How China Became An Energy Superpower Ep262 Professor Ning Li

TITLE: xCUASv01bVY CHANNEL: Unknown DATE: ---TRANSCRIPT--- China has sort of started preparing for this kind of a problem or risk from quite a while back and so you know after this uh the the the Middle East conflict China was originally sort of a reacted quite strongly it limited sort of a export of like uh petroleum products and fertilizer etc and started using its strategic petroleum reserve but turned out China has sort of diversified it supply and domestically beginning to reduce uh reliance on petroleum as a fuel source or energy source from several years ago. So the impact was while it originally was sort of a you know quite a scare it turned out to be not much. [music] Hello, I’m Briany Worthington and this is Cleaning Up. My guest this week is Professor Ning Lee, Dean of the School of Energy Research at Charman University. Professor Lee and I were together recently at a conference in Beijing focused on the challenge of replacing China’s huge fleet of coal stations. And as the disruptions in the global energy system have persisted with the closure of the straight of Hammuz, I wanted to ask him how this was being viewed in China. And as he’s worked on numerous nuclear power projects in China and is credited with coining the term small modular reactors, I wanted to ask him about the prospects of these ever making it to market. We also touched on China’s embrace of modularity and efficiency in its drive for economic development, Trump’s recent visit to China, and the question of whether people are right to say switching from fossil fuels to Chinese electrote is really swapping one vulnerability for another. Please join me in welcoming Professor Ning Lee to cleaning up. Professor Ning Lee, uh thank you so much for joining me uh this evening. Um, we are recording on uh the 30th of May, which is a Saturday for you. And uh we we should probably start by warning our listeners that we might hear some construction sound in the background. That’s right, isn’t it? Uh but that’s because

China’s busy building things. Subway. A subway station nearby. Okay. And it’s got to be done on time, so they’re working on a Saturday. Yes. sometimes annoying, but I think overall you have to do these things fast, otherwise the annoyance just lasts longer. Exactly. Well, and China certainly knows how to move fast. So, I’m really delighted you could join me, but I wanted to start by asking the question which we always begin with, which is could you introduce yourself in your own words, please? I’m Dr. Ning Lee uh professor and the founding dean of college of energy X shia university uh in a beautiful sort of coastal city in in uh chi southern China and I’m also have been advisor to innovation labs and board of director for uh public companies in energy and chemical industries. I was a uh member of the technical committee of SNPTC uh a Chinese nuclear uh power company that was working with US Westinghouse to build the world’s first uh four AP 1000s. So I’ve sort of seen quite a bit across the industry over over time. And so as well as kind of being at the center of watching China’s energy transition from China, you also spent some time in the States, isn’t that right? earlier in your career uh studying complexity theory. Is that what you were doing? Yes. I uh went to uh I went to Santa Barbara at University of California in Santa Barbara and studied a branch of science that back then was called nonlinear dynamics but now it’s more popularly known as the complexity science or science of complex adaptive systems. And this helps a lot uh for me to frame my thinking and also guide me how to sort of operate uh in in this complex world both in energy industry and you know in economics in societies. Yeah. And uh then I worked uh in the US uh national laboratory for some times working on civilian nuclear technologies like uh nuclear waste transmutation uh generation for nuclear energy system and I did some sabbatical MIT and had a appointment at UC Berkeley. So I had pretty broad exposure in the space. Yeah. and and perhaps we should talk about this early because um one of the things that you’re quite well known for is uh you’re accredited with actually coining the phrase small modular reactors um and that I find that fascinating and this was quite a long time ago wasn’t it this is maybe a couple of decades ago tell us about that yes okay well you know I I want to acknowledge that the uh the the technical founder co-founder of new scale power Jose Ray for for for doing that. I you know when I first sort of caught SMR it was nearly two decade ago and I started sort of during my sbatical at MIT during 2005 2006. I started looking at sort of beyond the nuclear in technology and industry looking at other technology and industry and trying to understand why they can grow while nuclear seem to be in stagnation and decline. And one of the things I find out is the technologies especially since the uh mid 1980s to 90s they become more and more modular. Okay. And the modular technologies just can scale faster. And so I sort of started thinking it and looking through the history looking at the industry data and stuff and I think okay if we we do nuclear the next around we have to do it modular and we have to be make if you want to do modular you have to make many of them and so we make them smaller and smaller nuclear system are also intrinsically safer because it’s much less likely and you know we can by design eliminate uh the the possibility of a mel meltdown. So you know three mile island you know Chernobyl and Fukushima those kind of things are physically impossible to happen in these smaller safe and modular systems. So so that’s when I sort of started thinking a lot. So that’s almost two decades ago but you know I was ahead of time so nobody sort of picked it up until now it’s become the hardest things that it’s where everybody’s going into. We certainly will come back to nuclear, I’m sure. But be before we do that, I just wondered if um well, here we are, uh what is it, day 91 or two of the, you know, the kind of troubles in the Middle East, the straight of Moses closed. Um and and there’s been a lot of commentary about who who who is most exposed to that the impact on the oil and gas flow and it’s actually you know Asia is obviously one of the biggest buyers and it was you know there was a lot of speculation that China would be affected by this but it doesn’t seem to be have having had that big an effect and how much is this being discussed in China is there is there an active discussion about you know getting off oil and gas faster um and How how is it that the prices are not so high? Is it because China’s got just huge stockpiles? Yeah. So, China has sort of started preparing for this kind of a problem or risk from quite a while back. And so, you know, after this uh the the the Middle East conflict, China