top energy experts of the world. When we made this Net Zero Roadmap, we were really very happy to see that so many people and banks, investors, companies are using this as a benchmark for their studies. But I don't know if it is well understood... Mostly well understood, but there is this issue you mentioned, this maybe needs some more discussion. What we are saying is, if we want to come to net-zero, then there is no way... The fossil fuel consumption needs to go down. Because you cannot have the fossil fuels at this level and go to net-zero - it needs to come down. And it needs to come down substantially, all coal, oil and gas. And if they come to the level that is compatible with net-zero, then the current existing oil and gas fields or coal mines will be enough to meet this declining demand. So, we don't need to invest [in] large scale fossil fuel investments. So, this is the point of departure, is the demand for fossil fuels needs to come down. And when they come down, the existing fields are more than enough to make the investments, more than enough to meet the demand. So, they're asking me, or us, an oil company, taking a decision to increase the production capacity here for oil and gas - it is up to them. If an oil company says, I am going to increase my oil production by 3 million barrels per day, I have no problem - it is up to them, they want to make profits, well understood. But if an oil company tells me that I am going to increase my production by 3 million barrels per day, and my company's strategy is in line with the 1.5, then there is a problem. So, it doesn't add up, there's the clash, there's a big difference between those. You cannot say, at the same time, increase the production substantially, and at the same time, 1.5 is the North star for my company. So, this is what we are saying. And again, to reach 1.5 is possible or not, it remains to be seen. But I see a lot of encouraging signs, as we discussed, on solar and electric cars, heat pumps, nuclear power, but still a major challenge. And we are not putting anybody under pressure companies or governments... But we all are under pressure because of our pressing climate change challenges.

ML  You gave the example of a company that says we're going to increase output by 3 million barrels? Of course, you can't tell them what to do, but you can say that is not compatible with the Paris Agreement. What do you do if it's a company that is going to increase its output from 4 million barrels per day to 5 million barrels per day? Presumably that's the same logic, that that would be incompatible with Paris?

FB  If we believe in the Paris Agreement, the demand for oil needs to come down.

ML  But that company is ADNOC, in Abu Dhabi, that is planning to go from 4 million barrels a day to 5 million barrels a day. And that's surely not compatible with Paris? And yet they are hosting - and the CEO of that company is the president of - the forthcoming COP, later this year. But what they're doing is not compatible with Paris?

FB  So, I don't talk about specific companies, per se. But I was just where you're sitting now, only three days ago, Doctor Sultan Al-Jaber, who is the COP28 president was sitting, and we were talking, and he told me that he wants to see from COP28 a conclusion that the fossil fuel consumption comes down and that fossil fuel decline is irreversible. I count on this, and I very much hope that this will be the outcome of COP 28, in the interests of all the parties. And I believe if we can have a good outcome from COP28, which is taking place in a key country in Middle East, it can be inspiration for other countries to diversify their economies in [the] Middle East.

ML  The last episode that just aired, Episode 131, was with Tzeporah Berman, who was behind the Unfriend Coal campaign at Facebook. And she's now leading something called the Fossil Fuel Non-Proliferation Treaty, as an activist, trying to get countries... Because if every country says, we all believe in Paris, but of course, we are going to extract the last barrel, the last drop, the last therm, or BTU of gas, that doesn't work as you've pointed out. So, is that a framework? I mean, do you see then perhaps out of COP28, a Non-Proliferation Treaty, or some sort of an agreement that says, well, we won't approve new fields, if you don't approve new fields. And then, instead of going from 4 million barrels to 5 million barrels in Abu Dhabi, that they would go in the other direction? Is that a possible outcome?

FB  Now, I hope there'll be a lot of good outcomes from COP28. One of them is, I would like to see, as we discussed in the beginning, how we can facilitate clean energy investment in developing countries. For me still the fault line is this one. And the second one is how we are going to reduce the fossil fuel consumption around the world, and how we are going to increase clean energy around the world. So, it is, of course, in which context it will come, in which framework, I don't know. But it'll be a very important meeting in Dubai. And I hope that we don't come up with bad news. But we do everything as International Energy Agency, working with many stakeholders, including the COP28 presidency, so that a good outcome comes from that meeting.

ML  Indeed. I'm also I'm very optimistic, very interested - I don't know if I should be optimistic yet, but - I'm following very closely the Bridgetown agenda. So, this is the global, the summit that was last week in Paris, about the new financial structure. And hopefully that will be a way of changing the cost of capital for these projects in the developing world. And I know that's something else that you'll be involved in.

ML  I saw the Prime Minister of Barbados, Mia Motley here in Paris, just before that summit. I came over for that, and she's so inspirational, that I kind of committed to get back involved in that agenda, which for the last few years, I've not done much on because it was sort of it was proving very, very difficult...

FB  Very much so. In fact, President Macron organized a meeting last week in Paris, and brought more than 50 heads of states. And one of the tasks all the heads of states gave to IEA is how we are going to bring [down] the cost of capital for clean energy in developing countries - which is currently three, four times higher than in advanced economies. And we will take it seriously, working with the multilateral development banks and the international financial institutions and others to make it happen. Going back to our previous discussion, two and a half years ago, I said that for me, the fault line is how we are going to facilitate the clean energy investment in developing countries. I say the same now, and I hope next time when we meet, I will not repeat myself.

FB  It is the nerve centre of all the fight against climate change.

ML  Fatih, thank you so, so much for your time. It's been absolutely fascinating and an honour.

FB  Thank you very much, great pleasure. Thank you very much, Michael.