The Energy/Carbon Conundrum

Susannah Streeter: Hello and welcome to Switch Your Money On from Hargreaves Lansdown. I'm Susannah Streeter, I'm the senior investment and markets analyst here at Hargreaves Lansdown and I'm with Sarah Coles, our senior personal finance analyst. So Sarah, spring does seem to be hurtling past and we have been trying to make the most of the sunshine peeking through the clouds occasionally by taking some road trips to explore the great outdoors. Although, it has been punctuated by a bit of moaning from the back seat as to whether we're there yet as usual.

Sarah Coles: That is definitely something I recognise. We opted for a road trip over the Easter break and actually the worst thing about our trip was the souvenir we decided to bring back with us which was COVID. So although we're lucky, we've got quite a mild case, but it's still not an ideal souvenir to bring back.

Susannah Streeter: Certainly isn't, well I hope you're feeling better. I'm glad you're here. Now looking ahead, we do of course have a few more bank holidays coming up. I hope you're better by then. But our car is fast becoming too small, a combination of long teenage limbs and tumultuous hormones, I think, taking its toll, but buying a new one is out of the equation right now. As we've been discussing on this podcast, the supply chain crisis means there's a long wait for a new model. So we're going to let the train take the strain with a rail card that is a lot easier on the wallet and the environment, of course.

Sarah Coles: Yes, the soaring cost of fuel is making so many of us question whether we should be taking these longer trips. Then, of course, if you choose to fly instead then you've got these big rises in the costs of flights. That's all bad enough and then you've got to consider those huge queues in the airport over Easter so there is a really good chance that more of us are going to stay closer to home this year.

Susannah Streeter: So as the cost of living crisis continues to bite, it does seem at least some of us will be taking and making more environmentally conscious decisions. But what is the impact going to be on a national and international scale? We were already undergoing a fundamental rethink about how and where we get our energy, and those deliberations have now reached fever pitch with the war in Ukraine sending the oil price rocketing as calls mount for Europe to impose an oil embargo on Russia.

Sarah Coles: On the one hand it's prompted countries all over the world to make promises about using energy more wisely and that could accelerate the move to renewable energy. But then on the other hand, there's still the need for fossil fuels in the interim so countries like the UK are planning new licenses for oil and gas exploration. So the question is whether Russia's invasion of Ukraine is going to lead to an acceleration of the transition to renewable energy, or whether it'll actually put it into reverse, and that's what we're going to be exploring on today's podcast in an episode we're calling The Carbon Conundrum. The UK's throwing its weight behind renewables like wind as well as nuclear power, but where will hydrogen fit into the mix? To find out, we have Dr Vidal Bharath, Chief Operating Officer at Bramble Energy with us. So the company's addressing key challenges in the production of hydrogen fuel cells, and I'm really looking forward to speaking more about it, Vidal.

Dr Vidal Bharath: Hi, guys, thanks for having me on today. I'm really excited to talk about this and I think it's a really key time to be addressing this now.

Sarah Coles: Thanks, Vidal. I know we're going to hear a lot more from you in a few minutes time.

Susannah Streeter: We'll also be chatting to our Lead Equity Analyst Sophie Lund-Yates about the state of play regarding the big energy giants and their energy transition, particularly given the conflict in Ukraine. Hi there, Sophie.

Sophie Lund-Yates: Hi, Susannah. Yes, definitely a lot going on in the space right now and looking forward to getting into that a little bit deeper later on.

Sarah Coles: And we'll get the low-down from our Head of Research and Analysis here at HL, Emma Wall, about how managers of ESG funds are navigating all of this.

Susannah Streeter: Environmental, social and governance has to be on their minds, but first, let's look at the energy market right now. The price of oil really shot up in the weeks following the invasion, with brent crude peaking at $139 a barrel. The invasion, of course, set off a chain reaction of events with the US banning Russian energy imports and the UK promising to phase them out by the end of the year. Europe has resisted so far, an embargo, but even so, there has been a reluctance of firms to ship Russian oil. So exports from Russia have dwindled but OPEC Plus countries, those oil producing nations, have refused to turn on the taps more fully than planned. Now, that's led to renewed worries about whether there will be enough oil to go round to meet demand and it's led to the unprecedented release of emergency oil reserves by the US and other nations to try and bring down the cost and help consumers at the pumps.

