WEBVTT 1 00:00:04.280 --> 00:00:07.799 With Laurent's segle And from London and Gerard Reid from Berlin. 2 00:00:08.320 --> 00:00:11.439 This is Redefining Energy Today. 3 00:00:11.480 --> 00:00:14.759 On Redefining Energy, we're going to talk about the bankability 4 00:00:14.800 --> 00:00:18.320 of battery storage investments and the podcast is based on 5 00:00:18.519 --> 00:00:22.000 a panel discussion that Laurent was involved in a Solar 6 00:00:22.000 --> 00:00:26.000 Power Europe's event in Brussels in May twenty twenty six. 7 00:00:26.559 --> 00:00:26.760 Yeah. 8 00:00:26.800 --> 00:00:29.879 Actually, Lauren, if I remember, you were with Friedrich Sandberg 9 00:00:30.280 --> 00:00:34.039 and Hannah Kunzman. Friedrich is from RWE and Hannah's from 10 00:00:34.280 --> 00:00:37.840 EQT and a really interesting discussion in and around as 11 00:00:37.840 --> 00:00:42.399 I said, batteries, stationary store origin. What's going on there? 12 00:00:43.000 --> 00:00:47.079 Yeah, and also a lot of conversation around cove, new models, 13 00:00:47.119 --> 00:00:52.719 around regulation, around technology. So we thank power Job for 14 00:00:52.880 --> 00:00:57.359 organizing all this world Boga, the wonderful team, and it's 15 00:00:57.399 --> 00:00:59.560 probably time to listen to the conversation. 16 00:01:00.240 --> 00:01:00.640 Bringing on. 17 00:01:01.759 --> 00:01:04.879 Welcome to this panel. So we're in Brussels, it's a 18 00:01:05.120 --> 00:01:10.439 Cellar Power Europe and have the privilege to share a 19 00:01:10.480 --> 00:01:16.680 great conversation around bankability of storage project. My name is Lawrence. Again. 20 00:01:16.760 --> 00:01:19.519 You might know my voice because I'm the co host 21 00:01:19.560 --> 00:01:23.680 of the Really Funning Energy podcast. I have the privilege 22 00:01:23.719 --> 00:01:29.319 to introduce my guest, two heavyweights of the storage industry, 23 00:01:30.319 --> 00:01:36.840 Frederick Andred Sandberg from WE and Anna Kuzman from EQT. 24 00:01:38.040 --> 00:01:43.400 WE is investing ten billion for storage and flexible assets 25 00:01:43.640 --> 00:01:47.879 over the next five years and to expand to six 26 00:01:47.959 --> 00:01:51.719 gigawatts and that is twenty five percent of the overall capex. 27 00:01:53.200 --> 00:01:57.400 As for EQT, a Swedish investment fund, they have a 28 00:01:57.599 --> 00:02:02.439 twenty billion Infrastio six funds to scale massive development and 29 00:02:02.480 --> 00:02:06.719 they have a pipeline of sixteen gigawad of storage. So 30 00:02:06.760 --> 00:02:16.439 please welcome our guests. We have decided to slice the 31 00:02:16.560 --> 00:02:21.280 conversation around four main topics of bankability. The first one's 32 00:02:21.280 --> 00:02:24.280 going to be about the technology, the second one about 33 00:02:24.439 --> 00:02:28.800 of new models modetization, the third one about regulation and 34 00:02:28.840 --> 00:02:31.560 the fourth, if we have time, around the digital layer. 35 00:02:32.280 --> 00:02:35.840 So the first question I'm going to ask technology, what 36 00:02:35.919 --> 00:02:38.919 do you like as technology to invest in? What is bankable? 37 00:02:39.680 --> 00:02:41.479 Thank you so much for bringing us to this panel. 38 00:02:41.479 --> 00:02:43.879 I also found it interesting how inticative we are in Europe. 39 00:02:44.159 --> 00:02:47.039 We have a German person working for Swedish company and 40 00:02:47.080 --> 00:02:50.000 then a Swedish person working for Germ companies. Also shows 41 00:02:50.000 --> 00:02:53.000 how well Europe is is working in a moment. When 42 00:02:53.000 --> 00:02:55.439 I look at the technology, we do actually see storage 43 00:02:55.479 --> 00:02:57.840 to be quite mature. So I mean we do have 44 00:02:57.960 --> 00:03:00.719 the foreseeable how they degrade us. So I think the 45 00:03:00.759 --> 00:03:03.000 main problem is not the technology moment, as long as 46 00:03:03.000 --> 00:03:06.199 it can be ensued and we have the revenue certainty 47 00:03:06.199 --> 00:03:09.280 and then I think is definitely bankable. And I mean, 48 00:03:09.280 --> 00:03:12.520 as we also see how the anty landscape is developing 49 00:03:12.560 --> 00:03:15.280 in Europe, storage is simply needed. We see that with 50 00:03:15.520 --> 00:03:18.400 the large scale a lot of renewables which is not 51 00:03:18.520 --> 00:03:21.879 needed for anty security and other reasons, we simply need 52 00:03:21.919 --> 00:03:24.240 storage to back this up. We need storage of flex 53 00:03:24.280 --> 00:03:26.280 plaster to make sure that we can actually integate the 54 00:03:26.280 --> 00:03:28.599 renewables that we so desperately need to build. 