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tv   Talking Business  BBC News  June 18, 2017 2:30pm-3:01pm BST

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almost 700 men and women were still battling the blaze in central portugal while hundreds more fought fires elsewhere. dozens of fires had started on saturday amid hot, dry conditions but it is just one big blaze that has claimed so many lives. 30 people were found dead in their cars having tried to feed the flames. 0ther deaths and injuries occurred along or near the same highway. translation: we were inside the house, the fire was all around us. the firefighters came to get us out because we could hardly breathe. the house must have burned for sure. 0fficials hardly breathe. the house must have burned for sure. officials were shaken by the deaths. the prime minister said it was the worst ever such tragedy in terms of lives lost. translation: this was a big tragedy. we have identified 2a victims but this could rise. all who died were concentrated
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on the road parameter. we had 156 fires around the country of which 11 are still active and two are preoccupying. several firefighters are among those seriously injured or missing. france and spain sent aircraft to back—up portugal's own effo rts aircraft to back—up portugal's own efforts but with temperatures expected to remain high, firefighters face another difficult day. a reminder of how serious the heatwave can be in some circumstances. we can go to the other side of the studio, and looking at those pictures, it must really strike you as a meteorologist. yes, it is the dry weather they have had across iberia, temperatures in the 405, and weather they have had acro55 iberia, temperatures in the 405, and the thunderstorms which don't help, because the lightning can 5park 5torm5. we have already got up to
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31.9to 5torm5. we have already got up to 31.9 to the south of london. relief close to the coast, that was a lovely picture from cornwall. sea breezes developing near the coast. another exception to the heart theme i5 another exception to the heart theme is the north west of scotland. more cloud and outbrea ks is the north west of scotland. more cloud and outbreaks of rain acro55 the far north west, but look at the temperature, 31, 32, quite easily in the south—east. that might 5park temperature, 31, 32, quite easily in the south—east. that might spark the occasional shower in east anglia, but the vast majority will be dry. 0vernight, very warm and muggy, especially in towns and cities, although we have this area cloud and patchy rain. that is a weather front, very slow moving. for much of northern ireland, eastern scotland into england and wales, sunshine, and the occasional shower, and temperatures could reach even 33 degrees tomorrow. hello.
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this is bbc news. the headlines: the leader of kensington and chelsea borough council has been defending the way the authority handled the grenfell tower tragedy. councillor nick paget—brown in5isted there was now "a coordinated relief effort on the ground". but residents say they are unsatisfied with the council's reponse. church services are taking place across the country today, to remember those affected by the blaze. the queen's speech to parliament next year is to be cancelled — to allow mp5 more time to scrutinise brexit legislation. it's been described as an unusual move. a rapidly—spreading forest fire in central portugal has killed at least 62 people and injured dozens more. many of the victims burned to death in their cars as they tried to flee the flames. the portuguese government has declared three days of mourning. now on bbc news it's time for talking business. kazakhstan, central asia's largest economy, blessed with natural resources like coal,
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oil and uranium, but when global oil prices fell, this country's fortune5 fell, too. now, it's looking to renewable energy for its next phase of growth, but how is that going to happen? welcome to talking business, and welcome to the a5tana expo in kazakhstan. this expo is all about 5howca5ing kazakhstan‘s vision for itself. by 2050, the government wants half of this country's energy needs to come from renewable energy, like wind, water and solar power. the man behind this vision, president nursultan nazarbayev.
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he has led kazakhstan for more than two decades, the capital a5tana is his brainchild. this expo is his initiative, the renewable energy vision is his plan. sure, kazakhstan has lots of wind, water and sunshine, but what it has more than anything else is oil, and coal, so how is that going to square with these plans? the question i put to kazakhstan‘s minister of energy. translation: we've created regulations to attract inve5tor5 into renewable energy and it is working. the sector is becoming more attractive for foreign investors. we've signed an agreement with one of the biggest wind and solar firms in saudi arabia. and chinese companies, all of them want to work with us. we are negotiating with them. but foreign investors tell us that the legislation is not clear, and they are worried about long—term viability of their business operation5 because of the volatility in the currency and they are
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concerned that there are not enough incentives being provided by the government for them to invest. translation: we understand that foreign companies face certain risks because they will earn their profits in our local currency. which has been volatile. we are trying to take the risks away from them by tying tariffs to the currency. so, if the local currency drops, then tariffs will rise. when we speak to local people they said that as admirable as these renewable energy targets are, how are they going to boost the economy of kazakhstan? because many people feel it is just boosting the image of kazakhstan. not the actual economy. translation: the cost for renewable energy production has fallen by 40—60% and by the year 2020 it will be even cheaper.
