Nato eyes risks in EU power markets

The last two years of the conflict in Ukraine, and the rise in malicious cyberattacks, has raised concerns security risks over Europe’s plans to be more self-sustainable in energy supply.

Now, as countries across Europe roll out their plans for further decarbonisation and electrification, the security of these plans has come into question, pushing the energy sector firmly onto NATO’s radar.  Is Europe’s energy market set up to deal with security threats?

In this episode, Richard speaks to two of the authors of a new report from Eurasia that puts the pressing issues of energy storage and grid compacity in Europe into a new – more urgent – context of security.

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

Guests:Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy; Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group; Laurence Walker – Deputy Editor-in-Chief, Montel News

Transcript

Richard Sverrisson - Editor-in-Chief, Montel: 0:07

Hello listeners and welcome to the Montel Weekly podcast where we bring you the latest news issues and changes happening in the energy sector. We've covered the economic and market implications of the energy crisis extensively. Over the past two years, we've talked about the impact of blockages to Russia's pipeline and how the escalating conflicts in Ukraine and the Middle East. Are affecting supply, demand and prices. We have discussed the issue of security, particularly in the new world order as events in the Middle East and in the Ukraine, coupled with the challenges that the electrification of Europe poses has put the energy sector firmly on NATO's radar. Eurasia recently re released a new report that puts the issues of energy storage and grid connectivity into a new and arguably more pressing context given the international security risks that Europe's decarbonization plans raise. I'm going to be joined by two of the reports contributors, but first I'm joined by our deputy editor in chief Laurence Walker. A warm welcome to you, Laurence. How are you doing?

Laurence Walker – Deputy Editor-in-Chief, Montel News: 1:10

Hello, Richard. Yes. All, all good.

Richard Sverrisson - Editor-in-Chief, Montel: 1:12

Excellent. I thought, you know, we'd start off by talking about what are the current trends in an energy security based on our news coverage?

Laurence Walker – Deputy Editor-in-Chief, Montel News: 1:19

In terms of our news coverage we're certainly covering the sort of news possible scenarios that perhaps five years ago would've seemed quite outlandish. Whereas in the past we perhaps reported more on. Operational threats to supply outages. These seem to be the biggest concerns that we were looking at. We are now obviously looking at a lot more malicious threats, geopolitical threats and obviously actual attacks at times. So it's a different a different sort of focus that we had since the war, certainly since the war began in Ukraine. In terms of the threats, we're looking at, I suppose physical threats, so maybe attacks on pipelines, on plants you know, very obviously we linked to explosions or something of this sort. And then obviously in, in Ukraine linked to the conflict in terms of political threats, we are covering t to tit for touch sanctions restrictions on supply. You know, how people respond to sanctions. So for example, with the. With the gas we've seen a big drop in supply from Russia, which prior to the war was fairly constant in something which we did not really consider. It's gonna be a, an issue. Then also we're, looking at more covert threats such as cyber attacks on infrastructure, maybe hacking, and these are all things which I think our readers are interested to to keep on top of. So we're, we are doing our best to do so too.

Richard Sverrisson - Editor-in-Chief, Montel: 2:35

But you say they've become more malicious. What? What do you mean by that? Laurence?

Laurence Walker – Deputy Editor-in-Chief, Montel News: 2:38

In terms intentional disruptions to supply perhaps is a better way of saying it, or intentional damage. So as I mentioned in the past, maybe we would have a, have an issue, there'd be a, a plant would go offline. There'd be a fire perhaps in worst case scenario, but they would generally be down to accidents, down to an issue with maintenance, something of this sort. Whereas now we have to bear in mind that, there, there are people who wish Europe's energy infrastructure Ill perhaps also and we have to be on our guard a lot more than we did perhaps in the past.

Richard Sverrisson - Editor-in-Chief, Montel: 3:09

And a lot of this is now happening in, in cyberspace as well, or on, on hacking from our, from rogue stations or rogue organizations.

