WEBVTT 1 00:00:08.240 --> 00:00:12.720 You are listening to Redefining Energy. Your co hosts from 2 00:00:12.720 --> 00:00:16.760 Berlin Gerard Reid and from London Laurent Segalam. 3 00:00:18.199 --> 00:00:22.120 Today on redefining Energy, we're going to talk about hydropower. 4 00:00:22.800 --> 00:00:26.600 Yes, each energy source as is on attribute in term 5 00:00:26.679 --> 00:00:32.000 of green, in terms of intomitency, in term of price relativity, 6 00:00:32.159 --> 00:00:36.320 in term of capex. None is perfect. But what is 7 00:00:36.399 --> 00:00:39.399 sure is we are not too king enough about idle. 8 00:00:40.000 --> 00:00:41.479 But first award from our. 9 00:00:41.399 --> 00:00:45.920 Partner Redefining Energy sponsored by a Mundi, the leading European 10 00:00:45.960 --> 00:00:49.679 asset manager, your trusted partner to accelerate the transition to 11 00:00:49.759 --> 00:00:53.799 a low carbon future. Leading asset manager based on the 12 00:00:53.840 --> 00:00:58.960 IPE ranking. Investing involves risk? Can sult your financial advisor. 13 00:00:59.159 --> 00:01:02.960 Well, I agree to we're not talking enough about hydro 14 00:01:03.039 --> 00:01:05.799 and I want to say I think we're not talking 15 00:01:05.920 --> 00:01:09.799 enough about pumped hydro in particular because pumped hydro gives 16 00:01:09.799 --> 00:01:12.599 you flexibility. And we talk quite a lot about this 17 00:01:12.680 --> 00:01:14.760 Dounkel flouter or in other words, what do we do 18 00:01:14.799 --> 00:01:16.560 in these dark days when there's no wind and solar? 19 00:01:16.640 --> 00:01:19.120 Well, guess what? You store it? Right? 20 00:01:19.319 --> 00:01:20.480 And store it? 21 00:01:20.599 --> 00:01:22.680 How do you store it? You store water that sticks 22 00:01:22.760 --> 00:01:24.799 up on the top of a reservoir. Right, So I 23 00:01:24.799 --> 00:01:26.920 think it's really, really really critical. 24 00:01:26.840 --> 00:01:29.079 If you look at the big picture, and I've got 25 00:01:29.079 --> 00:01:32.200 all those data from Amber Climate, because really when it 26 00:01:32.239 --> 00:01:36.719 comes to electricity, they're the best. So hydro is the 27 00:01:36.879 --> 00:01:42.000 largest source of clin energy globally. It's fourteen percent of 28 00:01:42.120 --> 00:01:45.920 the global energy production. Now, what is interesting is compared 29 00:01:45.920 --> 00:01:51.159 to win and solar, the generation of hydro between to 30 00:01:51.439 --> 00:01:56.319 eighteen and to twenty three was flat worldwide because of drought, 31 00:01:57.159 --> 00:02:02.719 low rainfall, especially in China the US. Now there's been 32 00:02:02.760 --> 00:02:05.959 a strong recovery the first half of two twenty four. 33 00:02:06.680 --> 00:02:09.879 And if you look at the countries, you really have 34 00:02:10.080 --> 00:02:14.319 the big threes. You have China first, then Brazil, then Canada, 35 00:02:14.879 --> 00:02:19.080 then US, Russia, India and Norway. And to give you 36 00:02:19.080 --> 00:02:22.199 an idea, China is as big as the next four. 37 00:02:22.560 --> 00:02:24.520 Extraordinary China play here. 38 00:02:25.120 --> 00:02:26.919 Wow, China is the renewable king. 39 00:02:27.120 --> 00:02:30.800 It's not just hydro, it's solar, it's wind, and there's 40 00:02:30.840 --> 00:02:32.280 everything at this energy transition. 41 00:02:32.439 --> 00:02:33.199 That's the reality. 42 00:02:33.879 --> 00:02:39.360 So it's important to properly manage that resource. And of 43 00:02:39.400 --> 00:02:43.520 course when we say properly managed, we're talking about digitization. 44 00:02:43.439 --> 00:02:47.800 Which is why we're bringing on Jana's Goodenough, who is 45 00:02:47.879 --> 00:02:50.759 the CEO and founder of Hydrogrid, which is an Austrian 46 00:02:50.840 --> 00:02:55.199 based business focused on as well as helping hydropower plants 47 00:02:55.520 --> 00:02:57.360 optimize unapprove efficiencies. 48 00:02:57.800 --> 00:03:01.960 Look globally the capacity of all the idle plants in 49 00:03:02.000 --> 00:03:04.840 the world, the average is forty four percent. So it's 50 00:03:04.960 --> 00:03:08.360 kind of the same as of show win. But you 51 00:03:08.400 --> 00:03:11.360 can dispatch it whenever you want. That's what makes it 52 00:03:11.400 --> 00:03:12.479 extremely valuable. 