Speaker 1: With Laurent's segle And from London and Gerard Reid from Berlin.
Speaker 2: This is Redefining Energy Today.
Speaker 3: On Redefining Energy, we're going to talk about the bankability
Speaker 3: of battery storage investments and the podcast is based on
Speaker 3: a panel discussion that Laurent was involved in a Solar
Speaker 3: Power Europe's event in Brussels in May twenty twenty six.
Speaker 4: Yeah.
Speaker 3: Actually, Lauren, if I remember, you were with Friedrich Sandberg
Speaker 3: and Hannah Kunzman. Friedrich is from RWE and Hannah's from
Speaker 3: EQT and a really interesting discussion in and around as
Speaker 3: I said, batteries, stationary store origin. What's going on there?
Speaker 4: Yeah, and also a lot of conversation around cove, new models,
Speaker 4: around regulation, around technology. So we thank power Job for
Speaker 4: organizing all this world Boga, the wonderful team, and it's
Speaker 4: probably time to listen to the conversation.
Speaker 3: Bringing on.
Speaker 4: Welcome to this panel. So we're in Brussels, it's a
Speaker 4: Cellar Power Europe and have the privilege to share a
Speaker 4: great conversation around bankability of storage project. My name is Lawrence. Again.
Speaker 4: You might know my voice because I'm the co host
Speaker 4: of the Really Funning Energy podcast. I have the privilege
Speaker 4: to introduce my guest, two heavyweights of the storage industry,
Speaker 4: Frederick Andred Sandberg from WE and Anna Kuzman from EQT.
Speaker 4: WE is investing ten billion for storage and flexible assets
Speaker 4: over the next five years and to expand to six
Speaker 4: gigawatts and that is twenty five percent of the overall capex.
Speaker 4: As for EQT, a Swedish investment fund, they have a
Speaker 4: twenty billion Infrastio six funds to scale massive development and
Speaker 4: they have a pipeline of sixteen gigawad of storage. So
Speaker 4: please welcome our guests. We have decided to slice the
Speaker 4: conversation around four main topics of bankability. The first one's
Speaker 4: going to be about the technology, the second one about
Speaker 4: of new models modetization, the third one about regulation and
Speaker 4: the fourth, if we have time, around the digital layer.
Speaker 4: So the first question I'm going to ask technology, what
Speaker 4: do you like as technology to invest in? What is bankable?
Speaker 1: Thank you so much for bringing us to this panel.
Speaker 1: I also found it interesting how inticative we are in Europe.
Speaker 1: We have a German person working for Swedish company and
Speaker 1: then a Swedish person working for Germ companies. Also shows
Speaker 1: how well Europe is is working in a moment. When
Speaker 1: I look at the technology, we do actually see storage
Speaker 1: to be quite mature. So I mean we do have
Speaker 1: the foreseeable how they degrade us. So I think the
Speaker 1: main problem is not the technology moment, as long as
Speaker 1: it can be ensued and we have the revenue certainty
Speaker 1: and then I think is definitely bankable. And I mean,
Speaker 1: as we also see how the anty landscape is developing
Speaker 1: in Europe, storage is simply needed. We see that with
Speaker 1: the large scale a lot of renewables which is not
Speaker 1: needed for anty security and other reasons, we simply need
Speaker 1: storage to back this up. We need storage of flex
Speaker 1: plaster to make sure that we can actually integate the
Speaker 1: renewables that we so desperately need to build.
Speaker 2: I agree for us, we understand the technology to be
Speaker 2: broadly proven and to be modelable. And you know what
Speaker 2: an investor at the end of the day wants and
Speaker 2: needs is that that certainty of long term revenue contribution
Speaker 2: and also the certainty of operation ensurability, bankability. What we see,
Speaker 2: and this is all going a bit outside of the
Speaker 2: topic of you know, lithium iron or not lithium iron,
Speaker 2: is we see an MN shift towards longer duration where
Speaker 2: we still see the supply chain in the economics developing
Speaker 2: over time. I mean we think sill the very market's
Speaker 2: becoming more and more crowded by market. So we saw
Speaker 2: the same in the UK, We see the same that
Speaker 2: happening in Germany. We see a shift in our portfolios
Speaker 2: from a one to two to two to four and
Speaker 2: then ultimately eat our battery where we just need to
Speaker 2: also have more commercialization options come intact with the need
Speaker 2: that we see from the market and also quite frankly,
Speaker 2: if we are all seeking to transition to a green future,
Speaker 2: that is what we require right in order to get
Speaker 2: to baselope, we will require longerteration storage and that needs
Speaker 2: to be economic and make sense of turch strategy and
Speaker 2: a technology perspective as well.
