WEBVTT 1 00:00:00.560 --> 00:00:07.360 You're listening to Redefining Energy. Your co hosts from Berlin Girard Reid and from 2 00:00:07.440 --> 00:00:14.080 London Lawrence Segalem Episode one or two and Ja Today on really Funding Energy, 3 00:00:14.759 --> 00:00:21.120 will go live from Brussels where we have an exceptional interview with Lio Bionbaum, 4 00:00:21.359 --> 00:00:25.239 the CEO of bion a new president of Your Electric, but first of all 5 00:00:25.320 --> 00:00:30.000 from our new partner. This podcast is powered by Axpo, an international leader 6 00:00:30.039 --> 00:00:35.119 in providing sustainable energy solutions for the future. In an ordex. AXPO has 7 00:00:35.119 --> 00:00:39.600 been a pioneer within trading and origination services for the last twenty years. Yeah, 8 00:00:39.600 --> 00:00:43.560 Axpo, we're really glad to have them as a partner and very robust 9 00:00:43.719 --> 00:00:48.520 Swiss utility. We're very glad. So back to the conversation. We've been 10 00:00:48.600 --> 00:00:54.600 invited by Christian Ruby and Bruce Douglass Emilio Lay, fantastic team of Your Electric. 11 00:00:54.719 --> 00:01:00.159 Two have a podcast recording with Lio Bionbaum and to set up. It's 12 00:01:00.240 --> 00:01:04.200 kind of strange because we're in the middle of this gigantic tour and taxi all 13 00:01:04.280 --> 00:01:07.319 and we're in a fish tank. Yeah yeah, yeah, and that was 14 00:01:07.359 --> 00:01:11.159 actually a cool fish tank because that particular day, oh my god, it 15 00:01:11.200 --> 00:01:15.719 was warm and there was nowhere conditioning anywhere except where we were. There were 16 00:01:15.719 --> 00:01:21.799 a lot of spectators but didn't put the lot speaker, so whatever we said, 17 00:01:22.359 --> 00:01:26.359 so now you have the sound. You deserve the sound because that interview 18 00:01:26.439 --> 00:01:29.719 was really fantastic. It was fun. I like Leo a lot. That 19 00:01:29.879 --> 00:01:32.680 makes it easier when you like someone right when you get onward, because he's 20 00:01:32.760 --> 00:01:37.519 very open with awesome. We were open and likewise for our American listeners who 21 00:01:37.599 --> 00:01:41.640 don't know Europe, first, well, you're Electric, which is the association 22 00:01:41.760 --> 00:01:47.120 who gathers all the production, distribution and everything of energy on the continent. 23 00:01:47.200 --> 00:01:52.599 So it's a very very powerful business organization. And Leo is also the CU 24 00:01:52.680 --> 00:01:56.159 of Eon, which is a gigantic German utility. Do you want to talk 25 00:01:56.200 --> 00:02:00.239 a bit more about Ion. Well, Ion's the biggest retail chility in Europe 26 00:02:00.239 --> 00:02:07.560 in terms of customers, and it's also a distribution grid operator across the continent, 27 00:02:07.680 --> 00:02:10.080 mainly in the German markets, but also in other markets as well. 28 00:02:10.120 --> 00:02:14.719 So it's a really interesting business it is. And of course, so what 29 00:02:14.759 --> 00:02:17.400 we're going to talk about with Leo, Well, first we're going to start 30 00:02:17.400 --> 00:02:23.159 at energy crisis with Ukraine and how did they react on a day to day 31 00:02:23.159 --> 00:02:27.439 basis, because some energy Govenny did very well out of it and some very 32 00:02:27.479 --> 00:02:31.159 poorly, and I would say beyond it pretty well. And then we'll come 33 00:02:31.199 --> 00:02:38.719 around what is their three main access of work in the coming years? Well, 34 00:02:38.719 --> 00:02:42.280 listen, why don't we listen to the interview. Welcome to really finding 35 00:02:42.360 --> 00:02:46.520 Energy life from brusself with a fantastic guest, Lil bim Baum. My pleasure, 36 00:02:46.560 --> 00:02:51.159 colleagues, Nice to be here. You got to see again absolutely pleasures 37 00:02:51.159 --> 00:02:53.800 on my side. Long time since we met in this group exactly, so 38 00:02:53.840 --> 00:02:58.199 it was two years ago you came on our podcast and since a lot of 39 00:02:58.240 --> 00:03:01.439 things have happened in the energy sector. What's your first question? Yeah, 40 00:03:01.439 --> 00:03:05.800 I'd love to hear your reflections on last year, actually the whole crisis that 41 00:03:05.840 --> 00:03:09.120 we've come true, and how you see things going forward? Actually a short 42 00:03:09.199 --> 00:03:14.560 question for the beginning. So first, how does one look at the last 43 00:03:14.599 --> 00:03:17.520 year? It's horrific. We're going to talk about what it meant for the 44 00:03:17.639 --> 00:03:22.919 energy sector, but in reality it's a tragedy what we have observed last year. 45 00:03:23.680 --> 00:03:28.240 Now, in every negative, there's something positive. Europe has risen up 46 00:03:28.240 --> 00:03:32.199 to a certain extent to this challenge which was inflicted upon us by the Russian 47 00:03:32.199 --> 00:03:39.199 aggression against Ukraine. And we have shown in a surprising way, first that 48 00:03:39.639 --> 