Laurence Walker – Deputy Editor-in-Chief, Montel News: 3:18

Yeah, for sure. I mean, we've, we've spoken, I suppose Ukraine is sadly a sort of a Guinea pig in a way for what we're seeing in terms of some of these developments. We've spoken with cybersecurity firms in Ukraine who spoke of literary millions, millions of attacks on infrastructure since the war began. Which they've generally managed to fend off. But yes, there, there's the scope for, taking hold of, I don't know the infrastructure remotely causing problems, whether it be through plants, operations, through battery storage or whatever. And it's a bit of a new world in that way. And it's stuff which perhaps we would've looked at and we talked about in the past, but it's now a lot more real. And requiring requiring a lot more thought. An investigation.

Richard Sverrisson - Editor-in-Chief, Montel: 4:02

Laurence tha thanks over so much. I'll let you get back to the covering the news and making sure we're putting out the interesting and relevant stories at this time. But thank you very much.

Laurence Walker – Deputy Editor-in-Chief, Montel News: 4:10

Thank you, Richard.

Richard Sverrisson - Editor-in-Chief, Montel: 4:11

Now I'd like to delve a little bit deeper into some of the issues. That that Laurence raised and I'm pleased to be joined by two of the authors of the report I mentioned. Former Deputy Energy Minister, and the Norwegian ministry of Petroleum and Energy, Amund Vik and Eurasia Group, head for Energy, climate and Natural Resources Henning Gloystein. Henning. A warm welcome back to you and Amund. Welcome to the pod. And if I can start with Amund and ask really, so why are NATO interested in the energy markets now?

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 4:39

I think that dovetails quite nicely with what the discussion we just heard. I think the energy sector is quite squarely now in the theater of conflict with the Russia, Ukraine conflict, but also other players around our signaling or there's more intelligence activity. And the threat of both physical and cyber attacks to energy has increased over the last couple years, but especially following the war and following the North Stream situation. I think the realization of policy makers all over Europe particularly, but the world in general, is that energy is now. Fully back, I would say in the sort of more kinetic piece of geopolitics thinking on the policy side and the Norwegian government and the European governments have really been working to get energy security back in the spotlight of policymaking over time and naturally. Nato also takes an interest in this. We talk about it in the piece. As well as when governments and communities move from one energy carrier to the other, energy security changes its composition and the energy security discussion we had primarily during the last. Two to three years have been tied to to fossil energy, to natural gas deliveries, to Europe to the physical integrity of the export system, but also on electricity. There are real security of supply concerns and I think our piece discusses both the policy implications and what you need to think about to maintain energy security in a more electric, European energy system. But also there's. Market implications and their cyber implications. And all of this together, I think means that NATO and anyone else interested in the full security picture for Europe and for the NATO countries need to pay much more attention to, energy security and energy developments both in the short and longer term?

Richard Sverrisson - Editor-in-Chief, Montel: 6:24

We'll certainly come back to the policy implications'cause that's absolutely crucial and what it means for the e electrification and the decarbonization strategy in Europe. But Henning what are some of the shortcomings we've seen, that've come to the surface over the past two years in terms of energy security?

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 6:39

The biggest shortcoming was an overdependence on natural gas supply from Russia. By certain members of the European Union. Germany, Italy, there's a couple in central Europe that was, we know now a historic mistake of pretty epic proportions that we've actually talked about in the past as well, of course. But looking at the future there's other aspects the, the and Amund talks about this a lot as well. It is the diversity of supply and a diverse supply mix is really important for import regions to maintain. If you rely on. Imports of energy, whatever form form they take you, you need a diverse supply base in case one supplier drops out because of whatever reasons could be a malicious form of dropout. So supply disruption, as we've seen with Russia, could be a natural disaster. It could be an accident. There's a lot of things that can go wrong. And you need to maintain that. Now in the past that was quite. Easily, not easily done, but it was it happened almost naturally for importers when you had a diverse supply base of fuels. You were burning coal, you were using nuclear power, you were burning a lot of gas. You may be burning oil, and you had some renewables. As we electrify more and more procedures. We are losing diversity of supply. Because if we are phasing out gasoline from passenger transport, if we are phasing out natural gas and oil from household heating, and we're even even taking out natural gas from and coal from electric energy intensive industries like. Blast furnaces in steel making or in chemical facilities. That is all very important to do in terms of combating climate change and decarbonization and combating pollution as well. But it does narrow your supply base and diversity, and this is an issue because if everything relies on the grid, what happens if the grid fails? What do you. And that is something that I think NATO became aware of. And this is what Amund and I were putting our thinking at on about,

