The Reality of Renewables in an AI World

I'll be honest with you, ladies and gentlemen, I I could not be more fascinated about the next subject as well. And I've got two amazing uh interview panelists to talk about it as well. As I mentioned in my introduction, I I I'm not worried about the ability of the world to achieve what it wants on large language models and give us all those benefits. Well, I'm probably slightly worried about the profitability of it thereafter, but that's another issue for another panel as well. I'm certainly not concerned about the availability of the chips as well and the ability of the Jensen Hongs of this world to come up with the goods as well.

But I am fascinated, concerned, excited, all of the above about the energy equation as well. It it it is not a side topic. It is central. If we do not have the energy to provide these stunning new technologies with the power it needs, we're going to flounder. We're going to have a massive bottleneck.

And there are some parts of the world that are doing some quite extraordinary things. And I think the UAE is a is a a role model for thinking about all the different types of energy usage that can be used, especially uh clean tech as well. Let me just get straight into who I'm joined by on this panel and I'll get into some uh questions with them as well. Sam Bilbal Ilon is the director general of the World Nuclear Association and and and I and it's very very interesting. In our very brief conversation um before we came on I was saying to wow it's such an exciting space now with all the SMRs the small modular reactors to which Samma put me down straight she goes Steve it's always been exciting and it cannot just be about SMRs as well so I think we've got some brilliant conversations to have there as well and I'm really really excited as well to speak to Muhammad Jamil Al Ramaki as well is the chief executive officer of Mazda sir it's really really good to be in the region and see you.

And one of the reasons why I'm always so excited to speak to Mazdar because I've got a bit of history with Mazdar as well because I first uh came to this region about 20 years ago as well and I got put on a bus. Now this must have been about 2007 and we were trundling along in the desert and it was a very long journey and we got out and there was a solar panel field there as well and and it was the site of Mazdar city long before a lot of the extraordinary expenditure and excitement surrounding Mazda really taken off as well. So it's been brilliant looking at the journey of Mazdar uh over the last 17 18 years as well. So look, let me just ask you both a very generic question and Muhammad, I'll start off with you as well. How prepared are we to provide energy for the AI revolution?

Good morning, Steve. Thank you, CNBC and of course ADGM and Abu Dhabi Finance Week. Uh good good morning to to all of the audience. Well, I think um you see data centers have been there since the beginning. Uh and they will remain there for the future.

Um but however, AI has obviously accelerated the demand for data centers. Um and the fact that the world is being electrified and the world is being smart with uh intelligence using smartphones and whatnot that also uh pushes the growth of uh uh data centers. The UAE, Steve, has been uh uh leading the world on both energy and AI. And when I mean lead, I mean uh establishing the relevant strategies and of course the relevant policies that allows capital to flow. So now obviously capital is available Wherever you go, you hear big numbers, big numbers to build new data centers, hyperscalers, uh massive uh industrial data centers, uh they call them hyperscalers or super data centers.

So these data centers require capital. We believe capital is available. uh and there is also capital that is available for the power that is needed to fuel these data centers. Obviously data centers are fueled by electrons. Electrons are fueled by an energy source.

This energy source could could be conventional i.e. coal, gas, it could be clean, nuclear, hydro, it could be renewables, solar, wind. So the capital even though the numbers are big, we believe it's available. What's not available is few things.

a policies clear national strategies. The UEE has established is national strategy for both AI and energy and you will hear obviously you will be hosting his excellency Selma Mazoui and of course he can get into the depth of that strategy and national policy. Now these uh factors are very important because without clear strategy for any country you will not be able to establish the right policies to in enable capital to flow right. So I think uh uh and and these policies Steve needs to be agile. So when the demand spikes like what we see today, your policy needs to be agile to pivot away and cater for the new changes.

And again, I'm I'm not saying that because I'm from the UAE and we are in Abu Dhabi. Honestly speaking, this is the reality today here in this country. Okay? And you know, Mazda operates in more than 20 countries.

Mhm. And just you know just to put things into perspective and yes we are one of the largest renewable energy companies in the world you visited Mazda 20 years ago we had 10 megawatt now we have around 60 gawatt you know so just the scale have changed and and and we are very close to all of these markets because we are embedded within these markets. So we feel the pulse. We understand the challenges but we also understand the opportunities. And here in the UAE and and this is a great example when the demand spiked on on data centers because of the AI revolution and evolution.