55 00:03:29.479 --> 00:03:33.360 I agree for us, we understand the technology to be 56 00:03:33.479 --> 00:03:36.759 broadly proven and to be modelable. And you know what 57 00:03:36.879 --> 00:03:39.080 an investor at the end of the day wants and 58 00:03:39.199 --> 00:03:43.080 needs is that that certainty of long term revenue contribution 59 00:03:43.199 --> 00:03:48.120 and also the certainty of operation ensurability, bankability. What we see, 60 00:03:48.319 --> 00:03:50.879 and this is all going a bit outside of the 61 00:03:50.879 --> 00:03:53.159 topic of you know, lithium iron or not lithium iron, 62 00:03:53.280 --> 00:03:56.360 is we see an MN shift towards longer duration where 63 00:03:56.360 --> 00:03:59.039 we still see the supply chain in the economics developing 64 00:03:59.400 --> 00:04:01.639 over time. I mean we think sill the very market's 65 00:04:01.680 --> 00:04:03.879 becoming more and more crowded by market. So we saw 66 00:04:03.879 --> 00:04:05.280 the same in the UK, We see the same that 67 00:04:05.400 --> 00:04:08.479 happening in Germany. We see a shift in our portfolios 68 00:04:08.479 --> 00:04:10.560 from a one to two to two to four and 69 00:04:10.599 --> 00:04:14.479 then ultimately eat our battery where we just need to 70 00:04:14.520 --> 00:04:18.560 also have more commercialization options come intact with the need 71 00:04:18.600 --> 00:04:21.000 that we see from the market and also quite frankly, 72 00:04:21.040 --> 00:04:25.480 if we are all seeking to transition to a green future, 73 00:04:25.720 --> 00:04:27.680 that is what we require right in order to get 74 00:04:27.720 --> 00:04:30.560 to baselope, we will require longerteration storage and that needs 75 00:04:30.560 --> 00:04:33.600 to be economic and make sense of turch strategy and 76 00:04:33.600 --> 00:04:35.199 a technology perspective as well. 77 00:04:35.920 --> 00:04:39.759 Yeah, because one of the issue that the battery as 78 00:04:39.839 --> 00:04:43.079 is a lot of the professional come from the wind 79 00:04:43.079 --> 00:04:47.079 and solar universe with a type of mindset like okay, 80 00:04:47.120 --> 00:04:49.720 you put the asset. Okay, maybe you're going to change 81 00:04:49.720 --> 00:04:53.519 your gearbox once every never all blade, or you're going 82 00:04:53.519 --> 00:04:55.680 to clean your sell up bandle once in a while. 83 00:04:55.759 --> 00:04:59.000 But the battery is a different animal. It's every day 84 00:04:59.199 --> 00:05:01.720 you need to every hour, every minute, you need to 85 00:05:01.800 --> 00:05:05.160 check what's going on. So there is this evolution that 86 00:05:05.240 --> 00:05:08.600 we're seeing in the management of batteries. The bank ability 87 00:05:08.639 --> 00:05:11.879 is not just at a FID, it's the bank ability 88 00:05:12.279 --> 00:05:16.480 along the life of the battery. And unfortunately we see 89 00:05:16.519 --> 00:05:19.439 that those equipment which are ten years old. I've got 90 00:05:19.439 --> 00:05:21.720 a ten years old sol our farms are okay, fine, 91 00:05:22.279 --> 00:05:24.879 but a ten year old battery, I'm starting to freak out. 92 00:05:24.920 --> 00:05:27.879 Correct I like, there's also been a bit of an 93 00:05:27.879 --> 00:05:30.920 evolution in the holy space for batteries. And as you say, 94 00:05:30.959 --> 00:05:33.959 I mean it's a very different beast compared to solar 95 00:05:34.079 --> 00:05:37.199 and window. I mean a windows, it's it's a mechanical energy, right, 96 00:05:37.240 --> 00:05:40.000 and solar is physics. Here it's chemistry. You need to 97 00:05:40.040 --> 00:05:42.000 manage chemistry for for many, many years, so we know 98 00:05:42.040 --> 00:05:44.680 how chemistry can react. On that other hand, we're quite 99 00:05:44.759 --> 00:05:46.839 used to these cameras assets in our company as well. 100 00:05:47.040 --> 00:05:49.560 We have other conventional assets. We of course need maintenance 101 00:05:49.639 --> 00:05:51.959 and people working on them every day. So with the 102 00:05:51.959 --> 00:05:54.319 other toes of bankability, we do believe that we have 103 00:05:54.399 --> 00:05:57.480 a good idea on the degrading factors of the assets. 