Speaker 4: Yeah, because one of the issue that the battery as
Speaker 4: is a lot of the professional come from the wind
Speaker 4: and solar universe with a type of mindset like okay,
Speaker 4: you put the asset. Okay, maybe you're going to change
Speaker 4: your gearbox once every never all blade, or you're going
Speaker 4: to clean your sell up bandle once in a while.
Speaker 4: But the battery is a different animal. It's every day
Speaker 4: you need to every hour, every minute, you need to
Speaker 4: check what's going on. So there is this evolution that
Speaker 4: we're seeing in the management of batteries. The bank ability
Speaker 4: is not just at a FID, it's the bank ability
Speaker 4: along the life of the battery. And unfortunately we see
Speaker 4: that those equipment which are ten years old. I've got
Speaker 4: a ten years old sol our farms are okay, fine,
Speaker 4: but a ten year old battery, I'm starting to freak out.
Speaker 1: Correct I like, there's also been a bit of an
Speaker 1: evolution in the holy space for batteries. And as you say,
Speaker 1: I mean it's a very different beast compared to solar
Speaker 1: and window. I mean a windows, it's it's a mechanical energy, right,
Speaker 1: and solar is physics. Here it's chemistry. You need to
Speaker 1: manage chemistry for for many, many years, so we know
Speaker 1: how chemistry can react. On that other hand, we're quite
Speaker 1: used to these cameras assets in our company as well.
Speaker 1: We have other conventional assets. We of course need maintenance
Speaker 1: and people working on them every day. So with the
Speaker 1: other toes of bankability, we do believe that we have
Speaker 1: a good idea on the degrading factors of the assets.
Speaker 1: We also understand how take me assured and all understand
Speaker 1: how to operate them. So I think it's definitely bankable then,
Speaker 1: of course, I mean if you look at the whole
Speaker 1: space now, we see that only roughly twenty percent of
Speaker 1: all the renewables that need to be built out towards
Speaker 1: twenty fifty has been built out for batteries. Are not
Speaker 1: sure about the exact percentage, but it means that we'll
Speaker 1: still need to build a whole lot of batteries and
Speaker 1: storage going forward. I'm also sure that there will be
Speaker 1: evolution on the technology front here, so the chemist system
Speaker 1: used today will probably evolve into other systems and then
Speaker 1: we need to learn from those as well. But overall,
Speaker 1: we're quite confident that these you know, will work and
Speaker 1: it's reliable enough to be bank.
Speaker 2: And to beigg back on that we need to have
Speaker 2: also that reflected in the permitting. So when we plan projects,
Speaker 2: and we've just recently approved quite a few tso ultra
Speaker 2: high voltage projects in Germany where you lead, times are
Speaker 2: frankly three years under transformers and the substations, and as such,
Speaker 2: in those three years you've already ordered equipment, you have
Speaker 2: ideally already told the asset. You kind of locked in
Speaker 2: on your unit economics, but there can be a shift
Speaker 2: in technology for the better. There is a potential to
Speaker 2: maybe improve some of these economics. And so ideally a
Speaker 2: battery which is something we would order twelve to eighteen
Speaker 2: months before COD versus a transformer thirty six months before COD.
Speaker 2: There needs to be an ability, ideally in the permitting,
Speaker 2: so we can change which containers who are essentially putting there.
Speaker 2: For example, power density going up and us being able
Speaker 2: to put four hours instead of two hours, that will
Speaker 2: be positive to the grid. It would be something the
Speaker 2: TSLOS like to see because we're less playing in the
Speaker 2: in the ancilliary markets, or it becomes less of an
Speaker 2: importance in a multi stacked revenue stream. But if the
Speaker 2: permitting then says no, you've permitted technology A and on
Speaker 2: that hour system and the containers are two meters times
Speaker 2: x meters, you can't change that. That gets a bit
Speaker 2: rigid and I think we need to reflect that as
Speaker 2: opposed to SOLO, which is a twelve month of construction cycle.