was originally sort of a reacted quite strongly. limited sort of a export of like uh uh petroleum products and fertilizer etc and started using its uh strategic petroleum reserve but turned out China has sort of diversified it supply and domestically beginning to reduce uh reliance on petroleum as a fuel source or energy source from several years ago. So the impact was while it originally was sort of a you know quite a scare it turned out to be not much. uh so this impact is much much stronger in like felt like in Japan in South Korea or Southeast Asia where you know in like a Vietnam and other places their factory had to sort of a you know stop working full-time and they ask people who don’t have to go into factory and offices to work from home to just to save few and but there are places where you know they’re missing even in the US they’re missing sort of the the fertilizers for for the growing season. So the impact is pretty broad but China’s you know almost over decades sort of a preparation for these have weathered this storm quite much better than than lots of others and it really the secret to it is this huge push into electrification right so um you know your power grid is absolutely huge now and not just providing power but also then having electrified a huge amount of transport and and now starting to electrify industrial heat and heat sources. So um you I think I don’t know the exact statistics but I think China’s amongst the most electrified economy now in the world. Yes. And so this is sort of a really interesting sort of a you know it’s a historical story that will be studied and told because when China started developing uh the uh the heavy industry and getting to the world trade organization and developing renewables storage uh electric vehicles actually number of technologies industry are being sort of promoted because industrialization urbanization modernization was the overall will go. But throughout the process, those that sort of benefits from like modularity from f rapid learning and and networking effects wing out. Okay. And so over time uh renewables with batteries, electric vehicles, storage, these has grown so fast in China has sustained sort of a double digits high double digits growth for over two decades. And now last year alone, China adds over 260 gawatts of solar and wind which is more than most countries probably other than like the largest like a US uh you know the total installed base in one year. So, China has quickly risen. Uh the electricity, you know, has become so overs supplied in some places that you know, the spot prices become negative couple hundred hours out of a year. Uh but because China did not stop uh constructing co and operating coal fire power plants, especially adding a lot more nuclear, the China grits are very very stable. So even if though there’s a lot of uh intermittent uh renewables coming to the grid uh the stability and reliability of Chinese China’s grid is stable. So that uh sort of these factors combined making China is yeah it’s emerging become probably the the first electro state in the world. Uh it’s yeah it’s very it’s a fascinating story. Is that a phrase the electro state that you hear in China or is that just something you hear the western commentators? Yeah, it’s probably more from western commentator. You know that these kind of ideas and stuff often emerge in the western media’s uh uh you know sort of a thing think tanks etc. And so coining these terms uh really you know China is sort of more focused on doing things and so you know Lots of things were done without a name or category. But once they find it’s effective and efficient, they started doing it very very quickly. Okay. So often times it become a hindsight to study them rather than sort of a foresight to to sort of think it through and do them. Okay. Because there’s so many things going on you one never really quite understand how human creativity will leads to. It’s only during the process of like a competition and evolution the winning ideas, the winning concept, the winning technologies emerge and then you know you will give it a name. [laughter] Well, there is a kind of new name isn’t there that’s been coined in China which is the three new industries uh which has got its own kind of characters that in China it’s called new three exports. ah solar panels even more specific. Yeah, more specific because there are lots of things. It’s called the new three uh the new three exports is the solar panels, the power batteries, especially lithium batteries and electric vehicles because these things are growing so much faster than the overall Chinese economy on the export. China’s exports would have declined quite significantly in the last several years without these three new exports. And there’s a good reason why lots of countries especially developing countries the global south are coming to China for these because they are really good technically and they are very very affordable. Okay. And once you have them you have power for decades. Okay. you have transportation for decades and you don’t have to rely on constantly buying and supplying burning fuels and stuff. So this is why sort of this the electrification is picking up space pace in developing countries in global south more so than in the developed economy. Yeah. And have you seen evidence I mean there are sort of graphs that have circulated on I’ve seen on social media of the last 3 months of exports of of Chinese um electrote if you want to call it that. Um and it it has really spiked hasn’t it? There’s just been a massive surge in demand for these products. Yeah. And this sort of a picked up uh very quickly. Uh so last year you know we there’s a there’s a very significant event in Spain and Portugal the blackout and then the a lot of the European countries and companies suddenly realize they need energy storage uh to back up their renewables. Many countries have very high percentage high penetration renewables. So that started picking up already. But then the end of February the the the the US, Israel and Iran conflict suddenly broke out and then all these petrols the the the gas the the the natural gas the petroleum 20ome% of the the the world uh sort of export trades has been disrupted by this. So now all of a sudden the the order for the the solar panels, power battery, electric vehicles spiked. I think in May uh in March the the exports of uh uh the Chinese EV has more than doubled uh you know and the solar and and batteries are also sort of nearly doubling uh and then it it’s sort of kept at an elevated space at because this is just all of a sudden people sort of the shock or the crisis shocked people out of the more the comfort zone or whatever the stat the the inertia and suddenly start realizing uh using these systems you have more reliability and security and energy security fundamentally is the basis of national security. So you don’t have