53 00:03:12.800 --> 00:03:15.639 Yeah, exactly, well said, Well, let's bring around the show. 54 00:03:16.639 --> 00:03:18.360 Johnny's welcome to the show. 55 00:03:18.680 --> 00:03:19.840 Thank you so much for having me. 56 00:03:20.240 --> 00:03:20.599 Jannis. 57 00:03:20.639 --> 00:03:22.919 The reason we brought you almost to talk about hydro 58 00:03:23.319 --> 00:03:27.240 and the role of hydropower the energy transition. At the 59 00:03:27.319 --> 00:03:28.759 end of the day, you've been doing a hydropower for 60 00:03:28.759 --> 00:03:33.719 a long life. How do you say the state of hydropower. 61 00:03:33.080 --> 00:03:34.280 And how do you see the future of it. 62 00:03:34.919 --> 00:03:37.840 First of all, hydropower is a technology that is old 63 00:03:37.960 --> 00:03:41.199 but good, and because it's so old, it's not given 64 00:03:41.479 --> 00:03:44.360 nearly as much attention with regards to the huge role 65 00:03:44.400 --> 00:03:47.400 that hydro has to play for a successful energy transition. 66 00:03:48.000 --> 00:03:51.479 The hardware, the turbines and the gates, all of that 67 00:03:51.520 --> 00:03:54.039 has been around for one hundred years. The efficiency has 68 00:03:54.080 --> 00:03:57.800 been optimized to the second digit after the comma that 69 00:03:57.879 --> 00:04:00.360 we have a future in hydro that is going to 70 00:04:00.360 --> 00:04:03.960 be about digitalization to bring that fantastic technology to the 71 00:04:04.000 --> 00:04:06.800 twenty first century. And I'm excited of that road ahead. 72 00:04:07.319 --> 00:04:09.240 Can I jump in straight away with Joe just said 73 00:04:09.240 --> 00:04:13.080 that digitalization? So how can you digitalize our hydropower station? 74 00:04:13.080 --> 00:04:15.159 Because at the end of the day, orders coming down 75 00:04:15.159 --> 00:04:17.759 a mount and comes to a dam and then you 76 00:04:17.879 --> 00:04:20.600 lead it to a turbine, right, I mean, what's there 77 00:04:20.680 --> 00:04:21.439 to digitalize? 78 00:04:22.439 --> 00:04:25.319 What's to digitalize is kind of the real time reaction 79 00:04:25.480 --> 00:04:30.560 to continuously changing circumstances. So hydropower plants have the blessing 80 00:04:30.600 --> 00:04:33.800 and the curse that they are strongly influenced by their environment. 81 00:04:34.120 --> 00:04:37.040 The weather is constantly changing, there are a bunch of 82 00:04:37.279 --> 00:04:41.279 environmental requirements that hydropower producers have to constantly be aware 83 00:04:41.279 --> 00:04:45.399 of with regards to flood and drought management, fishing, tourism. 84 00:04:45.839 --> 00:04:49.720 So hydropower plants are very closely integrated with their environment, 85 00:04:50.319 --> 00:04:53.519 and that means you need to be continuously reacting to 86 00:04:53.560 --> 00:04:57.360 that environment. And this reaction is the part where digitalization 87 00:04:57.480 --> 00:05:00.279 comes in. But there are also other parts of across 88 00:05:00.279 --> 00:05:03.480 the hydropower life cycle where digitalization comes in when we 89 00:05:03.480 --> 00:05:07.519 speak about building new power plants, predictive maintenance. So there 90 00:05:07.560 --> 00:05:10.759 are a number of applications throughout the whole hydropower life 91 00:05:10.759 --> 00:05:14.360 cycle there where there's an important role for digitalization. 92 00:05:14.839 --> 00:05:18.839 Jenny's if I look at hydro the past twenty years, 93 00:05:18.920 --> 00:05:22.439 is you really have two stories. On one hand, North 94 00:05:22.439 --> 00:05:26.519 America Europe where pretty much everything that could be dammed 95 00:05:26.560 --> 00:05:30.480 has been damned, while we've seen a lot of development 96 00:05:30.959 --> 00:05:34.519 in China, a bat in India, and to a certain 97 00:05:34.519 --> 00:05:38.120 degree they continue in Latin America. How do you see 98 00:05:38.160 --> 00:05:39.040 the global market? 99 00:05:40.120 --> 00:05:43.680 Hydropower is moving at different paces, in different continents, so 100 00:05:43.759 --> 00:05:45.800 to speak. So let's start maybe with the one that 101 00:05:45.920 --> 00:05:49.240 is the most far advanced, which is Europe. We're on 102 00:05:49.319 --> 00:05:52.800 the one hand side, we have probably the highest percentage 103 00:05:52.839 --> 00:05:56.600 of built out capacity in relation to the potential, and 104 00:05:56.639 --> 00:06:00.560 we also have the highest and most advanced liberalized power markets. 