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
Offshore wind: Navigating the storm
In May, Danish energy producer, Orsted, pulled out of the UK’s Hornsea 4 project, citing "economic reasons", and earlier this week, industry leaders in The Netherlands have expressed their serious concerns about the high costs and potential delays which threaten the delivery of key offshore wind projects.
In this episode, Richard speaks to the CEO of WindEurope about the state of Europe’s renewable energy sector. He also speaks to a panel of experts from the UK and The Netherlands - including a former Dutch MP - about how delays and rules set by governments are causing serious issues for the industry.
Presenter: Richard Sverrisson
Contributor: Karolin Schaps - Dutch Reporter, Montel News
Guests:
Giles Dickson - CEO, WindEurope
Fintan Devenney - Senior Energy Analyst, Montel
Jan Vos - Chairman, NedZero
Bas Sudmeijer - MD, Boston Consulting Group
Editor: Bled Maliqi
Producer: Sarah Knowles
Hello listeners and welcome to Plugged In - the energy news podcast from Montel, where we bring the latest news issues and changes happening in the energy sector when Europe has set clear net zero targets. Why are we seeing pauses and delays to offshore wind projects? In May, Danish energy producer Orsted pulled out of the UK's Hornsea 4 project because it said it no longer made economic sense. And earlier this week, industry leaders in the Netherlands publicly shared their serious concerns about the costs of delivering wind farm projects and the potential delays caused by the collapse of the Dutch Coalition government. I caught up with Giles Dickson, CEO of WindEurope, whilst I was at your electric's Power Summit in Brussels. Here's what he had to say about the current investment climate for offshore wind projects in Europe. Giles it must be frustrating for you and your members to see some of the headwinds that, that the offshore wind projects are facing in, in, in recent weeks, months. What do you see as at the core, what's the core issue? What's really happening here?
Giles Dickson - CEO, WindEurope:Look, it's very difficult taking final investment decision on an offshore wind farm in Europe today for a variety of reasons. First interest rates are still pretty high. They are higher than they were over that very long period of low interest rates that we had between 2009 and 2022. Sure. They are coming down from the peak they reached in September 23, but they're still higher than the levels that we all got used to. Yeah, for many years. Okay. Second reason there has been inflation in the input costs. Offshore wind. Yeah. Steel and other commodity prices are much higher than they were. Turbine prices have gone up by some people say 50% in the last four to five years. Yeah. And that makes it challenging. In addition to that, we still have one or two instances in some countries where you don't get the full indexation when there is inflation in the input costs, especially full indexation covering that critical period between the bid price being fixed. By the developers and them actually doing their procurement and signing the orders with the turbine manufacturers, which, may be 18 months, two months after the date on which they fix their bid price before the auction. And if you've got big inflation in that period and it, the auction prices are not completely indexed, then you got a bit of a problem. Okay? So it is challenging. Out there today, we still have some governments which are still not running the right auction systems for offshore wind. Denmark had a complete failure with their auction at the end of last year because they were still running it on negative bidding, and we've been saying for years that doesn't work. You've gotta use two-sided contracts for difference. And thank goodness the Danish government have now seen the error of their ways. And I've announced that their next auction will be using CFDs. It's rather like the UK government, previous UK government learned from their mistake with their last but one auction when nobody bid'cause they hadn't fully indexed the price ceiling. To their credit, they learnt the error their ways and there was a big increase in the price ceiling for the subsequent auction. Now the new German government are still running negative bidding for their auctions this summer, but they've made it pretty clear that they wanna move to CFDs as well, which is good. And in the Netherlands we are hoping that from 2027 they will move away from negative bidding. And introduce CFD auctions as well. And at that point, every government in Europe will be running CFD auctions for offshore wind, which will help a lot. You know, when these auctions are negative bidding as they have been in the three countries I've just mentioned, Denmark, Germany, and the Netherlands. It makes it extremely difficult, yeah. To get your business case together and take final investment decision. Now, having said all of that, Richard, there were some good things happening out there. We have had four final investment decisions so far this year on big offshore wind farms in Europe. Yep. We had inch Cape in the uk we had Baltica two in Poland. The PG örsted project, we had the Vattenfall Nordlift project in Germany. That's conditional final investment decision conditional on the final permits. And just two weeks ago we had the huge. Announcement, A final investment decision on Baltic two and three. The Polenergia, Equinor project in Poland which incidentally is worth over 7 billion euros. It's poland's largest ever private sector investment. Yeah, so some good things are happening. It's not all doom and gloom, but it is tough out there.