energy security you can’t have national security. So these things are becoming suddenly you know lots of countries and companies uh are waking up to this possibilities and start importing these. Is China now kind of at maximum capacity or or could we expect these can this could be sustained I suppose was it uh was it was there a stockpile because domestic demand was slowing and therefore you could just ramp up export uh you how how can it keep going can it get even can can it increase can can China keep increasing increase the supply of these uh well so yeah let’s look at the data the domestic side China last last year built putting so much solar and wind that this year has a dramatic drop in the chi domestic installation. I mean the grid and the demands are only so large you cannot sort of keep building them sort of infinite and to so they are slowing down the electric vehicle slowdown is less so but it’s also slow down because last year China’s uh new car new auto sales over 50% is electric or or you call the new energy you know electric pure electric or hybrid so you cannot keep that pace for for very long. So these things are slowing down but the production capacity are still there. So if anybody needs them, China can supply them. Okay. So so that’s something that uh is ready if especially the global south when you want to leakro the fossil fuel stage of development that solution is available. There are some markets though who are being a little bit less uh enthusiastic about purchasing uh let’s say EVs for example the US has put a 125% tariff on Chinese vehicles um and there’s been commentary in the European Union uh you know they got their own certainly the German car manufacturers have famously been quite defensive it is you know there’s quite a lot of commentary about well we’re just switching one vulnerability one dependency on fossil fuels for another dependency which is a dependency on China and I I wonder if that is a conversation that’s surfacing in China is that kind of is there a fear that you could lose access to these big markets as well you the EVs have not yet gained access into American markets so h how what’s China’s response to this kind of well it’s we be we don’t want to be dependent on you we don’t want to switch dependencies yeah so first of are sort of a you know there is certainly sort of a uh sort of you know if you have existing uh industry and labor force that depending on something you cannot really sort of take them down very very quickly okay the in in US in Europe there’s a very advanced internal combustion engine auto industry and and people working on it you know it shouldn’t switch them off because they become stranded assets are you unemployment which will become a significant social problem not just economical. So I wouldn’t advise these countries to go all in like you know China or other some other countries developing countries are picking up electrification much much faster because they didn’t have that the other sort of the legacy system in in place. Uh so that’s sort of a you know just to say that countries with significant uh sort of thing do have to protect their industry employment and and their their assets. So that’s not a universal solution to everybody. But that said is electrification provided so much more efficiency, cleanness and low carbon and ability to accelerate uh transformation of the economy and society. That’s something that should not uh stop doing. Okay. So can you can learn something here is you while you want to protect the old but don’t sort of sunk subsidies and all these other things into them because what you need to invest in is into these newer technologies and newer systems and building it up and also you know China is learning its lessons too because while it’s very powerful to have these technologies and system with you know great performance and prices. It’s not a good way to work with the neighbors by breaking down their industry and economy and you know employment. So there’s a lesson to be learned both sides but that’s not something that unique you know there are many technologies and productions are centralized you know middle east sort of you know petrol states automobile were used to mostly built in America in Europe and then Japan then South Korea now airplane is even more highly concentrated you know Europe and and US are about the only country plus a little bit of from from Canada and Brazil on large commercial jet lines. So we can work these things out, but there’s sort of a you can so you have to figure out sort of in terms of economic efficiency and also some kind of a social development and sort of like just transition etc. How to dynamically balance these? But my proposition is you have to skew toward the more efficient, the cleaner, the lower carbon uh sort of way because if you skew too heavily on the protection side, you’d be left out and then you know a generation or two later you’d be so far behind. You become the underdeveloped. But because this development is so fast, we have to we have to increase our ability to learn and to to update to to to to innovate scale faster because otherwise you know there bound to be some sort of a people who left behind in this. Just going back to something earlier you said about um the the power system still having coal because that’s another difference about China, right? that that gets a lot of attention and a lot of misinformation about China’s kind of uh building five, you know, two coal sts a day or whatever it is. Um and and it but but it has carried on adding new coal capacity and as you said, it’s part of the reason why the grid is is relatively stable. There’s a lot of a lot of large lumps of metal still spinning on this system, but they’re they’re having to flex, aren’t they? Is there is there now a move towards coal providing more of a backup or a more flexible system and and how’s China achieving that? Yeah, right. I mean, China was, you know, historically known for uh sort of a scarcity in in petroleum and in natural gas. So, it had to rely on what it has most, which is coal. And coal is a technology that China has really mastered. and China builds the most advanced cleanest the lowest carbon intensity uh ultra superc critical coal fire power plants in the world. Okay. So that China has done but China used to rely nearly 80 over 80% on coal fire power plants and today is about 50%. Okay. The dramatic increase in renewables and nuclear has reduced China’s reliance on coal significantly. Coal fire power plants are traditionally designed for 5500 hours out of a year operation. Most of ch the average Chinese factory uh uh co-fire power plants operates under 4,000 hours. It’s margin toward 3,500 hours out of year. So which is less than half of the time and so the China’s coal consumption has been dropping but why coal cannot be sort of a shut down so phase out so quickly because our systems our energy