Sarah Coles: Yes of course the cost of energy has been a big driver of inflation which is such a worry right now, and that's not just for governments and central banks who've got the really tricky task of trying to keep a lid on it, but also for those of us who are wrestling with higher bills. So in a survey by the Office for National Statistics, more than 3/4 of people said the price of fuel was responsible for the higher cost of living. And among those who pay energy bills, around 4 in 10 said it was at least somewhat difficult to afford them and that's hardly surprising really when you just see how much monthly direct debits have increased overnight recently. The more positive news is that the release of energy oil reserves you mentioned has really helped push the cost of food further away from the sky high prices in early March, but prices are still up by more than 30% since the start of the year, so we're still really feeling the pain. European nations are debating whether to bring in a ban on Russian oil but in the interim, they've been urging people to use less energy. So the suggestions have been drawn up with the International Energy Agency and they include things like driving less, working from home three days a week, and turning down the air conditioning. Given that trying to find alternative suppliers is so difficult, it seems that getting people to change the way they live is seen as the most immediate way of reducing the reliance on Russian energy.

Susannah Streeter: I'm sitting here in a cosy jumper, Sarah, turn down the dial on the heating. But all of this has really put a harsh spotlight on the reliance so many countries have had on fossil fuels from Russia and the need to accelerate the green transition. But, at the same time, in the short-term, there is real concern about energy security, keeping the lights on, and the factories running if the tap to a major source of energy is abruptly turned off. That's why at the same time as promising to turn greener, governments are queasy about weaning off fossil fuels too quickly and are rapidly laying the groundwork to invest in new, liquid natural gas terminals like Germany's doing or offer new licenses for oil and gas exploration as in the UK. But, of course, the worry is that these policies will lock nations into fossil fuels for longer, meaning that they could miss their climate pledges at a time when the need to transition to clean energy is even more urgent. There is also a worry that in focusing on short-term needs, it could mean they'll neglect other renewable technologies and company's are desperate for investment to grow. The UK has pledged to reform planning rules to cut approval times for new offshore wind farms from four years to one year to speed up the transition, but at the heart of the new energy strategy is the acceleration of nuclear power adoption with plans for it to meet a quarter of electricity demand. But crucially, there's also to be a new licensing round of North Sea oil and gas projects planned to launch in the autumn to boost the UK's energy security. And although gas produced in the UK does have a lower carbon footprint than if it's imported from abroad, the worry is that the UK will rely on gas for a lot longer.

Sarah Coles: Yes, and although hydrogen power did make the UK's energy security policy, it was a lot further down the list of pledges with the aim to create up to 10 gigawatts of low carbon hydrogen production capacity by 2030. So how has that pledge gone down with those in the industry? Let's bring in Dr Vidal Bharath, Chief Operating Officer at Bramble Energy. So, can I start by asking what you make of the UK's energy security policy?

Dr Vidal Bharath: It's definitely a step in the right direction. Does it go far enough is a different question and when we look at pledges like this, we need to delineate between what is a goal and what is a strategy and certainly for us in the hydrogen space, we can see that there's a goal. But, we don't see the strategy to get there.

Susannah Streeter: Did you want to see hydrogen play a much bigger role because there is this pledge to create 10 gigawatts of low carbon hydrogen production capacity by 2030, does that fall way short of your expectations?

Dr Vidal Bharath: It certainly doesn't feel as though it's enough. Hydrogen has a massive part to play in how we de-carbonise our world. It's going to be a major part of the energy mix because of its versatility as an energy vector and it would have been great to see a bit more commitment towards how we achieve that. But as I say, we're glad to see it feature, we're looking forward to having more of it featuring going forward.

Susannah Streeter: And generally, tell me a little bit more about your business and what you do and why you think part of your operations could help create this game changer strategy for the industry?

Dr Vidal Bharath: Bramble Energy is a really innovate company which span out of Imperial College and UCL a few years ago. We're an electro-chemical devices company. We currently focus on fuel cells which is how you consume hydrogen to create electricity, but we also have different aspects to our business, such as hydrogen generation through electrolysis.