Speaker 2: We see construction batteries, especially in large scale projects above
Speaker 2: one hundred megrow, it's really as a three year, long
Speaker 2: term project with that certainty also necessary and that certainly
Speaker 2: for me, also goes into regulation. Regulation and batteries needs
Speaker 2: to be for changes that we discuss now on regulation,
Speaker 2: it affects a twenty thirty battery and then twenty twenty
Speaker 2: nine battery, So just to bring that also on top
Speaker 2: very one's mind, and it's a long term game. And
Speaker 2: when we discuss adverse regulation, it goes into the technology
Speaker 2: question as well, just because of the as a cast
Speaker 2: that we're in.
Speaker 4: Okay, so before we move into the next chapter, I'm
Speaker 4: gonna ask your last question. Please answer by yes or no.
Speaker 4: It's very bigate yes or no.
Speaker 1: I'm not sure I'm able to do that, but let's
Speaker 1: say yes.
Speaker 4: Of course you can't, but you're still going to do it.
Speaker 4: And the question is decide LFP batteries. Do you have
Speaker 4: any other technology that you see bankable and scalable in
Speaker 4: the next two years?
Speaker 1: I don't know, Actually I don't know, good, Hannah, not
Speaker 1: yet for me.
Speaker 4: So it's a no. Basically technologically to ship as sailed,
Speaker 4: that's very interesting. It means the technology stable. Okay. Good.
Speaker 4: So now let's go into a much more dynamic universe,
Speaker 4: which is the universe of revenue, monetization and so on.
Speaker 4: And we have the privilege of having anna. We're trying
Speaker 4: to investing in batteries or trying to find some tolling
Speaker 4: or long term revenue. And here at the w with
Speaker 4: doing everything, of course, because you're so big, but you
Speaker 4: are also buying flexibility as a service. Maybe start with
Speaker 4: an explain when you're going to invest the collocated and
Speaker 4: the stand alone is a bit of different animal, but
Speaker 4: let's start with the stand alone battery. Explain what's your
Speaker 4: revenue strategy in order to get the project more bankable? Please?
Speaker 2: In order to answer that worth taking a tiny step
Speaker 2: back and explaining. So EQT, as mentioned, is an asset
Speaker 2: manager who is majorly managing the money of pension funds
Speaker 2: and insurances, so very large scale institution investors with three
Speaker 2: and ared billion AM of which seventy billion is an
Speaker 2: infront and we have across Europe thirty gig or what
Speaker 2: hours of installed battery or a near term pipeline that's
Speaker 2: coming to turn. And because we have this institutional asset base,
Speaker 2: we're not a merchant trader, or it could be opportunities
Speaker 2: where we do that, but our investors really want us
Speaker 2: to toll and show long term certainty of cash loss,
Speaker 2: and across Europe we make it dependent on what is
Speaker 2: available in the market. For example, we have floora agreements
Speaker 2: in the UK across our portfolio company Zetera. We have
Speaker 2: tolls in Germany across Celestia and units in the Nordics
Speaker 2: we have a mix of everything you can imagine across
Speaker 2: OIX two and Celestra, and then in the South we
Speaker 2: also do a lot of hybrid PPA. So it depends
Speaker 2: on what off take market is there. But we see
Speaker 2: it support bankability and provide the necessary visibility that our
Speaker 2: investors really need and require. And we see the economics
Speaker 2: today be intact still on the capex that we need
Speaker 2: to bring up and the ever degrading cost of equipment
Speaker 2: and a tolling market which is establishing, and we've been
Speaker 2: able to sign of what we believe to be the
Speaker 2: first operating toll last year with units in Germany. That
Speaker 2: being said, for US, we typically toil away the majority
Speaker 2: of the asset, but not all given we want to
Speaker 2: leave some flexibility also for downtimes, for maintenance and all
Speaker 2: of these things, and invoid unnecessary penalty payments. But if
Speaker 2: you have a broader portfolio can even remove that a
Speaker 2: bidding and be even more optimistic if you are able
Speaker 2: to hype like synthetically pool your batteries into a portfolio
Speaker 2: and thereby shift load from one to another for example. Broadly,
Speaker 2: as a main statement, it's a multi market strategy in
Speaker 2: all of the markets that we're in. And for me,
Speaker 2: it is important to if you told the asset, find
Speaker 2: someone where one it is competitive against a merchant off takers,
Speaker 2: so to say, and you also for the merchant piece
Speaker 2: that you have, have a good optimizer that you also
Speaker 2: benchmark against indecs and also ideally across the portfolio against
Speaker 2: each other, just to be sure that you're twenty or
Speaker 2: thirty percent that you have in a portfolio of merchant
Speaker 2: revenues also getting traded in the most appropriate way. Where
Speaker 2: then technology also is a factor that comes back in
Speaker 2: on the energy management systems.