00:03:44.520 Europe is the solution and not the problem. And so in that sense, 49 00:03:44.599 --> 00:03:49.319 the first learning that we got together, we are stronger, and only together 50 00:03:49.360 --> 00:03:53.039 can we actually manage challenges like the one which is being thrown into our direction 51 00:03:53.080 --> 00:03:58.039 by the war. But it's the same is true for climate action. Also, 52 00:03:58.319 --> 00:04:00.560 only together can we sort out the time election. So maybe it's even 53 00:04:01.240 --> 00:04:05.159 you know, like the last year is even a test run what we should 54 00:04:05.240 --> 00:04:10.080 be able to do. So the last year was a test outcome. We 55 00:04:10.120 --> 00:04:14.360 are now much better prepared than we have been last year. Last year in 56 00:04:14.400 --> 00:04:17.920 April March April, we didn't have processes, we didn't have systems, we 57 00:04:18.000 --> 00:04:24.319 had an empty storage, we didn't know how to communicate. Partially, we 58 00:04:24.360 --> 00:04:28.160 didn't have the legislation which we needed, so it was all in flux. 59 00:04:28.560 --> 00:04:31.879 This year we have all of that. We have better storage, established processes, 60 00:04:32.000 --> 00:04:35.639 communication, etc. So I think we are much better shaped than last 61 00:04:35.720 --> 00:04:40.959 year. So I'm optimistic that we can manage the situation going forward. Now, 62 00:04:41.279 --> 00:04:46.000 what has also happened is we only manage the crisis. We didn't structurally 63 00:04:46.079 --> 00:04:48.560 solve it. Now this is the task now going forward, and this is 64 00:04:48.560 --> 00:04:53.199 really what we need to discuss. How do we long term really solve the 65 00:04:53.240 --> 00:04:56.199 issue and not only manage the crisis for one year, for two years and 66 00:04:56.240 --> 00:05:00.000 for three years. But again, the progress since last year is remarkable, 67 00:05:00.040 --> 00:05:02.879 Bill, and we can take encouragement from that in the way that we have 68 00:05:02.959 --> 00:05:09.000 seen corporation, which I didn't believe before. So as a president of your 69 00:05:09.040 --> 00:05:15.279 electric you have all your members, and some has done extremely well and some 70 00:05:15.399 --> 00:05:17.839 have suffered a lot and have been bailed out. So it is a bit 71 00:05:17.839 --> 00:05:23.480 of a redistribution of the cards. And of course, Ion, you're probably 72 00:05:23.519 --> 00:05:30.160 gonna tell us if you find yourself stronger after the crisis, what's your interpretation. 73 00:05:30.800 --> 00:05:34.879 One should not be too arrogant. In such a crisis. You also 74 00:05:34.959 --> 00:05:39.480 need luck, and we were lucky, for example with the warm winter. 75 00:05:39.959 --> 00:05:45.040 The warm winter actually meant that we managed to get through without spikes, cold 76 00:05:45.079 --> 00:05:47.839 spells and so on, which would have been a real commercial disaster this year. 77 00:05:47.920 --> 00:05:51.759 So one should be careful to say I did fine, but Ion did 78 00:05:51.800 --> 00:05:57.160 fine. We are actually getting out of this crisis, I believe stronger than 79 00:05:57.199 --> 00:06:02.240 we went into the crisis, but only because I think what we can take 80 00:06:02.279 --> 00:06:08.279 credit for is that we started earlier. We started crisis meetings, daily crisis 81 00:06:08.279 --> 00:06:13.959 meetings in November twenty one, so four months before the war broke out, 82 00:06:14.040 --> 00:06:16.319 because we felt something is happening. Can I say just that because of the 83 00:06:16.399 --> 00:06:19.240 changes in the gas markets or is it because of the fact that you sort 84 00:06:19.279 --> 00:06:23.839 of got word from Russia UKRAINO. Because we looked at the markets, we 85 00:06:23.959 --> 00:06:27.759 knew as much as anybody else, So we didn't have any insight that were 86 00:06:27.800 --> 00:06:30.439 secretly conveyed to us. We had the same perspective. And then we start, 87 00:06:30.480 --> 00:06:34.680 oh, something is happening. We need to prepare And if something is 88 00:06:34.680 --> 00:06:39.639 happening, all that matters is speed. So we set up a crisis team 89 00:06:39.680 --> 00:06:43.120 and we said we need now to get into a different discussion mode and different 90 00:06:43.160 --> 00:06:47.839 reaction mode, different agility, and in the end, speed was what really 91 00:06:47.879 --> 00:06:53.199 made the difference when the crisis really materialized. The second thing we said is 92 00:06:53.600 --> 00:06:58.240 speed really means we need to be able to take decisions, I mean fundamental 93 00:06:58.279 --> 00:07:01.240 decisions on a daily basis. It can't be that somebody makes a proposal. 