and power system including the modern economy and societies heavily rely on the intrinsic capacity for fossil fuel to store energy in the fuel itself. Okay. So when you have fuel itself as the as the sort of a fuel energy storage which is very cheap and and at large scale and then the the the the burning the combustion system and the spinning uh generator the turbines and generator also have this inertia in them which makes the the the the modern sort of power system so reliable. You can you know these things won’t get shut down very very quickly. you keep them in point. But if you shut these downs and just switch to renewable too quickly, you run into problem like Germany has. Okay, Germany shut down and face out coal and nuclear before solar, wind and energy storage is really sort of a can sustain yourself. So, China is basically turning coal fire plants. one is increasing their uh sort of a capacity uh charge so to keep them in place. So when you know you have weeks without sun or wind you can turn these things on and they are they you can keep them on as a very reliable sort of dispatchable firm power but and also adding nuclear. Okay. So that’s something that uh so so the co-fire power plants increasingly become a grit sort of a firmer stabilizer rather than the the the main source of a power supply. That’s something that uh you know I think China has done right. So China’s although while there is lots of coal fire power plants the the burning of coal has reduced while China still has lots of uh ice cars the using of petroleum has dropped. Okay. So that’s how you sort of make managing the the transitions sort of go from so you you you before you dismantle the old you have to build the new first so that you don’t have a disruptions in your system. Yeah. And and also not just dismantle but adapt right because the coal stations are being invested in to make them more flexible. And one of the things we learned or I’ve been learning by visiting Beijing is that the adding of storage to the coal stations including largecale thermal stores is allowing those uh coal stations to provide different services and to ramp up and down in a way that that gas might do in Europe for example. Yes. And so yeah many of the co-file plants have turned into first is become a co-gen plants. They start as sort of instead of focusing on power generation they’re focusing on generating heat steams the supply to local industries. Okay. you know the the one sort of power plants we went to visit you know after the Beijing meeting it used to be a small co-fire plants and then they added municipal waste and biomass but now they are entirely sort of a switch toward providing steam to the local factories and that replace a lot of the coal boilers you know steam cannot be sort of like a globe like a national grid shipped all over the place it’s more local and so you use these uh to supply uh supply uh heat uh to these industries and then you know the power is being replaced by other things. Okay. And it’s it’s much more profitable for the company as well. Okay. They they generate so much more profit than they would have generating power alone. So power is become secondary. Heat or steam is that primary out output. Yeah. And I think it’s something like 50 to 60% of coal powered stations now, coal fired power stations in China have got some kind of heat component. There’s a huge amount of CHP, right? And so replacing that heat is is the challenge. And the other thing we visited was that very high temperature industrial heat pump, right? So so you’ve got surfit of electricity now being able to use heat pumps very efficiently. So, so there’s so will do you think heat pumps are going to be the fourth uh export industry that that go from three to four as heat pumps start to take become modularized? [clears throat] Well, it’s already gone to force the wind turbines become the new force. So the heat pump might become the fifth. But there was a sort of a mini a wavelit of a heat pump export uh during the during the after the uh uh the the Russian Ukraine war broke out because the the Europe suddenly started realizing heat pumps uh uh way to do heating uh when when gas supply and gas prices got so high. Okay. So heat pump has a very high efficient of moving heat. No. So if you use electricity to generate heat directly, at most you get 100% heat. But if you use electricity to to power a heat pump, it can move from heat from one place to another. And and the typical sort of COP or coefficient of performance uh is from three to five meaning one unit of electricity can move three to five unit of heat. Okay. it can increase the the the quality of heat and thus making the heat more valuable. So you can you know you can recover lots of the low grade heat and turning into them higher grade heat for for making things. There’s two things about heat pumps I think are not really properly communicated. One is that you buy one get three free is how we should sell this, right? Because you’re putting one unit of electricity in getting three back, right? Um and the second thing is that we spend a lot of time in Europe talking about energy efficiency and often in people’s minds that oh you know putting some log putting some loft lagging in or or insulating your radiators but the single biggest efficiency measure you can make is to switch to a heat pump because of that lovely coefficient as you just described it. And so, you know, I I feel like um yeah, there’s just some education needing to be done because it’s not just a it’s not just an appliance, you know, it’s actually saving you a huge amount of energy in the process. But it all depends then on the price of electricity. I mean, that’s the problem we have in Europe. Our electricity is is very high. Um is there a similar affordability challenge in China? Yeah. So, China had do was dominated by coal burning, you know, whether for power or or for heat. And so using sort of heat pumping, China has to compete against uh those uh solutions. But it’s beginning to emerge because renewables become so abundant and at times so cheap and negatively priced that you can think of using them to drive heat pumps to to either store heat or you know do you know air conditioning or heating etc. this kind of services and this option will rapidly become available uh for lots of other countries as well because you know in places where you have large amounts of renewable like during the day for instance lots of solar and you don’t you cannot consume them instead of dumping them you know drive a heat pump to do whatever heat thermal storage you need and and that way you can use the existing lots of the buildings and you know the the coal chains etc for storing energy while you are you know you cannot consume it by electricity alone at time electricity has this instantaneous you know whatever produced has to be consumed or stored at the same time but by turning into