105 00:06:00.600 --> 00:06:03.279 So in Europe pretty much every country has a fully 106 00:06:03.360 --> 00:06:07.120 liberalized power markets, from long term future markets to day 107 00:06:07.160 --> 00:06:11.000 ahead intra day including ancillary services. When we move west 108 00:06:11.120 --> 00:06:14.560 to North and South America, we are technologically or in 109 00:06:14.639 --> 00:06:17.480 terms of the power market side a bit further behind. 110 00:06:17.560 --> 00:06:20.439 So in the US there is first of all, still 111 00:06:20.560 --> 00:06:24.360 in many places, quite a tightly regulated market, and over 112 00:06:24.399 --> 00:06:27.560 the last few years there's been a lot more focus 113 00:06:27.639 --> 00:06:31.639 being given to wind and solar. In addition, in the US, 114 00:06:31.800 --> 00:06:36.319 we have a quite large potential of unpowered dams. In 115 00:06:36.360 --> 00:06:39.560 the US, there are I believe two five hundred powered 116 00:06:39.639 --> 00:06:43.399 hydro dams, but there are actually eighty thousand, eight zero 117 00:06:44.079 --> 00:06:47.399 non powered hydro dams, meaning hydro dams that could in 118 00:06:47.439 --> 00:06:50.519 principle be used for power generation but are currently not. 119 00:06:51.240 --> 00:06:54.480 This is a huge potential that's currently unused. There is 120 00:06:54.519 --> 00:06:57.839 a study from the Department of Energy that using only 121 00:06:57.920 --> 00:07:00.720 the most feasible ones out of the world, those non 122 00:07:00.759 --> 00:07:04.439 power dams for power generation could add about twelve gigawatt 123 00:07:04.480 --> 00:07:08.720 of hydropower generation to the existing hundred gigawatts of hydropower 124 00:07:08.720 --> 00:07:10.079 generation that currently exists. 125 00:07:10.800 --> 00:07:15.079 Can I just interrupted and just explain why nobody knew 126 00:07:15.160 --> 00:07:17.560 as talks about hydro We all talk. All you hear 127 00:07:17.600 --> 00:07:21.560 about is tax credits going into winds, solar, bath rais, 128 00:07:21.600 --> 00:07:23.839 but nobody talks about hydro So why is that? 129 00:07:24.560 --> 00:07:28.199 Honestly, it baffles me. Also, the reason is number one. 130 00:07:28.759 --> 00:07:34.120 I believe hydro is seen largely from a water management perspective, 131 00:07:34.439 --> 00:07:39.000 flood management, draft management, and the power generation capacity of 132 00:07:39.079 --> 00:07:42.639 hydro is seen almost like a b side. And there 133 00:07:42.680 --> 00:07:44.879 have been quite a lot of efforts where from an 134 00:07:44.959 --> 00:07:48.720 environmental point of view, hydro power maybe has been painted 135 00:07:48.800 --> 00:07:51.319 not in the best light. In a few cases maybe 136 00:07:51.399 --> 00:07:54.879 rightfully so, but for the largest part not rightfully so 137 00:07:55.040 --> 00:07:57.800 at all. So it's a big root cause why the 138 00:07:57.920 --> 00:08:00.879 US specifically has a lot of up to do with 139 00:08:00.920 --> 00:08:04.800 regards to hydropower buildout but also hydropower digitalization. 140 00:08:05.439 --> 00:08:07.959 What you said about Europe really was that we were 141 00:08:08.439 --> 00:08:10.680 sort of the most developed hydro marker, right, And I 142 00:08:10.720 --> 00:08:14.560 suppose what I'd love to hear is what potential do 143 00:08:14.680 --> 00:08:18.519 you see in Europe in and around new build going forward? 144 00:08:19.399 --> 00:08:23.360 In Europe? Clearly a big part of the technologically feasible 145 00:08:23.360 --> 00:08:27.560 potential has been built, but there is still something left 146 00:08:27.600 --> 00:08:31.240 to do, specifically when it comes to smaller and medium 147 00:08:31.240 --> 00:08:35.159 sized assets and when it comes to flexibilizing those assets. 