94 00:07:01.279 --> 00:07:03.879 It goes to the board and then it goes to the risk committee, and 95 00:07:03.879 --> 00:07:08.600 then four weeks later we react if the crisis materializing, we need to be 96 00:07:08.680 --> 00:07:12.120 faster. So that is the second thing we did. And then where the 97 00:07:12.319 --> 00:07:15.639 two actions which really made the difference for Ian on the commercial side. And 98 00:07:15.680 --> 00:07:19.680 then in the end we did much more things right than wrong. And every 99 00:07:19.680 --> 00:07:24.240 mistake is triple digit million, but everything you do right is also triple digit 100 00:07:24.279 --> 00:07:28.480 million, since we did more positive than negative. In the end, actually 101 00:07:28.480 --> 00:07:31.480 our results were strong, so are we getting our stronger? I believe the 102 00:07:31.600 --> 00:07:35.639 good companies must have an aspiration to get out stronger out of a crisis. 103 00:07:35.639 --> 00:07:40.079 For them, a crisis is an opportunity and should be an opportunity. For 104 00:07:40.199 --> 00:07:43.680 weaker companies who are not set up, the crisis will actually make them even 105 00:07:43.680 --> 00:07:46.399 weaker. Can I ask them just to look at Ian. You would have 106 00:07:46.399 --> 00:07:50.000 had learnings from us, And I suppose my question is, really, do 107 00:07:50.319 --> 00:07:56.560 those learnings bring about changes in your strategy going forward or you're just saying no, 108 00:07:56.680 --> 00:08:00.319 it's all about the same. We'll just keep executing what we planned before 109 00:08:00.360 --> 00:08:03.879 the crisis. The big learning is speed. So the second learning is if 110 00:08:03.879 --> 00:08:07.560 you have a weakness and you tolerate it. When times are good, that's 111 00:08:07.560 --> 00:08:11.439 fine. Probably the weakness won't hurt you a lot. But when the crisis 112 00:08:11.519 --> 00:08:16.519 hits you, a weakness is expensive. So if you need to do something, 113 00:08:16.800 --> 00:08:18.360 just get it done. The faster you get it done, the better, 114 00:08:18.800 --> 00:08:22.800 and if you get it done before the crisis, even better. So 115 00:08:22.920 --> 00:08:26.519 that was my second learning. So we had some decisions whereas, ah, 116 00:08:26.639 --> 00:08:31.000 we should have done that earlier. We knew that this was not our strong 117 00:08:31.120 --> 00:08:35.480 but somehow other things. So don't tolerate weaknesses and be fast. So those 118 00:08:35.519 --> 00:08:41.200 are my two big learnings from the crisis. On the strategy, no, 119 00:08:41.639 --> 00:08:46.159 actually, what was our capital market story which we presented actually briefly before we 120 00:08:46.200 --> 00:08:50.279 started our crisis meetings. It was we are looking at a decade of growth 121 00:08:50.519 --> 00:08:56.080 which is driven by the quest for sustainability or decombanization, and it will require 122 00:08:56.159 --> 00:09:01.320 full digitalization of all the systems and processes. This story is completely intact. 123 00:09:01.519 --> 00:09:07.360 Actually it's even more true than before, and we have seen the requests and 124 00:09:07.440 --> 00:09:11.399 the requirements for investments going up even more. Can I ask you one other 125 00:09:11.440 --> 00:09:13.039 question, just on the strategy, which is the one change that I think 126 00:09:13.039 --> 00:09:18.600 that's to come about? Sarah Laurent. The one change I think that's come 127 00:09:18.639 --> 00:09:22.679 around, which is that now I think this energy transition has become about the 128 00:09:22.679 --> 00:09:28.720 customer. So the question I'd ask is whether you're customer centric enough or do 129 00:09:28.759 --> 00:09:31.559 you have to change the way you do things. How do you feel about 130 00:09:31.559 --> 00:09:35.759 that relationship to the end customer. Now we have seen now in the last 131 00:09:35.200 --> 00:09:41.159 months, maybe an increasing discussion what is it that customers really can manage, 132 00:09:41.200 --> 00:09:45.759 can support? How much volatility can they be exposed to? And that is 133 00:09:45.799 --> 00:09:50.399 something that needs to be on our mind. But the reality is in the 134 00:09:50.480 --> 00:09:54.320 crisis, we felt as long as we really went the last mile to explain 135 00:09:54.559 --> 00:10:00.720 what is happening, explain why we are struggling, customers really accepted it. 136 00:10:01.039 --> 00:10:05.440 We were actually blamed less for high prices with the price level of twenty two, 137 00:10:05.480 --> 00:10:11.159 then we were blamed for much lower prices years before. So to a 138 00:10:11.200 --> 00:10:16.600 surprising extent, customers tolerated the outcome of the crisis that was number one, 139 00:10:16.519 --> 00:10:22.240 and they even gave us credit for us trying to manage it, despite the 140 00:10:22.279 --> 00:10:24.879 fact that it's a real hardship for many customers. But for example, if 141 00:10:24.879 --> 00:10:30.799 you want, we hired an additional five hundred call agents just to explain the 142 00:10:30.879 --> 00:10:33.720 stuff that we are doing, because the call volume which we got was just 143 00:10:33.960 --> 00:10:39.840 increasing massively despite also the digital channels