104 00:05:57.480 --> 00:06:00.639 We also understand how take me assured and all understand 105 00:06:00.680 --> 00:06:03.519 how to operate them. So I think it's definitely bankable then, 106 00:06:03.800 --> 00:06:05.079 of course, I mean if you look at the whole 107 00:06:05.079 --> 00:06:08.199 space now, we see that only roughly twenty percent of 108 00:06:08.240 --> 00:06:10.120 all the renewables that need to be built out towards 109 00:06:10.120 --> 00:06:12.720 twenty fifty has been built out for batteries. Are not 110 00:06:12.839 --> 00:06:15.360 sure about the exact percentage, but it means that we'll 111 00:06:15.399 --> 00:06:17.600 still need to build a whole lot of batteries and 112 00:06:17.600 --> 00:06:20.120 storage going forward. I'm also sure that there will be 113 00:06:20.600 --> 00:06:23.680 evolution on the technology front here, so the chemist system 114 00:06:23.800 --> 00:06:26.959 used today will probably evolve into other systems and then 115 00:06:27.000 --> 00:06:28.959 we need to learn from those as well. But overall, 116 00:06:29.000 --> 00:06:31.480 we're quite confident that these you know, will work and 117 00:06:31.519 --> 00:06:33.480 it's reliable enough to be bank. 118 00:06:34.199 --> 00:06:36.120 And to beigg back on that we need to have 119 00:06:36.240 --> 00:06:39.600 also that reflected in the permitting. So when we plan projects, 120 00:06:39.600 --> 00:06:42.399 and we've just recently approved quite a few tso ultra 121 00:06:42.439 --> 00:06:45.800 high voltage projects in Germany where you lead, times are 122 00:06:45.839 --> 00:06:49.279 frankly three years under transformers and the substations, and as such, 123 00:06:49.920 --> 00:06:52.600 in those three years you've already ordered equipment, you have 124 00:06:52.720 --> 00:06:55.160 ideally already told the asset. You kind of locked in 125 00:06:55.160 --> 00:06:57.160 on your unit economics, but there can be a shift 126 00:06:57.160 --> 00:06:59.519 in technology for the better. There is a potential to 127 00:07:00.040 --> 00:07:03.079 maybe improve some of these economics. And so ideally a 128 00:07:03.120 --> 00:07:05.680 battery which is something we would order twelve to eighteen 129 00:07:05.720 --> 00:07:09.240 months before COD versus a transformer thirty six months before COD. 130 00:07:09.920 --> 00:07:12.959 There needs to be an ability, ideally in the permitting, 131 00:07:13.079 --> 00:07:16.199 so we can change which containers who are essentially putting there. 132 00:07:16.759 --> 00:07:19.360 For example, power density going up and us being able 133 00:07:19.399 --> 00:07:21.360 to put four hours instead of two hours, that will 134 00:07:21.399 --> 00:07:23.600 be positive to the grid. It would be something the 135 00:07:23.639 --> 00:07:26.399 TSLOS like to see because we're less playing in the 136 00:07:26.680 --> 00:07:29.240 in the ancilliary markets, or it becomes less of an 137 00:07:29.240 --> 00:07:32.639 importance in a multi stacked revenue stream. But if the 138 00:07:32.639 --> 00:07:35.879 permitting then says no, you've permitted technology A and on 139 00:07:35.920 --> 00:07:38.879 that hour system and the containers are two meters times 140 00:07:39.040 --> 00:07:42.000 x meters, you can't change that. That gets a bit 141 00:07:42.120 --> 00:07:44.199 rigid and I think we need to reflect that as 142 00:07:44.199 --> 00:07:46.519 opposed to SOLO, which is a twelve month of construction cycle. 143 00:07:46.519 --> 00:07:49.839 We see construction batteries, especially in large scale projects above 144 00:07:49.839 --> 00:07:52.079 one hundred megrow, it's really as a three year, long 145 00:07:52.160 --> 00:07:55.839 term project with that certainty also necessary and that certainly 146 00:07:55.879 --> 00:07:59.800 for me, also goes into regulation. Regulation and batteries needs 147 00:07:59.800 --> 00:08:02.639 to be for changes that we discuss now on regulation, 148 00:08:02.720 --> 00:08:05.079 it affects a twenty thirty battery and then twenty twenty 149 00:08:05.160 --> 00:08:07.759 nine battery, So just to bring that also on top 150 00:08:07.879 --> 00:08:10.160 very one's mind, and it's a long term game. And 151 00:08:10.199 --> 00:08:13.759 when we discuss adverse regulation, it goes into the technology 152 00:08:13.839 --> 00:08:15.879 question as well, just because of the as a cast 153 00:08:15.920 --> 00:08:16.519 that we're in. 154 00:08:17.040 --> 00:08:20.560 Okay, so before we move into the next chapter, I'm 155 00:08:20.600 --> 00:08:24.120 gonna ask your last question. Please answer by yes or no. 156 00:08:24.600 --> 00:08:26.240 It's very bigate yes or no. 157 00:08:26.639 --> 00:08:28.040 I'm not sure I'm able to do that, but let's 158 00:08:28.079 --> 00:08:28.560 say yes. 159 00:08:28.600 --> 00:08:31.639 Of course you can't, but you're still going to do it. 160 00:08:32.039 --> 00:08:37.639 And the question is decide LFP batteries. Do you have 161 00:08:37.840 --> 00:08:42.279 any other technology that you see bankable and scalable in 162 00:08:42.320 --> 00:08:43.279 the next two years? 163 00:08:43.679 --> 00:08:48.279 I don't know, Actually I don't know, good, Hannah, not 164 00:08:48.399 --> 00:08:48.879 yet for me. 165 00:08:49.320 --> 00:08:53.039 So it's a no. Basically technologically to ship as sailed, 166 00:08:53.399 --> 00:08:57.240 that's very interesting. It means the technology stable. Okay. Good. 167 00:08:57.279 --> 00:09:00.960 So now let's go into a much more dynamic universe, 168 00:09:01.000 --> 00:09:04.759 which is the universe of revenue, monetization and so on. 169 00:09:05.240 --> 00:09:07.879 And we have the privilege of having anna. We're trying 170 00:09:07.919 --> 00:09:11.639 to investing in batteries or trying to find some tolling 171 00:09:11.879 --> 00:09:16.200 or long term revenue. And here at the w with 172 00:09:16.320 --> 00:09:18.679 doing everything, of course, because you're so big, but you 173 00:09:18.720 --> 00:09:23.080 are also buying flexibility as a service. Maybe start with 174 00:09:23.200 --> 00:09:27.080 an explain when you're going to invest the collocated and 175 00:09:27.159 --> 00:09:29.080 the stand alone is a bit of different animal, but 176 00:09:29.559 --> 00:09:32.960 let's start with the stand alone battery. Explain what's your 177 00:09:33.000 --> 00:09:36.159 revenue strategy in order to get the project more bankable? Please? 178 00:09:36.799 --> 00:09:39.279 In order to answer that worth taking a tiny step 179 00:09:39.320 --> 00:09:42.639 back and explaining. So EQT, as mentioned, is an asset 180 00:09:42.639 --> 00:09:46.080 manager who is majorly managing the money of pension funds 181 00:09:46.080 --> 00:09:49.639 and insurances, so very large scale institution investors with three 182 00:09:49.679 --> 00:09:52.000 and ared billion AM of which seventy billion is an 183 00:09:52.000 --> 00:09:55.399 infront and we have across Europe thirty gig or what 184 00:09:55.559 --> 00:09:59.360 hours of installed battery or a near term pipeline that's 185 00:09:59.360 --> 00:10:02.879 coming to turn. And because we have this institutional asset base, 186 00:10:02.960 --> 00:10:07.279 we're not a merchant trader, or it could be opportunities 187 00:10:07.279 --> 00:10:10.120 where we do that, but our investors really want us 188 00:10:10.120 --> 00:10:12.919 to toll and show long term certainty of cash loss, 189 00:10:13.320 --> 00:10:16.039 and across Europe we make it dependent on what is 190 00:10:16.039 --> 00:10:19.440 available in the market. For example, we have floora agreements 191 00:10:19.480 --> 00:10:23.039 in the UK across our portfolio company Zetera. We have 192 00:10:23.120 --> 00:10:26.799 tolls in Germany across Celestia and units in the Nordics 193 00:10:26.799 --> 00:10:29.679 we have a mix of everything you can imagine across 194 00:10:29.759 --> 00:10:32.240 OIX two and Celestra, and then in the South we 195 00:10:32.279 --> 00:10:34.679 also do a lot of hybrid PPA. So it depends 196 00:10:34.720 --> 00:10:38.440 on what off take market is there. But we see 197 00:10:38.480 --> 00:10:42.639 it support bankability and provide the necessary visibility that our 198 00:10:42.679 --> 00:10:47.120 investors really need and require. And we see the economics 199 00:10:47.159 --> 00:10:50.600 today be intact still on the capex that we need 200 00:10:50.679 --> 00:10:53.399 to bring up and the ever degrading cost of equipment 201 00:10:54.120 --> 00:10:57.399 