'Too much noise around energy from alpha males with big egos but little knowledge'

Vattenfall UK country manager Claus Wattendrup speaks to The reNEWS Podcast on the sidelines of All-Energy 2026 about the political climate for renewables and the company's plans in onshore and offshore wind.

Transcript

SPEAKER_01 0:01

Welcome to the Renews Podcast with me, Steven Dorn.

SPEAKER_02 0:08

In the long run, the direction is very clear. It doesn't mean that any government cannot do any harm. The car is running currently on the motorwell at 70 miles an hour. We see the target already, and it might be a bit bumpy now going forward, but going into reverse at full speed is wrong. Yeah, it's it's full of energy here. It's buzzing, and I had the chance to listen to Michael Shanks and his uh his speech here. Um also announcing the uh the energy independence bill. It was now published uh this this morning, um announced by the king. And it was really interesting to listen to him because it is about the big topics in the energy industry currently, because we see now uh the second oil price or gas price shock in five years, and it does remind me a bit of the 70s and then 80s, and at that time we had a quite a strong reaction as a society and as as countries. We built nuclear. Um we are now farther down the line and and we have new technology and we can we can do more, we can do different things. And the speech was also about how do we become independent from fossil fuel imports, and that's crucial for us because this is what's driving the costs currently. We have to reduce the dependence on gas. And how do we do that? I feel is we on the one hand have to electrify more, so really build out heat pumps, EVs, industrial processes and so on, but also increase the build-out of clean power. This is wind, solar, potentially nuclear. This is bringing costs down in the end. Um and plus we have to couple this with the flexibility because we can't run the country on wind and solar alone. It needs to be coupled with flexibility, and then we have also the demand side, not only like batteries. And then we have a new system, and I really hope that we go in this direction. I haven't read the bill yet. Um I heard it's about permitting or some accelerations of grid build-out. Uh, that would be good. But we really have a chance now to to move forward and really uh deploy renewables, potentially nuclear at larger scale and become more independent from these fossil fuel imports. And there I see some people advocating for turning the clock back, right? Uh and that to me doesn't work, right?

SPEAKER_01 2:48

Well there was a point I wanted to pick up with you. You provided uh an interview piece for the renewed show dailies for all energy, and I was struck by one of your points. Uh you wrote that we're racing to secure the UK's energy future by breaking our addiction to expensive fossil fuels, yet energy has been dragged into a pointless culture war. Uh everyone knows the system is complex but the direction is clear. Electrifying cut costs, there's too much noise from alpha males with big egos but little knowledge. Maybe you could expand on that point and tell us what you mean.

SPEAKER_02 3:27

Yeah, uh listen, I mean I am an engineer by training, right? And I I wish sometimes these debates would be um a bit more based on facts and uh a bit toned down. I feel it's uh it's a lot about shouting matches and uh and just stuff being being said that is that is questionable. And I rather have uh five engineers sitting in a room thinking about the energy system because it is complex and there is no quick solutions. We're talking about decades here, right? Um and all these big shifts in in uh in the energy system, they have happened over 30, 40 years lifespans, right? And and then there's a clear direction, I feel, globally, which is going towards clean power and flexible solutions and digital solutions. And then I hear some people shouting out, yeah, let's just drill some some oil from the North Sea, full stop. And that is we need, listen, we need gas and we need oil going forward for sure, but we have to reduce the dependence. And and the answer is not that we are now going back to the 90s and and drill what we there's nothing left by the way, uh, in the North Sea. Uh, and it is not not cheap, it's expensive. And then this this quick fix is is uh is too shallow and it's not really solving the problem.

SPEAKER_01 4:52

And we're talking after a weekend of uh political results in elections across the UK where you know devices that you're referring to, largely from the right, have made big political gains in certain elections, particularly in the English councils. You know, you you work for a big Swedish utility that's active across Europe in multiple jurisdictions. How is that emergence of a political culture that is opposed to renewables being felt in the boardroom in Stockholm?