Richard Sverrisson:So how does the offshore wind market currently look set against the targets the EU has set out? I'm pleased to be joined by our Dutch correspondent, Karolin Schaps who can tell us more. Welcome to the podcast, Karolin.
Karolin Schaps - Dutch Reporter, Montel News:Thanks Richard. Greate to be here.
Richard Sverrisson:Could you tell us first of all what are the EU targets for offshore wind?
Karolin Schaps - Dutch Reporter, Montel News:Yeah, that's an interesting one because there were revised just in December and actually revised upwards because the commission realized, oh, we can get a lot more out of our sea energy than what we thought. Back in December, the new targets that were set were sort of, put into ranges. So for 2030, the target is between 86 and 89 gigawatts. And then for 2040, that is rising to 259 to 261 gigawatts. So huge increase there. And then by 2050, obviously even higher to around 360 gigawatts. And those were, you know, revised up. Upwards quite significantly at the time. So the expectations are high. Whether those are gonna be reached is a different question. But those are the ranges set by the commission at the moment.
Richard Sverrisson:That's very helpful, Karolin. And I'm sure we'll touch on on, on the feasibility of those targets in the podcast. We've seen the collapse of the government in the Netherlands. Aside from, the political uncertainty, what concerns does this raise for industry leaders regarding offshore wind projects?
Karolin Schaps - Dutch Reporter, Montel News:Yeah, actually offshore wind is an interesting topic at the moment in the Netherlands. In fact, the Dutch market is expected to contribute another 21 gigawatts to the EU goals by the early 2030s. That's quite a healthy, chunky part of, the sort of targets that the wants to reach. So the Dutch market is fairly important in that way and the fact that the government has fallen and obviously, shows. Politically the things, I'm very stable at the moment, but at the same time the caretaker governments I think understands that this topic is so crucial and will most likely continue pushing through, the offshore winds policy that it's reviewing at the moment. And in fact, in September, the minister responsible for energy is set to update on a new strategy. So they're at the moment looking to install ACFD mechanism. That's not been the case before in the Netherlands. I don't know if you recall, but the Netherlands was actually the first country in the world to award a subsidy free offshore wind farm back in 2018. So now installing ACFD mechanism to support these projects financially is quite a u-turn for that. Policy yeah, the policy actions for the Netherlands going forward. So the industry is very much, looking looking forward for that to be implemented. And of course there's concerns now that there might be some delays, but at the same time I think it's. Pretty clear that it's a priority for the governments that this gets pushed through as the industries is really struggling at the moment to, get any business cases past the financial offices. And in fact the auction that's upcoming in the Netherlands in, in September has been scaled back. Initially it was gonna be three gigawatts for three sides. But the government's decided, oh, let's just focus on one site for now, because we've realized nobody really has any money to spend on these at the moment.
Richard Sverrisson:So I mean, what's clear is then that the industry or keeping a very keen eye on policy makers and the decisions made by the government and by the parliament. That's probably the most certain aspect of this, Karolin.
Karolin Schaps - Dutch Reporter, Montel News:Yeah, absolutely. I think everybody involved in the offshore wind industry. Very we'll be looking very close. Get what's going on there. And I think also keenly waiting for the energy ministry to say something about how things are gonna go forward. Because if you are looking to bid in the next auction, which will open in September, you have to prepare these bid. It takes at least six months and a team of, dedicated people doing nothing else, but putting these bits together to work on these. So September, there's just three months away from the, from now. There's, it's really, time is up of absolute essence at the moment. The government really has to, or caretaker, government, I should say, should yeah, really clarify what's happening.
