Epic problems, epic solutions

Over the past decade, Germany has experienced serious energy shocks – many of which were of its own making. For instance, the over-reliance on Russian gas and exiting coal and nuclear power at the same time. However, it has also provided solutions on a remarkable scale. Listen to a discussion  - recorded live at the E-World trade fair in Germany - on how the country dealt with its energy crisis, and the positive progress made since 2022. But how can it speed up investments into the grid as well as into renewables?

Host: Snjólfur Richard Sverrisson, Editor-in-Chief, Montel

Guests: Tobias Federico, Managing Director, Energy Brainpool, a Montel Group company;
Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research; 
Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group

Transcript

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 0:06

Hello listeners and welcome to the Montel Weekly podcast. Normally, we bring you energy matters in an informal setting, but today we're at E-World, the huge gathering of the energy sector, in Essen, Germany. As befitting the context, we are gonna focus on Germany in this episode. The country has been at the forefront of the expansion of renewables, and last year over half of the country's electricity demand was met by wind and solar power. A quite astonishing achievement, but there are headwinds and. If the energy transition has to succeed more generally, it has to succeed in Germany. Joining me, Richard Sverrisson, Hanns Koenig of Aurora Energy, a warm welcome to you, Hanns.

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 0:53

Thank you very much for having me.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 0:54

Tobias Federico of energy, Brainpool now part of the Montel. A warm welcome to you.

Tobias Federico, Managing Director, Energy Brainpool, Montel: 0:58

Thank you Richard.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 1:00

And Henning Gloystein of Eurasia Group. Oh, warm, welcome to you Henning.

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 1:04

Thank you.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 1:05

Henning. I'd like to start with you really, because. You know this pod, the idea came from a discussion we had several weeks ago when you were talking about Germany has had epic problems, but has also had found epic solutions to those problems. Could you explain a bit by what you meant there?

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 1:23

Yeah, thanks. So I actually think there's been a little bit too much negativity around this. Now I know that you know that there, there was a price shock, which is probably equivalent to a heart attack in 2022. Power prices, gas prices, coal prices everywhere in everything, went through the roof and have. Prices stayed that high. A lot of companies in Germany would've gone bust. They would've been this famed or much touted deindustrialization, but that hasn't happened on this scale. Yes, of course there's a recession in the energy intensive industry has scaled back. But the government support for heavy industry and for consumers has been quite remarkable. And not just the German government support, there's been solidarity across Europe, the Spanish government. Started to put limits on cooling in their cinemas in 2022. Before the German government put any thermostat rulings into place, there was new pipelines built for reverse capacity to start bringing LNG from France to Germany before Germany could build its own LNG import terminals. Germany now has. Three LNG import terminals. The Dutch built another two in the same time. And as and the efficiency gains the German industry and the Dutch industry and across Europe have been made in the last two years are astonishing. And these are gains that will never be given back once. You make those gains, you become more efficient and smarter in the, in your energy use, you will maintain them. And we've seen that with clients across the world who now look at industries in Europe and think, goodness me, these guys have put into place efficiency gains that we were planning to do in five to 10 years. And it's still hurting. Germany is still in a recession. 2024 will not be a boom year without. A doubt. And there's still problems, but there has been a lot of problems have been resolved and had, we sat here in February, 2022. I mean, the invasion of Ukraine is two years old this year. This week had we been here two weeks two years ago, and said shortly after invasion, it's oh, if the Russians cut all gas. Apply Germany will be through the worst. Within two years, I think we'd have been all been considered mad. And I think that's worth consider keeping in mind that a lot of the problems have been resolved. There's a lot of other problems that'll have to be resolved. There's price issues, the fiscal stress which I'm sure will come to discuss so that we're halfway there, but we are halfway there. So I'm a glass half full kind of person.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 3:36

But in a sense though, he, the problems, we can say this with the benefit of hin hindsight, that the problems world Germany's are making, the reliance on Russian gas exiting coal plants or coal and coal burning at the same time as nuclear. You know, so some of these. Were created by the country itself.