The country was ready not only ready to build the infrastructure that is needed for data center but they were also ready to fuel that data center.

Yeah. you know our roundthe-c clock project we just you know did groundbreaking on the RTC we call it solar 24/7 okay that was designed and built will it's under construction will be commissioned in 2027

to fuel some of these hyperscalers

but this is only one project and it's the largest roundthe-clock project in the world

so obviously uh we did not just wake up in the morning and ah let's uh let's build the round the clock project. We have been preparing for this

because of the clear vision, the clear strategy and the regulator who are working with particularly in Abu Dhabi the department of energy and of course the federal uh ministry of energy.

We've known that this is coming.

Yeah,

we were ready for it. Now this is unique, right? This is unique because if you go somewhere else, you have to queue for 6 years to get a connection. Now, how are you going to fuel that data center evolution if you are unable to connect to the grid?

Muhammad.

Yes, sir.

I'm going to come back to you because I could not be more excited about the solar plus battery project. I for me it answers so many problems about intermittency, about resil resilience, what have you. But I want to come back to that as well because I want to get in at Sam if I can as well into this conversation and and Sama again as I said beforehand as well you've always been excited about the possibilities of nuclear. There are large parts of the world that are less excited but then there are others who are saying okay if nuclear is going to have a future it has to be more nimble. It has to be about maybe small modular reactors.

But I think you believe that actually there's a role to play for all kinds of nuclear. Well, thank you, Steve, and thank you, uh, CNBC for the opportunity to join all of you here. Uh, well, I I agree with with Muhammad that we have this enormous energy growth, right? Um, but it's not just data centers. So what we have seen is that we are decarbonizing the economy.

We are electrifying the economy and at the same time we have well 800 million people around the world with zero access to any electricity. So obviously the demand is only going to grow up. So as you very well said Steve uh nuclear energy is today and has been for for several decades uh the largest source of carbonf free electricity in the OECD countries second only at a global level to hydro power. So clearly this role perhaps not very visible to many of you is is is uh is clear and obvious uh uh in the in the real markets in the real world. So what we are looking now is uh both in the AI world but also the entire economy.

We are seeing the metallurgical industry, the chemical industry, the prochemical industry, uh sustainable aviation, fuel, shipping, all these uh key pieces of the economy are looking at nuclear energy as a key component of their energy mix. Why? They need abundant affordable 247 carbon-f free electricity and heat. And this is very important because nuclear energy as you very well know obviously has been producing electricity for six decades. But at the same time we can produce steam and steam is going to be uh essential to the carbonize the entire economy not just electricity.

So we are looking at um enormous opportunities for nuclear energy large and small. Right now as you very well know uh there are 70 reactors under construction all over the world. And when we look at the plan and projected uh reactors in currently uh more than 60 countries in the world, we are looking at tripling global nuclear capacity by 2050. Tripping three times. and and that that sounds very ambitious to you.

It's really not that very ambitious.

Okay. Do you want to address for me my over excitement about SMRs? Because I I I look at how nimble they are. I look at the modular part of the SMR acronym and I think wow these are an amazing solution for all parts of the world or for many parts of the world rather than the concerns about these enormous projects, the Henkley points of this world, the Flamonville of this world. Uh, and if you're not aware of Flamonville and Hinckley Point, someone will tell you just how expensive and overrun they are on costs.

But but but am I too excited about an unproven technology?

No. Well, let's be clear. The small modular reactors, the technology is proven, but it's new about the reactors is the delivery mechanism. So, as you very well said, we are moving from large projects to smaller products. So we are moving to an economy of serious as opposed to this uh well uh economies of scale.

At the same time I I want to point out to you yes we have Hillel point on Flamville we also have Baraka. Okay. So as you all you just mentioned this uh in the UA we've gone from zero to 24% of our electricity coming for carbonfree electricity in less than 15 years. uh that's what China is doing that's what Bangladesh is doing that's what India is doing Korea Japan so there is many countries in the world that have been doing on time and on budget now small modular reactors which is what you really wanted to talk about um there are as I said the delivery mechanism is a little bit different so these are going to be factory fabricated you are essentially going to make them in a factory and you are going to put them on the back of a truck you are going to ship them wherever you it is that they need to be deployed and with minimum civil infrastructure they are going to be deployed. So what we are talking is about more affordable technologies as you said very customizable so can be used to remote locations to energy centers to mining centers to places where they don't have uh the electricity infrastructure that we may have here in the UAE or or other uh OCD countries but again this is a complement to existing nuclear power plants as you know uh already in the US Microsoft Google uh Meta, Amazon, they all are already investing in large and small modular reactors.