and a tolling market which is establishing, and we've been 202 00:10:57.440 --> 00:10:59.080 able to sign of what we believe to be the 203 00:10:59.120 --> 00:11:02.799 first operating toll last year with units in Germany. That 204 00:11:02.919 --> 00:11:05.960 being said, for US, we typically toil away the majority 205 00:11:06.000 --> 00:11:08.559 of the asset, but not all given we want to 206 00:11:08.840 --> 00:11:13.279 leave some flexibility also for downtimes, for maintenance and all 207 00:11:13.320 --> 00:11:17.440 of these things, and invoid unnecessary penalty payments. But if 208 00:11:17.480 --> 00:11:20.799 you have a broader portfolio can even remove that a 209 00:11:20.840 --> 00:11:23.639 bidding and be even more optimistic if you are able 210 00:11:23.679 --> 00:11:28.200 to hype like synthetically pool your batteries into a portfolio 211 00:11:28.279 --> 00:11:32.679 and thereby shift load from one to another for example. Broadly, 212 00:11:33.200 --> 00:11:36.200 as a main statement, it's a multi market strategy in 213 00:11:36.279 --> 00:11:38.799 all of the markets that we're in. And for me, 214 00:11:38.960 --> 00:11:41.679 it is important to if you told the asset, find 215 00:11:41.679 --> 00:11:45.639 someone where one it is competitive against a merchant off takers, 216 00:11:45.679 --> 00:11:48.240 so to say, and you also for the merchant piece 217 00:11:48.279 --> 00:11:50.600 that you have, have a good optimizer that you also 218 00:11:50.600 --> 00:11:54.639 benchmark against indecs and also ideally across the portfolio against 219 00:11:54.679 --> 00:11:57.080 each other, just to be sure that you're twenty or 220 00:11:57.080 --> 00:11:59.360 thirty percent that you have in a portfolio of merchant 221 00:11:59.399 --> 00:12:02.720 revenues also getting traded in the most appropriate way. Where 222 00:12:02.879 --> 00:12:05.320 then technology also is a factor that comes back in 223 00:12:05.440 --> 00:12:07.279 on the energy management systems. 224 00:12:07.639 --> 00:12:10.559 We also have a different studies across the different marketer zone. 225 00:12:10.840 --> 00:12:12.840 What we see is that if you look at power 226 00:12:12.879 --> 00:12:14.679 markets in Indian I mean so yes, we see that 227 00:12:15.000 --> 00:12:17.480 storage is long term needed, it is something that should 228 00:12:17.480 --> 00:12:19.200 be profitable in this markets, but we also see that 229 00:12:19.240 --> 00:12:21.440 there's a lot of intervention. See the market. So we 230 00:12:21.519 --> 00:12:23.360 see a relulatory into invention. We're seeing it in the 231 00:12:23.360 --> 00:12:25.720 past couple of weeks and months in different coundra zone. 232 00:12:25.720 --> 00:12:28.559 And that also means that it's very hard to forecast 233 00:12:28.840 --> 00:12:31.279 what kind of volatility we see the markets, but what 234 00:12:31.360 --> 00:12:34.159 kind of arbitrage will we have so reaskly we can't 235 00:12:34.200 --> 00:12:36.759 really control because it's a political risk where some government 236 00:12:36.799 --> 00:12:39.399 goes in and do something to market in three years time, 237 00:12:39.440 --> 00:12:42.240 we simply have no protection if we only have merchant revenue, 238 00:12:42.279 --> 00:12:44.320 for instance. So when we look at all those markets, 239 00:12:44.320 --> 00:12:46.159 we do believe that there should be some kind of 240 00:12:46.159 --> 00:12:48.720 relatory support for the assets. Otherwise I think it will 241 00:12:48.720 --> 00:12:51.639 be very difficult for anybody long term to invest in them. 242 00:12:51.639 --> 00:12:53.480 And then, of course you will have different agreements, you 243 00:12:53.519 --> 00:12:55.360 will have total agreements, you will have different things to 244 00:12:55.360 --> 00:12:58.200 the risk. But a big part of risk sits on 245 00:12:58.279 --> 00:13:00.679 the relatory side and the political side, and that is 246 00:13:00.720 --> 00:13:03.360 something that simply needs to be managed by the bailer. 247 00:13:03.960 --> 00:13:07.360 I believe we playbook. They always need government support when 248 00:13:07.399 --> 00:13:09.399 things go bad and when things go up is for 249 00:13:09.519 --> 00:13:10.320 the shareholders. 