increasing massively, so they need to communicate 144 00:10:41.000 --> 00:10:46.440 is massive. But if you do that, then actually customers understand that obviously 145 00:10:46.480 --> 00:10:50.360 a crisis, a global crisis, cannot just be weathered off by a private 146 00:10:50.360 --> 00:10:54.320 company. So you took about prices, and of course for ten years were 147 00:10:54.600 --> 00:11:00.600 market prices anywhere between fifty and seventy Europe and making one hour. Everybody thought 148 00:11:00.639 --> 00:11:03.519 that would be the end of historian. Of course, last August we climbed 149 00:11:03.519 --> 00:11:09.360 to watch out one thousand euros eleven hundred, and of course, all of 150 00:11:09.360 --> 00:11:15.279 a sudden the politician starts getting very agitated or right or wrong, and they 151 00:11:15.360 --> 00:11:20.080 want to reform the market. And we've seen everybody coming with their brilliant idea, 152 00:11:20.240 --> 00:11:26.120 and somehow we are into thinking about an energy market reform because of course, 153 00:11:26.240 --> 00:11:31.799 why should the gas be the marginal pricing? And of course con webbles 154 00:11:31.840 --> 00:11:35.240 and blah blah blah. I mean we heard a hundred times so and here 155 00:11:35.279 --> 00:11:39.799 I'm talking about your electric and your position in general, what do you want 156 00:11:39.840 --> 00:11:43.919 to say about all the attempts right now? At energy market design reform. 157 00:11:45.799 --> 00:11:48.679 I'll try to answer without now getting into the details of the daily discussion, 158 00:11:48.720 --> 00:11:54.360 which is then outdated by tomorrow. So Number one, the European market has 159 00:11:54.399 --> 00:11:58.440 saved us if you wouldn't have had a European market, right. The French 160 00:11:58.559 --> 00:12:01.919 got their tricity from the European market, which they didn't have. The Germans 161 00:12:01.919 --> 00:12:07.039 got the access to infrastructure which they didn't have. The Eastern Europeans were depending 162 00:12:07.039 --> 00:12:09.960 on us anyway on the West, supplying to the East, and so the 163 00:12:11.000 --> 00:12:15.480 European market was key. The first insight is we need to preserve the European 164 00:12:15.519 --> 00:12:18.039 market now. The second comment at prices. If one thousand, one hundred 165 00:12:18.120 --> 00:12:24.879 or whatever the prices are, the market will break apart because that's an unsustainable 166 00:12:24.919 --> 00:12:28.240 price level. I can't hatch at one thousand euros Permega one hour because I 167 00:12:28.240 --> 00:12:33.600 would just be locking in positions which I couldn't charge to my customers. You 168 00:12:33.639 --> 00:12:37.360 know, the debt would rise to a level which would be impossible to bear 169 00:12:37.399 --> 00:12:41.879 for all the retailers. So if that price level would have persisted, the 170 00:12:41.960 --> 00:12:46.279 market would have broken apart. Therefore, number three is clear that the discussion 171 00:12:46.320 --> 00:12:52.440 around the market design reforms or were started and triggered by this. It got 172 00:12:52.600 --> 00:13:00.279 luckily into and let me call it better environment prices went down significantly in September, 173 00:13:00.360 --> 00:13:05.399 and so we got now a reasonable consultation what could we do to amend 174 00:13:05.559 --> 00:13:09.639 the market to make it stronger going forward? And we got a very reasonable 175 00:13:09.799 --> 00:13:16.080 consultation by the EU Commission exactly in that direction. And fourth, the Commission 176 00:13:16.159 --> 00:13:20.360 then made a reasonable proposal for amendments. We as your electric set, the 177 00:13:20.399 --> 00:13:24.639 glasses are full. That makes sense. And fifth, this is never the 178 00:13:24.879 --> 00:13:28.519 end of the story in Europe because then even if the proposal is reasonable, 179 00:13:28.600 --> 00:13:33.279 then the trilogue starts, the EU Parliament comes in, and now we're in 180 00:13:33.320 --> 00:13:37.639 the middle of seeing whether the final outcome of this whole process will really strengthen 181 00:13:37.639 --> 00:13:43.159 the market or will introduce elements which are detrimental for the development of the market. 182 00:13:43.519 --> 00:13:48.399 Both are actually still possible outcomes. We will see how this works out 183 00:13:48.399 --> 00:13:52.279 in the next weeks. We're going to talk about the future now, and 184 00:13:52.399 --> 00:13:56.480 you just published a manifesto. Nobody talks about manifesto. I mean Colt Marsi 185 00:13:56.600 --> 00:14:03.159 the manifesto at some point, okay, so whatever, okay, whatever, 186 00:14:03.320 --> 00:14:07.279 But if people talk about my manifesto in one hundred and fifty years, I 187 00:14:07.320 --> 00:14:13.679 would be positively surprised. Can you summarize the key points you see in that 188 00:14:13.799 --> 00:14:18.919 manifesto because there is okay, there is the classic thing about humanizations, stabilizations 189 00:14:18.919 --> 00:14:20.879 on, but there are some new things which have a really interesting, a 190 00:14:20.919 --> 00:14:26.639 bit innovative. So let's talk about what's new. Yeah, and maybe just 191 00:14:26.720 --> 00:14:30.159 to start, we had a strong focus, as you're electric, always on 192 00:14:30.240 --> 00:14:35.759 the story that electrification is really the path forward and the solution, and so 193 00:14:35.799 --> 00:14:41.000 we had previous manifestos which were really emphasizing this point electrification is the solution. 