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we're saying within a few years the cost of renewable energy will be close to the cost of electricity which today we can generate from traditional sources. it will be competitive. there will always be pe55imi5ts, and there will be optimists and we will support them. how are you going to look after the people who are employed in old fuel economies like the coal sector and the oil and gas sector, as you make this transition? translation: the transition will happen step—by—step, each year until 2050. within this time we can diver5ify our production. profe55ion5 can be changed, lives can be changed. we don't expect it to be easy, we need to change the culture. it's important for our people to understand the benefits of using renewables for the environment. i'm in the energy best practices area. this is where foreign and domestic
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companies are showcasing their ideas and solutions for innovation in this sector, there's a reason they are here, the potential in kazakhstan is huge. but what are the realities? joining me now to talk about this is the governor of a5tana international financial centre. the managing director of energy and natural resources at the ebrd. and the ceo of ge central asia and azerbaijan. thank you forjoining us today. i want to start with you, why the urgency for kazakhstan to get to these renewable energy goals and targets? why is the country doing this? we are known as an oil—rich country and we produce 1.6 million barrels per day and we are going to double it in the next 15—20 years. but the recent events and the dramatic shift
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in our commodities prices, especially in the oil sector, even with the new technology factors, like shell oil for example, in the united states, from one side. it gives us ideas that probably the era of high prices for oil is over, from one side. and from the other side, the other di5ruptive technologies, for example, like new automobile tendencies, like driverless car5, more focus on electric energy. i think that this is a paradigm shift and everyone realises the technology is shifting and changing and disrupting. and in kazakhstan we understand it and we should be preparing very well from one side. and for the other side it was a business model that the country is changing. is that your sense, working here with the ebrd, there is a desire to move into this direction? absolutely. if i can add there is a
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big commitment here under paris to reduce emissions, and while this is an oil producing country, 70% of the electricity system here runs on coal and the power sector which is electricity and heat contributes 80% of the carbon emissions to this country, so if, in tandem with the paradigms shift, it is essential that kazakhstan will have two transition away from coal, and really gas and renewables is the only way that they can do this in a substantial material way, and i think also the sharp decline that we have seen in the cost of renewables re ce ntly have seen in the cost of renewables recently in particular solar. kazakhstan adopted in 2013 the green economy transition concept, and between then and now, so the prices have dropped almost 80%, so there is also an economic imperative to launch into this next phase. from a corporate perspective, what kind of
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opportunities are you seen in kazakhstan, given there is this pu5h in this direction? the strategy is very well thought through. it is very well thought through. it is very ambitious, it sounds today very ambitious but this is a very long—term strategy. if we continue to work towards that actively, all the participants, the government, investors, and producers, we can get there, soi investors, and producers, we can get there, so i see this as realistic. in terms of renewables in the overall development of kazakhstan, i understand that this expo will turn into a massive financial centre at onceit into a massive financial centre at once it has been completed, but how much will renewables make up as part of the overall strategy for kaza kh5ta n of the overall strategy for kazakhstan in the future? first of all it is a change in mind, in the country, the level of central government and local government, and
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the people of kazakhstan, so i think the people of kazakhstan, so i think the idea of this expo is the future of energy, and from one side this is the message to the external communities that kazakhstan understands and wants to adopt any renewable technologies in kazakhstan, and the deep place for this in central asia. —— the place. but also to say to the people of kazakhstan, a new way of thinking, about how to use the energy and how to think about the future energy. and our strategy until 2050, renewable energy reach should be 50%, which is a very ambitious goal, but i think this is like the way which we will start from now. we would like to use this opportunity in terms of this expo to create a legacy, and the legacy of expo will not just be legacy, and the legacy of expo will notjust be the physical infrastructure, but kind of the new