148 00:08:35.519 --> 00:08:38.879 So we see, for instance, in the Nordics, Norway, Sweden, Finland, 149 00:08:39.440 --> 00:08:42.480 that there is a huge number of small and medium 150 00:08:42.480 --> 00:08:47.200 sized hydropower plants which physically would have the capability to 151 00:08:47.279 --> 00:08:51.559 become storage hydropower plants, but which for reasons of the 152 00:08:51.600 --> 00:08:54.679 concession that was given maybe fifty or one hundred years ago, 153 00:08:55.200 --> 00:08:58.559 are currently not able to store any water. So that's 154 00:08:58.919 --> 00:09:03.720 a point where even without constructing a completely new power plant, 155 00:09:03.799 --> 00:09:08.440 you could significantly increase the practical usability to the grid 156 00:09:08.559 --> 00:09:11.240 by making these plants flexible, which on the one hand, 157 00:09:11.399 --> 00:09:13.840 increases their power output because you can run at a 158 00:09:13.840 --> 00:09:17.240 better efficiency point. You can collect more water, so you're 159 00:09:17.279 --> 00:09:20.879 better able to deal with variations in rainfall, and of 160 00:09:20.919 --> 00:09:23.480 course it makes them also usable as a green battery 161 00:09:23.519 --> 00:09:24.039 to the grid. 162 00:09:24.600 --> 00:09:28.039 I hear you, and of course we'll go more into 163 00:09:28.120 --> 00:09:31.120 the detail of it. Hydro adds certain im more value 164 00:09:31.159 --> 00:09:34.039 to the grid and additional wind. But you know a 165 00:09:34.039 --> 00:09:38.399 lot of our listeners are infrastructure investors, private infrastruture investors, 166 00:09:38.840 --> 00:09:41.960 so wind okay, yeah, I've had some problem recently, but 167 00:09:42.080 --> 00:09:44.279 you know, you know how much it costs, you know 168 00:09:44.559 --> 00:09:48.799 how long it's going to take. There's a scale effect hydro. 169 00:09:49.480 --> 00:09:53.360 The last big project in Europe was this Swiss Pompidro 170 00:09:53.480 --> 00:09:56.600 I mean graces, but it took fifteen years to build 171 00:09:57.399 --> 00:10:01.639 it means that's probably the case pretty much everywhere. It's 172 00:10:01.720 --> 00:10:06.039 much less a private investor game than a public whether 173 00:10:06.080 --> 00:10:09.720 it's public utility or you know governments, which of course 174 00:10:09.840 --> 00:10:14.080 go at their own pace and the budget sometimes goes 175 00:10:14.120 --> 00:10:17.919 pretty much out of control. As an investor, do I 176 00:10:17.960 --> 00:10:21.519 want to touch hydro? I'm kind of freaking out as 177 00:10:21.519 --> 00:10:24.919 an investor. Now once it's built, I can understand very clearly. 178 00:10:25.000 --> 00:10:28.120 So is that the same analysis you're doing in relation 179 00:10:28.240 --> 00:10:30.279 to investing in a new capacity. 180 00:10:31.159 --> 00:10:34.120 Yes, that's absolutely true. So another reason why from an 181 00:10:34.120 --> 00:10:37.639 investment point of view, wind perhaps has been more favored 182 00:10:37.679 --> 00:10:41.720 compared to hydro is the very very long lifetime of hydro, 183 00:10:42.000 --> 00:10:46.559 So investors think in kind of return on investment. Hydropower 184 00:10:46.559 --> 00:10:49.440 plants have a lifetime of one hundred years, but you 185 00:10:49.480 --> 00:10:52.480 can't really capture that in a business plan. You're thinking 186 00:10:52.519 --> 00:10:56.559 they're in annual return rates. So Wind over the last 187 00:10:57.080 --> 00:10:59.720 decade perhaps has often been seen as the more safe 188 00:10:59.759 --> 00:11:04.039 bet because again there has been subsidies for wind giving 189 00:11:04.080 --> 00:11:07.840 you a fixed return, and also the commissioning process may 190 00:11:07.840 --> 00:11:11.600 be easier. There are perhaps less environmental factors to consider, 191 00:11:12.159 --> 00:11:15.879 and you can calculate your return within ten twenty years, 192 00:11:16.039 --> 00:11:17.519 so that is another factor for sure. 193 00:11:18.399 --> 00:11:22.480 Let's see probably Europe. Let's look about Canada, South America 194 00:11:22.600 --> 00:11:24.679 before we move to Asia. 195 00:11:25.000 --> 00:11:27.399 If we look a bit north from the US, the 196 00:11:27.440 --> 00:11:31.440 big brother Canada actually has almost the same amount of 197 00:11:31.519 --> 00:11:34.679 hydropower as the US, so eighty three gigawab And here 198 00:11:34.720 --> 00:11:37.799 we see a move towards a power market liberalization. So 199 00:11:37.840 --> 00:11:41.919 there has recently been a liberalization in Ontario and now 200 00:11:42.279 --> 00:11:46.039 power producers are moving away from this central dispatch model 201 00:11:46.279 --> 00:11:51.159 to a liberalized power market. Looking to the South of America, 202 00:11:51.279 --> 00:11:55.039 here we still have to a large extend state regulated markets, 203 00:11:55.480 --> 00:11:59.000 but in more and more of these countries, plants now 204 00:11:59.039 --> 00:12:01.320 have the option to try aid at least part of 205 00:12:01.360 --> 00:12:05.279 their power in a newly created liberalized market. There's also 206 00:12:05.360 --> 00:12:09.720 some funding incentives to modernize hydro through digitalization and other projects. 