Richard Sverrisson:Perfect. Thanks very much for setting the scene for us, Karolin. Would projects like this benefit from tighter state control, or would we see fewer delays if offshore wind was firmly in the hands of the market? To discuss this further, I'm pleased to be joined by Jan Voss, former member of the Dutch Parliament and Chairman of the Trade Association for Wind Energy, NedZero. Bas Sudmeijer, managing director and partner of Boston Consulting Group and one of our senior energy analysts here at Montel, Fintan Devenney. And warm welcome to the podcast everyone. Fintan I'd like to start with the uk. We've heard about the EU targets, but what are the targets for Great Britain and Ireland and how realistic are they?
Fintan Devenney - Senior Energy Analyst, Montel:So for gb UK government has put out a a plant towards the tail end of 2024 called the Clean Power 2030 Plan which was this and remains this very ambitious set of targets. I think it's it's fair to say, which involves, essentially, it lays out the increases of installed capacity that's required in order to reach a, what they call a clean power system by 2030, which is 95% run by by renewable power. So yeah, these kind of targets were really fairly immense of offshore wind. We're talking about a kind of three to four times increase in the amount of installed capacity that we've got. The kind of it sets up this this kind of context in which. A lot of people are trying to reach for these sorts of targets, but also maybe in many cases struggling to meet them because of all the sort of uncertainties in the market. So we've got this kind of push pull dynamic as everybody tries to race towards this super ambitious 2030 target. That's the kind of context of the British market right now.
Richard Sverrisson:And we've also seen Orsted pulling out of Hornsea 4, where there's quite a blow to that development here. What does this tell us about the current climate in the UK regarding offshore wind projects?
Fintan Devenney - Senior Energy Analyst, Montel:It tells us that it's quite hard to make offshore wind right now. It's quite, ultimately I think the thing is that. The government are asking with this clean power plan, they're asking for really big investment. And they're also saying at the same time that 'cause the sort of the scale of the sweeping changes is so big that they ultimately want all this big discussions around sort of fundamentally changing the rules of the power market. So there's this thing at the review of electricity market arrangements going on right now. Which is essentially the government looking at a really, really low level, looking at the basic rules of the power market and saying, are these rules fit for purpose? And so they're kind of doing two things at wants to say, okay, we're gonna rewrite the rule book fundamentally. And right now this, as at the time of recording, we don't know exactly what those rules are gonna be. We're expecting a decision sometime this summer 2025. But right now we don't exactly know what these rules are gonna be. So the government is saying, on the one hand, yes, we want a massive investment in offshore wind. We wanna triple, quadruple the amount of offshore wind that's that's on the system. But we also are not telling you the rules of the system in which you are investing, if so there's big uncertainty in the market right now, which is why you see things like the haunted project pulling out. Ultimately they couldn't make the numbers add up.'cause I think there's too much uncertainty in the market for people to feel really comfortable making the kinds of investments or the scale of the investments that the government are asking for.
Richard Sverrisson:Absolutely. Bas! And what's your view here? What do you see are the main causes of delays or pauses to some of these projects that we're seeing in the uk, the Netherlands, and elsewhere?
