Chief Executive Officer, Dottikon ES Holding
Dr. Markus Blocher | Delegiertenversammlung vom Samstag, 18. März 2023
About Markus Blocher
In March 2023, Markus Blocher, CEO of Dottikon Es Holding, spoke at a delegate assembly where he argued against the Swiss climate protection law, describing it as "too short-term and too expensive." He stated that achieving net-zero emissions would require at least 10 to 30 billion Swiss francs per year and estimated a realistic timeline of around 55 years, suggesting 2080 rather than 2050 as a feasible target. Blocher said that when risk and uncertainty are high, diversification across technologies is necessary, and when challenges are complex, focus should be on core tasks. Blocher also discussed energy supply and geopolitics, saying that Switzerland could face a shortfall of 30 to 50 terawatt-hours of electricity by 2050. He advocated for extending the operating life of nuclear power plants to 80 years, expanding hydropower and pumped-storage plants, and developing fossil-fuel electricity generation as a bridge during the transition. He noted that geopolitical shifts may force the relocation of CO2-intensive industry back to the West. Additionally, Blocher criticized the volume of new regulations, stating that over 100 pages of new rules per day had been produced in recent years, and called for fewer laws and more reliance on markets.
Transcript (15 segments)
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Markus Blocher0:03
Good day. I understand French well, but I don't understand it. So I hear it well but don't understand it, therefore I speak German. Right. The politician will come back to about 60 terawatt hours, whereby the demanding selection of solar energy accounts for 10 to 20 terawatt hours, which corresponds to ten times the Fischpertal solar project's electricity amount in question. Then there is additional consumption through heat pumps, electromobility. If I assume 50 to 100% electricity in mobility, 10 terawatt hours from population growth, you end up with a similar number: 90 to 110 terawatt hours. That means 30 to 50 terawatt hours of electricity are missing, will be missing.
I traveled by train today, and it would be nice if we could still do that in 2050. The idea is then we import it, but our neighboring countries, especially Germany, have the same problem by then. Second point that should not be overlooked is geopolitics. The world has changed. There are two poles that are fighting for supremacy of the world order: the USA and China. And the world is splitting into a US alliance and a China alliance. The Americans have strategically declared the next 10 years as the decisive decade for establishing world supremacy and are following this strategy, as one can read daily in the newspapers.
The alternative power supply is dependent on China and volatile. 50 to 90 percent of the components of alternative power generation plants come from China today. Furthermore, regarding volatility, as previously explained, you often get electricity when you don't need it, and in the dark there is no or little electricity generation. So the electricity must be stored. When I store electricity and take it back out of storage, I get back less than I put in. This is reflected in the efficiency, which is somewhere between 30 and 85%. The most effective for the required storage are pumped storage plants, which we will come back to.
When risk and uncertainty are high, you must diversify. That means you have to bet on different technologies and use them. And the second is, when it is complicated and demanding, you should concentrate on the core tasks. I would like to remind politics: what are the core tasks? It is education, it is basic supply, and it is security. And the center-left parties have destroyed education, they have starved security to death, and now they are destroying energy supply and health. If we want to sustainably secure independence and freedom, we must take these three core tasks seriously from the start and ensure them.
We are talking today about energy, fuel, and electricity supply. Who actually determines what the right technology is? Certainly not politics. It is the market. Then for all federal parliamentarians here, I ask you to take these messages with you to Bern. In the last 15 years, you have produced an average of 100 pages of new regulation per working day. That means I have to read 100 pages every day to understand what you are generating there in Bern. Without the cantonal constitutions, it's no wonder you can't see the forest for the trees. I wish for fewer rules, more market.
The key statements that follow in the following slides are: First, fossil energy has brought a lot of prosperity and population growth. Second, population growth with increasing prosperity needs more and more energy. Third, increasing CO2 in the atmosphere leads to global warming, and we will discuss the rest today for everyone. This is knowledge, these facts are scientifically substantiated. Fourth, it is not fundamentally feasible, and finally, it not only needs about 50 years for implementation but also costs at least 10 to 30 billion Swiss francs annually.
85% of global energy consumption is fossil, as we saw earlier. This fossil energy consumption has enabled extremely strong prosperity growth and population growth, shown here as global gross domestic product. This increase in prosperity has brought a quadrupling of prosperity to almost all countries on average. Most countries today have significantly higher prosperity than they had in 1950. However, the high prosperity and the increase in population and the increasing prosperity in all regions lead to global warming. If you look at the average from 1850 to 1900, since 1970 the average temperature has warmed by one degree.
The key questions are: Who is responsible for the rapid increase? Who must reduce CO2? How and where should CO2 be reduced? If you look at CO2 emissions from fossil fuels and cement production, it shows that since 1970 the increase comes from Asia. If you compare the absolute CO2 emissions of Switzerland, it is absolutely negligible compared to the USA and China. However, if we look at CO2 emissions per capita and by two different criteria, namely CO2 emissions per capita from CO2 produced in the country (the dark graph) and CO2 emissions per capita caused by consumption in the country (the light graph), we see that we are in no way better than the USA. There is an efficiency increase seen by the decrease of both curves in China, an increase due to the rise in prosperity and production for the whole world, and we have outsourced the CO2- and energy-intensive industry and are pleased with our services that we have saved CO2.