SPEAKER_02 5:29

Well, first of all, let's see what happens, right? The election is three years uh away. Um second is, I mean, we are working in in many different countries and and we see elections every four or five years. Um and we have seen changes in several countries, also in the UK. I mean the last election and the the policies of today are in principle supportive and the right direction, I would say. Um we have seen other countries where this is more difficult. We work with all uh, of course, governments in in any country and we and we drive it, drive the right ideas forward. In principle, um this has a potential for damage if you come with the wrong recipes of the past and don't move forward. At the same time, I mean look at the US. Uh we have um someone in charge who is in favor of drilling. If you look at last year, I mean I guess the US added 130 terawatt hours of new uh production, and that is like a third of the UK, so quite massive growth. And the majority of that was covered by solar and wind. So yeah, despite all the talking, there's facts on the ground, which is costs and uh how easy can you deploy technologies, how fast are they coming online, that is more important in the end, and that is the fundamentals which are changing the overall picture.

SPEAKER_01 7:00

So the political situation is to put it simply, noise that shouldn't distract companies like Vattenfall and others from the core task of electrifying uh the grid.

SPEAKER_02 7:15

Is that essentially what you Yeah, it's more that in the long run uh I'm pretty sure the direction is very clear. We will see clean power globally and and we will see a new system that is emerging already now. Um it doesn't mean that any government cannot do any harm. Yes, it's possible, but that is more of a delay of the transition and not like a total reversal. Um I mean this is like uh the car is running currently on the motorway at 70 miles an hour and uh and we we see we see the target already and it might be a bit bumpy now going forward because it's not easy, it's a transition, but going into reverse at full speed is is wrong.

SPEAKER_01 7:57

In the UK, obviously your area for Vattenfull, Vattenfull has been active in many different forms in offshore, onshore solar, everything for a long, long time. Yeah. In onshore wind you're building, I think, Clash and Darek 2 at the moment. You've just unveiled plans for a new onshore project in England. Ray too. Before we maybe get into that detail, is there anything that gives you just a pause for thought around continued investment in the UK based on the political climate?

SPEAKER_02 8:27

No, the UK is is a is a core market for us, it's an important market for us. We are uh strong here, especially in wind, onshore and offshore, offshore as you say, and we have a very competent team that is developing uh wind farms since decades, and and we continue. And this is also, I mean, you know that is you don't develop a wind farm in a year, right? It's a longer process. And uh we have started uh activities a decade ago, and we will continue this, right? So there's a long-term thinking behind. Um and the and the current climate is um actually the the the recent legislation and also what I have just superficially seen of the energy independence bill, um, is in principle helping. It's speeding up, permitting uh the intention of the grid reform is also right, although we are waiting for some grid to offers desperately, but but uh in principle it's the right direction and therefore it is supportive. Um the current government in the UK is is more supportive than other governments in some other countries we're active in, I have to say.

SPEAKER_01 9:35

So focusing on on some of the projects and Clash and Darek obviously is is the one uh the second phase. You think you're about to start construction, or maybe you already have? Could you give us uh a bit of an update on that project and on what the plan is for the next sort of uh year to 18 months building that out?

SPEAKER_02 9:51

Yes. I mean uh we have taken uh final investment decision um and uh we are in the process of preparing the construction and uh real work at site will start in summer, I think. Um yes, and um and then it's in full swing, right? Uh we're erecting all the uh first foundations, then turbines, uh the cabling and so on. And that is uh that's a good project, and we we have a sister project, uh Klashenderok one, so to say, and therefore it's an extension. It also makes a lot of sense. You have the same stakeholders, you have the same uh history there in this this area, and also the link to the community and and uh the the funds we have, right? So that's very promising.

SPEAKER_01 10:34

You're repeating that with with Ray too, you know, it's an extension to an existing project.

SPEAKER_02 10:39

Yeah.

SPEAKER_01 10:40

It's also an English project which makes it very interesting and one of the very first English projects to sort of come out of the woodwork since that de facto ban was lifted. Yes. Uh what's the sort of strategy with that project and on a longer, bigger picture in terms of English onshore wind? Is that something that Vattenfeld is attracted by and do you have other projects in the works?

SPEAKER_02 11:03

Yes, uh we are attracted by and and we have more projects. Ray 2 is um is in an early phase, it is uh uh it was uh is in publication phase and um um we have roughly 700 megawatts in England and 800 in Scotland in in development. Um so yes, lifting the onshore ban is was important and is helping, and uh we really um believe that we can we can build some very promising projects there.