Susannah Streeter: So yes, Vidal, this whole process, it's highly expensive isn't it? The way hydrogen gas is extracted from water involves running this high electric current through water to separate hydrogen and oxygen atoms. Is it really viable to energise hydrogen then, domestically, at low cost because it's so complex?

Dr Vidal Bharath: The actual devices, the electrolysers that create the hydrogen, are actually expensive in their own right. Now, Bramble's unique technology which manufacturers fuel cells and electrolysers through the printed circuit board industry, actually is completely game changing in this area. We've found ways in which to reduce the cost of these devices significantly. Now that brings us one step closer towards existing electricity generating mechanism costs, something that the industry is desperate to have seen.

Sarah Coles: Presumably part of this process is that it requires energy in, in order to generate the electricity and presumably there is a reliance, to a certain degree, on fossil fuels at the moment. What do you see happening in order to make the process greener overall?

Dr Vidal Bharath: Today around the world, we actually use over 70 mega tonnes of hydrogen globally per year. All of that hydrogen is currently generated using grey mechanisms. That means that it's not green and it's not clean. We need to find a way to aggressively move that amount of hydrogen to green generation just to satisfy our current hydrogen demand. As we move forward into using hydrogen for electrification purposes, there'll be even more demand for that green hydrogen, and that means having to use renewable energy to generate it, such as wind and solar.

Susannah Streeter: You mentioned just now, Vidal, that you are one step closer to this really becoming a price whereby it's attractive for potentially regular electricity generation, but what steps still need to be taken before you reach that point and what kind of extra support do you need?

Dr Vidal Bharath: One of the big players in supporting an industry like ours are these targets. The goals for net zero by 2050 and different transportation sectors making their own pledges. So we're working with companies in aviation and the marine sector, as well as on the roads for haulage and transportation, and each of these sectors need to drive their own change.

Susannah Streeter: There is scepticism about the use of hydrogen because it's so volatile. Do you think you're seeing that coming from industry sectors and consumers still?

Dr Vidal Bharath: You'd be surprised how little we're getting that commentary these days. As with any fuel, it's about how you manage it and its safety case. In fact, I'm currently sat in a hydrogen vehicle doing this interview. I drive this car every day and I've never had an issue and there's lots of information out there that debunks the mysteries around hydrogen safety.

Susannah Streeter: Yes, you're parked up outside your new facility aren't you, at Crawley, in the UK. I just want to ask you a little bit more about how easy it is to attract investment right now? You mentioned you're in this hydrogen car, you mention how easy it is, but at the same time, electric vehicles are really gaining ground, a lot of adoption. Is it a harder sell to compete against other technologies right now?

Dr Vidal Bharath: I would pre-cursor that question by saying that renewable technologies are all very different and we are really facing quite the climate crisis. We actually need all types of renewable energy in order to overcome it. So we often get this argument about whether it's batteries vs fuel cells and who's going to win and Elon Musk is really waving the flag for batteries and they're definitely going to win it. The truth is, it's not really about that. It's about how we all play in the same sand pit together and it's about the different use cases. It's a horses for courses type of analogy. If you, for example, have a small city car and you only drive from your home to the shops and you've got off-street parking an electric car's brilliant. However, if you need to drive lots of miles or you need to move heavy things long distances, you absolutely need hydrogen. We often talk to people who want to make buses, for example, who are trying to electrify it and the automatic look is towards batteries. But as you understand the use cases and the drive cycles better and the utilisation of the asset, you will often find that hydrogen makes more sense for those type of applications.

Susannah Streeter: So practically, if you're running a truck, for example, you've got a big trucking business, what would you have to do to power your vehicles on hydrogen? What are the practical steps and how does it work?

Dr Vidal Bharath: One of the great things about commercial vehicles is that often, they start and end at the same point. That means that you can have a depot where you refuel. So for example, if you had a hydrogen refuelling station at your depot, you would be able to drive back to your depot after your trip, refuel your vehicle, within the same sort of timeframe as petrol or diesel and then have it back on the road doing its deliveries. If you consider that application with a battery, pure battery electric vehicle, you would have to come back and charge up your quite large battery for quite a long time. Now, as I say, that's not to say that fuel cells vs batteries again, it's just that in this particular use case, a fuel cell potentially with a hybridised battery makes the most sense.