Brilliant. Thank you. Look, um um couple of points. One, everyone over there, I don't mean to turn my back on you, not least because my boss is sitting over there. Uh but but two, there's something I I I want to tell you about and I know Dan mentioned at the top of this well, I think it's like an elongated show to be honest.

You've got slido. Okay, this is an interactive session. You lot don't get off the hook as well. In fact, I have to do less work if you do a bit of work for me as well. So, if you do have any questions for these amazing panelists, Muhammad and Sama are going to hang around for about 10 minutes to answer your questions as well.

If you don't get them in, that's fine. I'll do it as well. Um, you don't just get to play in the quizzes as well. So, just slide over, have a think about your questions about the energy conundrum and the energy mix. Right.

Okay. Before I get back to the planning side of things, which I thought was a brilliant point from both of you, we've just assumed something and journalistically I have to come back and you said in a decarbonizing world, a decarbonized world. Look, I'm not going to get political on this. I'm not picking on politicians. I'm not going to look specifically at certain big administrations in certain big countries in the Western Hemisphere.

But there are those politicians who do not see necessarily the AI drive being driven uh by clean energy, by renewables. In fact, they see a role for coal. They see a role for gas and I think there is a role for gas as well. Um but but in terms of AI being accompanied hand inhand by decarbonization. Do you just want to address that very issue that has come up already?

Muhammad, why don't you start off? So I mean let's start with the with the simple answer. I mean anybody who who doesn't believe that uh climate change is is an issue uh that's a different story. We believe climate change is an issue. It's a serious issue and uh you know we've hosted COP 28.

It was a great successful COP 28. So as a country and as Mazda obviously we are what we call ourselves we are the Mazdarians. We are the Green Party here. So so of course

you got to be careful. The Green Party in the UK is completely different political

green UAE green party.

Okay. As long as we know where we are sir. Okay.

So not in any political way just

absolutely

green energy we represent the green energy industry. So um um so obviously decarbonization is is very important uh and I think both renewables is is a key contributor to decarbonization. uh electrification is a key component to decarbonization and obviously using technologies like nuclear and SMR is also very important and key for decarbonization. In fact the first cup uh that really uh positioned nuclear

was at COP 28. Okay, that's a a very important milestone because uh because we believe in nuclear, we believe in SMR and we believe that these technologies are very important to establish the net zero targets and our decarbonization uh uh advancement, right? So obviously any spike uh on on demand v electrons that means what that means you need to essentially create the supply to these electrons and to create those the the supply to these electrons you need to start generating more power okay and there are different ways to generate more powers like I've highlighted coal is one one aspect and and unfortunately because of the increase of of uh the demand on power you will see that uh uh the decommissioning uh in fact you will also see uh an increase in buildup in coal which is something that we have not seen over the past 20 years. This is an unfortunate outcome of the potential increase in demand.

Muhammad it doesn't have to be that way does it? It doesn't have to be that way because we do have all the relevant technologies to enable the supply of that demand. Okay, SMR is one.

Wind, solar, energy storage system, geothermal is a great source of energy.

Okay, I'm a coal advocate.

For the sake of argument, I'm a coal advocate. I'm not, but I am for the sake of this argument. I say to you, yeah, but these renewables, this clean energy can only survive and compete with load of subsidy. What do you say to that?

That is totally incorrect because the cheapest form of electrons today is renewable energy. You know, I mean, you can you can you can say whatever you like to say. In the end of the day, there are facts, there are numbers, they are, you know, and these are realities. If you if you said that 20 years ago when you visited Mazdar city, you know, with our first solar, I will tell you yes, 20 years ago, solar was very expensive. In fact, solar PV was more expensive than solar CSP, concentrated solar power.

You know, the first 24-hour solar project in the world was not done in the UAE. You know where it was done? It was done in her beautiful country, Spain.