heat or cold it’s very easy to be flexible in these uh systems now and here’s also another sort of insight that might help people understand you know when you think about efficiency improvement people often think in the incremental ways okay add a little bit insulation increase efficiency of air conditioning or utilities you know I mean appliances and stuff a little bit but there are structural efficiency uh gains that gains from adopting new technology and system you know going from heating from whatever you use to heat pump the efficiency jumped not by like 10% or 20% by several order several folds. The same thing with transitioning from like ICE autos ICE vehicles to to electric vehicles. Electric vehicles from from well to wheel is doubled the efficiency of wellto-heel in the ice uh vehicle. If from renewable to to wheel uh electric vehicle is nearly 90% efficiency compared to about 20% wellto-heel efficiency of ICE car. These are dramatic step increases and I mean why would people fight against these kind of a dramatic improvement when you fight for like a one or two percentage point of improvement in in incremental I mean that you know when you have a such a step improvement options in place sticking with incrementalism is a losing proposition right cleaning up is proud to be supported by its leadership circle. 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So sort of if you can make that you know as you say you know like cut down the wastage to by 2/3 so that you’re reducing your overall material consumption and making it so efficient then that’s going to be a boost to your productivity right so worrying about uh you know we seem to be worrying about well but what about you know certain jobs in certain factories in certain parts of the world that’s a very local political issue but at a macro level if you want your economy to be boosted and and you want to do well and become more productive. You’ve got to embrace this efficiency. You just can’t not. And I’m kind of glad that the UK at least is, you know, seemingly understanding this. And we are seeing uh Chinese BYD vehicles now on the streets. We’ve got showrooms opening up. We’ve got many Chinese brands being brought in with, you know, not with any punitive tariffs. And it’s going to be a great experiment to see how do British people respond. are they, you know, will this will this do what we hope it will do, which is be overall a very net positive for the economy? Yeah. And you know, this is you just mentioned a great sort of wing-wing example of working between countries and industry. Now, so uh the BYD, okay, obviously what I just mentioned about electric vehicles efficiency. Uh there’s a large battery in in the car that stores like almost a week worth of power for a typical family in the car and it’s not used all the time. So now here’s a really interesting sort of wing-win solution. Okay. The UK company called Octopus Energy. Yeah. They c they came with Kama to visit with Shei, didn’t they? That’s right. They they they came with the prime minister came here and they went to BYD says look you have uh a huge uh mobile energy storage uh in your cars and you actually had a design in feature of uh V2G meaning instead of just taking power from the grid you can you can reversely sort of charging the grid when the grid needs more power. Okay. So long as you connect it called a V2G. No, you turn that feature back on. Then our customers in UK with electric vehicles can lease battery from us and then we use the batteries uh as a mobile storage to to for flexible you know demand response and you know flexible generation etc. And then you get to drive your car for free because the power used is a small fraction of that the bad the mobile battery pack energy storage in your car now. So by doing this uh both sides wins. Okay. the BYD wins, the octopus energy wins, and the UK people win because now all of a sudden the large amounts of renewable from whether it’s from wind mostly from wind can be utilized much more effectively and you have to spend less on energy storage as a separate item. The car itself is energy storage for you. It’s a mobile as well. So you know these are the things that you know if you break down these silo of barriers uh to think about you know it just opens up okay opens up this dramatic and that’s all come from this dramatic improvement in in the fundamental technologies efficiency. Yet the fundamental technology is not efficient. You don’t have much space and you have to just fight for it whatever you know it’s become a zero sum game. But when you have such a large step up increase in the efficiency it creates so much space for everybody to benefit from using this. Okay. So that’s how it should go. I hope it you know. So UK and China are setting up really great examples for for the rest of world how these things can work together. Yeah, I hope so. And I also hope it acts as a kind of um a living example of how because some of the conversations about vulnerabilities to uh taking Chinese products, you know, that we talked about jobs, but the other thing is, oh, but what about kill switches? What about designed, you know, software that can be activated in a in a hostile environment? If we ever have ever ended into a hostile uh what would be China’s control? And I I often wonder, well, why, you know, why single out electric cars and solar panels or inverters when we’re all carrying around, you know, phones, we all use laptops. We all have all of this electronic equipment that is very fundamental to our economy, which is also fabricated in China. It’s just that the proper safety procedures and safety checks and safety and the right specifications were put into those products. And I don’t understand why we can’t do the same secure uh tests and and procurement rules for these products. Surely it’s possible. Yeah. In fact, you know, the communication system are less sophisticated than than our mobile phones. So whatever you do with the mobile phones, you can make the electric vehicle safe as well. And so here’s the thing that I think you know we have to face sort of the sort of the the hubris and the ideological sort of rigidity sort of building into these sort of a political thinking that trying to use these to scare up things. But that you know these things can work for a while but fundamentally they are working against self-interest because that locked yourself into a more efficient uh you know a better way of doing things. Okay. So the the the more sort of a productive way or constructive way of doing this is acknowledging there’s safety problem and working together to solve it. In the process, you’ll be able to develop a better tech, you know, better security, more reliable system stuff, and then it’ll become the next round of innovation. Over time, we build a better world, a better civilization. Because of that, if everything comes up treated as a threat, then you