194 00:14:41.720 --> 00:14:46.840 Now, what we are saying in this manifesto is three things. Number one 195 00:14:46.039 --> 00:14:52.559 is security of supply is back on the agenda. It was not considered a 196 00:14:52.679 --> 00:14:56.000 critical target or whatever. It was taken as a given, and we are 197 00:14:56.039 --> 00:14:58.600 saying, no, it's not a given. It's back on the agenda. 198 00:15:00.080 --> 00:15:05.600 And electrification done in the right way is one way of producing the securitive supply 199 00:15:05.000 --> 00:15:09.679 and the decombonization. So we should just accelerate on the pass which we have 200 00:15:09.799 --> 00:15:15.720 been on. But we should be mindful of securative supply as an issue and 201 00:15:15.799 --> 00:15:18.320 not just take it for granted. So there's number one, and that requires 202 00:15:18.360 --> 00:15:24.440 also appropriate market design, long term incentive signals, all the good stuff which 203 00:15:24.440 --> 00:15:30.320 we need for the development of an electrified future which includes much more renewables, 204 00:15:30.360 --> 00:15:33.960 etc. So there's number one. Number two we said, we have to 205 00:15:35.039 --> 00:15:39.799 be clear that the new bottleneck is grids are the new permitting. The infrastructure 206 00:15:39.919 --> 00:15:45.279 on which this energy transition happens needs to be strengthened. We are going to 207 00:15:45.360 --> 00:15:50.799 hit constraints if we accelerate immobility, which immobility happens in the infrastructure, in 208 00:15:50.799 --> 00:15:56.039 the low voltage infrastructure. Actually, if we actually electrify heat now massively as 209 00:15:56.080 --> 00:16:02.559 we are discussing, if we integrate mass safely more renewable at a speed which 210 00:16:02.639 --> 00:16:07.000 is completely unprecedented, So we need to make sure that we actually provide the 211 00:16:07.039 --> 00:16:11.919 infrastructure for that. And that is not a given anymore because we have eaten 212 00:16:11.039 --> 00:16:15.559 through the reserves which we had in the infrastructure. So we have second focus. 213 00:16:17.000 --> 00:16:21.919 We really need to look at a much more strength and fully digitized infrastructure. 214 00:16:22.360 --> 00:16:25.960 And the third point is we said we need to look at fairness, 215 00:16:26.600 --> 00:16:30.919 and we consciously chose fairness because you know, affordability that becomes a price discussion 216 00:16:30.960 --> 00:16:34.720 competitiveness becomes a difficult discussion between sectors. We said, no, it's about 217 00:16:34.759 --> 00:16:41.720 the fairness. There's a distribution of burden and opportunities between investors, customers and 218 00:16:41.759 --> 00:16:45.000 for example, the state. If the state takes some risks, and we 219 00:16:45.039 --> 00:16:49.639 need to make sure that we get a fair distribution to make viable businesses so 220 00:16:49.679 --> 00:16:53.720 that the market which we want to work really can work. And it's not 221 00:16:53.919 --> 00:16:59.320 just about protecting vulnerable customers. That's part of it, but it's also about 222 00:16:59.360 --> 00:17:04.000 protecting investors so they keep the confidence and continue to provide huge amounts of capex. 223 00:17:04.599 --> 00:17:10.119 It's about the state, which shouldn't provide free lunches. But on the 224 00:17:10.119 --> 00:17:14.279 other side, you know, like needs probably to take some of the risks. 225 00:17:14.319 --> 00:17:17.759 And so those are the three elements. Securitive supply is back on the 226 00:17:17.799 --> 00:17:22.880 agenda, pushes the old agenda of electrification, stronger and more digital infrastructure and 227 00:17:23.000 --> 00:17:27.160 a fair deal for all parties that need to deliver. Can I jump on 228 00:17:27.240 --> 00:17:32.319 digitalization because the last time we spoke, I mean, you really got emotional 229 00:17:32.359 --> 00:17:37.519 about smart meters, right about smart meters in Germany, to be more exactly 230 00:17:37.559 --> 00:17:40.640 smart meters in Germany. But I think one of the other reflections I have, 231 00:17:40.680 --> 00:17:42.920 and I see all these minus prices in the markets almost every second week. 232 00:17:42.960 --> 00:17:45.720 Now you're sort of, oh, we need flexible tariffs in this we 233 00:17:45.799 --> 00:17:49.400 need much more flexibility. And that flexibility for me, is about digitalization. 