Plugged In: the energy news podcast
Coming from the heart of the Montel newsroom, Editor-in-Chief, Snjolfur Richard Sverrisson and his team of journalists explore the news headlines in the energy sector, bringing you in depth analysis of the industry’s leading stories each week.
Richard speaks to experts, analysts, regulators, and senior business leaders to the examine not just the what, but the why behind the decisions directing the markets and shaping the global transition to a green economy.
New episodes are available every Friday.
Plugged In: the energy news podcast
Don’t fall in love with old plants
In this week’s pod, CEOs of two of Europe’s largest energy companies discuss the massive transformation currently happening in the sector.
They talk about the challenges facing them in the transition to a low-carbon economy, and the impact of the European elections. Utilities should avoid becoming too attached to their old fossil fuel-fired plants and plan for the green future, they say.
Hosts:
- Richard Sverrisson, Editor-in-Chief Europe, Montel,
- Andrés Cala, Madrid Bureau Chief.
Guests:
- Magnus Hall, CEO of Vattenfall,
- Francesco Starace, CEO of Enel,
- Kristian Ruby, Secretary General of Eurelectric.
Hello and welcome to the Montel Weekly Podcast. Bring New Energy Matters in an informal setting. My name is Richardson, and I'm joined today by my colleague Andres Carla, who is Montel's Madrid Bureau Chief. Welcome, Andres.
Andrés Cala, Madrid Bureau Chief:Happy to be here.
Richard Sverrisson, Editor-in-Chief Europe, Montel:We are at the Euro Electric Annual Conference in the beautiful city of Florence, as you can probably hear from the background, and we have the great pleasure in welcoming to the pod Marcus Hall, CEO of Vattenfall, and the new president of Euro Electric, as well as Francesco Starace, CEO of Enel, and the outgoing president of the Trade Association. Today, we'll look at several issues in the transition to a low carbon economy, including public acceptance or not of renewables. And the future shape of EU energy policy amid a potentially fragmented EU parliament following the European elections this week. Welcome Magnus, and congratulations on your new position.
Magnus Hall, CEO of Vattenfall:Thank you very much.
Richard Sverrisson, Editor-in-Chief Europe, Montel:We're at it. Critical point in the energy transition and we need to, um, build more renewable capacity. Yes. But there is an issue of public acceptance here that I think was highlighted in the conference today, that, you know, when you actually start building them, people don't want them in their backyard, but Yeah. But they want the concept, but not the idea. How do you bridge this gap between, you know, people welcome them in green growth, but not wanting in that backyard?
Magnus Hall, CEO of Vattenfall:For us, it's very, I mean, I think it's very much about engaging locally, talk to people and get, sort of, get the confidence in what you're going to do because people. When, when you do that and you really take their views into account, normally you can create a good discussion. So the local stakeholder management to deal with that is a, a very important part of this development. And I would say that that is the first thing we're gonna do because if we start forcing these issues, I think we might have a problem. Another development that I see is a natural development is more offshore wind because you will be able to build, you know, um, a much more capacity where you don't really have to deal with, uh, people. Uh, individual views on, on, on how it looks and other things. So we will have to do a parallel development as I see it,
Richard Sverrisson, Editor-in-Chief Europe, Montel:there is a big debate in in Norway at the moment and big addition to onshore wind, especially. In the western, the country near Trondheim. Yeah. Uh, is there, is there there similar, uh, issues in Sweden?
Magnus Hall, CEO of Vattenfall:Well, certainly in the southern part of Sweden, you can see that. So, uh, and, and that's why we concentrate on big part of the development in the northern part. Mm-hmm. Uh, and I, yeah, I, you, you, you have to this with stakeholder development and people views are important and we just have to sort of plow through it and make it, uh, make them, make them part of it.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Another issue that is, was very. Very clear today is that with the upcoming EU elections, there's gonna be increased fragmentation in the European parliament. Is this something that concerns you in your position for vaal and your electric, and what could it do to EU policy? Could it put the sort of, could it slow it down to snail space?
Magnus Hall, CEO of Vattenfall:I still see a lot of traction in the climate question, so I think that there will be enough pressure to keep that going. Mm-hmm. Of course, it might, might. Need, there is a need for an increased sort of, um, intervention from our side in, in talks with others. Mm-hmm. But I don't really see this sort of as a, as a game changer. No.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Since there's a discussion in Sweden, um, about, uh, reversing the decision decision to close nuclear reactors, what, what's button F'S view on this?