250 00:13:10.600 --> 00:13:12.919 We're a big player, but I don't think the economics 251 00:13:12.919 --> 00:13:15.200 looks anything different from us than it does for other players. 252 00:13:15.240 --> 00:13:17.480 I mean, you need to have a long term certainty 253 00:13:17.519 --> 00:13:20.879 this as it will stand there for decades hopefully. It's 254 00:13:21.000 --> 00:13:23.399 really for difficult to focus what will happen in the 255 00:13:23.440 --> 00:13:24.080 in decade? 256 00:13:24.519 --> 00:13:26.200 Yeah, future is difficult to forecast. 257 00:13:26.360 --> 00:13:28.919 Yeah, especially the future, especially the future. 258 00:13:29.039 --> 00:13:33.480 Yeah, good, good, good. So basically everybody's trying to put 259 00:13:33.519 --> 00:13:37.960 some long term edge over the short term flexibility. And 260 00:13:38.039 --> 00:13:40.080 the banks, of course, you know you have a good 261 00:13:40.080 --> 00:13:42.720 toning agreement, they're going to lend you I don't know, 262 00:13:42.960 --> 00:13:46.360 eighty percent or whatever. If you're a merchant, I think 263 00:13:46.360 --> 00:13:49.519 they give you forty percent of eighty percent max. Okay, 264 00:13:49.759 --> 00:13:53.840 now to your favorite topic, everything that goes wrong. Regulation. 265 00:13:54.960 --> 00:13:59.440 Let's talk about how regulation is affecting bankability. I know 266 00:13:59.480 --> 00:14:00.799 you want to start first. 267 00:14:01.320 --> 00:14:04.399 I love regulation, Yeah, I know. So we're in the 268 00:14:04.559 --> 00:14:07.679 power market, that's the powermark business, and it's deeply regulator 269 00:14:07.720 --> 00:14:10.200 for good reasons. We're not selling hot dogs, We're selling 270 00:14:10.240 --> 00:14:12.240 something that needs to be functioning one hundred percent of 271 00:14:12.279 --> 00:14:14.759 all the hours of the year. So a lot of 272 00:14:15.039 --> 00:14:17.639 relation is helpful, I must first say, but there are 273 00:14:17.639 --> 00:14:19.519 some which is not. I think that grid cues is 274 00:14:19.519 --> 00:14:23.039 one of those things that really is making life difficult 275 00:14:23.080 --> 00:14:24.720 for many of us. We used to come from a 276 00:14:24.799 --> 00:14:27.679 very static system and then it was really about first come, 277 00:14:27.759 --> 00:14:29.960 first serve when it comes to the grid. But that 278 00:14:29.960 --> 00:14:31.840 also means that now we have a huge build up 279 00:14:31.879 --> 00:14:34.480 of porests that can really be well, that are not bankable, 280 00:14:34.480 --> 00:14:37.639 that it's not really verdical to construct. And there is 281 00:14:37.639 --> 00:14:39.720 some work now being done to sort of dix these 282 00:14:39.720 --> 00:14:41.320 Greek queues, and I think that is key because we 283 00:14:41.399 --> 00:14:43.559 need to be able to make sure that those protests 284 00:14:43.600 --> 00:14:46.840 that can be built can get online fast or the 285 00:14:46.840 --> 00:14:48.440 one that is needed, and we need to do something 286 00:14:48.440 --> 00:14:50.159 about this so they can be constructed. 287 00:14:50.480 --> 00:14:54.519 You're really a regulation expert. Explain to me why greed 288 00:14:54.600 --> 00:14:58.600 fees are not the same in different countries. Why certain 289 00:14:58.639 --> 00:15:01.960 countries decide to apply fees of a certain leven and 290 00:15:02.039 --> 00:15:05.440 other not even the relationship, say, oh, is a battery 291 00:15:05.480 --> 00:15:08.519 a battery? What is a battery? Is it degenerating? Is 292 00:15:08.559 --> 00:15:11.440 it consuming? Doing to charge? In charge? Y? 293 00:15:12.120 --> 00:15:15.039 Well, twenty seven member states in Europe, they don't all 294 00:15:15.200 --> 00:15:17.559 treat it DEAs the same. And also like hey, colocate, 295 00:15:17.600 --> 00:15:20.240 how can you bundlessen songs? I mean, yes, it is 296 00:15:20.279 --> 00:15:21.600 a bit of a I don't want to say we're 297 00:15:21.600 --> 00:15:23.120 a mess, but I do a bit of a mess, 298 00:15:23.240 --> 00:15:25.240 and I think that a bit more lned approach across 299 00:15:25.279 --> 00:15:27.960 Europe could definitely be helpful. And that, of course, I 300 00:15:27.960 --> 00:15:29.919 mean there will also be differences because you have different 301 00:15:30.039 --> 00:15:33.080 ground circumstances. The need for batteries in Sweden is very 302 00:15:33.080 --> 00:15:35.080 different from the need of battery in Germany, for instance. 