Sarah Coles: Have you noticed any change in enthusiasm for your technology since the war in Ukraine? Has there been an acceleration of interest?

Dr Vidal Bharath: One of the things that the war in Ukraine has highlighted and, of course, a terrible event, is energy security across the world, especially in Europe. What hydrogen allows you to do is really firm up our energy security. Because we're essentially taking our wind and solar and storing it in hydrogen for deployment where we need it, whether it's in vehicles for transportation or whether it's in your home, or for portable power applications. We're not reliant on anyone else and this is actually why we see counties like China have really moved towards hydrogen. Countries that are not rich in natural resources, or what we would typically class as natural resources, are finding hydrogen a really great way to secure their energy features too.

Sarah Coles: In terms of the future then, obviously there's lots of opportunities for hydrogen, but where do you see the key challenges at the moment?

Dr Vidal Bharath: The key challenges really lay in cost and actually, in fact, it is the thing that Bramble Energy is trying to solve. It's about the cost of the electrolyser that creates the hydrogen and it's about the cost of the fuel cell that takes the hydrogen and converts it to useful electricity in the end application. Bramble Energy's technology allows us to solve that problem.

Susannah Streeter: How far away are we, do you think, Vidal, from a scenario where hydrogen is powering many more of our homes?

Dr Vidal Bharath: Great question because it's not just about your homes, it's about your lifestyles. It's already starting to power some of mine as I mentioned before with my hydrogen vehicle, however, I think what we're seeing in the last couple of years is a much greater appetite towards hydrogen as an energy vector and that is because of education. Decision-makers across different industries and sectors are now better educated to understand that it's not about just throwing more batteries into their use cases, it's about getting the right mix for their problems and their applications. So as I say, we're now talking to many more manufacturers, especially within the aviation and the haulage and the light vehicle space that require hydrogen as well as batteries.

Susannah Streeter: So it's the mix that is the way forward, okay Vidal, thank you very much, it's really great to have you on the show and get your perspectives for the future and learn more about your specific technology, so thank you.

Dr Vidal Bharath: Thanks for having me, guys.

Susannah Streeter: So let's bring in Sophie Lund-Yates now, our Lead Equity Analyst at Hargreaves Lansdown and Sophie, you've been looking at some of the listed companies operating in the energy sector. Let's start with BP, what has the Ukraine crisis meant for its ongoing energy transition?

Sophie Lund-Yates: So, to put it simply, BP has been quite brave with its approach to the future and all I mean by that really is it's allocating a lot of capital expenditure to lower carbon assets. The group spent $4.7 billion on gas and low carbon projects last year and that's just slightly below what it spent on oil and gas operations. So that gives you an idea of how seriously BP is taking this. And a step further is by 2030, the group expects to be spending $5 billion a year on low carbon energy projects, up from just $1.5 billion in 2021. And the reason that I've described this as brave is really because if the low carbon shift happens more slowly than expected, then BP is giving itself a lot less to rely on. At the same time, the new strategy calls for a 20 fold increase in renewable generating capacity, big increases in biofuel and hydrogen output, increased focus on its petrol station convenience offering and continued investment in electric vehicle charging. So meanwhile, the carbon intensity of the groups remaining oil and gas assets is also going to fall. I feel like this approach is definitely an inspiring one. Looking at it from the investment side, BP may be swapping high-returning, high-quality oil and gas fields for low returning renewables with an unproven track record. So at the moment there are a few concerns because the highly elevated oil price means things are going well, but as and when that does turn, I can't rule out a tougher time for BP.

Susannah Streeter: Exiting Russia has also been very costly for Shell hasn't it?

Sophie Lund-Yates: Precisely, and of course I can't be talking about BP without tackling Shell too. So Shell has made some big commitments and it's committed to halving emissions from operations by 2030. The issue is getting this to happen will mean massive spending on new technologies and/or restructuring of the business. Timelines and budgets for this are a bit unclear at the moment. And like I was saying with BP, Shell will be first and foremost an oil and gas company for some time to come. So while the oil price is supportive, that does put Shell in a good position but those with a more ESG motivated investment style might prefer a bit more detail on the how and when of low carbon investing.