234 00:17:49.440 --> 00:17:52.839 But that's how i'd see it, lot, how you'd see it, and 235 00:17:52.920 --> 00:17:57.799 how important you see that. Absolutely, we talk a lot about capacity mechanisms. 236 00:17:59.279 --> 00:18:03.839 I would say we need flexibility mechanisms. Yeah. Yeah, capacity is 237 00:18:03.880 --> 00:18:08.960 like power stations. So I think flexibilities demand responds demand side management. It's 238 00:18:10.039 --> 00:18:14.920 integration. And it's absolutely clear if you think about it. Millions of participants 239 00:18:14.960 --> 00:18:18.440 participating in this market bidding not bidding. We can do that only if our 240 00:18:18.519 --> 00:18:26.039 systems are fully transparent at any moment in time, and if we have them 241 00:18:26.119 --> 00:18:30.599 under full digital control. And so anybody who just believes that we can even 242 00:18:30.720 --> 00:18:36.319 run manually the systems of the future, no way, no way. So 243 00:18:36.759 --> 00:18:42.920 digitization is an absolutely requirement for our let's call it flexibility, reserve markets, 244 00:18:44.000 --> 00:18:45.960 or whatever you want to call it. We like it. We like it. 245 00:18:45.359 --> 00:18:49.160 We like it a lot. To pursue on the same theme, there 246 00:18:49.279 --> 00:18:55.119 is a concept which we didn't have two years ago. Is that twenty four 247 00:18:55.240 --> 00:19:00.400 seven trust ability, energica, granularity. Everybody has a different name for that, 248 00:19:00.480 --> 00:19:03.160 but it's the it's the capacity to track every electrons, where they come 249 00:19:03.279 --> 00:19:07.200 from, where they we're emitted. So when all those companies say oh, 250 00:19:07.240 --> 00:19:11.200 yeah, we're super green, they need to prove it not once a year, 251 00:19:11.759 --> 00:19:18.000 but by the hour. How do you see that movement evolving. Well, 252 00:19:18.039 --> 00:19:22.039 that's another one again which you can only solve a view digitize the whole 253 00:19:22.079 --> 00:19:26.400 thing. And we have such efforts in the automotive industry, you know, 254 00:19:26.480 --> 00:19:30.640 where they want to then be able to trace their supply chain. Katina X 255 00:19:30.759 --> 00:19:34.799 is a big effort supported by the German government and the cow industry and SAP 256 00:19:36.000 --> 00:19:40.519 and others. And we have the same requirements here. So we as Eon, 257 00:19:40.799 --> 00:19:45.359 we're trying with an industry consortia to actually set up something exactly like that 258 00:19:45.680 --> 00:19:48.920 voluntary carbon credits because there, for example, we need to be able to 259 00:19:49.039 --> 00:19:52.799 establish a standard and then to show and improve that standard. So that is 260 00:19:53.240 --> 00:19:57.400 just another requirement as are like, it's not that our task is getting more 261 00:19:57.400 --> 00:20:04.599 difficult by the day. On top the request for transparency etc. Is increasing, 262 00:20:04.680 --> 00:20:10.480 So just one more reason to use as much as digitization AI and whatever 263 00:20:10.519 --> 00:20:15.559 you can get as possible. It's some time to conclude job. I'd love 264 00:20:15.599 --> 00:20:19.319 to just talk about mobility and if I look at mobility, for me, 265 00:20:21.160 --> 00:20:25.160 what we really need to do is make sure as much intelligence as possible in 266 00:20:25.599 --> 00:20:29.319 the whole mobility charging area. And you've got vehicle to grid coming etc. 267 00:20:29.960 --> 00:20:32.200 And you've made a big push in this area. So I'd love to hear 268 00:20:32.240 --> 00:20:36.160 your views on it and how you see the future. In general terms, 269 00:20:36.279 --> 00:20:40.519 that's one of the sources of flexibility that we're getting. It's clear if you 270 00:20:40.559 --> 00:20:45.000 get immobility in that is one source of flexibility, and for example, is 271 00:20:45.000 --> 00:20:48.200 one of the big debates which we're having right now in Germany. So do 272 00:20:48.240 --> 00:20:52.480 we need, for example, in the grid to provide whatever requirements in power 273 00:20:52.519 --> 00:20:56.960 at any point in time at any place or can we actually control and steer 274 00:20:56.039 --> 00:21:00.440 that and then maybe do trade offs in the cap investments that we are making. 