Magnus Hall, CEO of Vattenfall:Well, our view is the same as always. We took a decision to close them and we are going to close them. And of course we have revisited the issue, but we can't see that there is any, you know, uh. Business case in, in, in, uh, re reinvesting and restarting. Uh, and one of the reactors ring holes too is actually also under special permission to be run to the end of this year. Other, after that, we have to do a significant rebuild part of the reactor in order to make it run further. So that's absolutely not possible. Economics don't make sense, and there's, that's a huge rebuild. And those two reactors, were never planned to go beyond 2025 anyway, in terms of prolongation, uh, planning. So for us, it's clear we're gonna close them. Bring us. Two this year. Ring house one next year.
Richard Sverrisson, Editor-in-Chief Europe, Montel:You are involved in an interconnector from Norway to to Scotland. Yes. There's been some issue of, or some have voiced to the opinion that that should be sold to, to the TSO
Magnus Hall, CEO of Vattenfall:if there is a view that they want to own and operate it. We, I think they want to, and we don't have a view on that. We don't need to own it. We think it's a good idea to build it. Mm-hmm. Sure. And then if we find other owners, we're perfectly happy to make that, uh, you know, go in either direction. So for us it's, it's, it's, the important thing is to build it, not to operate
Richard Sverrisson, Editor-in-Chief Europe, Montel:it. Yeah. You've said clearly that you want to, um, become carbon neutral within a generation. That's Vattenfall policy. What does that, um, how you are active in, in many wind auctions across, across Europe? How, how is, how, could you say a few words about how your, your, your strategy or your ideas here?
Magnus Hall, CEO of Vattenfall:Our, our aim is to make fossil free living, uh, possible within one generation. That's what we talk about, and I, I just make sure that. Generation really means a commitment to the next generation. The kids who are born today, when they get their kids, we should be there. Right? And so for us it means building more renewables and we talk about fossil free, but of course the, the investments we are doing now is in wind power mainly. We do some in solar, but really in wind power. And a big part of that is in offshore. So that's where you see our participation in auctions because we do believe we are good at that. But then we also develop a lot of business around our customers. Where we're supplying, helping them to, to, uh, electrify transportation, electrify, um, industry, we are involved in several different projects there where we look at using hydrogen. Oh, there's a big Congo. They're calling the, but, but so, so we have, we have an a strategy for a electrification arena. That's what we view ourselves as, both internally in how we deal with change, but also externally, how we can offer new solutions towards. Transportation, heat customers, industry customers.
Richard Sverrisson, Editor-in-Chief Europe, Montel:My colleague Andres Carla, who's, um, the Madrid Bureau of Chief, uh, Andres, you have some questions for, for Magnus?
Andrés Cala, Madrid Bureau Chief:I certainly do. Uh, going back a little, not just to the fragmentation that we could see in the Europe in new Parliament, but actually what we see throughout Europe, we see a northern Europe, we see a Southern Europe. Vattenfall, uh, for example, is a, it's a renewable champion. It's a win champion. Yet it's, uh, its presence in Southern Europe is a testimonial to put it in, in a way. However, there is, uh, a lot of wind and solar potential. Yeah. Italy's not picking up. Spain again, is not really picking up. The plants are formidable. What is missing from the equation, and I go back per se, perhaps to the answer we had, uh, on the screen early on the, your electric conference. That it's a regulatory stalling and that it's just not clear to clear to attract investment. Do you see, uh, this as a problem?