Susannah Streeter: And what about some of the other less well-known energy companies that are out there?

Sophie Lund-Yates: So some of our listeners won't have heard of Ceres Power. The company is a UK based fuel cell technology and engineering company. The company is involved in the development and selling of this tech. So Ceres provides clean energy to businesses, homes, and vehicles. From a technical side, it's a developer of solid oxide electrochemical technology, I always have to practice saying that one a few times, which is applied in fuel cells in hydrogen. Its steel cell technology can generate power from conventional fuels like natural gas and from sustainable fuels like biogas, ethanol, or hydrogen. So this is clearly an exciting place to be, a joy to research, and even more exciting from the business angle is that revenues, after the current year, are expected to start growing at a very reasonable rate. Unfortunately, profits aren't expected to follow any time soon and the group is looking to be loss making for at least the next few years. And getting new tech like this off the ground and at scale, it just doesn't come cheap and that's the crux of the matter really. There is a strong argument to say that in today's world, companies like Ceres deserve support. I think what they do is really impressive and it may appeal to investors who can handle the risks. However, as always, I would usually prefer to see an example of sustained, organic profits before giving a total green light and that is simply from a risk and volatility perspective.

Sarah Coles: Thanks Sophie, it's really interesting to see the breadth of energy companies affected by this transition to renewables. I should also add that as always, no view is given on the present or future value or price of any investment and investors should form their own view on any proposed investment. Investing in individual companies is higher risk compared to investing in funds as your investment is dependent on the fate of one company and any investment should be made as part of a diversified portfolio.

Susannah Streeter: You're listening to Switch Your Money On from Hargreaves Lansdown with me, Susannah Streeter, and Sarah Coles.

Sarah Coles: Now I'd like to bring in Emma Wall, our Head of Investment Research and Analysis here at Hargreaves Lansdown who's unsurprisingly immersed in the world of ESG investing into which much of the renewables sector falls. Can I get you to start, Emma, by telling us a little bit about what ESG actually means?

Emma Wall: Absolutely, if you'll excuse the pun, I want to shine a bit of a light on what ESG means because at HL we believe investing with environmental, social and governance criteria in mind just means good risk management. So you want to invest in sustainable businesses, businesses that aren't going to fall foul of regulation or dwindle in consumer demand because of the way they operate. That means they're more likely to have sustainable revenues, sustainable profits and sustainable dividends. Our house view is not to take an exclusions approach, but instead is focused on best in class. So the main oil majors have vastly differing approaches to timelines when it comes to investing in renewable energy, for example. A best in class investor recognises oil and tobacco are going to make up a part of our society for years to come and what matters, is supporting those that are striving to do their best for the environment, society, and integrate the highest levels of governance. That said, there are certain sectors, known colloquially as sin stocks that for some people are just unpalatable to invest in. So it may not matter the tobacco company is pivoting away from cigarettes, for example, into vaping, or that an oil major is developing a renewable energy technology for some people, they just don't want any part of it.

Sarah Coles: So what does this mean for fund investing?

Emma Wall: Well first up, it's important to clarify that each fund's approach to responsible investing is different and you need to make sure that it's consistent with your views before you invest. So, exclusions investing, which I mentioned a bit earlier, means funds that avoid companies that do harm to society, like weapons manufacturing, tobacco companies, oil and gas. This is also called negative screening, so cutting out certain industries completely is one way to make sure that your investment portfolio is aligned with your morals, but it's important to know that it can affect performance. So for example, if you invest in a fund without exposure to the oil and gas industry, it would do well compared to unrestricted funds when the industry is out of favour but it won't do so well if the industry recovers and we have seen this recently with a commodity rally. Stewardship funds invest slightly differently, so they invest to deliver a good return alongside sustainable benefits for the economy, the environment and society. Fund managers practising good stewardship vote at AGMs, that's annual general meetings, and engage with company managers to hold them to account. ESG integrated funds systematically consider environmental, social and governance factors as part of their wider risk management processes. Sustainability funds try to make money investing in companies that are more sustainable than their competitors or that are likely to benefit from the growing need for more sustainable goods and services. Finally, impact investing goes one step further. These funds measure and report back on the positive impact that they set out to make on the environment and society. For some investors, performance may not be the only consideration and may be more willing to compromise on returns than on their ethics. ESG integrated funds and those with a more sustainable focus normally give the manager a bit more freedom to invest in a broader range of areas. They can invest where they see best opportunities and the extra diversification should mean that the fund is less volatile over the longer term.