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understanding and new perception of kaza kh5ta n understanding and new perception of kazakhstan in terms of the development of green technologies. from your experience of overseeing the5e from your experience of overseeing these projects in kazakhstan, do you get the sense that these targets are achievable? absolutely. they are achievable, but as he said very correctly, this will lead a coalition of interests, public and private. we really need the policymakers in kazakhstan to set the framework that will make these projects viable. credible. we need the investors and to be honest i think the expo has been fantastic in that regard, just between breakfast and hey, i ran into three different investors that i would not have expected to see in kazakhstan, and it is very clear that this is going to bea it is very clear that this is going to be a message to the internal policymakers, time to get the act together, to put the frame work together, to put the frame work together, and also the external investing community to say that kazakhstan is open for business, and
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for people like ourselves, this is music to our ears. this project will be doable if you have a real kind of financial institution to implement it. talking about green credit5, emi55ion trading system, the5e ingredients will be part of the new green financial system in kazakhstan which will allow us to bring global and regional inve5tors. which will allow us to bring global and regional investors. looking into kazakhstan, what is your sense of what else needs to be done? we did oui’ what else needs to be done? we did our share what else needs to be done? we did ourshare in the what else needs to be done? we did our share in the form of legislation, as much as we can. and consulted the government. it is very important, what was said, because this strategy but this is more of a vision. the vision doesn't need to have all the steps. what has been donein have all the steps. what has been done in the last three years, in some cases it seemed to be investors, and for us as producers, slow, it a much longer term game which we are in. what i would say,
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we have a clear vision for the 3%, thatis we have a clear vision for the 3%, that is doable and that, with all of these things coming together finally, i think we will get to the finishing line. that is a good point, we will get back to our di5cu55ion point, we will get back to our discussion but now i want to show you some of the challenges that we have seen with trying to get to the renewable energies vi5ion here in kazakhstan. this is a report from outside of astana. this is what kaza kh5ta n say5 outside of astana. this is what kazakhstan says it wants power generation to look like. ma55ive wind turbines, rotating above the central asian step5, powering homes and offices and schools. this into this, that is the sound of wind going at 60 kilometres per hour and thatis going at 60 kilometres per hour and that is not even at full speed. i'm not even sure i can keep standing, i'm worried about being blown away. but this wind is one of the key
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reasons why kazakhstan i5 but this wind is one of the key reasons why kazakhstan is so well 5uited reasons why kazakhstan is so well suited for new oval energy. this wind farm is the first of its kind in the country, run by state—owned firms, and right now renewables make up firms, and right now renewables make up less than 1% of kazakhstan‘s energy production, and there is room for growth, but are unlikely to come from local companies. the main problem for the renewable energy equipment is from foreign countries, because from germany and china, we cannot buy much of them because of the financial crisis, but foreign inve5tor5 the financial crisis, but foreign investors can bring this equipment. and that is what the a5tana expo is for, the grand show that kazakhstan has put on for foreign investments. but that doesn't mean they find it any easier as i found out from california —ba5ed primu5 power which builds energy storage solutions. the local currency devalued in 2016 more
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than 65% which gives very negative effect on renewable project because all the equipment, even small bolts, are imported, and when in the investor comes there is too much uncertainty, the government did not 5et uncertainty, the government did not setup proper rules. uncertainty, the government did not set up proper rules. this is where you live? it is notjust inve5tors, many local5 also feel the strategy i5 many local5 also feel the strategy is not well thought out but few dare to speak out. this is when they sentence you to three years of no public speaking and not being able to organise a protest? this lawyer and activist tells me it is all the show. translation: they've built a few power why not everywhere? and why not cheaper so that people can actually use it? but none of this is
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changing everyday life, 80% of kaza kh5ta n changing everyday life, 80% of kazakhstan 5till changing everyday life, 80% of kazakhstan still uses coal because it is cheap, and until there is a clear road map, kazakhstan‘s lofty vi5ion may remain out of reach. so, a5 vi5ion may remain out of reach. so, as you have seen, there is still perhap5 as you have seen, there is still perhaps a long way to go before kaza kh5ta n fully perhaps a long way to go before kazakhstan fully realises some of the5e ambitiou5 goal5 kazakhstan fully realises some of the5e ambitiou5 goals and the vision it has set for itself. to discuss the challenges we can get back to our panel. i'd like to pick up with you again, in some of our travels across the country, we have consistently heard from foreign and domestic companies, looking to invest in the renewable energy sector, that it is a very noble goal but it is still very difficult on the ground. 0ne noble goal but it is still very difficult on the ground. one of the things they pointed out, the