SPEAKER_01 11:38

You are listening to the Renews podcast. For breaking news or to access our exclusive market intelligence on the global renewable sector, subscribe at renews.biz. Now, back to the show. We've seen locational issues around Tenews in Scotland. It was a big talking point at uh at the onsh offshore panel earlier.

SPEAKER_00 12:02

Yes.

SPEAKER_01 12:02

In onshore it has a similar impact depending on how far north you go. Your experienced Vattenfall in building projects in Scotland. Are those locational signals from Tenua making you think differently about Scotland in the long term? And is that part of the reason why we see Ray 2 and maybe future projects start to emerge in England and possibly Wales?

SPEAKER_02 12:24

I do understand the logic of having locational signals and we are not against that. Uh the devil is in the details, so we need to, and I mean there's a consultation uh hopefully coming, and I would really wish for more involvement of us because we are the experts and we know how it how it works. Um I'm lacking this a bit to be honest. But um yes, we are building projects in England and Scotland, and I I trust into in that the grid fees potentially also coming are not as huge as to totally deter investment in Scotland. Because what people sometimes forget also demand is not static. It's not like we have all demand in England and therefore let's build only in England. I mean a data center could be built in Scotland. And and if the fundamentals are better, like more wind speeds, for example, then it might make more sense to have more wind in Scotland, locate some demand there, and have an overall system which is more cost-efficient. So it depends on these details, and I haven't seen these details.

SPEAKER_01 13:30

Sticking with the grid on a slightly different point, you I think you mentioned Gay 2 briefly there. I mean, we hear a lot about delays and issues in Gay 2. Could you really map it out for our listeners exactly what is the process for developers in Gay 2? What has gone wrong and how much difficulty it is causing to near-term projects?

SPEAKER_02 13:52

Yes, and uh again in principle I I very much like the the approach of uh grid reform. Um projects blocking the grid that are not viable is not helping anyone. So the intention is uh is is right. Um and then it's about the implementation. Um and um I think it helps kicking out some projects, um even if it's hard, also for us sometimes, because we are now in some with some projects we have invested in and we are now out there in the 2030s, right? It's it's not nice. Um but in the overall picture is is it it makes sense. Um where it is more difficult is that we are desperately waiting for some some, for example, gate two offers. Yeah, we want to hand in our projects into uh AI8. Uh but if we are waiting on this offer, we we are waiting, waiting, and we we can't do it. So it might be a resource issue, but um so speeding this up and reducing this time of uncertainty is really key for deploying more wind because nobody invests in times of uncertainty, also the grid reform or also the grid charges potentially. Uh we need clarity and uh and the offers need to come soon, and uh it's yeah, that's the topic.

SPEAKER_01 15:10

With AR8 the offers might not come, but I think there is a recognition on government's behalf of that uncertainty if I'm not mistaken. Are you seeing anything around AR8 that might allow you that little bit of flexibility on gay two grid offers to be able to bid in with confidence?

SPEAKER_02 15:25

Yes, um, but it's also fair to say that um that we will also have some some projects for the next uh AR, AR9. Um and um sometimes you are with your project on this on this very in this tight spot where yeah you you might make it uh it's a matter of weeks or so, and then and then some leeway is is helpful, but um yeah in principle uh we have to speed this up the process. That's my we have to be faster in in doing that.

SPEAKER_01 15:54

Well switching to offshore, uh Vattenfall again has a long track record in the UK in offshore.

SPEAKER_02 16:00

Yes.

SPEAKER_01 16:00

We have, however, seen obviously recently the departure from the uh and I always get the pronunciation wrong on this one, the Muirvor.

SPEAKER_02 16:09

Don't ask me for the correct pronunciation.

SPEAKER_01 16:12

Well an Irishman should be able to get Scotts Gaelic at least. Uh obviously that's a departure from a from an early stage project. It leaves Vattenfoe with uh nothing, I think, in offshore wind in the UK in terms of early stage projects. Can you give us a bit of a sense of like what that departure, why you took that decision and what it means for the company in terms of offshore wind in the UK going forward?