303 00:15:35.159 --> 00:15:37.120 Of course it will be differences, but I think a 304 00:15:37.120 --> 00:15:38.480 lot more things can be aligned. 305 00:15:39.799 --> 00:15:42.960 My favorite thing about batteries is that it's the only 306 00:15:43.120 --> 00:15:47.600 unsubsidized asset class in the energy space, at least in Germany, 307 00:15:48.159 --> 00:15:50.840 and that's something that I am very proud of being 308 00:15:50.840 --> 00:15:54.200 in As an industry, I fundamentally believe that we should 309 00:15:54.279 --> 00:15:57.840 make energy investments attractive to private markets on a standard 310 00:15:57.960 --> 00:16:00.360 one basis, and battery have been able to so far 311 00:16:00.440 --> 00:16:03.799 in Germany to do that in Germany just for I 312 00:16:03.840 --> 00:16:05.960 know many of us probably know it, but we have 313 00:16:05.960 --> 00:16:08.039 an upfront payment that we pay in order to get 314 00:16:08.039 --> 00:16:10.840 the grid connection, which is quite sizable. It's grown over time. 315 00:16:10.840 --> 00:16:13.159 It's now as much as say one hundred k Pomegawa 316 00:16:13.360 --> 00:16:15.840 is I would even say the average at this point 317 00:16:16.200 --> 00:16:18.960 and then we do have grid charges that are coming in, 318 00:16:19.200 --> 00:16:22.840 they're unknown in size and methodology. Today here we have 319 00:16:22.919 --> 00:16:27.200 an interlope of issues which we need to address, and 320 00:16:27.200 --> 00:16:28.879 I think we need to just have a very open 321 00:16:28.919 --> 00:16:31.759 and transparent discussion with the regulators. One for me is 322 00:16:32.279 --> 00:16:35.000 we can't just change the world today and apply it tomorrow, because, 323 00:16:35.000 --> 00:16:38.080 as I said, projects are three years ahead. A project 324 00:16:38.120 --> 00:16:40.679 that I've signed and improved the capaxon a few months 325 00:16:40.720 --> 00:16:42.840 ago will be built in twenty twenty nine. So if 326 00:16:42.840 --> 00:16:45.960 we now change the regulation and that project might be uneconomical, 327 00:16:46.440 --> 00:16:51.399 we're essentially hurting institutional capital, those who we should protect 328 00:16:51.399 --> 00:16:54.759 as a society. We're hurting pensioners and insurance funds. For me, 329 00:16:54.879 --> 00:16:59.080 that fundamentally is my believe. So that's one the timing 330 00:16:59.120 --> 00:17:01.720 of regulation. Okay with the twenty twenty nine dead line, 331 00:17:01.799 --> 00:17:04.359 but it's completely distorted the market. It's led to a 332 00:17:04.480 --> 00:17:07.839 run on pre twenty nine connection that's created that massive 333 00:17:07.920 --> 00:17:11.119 queue that grid operators have to handle. And I also 334 00:17:11.160 --> 00:17:14.079 find sympathy in that. Quite frankly, if you're a grid 335 00:17:14.119 --> 00:17:17.160 operator now having to handle one hundred gigawat QUEU where 336 00:17:17.160 --> 00:17:19.200 you know there will only be ten or fifteen Gigawa 337 00:17:19.279 --> 00:17:22.519 being built by twenty thirty. You are completely overwhelmed and 338 00:17:22.559 --> 00:17:25.680 you're trying to grasp for air. Making the entire market 339 00:17:25.720 --> 00:17:29.319 unprofitable might not be the path forward given in my mind, 340 00:17:29.400 --> 00:17:32.000 we need batteries in order to be able to have 341 00:17:32.079 --> 00:17:35.440 a green energy system that provides sufficient based out. And 342 00:17:35.480 --> 00:17:37.480 so what I think is frankly just a very open 343 00:17:37.519 --> 00:17:39.920 discussion which is going on at the moment where they'll 344 00:17:39.960 --> 00:17:42.440 regulator proposed the solution of how to handle grid fees. 345 00:17:42.480 --> 00:17:45.119 We push back and it comes to a system that 346 00:17:45.200 --> 00:17:48.400 is both sustainable in a private capital perspective and for 347 00:17:48.480 --> 00:17:51.079 the grid operator to provide sufficient funding in order to 348 00:17:51.079 --> 00:17:54.079 build out the network. The other point we should touch 349 00:17:54.119 --> 00:17:56.559 on is the flexible connection agreements that we see in 350 00:17:56.559 --> 00:17:59.279 Germany come in. I personally don't have any issues with 351 