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volatility in the currency makes it very difficult for businesses to have a firm plan about how they go about doing this autumn they want to do it but it is very challenging. what would you say to foreign and domestic companies are keen to invest? kazakhstan is very well—prepared to invest? kazakhstan is very well—prepa red to absorb invest? kazakhstan is very well—prepared to absorb any external 5hock5 well—prepared to absorb any external shocks and we have created a national fund shocks and we have created a nationalfund which shocks and we have created a national fund which consists from the oil revenues produced in kazakhstan, from one side, and we have over 62 us billion dollars. the exchange rate policy, we have co nsi5te nt exchange rate policy, we have con5i5tent monetary policy and we moved to the restructure all forms and that means a change in mind and in legislation, and we move to english, law5 in legislation, and we move to english, laws for example. from the other side, a lot of privileges and tax exemptions for renewable energy,
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and all of these key ingredients will help really to do the investment to make commercially viable. is the short-term pain worth the long—term five velotec? is it viable? absolutely, we have learned lessons from the short—term pain, one of them is the challenges of foreign exchange risk and the devaluation of the currency which was the right way in light of the shuttle reforms which were described ash structural. it caught some of oui’ ash structural. it caught some of our projects quite unawares and with some costs. the foreign exchange risk is a very valid one, especially when you have foreign investors coming in investing in a product which is really a local revenue. there are a few ways to solve this issue, and this is not unique to kazakhstan, we have seen this in many other countries. 0ne kazakhstan, we have seen this in many other countries. one of the ways is index eight, and i think the government is ready, especially if
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they move to a competitive auction process, for the next renewable projects, where they feel comfortable that they are getting the best possible market price and that there will be more open to indexing is, say, the dollar. there is also reshaping the local capital markets, this is something we are focused on. we want to do more lending and we believe that projects that are generating local currency and local revenues should be financed with local currency and this is another area we are focusing oi'i this is another area we are focusing on here. it is expensive, in terms of the tariffs in wind power compared to fo55il of the tariffs in wind power compared to fossil fuel power, is far cheaper to consistently get your power and electricity from fossil fuels. you can see the hesitation. the economy is very energy intensive, the goods produced here need electricity, and it is very cheap today, so you can't compete
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with the electricity centre and coal —based things. with wind —based production. it is a very difficult equation to convince the investor in that environment but this is going to be, as we said, going into macro directions, from one side of gradually the tariffs will be going. we have no other choice. to make sure that it fits the economy and the challenges of the economy, and at the same time, the other side, as producers we are doing everything to make it cheaper. it should notjust be like a financial comparison to 5ay be like a financial comparison to say this is cheap and this is more expen5ive. say this is cheap and this is more expensive. everyone say this is cheap and this is more expen5ive. everyone realises that it will be kind of a global requirement, to any indu5trial production, if you produce it with a not very green technology, you will be punished anyway from one side,
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thatis be punished anyway from one side, that is unavoidable. it should be done like this. on the other side, let's see inside of kazakhstan. if we are still using not very environmentally friendly technology it means a cost to the social inclu5ion it means a cost to the social inclusion and to the different diseases and the problems of health sca res diseases and the problems of health 5care5 and if you can collate everything then we will see that it i5 everything then we will see that it is really co5tly. everything then we will see that it is really costly. 7596 of the economy i5 is really costly. 7596 of the economy is based on fossil fuels and is really costly. 7596 of the economy is based on fossilfuels and people are worried about losing job5 is based on fossilfuels and people are worried about losing jobs in the coal sector and they hear this vi5ion coal sector and they hear this vision that is coming from a top—down approach, and they are wondering what does this actually mean for them and their livelihood. that is what i'm trying to get from you, to understand, how do you manage the expectations of the local people and make sure that the vision actually benefits everyone? that is why we are talking about this commitment for the long—term, we can't do it overnight. in the first