207 00:12:10.279 --> 00:12:12.840 But here we see that really the impact of climate 208 00:12:12.919 --> 00:12:16.720 is significant because the variation here on here with Elninio 209 00:12:16.799 --> 00:12:19.320 La Nina is really big, and this is some of 210 00:12:19.360 --> 00:12:23.120 the biggest challenges that these producers in South of America face. 211 00:12:23.679 --> 00:12:26.840 And maybe we want to move east as well to China. 212 00:12:27.480 --> 00:12:28.240 Talk about Asia. 213 00:12:28.320 --> 00:12:32.799 Yeah, China specifically, we don't have the fully exact numbers, 214 00:12:32.799 --> 00:12:35.440 but based on what we know, China is about three 215 00:12:35.480 --> 00:12:39.120 hundred and sixty gigawa of hydro capacity growing fast out 216 00:12:39.120 --> 00:12:41.399 of a total of about five hundred and fifty gigawat 217 00:12:41.480 --> 00:12:44.799 in East Asia and Pacific. So here we see a 218 00:12:44.919 --> 00:12:49.720 rapid expansion across all sizes, so small, medium, and large hydro. 219 00:12:50.320 --> 00:12:54.240 And this is for mini producers and also suppliers in 220 00:12:54.279 --> 00:12:56.759 the hydro industry, a market that is hard to ignore 221 00:12:56.840 --> 00:13:00.440 because in terms of speed of new build, Asia is 222 00:13:00.480 --> 00:13:03.600 definitely where it's happening because there is the largest potential 223 00:13:03.679 --> 00:13:08.440 of currently unfinished or unbuilt projects still definitely lies in 224 00:13:08.559 --> 00:13:09.759 Asia and Asia Pacific. 225 00:13:10.279 --> 00:13:13.480 But that's where you come in because as we all know, 226 00:13:13.879 --> 00:13:17.320 there's a lot of value about being able to dispatch 227 00:13:17.639 --> 00:13:21.399 clean power at the flick of a switch. But of 228 00:13:21.519 --> 00:13:24.600 course you can't have just a guy calling another guy 229 00:13:24.720 --> 00:13:27.960 and say okay, pisto on on, pistol off. The way 230 00:13:28.000 --> 00:13:30.679 we see it, if you look at and Boss report, 231 00:13:30.960 --> 00:13:34.120 eighty percent of the new capacity addition in the world 232 00:13:34.279 --> 00:13:37.559 are wind and solar, which means we are putting more 233 00:13:37.639 --> 00:13:42.799 intermittency on the system, which indirectly brings more and more 234 00:13:43.200 --> 00:13:47.000 value to the flexible assets and in particular high or 235 00:13:47.159 --> 00:13:48.559 so can you elaborate a bit on. 236 00:13:48.559 --> 00:13:53.279 That, please, yes, exactly. In order to master a renewable 237 00:13:53.360 --> 00:13:56.120 energy transition, we are adding all this wind and solar 238 00:13:56.639 --> 00:13:59.639 what we actually have going forward. It's not an energy problem, 239 00:13:59.799 --> 00:14:03.559 it's capacity and storage problem. We are going to very 240 00:14:03.600 --> 00:14:05.960 quickly be in the situation where we have plenty of 241 00:14:06.039 --> 00:14:09.039 renewable energy, but it's going to be difficult to deliver 242 00:14:09.159 --> 00:14:12.559 that energy to the consumer when they need it. And 243 00:14:12.639 --> 00:14:16.240 there's really only a handful of technologies that we have 244 00:14:16.320 --> 00:14:20.360 available today that can be used to store energy. The 245 00:14:20.360 --> 00:14:23.720 first one of those is demand response, meaning not storing 246 00:14:23.720 --> 00:14:29.000 the energy, expecting the consumer to adjust his consumption behavior 247 00:14:29.480 --> 00:14:33.159 to match when the energy is available. There are a 248 00:14:33.240 --> 00:14:36.440 bunch of projects out there in this area, both on 249 00:14:36.480 --> 00:14:39.480 the industrial and on the household side. I personally don't 250 00:14:39.519 --> 00:14:43.200 believe in them, because we have become very accustomed to 251 00:14:43.399 --> 00:14:46.039 the energy being there when we want it, and anything 252 00:14:46.159 --> 00:14:49.919 that asks the end user to reduce their comfort by 253 00:14:49.960 --> 00:14:53.480 even the slightest amount I don't think personally is going 254 00:14:53.519 --> 00:14:53.960 to happen. 