Magnus Hall, CEO of Vattenfall:Well, to be honest, we are sort of, uh, geographically limiting ourselves to a certain extent to Northern Europe. That doesn't mean that we will move further out, uh, in due time. Uh, so we are really not that versed with the situation in Italy or Spain. We are looking now to the next phase, going from where we are to France, where we're participating, and I think we will take a stepwise approach on that, but we also have. Um, a considerable amount of projects available in the geographical area where we are. So we think that we can cater for the, the growth that we are looking for internally as we speak, uh, with the situation we have. But we, you know, for the future, we don't rule out anything. So, uh, let, let's see. But in the near term, it's, it's not, uh, on our agenda
Andrés Cala, Madrid Bureau Chief:and just a couple of other things. Uh, all everything we've been talking about is within Europe, but of course we have to deal with China and US Tar war. We have to deal with the conflict, potential conflict, uh, in the Middle East. All of these issues will have an impact on Europe. What is, uh, uh, how, how can this, uh, uh, thread our own projects are your own European projects in the long term? In the, in the midterm? I,
Magnus Hall, CEO of Vattenfall:I, you know, in general, I see, uh, an increased concern over security. Perhaps in Europe. I can see that very much in my own country because of geopolitical changes, but I. And that might mean that it will be more, you know, investments in grids and, and critical infrastructure as such will be more controlled. I think we can see that development coming up more and more. But apart from that, I don't see any real threats to what we want to do within the, sort of the Euro electric framework coming the next 30 years. Uh, there I'm not so, uh, worried in, in relation to what you just mentioned, apart from the security questions
Andrés Cala, Madrid Bureau Chief:and just finally. When do you actually expect a realistic sprouting of the power to gas? I think
Magnus Hall, CEO of Vattenfall:we're looking very difficult to say, but I think we have it. 10 year period before, before it really sees commercially driven. But in the meantime, you might find support systems make it possible for certain parts. And, and this, I think we need to do something like that to make sure that we can operate it and understand it. So you might take blue hydrogen, you know, uh, if it's cheaper, and then you start with that and, and you see if we can run the process. Uh, you need a lot of storage knowledge, you, how you treat, uh, hydrogen and, and in order to make that power to gas work. So I think it's for the. Future, but I think a lot of batteries and other storage solutions might come a little bit earlier,
Richard Sverrisson, Editor-in-Chief Europe, Montel:but they need subsidies.
Magnus Hall, CEO of Vattenfall:I think they do. They're not really commercially viable today. That's my view. But on the other hand, I'm not an expert. Thank
Richard Sverrisson, Editor-in-Chief Europe, Montel:you very much, Magnus.
Magnus Hall, CEO of Vattenfall:Thank you so much.
Richard Sverrisson, Editor-in-Chief Europe, Montel:The next part of the podcast focused on Italy and, and Southern Europe. And it's a great honor and pleasure to have Francesco Za here, who's CEO of NL and the outgoing president of, of, uh, Euro Electric, the, the European Electricity Trade Organization. Francisco, welcome.
Francesco Starace, CEO of Enel:Thank you very much. And, uh. Good morning or good afternoon. I dunno when this podcast will be heard. Probably go after the morning to all the listeners. That's a, that's a,
Richard Sverrisson, Editor-in-Chief Europe, Montel:that's a great message. Yeah. I'd like to start Francisco. We, there's a lot of talk today about, uh, the European elections and the potential fragmentation of, of the parliament. Is this a concern for you or for your electric? Uh, and generally is there, is there a threat maybe that the carbon transition could be slowed down?
Francesco Starace, CEO of Enel:Frankly, I don't think so.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Low carbon transition.
Francesco Starace, CEO of Enel:No, I, I don't think there is a risk of that. I think there is a wide open consensus from most of the political parties around Europe that this is a transition that has to happen. Mm-hmm. And that it is beneficial for Europe, partly for the world also. Um, so we are not concerned, well, we're concerned about other things, not this one, let's put it this way. So. And we think from an energy policy standpoint, the commission that ends now has done an excellent work, has left the clean mobility package, and then a, uh, energy package, uh, in excellent conditions. I don't expect major changes or impacts because of these elections at all.
Richard Sverrisson, Editor-in-Chief Europe, Montel:That's a reassuring, um, opinion, I think because there's, there's, there's certainly worries out there I think that suddenly, you know, things could, could change in a, in a not advantageous direction. You made some quite interesting comments today about companies either choosing to defend their legacy or to move forward. Could you say a little bit about that? You know, I think it's very important for the utility sector in, in, in Europe as a whole.