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 3:53

Absolutely. Yes, you do have some of the you mentioned epic problems were house made and some of the epic solutions also house made. Germany seems to have this thing of creating pretty big problems for itself and then resolving them rather fast. But it and in a perfect world, you wouldn't have the problems in the first place, should. Germany never imported have imported Russian gas. I think it's, Germany is in the proximity of Russia and in a normal world, Russia should be supplying gas. But should it have been two times, two pipelines, north Stream one and two? Maybe not, probably not. Was the reliance too big? Yes. And should you have exit done? A w turn on the nuclear exit? Probably not. And was the, is the coal policy a bit of a mixed bag and a confused Yes. So I agree that there, there a lot of mistakes have been made as well, but it is amazing when you are faced with an essential cri existential crisis of how fast solutions can be found, if you really have to do it. And you actually in a bit of a smaller scale, you saw that late, this late last year when the German budget crisis erupted, another house made crisis. The berg is, it's not like Germany doesn't have the ability to raise debt or to to finance these projects. It's just the way it's done it. The government was basically called out cooking their books in a weird way, but and the constitutional court said, no, you have to stop doing this. So they had to, they, it required a sharpening of thinking by the German government on where you focus your priorities, what are they, and and they did it in the short term, and they're gonna have to do it again this year, next year as well. But the solutions are there. We know what we'll need to, and I'm again, moderately. Optimistic that we'll find the right solutions.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 5:24

Do you share that sense of optimism here, Hanns, and that we should be looking at the glass that should be half full rather than half empty? We are aware that there are certain problems within the energy market in the country, but, there are many bright spots as well, right?

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 5:36

Absolutely. So I would distinguish slightly between getting through the crisis of the past two years and now what's ahead of us, the challenge of actually implementing the energy transition.'cause we're still not very far, as you mentioned we are just about 50% of electricity demand renewable last year. But of course shares are much lower in the other sectors, in in heating and industry, in in transportation and so forth. And that is the huge challenge that is. That is still ahead of us in a way, getting to very high renewable share in the power sector, that is the easy bit. So I would say yes, we got through the energy crisis almost spectacularly well, no one would've or very few would've thought it'd go that well, we were also a little bit lucky because we've had two relatively warm winters. I think that also has to be said. But in that regard, we are in a very good place. But in terms of what's ahead of us, so getting all these renewables built, accelerating, perfecting, getting the grids. Getting the grids built in a cost effective way and preventing grid fees for consumers from going through the roof. I think those are, even within the power sector, are huge challenges that are ahead of us. And then the other big challenge other big challenges are in transportation where German industry isn't well prepared, prepared for the electrification of transport, and Chinese manufacturers are coming for the German OEMs with force. And then in industry. We will really struggle to maintain a couple of very energy intensive activities which we are currently doing. Things like producing ammonia producing methanol producing steel. These are things that will be more economical to do in other places and we'll have to have a really tough discussion about which of these things do, can we keep here? Which of these should we subsidize in the longer term for strategic reasons for security of supplier reasons, potentially. And which of it, which of these do we let go and what can we, what can we build in instead? I do think we have huge challenges ahead of us despite the fact that we got through the past two years in a relatively way, to be honest.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 7:30

If I can turn to you and ask, a lot of the issues that Hanns talked about here, we've been talking about for years and years. The expansion of renewables the grids. Are there, there are a lot of challenges as Hanns mentioned, but there are some bright spots as well. So there's a balance of the two. Is there not?