Speaker 1: We also have a different studies across the different marketer zone.
Speaker 1: What we see is that if you look at power
Speaker 1: markets in Indian I mean so yes, we see that
Speaker 1: storage is long term needed, it is something that should
Speaker 1: be profitable in this markets, but we also see that
Speaker 1: there's a lot of intervention. See the market. So we
Speaker 1: see a relulatory into invention. We're seeing it in the
Speaker 1: past couple of weeks and months in different coundra zone.
Speaker 1: And that also means that it's very hard to forecast
Speaker 1: what kind of volatility we see the markets, but what
Speaker 1: kind of arbitrage will we have so reaskly we can't
Speaker 1: really control because it's a political risk where some government
Speaker 1: goes in and do something to market in three years time,
Speaker 1: we simply have no protection if we only have merchant revenue,
Speaker 1: for instance. So when we look at all those markets,
Speaker 1: we do believe that there should be some kind of
Speaker 1: relatory support for the assets. Otherwise I think it will
Speaker 1: be very difficult for anybody long term to invest in them.
Speaker 1: And then, of course you will have different agreements, you
Speaker 1: will have total agreements, you will have different things to
Speaker 1: the risk. But a big part of risk sits on
Speaker 1: the relatory side and the political side, and that is
Speaker 1: something that simply needs to be managed by the bailer.
Speaker 4: I believe we playbook. They always need government support when
Speaker 4: things go bad and when things go up is for
Speaker 4: the shareholders.
Speaker 1: We're a big player, but I don't think the economics
Speaker 1: looks anything different from us than it does for other players.
Speaker 1: I mean, you need to have a long term certainty
Speaker 1: this as it will stand there for decades hopefully. It's
Speaker 1: really for difficult to focus what will happen in the
Speaker 1: in decade?
Speaker 4: Yeah, future is difficult to forecast.
Speaker 1: Yeah, especially the future, especially the future.
Speaker 4: Yeah, good, good, good. So basically everybody's trying to put
Speaker 4: some long term edge over the short term flexibility. And
Speaker 4: the banks, of course, you know you have a good
Speaker 4: toning agreement, they're going to lend you I don't know,
Speaker 4: eighty percent or whatever. If you're a merchant, I think
Speaker 4: they give you forty percent of eighty percent max. Okay,
Speaker 4: now to your favorite topic, everything that goes wrong. Regulation.
Speaker 4: Let's talk about how regulation is affecting bankability. I know
Speaker 4: you want to start first.
Speaker 1: I love regulation, Yeah, I know. So we're in the
Speaker 1: power market, that's the powermark business, and it's deeply regulator
Speaker 1: for good reasons. We're not selling hot dogs, We're selling
Speaker 1: something that needs to be functioning one hundred percent of
Speaker 1: all the hours of the year. So a lot of
Speaker 1: relation is helpful, I must first say, but there are
Speaker 1: some which is not. I think that grid cues is
Speaker 1: one of those things that really is making life difficult
Speaker 1: for many of us. We used to come from a
Speaker 1: very static system and then it was really about first come,
Speaker 1: first serve when it comes to the grid. But that
Speaker 1: also means that now we have a huge build up
Speaker 1: of porests that can really be well, that are not bankable,
Speaker 1: that it's not really verdical to construct. And there is
Speaker 1: some work now being done to sort of dix these
Speaker 1: Greek queues, and I think that is key because we
Speaker 1: need to be able to make sure that those protests
Speaker 1: that can be built can get online fast or the
Speaker 1: one that is needed, and we need to do something
Speaker 1: about this so they can be constructed.
Speaker 4: You're really a regulation expert. Explain to me why greed
Speaker 4: fees are not the same in different countries. Why certain
Speaker 4: countries decide to apply fees of a certain leven and
Speaker 4: other not even the relationship, say, oh, is a battery
Speaker 4: a battery? What is a battery? Is it degenerating? Is
Speaker 4: it consuming? Doing to charge? In charge? Y?