Richard Sverrisson - Editor-in-Chief, Montel: 8:29

and especially when we're talking about a greater interconnectivity, for example, for off on offshore grid and interconnected to between the countries. I know the interconnectivity is a bit of an issue in Norway, Amund, but we're not gonna touch on that today. But let's talk about the. Of the grid and of the what we're talking about here where are the largest risks? For example, I mean, if there were to be an incident at a substation that connects the offshore gas facilities, then that could knock out a lot of, not just Europe's gas supply, but also some of the power supply in, in the region in Norway, Amund. So what?

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 9:03

Yeah, absolutely. I think there are regional gaps, in energy security. I the classic electricity energy supply line of thinking is sort the n plus one. Scenario where you need to have a slight over capacity on the grid side, especially not for any major population centers or industrial hubs only rely on one connector. In, so I think in the sort of local context, there are pockets of energy security risk in Europe that can enable, say, as you say, there's. Electricity powers some of the gas export facilities from Norway, onshore, offshore. But I would say for the, for that particular case, I'd say there's enough redundancy in the Norwegian gas export system to tolerate sort of electricity fallouts. There are other challenges, cyber and physical of course, on what we talk about in the article as well in the piece is. If you look at this from the lens of the last two to three years, what really saved Europe getting through this crisis was the interconnectedness of Europe. That you could have problems in Germany, you could have problems in France, and for a period there you also had a. Real concerns about the availability of hydropower in Norway and Sweden, France, for that matter, due to droughts, due to changes in, in rainfall. So you were able as a system to deal with regional and local challenges, right? So you had German gas fired power plants per down, reduced due to the situation with Russia, you had French nuclear power out. You had different challenges that you were able to manage because you could move power from surplus areas to deficit areas across Europe. And one of the things that we talk about in the piece is that the political underpinnings of that. Structure, like the European interconnectedness that you could have a level of solidarity in electricity supply is also somewhat crumbling under the rise of populism in a lot of these European governments. And you'd see it in governments where you. Expect better, like we, we've talked about this. You alluded to some interesting discussions we've had in Norwegian political context over the last couple of years. But but you also saw the same when the Swedish government recently rejected the Swedish TSOs wished to build another interconnector to Germany. They referenced the German price structure and high prices in Germany. But there's also the underpinnings of a European energy system that's able to balance. And deal with local and regional supply shortages are at risk, I think, which is some when we're looking forward to, where's this, as you asked Henry, where's the shortcomings? I'd say one of the shortcomings is that it seems that Europe's through this steam in Europe's effort to build an energy system that can actually cope with an over reliance on electricity as the main supply, barometer I think could be difficult over time. So There's that as well.

Richard Sverrisson - Editor-in-Chief, Montel: 11:51

Are you concerned then you we do mention, you mentioned some countries and they're, wish to, to isolate this kind of introspection and saying, obviously politicians are elected nationally, they're not elected on European basis, so they're looking to keep the lights on and provide cheap power. Is there a conflict of interest, say, with the wider, pan-European security?

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 12:11

I wouldn't say there's a real conflict of interest to the extent that I truly believe that having a European energy system that's resilient enough to deal with local problems in electricity production or energy production is clearly an upside for any European voters. I think if you play through the movie over the last two to three years, without that availability of cross-border electricity supply, I think you'd be looking at a very different political environment, both in Germany and France and with the somewhat dire outlooks for European policy making as a whole. So I don't really accept that there's a real conflict of interest. I do think there's, if you're very short term oriented in your way of understanding the. Trajectory of European energy politics. I think you can say that there's a, if you're a very isolationist or if you wanna keep your energy to artificially decrease your prices, I think that there's a potential for a short-term conflict of interest. I do think that's a microcosm, or the populist to now say that the renewable energy enthusiasts under emphasized security of supply. I think they make the same mistake.'cause if you. If you try to price local energy without pricing in the cost of having a secure and resilient system, you're fooling itself, right? So the price of electricity in a given European country has to include at least a conception of the cost involved in making sure that you can turn on the lights no matter what. Even if there is a war somewhere in Europe or there's nuclear problems in France, or there's some other problem.