Bas Sudmeijer - MD, Boston Consulting Group:I personally seeing across markets, I see really things coming to a head, which is, I think there is for a long time in Europe in the fundamental belief that we had served. Resolve the renewable build out problem and that it was all gonna come with defined market mechanisms. And I think what we're now seeing is prolonged period of negative prices, significant volatility, a reemphasis on stability and that sort of. I, we'll have to re, we'll have to create a rethink, I think. And I think it's actually quite important to realize that the original power system, as we know it today, was primarily built in the fifties, sixties, seventies, across many European markets, and it was really centrally built. So state utilities, plant capacity insured, adequacy owned infrastructure. What we then did is we added liberalized power markets on that to run a system, but those markets were never really designed to build or transform the system. And that run the system was based on the assumption of dispatchable fossil assets with high variable cost, and it was all about driving efficient dispatch via marginal. That's not how renewables work. And I think trying to completely reconfigure the system with what we're now doing, we're doing a massive build out 10 trillion across the world of infrastructure. And trying to do that with a patchwork of market mechanisms is very hard to do. And I think that's what we're seeing across different markets that different markets are doing different things, but I think everybody's starting to realize that. That comes with its spare share of problems. And then the question is, do you continue building further patchworks on top of that? Or do you start to think about a fundamental rethink about how we do this at the pace and the skill that is needed?
Richard Sverrisson:So you, if I understand you correct it Bas, you're saying in a way what Fintan raised here? That the design of the market is not fit for purpose anymore?
Bas Sudmeijer - MD, Boston Consulting Group:I think the UK's. The process in the UK as it's called the review electricity market. Still assume that markets are the right solution and that might well be the case. But I think the starting point was we can resolve this with markets. Maybe the question could have been our markets. Suitable. And where are they suitable within the value chain to help scale out renewables? Or do we need different remuneration mechanisms? We're moving to a fixed cost system. The way that we, rerate network build outs is done on fixed remuneration. There's very little variability in that. And when you think about renewables being also 80, 90% fixed, and networks being a hundred percent fixed. One could ask itself the question, why would we remunerate that in a different way, given that the risks that investors are running are actually fairly similar.
Richard Sverrisson:That's a very interesting viewpoint and probably one that is probably not welcome everywhere or would we touch controversial? There may be Bas, but Yeah. And what's your view here does the design of the market need a radical rethink?
Jan Vos - Chairman, NedZero:Well, the what we're seeing I think is, if I look at the Netherlands too, because that's my, my, the market that I know best. 10 years ago, 10, 15 years ago, there was six, 7% of renewable electricity in, in the electricity system. If you talk about electricity nowadays it's over 50 and often 80, 90%. So very successfully and very rapidly. We succeeded in really transforming the sources of electric electricity generation, and we did it mainly by, by wind and solar up until today and in 2032. And we will reach 21 gigawatt, installed power. Then it will be wind only will be responsible for 75% of all electricity coming out of your sot or powering your industry in the Netherlands over the grid. So this I think is a, and I think it's important to realize this. It's a major success. Now I do agree with boss that we seem to be heading into murky waters now. And why? Basically because prices are negative. There's no demand. And so if there's too little demand, and this is especially for industry, this is the major issue now. Industry mostly still burns. Anything that's fossil and if they can transform into electrical electrically operated plants. There is a really nice agora report from Germany, from a scientific institute there, and they say about 90% of all nine 0% of all. Industrial processes should be electrified. And why is this? Basically because if you keep on burning stuff it will, in the end it will be more expensive than when you fortify your grids. And the thing that we need to solve, and buses, I think, very right about this, is how do we make markets and governments interact? And at the moment this seems to be quite hard and most networks in, in Europe are public. As opposed to the us. And what in US and in Australia where there's a much more market-based network system is that there's way more it and more flexibility in the grid and the market plays a way better role. Now there's also disadvantages to this system, so I'm not making any political statements here, but I do see that grid operators in Europe are mostly way behind. That being said two, three years ago in, in ent when all the government leaders came together and usla from Aya after Russia attacked Ukraine, there was a really ambitious buildup being planned, and so far we're quite on schedule. Oh, we're running a little bit behind, but we're still on schedule. So I think it's not easy. This whole transition and we'll have to figure this out together. Government and markets.
Richard Sverrisson:Absolutely. So there's certainly the headlines, the whole, Orsted pulling out it would. Reduction in the amount auctioned in the Netherlands. So what are your views of the reasons for, is it about uncertainty, about the market design or is there other macroeconomic factors that play in here as well? Jan?