Speaker 1: Well, twenty seven member states in Europe, they don't all
Speaker 1: treat it DEAs the same. And also like hey, colocate,
Speaker 1: how can you bundlessen songs? I mean, yes, it is
Speaker 1: a bit of a I don't want to say we're
Speaker 1: a mess, but I do a bit of a mess,
Speaker 1: and I think that a bit more lned approach across
Speaker 1: Europe could definitely be helpful. And that, of course, I
Speaker 1: mean there will also be differences because you have different
Speaker 1: ground circumstances. The need for batteries in Sweden is very
Speaker 1: different from the need of battery in Germany, for instance.
Speaker 1: Of course it will be differences, but I think a
Speaker 1: lot more things can be aligned.
Speaker 2: My favorite thing about batteries is that it's the only
Speaker 2: unsubsidized asset class in the energy space, at least in Germany,
Speaker 2: and that's something that I am very proud of being
Speaker 2: in As an industry, I fundamentally believe that we should
Speaker 2: make energy investments attractive to private markets on a standard
Speaker 2: one basis, and battery have been able to so far
Speaker 2: in Germany to do that in Germany just for I
Speaker 2: know many of us probably know it, but we have
Speaker 2: an upfront payment that we pay in order to get
Speaker 2: the grid connection, which is quite sizable. It's grown over time.
Speaker 2: It's now as much as say one hundred k Pomegawa
Speaker 2: is I would even say the average at this point
Speaker 2: and then we do have grid charges that are coming in,
Speaker 2: they're unknown in size and methodology. Today here we have
Speaker 2: an interlope of issues which we need to address, and
Speaker 2: I think we need to just have a very open
Speaker 2: and transparent discussion with the regulators. One for me is
Speaker 2: we can't just change the world today and apply it tomorrow, because,
Speaker 2: as I said, projects are three years ahead. A project
Speaker 2: that I've signed and improved the capaxon a few months
Speaker 2: ago will be built in twenty twenty nine. So if
Speaker 2: we now change the regulation and that project might be uneconomical,
Speaker 2: we're essentially hurting institutional capital, those who we should protect
Speaker 2: as a society. We're hurting pensioners and insurance funds. For me,
Speaker 2: that fundamentally is my believe. So that's one the timing
Speaker 2: of regulation. Okay with the twenty twenty nine dead line,
Speaker 2: but it's completely distorted the market. It's led to a
Speaker 2: run on pre twenty nine connection that's created that massive
Speaker 2: queue that grid operators have to handle. And I also
Speaker 2: find sympathy in that. Quite frankly, if you're a grid
Speaker 2: operator now having to handle one hundred gigawat QUEU where
Speaker 2: you know there will only be ten or fifteen Gigawa
Speaker 2: being built by twenty thirty. You are completely overwhelmed and
Speaker 2: you're trying to grasp for air. Making the entire market
Speaker 2: unprofitable might not be the path forward given in my mind,
Speaker 2: we need batteries in order to be able to have
Speaker 2: a green energy system that provides sufficient based out. And
Speaker 2: so what I think is frankly just a very open
Speaker 2: discussion which is going on at the moment where they'll
Speaker 2: regulator proposed the solution of how to handle grid fees.
Speaker 2: We push back and it comes to a system that
Speaker 2: is both sustainable in a private capital perspective and for
Speaker 2: the grid operator to provide sufficient funding in order to
Speaker 2: build out the network. The other point we should touch
Speaker 2: on is the flexible connection agreements that we see in
Speaker 2: Germany come in. I personally don't have any issues with
Speaker 2: an FCA agreement if it's known ahead of time. If
Speaker 2: they tell me that there is in a wind area
Speaker 2: where you're not able to feed in during dec and
Speaker 2: these wind hours, I'm okay to price that end the
Speaker 2: project might be uneconomical, but as long as I have
Speaker 2: not spent CAPEX, I'm okay with that. Again, what I
Speaker 2: struggle with and what I think the entire investment scene
Speaker 2: struggles with is if things are applied after you've given
Speaker 2: the go ahead on spending money, and that is something
Speaker 2: we need to discuss very openly and raise against with
Speaker 2: the regulators, just because it's two different ways of thinking.
Speaker 2: One is a three ahead thinking, one is a all
Speaker 2: God migrant is under stress, I need to act now thinking.
