3. Lo scenario internazionale della transizione energetica 37 cheaper than what we call gray hydrogen, which is hydrogen produced from Steam methane reforming even without Ccs (Slide 7, page 57). Overall, on the next chart, please, it is now possible to imagine that we can develop power systems, which are very heavily near total reliant on variable renewables, using hydrogen as a seasonal storage device, using batteries as a short term storage device, using a range of other stories technologies, liquid air, pumped hydro, compressed air, various forms of heat and chemical storage, we think we will be able to build systems which are 75 or 85%, dependent on variable renewables and deliver electricity pretty much across the world at prices, which are fully competitive with fossil fuel based electricity production, though with big varieties in the cost between the most favorable locations which have lots of sunshine, or wind, and cheap land, and more expensive space constrained locations such as Japan, and some high densely populated countries. However, we can now see the way to these near total renewable systems. And that, by the way, is something really new in the last 15 years when I was the first chair of the UK is climate change committee in 2008. Sorry, can we just go back to that chart in 2008. If you’d asked me, then, how do we decarbonize electricity systems, we thought we would use a combination of fossil fuels plus carbon capture and storage, nuclear, and renewables, with renewables, maybe accounting for 50% of total generation. But we did not foresee then back in 2008, that renewables could account for 75 or 85%. But when the facts change, I changed my mind. And I’ve changed my mind. And this is now a real possibility. So that’s an optimistic story (Slide 8, page 58). But if we go to the next slide, the last year has been the first year 2021, where some of these estimates of the cost of renewables, wind and solar actually went up during the year. And that reflects the stresses that we are seeing all the way across the economy, which are producing inflation and supply chain challenges in all areas of the economy, wind turbines, new need steel, and the cost of steel went up, solar panel prices have gone up, because there isn’t enough poly silicon capacity. So we saw these increases last year. But we are absolutely confident that this is only a temporary effect, and that we will now see a risk, a continuation of the downward trends that we’ve seen in the past.
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