Francesco Starace, CEO of Enel:Let's say that the utility industry. Like many others, but this is a very heavy, intensive, capital intensive industry. So all utilities in Europe have a legacy of assets that sit on their books that are part of, it's their culture, their decades of, uh, investment in the past. The trend, uh, every time that this happens of an industry is invariably to try and squeeze value out of these assets. The more you can. Hmm. Uh, and year after year, this, uh, reinforces itself. You know, if you were able to work, uh, money out of depreciated asset or assets that were built years and years ago, you can try and do it again and again and again. And this is, I think nothing wrong with that. I think it is, however, uh, an attitude that might prevent you from seeing what happens, what happens around you, what happens next to you, and what happens. On these assets to this asset. So I think utilities need to take, um, step back and say, let's revisit the value of these assets going forward and separate those that still make sense provided they are perhaps refurbished or perhaps digitized or, or used in a different way. And notably, this is the field of grids and distribution grids. And let's look at those assets that have basically no future. And then say, guys, do we need to still keep them up? Why is it that they don't have any future? Is there anything else that will displace them? So let's look at that. Thermal plans fall in this category, not all of them. And I think it is a year after year after year, weeding out process. So you should take a year view and say, I have all these plans. Which of them have no future in these plans that have no future? Stop putting money and just plan their exit. Which plants have a future of say, five to 10 years. Then these plants keep them in good conditions, work them efficiently, improve if you can them, and which plants, I don't know, those plants don't put any money on them and revisit next year. So that progressively you face them out and mm-hmm. And I think this process will take, uh, 10 to 15, 20 years depending on the. Age of the plants. Uh, this is variable in, in many countries in the different system. But if you take this detached view, don't fall in love with them. Just look at them or what They are worse. And it's not a disgrace. If a plant gets out of line, it's done its job, but there's something else and that's, that kicks in. So take renewables and, and say, which renewable technology can I put in place in this country? What is, uh. The endowment that Mother Nature give more wind, more solar, more whatever, and they plan the substitution. I think this is something that, uh, we are doing now every year, uh, on all our portfolios, and it provides and it proves to be very efficient. Mm-hmm. It's a very way, it's a very organized and smooth way of doing this transition in a orderly fashion without creating problems to society.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Absolutely. It's a way for. For the sector to survive, I think for the company. For, for, yeah. It's, it's large companies to it rather
Francesco Starace, CEO of Enel:than, yeah. Survive and also improve the profile because actually if you progressively decarbonize, you find out that your energy mix is going to cost less and less.'cause the more zero margin and cost energy you inject in a mix, uh, the wholesale prices go down and also they become less volatile when compared to commodities or exchange, uh, or currency evaluation. So it's a positive improvement and a de-risking of your profile. It's not only survival, it's improvement.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Also, joining me is Andres Kala, a Madrid bureau Chief Andres, you have some questions for Francesco?
Andrés Cala, Madrid Bureau Chief:I do. And, um, funny you would, uh, mention that transit transition from thermal, uh, into renewable, one of the. Uh, result of the, uh, during the, uh, your electric, uh, poll is that unclear. Regulatory frameworks are the most important investment challenge on the, on the road to 2050. And this is what we see in Southern Europe. Certainly we see all the benefits of renewable, of, uh, phasing out old coal fire stations in Spain, uh, old gas fire stations in in Italy, et cetera, et cetera. However, renewables. Seem to be, uh, getting a slow start. Is this regulatory driven? I mean, is it the lack of, of regulatory, uh, certitude that, that, that's holding them back?
Francesco Starace, CEO of Enel:Basically, it is not this, I think in, uh, across Europe and ovo, of course, also in Southern Europe. The issue is that, uh, we all knew that the commission was preparing a new mobil, a new clean energy package. So, and we all knew that this, as a result of this clean energy package, the member states would have to issue their own climate and energy plans and then regulate around them. So the industry is basically saying, okay, that's the direction and prepare for that. So everybody's developing projects because we know this is coming. The industry is clear in that. Now, what missing is that the directives that were issued. I have been implemented in those plans that each member state has submitted to the commission, and we know that the commission has time to revise them and come back and saying, you know, please change this. Please change that. I, uh, you need to adapt a little more. And we expect that major countries, as such as Italy, Spain, uh, France, uh, Germany will issue the new regulatory framework on renewables the next 20 20, 20 19, end of 2019. So. It's just the waiting of this process to to, to be carried out until the end. It's nothing else than that. So it's just a question of having this new regulatory framework finally and role and unfold in front of us. You will see that picking the speed of investment, picking up through 20 20, 21, 22.