Jan Vos - Chairman, NedZero:Oh, First of all, demand. If there's a PPA with a good pricing, you'll definitely be able to develop a wind park and it's just not there at the moment. Second inflation. It played a major role over the past few years especially where subcontractors in that inflation has contracts. This is, this has caused a lot of turmoil in the market and now we see shortages in the market. There's a number of operators developers winning contracts and then not being able to secure. Their supply against the right prices. This is mainly a way of designing your auction system in in a better way, more predictable. And then third, obviously there's been disruption in the supply chain and that it's still, up until today, we still see this. More than in, in any other industry because the things that we're doing are so big and so complex. Then there's also governments doing things that are pretty silly sometimes in Denmark, they had a really good CFD system. They took it out of the the tender the tender regulations and then for aah. The tender failed in, in the uk. You had a strike price that was devised by the Ministry of Finance that was really too low, and then you had to compensate. In the Netherlands we've been telling the government for two, three years now that they really need to step in with a CFD or some other measures because otherwise things will will not work out. And the government is just realizing too late and now they had to postpone some of the tenders that we planned for September. So it, it's really also about politics and it doesn't help that the political situation is so volatile in so many countries at the moment.
Richard Sverrisson:Fintan, if I can turn to you and to the situation in the uk is the UK government doing, as Jan would say, doing silly things? Or are you confident that it's gonna do, find sensible solutions to the issue of building out o offshore wind?
Fintan Devenney - Senior Energy Analyst, Montel:That's a good question. Is the go, is the UK government going to do silly things? Is a loaded question, Richard.
Richard Sverrisson:Sorry if I was open. That's a, I dropped that bomb say at you there Fintan. Yeah. Yeah.
Fintan Devenney - Senior Energy Analyst, Montel:I don't know what decision gonna make. I think the difficulty is that there's something of a civil war going on over this this discussion. And I think the main part of it is around this total pricing. Right where they, there's wood on the street that the GB market may be moving to a zal market. And if it is moving to a zal market, what do the make of the zones look like? How many zones are they? Where are they? Where are the boundaries? Are they aligned with the transmission zones? Are they not? Da? And so there's there's a lot of people on both sides of the side commit, yes, we should have zonal pricing. No, we should not have zonal pricing. I think the government are in a tricky situation in that whichever side they land on there's always gonna be a lot of people who are not very happy with it. So there will always be someone who think, yep, that is a very silly decision that the government has made. Yeah, I think, yeah, I think ultimately time will tell and the results will speak for themselves. Yeah, we should be seeing. This summer 25 is the CFD allocation round seven which is the yeah, just as an explainer, this is the UK kind of flagship renewable subsidy scheme. New renewables coming on are gonna be competing for CFD contracts in this allocation round seven. I think the results of this round, what comes out of this, this allocation round that's gonna be indicative of whether the decisions that the government have made have had any results or not because it a couple of years ago, an allocation round five, there was zero offshore wind was they secured CFD contracts, which is not a great thing for the renewable targets. So if it is the allocation of round seven, there's loads of offshore wind, then I think the government could pat themselves on the back a little bit. But yeah, the proof will be in the pudding. I think
Richard Sverrisson:Bas. You, you highlighted, quite clearly the difficulty of having offshore wind in the current market. Si situation or the design of the current market, wholesale market as we know it. What do you see as the solution? Ian, but I, and also I think, yarn makes a very good point that. Let's not forget we have rolled out huge amounts of offshore wind already. So there, there is a success story here as well. But in, in order to meet the 20, 30 and 2040 targets what, in your view, needs to happen?
Bas Sudmeijer - MD, Boston Consulting Group:If the last question was a big question, this is definitely also in the category of big questions.
Richard Sverrisson:I'm throwing them out there. Jan, I'm building up for you next as well.