Speaker 2: So those two worlds just need to come together, and
Speaker 2: I see a completely walkable path that is in front
Speaker 2: of us.
Speaker 4: Okay, So talking about the change of regulation, we are
Speaker 4: very recently the EU Open Commission I don't know who
Speaker 4: who decided that Chinese inverters are not welcome anymore, which
Speaker 4: is a bit of a problem, especially if you have
Speaker 4: a three year development cycle. So how as asset owner
Speaker 4: you react to this type of very rapid change which
Speaker 4: come out of I don't know security. They're going to
Speaker 4: name it whatever they want, but it's very abrupt. Do
Speaker 4: you have any comment to make?
Speaker 1: First of all, when it's coming out of nowhere, that's
Speaker 1: really the issue, right because then you can't really plan.
Speaker 1: So we need to have long term certainly for these things.
Speaker 1: So that's the general relatory thing that we need. Long
Speaker 1: term time certainty and stability. This specific news that came out,
Speaker 1: it was not regarding the funding from EU based programs
Speaker 1: has a special regulation for chinesea inverters. When we look
Speaker 1: at our asset base, I mean we have a huge
Speaker 1: asset base. We have everything from gas to legunite, we
Speaker 1: used to have nuclear power and zone. So we take
Speaker 1: cybersecurity super seriously. But we haven't really found a strong
Speaker 1: correlation between the origin of the inverter and the safety
Speaker 1: of them, So I mean we would take the super seriously.
Speaker 1: We need to make sure our assets are safe. But
Speaker 1: I think it's also important that we have a dialogue
Speaker 1: with the regulator about these things to make sure that
Speaker 1: we're well reformed decisions on points. But of course we
Speaker 1: should be cautious blackouts in the future due to cybersecurity
Speaker 1: well practice song so it's important, but we need more
Speaker 1: certainty and dialogue for.
Speaker 2: Me personally, the permitting that needs to be intact. If
Speaker 2: we have a project which is permitted with a different equipment,
Speaker 2: then if there's a regulation change, there needs to be
Speaker 2: an adjustment in a way that building permits can be
Speaker 2: without delay to the project to be adjusted. If one regulation,
Speaker 2: one politician makes a decision which I understand and find
Speaker 2: sympathy and we're coming from I don't agree or disagree.
Speaker 2: Then on the other hand, the people that are working
Speaker 2: on our permits need to have an understanding that that
Speaker 2: requires us to repermit projects. I would love to have
Speaker 2: more coordination of different departments and more intact movement. As
Speaker 2: a general statement, certainty, predictability, and being able to react
Speaker 2: on changes is required in order to make solid and
Speaker 2: long term investment decisions.
Speaker 4: Okay, you're very polite.
Speaker 1: And I think that's really the key what we just
Speaker 1: say are so we need the very very high standards
Speaker 1: for cybersecurity and these kind of things, but we need
Speaker 1: to tell this standards uniform and uniformly applied. So as
Speaker 1: long as we have high standards make sure that they
Speaker 1: do what we want them to do, then we should
Speaker 1: let those regulations steer and not to take the decision
Speaker 1: on a certain origins on.
Speaker 4: Okay, and now we go to the last chapter, which
Speaker 4: is in my opinion, the most interesting and the one
Speaker 4: where the bank ability is very difficult because we go
Speaker 4: in the realm of digital and batteries are digital animal
Speaker 4: because as we said, we need to check on them.
Speaker 4: Twenty four to seven. I remember I had a battery
Speaker 4: and the guy he blew off the five G connection,
Speaker 4: so we were blind with no idea what was going
Speaker 4: on inside the battery. And after two weeks he called
Speaker 4: it the it that's not working. Yeah, so you need
Speaker 4: to send a technician and of course after ten seconds
Speaker 4: it put it back on. And ninety percent and the
Speaker 4: represent of the problems of batteries can be fixed in
Speaker 4: the cloud and only a few percent needs to be
Speaker 4: physically help. So BMS ems cloud management that starts to
Speaker 4: impact into bankability. Difficult question, but try to have an
Speaker 4: educated answer.
Speaker 2: Do you need to have the interface is managed in
Speaker 2: order to be able to get proper insurance, to be
Speaker 2: able to have proper claims, especially if you start toiling
Speaker 2: your asset and you potentially have penalties if you're not available,
Speaker 2: and the interface matrix and topics become a super important point.