SPEAKER_02 16:37

Yeah. I mean as you know, we are one of the uh leaders in offshore wind globally, uh also operating many offshore wind farms in many different European countries, and uh we believe in offshore and and that is our core technology, it's really key for Vattenfall. Um the um in the UK um you rightly say that we um do not continue um on the Moi War project, or this is this is done by Fred Osen. Um the reasoning behind is uh prioritization. Uh we are having quite a large pipeline. Um I wouldn't say globally because we're only in northwestern Europe, more so to say, but we have um a large pipeline there, and then we are now building currently Nordlicht in uh in Germany. Uh we have we are talking about an FID in in Netherlands, so we have uh Buttonfly is a big company uh but our funds are not unlimited, so we have to have to prioritize.

SPEAKER_01 17:37

There are new opportunities arising in UK offshore wind, whether it be what appears to be a fairly healthy MA situation with some fairly advanced projects, and then round six, which is coming over the coming months and into next year a lease auction. You know, given Vattenfell has that track record in UK offshore wind, will we see the company perhaps look at something opportunistic or maybe be involved in the in the more greenfield development space around round six?

SPEAKER_02 18:11

Yes, the UK is an important market for us. We have operational offshore here and it's we have the competence here and therefore we indeed uh will look at the future seabed leasing rounds and uh future projects and that is attractive to us, yes.

SPEAKER_01 18:27

What's your view, Klaus? Finally, I mean looking at your LinkedIn bio, you've spent a lot of time in offshore wind too. When you look at offshore wind generally, obviously you're UK head and it's one of the leading markets for offshore wind. But when you look at the last few years, it's been a bumpy ride, I think, to put it mildly, for offshore wind. One of the panel sessions this morning was titled, Is Offshore Wind Back on Track after AR7? What's your sense of that question and what also could be done to help, I guess, a positive answer to that?

SPEAKER_02 19:03

Yeah, I was I remember I was a project director in Dantusk, a German project a couple of many years ago, and um and there we have seen some cost increases, and I was asking my team, okay, what kind of uh SUE do you believe in in five years? And then the prediction was not too promising, um, and then it went down. So the team or I was wrong, right? So we have seen more cost decreases. Then the opposite, we have seen cost increases. Um this is difficult for the industry, and um I really do believe in offshore going forward, especially in our part of the world here. Uh we have some advantages with the North Sea, for example, and we will see a larger build-out. Important is that we have a stable build-out, so that we see investments of the supply chain into factories, into new platforms. Um this this up and down doesn't help at all. Um and that is key. So I'm I'm also happy to see in Denmark that we see some uh new auction rounds and and upcoming in the UK and and other countries. So it's important to have this this um a sizable growth each year, which is then securing the supply chain. So and that I have the feeling now is is dawning on more people and more politicians and is more and more implemented. So I'm I'm quite hopeful there.

SPEAKER_01 20:33

And just to finish on the point we started on to bring it full circle in the UK, the current administration is certainly committed to AR8, AR9, regular auctions, grid reform, planning reform, so on. But politically, you know, if the local election results were to be repeated in a national election, there would be parties who have said that they would actually rip up CFD contracts. Is that a concern on the horizon?

SPEAKER_02 21:04

Yeah, I also got a letter from Richard Tice uh claiming that. Um I um I don't think it's legally possible, uh, but it's of course um it's is it's a concern. At the same time, um the fundamentals are also we we do need new generation uh and it won't be expensive gas. Uh and then we are building or we have built South Guile in the UK without any subsidies or any any CFD scheme. Uh we do this in Germany currently in Nortley, so then I hope maybe then there's maybe PPAs emerging again. So there's there's a way. That's our company motto, by the way. Um so I believe in it.

SPEAKER_01 21:43

Is it not motherfucking wind funds?

SPEAKER_02 21:47

We changed to it there's a way. Thank you very much for your time. Thank you.

SPEAKER_01 22:02

The Renews Podcast was produced and edited by me, Stephen Dunn. Click subscribe wherever you get your podcast to make sure you never miss an episode. For more exclusive market intelligence on the renewable sector, see renews.biz.