I did. It's called

24 hours concentrated solar power that was engineered, developed, constructed by us and a great company in Spain called SE. Okay, but it was very expensive.

Okay, so we I'm going to move carry on moving because guess what? You lot are delivering you are giving me questions. So I'm very excited. That's why my iPad was going back and forth because I managed to break it straight away. Um and they repaired it.

Now look, so that is a really key point and and and Sam, you'll pick up on this as well. Decarbonization is happening regardless of subsidy and actually it is very competitive as well. Let's get rid of this idea that hydrocarbons are more competitive than renewables as well. Sama,

well I think that uh Muhammad mentioned this at the very beginning, right? So there is not one solution that fits all and for this we really need strong policies strong strategies and what works in one country may not work in another country. So the question is how do we get a system

sorry summer let me come in I'm sorry this is me being all TV like is there any scenario where coal is better than all the other alternatives

well uh I don't know you have to do the math right so this is what what where what I see the the point so if uh for whatever reason uh the carbonization is not a priority for you then it may be I mean for many of us it obviously is a priority but let me just say the point here is how do we achieve a system that gives us the abundant, affordable, 24/7, hopefully clean, carbon-f free energy that we need. Uh, and there will be many answers, different answers in different countries. Obviously, I do think that nuclear plays a role in many of those scenarios. There will be countries that will not want to have nuclear energy. There will be countries that will want to have nuclear energy.

But again, uh it is about the system. It's not it's not about one generation versus the other. Okay, that so many interesting points and look I've got about six minutes before you lot get to play as well but but but I really want to come back to this planning issue that Muhammad mentioned earlier on as well and it is very very and I've just finished a book called progress. It was one of the FT books of the year and it was all about the role of the private sector and the state and the interaction. It was very good.

It didn't win funny enough a book on Jensen Huang won the the award but it was very good nonetheless. the role of the state as a guiding as a planning facilitator as opposed to um as opposed to uh forcing industries and the private sector to do things. What how important is this role in planning and I'll start off with you Muhammad on this one as well because in the UAE it has been a guiding hand but it has encouraged the private sector to come in as well. Indeed, like I said, Steve, you know, having a clear national uh strategy that is complemented with a clear policy and procedure policies that enables capital to flow is very important

but also the agility of these policies and framework. So I if it has to be there to enable also the the regulation to pivot away when things like AI or a spike in demand happens.

Yes.

You know and the UAE has is is is a today honestly is is a global benchmark you know we've we are leading not only our region we are one of the global leaders in the AI infrastructure. We are one of the global leaders in the clean energy uh and and uh energy infrastructure. Uh and that's why we are attracting with partners capital into this domain.

But you've hit upon something again you I don't know if you did it on purpose but you've hit upon another great point and that is it's not just about the planning. It's not just about the facilitation, it's about permitting and regulation as well. And I see so many brilliant men and women in the energy field, in the clean energy field, in the renewable field whose ambitions are thwarted by six, seven, eightyear planning. And the CEO of a very large wind company said to me during COVID, he said, "If we or well during COVID and this devastating war in Europe, he said, "If we moved as quickly on permitting for wind as we did for an LNG terminal in northern Germany, we would be there."

The government role, Sam, tell me that. very important uh as we said we need to have an strategy but very importantly that needs to be implemented as an industrial strategy uh we need to put in place the mechanism so the parac sector has the visibility the long-term signals that are going to incentivize them to invest in this so as as we were hearing so when there is clarity when then when there is visibility of what's uh the what the future brings the private industry is going to invest there's not forget that energy typically is we are talking about very large infrastructure I mean even though it is a unit or the entire system the grid uh if you are looking at uh the pipelines etc etc so obviously there is a need to have a central uh thinking process a central coordination that incentivizes everybody else

which is so missing I'm afraid in so many parts of the world where I come from as well look um I I'm very aware that I don't get this panel too long too early because um I will throw the whole schedule in and uh his excellency the minister will not be happy with me just like in the days of Vienna when I was chasing him around as well. Um those were the OPEC days anyway as Dan Paul knows well but Muhammad I do have to chat about one more technology which you've already alluded to as well and this is 247 solar plus battery. Oh solar energy it's too intermittent. it it it doesn't give the the the resilience well that we need for our base load as well. But if you have enormous battery capacity plus soda and you get 24/7, hello, we're in the game.