Andrés Cala, Madrid Bureau Chief:In, in Southern Europe specifically. Uh, that's a, a timeframe we could count on or from? I
Francesco Starace, CEO of Enel:think actually you probably see Spain has already moved. I mean, uh. Italy will probably pick up next year. Greece has never really slowed down, although, but it's a tiny part of the, of the system. But the same will happen in France and in Germany. The major markets across Europe In that timeframe, the experiences that around the world as regulated or government run auctions on new capacity or new renewable capacity unfold and prices show their competitiveness. And then large companies and private sector kicks in and it shows interest, and that will probably come in Europe a year or two later. So Europe is kind of in this, in this building up moment. Right now, it's not, I don't think there is any signal of lack of interest, rather, it's just that everybody wants to be ready when the rules are out.
Richard Sverrisson, Editor-in-Chief Europe, Montel:What will this. Massive growth in, in solar and specifically, uh, rooftop solar due for the business model of utilities such as yourself. I mean, in some ways that can, can we eat away at revenues?
Francesco Starace, CEO of Enel:Well, you know, we have a direct experience of that because Italy has, at this very moment, more than 700,000 solar rooftops installation for, um, 12,000, 13,000 megawatts. So we've seen that already. There are two answers, uh, to your question. One is, if the system has a digital network. In that case, the growth happens in a, I would say, rather painless way. There is no real problem of that big, uh, amount of capacity coming at medium to low voltage, and there are huge potential pockets of value creation for those utilities that enable customers to do this. If you don't have a fully digitized network, there is certain threshold beyond which the grid will have a problem to accommodate. Access, I mean, large amount of distributed power. So this growth will reach to a certain point and then start to stall. That's why we insist so much, uh, that uh, it's a rush to digitize network. Networks need to be digitized.
Andrés Cala, Madrid Bureau Chief:The energy union, the European Energy Union, can only work if we actually coordinate, and I know we all know this, uh, but part of that coordination is, uh, well they're tariffs. In this case, I'm referring specifically to the German announced decision to increase gas tariffs on the border with Italy and of course to Italy specifically. This could, uh, raise. Well, it should raise your power prices, obviously, your gas prices as well. Is this a concern for Italy, for nl?
Francesco Starace, CEO of Enel:Not much because, not for nl, because we don't, we buy very little on the spot market. Actually, we have long term contracts that don't have this kind of problem. But obviously if, uh, this kind of say fragmented behavior becomes a norm, this is not going to be helpful in general in any, uh, energy market. And the moment you take an energy market and cut it into pieces, the overall cost increase is obvious. So this will happen. It can happen. In different directions, you know? So overall, we think this is not a good policy in general at at European level.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Francesco, thank you very much. Thank you. We finished this week's pod, uh, by talking to Kristian Ruby, the Secretary General of your electric. It's a great pleasure and a privilege to have you here, Christian. Thanks. Welcome.
Kristian Ruby, Secretary General of Eurelectric:Thanks.
Richard Sverrisson, Editor-in-Chief Europe, Montel:I'd like to start off by, uh, talking about something that was brought up yesterday and. I think 45% of the delegates at this conference, one of the challenges they felt was the regulatory uncertainty. I wonder if you could comment on that. I mean, isn't the part of the issue here is we live in a democracy. You know, governments change quite regularly. We haven't got the ability to set 10 year targets. So how achievable is, uh, a, a, you know, a concrete, stable, regulatory environment.