That means in the end, CO2 emissions depend on prosperity and the degree of tertiarization. Where heavy and energy-intensive industry is located, there is more CO2 output per franc or US dollar of GDP. Political change will force us to relocate CO2- and energy-intensive industry back to the West if we want to maintain our freedom, independence, and prosperity. CO2 emissions are the product of population size, economic output, energy efficiency, and CO2 intensity. You can reduce CO2 emissions by controlling the birth rate, introducing birth control or one-child policy. I am the wrong person for that; I have seven children. But you can also control immigration, and you can tell your voters that we would like less prosperity because a lower GDP also leads to less CO2 emissions. These are political questions that I leave to politics, and for that we also need many humanities, social and political sciences that our education produces.
But the other two factors, energy demand per activity, namely energy efficiency and CO2 intensity, the CO2 output per usable energy unit, are technical questions. And here, an appeal to the Eidgenössische Direktorenkonferenz (Swiss Conference of Cantonal Directors of Education): it would be good if they promoted more mathematics, natural sciences, computer science, and technology in their education, because this problem will only be solved by these faculties.
After my predecessor, I take the liberty of listing the laws of thermodynamics. The first law of thermodynamics states that for a closed system, energy is conserved. So energy is always conserved. When I do work, however, there is reversible energy that is reversible and always has an irreversible portion. This is determined by the second law of thermodynamics, which introduces entropy, a measure of disorder in the system. Spontaneous processes are irreversible; they go in one direction and show the arrow of time. For example, heat flows spontaneously only from a warm reservoir to a cold one, and not vice versa. In other words, the creation of order in one place creates more disorder in another place in the system. That means the creation of order and structure always results in irreversible energy. That means if we want to maintain functioning societal structures with population growth and increasing prosperity, we must accept the associated entropy production. The challenge remains the sustainable organization of entropy production, or entropy efficiency. Now what does that mean in practice?
From this, the following sustainability measures are derived, according to priority: First, existing structures should be used more efficiently and for longer. Second, the recycling of existing structures should happen at the highest possible value retention level. Third, when replacing and expanding existing structures, one must rely on sustainable approaches for new structures. What does that mean in practice? Examples: First, increase the operating life of nuclear power plants to 80 years. Second, continue using today's electricity and fuel distribution infrastructure. It makes no sense to build a parallel electricity grid for electric vehicles when we have produced a lot of entropy to build the fuel supply. Furthermore, electricity generation should be done where today's electricity generators are, so that the existing distribution infrastructure can continue to be used. Third, expansion and new construction of pumped storage plants in combination with solar. These are sustainable approaches.
What does the future look like then? I have alternative electricity generators that generate electricity, and as we have heard, unfortunately not always when we need it, and sometimes too much when we don't need it. So it must be stored. Suitable for this are pumped storage plants. Switzerland is predestined for this with its mountainous landscape. Second, this excess electricity can be used to make hydrogen from water through electrolysis. Furthermore, the excess electricity can be used for CO2 capture from the atmosphere or at point sources during combustion. From the hydrogen and CO2, through biological processes and chemical syntheses, fuels and synthetic fuels, so-called e-fuels, can be produced. These can be distributed through the existing distribution network to where they are needed, and the internal combustion engines that are already in operation today can continue to run. Studies show that if this is implemented on a large scale, you will end up with a fuel price of about five to seven francs per liter. Furthermore, raw materials could be obtained that can be used in the chemical industry to produce, for example, medicines. Now this is quite demanding; it requires a major change to build this network.
Kondratiev, a Russian scientist, researched this before the war, and may he still be mentioned. He studied the long-term wave-like movements in the economy, from the steam engine to the railway to the automobile to airplanes. And he found that these new technologies always reached their peak at intervals of exactly 57 years. That remained constant. Economic growth became larger, but until they reached the peak of implementation, it was always 57 years. Similar studies have shown that basic innovations typically take about 55 years to reach their peak and become established. That means 2050 is unrealistic. 2018 would be a more feasible time horizon. Now to the costs: assuming these e-fuels at five to seven francs per liter, taking 9 kilowatt-hours per liter of energy, and the difference of the missing electricity of 30 to 50 terawatt hours, assuming today's two francs per liter for fuel, at 10 to 30 billion francs per year, that corresponds to two to four percent of today's gross domestic product. That would be a price increase of 4% every year until 2050, or in other words, a third of Swiss federal tax revenues. Conclusion: for net zero, it needs a lot of money, at least 10 to 30 billion per year. Second, it needs time, about 55 years, and a realistic time horizon is 2018.
Who brings this money? It is the economy. And who brings the innovation to accomplish this? It is the economy. So that the economy can bring this money and innovations, it needs energy, fuels, electricity. Because without electricity and energy, the economy cannot carry out its activities. Thus come the conclusions: The operating life of nuclear power plants must be secured for 80 years. Fossil electricity generation must be established so that we can bridge the electricity shortage during the transition period. Then there needs to be a massive expansion of existing hydropower. New pumped storage plants are needed. If we want to save the world, we must flood valleys. Solar and wind must be expanded, and CO2 capture and conversion to e-fuels and fuels must be advanced. So from an entrepreneurial perspective and with common sense, I say no to the climate protection law. It is too short-term and too expensive. [Applause]