Just just give us a minute on that because I could not be more excited about it.

Yeah, sure. I mean, we've been, you know, working on this. Obviously, one of the key challenges in renewables as you've highlighted, Steve, is the intermittency. Uh and that was always a dream for all of us within our industry is to design build a solution that allows the utilization of the sun 247

the wind 24/7 even when the sun doesn't shine you still generate and that has always been our northstar you know and and here in the UAE we were able to again demonstrate our ability to create something a dream a dream a a reality. Um and obviously it's a lot of work with a lot of contribution from all from technology providers to our technical team and engineer and a lot of experience in this field. Um and now combining solar for example us in the UAE uh and our region we are blessed with a lot of solar obviously but in other countries you are blessed with wind for example in the UK you have a lot of great offshore wind

don't remind me Muhammad I've just come from 8° and it's pelting down to 27 degrees in UAE wonder why it's so attractive out here for so many people but yeah but it is so exciting isn't that

exactly

right okay I um trying to keep on track here. Okay, so we got some questions from you as well. Let me just fire these away and Sam, why don't we start off with you and then Muhammad will answer the same question. How are you hedging your risk in a scenario where the AI cloud energy need was to be much less than what is forecast by the new the news? You mean CBC?

I know what you mean. I have the same question. If we do see an AI downturn, I I guess the question is really hedging a risk on the fact that we're overestimating the demand from AI. S and then Muhammad. As as I said before uh AI is just one piece of the puzzle.

I think that we all have become very aware of of AI because well it is exciting to all of us but the energy demand the electricity demand growth has been obvious to to many people for quite a while. As I said before we are electrifying everything. Transportation we are electrifying heating and cooling in our houses. We are trying to provide energy to all those people everywhere in the world that do not have it. So even if the AI demand is not as big as we expected, there are plenty other pieces of the economy that need lots of electricity, lots of energy and in that sense uh we are very much ready to it's sobering.

I've got to calm down. It's not just about AI. It's about the growth in amazing areas such as the Middle East. The Middle East will carry on growing regardless of AI, but we AI we know is a great facilitator. Muhammad, did you want to come back on this one?

How are you hedging your risk just in case AI isn't as explosive as we think it is now in the news? Whoever wrote that, I'm watching you.

I think uh the development of data centers, be it for the utilization of AI or for technology uh innovation, is here to stay forever. So that demand will continue to grow.

So we don't see honestly we don't see uh any risk whatsoever. The real risk is the implementation.

The real risk is really finding a place to build these data centers. The capital is there.

I can tell you right now there is challenges across the world. You can't find uh the waiting list to a data center to connect in Europe. Good luck to find the right place in Europe to to build the data center with scale. Okay. The same thing with the US.

Okay. And even if you find the the the hub to connect to as a data center, you know, to a to a grid, you can't find the power to supply that grid. So, so the reality is that AR data centers will be built but if you do not uh provide the relevant policy, the relevant regulation and the relevant opportunity for these things to be built in your country,

they will move somewhere else. They will come here to our region and

and we are happy to host them.

Absolutely. And you'll be happy to have me back to look at your 24/7 as well. You must do that as well. And by the way, it's it's a similar kind of topic which I'm going to speak with his excellency Majid Al-Suadi in a few moments about is the difficulty in putting that capital to work as well. So thank you sir.

It' be great to speak to you in a few moments time as well about that. By the way that was anonymous who was saying as forecast by the news. Some of you have put your names down for these. So I'm going to go to anchor's question next. A lot of excitement and interest in building nuclear energy capacity in AI leading nations such as Singapore GCC.

How will the spent fuel be dealt with safely? It's a great question. It's a perennial question.

Well, this is the way we've always done it, right? So, uh first of all, I mean, many of you think about spent fuel as as something that is a huge problem. In reality, the amount of spent fuel that we have for all the nuclear power plants all over the world is very very small. We are talking less than a a football field in the entire world. So, that's very small.

The other thing is this is a matter again of policy and planning. uh you can you can just uh have uh the the the appropriate plan to to manage that. As you know 95% of the energy still exists in the spent fuel. So in many countries what we are thinking is actually recycle this material reprocess this material as we are doing this in France in Japan in in the UK and Russia.