Richard Sverrisson - Editor-in-Chief, Montel: 13:41

And these markets, and the electrification, the process that entails more flexibility, more storage both demand and supply side additions here Henning. What does this apply? What does this mean from a security point of view?

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 13:54

A bit like Amund I'm a great supporter of expanding the grid. And expanding domestic clean power capacity to achieve affordable, clean, and safe supply. It's, it is a tested way. We, ahm already mentioned Europe avoided outages in the last couple years because this China's advanced in this same project to create this like continental power grid. That it that benefits from surpluses of like hydropower in the north, in the Nordics, in the Alps, solar power in the Mediterranean, and wind power in the North Sea and Baltic seed future, that sort of stuff. It works brilliantly, but it does require this corporation politically and nationalistic pol politics stands in that way. It also requires a lot of money. So you need fiscal ability to implement this, and their politics is at risk again, because the EU has limited fiscal ability. The, the countries with high credit ratings, IE with a lot of money like the Danes, the Germans, the Dutch, and that sort of stuff they are unwilling to finance it for everyone else. They have their own budget problems, priorities to compete to defense. Pensions, healthcare, infras, whatever. So the, these all compete. But you do need, and we say this a lot to contacts clients, you do need to bring forward CapEx or capital expenditure in order to bring operational costs down in future. And that is politically very different, difficult, the market signals are there. So these infamous negative power prices that you see across Europe now Montel does a great job of tracking them this year versus last and so forth. This is happening and this is a. In its purest term, a beautiful market signal to tell you where to invest into storage and or transmission capability so that you can take a temporary surplus and either store it for later when there's a deficit or send it somewhere else. Where's a deficit? But this requires political action. And Amund mentioned this a lot. It requires politics and regulators to, to enable the market signal to be turned into a solution. Otherwise it's just a red flashing light, and then it causes the troubles to the grid as that Montel often reports about. And so this is a classic example that it, the market is telling you where the solutions need to be applied to, and now it's up to regulators and politicians to enable these signals to be turned into a solution. And we're I'm positive. But we're not quite there yet.

Richard Sverrisson - Editor-in-Chief, Montel: 16:13

But there, there are issues as well. The ideal solution you have Nordic Hydro, Alpine, Alpine Hydro as well, French nuclear German renewables, as well as Mediterranean solar, all working in perfect harmony and helping each other out. But there are issues. In certain localities, for example, the Netherlands, where you have huge constraints on the grid and you have curtailments of solar. You're telling people, forcing people to stop producing renewables. What are the, as we are getting, what are the policy implications here? Henning?

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 16:42

The policy implication here would be that the Netherlands has more interconnections with its neighbors. The Germans are net importers and they for now, and they will remain it for a while. We think probably mo most of this decade, so till about 2030. And that means they will import electricity and if they could get that into Germany, that would be good. But there's a policy problem here as well for the same reason that Amund earlier said that Sweden had declined to build another power connector to Germany. Dutch might be a little bit reluctant because there's poli political issues. The Dutch power grid operator turnout owns the German Northern German power grid as well, and that is a problem because Germany only has one price zone. In a normal world, Germany would have two price zones. It would be a more highly priced Southern German price zone and a more cheap Northern German price zone, so they could send that Dutch electricity food. Northern Germany into Southern Germany to reflect the reality. And maybe one day if the Netherlands is dark and un windy the German Southern German solar can be sent up north. The problem is in Germany, you can't do that because. There is German politics involved in this as well. The Southern Germans, which are richer than the Northern Germans, they don't want a higher electricity price. And they are blocking this in federal pol political levels. It's a bit like a mini eu, Germany the Southern German richer states co-finance, the northern and eastern German states. And they say that if our power bill goes up because of two different prices, we will stop financing you. So this was not gonna happen. And so again, politics is preventing what should be happening, which is more Dutch solar and wind electricity be sent where it's needed. It's a beautiful example and that's why their power prices go crazy negative all the time. And sometimes, like you say, Richard, there's some curtailments. Yeah.