255 00:14:54.639 --> 00:14:57.320 Let's not put down the rabbit hole of demand response. 256 00:14:57.399 --> 00:15:00.360 Let's talk about storage. On the other side, do you 257 00:15:00.440 --> 00:15:03.639 see the role of a hydro power. 258 00:15:03.320 --> 00:15:06.879 In USh Given that we talk about storage, there's only 259 00:15:06.919 --> 00:15:09.600 really a small number of technologies that we have available, 260 00:15:09.879 --> 00:15:14.960 and that is effectively hydro storage and batteries. Now, both 261 00:15:15.039 --> 00:15:18.279 of these have their pros and cons. Hydro storage has 262 00:15:18.360 --> 00:15:22.600 the advantage that it is very large storage volume, it's 263 00:15:22.679 --> 00:15:25.480 quite quick to respond, but the downside is it's not 264 00:15:25.559 --> 00:15:29.399 possible everywhere. You need the geographic circumstances to be able 265 00:15:29.440 --> 00:15:31.960 to build a hydro dam, so it won't work everywhere 266 00:15:31.960 --> 00:15:35.639 in the world. And it's also a centralized form of storage, 267 00:15:35.639 --> 00:15:39.440 meaning you can't put this in every little household. On 268 00:15:39.519 --> 00:15:43.399 the other hand, battery technology has the advantage that you 269 00:15:43.440 --> 00:15:46.360 can build battery pretty much at any size and scale. 270 00:15:46.440 --> 00:15:49.120 You can put them pretty much wherever you want, and 271 00:15:49.159 --> 00:15:52.120 you can also use them in a completely decentralized fashion. 272 00:15:52.639 --> 00:15:55.360 The benefit is they also are rapid in terms of reaction, 273 00:15:55.559 --> 00:15:59.519 but they have significantly smaller storage volume. By storage volume, 274 00:15:59.559 --> 00:16:04.039 I meantio between Megawa and Mega what ours capacity? 275 00:16:04.759 --> 00:16:10.399 I agree with you centralize five days against decentralized two 276 00:16:10.480 --> 00:16:14.159 or three hours. So this is where you see not 277 00:16:14.240 --> 00:16:17.639 really a competition but I would say a good complimentarity 278 00:16:17.919 --> 00:16:19.519 between the two technologies. 279 00:16:20.120 --> 00:16:21.879 Exactly, we're going to need both. 280 00:16:22.480 --> 00:16:24.080 Jana's sort of as I love that. 281 00:16:24.240 --> 00:16:25.919 Really what we need to do is we need to 282 00:16:25.960 --> 00:16:30.559 combine hydro power plants with going forward with batteries. 283 00:16:30.559 --> 00:16:31.559 I mean, how do you see that. 284 00:16:32.159 --> 00:16:35.879 Yes, that's a very exciting opportunity going forward. So it's 285 00:16:35.919 --> 00:16:39.240 not needed for hydropower plants who already have storage capacity 286 00:16:39.360 --> 00:16:42.840 right them power plants, but for run of river power plants, 287 00:16:42.919 --> 00:16:46.120 this ability to have what we like to call hybrid hydro. 288 00:16:46.720 --> 00:16:50.399 Combining hydro run of river with battery capacity can bring 289 00:16:50.480 --> 00:16:53.600 us the best of both worlds, the combination of being 290 00:16:53.639 --> 00:16:57.080 able to turn smaller run of river power plants into 291 00:16:57.320 --> 00:17:01.799 somewhat decentralized storage power plants, and that really allows to 292 00:17:01.840 --> 00:17:04.480 combine the best of both worlds from both technologies. 293 00:17:05.400 --> 00:17:08.480 Jenny's you pointed out, and you know, we hear that 294 00:17:08.599 --> 00:17:10.880 a lot that you know, the sun doesn't always shine, 295 00:17:10.880 --> 00:17:13.960 the wind always well, but you know, the hydros you 296 00:17:14.039 --> 00:17:18.480 had some good years and bad years, and we saw 297 00:17:18.880 --> 00:17:22.839 Glass year China had to restart coal plants because the 298 00:17:22.960 --> 00:17:26.799 hydro resources were very low, and the same in Europe 299 00:17:26.839 --> 00:17:30.039 in two twenty two. Of course price of gas because 300 00:17:30.079 --> 00:17:31.799 of Russia went through the roof, and of course the 301 00:17:31.880 --> 00:17:35.119 nuclear park in Europe was a bit of a disaster. 