Sarah Coles: So there's lot of different approaches that managers can take to ESG. How should investors think about integrating that into their portfolio?

Emma Wall: So most fund managers are now at least thinking about how environmental social and governance risks impact company revenues. Our fund research specifically calls out how fund managers are integrating environmental social and governance factors into these investment processes. At the fund house level, which means the fund groups that are providing the funds, the Artemis', the Jupiter, the Black Rocks, and how fair and progressive that parent company is and also, at a fund level. So we only promote the fund providers that we think are doing a great job of managing ESG risks. In particular, we think fund group Legal and General does this well, as does Aviva and Aberdeen Standard. And they all scored more than 80% in our ESG fund house dashboard. But, if you want to be more proactive in your approach, you could go a step further and invest a portion of your portfolio in an ethical fund which, as I explained, screens out companies that cause negative impact on the global society. And we like Aegon Ethical Equity in this space, they don't invest in tobacco or alcohol or any of the sins sectors I mentioned earlier. Or you could choose an impact fund that invests in companies making a positive contribution to society. This can be through green energy producers, companies involved in environmental clean up and recycling. So web sustainability focuses on nine sustainable investment themes which range from clean energy to resource efficiency and sustainable transport, education and wellbeing.

Sarah Coles: Thanks, Emma. That was a bit of a whistle stop tour of ESG but it was a great insight into investors options. I should also add that investing in these funds isn't right for everyone so you should only invest if the funds objectives are aligned with yours and you specifically need this type of investment. You need to get to grips with the specific risks of a fund before you invest and make sure any new investment forms part of a diversified portfolio. You can find out more about these funds, their charges, risks and key information documents on our website.

Susannah Streeter: Sarah and Emma, thank you very much. And now it is time for the quiz. I've been delving into some of the more unusual ways we found to power our lives since time memorial. Are you ready for this, Sarah?

Sarah Coles: I'm never ready for the quiz, I think we've established that at this stage.

Susannah Streeter: Okay, for the first one you might have to hold your nose. So back in 2014 the UK's first poo bus launch, and I'm very proud to say Bristol was the home to the first bio-bus which was powered by human and food waste. It was led by Wessex Waters renewable energy company GENeco to show how bio methane gas produced during the treatment of sewage and organic waste could be used as a sustainable alternative to traditional fossil fuels. So my question to you, Sarah, is, how much poo was needed to generate enough gas for a full tank and power the bus for 186 miles? Was it, the annual waste from five people, the annual waste from 50 people, or the annual waste from 75 people?

Sarah Coles: This famous poo bus just keeps coming up on this podcast, doesn't it. I think none of us can resist a toilet joke. But I have absolutely no idea how much it took to power the bus. So I'll go for 50 people.

Susannah Streeter: No, the answer is five people, so it goes a long way. But you can win a bonus point if you can tell me which number the bus operated under?

Sarah Coles: Now that I actually do know, so it was famously the number two, of course it was.

Susannah Streeter: Sadly, plans to roll out a fleet of number two buses went down the pan after the government turned down a funding bid. So the number two bus no longer operates. But dozens of buses running by methane do run now across the city but they're powered by food waste instead. Okay, we've had poo, let's move onto wind. So we've been using it as a form of power for thousands of years, from propelling boats floating down the Nile river back in 5,000 BC to the very first windmills which are thought to have been used for irrigation and milling in Persia and Iran. But when were the first modern day wind turbines developed to generate electricity, was it in 1807, in 1887 or in 1907?