Richard Sverrisson - Editor-in-Chief, Montel: 18:22

Yep. I think that's what I was alluding to in terms of when national politics trumps the great eu Good, if you like which is obviously a huge challenge for this, but let's get back to your report, Amund and the policy implications here. What are you recommending? We're talking lesser. About we're talking about security here and the risk posed to the greater electrification of Europe's energy systems. So what are you saying to policy makers? What should they do

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 18:48

in the report? We talk about a range of policy lessons really. I think mainly as we also talked about in this podcast, there is a lot of lessons to be learned for how Europe sets up its sort of future energy security. Universe and how we dealt with the energy crisis of the last couple of years, right? As, as we've talked about resilience through redundancy, through interconnectedness, through a level of solidarity when it comes to energy security. And I also think we don't talk about this as much in the article, but they're, one of the lessons over the last couple of years is there certainly exists price points for electricity and energy that. Would come into the category of security, of supply risk, even though the supply is actually there. But that's at a price point where a lot of people actually feel or really don't have money to use the energy more through to the physical or kinetic piece of energy security. European regulators, European TSOs and energy companies now have extensive experience with. So continuously rebuilding and reinforcing an energy system, electricity system under attack in Ukraine. And I think and we recommend in the piece of the European policy makers at the NATO level and security apparatus, also look at what are the components and pieces that need to be stockpiled in European or in European countries to maintain energy security even during. Kinetic attacks, cyber attacks different types of malicious outages in the energy system and in the energy security setup that we've been used to working with both on the sort of analytic side and in the policy side is based on basically stockpiling thermal resources. So either natural gas storage availability. Fuel storage, crude storage, SPR systems where you have the resource to be able to do either as you did as the IA countries did during the sort of the beginning when everyone thought this was gonna be a massive oil shock when Russian oil true, or at least temporarily was seen to be withdrawn from market. Where you were able to either flood the market to keep the prices down or to maintain security in an outage situation. I think one of the most important discussions for European policy makers to have on the energy security space going forward is how do you do that when much more of your system is electric? Where you'd have local outages, where you'd have problems with grids, with connectors, with transistors, with any sort or piece of the energy system that you need to stockpile and work with in other ways. And batteries, local battery production a lot of these things come into play. That's for now it's been on the outside 'cause the electric. The system has been much more of a local issue when it's now much more of a European issue. When we've realized and learned over the last couple years how important the interconnectedness of Europe is to the short, medium term energy security, and that's gonna just become more important as the energy transition carries on. While you would maintain a level of energy security in supply diversification on the production of electricity, the electricity in its system in itself needs. A more pan-European approach to energy security, both on a physical kine side, but also on cybersecurity, stockpiles, what have you.

Richard Sverrisson - Editor-in-Chief, Montel: 22:01

None of this Henning is cheap. Who pays for this and how? The druggie reports from a few weeks ago also highlighted the issue of competitiveness in Europe. And there were some eye watering numbers in there in terms of what. That would cost for cleaning up Europe's energy system in the most effective and competitive manner. So how do you pay for this?