know, we go back to really sustainable, which is pre-aggricultural, you know, then it’s really sustainable. But we don’t want to do that. There’s a lot there’s a lot of um discussion about utarchy or you know becoming more self-sufficient like reassuring everything becoming more nationalistic in our production but uh but that really only works if you’re happy to have a massive cailment in consumer choice right you you can’t do so whole full self-sufficiency and maintain this amazingly uh luxurious lifestyle that we’ve all become used to. So, you’re gonna have to choose. And my guess is that consumers will choose more choice over self-sufficiency. That’s that’s what we’ve been doing for decades. And I can’t really see us switching away from that. Well, yeah. And this is what’s happening, you know. So, even with the high tariffs and all these conflicts and stuff going on. Companies are still buying and trading and doing all these things. That’s, you know, because who who doesn’t want to get life better? Okay. I think you know the the past you know half centuries development is sort of a showcase you know you know sort of a doing commerce doing trade is much better than war and conflict and doing you know having open trades uh free markets you know it’s better than closed system we all live better because of that now there’s bound to be problem in those systems because nothing is perfect but solving these problem would be so much better than just shutting these things down and so that these problem don’t occur because when these problem don’t occur lots of the benefits are gone and and just thinking about this technology um sharing and developing together uh there’s a great example of this in reverse where Westinghouse uh came to China with their new reactor design and wanted to get it built and China didn’t say oh hang on we don’t want American reactors what if they switch them off China said, “Great, you’ve got a new technology. Let’s see if we can work on it together.” And you were involved in that project, weren’t you? And it wasn’t necessarily straightforward either, was it? Yeah. So, that’s a that’s a sort of a story how US and China work together to make a new generation of technology actually workable. So, when Westinghouse first came to China to sort of a to push their the prior design, which is AP600, it wasn’t mature design. It wasn’t commercializable. But by like 2005 2006 US decided to sort of approved its export and Westinghouse scale it up to a larger it’s a you know 1,200 megawatts a unit and then China decided to to sort of pay up for the technology transfer and then adopt its design. So, uh, SNPTC, the company I sort of helped, uh, advice and then, uh, uh, Westinghouse worked together. There were, you know, thousands of people going back and forth because the design at the time of the approval of the deal, the design was an on accelerated NRC approval. It’s not finalized. It took couple versions of iterations before it get finalized and some of the main components were not had not been scaled up to that. So during the initial sort of manufacturing and testing they run into problem. So the two two companies work together. You know, I saw the the the the CEO coming to to China and the chairman of SNPTZ going to Westinghouse Pittsburgh stayed there for months on end to solve these problem together and in the end it become you know something workable. Uh think about it before that deal uh the Japan steel work is about the only c only company in the world can make these large steel vessels and then after that cooperation China has two suppliers can do these things and then one of those designs in the in the uh AP 1000 is in in the sort of a in the hope of improving the the lifetime uh and reduce the maint you know the the point of failure and reduce maintain sort of maintenance for these these have like a one and a half diameter pipes that with without welding long pipes that bent and shaped into these things by by by you know by casting and rock rods okay instead of a sort of a cutting them and sort of shaping them and welding them together and the Chinese companies spent like lots of millions of dollars and and went through 23 24 iterations before they got it right and that’s something that helped both sides. Now you know AP 1000 is much simplified design is safer you know it’s a truly sort of one of the most advanced sort of large water reactor design in the world and that’s only capable because the US first invented and then working with China to actually realize it now it’s able to scale okay so that’s that’s a really good example well that but that is that is kind of the way it’s worked it designed in America but built in China because China’s got that tooling and engineering and capability that you know we have kind of exported. We we we’ve let it fall you know fall away from being the way that we generate wealth. The way we’ve been generating wealth has been through financialization and through you know digital ns and ones, you know, the kind of digital revolution and then through a service-based economy. I mean it was kind of remarkable wasn’t it that when Donald Trump came to visit uh China recently the things that they were selling were agricultural commodities and large airplanes which haven’t changed in their design for probably best part of 40 you know 40 years. So it didn’t feel like they were arriving with the next generation of technologies to to sort of sell to China. It’s sort of uh yeah, it there’s it’s not that everyone has to do everything the same, right? And and I but there is this risk that um the falling back to fossil fuels in particular locks you into an very old way of doing things and and you miss that whole next wave of of of development really. Yeah, that’s you know that’s certainly true. I mean you know I been studying and working in the US sometimes it sort of breaks my heart to think that yeah you know you’re selling to the rest of world like soy beans and corn you know those type of things you know why not other things actually you know China these days in addition to these news reports it also is one of the largest exports of electronics including semiconductors okay so this is something that you I mean I wouldn’t all fought the US because of this and that. It’s because US is probably one of the first country that gone so far in industrialization that it didn’t you know it had to figure had to innovate what to do next and unfortunately the financial engineer took over and then you know de-industrialized rather than keep investing in the sort of advancing the industrial uh technologies and manufacturing etc. so that you can keep those you know financial engineering sort of just look at the capital efficiency and sort of started globally doing this and de-industrialize uh the US which is very unfortunate and hopefully you know this will be corrected okay I mean there’s science of this being