302 00:17:35.279 --> 00:17:37.759 But also at the same time there was the hydro 303 00:17:37.839 --> 00:17:41.480 production in Spain and Italy was an absolute disaster. So 304 00:17:42.200 --> 00:17:48.200 your company, your software is helping also manage the supply better. 305 00:17:48.680 --> 00:17:51.359 We kind of took for granted that the dams will 306 00:17:51.359 --> 00:17:54.519 always be full, and it's probably not the case anymore. 307 00:17:54.559 --> 00:17:58.559 So how can you help manage a resource which is 308 00:17:58.640 --> 00:18:00.920 also impacted by climate change. 309 00:18:01.519 --> 00:18:03.559 What we see over the last year is that the 310 00:18:03.680 --> 00:18:07.319 variations year on year are becoming bigger. To give just 311 00:18:07.480 --> 00:18:11.640 one practical example, in Norway, within the last ten years, 312 00:18:11.680 --> 00:18:14.839 we both had a one hundred year flood and one 313 00:18:14.880 --> 00:18:18.240 hundred year drought year within the period of five years. 314 00:18:18.279 --> 00:18:20.799 So that tells you that something is going on and 315 00:18:20.839 --> 00:18:23.319 that we probably have to expect that with climate change, 316 00:18:23.400 --> 00:18:26.640 the year on year variations make it bigger. On a 317 00:18:26.680 --> 00:18:29.200 global scale. Of course, it evens out to some degree. 318 00:18:29.319 --> 00:18:31.400 You don't have at the same time that rot in 319 00:18:31.400 --> 00:18:35.440 Brazil and in Norway and in Malaysia. But locally this 320 00:18:35.599 --> 00:18:38.759 can be a significant issue. The problem is there's not 321 00:18:38.839 --> 00:18:42.920 really another technology to balance that out except fossil fuels, 322 00:18:43.319 --> 00:18:46.599 because you can't count on the fact that wind and 323 00:18:46.680 --> 00:18:51.319 hydro are negatively correlated, or solar and hydro being negatively correlated. 324 00:18:51.680 --> 00:18:55.680 So we realistically will need some amount of perhaps backup 325 00:18:55.720 --> 00:19:00.720 capacity to ensure that even in those years when the 326 00:19:00.759 --> 00:19:04.400 new renewables so both wind, solar and hydro are not 327 00:19:04.519 --> 00:19:07.160 delivering to the point where we need them, that perhaps 328 00:19:07.240 --> 00:19:09.480 flossil fuels will still have a role to play to 329 00:19:09.599 --> 00:19:10.359 pick up the slack. 330 00:19:11.039 --> 00:19:15.599 Janis we started this whole conversation talking about digitalization, and 331 00:19:15.640 --> 00:19:17.640 I think it's probably a good place to sort of 332 00:19:17.759 --> 00:19:18.880 come to the end of this podcast. 333 00:19:18.920 --> 00:19:20.960 We can you talk about digitalization. 334 00:19:21.240 --> 00:19:23.960 And what that means and how you see that going forward. 335 00:19:24.920 --> 00:19:27.440 There are a number of places in the hydro life 336 00:19:27.440 --> 00:19:30.680 cycle where digitalization comes into play. It comes into play 337 00:19:30.759 --> 00:19:35.160 during the building phase to use for instance, virtual digital 338 00:19:35.160 --> 00:19:38.960 twins of the power plant to find the right dimensioning 339 00:19:39.000 --> 00:19:43.039 of the turbine given the hydrological conditions, etc. It comes 340 00:19:43.079 --> 00:19:46.920 to play in the maintenance area, so with predictive maintenance, 341 00:19:47.599 --> 00:19:51.119 trying to prevent or predict when failures are going to 342 00:19:51.119 --> 00:19:54.160 happen and to prevent or reduce down times. And then 343 00:19:54.160 --> 00:19:56.720 the third part is in the daily operation of the plant, 344 00:19:56.720 --> 00:19:59.200 which is also where a software like Hydrogrid Insight comes 345 00:19:59.240 --> 00:20:03.079 into play, which is about digitalizing the production planning process 346 00:20:03.559 --> 00:20:06.559 and the optimal management of water and optimal trading and 347 00:20:06.599 --> 00:20:07.480 selling of power. 348 00:20:08.200 --> 00:20:10.160 So could you dig it to that latter part then 349 00:20:10.480 --> 00:20:13.400 and explain what that means, because the way I think 350 00:20:13.400 --> 00:20:16.160 of a hydro power plant is it's almost like somebody's 351 00:20:16.200 --> 00:20:18.160 switching a lever and switching. 