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 22:19

Yeah that's the conundrum of bringing forward the CapEx to bring down future opex. It's very easy to say for consultants, but very difficult to to turn into reality of both politicians and consumers. It is a real problem. The driver report, I think, was an important report to be. Issued it says sort of seven 50 billion euros to 800 billion euros to be spent every year. That is a little bit of a, like a lobbyist ringing the alarm bell. If Europe would've just spent, I dunno, half that. I think we'd have most problem resolved fairly soon. So I think the tools are there. So for instance, what you can do is you send in investments signals or incentives, so you can already see in Germany earlier this year the entire clean energy subsidies and incentive system was changed away from feed and towers for renewables because the renewables are pretty competitive now anyway. Which, and which are long-term a tool over like 20 years. Guaranteed spending and support towards more short-term investment incentives, invest now into capacity and we'll give you part of the money and towards subsidizing decarbonization of heavy industry rather than renewable electricity. That kind of saves money because it's not a 20 year commitment. And more more of a short term investment incentive and it should re result. So that's a real example. You can also, in the efficiency space, do so much more. Send consumers an incentive to use electricity during times of surplus. This is famous now. So 24 hour matching going on. Use your dryer at night when there's a surplus of electricity rather than when everyone else uses it. That stresses the grid and requires short term imports, for instance. So you can add on the efficiency again as well. You can, obviously buildings, mandates can be improved to, to improve efficiency. You can subsidize that as well. It saves money in the long term. But in the end, again, this all costs money. And this leads us to our, one of our main findings in the longer term of where the shifts in Europe will be. And unfortunately for some. This will mean that the countries that have the fiscal ability to act will act faster because this costs so much in the short term. So countries that have, a lower debt burden a lower interest payment need because of the lower debt burden, they will be able to use their fiscal ability to address this more quickly than others who have high debt burdens and tight fiscal constraints. And also that's because the, these countries with a bigger fiscal ability. To play at the moment are pretty unwilling or reluctant at least to spread their wealth to others. That is probably gonna at some point deepen the divide in the eu, which has political problems. And it will also lead to to differences in power prices. I think in the long term you we'll see in Northwestern Europe, the North Sea base, mu offshore wind, but also solar power. You mentioned the Netherlands. It's. Denmark as well as Germany, it's gonna be Britain even. I think you will see low power prices towards the end of this decade there versus what they are now and even what the forward curve implies at the moment.

Richard Sverrisson - Editor-in-Chief, Montel: 25:13

I think that's also come from this week's IEA report as well as thinking along the same lines there. Amund, do you, what's your view here?

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 25:19

I fully agree with the view that Henning has, and we do spend a lot of time talking with clients and contacts on what else are the business. Regulatory implications of that scenario that he laid out. So you get a somewhat of a fracturing of European energy systems, where you have pockets of low prices, pockets of high prices, pockets of available electricity in pockets where you don't have it. Or I would add to what he said about CapEx being needed and need to put money into this. And that's gonna favor a lot of the sort of. More resilient European missions. I think it's also important to stress that the price signals here are, they're beeping at full volume, right? So there's a lot of low prices, even ne negative prices in parts of Europe. That's a clear signal to invest both in battery storage new industrial production, any type of demand, and into connectors. And you have regions where the power prices are sending the opposite signal, where you have to build new production assets or interconnectedness or local connectors. And I think one it's important to keep in mind that while a lot of this requires CapEx, a lot of it's also actually profitable. So yes, there's a CapEx project by project. You could get financing not necessarily from governments, from for other people, especially on the production side. So one of the most important things for this market and the price signals to actually find someone on the receiving end is for the permitting structure in Europe to change. And we've talked about this quite a lot, that if you have a price signal that's beeping and it's gonna take you. 12 years to resolve it, then that's just gonna be annoying for everyone for 12 years. And then you'll solve someone's problem that they had 12 years ago or that potentially have been shifted around due to do other changes the geopolitical regional or regulatory. So I think as drug reports are also has like an undertone of emphasis on us. One of the most important thing European governments can do to make this work is actually to allow people to invest in the pieces of this status profitable and then enable'em to focus their fiscal and political attention on the things where the government supporters actually need it. But a lot of this can be sold by just getting out of the way.

Richard Sverrisson - Editor-in-Chief, Montel: 27:21

Absolutely. We're back to the permitting issue here and and the NIMBY issue to an extent, but, Germany for example, has very ambitious plans to expand its grid, but it only manages to do what between 50 and 70 kilometers a year, Henning? I think that's an example of the challenges ahead here, isn't it?