Speaker 2: Digital for us is even beyond that an important topic
Speaker 2: in sourcing the batteries. I mean you can find onlineg
Speaker 2: wuage interconnections still have some capacity, for example, so that
Speaker 2: becomes a very interesting path. Then in order to be
Speaker 2: able to trade your battery, probably you have to have
Speaker 2: good systems and they're ever evolving. However, from a risk
Speaker 2: perspective to your questional makability from me the interface matrix
Speaker 2: and really having that done before you put the battery
Speaker 2: into the field, having predictive maintenance that you can monitor
Speaker 2: from the cloud. All of that alow early on and
Speaker 2: certified and maybe spending top dollar and that is worth
Speaker 2: quite a lot in the long term because your act
Speaker 2: needs to run for fifteen to twenty years now.
Speaker 4: But for instance, you have a new most of you
Speaker 4: you have large park. Is there a decisions? Okay, same
Speaker 4: MEMS everywhere or same EMS in each country, regardless of
Speaker 4: the supplier. We want our ems, want to control a
Speaker 4: EMS or you just say the EMS come with the
Speaker 4: battery and we'll deal with it. How do you decide
Speaker 4: to do it? And if you don't know, it's fine,
Speaker 4: just say.
Speaker 1: In general, just another aspect of the asset. So I mean,
Speaker 1: we need to have the physical working batteries and we
Speaker 1: need to have digital working better. I mean, so the
Speaker 1: digitalization as such is a large inconvenience. I mean it's
Speaker 1: a bit cost driver as well. The cost driver something
Speaker 1: that is making it cheap. But we can now operate
Speaker 1: this asset from afar. We can do it very precisely
Speaker 1: and it brings a lot of benefit. But with all technology,
Speaker 1: if it doesn't work, then then you have an issue.
Speaker 1: I don't think we see this slum a separate issue,
Speaker 1: but it's a part of the assets, one of the
Speaker 1: big important aspects of it.
Speaker 4: Good. We have a few minutes left, so I'm going
Speaker 4: to ask each of you the same question, which is
Speaker 4: very simple. How do you see the evolution of bankability
Speaker 4: by the end of the decade. What will change in
Speaker 4: the concept of battery bankability in a few years' time?
Speaker 4: Wants to start.
Speaker 2: We have already done light speed steps in the last
Speaker 2: two years. Betteries two to three years ago was definitely
Speaker 2: a VC growth equity kind of investment. Now it's really
Speaker 2: infrastructure for me. By twenty thirty it is core infrastructure.
Speaker 2: It's becoming like renewables today, fully understood revenue models, maybe
Speaker 2: sometimes also a bit subsidized long term storage potential, so
Speaker 2: able to diversify your revenue stream from a commercial offtaker
Speaker 2: and from kind of governmental exposure. So it will become
Speaker 2: even more bankable in my mind, and even more understood,
Speaker 2: to the point.
Speaker 5: Where the natural buyer of these assets will gradually decrease
Speaker 5: in the kind of cost of capital to be at
Speaker 5: the very end, the ultimate inefficient cost of capital, which
Speaker 5: is very institutional long term capital that we'll go into
Speaker 5: the field, which makes it both bankable and financable for
Speaker 5: the long term.
Speaker 2: Then it becomes we have a system based view. Energy
Speaker 2: is inherently system based. It becomes a very known and
Speaker 2: long term component of how we run our energy systems
Speaker 2: across Europe.
Speaker 1: I'm very much in optimists, and I believe that we
Speaker 1: have the ability to learn, and I think that is
Speaker 1: what we'll see in the coming years as well. So
Speaker 1: batteries will go from a quite an exciting asset to
Speaker 1: a bit more of a boring asset. We will treat
Speaker 1: it as just any our assets, so as you say
Speaker 1: with solar panels, where wind farmers were gus as we
Speaker 1: have good assets, and now we have batteries. I think
Speaker 1: our understanding will evolve on how they work and how
Speaker 1: they should be in shortness on and then will treat
Speaker 1: it as a bit more of a boring common asset
Speaker 1: that we have in our system, which is necessary for
Speaker 1: us to finish the envy of transition.
Speaker 4: Okay, that's a wrap up. So I like to the
Speaker 4: panel and please upload them because it was a great conversation.
Speaker 3: Thank you for listening to Redefining Energy. Don't forget to
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