00:17:59.359 --> 00:18:01.720 an FCA agreement if it's known ahead of time. If 352 00:18:01.720 --> 00:18:03.720 they tell me that there is in a wind area 353 00:18:03.759 --> 00:18:05.880 where you're not able to feed in during dec and 354 00:18:05.960 --> 00:18:08.119 these wind hours, I'm okay to price that end the 355 00:18:08.160 --> 00:18:10.759 project might be uneconomical, but as long as I have 356 00:18:10.799 --> 00:18:13.480 not spent CAPEX, I'm okay with that. Again, what I 357 00:18:13.519 --> 00:18:16.880 struggle with and what I think the entire investment scene 358 00:18:16.920 --> 00:18:19.680 struggles with is if things are applied after you've given 359 00:18:19.759 --> 00:18:22.559 the go ahead on spending money, and that is something 360 00:18:22.559 --> 00:18:24.920 we need to discuss very openly and raise against with 361 00:18:24.960 --> 00:18:27.839 the regulators, just because it's two different ways of thinking. 362 00:18:28.480 --> 00:18:31.000 One is a three ahead thinking, one is a all 363 00:18:31.079 --> 00:18:34.680 God migrant is under stress, I need to act now thinking. 364 00:18:35.000 --> 00:18:37.680 So those two worlds just need to come together, and 365 00:18:37.960 --> 00:18:40.480 I see a completely walkable path that is in front 366 00:18:40.519 --> 00:18:40.960 of us. 367 00:18:41.160 --> 00:18:44.799 Okay, So talking about the change of regulation, we are 368 00:18:45.240 --> 00:18:49.960 very recently the EU Open Commission I don't know who 369 00:18:49.759 --> 00:18:54.480 who decided that Chinese inverters are not welcome anymore, which 370 00:18:54.519 --> 00:18:56.359 is a bit of a problem, especially if you have 371 00:18:56.400 --> 00:19:00.880 a three year development cycle. So how as asset owner 372 00:19:01.200 --> 00:19:05.039 you react to this type of very rapid change which 373 00:19:05.119 --> 00:19:07.599 come out of I don't know security. They're going to 374 00:19:07.680 --> 00:19:11.480 name it whatever they want, but it's very abrupt. Do 375 00:19:11.480 --> 00:19:12.599 you have any comment to make? 376 00:19:13.160 --> 00:19:15.640 First of all, when it's coming out of nowhere, that's 377 00:19:15.680 --> 00:19:17.680 really the issue, right because then you can't really plan. 378 00:19:17.799 --> 00:19:20.960 So we need to have long term certainly for these things. 379 00:19:21.319 --> 00:19:23.599 So that's the general relatory thing that we need. Long 380 00:19:23.640 --> 00:19:27.240 term time certainty and stability. This specific news that came out, 381 00:19:27.359 --> 00:19:31.000 it was not regarding the funding from EU based programs 382 00:19:31.160 --> 00:19:34.559 has a special regulation for chinesea inverters. When we look 383 00:19:34.599 --> 00:19:36.240 at our asset base, I mean we have a huge 384 00:19:36.240 --> 00:19:38.759 asset base. We have everything from gas to legunite, we 385 00:19:38.839 --> 00:19:40.720 used to have nuclear power and zone. So we take 386 00:19:40.759 --> 00:19:44.799 cybersecurity super seriously. But we haven't really found a strong 387 00:19:44.839 --> 00:19:48.160 correlation between the origin of the inverter and the safety 388 00:19:48.200 --> 00:19:49.720 of them, So I mean we would take the super seriously. 389 00:19:49.759 --> 00:19:52.000 We need to make sure our assets are safe. But 390 00:19:52.039 --> 00:19:54.039 I think it's also important that we have a dialogue 391 00:19:54.079 --> 00:19:56.480 with the regulator about these things to make sure that 392 00:19:56.480 --> 00:19:58.720 we're well reformed decisions on points. But of course we 393 00:19:58.720 --> 00:20:02.720 should be cautious blackouts in the future due to cybersecurity 394 00:20:03.119 --> 00:20:05.599 well practice song so it's important, but we need more 395 00:20:05.640 --> 00:20:07.160 certainty and dialogue for. 396 00:20:07.160 --> 00:20:10.079 Me personally, the permitting that needs to be intact. If 397 00:20:10.119 --> 00:20:12.640 we have a project which is permitted with a different equipment, 398 00:20:12.839 --> 00:20:15.960 then if there's a regulation change, there needs to be 399 00:20:16.200 --> 00:20:18.839 an adjustment in a way that building permits can be 400 00:20:19.000 --> 00:20:22.400 without delay to the project to be adjusted. If one regulation, 401 00:20:22.599 --> 00:20:26.160