Tobias Federico, Managing Director, Energy Brainpool, Montel: 7:45

Definitely it is. We passed the crisis. I would not agree that all problems are house made because when you want to make a energy turnaround from a fossil driven electricity production, you have to. Steer somehow if the market doesn't steer it. And that's why we needed to have this coal phase out. The coal phase out itself was much more a change in, let's say, economic development in certain regions where, especially Lake night mining was focused. That's why the focus was not on becoming climate neutral up to 2038, which was in the beginning now 2030 rather, to make an economic transition in those regions. On the other hand, we had the issue also regarding the tap. Part. Increasing state debt is something where Germans have their problems with, I would say in general. And the weird thing is now everybody's talking about, okay, let's get rid of this law and increase our debt at high interest rate. And in the period where we had really low interest rate in Germany, especially as the stated negative interest, right? Nothing has really been done in combination with that we are seeing the governmental plans of changing the, these. Supporting renewables is mostly by payment from the governments when we look into CFDs as an example. I think it's always a question of the perspective. When you are in the government and you want to steer things, you have to make decisions, which afterwards seem to be a mistake. But on the other hand the German economic growth was always based on cheap energy or rather in the beginning it was. The late night and coal, which was quite cheap in Germany. Later on it was Russian gas, and in the future it might be renewable energy, but the in between time now is definitely an issue for Germany.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 9:30

And the German government recently published its power plant strategy. There was, we've been waiting a long time for the details to med. To emerge. What's your verdict on on, on that plan?

Tobias Federico, Managing Director, Energy Brainpool, Montel: 9:42

It's a half glass. It's not a full glass. We have been expecting 25 gigawatt of gas turbines or CCGT power plants. Either they're going to be fired by natural gas or by hydrogen or green hydrogen. Now it's additional support of 10 gigawatt from the government. I think if we would not have had this constitutional decision there it would've been 25. This is one thing, and of course. They're looking into a capacity market which somehow makes sense to incentivize investors. The question is how is the detailed design? And unfortunately it was just a press release not a lot of details there. So we don't know what the design will be, and I think it will be the fourth or fifth cycle of let's introduce a capacity market into Germany. Let's see, but in the end, there's only, it's more portion of that. What should have been done?

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 10:28

What's your view here, Hanns? 10 gigawatts of hydrogen ready gas plants. I think that for me, that's quite a crucial part of it. Are they ever gonna be hydrogen ready or is it just another excuse to burn more gas and all? Or I should maybe say, put it it's the fear is that you could lock in the future to a dependence on fossil fuel gas rather.

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 10:48

I think obviously burning gas is not an end in itself. The end is keeping the lights on. And I think if you take that as a as the ultimate goal then. What we now have as a compromise is probably more sensible than what was initially being discussed. The more or less 25 gigawatts, of which around 10 would've been hydrogen fired, and that would've been extremely expensive in terms of subsidizing this or even over the next couple of years. So we've cut out the more expensive parts of the strategy and focused on the things that really that really keep the lights on. And that, from my perspective is quite understandable.'cause if you count if you calculate the. Cost of of these nine gigawatts of hydrogen power plants, we would've built, it would've be astronomical. It's really in my view, a rationalization and a focus on the question of security of supply. What do we really need? We need things that are flexible, that are dispatchable, that are relatively low carbon, and that will over time run less and less as more and more renewables are being built. The question is then what do they ultimately switch to? And do we have to regulate that now? In a way we have a European emissions trading system. If you just extrapolate the the linear reduction factor with which new uas that are given in just into the market every year are currently declining, you end up with zero and 2040. And when there's no more emission certificate, there's no more there's no more carbon. These plants can run off. So we if we keep the system and if we stick with that, we've got the mechanism for conversion to something carbon neutral built in, will that be hydrogen? Will that be ammonia? Will that be something else? I don't think we necessarily need to specify that. We just need to keep faith in the we need to keep it. The European Emissions Trading System, credible is probably a better way of putting it.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 12:29

Hanns alluded to there, that we've talked a lot in the last 10, 15, 20 years about the key pillars of the market, which are competitiveness security of supply and decarbonization. We seem to be falling back on security of supply now, which in the wake of the energy crisis, which is very understandable. But Hanns also led to industry and there's process. This talk of, potential de-industrialization or more focus on what actually works for Germany. What's your view here, Henning?