Bas Sudmeijer - MD, Boston Consulting Group:Look, I don't think there's a one size fits all for the world. I think you, you definitely see different. Countries making different choices. I do think there needs to be consistency in the choices that you make, and the US was highlighted as a sort of, there's definitely more open market designs and that, that creates a different environment. People can also point, for example, towards China. And I think a lot of people are looking currently at China, and I will take a note of I think the Financial Times called it the elector, the first elector state instead of first. Versus first petro state. And I think one important thing that you see in China, and this also gets to the point of young saying there's no demand for lots of new supply that we're building, is this very integrated five-year planning system of how do we electrify a nation? That requires you to make decisions on demand, on network and on supply. And you can then use different mechanisms by which you do that. But the Chinese have very clearly chosen a state led planning system. We're very clear, central targets by region integrated grid and generation planning, which I think is an important outlook.'cause right now we're planning grids and generation a little bit independently from one another in Europe. And I think that creates part of the problem and we don't really tell demand to electrify, which then for what Janna's saying doesn't create the right demand for PPAs. And importantly, the state provides a lot of access to low interest rate loans, which reduces the cost of capital and in a fixed cost system which is a system that we're moving towards. The cost of capital is gonna be one of the biggest drivers of the bill going forward. So I think the state plays an important role in reducing the cost of capital by creating consistency in the system that it. That it is designing for the next 10, 15, 20 years. And I think that's what sort of, where do you go for a state owned system or a private system? You need to provide stability to investors. Otherwise you don't drive down the cost of capital. And if you drive up the cost of capital, you will drive up the cost of bills for years to come.
Richard Sverrisson:The growth I is absolutely phenomenal in China. Both renewables for solar for renew, for renewables generally, and grids. But the, they're very difficult political systems, I think, and it's very, maybe hard to push at the same pace in Europe. What's being done in China? What's your view, Jan? I think, there's the, is the political climate in the Netherlands gonna cause further delays to, to offshore wind projects. Or your, the government plans to launch the CFD support scheme.
Jan Vos - Chairman, NedZero:The government is planning to launch the CFD support scheme. They announced an action plan for September. So I do trust that, that they'll work on this. And it will obviously also help our industry to continue rolling out the Plant 21 Gigawatt for 2032. However, in the end any subsidy scheme will not work. If you really need to to subsidize the industry for a long time against a high price, because then there will be political opposition against this then existing system, and it will disappear again. So the market needs to be revised and the main issue for many European countries and also for the Netherlands, because we don't forget, we used to be very rich in gas, natural gas. So we have a huge industry here. That is used to, to low prices for energy because of the gas supply that we used to have in, in, in the north of the Netherlands. And this, all these industries producing now against a very high price. And Germany to a lesser extent they have the same issue that their industry can just not compete at the moment with the US and with China. And if we. If we look 10, 20 years ahead in time, then it's inevitable in my eyes that industry will disappear from Europe partly because we will not be able to compete against us and China just because of the geographical situation of Europe and the access to to, to energy. And this means that we will need less. Energy than a lot of scenarios projected. However, we will need electrification. The first thing that we should be doing still is to fortify our grids and make sure that things really change there. Then politically it's going to be very hard, but we need to look at which industry we really want to keep and help those industries biceps these or grants or whatever to electrify their production. This is really important for the future, the strategic future of of Europe. And then thirdly, we'll have to really also look at how do I say this in English? To really do things in orderly way. Because what you see now is that there's panic in the market when the government changes plan on health way true. And governments need to be predictable. And if you ask me about the political situation in the Netherlands, I was in government 10 years ago. Things were very stable. We had a five year cabinet and basically the entire build out of renewable energy built on offshore and onshore. Is the result of decisions being taken back then by by the government in place at the moment our government were, was there for nine months and they really did nothing at all. They were fighting. So it's really important to, to have stable government in my view, and to have more or less sensible people there who listen also to the people around them. Which seems to be hard sometimes these days for politicians, whether in the US or in Europe.
Richard Sverrisson:Absolutely. That's very clear. But isn't always an argument for saying that the more renewables you bring into system, the cheaper the energy will become and certainly more secure. You're not relying on on other suppliers, foreign suppliers.