275 00:21:02.279 --> 00:21:07.240 Personally, I think this flexibility which we need as grid is surprise for 276 00:21:07.319 --> 00:21:11.079 a fast rollout of the energy transition. The fast that we move, the 277 00:21:11.160 --> 00:21:15.359 more compromises we need to make. And if then anybody says I don't accept 278 00:21:15.359 --> 00:21:18.160 any bottleneck at any point in time, anywhere. Then it just means we 279 00:21:18.200 --> 00:21:22.400 need to invest like hell at the speed which we can't cope with. So 280 00:21:22.519 --> 00:21:26.240 flexibility, in the end will be the solution for that, not only for 281 00:21:26.279 --> 00:21:29.680 a security of supply, but also for the speed at which we can drive 282 00:21:29.720 --> 00:21:34.240 the energy transition. So flex is really a word which has multiple angles under 283 00:21:34.240 --> 00:21:37.920 which you have to actually look at it. That's exactly what Jigasa said on 284 00:21:38.079 --> 00:21:42.319 IPIS at one hundred. If we said yes to everybody, we would need 285 00:21:42.359 --> 00:21:48.119 to invest three times, and I believe we can invest one point eight times, 286 00:21:48.160 --> 00:21:52.440 which is already going to be a lot. But we compromise us that 287 00:21:52.519 --> 00:21:56.039 we need to be done because we can't see yes to everyone. Just share 288 00:21:56.079 --> 00:22:00.400 one experience. I did a field visit in one of my great areas, 289 00:22:00.720 --> 00:22:04.559 and we discuss that we get actually a bigger change in the medium voltage than 290 00:22:04.599 --> 00:22:07.200 in the low voltage. Yes, in low voltage, we get the vault 291 00:22:07.240 --> 00:22:11.799 boxes and so on, and we get all these new connections and the rooftop 292 00:22:11.839 --> 00:22:15.279 PV. It's all fine, But what really changes is all, I mean 293 00:22:15.319 --> 00:22:22.000 really all the medium voltage transformers. Why because right now no customer has any 294 00:22:22.200 --> 00:22:29.279 incentive to actually optimize for the capacities requesting. So if we have somebody in 295 00:22:29.319 --> 00:22:33.359 Germany under the current regulation who's building an apartment block, he just puts on 296 00:22:33.519 --> 00:22:37.119 every parking spot a charger, and then he says, I need twenty two 297 00:22:37.200 --> 00:22:40.720 kV for every charger, and that is a new medium voltage transformer that we 298 00:22:40.759 --> 00:22:44.680 need. Then, so actually we need to get smarter because otherwise we will 299 00:22:44.799 --> 00:22:48.039 really run into trouble. The same is true, by the way, like 300 00:22:48.119 --> 00:22:52.839 the same transformer who's supplying to one thousand people, let's say a megawat or 301 00:22:52.880 --> 00:22:56.440 so, and then we put a small transformer there. When they all built 302 00:22:56.480 --> 00:23:00.279 their rooftop PV, the same transformer in one direction still needs one mega what 303 00:23:00.440 --> 00:23:03.440 in the other direction needs six mega what. And so all of a sudden, 304 00:23:03.519 --> 00:23:07.759 it means we need to replace every single asset already today. If we 305 00:23:07.880 --> 00:23:11.599 now do that in a reckless way, then actually we'll just not be able 306 00:23:11.599 --> 00:23:15.240 to cope up with the speed that is developing. So it's essential. Flexibility 307 00:23:15.319 --> 00:23:21.799 and smart changes of the system are crucial. Can I ask the governments and 308 00:23:21.880 --> 00:23:25.759 regulators listen to here. Let's say we have good dialogues and then we hope 309 00:23:25.759 --> 00:23:30.200 in the end that they listen more often than they don't listen. Well, 310 00:23:30.240 --> 00:23:34.160 that's an excellent way to conclude. Leo, thank you so much for coming 311 00:23:34.160 --> 00:23:37.759 on our show. You're a great guest, and we thank you Electric in 312 00:23:37.799 --> 00:23:45.079 this beautiful to run taxi house to let us this great place to record because 313 00:23:45.079 --> 00:23:51.720 we are the only guy with acclimatization here. Yeah, it has been a 314 00:23:51.720 --> 00:23:55.000 pleasure. Thanks well, John. I would love all our interview to be 315 00:23:55.039 --> 00:23:57.680 as smooth as this one. And it was live, and it was live, 316 00:23:57.839 --> 00:24:02.400 yeah, which is a tough exercise. It is because one of the 317 00:24:02.440 --> 00:24:06.559 things we pride ourselves with is that we want the people that were interviewing to 318 00:24:06.839 --> 00:24:08.839 be open with us. And sometimes they've been in the past too old. 319 00:24:10.599 --> 00:24:12.680 But the advantage is being that because we're not live, we can take out 320 00:24:12.680 --> 00:24:18.319 what they've said. If they've said something which is goes against you know what 321 00:24:18.319 --> 00:24:21.720 I legal, that's something we can take an out and we will say no 322 00:24:21.839 --> 00:24:25.240 more not. We've had a few incidents, but you have to be careful 323 00:24:25.319 --> 00:24:27.079 and Ian, as I said, I know you a many years at this 324 00:24:27.119 --> 00:24:30.559 point in time. So it's it's a really lovely conversation and it was great, 325 00:24:30.960 --> 00:24:33.920 excellent, So I'm going to share a little fun fact. I don't 326 00:24:33.920 --> 00:24:37.680 know if it was before or after, but somebody heard my voice and it 327 00:24:37.720 --> 00:24:41.000 comes to me and say, oh, you're the podcast guy. You're the 328 00:24:41.000 --> 00:24:44.119 podcast guy. I say yea, yeah, I am so job. And 329 00:24:44.160 --> 00:24:47.160 I say no, I'm not job. They say, oh, you're the 330 00:24:47.200 --> 00:24:52.519 other guy. I mean, it's great. It's a bit of