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 12:58

So The energy intensive industry, especially some of the AM production you mentioned earlier is a problem because that worked well when gas was cheap and abundant. If you look at the chemical plus pharmaceutical industry in 2021, they contributed about 2% to German. GDP but they consume something like 15% of German natural gas. And that just isn't feasible at this stage. We don't have as much gas in the market available right now as we did have a few years ago. And the gas that is there is more expensive. So we have to have the discussion on in the long term. Does Germany need to be a major fertilizer producer or pulp or glass, or can German companies invest elsewhere? Could be in, in China. That's a bit unpopular now as well, but could be in the Middle East, could be in the United States, and then. Free up energy to reinvest literally free up energy to reinvest into growth sectors, which is actually happening. If you look at the manufacturing output in Germany, it's not great as a oval, but there is actually growth in employment and in capacity expansion, whether it's batteries, whether it's optics, robotics electric vehicles, obviously. And of course now we have a major expansion in defense spending, which is actually, we're here in, in the Rh RO area. Rhine Mattel sits in Disseldorf. Look at their share price, a lot of the defense spending that's happening in Europe now will actually be going to German companies. So there is, there's a restructuring going on here and it's an important one. That's not to say though, that we need to get rid of all our chemical production. It these are strategically important jobs as we know now. Supply chain security matters. We don't want to outsource everything. There is this French shoring reshoring debate, so we do need some base industrial output in Germany. At least that's our view or my personal view as well to make. Chemicals to make steel to make cement here. You can see in some countries in Europe what happens if that cap capability goes. And so I live in Britain. There's a big discussion now whether whether Britain uses its virgin steel production, where whether they don't have the capabilities anymore. And I think that would, that's a major mistake. And that Germany and most European nations should try and avoid. We do need to look at some of the the most basic core products and just need to decide whether they have a feasible future to be made in Germany in the next 20 years, including in a net zero goal because they're carbon intensive products as well.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 15:15

Hanns?

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 15:16

One thing to that 'cause because that I think you're strike on a very important point.'Cause it's really two debates we're having here. So it's the one hand, there's the question of. What can we maintain in a climate neutral world? And then there's a question, what can we maintain even before that? Because the main thing, German industry German heavy industry, energy intensive industry is currently grappling with, it's not the energy transition policies. It's the fact that energy in the US it's extremely cheap. And if you're competing with gas at two, $2 per MB to U. The, there's that is extremely difficult to do in in Europe with or without Russian gas. I think a lot of the issues we are German industries is current industry is currently having, is really a function of this extremely cheap energy in the us, which is, of course, on top of that you have the the IRA subsidies, right? And it's that thing and not climate policy that is also creating challenges. But the two are often mixed in the public debate, which I think we need to be careful to do.

Tobias Federico, Managing Director, Energy Brainpool, Montel: 16:11

I would even increase the discussion a little bit because when we are talking about German economic growth and Ed industrialization, obviously coming from the wholesale market, we are looking in the energy intensive industry. But the backbone of German economy and German growth rate are the mid-size industries, and they are feeding the competition regarding the US American market. But they cannot escape into those markets. They don't have the financial capabilities. So high energy prices are for them an issue. Decreasing labor force. That's definitely an issue too. So I think we have a mixed picture here. One is of course, energy related, but the other one is a general economic development and getting new labor forces is really an issue for those small, medium sized industries, which are also accountable one to one third of the energy demand, at least the electricity amount in Germany.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 16:59

So you'd say the fate of these small, medium sized enterprises or that, that's the fame German middle stand, right? Yeah. It, their fate is more concerning than say that of large heavy industry.

Tobias Federico, Managing Director, Energy Brainpool, Montel: 17:12

Let's say, so we often look into large, heavy industry and we have the energy drain and economic drain. They go to the cheaper countries like Middle East or the US and they could do, they'd have the financial capacities to do and they are in international markets. Playing and producing, but the famous, they see the international market competition, but they don't have the chance to get out of Germany. So the only exit they have to reduce their production or in the end to fair bankruptcy.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 17:40

Absolutely. So how, o over to you then Henning and let's talk and go back. To renewables and the expansion of renewables. How would, how should Germany roll out? It's done very well, but there's still, as you said there, there are challenges as we've discussed ahead. How could this be sped up?