352 00:20:17.960 --> 00:20:19.960 On and off like that. But I presume in the 353 00:20:19.960 --> 00:20:21.759 future that's not how we're going to be doing there. 354 00:20:22.079 --> 00:20:25.680 Correct. What you just described was how hydropower plants were 355 00:20:25.680 --> 00:20:30.000 operated probably fifty years ago, and in many places not 356 00:20:30.079 --> 00:20:33.640 that much has changed since then, but a lot needs 357 00:20:33.680 --> 00:20:35.720 to change if we want to make hydropower fit for 358 00:20:35.799 --> 00:20:40.160 the twenty first century. So, since power markets are becoming 359 00:20:40.319 --> 00:20:43.920 more and more volatile through the addition of intermittent renewables, 360 00:20:44.240 --> 00:20:46.880 power markets are also becoming more and more short term. 361 00:20:46.920 --> 00:20:49.839 As a result, it's a bigger and bigger chunk of 362 00:20:49.880 --> 00:20:52.720 the total revenues that come from short term power markets. 363 00:20:52.720 --> 00:20:56.160 That's the one factor, and the other factor is embedding 364 00:20:56.200 --> 00:20:58.920 of hydro power in its environment and the need to 365 00:20:59.000 --> 00:21:02.960 react quickly to changes in the weather conditions. In order 366 00:21:03.000 --> 00:21:06.440 to manage a power plant efficiently for the twenty first century, 367 00:21:06.480 --> 00:21:08.880 you need to be able to react very quickly, in 368 00:21:08.960 --> 00:21:13.279 almost real time to changing events. And that's what, for instance, 369 00:21:13.400 --> 00:21:17.279 a hydropower production planning software like Hydrogrid Insight does. So 370 00:21:17.319 --> 00:21:21.119 we connect to sensor data from the power plant, we 371 00:21:21.160 --> 00:21:25.279 combine these with weather data from weather data suppliers as 372 00:21:25.319 --> 00:21:28.799 well as power market data from the power exchanges, and 373 00:21:29.160 --> 00:21:32.000 come up in real time with an inflow forecast as 374 00:21:32.039 --> 00:21:35.920 well as an intelligent production plan. So you can think 375 00:21:35.960 --> 00:21:38.960 of this a little bit similar as autonomous driving for 376 00:21:39.079 --> 00:21:42.119 cars but for power plants, meaning the plant is then 377 00:21:42.160 --> 00:21:45.880 able to seer itself intelligently in real time based on 378 00:21:45.920 --> 00:21:47.480 weather and market conditions. 379 00:21:48.160 --> 00:21:51.200 Joenny's when I look at the markets now, I see 380 00:21:51.359 --> 00:21:55.960 negative prices at noon, and then we see the evening 381 00:21:56.039 --> 00:22:00.880 ramp up. If I just look at California, you have 382 00:22:00.920 --> 00:22:04.640 a seventy gigawat I mean seventeen new clap plant just 383 00:22:04.680 --> 00:22:07.960 for California, a ramp up in a few hours. And 384 00:22:08.000 --> 00:22:10.640 I know you've been mostly in your but now you're 385 00:22:10.680 --> 00:22:13.759 starting to go in the US, So I would say 386 00:22:14.000 --> 00:22:17.240 those types of pricing means that you need to be 387 00:22:17.319 --> 00:22:19.640 much more granular in the way you're going to use 388 00:22:19.680 --> 00:22:24.559 your capacity. Do you see an evolution and using digital 389 00:22:24.680 --> 00:22:28.720 in the way those flex assets are being used and monetized. 390 00:22:29.279 --> 00:22:32.720 Yes, And the importance of this has gone up significantly 391 00:22:32.759 --> 00:22:37.000 over the last five or ten years. While five years ago, 392 00:22:37.279 --> 00:22:42.119 the difference in revenue between running your plant intelligently based 393 00:22:42.119 --> 00:22:44.640 on the power market for a flexible plant was in 394 00:22:44.680 --> 00:22:48.920 the range of ten to fifteen percent. Now with the 395 00:22:49.000 --> 00:22:51.960 increase in volatility, it can be up to fifty percent, 396 00:22:52.440 --> 00:22:56.319 which means that hydropower producers which don't tap into this 397 00:22:56.440 --> 00:23:00.640 potential are really losing their competitiveness in the market. And 398 00:23:00.680 --> 00:23:05.359 what that means is it also disengages the investment in 399 00:23:05.400 --> 00:23:09.440 new hydropower. So the whole industry really has an important 400 00:23:09.480 --> 00:23:12.920 role to play to digitalize, to make hydro power again 401 00:23:13.079 --> 00:23:17.039