Kristian Ruby, Secretary General of Eurelectric:Well, you know what? I think, uh, in a certain way it's natural for the companies to feel a certain level of regulatory uncertainty in the sense that we've really been spending the last five years revamping every single aspect of the legislation. Mm. Uh, the renewable targets, the efficiency targets, the decarbonization targets, uh, the market rules. Everything has been changed. So, so the fact that there's a certain level of uncertainty is not so strange. Mm-hmm. Um, I think, uh, the next few years will be about. Let's say letting the dust settle just a little bit because we need now all this European regulation to, to be transposed into na, national rules and, and, um, and legislation so that companies know more or less what they're dealing with. Then we need, uh, the national plans that, that are also a new tool to firm up. We need to see them gradually come in line with the, with the 10 year targets that have been set by the commission. And I think once that's happened, so when we meet, let's say in in Dublin next year or, or one and a half years from now, I think people will have a better sense of, of, um, of regulatory certainty and knowing where things are going. By then we'll see, uh, the balancing markets, uh, the ancillary services markets, the new market model, everything become implemented and, and have national plans for the delivery of, of renewals and so on and so forth. The last thing I want to say here is that we probably need to get used to the fact that, that now in two years and in five years, we're still living through an enormous. Technological disruption, which is Yes, a little bit unsettling. Yeah. Um, but also extremely exciting because it provides new opportunities and we just have to be honest about the fact that that regulation needs to follow the technological reality and the physical reality. And, and, and when the technologies provide completely new ways of doing things, regulation needs to catch up. And, um, and, and so there will be some certain. Uh, let's say some level of uncertainty going forward as a fundamental feature of this sector. And I think the guys that have been working in this sector for a long time, they need to, let's say, get used to this in more because they used be used to have a much more stable environment around them.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Absolutely. I mean, I've been coming to this conference for many years and I think the topics at this, this year's conference were certainly right up there with, with reflecting the change in their technological environment. Um, do you find then that. The regulators are far behind, or are they close behind the sector in terms of providing that framework for you to, to, to operate in this, in this brave new world?
Kristian Ruby, Secretary General of Eurelectric:Well, you know what, I, I think, uh, honestly speaking that regulators are also grappling with this, with multitude of change that we're seeing. So it's it's generation that's changing. It's. Digitalization that's changing. It's everything that's changing at the same time. Electrification is coming on very strongly and we are going into, uh, a new, uh, analysis, uh, uh, exercise, which is about trying to understand if we want to make all this happen at the same time, make sure that more and more customers choose the electric option. Make sure that the enormous volumes of, of, uh, self generation. Do not undermine the fundamental cost recovery of the system if we want to make sure that we can continue to connect all the stuff to the grid and so on and so forth. What is required in terms, let's say, of of regulatory signals? Because one thing is the overall regulatory framework. The other thing is the, uh, tariff setting and, and everything that goes along with that. And, and this. Let's say is, is really being overhaul, is seeing an, a fundamental, let's say, challenge from the old system, um, to what we need to do in the future to, to make this accelerated electrification, accelerated decarbonization happen within the next decade or two.
Richard Sverrisson, Editor-in-Chief Europe, Montel:On one side, it's a boon for your sector, um, or this electrification, both of transport and heating. But on the other side, you know, if you have this, this massive growth in self consuming, uh, the prosumers. They don't need the services from the, or maybe they do need some different, but they will need different kinds of services from the energy companies.
Kristian Ruby, Secretary General of Eurelectric:I think that different services is, is the key word here, because, um, it's very clear that if you are a normal, uh, customer with a house and, uh, you get an electric car, you have to have a very big garden and a very big roof to, to, let's say get all the, the, the solar, all the energy from, from your panels. Uh. To heat your house, to power your appliances, and also to power your car. For most citizens, that's not gonna be the case. And then we look at the inner inner cities where you have, um, big residential buildings where whether just don't have, uh, a chance of doing this, so we're gonna need the system going forward. And it's really a question of saying. What's the new role of that system? What's the new role of distribution in all this? Mm-hmm. And, and how do we connect all these things? How do we create a much more, uh, bi-directional system? This is the challenge at hand, and it's a big one.
Richard Sverrisson, Editor-in-Chief Europe, Montel:It is big and it's all in flux. It's all constantly changing. Very dynamic.
Andrés Cala, Madrid Bureau Chief:Yeah. These, this process of decarbonization, this European, uh, objective part of the issue, commissioner Conte, uh, addressed this, uh, recently. Is that we're also importing, especially from the Balkans, but now from Morocco, and we intend to import perhaps from Algeria, Libya, from Northern Africa in general. A lot of this energy, this, uh, electricity will be fossil fired. Does your electric, uh, have a position on how we deal with these, this decarbonization when we're actually at the same time importing. Dirty fuels?