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 17:54

Yeah. When you said earlier that, do you mean our produces 50% of its oh meets 50% of its electricity demand from renewables. That's remarkable, but it is also still one of the biggest coal burners in Europe. And yes, there's the exit goal for 2030, which is ambitious, but we hinted at it before I to support all the renewable build out. First of all, we need to build, invest into over capacity and renewables. That is one way to, to get rid of the intermittency issues. Like you can see this in the in the North Sea Basin, just build a lot of offshore wind capacity. So that there's a little bit wind everywhere. Costs a lot of money. Then we need intermittency solutions and we've got the 10 gigawatt clean gas hydrogen capacity coming up. I agree that we should probably not build a regulation and force stuff now into law that we might not be able to live up to in the 2030s. So we'll have, I think we'll have to wait and see a little bit on whether we run them natural gas, that in some form use CCS, which still has to be deployed at scale, or whether it is hydrogen that goes into the turbo. But we'll have to wait and see, but we don't have to decide that now. And Germany's a big enough economy, big enough country that can actually rely on several solutions. So the, here in the rural area, there's so many brownfield sites available where you can build big batteries. You Germany luckily is, for a look at a map, it's got nine land borders. It's got access to interconnections with the alpine hydro reservoirs, the Nordics in France, the nuclear power, which the Germans don't like, but it's there. And in Eastern Europe and central Eastern Europe as well. You can actually build a portfolio of solutions here. And that's, I think what Germany needs to do because it's a, it's the country's big. That's a disadvantaged sense that the land block part in the south doesn't have access to LNG and offshore wind, but it is also the, that's southeast, close to the Alps and close to France and close to southeastern Europe. It's big enough to, to and the economy is strong enough that there's the availability of several options and we. Don't need to decide them all right. Now.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 19:47

Would one possible solution be, which is often talked about splitting the German wholesale price zone into two or more, or joining with neighbours Hanns, what's your view here?

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 19:57

So I don't think it, it would help with renewables built out right? On for renewables. Just viewing them in isolation. It's it's actually an additional risk which needs to be accounted for. But though I do think that risk could be managed through earth. Through clever policy, I would almost turn it around and ask can we conceive of a decarbonized German electricity system, which doesn't have much stronger local incentive to incentives to consume especially electricity then when it's abundant, but also then when also the grids can get it to you. To give a concrete example where we are going into a world where we'll have tens of millions of electric vehicles and they will within a. Even technically they all have that now, but not everyone is doing this. They will have the capability to to charge in a smart way. Charge with electricity is cheap. So under the current system you'll have tens of millions of vehicles also in the south. And they will charge when it's windy because power prices will tend to be low. When it's windy, when all the offshore and onshore wind parks in Northern Germany are producing, thereby they would increase the already existing grid bottleneck. We have in the middle of Germany, and which is not going away, by the way. And and they would then need to be re patched out again by the grid operators. All we need to ramp up gas fired power plants to then charge dvs because we can't actually get the wind electricity down south where all these EVs are charging, right? So we. Going into a world where we have huge huge amounts of flexible demand, and we need to create incentives for flexible demand to behave in a system friendly way, and to not increase grid bottlenecks over what will have anyway. Managing the grid will be challenging anyway. If we create wrong zen, it will be much harder. So in the longer term, I don't think we can get around building these building these stronger local incentives and splitting a price on is only one way of doing that. Though. The standard European way of doing that there's things to be managed around that you need to find a solution for the energy intensive industry in the South. You need to find a solution for subsidy free offshore wind parks in the North Sea, which may not be longer. May no longer be viable. Under a split. And these are very real issues that need to be, that need to be worked on. However, just looking at it from the end I don't think we can have a decarbonize system that has, that doesn't have these local signals. So we better get going.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 22:10

Absolutely. What's your view? Tobias, is it all about grid expansion, both local and the high voltage and network? And how do we then boost that green growth that, that, that's so desired and needed? Is it all about flexibility?