Okay I'll ask one question that uh well actually this this is again anonymous thank you for your bravery. Um is Mazda considering investing in SMRs? um we we don't have the mandate to invest in SMRs but there are other sister companies within the UAE who are of course looking for example you know Emirates nuclear company they are focused designate designated platform that have already developed four nuclear power plants in the United Arab Emirates but Mazdar is only a renewable energy company that focuses on uh key renewable energy technology, solar, wind, geothermal and energy source system.

Okay, brilliant. Look, um, my clock says 40 seconds. I think that means 4 minutes, so I'm going to carry on. Uh, how would efficiency gains in data centers, hardware affect, uh, profitability of global power projects as well? It's a great point.

If they become more efficient, are we going to need as much power? Um, I guess this is being factored in. Do you want to come up?

Well, I mean, you're right. Obviously, uh, the chips are going to become more efficient. I don't I'm not sure that's going to mean that we are going to have fewer data centers. I think that we will be better at are using them. But again, as I said before, um well, this is just one of the pieces of the puzzle.

We uh we have finally put together this connection between abandon affordable 247 clean energy and prosperity and and that connection is clear to all of us uh in most countries in the world, every country in the world I would say. So the need for that kind of energy is going to be essential.

By the way, you guys have got the brief. Thank you. I've got so many questions here, including from Ambro Zakaria. Thank you very much indeed. What role, Muhammad, does geothermal play in the energy mix of Mazda's portfolio?

And I guess not just in the GCC as well, on a global basis. You mentioned 20 plus countries. I've got even down more countries than that you're active in.

Yeah. So, so and obviously geothermal is is a great source of energy. uh but it depends you need to to develop it and build it in the right place. Um for for instance we are uh with our partners Partamina the largest geothermal platform it's called Partamina Geothermal Power. We co-invested uh with uh with them in Indonesia.

Indonesia is a great place one of the top five countries in the world for geothermal resources as you can imagine. So it makes sense for Indonesia. Um and today our platform operates uh uh more than 2 gawatt of geothermal power generation and it's also like nuclear for example Zama mentioned that is not only power but also steam. So we use the steam as well from the geothermal. So it's a it's it's a great thing in California could be very feasible.

In fact, our platform in the US, Terraen, which uh originated in California, initially when it when they started in California, they were a geothermal company.

Yeah, I've got a great question here and from Khaled and it's one I'll I'll also bring to the former DGSR of COP 28 as well because I think it's a great point as well. The current demand for AI is predicated on existing AI technologies though. Um, in fact, actually, that one's moved up. Khaled, where are you? There we go.

What does this extra demand mean for net zero ambitions and energy transition? This is a great question. When I was at COP 28 in Dubai, when I was at COP 26 in Glasgow, when I was at COP 21 in Paris, maybe I missed something. I didn't talk a lot about AI, Dan. Did we talk a lot about AI in COP 28?

I don't know if it was our focus. That's Paul from me because I didn't see this tsunami coming as well. Is it going to thwart net zero ambitions? Muhammad first and then summer.

Okay.

Is is it gonna

is it going to thwart our our ambitions and our targets to get to net zero? This extra energy usage.

It depends on the country. Right. So in the UAE we will definitely not only achieve our target will overachieve our target but potentially in other countries it might deviate away from their either from their commitment or from their target.

We'll see. and

well no I I think that unfortunately we are not in a good trajectory to meet net zero targets in any case unfortunately I was just uh in BM at at COP 30 and if you look at the the national determining contributions versus the actual achievements unfortunately as a global community we are we have much work to do some countries are doing really really well some countries are not doing so well so but I think that uh that shouldn't really deter us from as I said before I mean energy is as of absolutely essential for prosperity so what we really need to do is coordinate these strategies and these policies

um thank you and I'm I'm on target-ish so look brilliant I I have thoroughly enjoyed uh kicking off this first panel uh with you both summer Bilbal Ilon and Muhammad Jamil al- Zamahi you have been fantastic you've been incredibly generous with your time you lost have done incredibly well. I have to say, keep it going everyone. You're interactive. We will keep up the interaction. I really want to say thank you to all of you, but especially to this wonderful first panel looking at the key energy that we need certainly from clean techch and renewables to keep the AI revolution going.

Thank you all very much indeed.