Kristian Ruby, Secretary General of Eurelectric:Well, I think, uh, it's very clear that that if we decarbonize in Europe and then, uh, basically, uh, choose a strategy where, where we just produce much less and then import, uh, dirty fossil fuels, we lose out on the economy and we lose out on the climate issue. So, so that's like a really bad idea. The thing we need to do is, of course, to make sure that we create a healthy decarbonized competitive electricity sector in Europe. That can provide what we need in terms of electricity to, uh, fuel a dynamic, uh, competitive European economy that has a clear, uh, objective of exporting energy, uh, as we go forward. That's gonna take a while, but I think, let's look at the upsides here. We have a very strong wind industry and if we create a significant build out for that, we can actually power up to half. Of, uh, Europe's energy needs with wind in the future, then we're gonna need some imports, uh, perhaps from, uh, from new sources of, of energy in the future. It's not a deal, it's not a good idea going forward to import a lot of fossil fuels. That's, that's bad for the climate. It's bad for the economy, but we will probably rely on some extent of, um, of clean fuels from outside in the future. If we have big producers of, let's say, solar based hydrogen, solar based, um, liquid fuels in the future from say, Saudi Arabia or Northern Africa, why not import it? Because at the end of the day, trade is about getting something you can't, can't produce yourself, and, and giving something else in return. We could provide a lot of interesting European services in return for some, uh, additional energy from the outside.
Andrés Cala, Madrid Bureau Chief:And in regards to the energy union, please correct me if I'm wrong, but there's a different speed in Northern Europe, Southern Europe. Southern Europe still needs to catch up with a lot of the decarbonization trends that are taking hold, uh, of Northern Europe just to name a few offshore wind or, or massive self consumption. Um, in Spain, Italy is, uh, a little more ahead on that, but Spain is only getting started on that despite the fact we have all this solar. How do we bridge that gap? How do we get Southern Europe and North or Northern Europe to actually Yeah. Materialize this energy union? Well, you know,
Kristian Ruby, Secretary General of Eurelectric:I think, uh, it's an important, uh, first step to, to acknowledge that there are differences in the resources. As you mentioned, there's a lot of solar in the south. Let's make sure that we really harvest all that solar in the North Sea. We have a unique offshore wind resource. Looking at the Mediterranean, perhaps the, the potential for offshore wind is, is slightly lower. There's a nice Atlantic coast that, that surely could be, uh, utilized much more for, for Portugal, for France, and for Ireland, um, with floating offshore. But I think we'll see different types of renewables dominate in different, uh, regions in Europe. And I think, um, I. The first steps of the, the Spanish government to set really, really aggressive targets for renewables is, is probably a good way forward to make sure that this starts happening. I understand that they've also made some quite preferential rules for solar in the most recent months, uh, in Spain. So, um, I would say for now, let's see what happens in Spain with all that new regulation. If, if it starts taking up and, um, and assess from there.
Richard Sverrisson, Editor-in-Chief Europe, Montel:The UB signed off. A, a huge package the end of last year. Were you happy with that? I mean, I know you, you had some reservations or some criticisms about certain aspects of it, especially the the five 50 gram rule, et cetera. I mean, how were you, how do you feel now about the, uh, the,
Kristian Ruby, Secretary General of Eurelectric:you know, I think we have to, to look at this. We. We were making a plan, a union for 500 million European citizens for how to walk into the energy future. It goes without saying that a big energy industry cannot agree on every single comment that, um, looking at the overall direction your electric shares. It, it's a market based approach. It is an approach that, um, takes renewable seriously. It is one that, um, attaches importance to energy efficiency. And it's one that also recognizes that electrification is actually an energy efficiency strategy that electrifying also means becoming more efficient. Also, uh, this energy union and, and the, let's say, related legislation in the area of transport also pushes, uh, electrification. So yes, we had our disagreements, but we also made a very clear point of always saying. The overall direction is the right one. Let's discuss some, some issues at the margins of this. Because there will be issues with backup capacity and there are some dilemmas about how fast you do things, how fast you phase out the old, before you phase in the new. There are some real dilemmas. The overall direction is the right one, and overall we have to say we're quite happy with the results because it's gonna mean more renewables, more electricity in the future and, and it's gonna mean that Europe moves on to a more climate friendly future.
Richard Sverrisson, Editor-in-Chief Europe, Montel:Christian Ruby, thank you very much for joining this Sweet's Spot. And that's about all from Florence. Be sure to follow all the latest market moving news on mont news.com and follow us on Twitter and LinkedIn. Thank you and goodbye.