Jan Vos - Chairman, NedZero:I think the main argument nowadays is geopolitically. We don't want to depend, be dependent on Russia and the US and especially Russia. The EU commission stated that we could have bought 2,400 F 35 fighter planes because of all the money that we sent to put. By using natural gas from Russia today we're still, ma we're still transferring tens of millions of euros every day to, to Russia. We don't want to do it anymore because Russia buys arms and they invade Ukraine. And that we have to to, to increase our defense, but yet by 5% because we need to defend ourselves against Ukraine. This is a silly loop. So our Secretary General, the nato, mark Ruter, he said that we should invest in infrastructure in Europe. And he meant all kinds of infrastructure, but definitely the energy infrastructure is one of them. And I think most European political leaders are really very much aware of this. However it is hard for them to put this into practice, to put their money where their mouth is because of the industry and the industry lobby and also the geopolitical interest that, that politicians have with regard to that industry in their, in, in their own, in, in their own countries.
Richard Sverrisson:Absolutely. Fintan, do you think then that the UK can still reach its targets?
Fintan Devenney - Senior Energy Analyst, Montel:I think a very challenging target has recently with the horn seat thing that you're talking about, Richard that has been made even more challenging. I think it was described by the head of system operator. The clean power 2030, the clean power 2030 targets were described as sort of herculean tasks and essentially that everything that could. Possibly go wrong, needs to go right. And already we're seeing that six months in that things have started to go wrong. I do, I wouldn't say because we still haven't had the CFD allocation around seven. I think the game is still up in the air. I don't think it's a done deal that we're not going to reach these targets, but it is very difficult. And it will get a much clearer review, I think this time. But by this time next year, we'll know. Quite well what the trajectory is going to be, if that makes sense. So yeah it's tremendously difficult. And yes I'm not jealous of people in government right now who have to make these decisions.
Richard Sverrisson:Absolutely. If I can round off with you, Bas to ask what your view is of the wider EU targets of at least 42.5% of energy, renewable energy by 2030. What's your view here? Is that achievable?
Bas Sudmeijer - MD, Boston Consulting Group:I think a lot is. Achievable with the right political will. I think Jan put it quite well, you need political stability for that. The one thing we've seen in our own research in BCG is that periods where energy security came top of mind were actually periods in which we've seen the fastest rate of decarbonization, whether with the dash for gas. In the UK for example, in the nineties, but we've also seen it in the energy crisis of the seventies and the eighties. There were periods where we saw rapid decarbonization, so I actually think that sort of energy security might actually be the thing that gets Europe moving faster than, than just pure decarbonization targets where we'll end up. I wouldn't want to use a crystal ball for that. But it's not impossible if you really put energy security to the forefront. And Europe is energy poor. Europe, actually Europe would not fully energy poor, but it's definitely not energy rich. But if you wanna deploy and use the natural resources that you do have, whether it's solar in the south, wind in the north, and use the gas that we have that we better move at pace and then not nothing is impossible.
Richard Sverrisson:Jan, what's your view here?
Jan Vos - Chairman, NedZero:To answer your question to meet the use 42.5% renewable energy target we would need to reach 425 gigawatt by 2030. And with Europe predicts that we're in we're at four hundred and fifty four five zero at the moment, so this would mean that we would definitely reach the target or even beat it. Which wouldn't surprise me because it, it still is on top of mind of many European leaders and as well said it correctly, mostly because of geopolitical issues at the moment.
Richard Sverrisson:I think that's a nice way to end today on an optimistic note that we will reach those targets. Jan, Fintan and Bas, thank you very much for being guests on the Plugged In podcast from Montel News. It's been an excellent and insightful discussion. I hope you agree listeners. And thank you for tuning in to this episode. Our podcast episodes are released every Friday. For the latest news from Montel, please visit montelnews.com and you can follow us on LinkedIn, Bluesky, and other social media channels. See you next time.