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pha5e, definitely, we have to use our competitive advantage. we have a high carbon energy here and we can use high carbon energy here and we can u5e nuclear energy and we can use the clean tech. with the coal industry, we have new destructive clea n industry, we have new destructive clean technology and we are going to use it. you energy is new opportunities, there will be opportunities, there will be opportunities for newjobs and different kinds of jobs, opportunities for newjobs and different kinds ofjobs, but there will be opportunities forjobs and what is important, the government is focused on vocational training and skills development, these economic inclusion actions which need to be taken andl inclusion actions which need to be taken and i think kazakhstan is very progressive in that way, one of the few countries that we know amongst our countries that has adopted a gender action plan, which has a very large component of skills development, access of jobs large component of skills development, access ofjobs for women. i'm confident that latimer ——
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kazakhstan will be able to make the transition. what else to you think companies need to see from the government, policymakers, to help make this vision a reality? we need to have the guarantees, the long—term financing in place, to achieve that goal, that is obvious for everyone. the most important thing is that people who understand what they are doing in the government, and it was mentioned at the beginning that this is a well thought strategy. the fact it goes ina thought strategy. the fact it goes in a evolution, notjumping through certain stages, it takes longer, but we will get there. zist—century is about efficiency. it is not about selling more things into kazakhstan, if kazakhstan has reserves technically speaking, they do not need extra capacity for a short—term or mid—term future, but at the same
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time there are ways to improve the efficiency of existing assets. thanks forjoining u5. efficiency of existing assets. thanks forjoining us. that is it for me. we are leaving you with shots of the a5tana expo. enjoy. a very good afternoon. damages have been climbing, the warmest day of the year so far, —— temperature barometer. we have got to 30 degrees and it might get higher. there is
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some relief on the coast. that's a lovely shot from st ives in cornwall. more cloud in north—west scotla nd cornwall. more cloud in north—west scotland moving into northern ireland, a weather front which has been sitting in the same place all weekend. some patchy cloud bubbling up weekend. some patchy cloud bubbling up across weekend. some patchy cloud bubbling up across southern and south—eastern areas and there is just a very small chance to the late afternoon that that could 5park chance to the late afternoon that that could spark a thunderstorm, but mo5t that could spark a thunderstorm, but most people will stay dry and those temperatures up to around 31. it will be a bit cooler on the coast. certainly northern ireland and eastern scotland, sunny 5pells, but for north—west scotland always more cloud and outbrea ks for north—west scotland always more cloud and outbreaks of rain courtesy of the weather front which will not move of the weather front which will not m ove very of the weather front which will not move very far at all as we had through the evening and overnight. low cloud for some we5tern coa5t5 but otherwise a finite. the temperatures might get no lower than
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18 or 19 temperatures might get no lower than 18 or19 in temperatures might get no lower than 18 or 19 in london and manchester. the weather front is not moving tomorrow, a bit more cloud into northern ireland and scotland, england and wales, a lot of sunshine, and a greater chance of another thunderstorm and a real contrast in the temperatures. to the north, 18, to the south is, 32, maybe 33. there is fresh air to the north of the weather front and it will start to move south on monday night, but hot air 5till will start to move south on monday night, but hot air still sitting down in the south and that will still be in place across southern areas on tuesday. everywhere to the north of the front where things will be feeling cooler and fresh and we might have the odd heavy shower. into wednesday, more of the same, pretty hot weather in the south, temperature reaching 30, cooler and fresher further north and then we have showers pushing from the west. moving quite erratically but some of
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that could be heavy, the odd rumble of thunder. northern part5 that could be heavy, the odd rumble of thunder. northern parts of the country on thursday with the fresher feel, but thursday in the south and south—east could be a very warm day with temperatures above 30 degrees once again. plenty more details on the website. this is bbc news. the headlines at three o'clock: the leader of kensington and chelsea borough council insists the local authority is helping victim5 of the grenfell fire. councillor nick paget—brown 5aid there was now "a coordinated relief effort on the ground". by by the time i got there just after 3:30am on wednesday it was clear that no one local authority in london would be able to cope with the enormous challenges facing a number of displaced residents and people affected by this. but sadiq khan say5
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people affected by this. but sadiq khan says more needs to be done to help the community. they are showing a community coming together to grave but also a community angry not only at the poor response in the days afterwards from

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