corrected okay so the AI build out the the the new SMRs and all these things the reshoring so this is working but there’s something also need to be said is uh while you’re doing this, China’s sort of a lessons learned should not be sort of a rejected out of hand because it’s all you know it steals from you know from the west and China had innovated because innovation not does not just come from sort of all thinking you lots of innovation come from doing things okay when you do things new ideas and new way of doing things emerge. So you know the the paper you share me about you know China be being the first country being modular native. Okay, this is how you know you this sort of thing was actually a hindsight you know in China a lot of people have figured out that we do to do these things modular so you can super scale you can scale super linearly okay and this is also how I you know two decades ago I sort of started thinking of why nuclear couldn’t work and then come up with this SMR small modular reactor trying to make mod reactor more like gas turbine solar power you know wind turbines etc. So it can scale uh superlinearally as well and that’s something that you know it you know we all can learn from these okay so everybody learning from each other and then you know overall the the worlds gets better we live and do do you think China will start to produce large large numbers of modular reactors because so far China’s been building pretty standard large pressurized water or lightwater reactors but it’s got various test reactors or pilot reactors of different scales and I think I recently learned from you that there’s even a nuclear ship that’s planned right so very very modular as in just you know a nuclearpowered ship so so but is China doing what it normally does which is just let the best technology emerge like do a few experiments and see which one thrives is that the plan yeah in a way it is uh so you know I mean China has sort of learned the the the skill to scale. Okay, so it it’s really good at it and modularity is one of the the the most powerful sort of a tool for super linear scaling and so China is doing this now. uh you know when I first sort of proposed SMR sort of a concept I studied almost all the nuclear construction in the world two decades ago China hadn’t even started its nuclear build yet so I said okay you know China is so great at construction maybe it’ll do better I mean it turned out it’s it has done considerably better than most other countries in construction these large reactor but compared to like factory made like solar panels, wind turbine, batteries, electric vehicles, it’s also losing out. Okay. So, so that’s something that China has to think about in the nuclear space. China is almost the best has because has the largest and fastest building nuclear program in the world. But compared to solar and Wayne electric vehicle and power battery energy storage, it’s nothing. Okay, it adds 5 to 10 gawatts to the to the grid every year as opposed to 200 300 gawatts of wind and solar a year or couple million electric vehicle a year to to the market. So you know this is how powerful this manufacturing paradigm can be. And so China will you know even though it’s it looks good in the nuclear space it’s losing out to the other ones and it know it’ll learn and it has multiple technologies under development are suitable for these and there are some prototypes that’s already being sort of designed and built right including the world’s first sort of commercial ACP 100 it’s not small enough But it’s it’s 10 times smaller. I mean it’s oneten of the large reactors. It’s IAEA sort of a certified you know it’s about to finish. So that’s uh that’s something that China will learn to do but once it learned how to do it uh it’ll do it very very quickly. Yeah. And it it always strikes me that well yes but adding 250 whatever gigawatts of Windows dollar a year I mean even China will eventually run out of space right. I mean, you you’ve you’ve carpeted so much of the land now that it’s even having I think you told me this, it’s even having a regional cooling effect. The amount of PV that’s gone into mountain mountain sides is having a it’s affecting the temperatures. So, and actually cooling it seems, which is interesting in itself. So, but you just can’t kind of imagine that carrying on forever. Whereas with nuclear, because the energy density and the footprint is so small, once you decide to do it, it could go everywhere, couldn’t it really? But the but there needs to be a relaxing of the rule at the moment that you can’t put it anywhere other than the coastline and I think that’s been a natural break on nuclear hasn’t but almost probably deliberate. Um but will that will that be lifted do you think? Yeah. Uh you know first of all that was sort of a more of an executive order than than a policy or law. uh so fundamentally can be changed but because of China right now China in some ways it’s you know in a sort of a gross term it’s not lacking power in fact sometimes it has too much power so so it doesn’t have the urgency to do that okay and but uh eventually it’ll come to realize yeah you cannot keep on adding uh solar and wind without adding significant to the system cost because now you know you have to overbuild a lot of solar and wind and plus storage to make the system as reliable as before and that you know the the the policy makers and the industry are beginning to realize that so that’s something that uh you know it it’ll change about the coastal sort of restrictions yeah you know after Fukushima you know China’s populations are the inland populations are living on a major uh river uh on the river banks Okay. So if you have England nuclear power plants have a disaster like Fukushima, the the impact is not is going to be tremendous. Okay. So there is certain thinking along that lines. Yeah, I hear that. But you’re not going to get a tsunami hitting an inland river, are you? So you know like it these things are quite robust. I always think it was probably politically expedient to limit it more than really a safety issue because as you say the disruption of of replacing everything fast, you’re rolling out renewables fast. If you also roll out the nuclear fast, the coal will be lost and there’ll be social and presumably system challenges associated with that. But but that’s kind of why we were in Beijing, right? F, you know, just to get right back to the beginning, we were in Beijing to talk about why nuclear, especially modular nuclear, especially high temperature nuclear, might be the perfect solution for replacing the heat load because you’re right, there’s too much power, but there’s probably not enough heat, clean heat, right, yet. That’s right. You know, about over 60% of the end use of power is in the form of heat. Especially like 60 70% in industry are in the form of heat. Okay. So you know heat will become sort of you know