Tobias Federico, Managing Director, Energy Brainpool, Montel: 22:22

Yeah, it is. We have a flexible production or let's say unplannable production, and that's why we have to be in accordance with the demand in accordance with the production itself. Looking into the price zones, I don't think that this is a solution that remembers me of when you have a hammer and a hand. Every problem is a nail. And we have been discussing regarding price zones all the time, and we see that sonar pricing does not increase investments into cross border capacities. It does not make incentives really into renewables. Investments. It steers a little bit, but look into Norway, what happens with North Norway and South Norway. And here we have solar. Thing since 30 years. So therefore, the thing is, what's the value of electricity when we have scarcity or when we have an overproduction and we have to generate a price signal, which we've seen as. What market we see in the intraday market, but we don't see it at the, on the end user level. And lifting flexible demand, which is one of our also scenarios where we have, of course, an increase of flexible demand. That's a new demand with more price signals. That's a solution. But on the other hand, when you look into this z only as a whole country price zone then we don't look at our blinds. Which is the grid and grid expansion. So there we have to do a lot of work and a lot of investment, which on a high interest rate level is difficult.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 23:48

And it's proceeding at snail's pace as well. Over the last 10, 15 years, a lot needs to be done.

Tobias Federico, Managing Director, Energy Brainpool, Montel: 23:53

Is there something slower than a snail?

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 23:56

Yeah, exactly.

Tobias Federico, Managing Director, Energy Brainpool, Montel: 23:57

So that's grid expansion, slug maybe. Yeah.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 24:00

Henning.

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 24:01

Yeah. Just to add to the problems for, it's I can see some of the arguments for a split price zone in Germany, because the north they have. Offshore wind, they have access to gas. They're connected to, to the Nordic and the Benelux market. So you can see where they're coming from, say why shouldn't we benefit from cheap electricity? And then in the South they have higher electricity prices. But the, in Germany, I think this is totally unfeasible because things like lender financials will break down over this. If Barden ER and Bain suddenly have a electricity prices three times as high as in Northern Germany, they will stop sending a financial aid to Northern Germany, into Eastern Germany. So the federal policy nature of Germany, I don't think allows for breaking up the German power price market. So I actually don't think it's a realistic debate, and I'd agree here because we've had this debate for ages and nothing is moving in that way. So what. What Germany needs to do is and you were alluding to this a bit earlier, saying it, we need incentives to invest into low clean capacity. First of all, on for security of supply, politically and economically, if fossil fuel import prices are high and the reliability of supply is low, IE there's, disruption, the incentive of economically and politically is to invest into clean local capacity. It'll cost. Lot of money, which is more difficult now because of high interest rates and fiscal stress. But that is the long term solution. And you can see in Germany, there's local issues around this Southern Germany. Now, if you have a major production project that you, that requires the equivalent power capacity of let's say 200 megawatt, you will not be able to build that in the next five or 10 years because there's not enough capacity. This is why all these investments are going to Northern Germany or central Germany, roughly north of Frankfurt because there is capacity, grid being access to the grid. Yes. Yeah. Yeah, exactly. And this requires what you said a bit earlier this, it requires local incentives to to get access to capacity somehow.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 25:50

Absolutely.

Henning Gloystein, Director for Energy, Climate and Resources, Eurasia Group: 25:50

And I don't think it is why splitting the market.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 25:53

Fair enough. And Hanns a final word from you I think on this matter.

Hanns Koenig, Managing Director, Central Europe, Aurora Energy Research: 25:56

Yeah. Just to be not bit as misunderstood on this point. I'm not saying we don't need grid expansion, we do need grid expansion massive amounts of it, but we. Cannot build enough grid to to transport all electricity we need. If we don't manage demand in a smart way we'll have more than a hundred gigawatt of flexible electricity demand in the south. Each high voltage line we're building to the, so to the, from north to south has two or four gigawatts of of capacity, right? So we would need 2030 4G of these lines if we mismanage the flexibility of demand and that simply cannot be done. So we need both both. Expansion and smart flexibility.

Snjólfur Richard Sverrisson, Editor-in-Chief, Montel: 26:34

I could go on for hours here talking about this. I think we only just scratched the surface, but I think we covered the main point. So I think we have to round off there and I'd have to let you guys go off and join the, this trade fair in Essen. But thank you very much Hanns, Henning and Tobias for being guests on the Montel Weekly podcast.