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 27:37

Bit by bit 50 to 70 kilometers a year here. That's that's very unfortunate because Hamburg to Munich is about 950 kilometers. So way to go. But,

Richard Sverrisson - Editor-in-Chief, Montel: 27:44

so we're talking the 12 years here that Amund mentioned. Yeah. Yeah,

Henning Gloystein – Head for Energy, Climate, and Natural Resources at Eurasia Group: 27:47

exactly. By the time I retire it's lovely, but the the, so there's a bit of a difference in, within Germany and actually across Europe here. Germany is better at building interconnectors with neighbors than it is to build interconnectors as in power lines within Germany. Now I know. So Amund mentioned earlier that the second Swedish link to, to Germany was canceled, but the uk to Germany is building an interconnector that's gonna go ahead. There's another one between Germany and Poland. I think that's gonna, probably gonna go ahead. So that's actually going ahead. That is reflective of Germany's position in Europe. If you look at a map, it's got nine land borders. That's where they're more active and interestingly, they find that easier than to build them within Germany, which is te tells you a lot about German politics, by the way, that it's easier to build one with your neighbor than to put it in internally. But that's a, it's a good example. 50 kilometers per year. That's awful. It's also reflected by the way, in. In some funny statistics in within Germany, which I think is very reflective of the real life impact that this has. If you, we know this from from German authorities. If you want to build a manufacturing facility or data center, for instance, that requires more than 200 megawatt of power capacity. Basically south of Frankfurt. If Southern Germany, you have a, a waiting time of between eight and 12 years at the moment because of this, because that power line is not gonna be there before then, the 50 kilometers per year. And if you build it north of Frankfurt you put in terms of energy capacity, you. Pretty much get approval immediately. And that is telling you exactly how Southern Germany will struggle to attract manufacturing investment and data investment, AI investment. There's just not enough power.

Richard Sverrisson - Editor-in-Chief, Montel: 29:24

A very good example, Henning, but if I can just round off Amund by asking you about, we are here about NATO and energy security. How do you see. NATO's role changing in this field, in this sector over the coming years? Are they becoming more and more interested and more involved?

Amund Vik – Senior Advisor to Eurasia Group and former Deputy Energy Minister in the Norwegian Ministry of Petroleum and Energy: 29:42

I think as a general trend we're back in a scenario or situation where the emphasis on national security, common security kind of bleeds into more and more areas as a consequence of advances in cyber and analysis in sort of hybrid warfare and. In general, expansion of the Conflict Theater, theater in sort of NATO and its adversaries. I think you'll see a NATO that's more, at least more interested in providing its view across a larger range of issues. I think in terms of entity security that's been mainly dealt with on the civilian side for or sort of party civilian and national. Preparedness and readiness side for especially in Europe. Over time, I think you'll see the national defense, NATO type of infrastructure paying more attention. Not entirely sure that there's a, a vast sort of space of renewability for NATO to be an active player, but I do think it's gonna be important for NATO to keep to stay on top of these issues and to see how the sort of changing nature of the energy. Makeup is changing Europe's approach to national security. And I think this sort of energy conflict over the last couple of years and this sort, the willing and intentional use of energy as a weapon in the sort of overarching conflict between Russia and NATO has certainly put energy back on the map as a key piece in a geopolitical and security play. That means that NATO has specific tasks in it. I think for other people to discuss. You did see NATO taking a bigger role in subsea infrastructure protection following the the Nord Stream explosion, right? And take the nor region example, there's 9,000 kilometers of pipeline connected to connecting Norway's production assets to European consumers and maintaining that integrity and security require also requires a level of of allied cooperation. I think NATO has certainly had a role to play and continuous role to play in that.

Richard Sverrisson - Editor-in-Chief, Montel: 31:37

It's a fascinating discussion and a fascinating area. We could, I could sit here for hours with you guys, but we have to draw it to a close. So thank you very much, Amund and Henning for a brilliant discussion and some which has opened our minds to the areas that we need to be concerned about and to avoid complacency. So thank you guys. And thank you listeners for tuning into this episode.