it’s an important area to to look into. So the the project you know we are collaborating working with called a code to nuclear it’s looking at sort of a cons given that we have this end use demand for heat we have this large grid infrastructure already in place uh you know using cold fire power plants. Why don’t we swap out the coal boilers and putting these modular nucleus? So we now playing clean and low carbon heat into the system. We can use the existing infrastructure to the to the to to the highest degree. But then we kind of make the transition sort of we have reduced uh the resistance because you know just like terop power is doing in Wyoming. Okay. Wyoming welcomes its nature because its coal fire power plants are going to be decommissioned, but the grids and the local labor force can be reused for for a new nuclear power plant. So, so reduce the the the the resistance to these transitions, reduce the the amount of stranded assets, you know, we we you know, all these things are still in place, we can use them. and then we achieved uh energy transition. Okay. So you know these are sort of again this is a sort of a a step change in efficiency carbon intensity efficiency etc. And that’s something that you know that’s the stuff that we are working on for a couple of years go to nuclear repower is by turning these you know existing co-fire plants into nuclear generations and then in the process we achieved what we need to achieve. Yeah. Great. Well, I think we’ve uh we’ve covered a lot of ground and uh it’s been so fun to catch up uh again and I mean just perhaps one last question which is do you ever think China will because and I you know taking a big step back one of the things I found so reassuring when we were in Beijing was that we were on a panel with uh one of a representative from a state-owned utility who just said well of course we’ve got to do this because climate we’ve got to do this because of climate change and we’ve got to reduce our emissions. And I just thought, “Oh, wow. How refreshing to hear, you know, someone in industry saying climate change is a driver and not feeling embarrassed about it and and not, you know, not we’re not having to hide this because in the US now, you know, you people just don’t say the words climate change anymore.” Uh, and you know, I that’s another thing that breaks my heart. I’m sure it breaks yours too. And you just but I suppose the question is can you ever see China stepping forward and becoming more of a leader on climate change being a a nation of engineers being you know grounded in science believing science and caring about stability of your you know of society because there’s a big gap at the moment the US has moved out and there’s no one replaced them yet and Europe is not really united enough to to do the job unfortunately. So yeah, what what do you think? Can you crystal ball gaze? Could China ever take on that leadership role? Well, China is already beginning to you know in terms of actions rather than words, right? you know since the cop two years ago, China has becoming sort of the the de facto sort of a you know on the ground you know sort of a leader in doing these things because of you know renewable storage electric vehicle and also uh sort of a low carbonization of you know all these coal and related industry and technologies. uh but it it it will take time for China to to learn how to do these things on a world stage and so that takes time and also because uh you know because of the the geopolitical conflicts had kind of a broke down some of the pathways that we could have done these things much more sort of efficiently. Now it becomes sort of an ideological sort of a you know geopolitical conflict to to talk about these things. Now I think one of the things that when I observe in the US in in the in in in Europe and also early stages of China development is see if you frame a transition or these uh climate mitigation etc as a cost uh issue as a preservation issue. It’s very difficult to get more people around it. Okay. You need to, you know, people just want development. I mean, we’ve debunked the idea of limited growth and degrowth and this stuff through decades of development without destroying the world. So, we know that’s bad idea. People naturally, nature by itself want to evolve, want to grow. Okay. So if you think about when you’re looking at an issue instead of framing it as exential threats that we need to yeah sure it’s a problem we need to to solve but the solution is how we grow okay and then you suddenly realize if for instance China two decades ago it was fighting you know all these climate responsibilities and stuff and suddenly come to realize well growing solar wind the renewable electric vehicle. It’s a great economic engine. Okay. And same thing, you know, when China first started doing like environmental protection, it was considered, you know, a cost. But over the years, once you started doing realize, you frame it as a development sort of rather than a mitigation and prevention issue, it suddenly, you know, it opens up. Okay, there are time to be preserving things but often times you need to innovate and build things and grow things and you know energy transition give us sort of a global and opportunity to grow things together and that’s something that I hope you know it’s a lesson that we all can learn and and improve it. Yeah, I completely agree. Even the phrase burden sharing, you know, it was and it turns out it was all wrong, right? It’s just about sharing the benefits of of what we build that’s new and more efficient and better. That’s right. Creating more opportunities, you know, more growth, you know, sharing the benefits. Yeah. It’s not the burden. Well, we’ll end on that positive note. Thank Thank you so much for your time and I look forward to seeing you again in Beijing or in Shaman maybe next time. I’m maybe in US. I being US uh after middle of June. So great. Well, we’ll hopefully see you there. Thank you so much. Thank you. So that was Professor Ningley, dean of the School of Energy Research at Shaman University in China. My thanks as ever to our manager Kendall Smith, Oscar Boyd, our producer, Jamie Oliver, our editor, and the rest of the cleaning up team and leadership circle that make this podcast possible. And thanks to you for listening. Please join us at the same time next week for another episode of Cleaning Up. Cleaning Up is proud to be supported by its leadership circle. The members are Actis, Alcasar Energy, Arab, Copenhagen Infrastructure Partners, Signnum Capital, Davidson Kempner, EOPragma Capital, EDP, Euro Electric, the Gillardini Foundation, KKR, Mitsubishi Heavy Industries, National Grid, Octopus Energy, Quadrier Climate Foundation, Schneider Electric, [snorts] SDCL, and Bartsilla. For more information on the leadership circle, please visit cleaningup.live. 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