a dose 331 00:24:52.559 --> 00:24:59.799 of humility. If we go back to the interview, the need foss P 332 00:25:00.079 --> 00:25:06.200 the energy companies are very slow moving animals. But when sorry shifted the fan, 333 00:25:06.440 --> 00:25:10.200 which was the case, if you didn't react fast, if you didn't 334 00:25:10.480 --> 00:25:14.039 make daily decision, what you would have made those decisions in weeks or months, 335 00:25:14.759 --> 00:25:18.480 if you allow any weakness, all of a sudden, they take huge 336 00:25:18.519 --> 00:25:26.240 proportions. And at the same time forward looking digitization, security of supply, 337 00:25:26.359 --> 00:25:32.119 which now is the big theme decobanization. There's a lot of things to take 338 00:25:32.200 --> 00:25:36.599 away from that great interview. What I took away from it was this need 339 00:25:36.640 --> 00:25:41.279 for speed and to be really brave, especially in critical moments. And also 340 00:25:41.799 --> 00:25:47.759 what's important is to make sure that you have the information to be able to 341 00:25:47.799 --> 00:25:51.039 make the correct decisions. And I tell you Aron, what happened after. 342 00:25:51.480 --> 00:25:55.200 I won't say the name of this particular utility, But there's another European utility 343 00:25:55.559 --> 00:26:00.519 who after the interview, I was in conversation with this particular ecutive and I 344 00:26:00.559 --> 00:26:04.640 was telling about the conversation with Leo and the fact that Leo was saying that 345 00:26:04.680 --> 00:26:10.079 it was all about information and not reactive but being proactive, and this other 346 00:26:10.119 --> 00:26:15.200 particular utility executive they didn't do that, and their share prices collapsed. And 347 00:26:15.240 --> 00:26:18.039 I wasn't criticizing him. I said, the issue is you didn't have the 348 00:26:18.119 --> 00:26:22.960 right information, and actually he said, you're absolutely right. We didn't have 349 00:26:22.000 --> 00:26:26.480 the right information. And in other words, they didn't understand what was going 350 00:26:26.519 --> 00:26:32.160 on in the gas markets in particular, while Leo was given the information beforehand, 351 00:26:32.160 --> 00:26:33.920 which was listen, we think there's something going on here, which led 352 00:26:34.000 --> 00:26:40.119 them to sort of come up with internal crisis teams before really we had this 353 00:26:40.200 --> 00:26:42.519 full crisis, so they were able to prepare for it. And I thought 354 00:26:42.519 --> 00:26:45.599 that was really, really, really interesting. And by the way, if 355 00:26:45.640 --> 00:26:48.759 you look at the share price of EAN, it recently hit a five year 356 00:26:48.839 --> 00:26:53.319 high. So there you go, and there's many a utility in Europe where 357 00:26:53.440 --> 00:26:56.640 you know, the share price are nowhere near where they were five years ago, 358 00:26:56.759 --> 00:27:06.480 and that says some part he have like edf exactly. You know it's 359 00:27:06.480 --> 00:27:07.839 true though, isn't it right? So I really thought, wow, well 360 00:27:07.920 --> 00:27:12.519 done again. Share prices say a lot. Let's be clear, share prices 361 00:27:12.519 --> 00:27:15.799 saying does more. Journey speaking. If you look at the European industry, 362 00:27:17.000 --> 00:27:19.839 it's great that you have such a great manager at the top of the European 363 00:27:21.279 --> 00:27:23.319 electricity industry. And by the way, you need to have a great team 364 00:27:23.359 --> 00:27:26.000 to do that, because he can only be a great manager if he's given 365 00:27:26.000 --> 00:27:30.519 the necessary information to make those decisions. We don't get any money from me 366 00:27:30.599 --> 00:27:36.279 on so we just we just we just say that. Really it's a really 367 00:27:36.319 --> 00:27:40.799 what with him? Okay job. I like to thank again you're electric for 368 00:27:41.119 --> 00:27:45.599 organizing. I think we'll be invited next year for Athens, which is going 369 00:27:45.680 --> 00:27:48.319 to be in May, and I guess we're going to go. I like 370 00:27:48.440 --> 00:27:55.519 the idea of Athens and the house sent me. Now, like I Gene, 371 00:27:55.920 --> 00:28:00.319 I'm never invited again, but here I guess we're doing a good jobs 372 00:28:00.680 --> 00:28:04.400 if we are reinvited. I like to thank our new partner XPO. Really 373 00:28:04.799 --> 00:28:10.000 very nice guys. You need to work more with AXPO because I believe they 374 00:28:10.000 --> 00:28:17.839 are excellent trader and analysts and also probably one of the best hydro specialists in 375 00:28:17.839 --> 00:28:22.119 Europe. So very interesting company and job I took to you in two weeks 376 00:28:22.119 --> 00:28:26.720 time, look forward to us. Thank you for listening to Redefining Energy. 377 00:28:26.039 --> 00:28:32.519 Don't forget to rate the show and subscribe on Apple Podcast, Spotify, or 378 00:28:32.559 --> 00:28:33.920 the platform of your choice.