Sarah Coles: Blimey, that's a hard one. Well I know the point at which everyone was really excited about electricity was the 1880s because that's when the electric light bulbs arrived so it can't have been then, it must have been later so I'll go for 1907.

Susannah Streeter: No, it was actually 1887, so it seems they were all having their lightbulb moments at the same time. But to give you a bit more background to all of this, the inventors vying for position of pioneering the field of wind in this year were Charles Brush, who built a wind powered electric generator in the back yard of his mansion in Cleveland, Ohio, and Professor James Blythe, the Scottish electrical engineer who built a turbine to light his holiday home in Marykirk. So although Blythe received recognition for his contributions to science, wind power was considered uneconomical and no more wind turbines were built in the UK until 1951, some 64 years after Blythe built his first prototype.

Sarah Coles: A man ahead of his time there. So clear the wind has changed a bit in the interim.

Susannah Streeter: It certainly has. Okay, we're going to stay in Scotland now as it's the location for another alternative energy source. Now we're not talking chip fat here, although given the popularity of deep fried Mars bars in some parts of the country you could be forgiven but no. Potale is used to generate biogas. It's the by-product from which manufacturing process, is it smoking salmon, weaving tartan or distilling whiskey?

Sarah Coles: Well I'm appalled to hear you maligning the deep fried Mars bar. I would say just don't knock it till you've tried it. It's a fine mainstay of the very late night trip to the chip shop, I think. I suppose in potale terms, I would love it to be weaving tartan just because I want that to be an answer to one of the quizzes but it has to be distilling whiskey doesn't it?

Susannah Streeter: Yes it does. It was an easy one there, Sarah, and you're right. Potale is a liquid by-product of the malt whiskey distillery process. Now the bioscientist founder of a company called Celtic Renewables, Martin Tangney, has developed a fermentation process to transform this ale into a biochemical that can replace some of the petrol and diesel used in cars. So there you have it, whiskey powered vehicles could be the future. Finally, how about a boogie to power a nightclub?

Sarah Coles: Tell me a bit more.

Susannah Streeter: Club Watch in Rotterdam was one of the first to bring the concept of harnessing kinetic energy and turned human moves on the dance floor into the energy needed to power the lights and music. Its sustainable dance floor was created by the company Energy Floors, which claim that dancing on each tile could product up to 35 watts of energy which can then be fed into the venue's system to help power the DJ booth and the lights. Now the concept's been taken on with another company Pavegen, selling tiles to be embedded in city streets, including Washington DC, with the movement of thousands of passers by helping keep the lights nearby on. But just how effective is kinetic energy really? So my question to you, Sarah, is how many people would it take to do 10,000 steps each on such floors to produce the energy needed to power an average Dutch house for a day. Is it 8-16 people, 80-160 people or 800-1,600 people?

Sarah Coles: I suppose on those days when the kids are running around it feels like it might be one. There's enough kinetic energy in one child to power half a county. But in reality I know it's going to be loads more so I'll go with 80-160.

Susannah Streeter: No, it is more than that, 800-1,600 people would all need to do their 10,000 steps outside to create enough energy to power a home. So that's an awful lot of people, an awful lot of steps, unless they were doing John Travolta style Saturday Night Fever moves of course. So Sarah, you are back to two correct answers, so a bit of a better performance because you've got that bonus point so a combination of poo, wind, whiskey and disco seems to suit you.

Sarah Coles: Thank you, I really don't like how that sounds at all but you gave me a bonus point, I'm not going to argue.

Susannah Streeter: Well that's all from us for this time but before we go we do need to remind you that this was recorded on 28th April 2022 and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice or a recommendation to buy, sell or hold any investment. You should seek advice if you're not sure what's right for you. Investments rise and fall in value so you could get back less than you invest and this hasn't been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research. However, HL has put control in place including dealing restrictions, physical and information barriers to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information so all that's left is for me to thank our guests, Vidal, Sophie, Emma and our producer, Elizabeth Parson.

Susannah Streeter: Thank you so much for listening. We'll be back again soon of course so if you enjoyed this podcast, particularly with the quiz, please do let us know what you think and do subscribe wherever you get your podcasts. You get a fresh new episode in your inbox as soon as it's ready. Goodbye.