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
SUMMER SPECIAL Episode 4: CEO of Rystad Energy
This is the fourth episode of Plugged In’s five-part CEO summer series, where Richard interviews prominent leaders in Europe’s energy sector.
In this episode, Richard sits down with Jarand Rystad, CEO and Founder of energy research and intelligence company, Rystad Energy.
They talk about the changes in China’s oil demand, the production - or lack - of hydrogen, and the challenges with battery and solar power in Europe.
Presenter: Richard Sverrisson - Editor-in-Chief, Montel News
Guest: Jarand Rystad - CEO and Founder, Rystad Energy
Editors: Bled Maliqi, Sarah Knowles
Producer: Sarah Knowles
Hello listeners, and welcome to Plugged In - the Energy News podcast from Montel, where we bring in the latest news issues and changes happening in the energy sector. Welcome to the fourth episode of our five part CEO summer series, where we put the big questions to key energy leaders. Last week I spoke to Asta Sihvonen-Punkka, CEO of finnish TSO, Fingrid by the key issues affecting the region. In this episode, I interview Jarand Rystad, CEO, and founder of Energy Research and Intelligence Company, Rystad Energy. We review the state of the oil markets, the latest nuclear renaissance, and what's next for the Nordics. I hope you enjoy this episode. So Jarand, what are the biggest changes you've seen in your time in the energy sector?
Jarand Rystad - CEO and Founder, Rystad Energy:Okay. I've been in the energy sector now actually since the 1980s, but I think the biggest change is the last five years where renewables has taken off from being a niche technology till being basically the main technology. And today we are investing more in green technologies, Stanley are in oil and gas, and this is of course, a big change.
Richard Sverrisson - Editor-in-Chief, Montel News:That is huge. Where, for example, where have the biggest changes taken place, and would you say it's across the globe or in, in some areas where the pace of that development has been faster?
Jarand Rystad - CEO and Founder, Rystad Energy:Yeah, I think the, there's the shock has been China, five and 10 years ago. The issue was that China was growing so fast in coal and China was, you know, the driver of increased global emissions. All of that. And people were kind of very negative to China in the terms of the green shift that they were the big problem, that they were just burning more and more fossil fuel, et cetera. Then five years ago they changed that policy officially, and they said, we will reach 1200 gigawatt of renewables by 2030. And people said, that is too ambitious and. They reached that level last year in 2024. So they were six years ahead of schedule for a very ambitious, so this is of course a big shift and just to take something very recent in the first quarter, 2025 or data now shows that. Terminal generational electricity, meaning oil and as coal and gas generational electricity in China was down, 4% of them been growing over the last 10 decades. And that's the first time it's been such a downturn. Except from COVID. Oh, okay. You had some COVID effects. Yes. But except from that, which is clearly economical driven but from structural point of view that this is the first time this effects, Has been there.
Richard Sverrisson - Editor-in-Chief, Montel News:I mean the, these are phenomenal changes here. And I think, you know, I was talking to a colleague and then we were discussing that, the electricity generation in China was below that of Germany in the 1980s or mid 1980s, and now it's over 20 times above it. So that's, these are huge changes you're talking about. If I stick with China Jarand, one of the key drivers globally for oil has been, obviously been China. It's been one of the biggest demand centers for oil, but the explosion of electric vehicles in China has been breathtaking. What, what is that gonna do for global oil demand, in your view?
Jarand Rystad - CEO and Founder, Rystad Energy:Yes, you're right. China was the kind of key driver or increased oil demand for the last two decades. Every year we could trust China to grow a half million barrel or a million barrel per year. That is over. China is peaking in oil consumption is a debate. Maybe this year, maybe next year, we are at a plateau at least. And I think maybe just now in a few years, economical cycles will actually be more important because the structural is going on. So now we have if it's a strong economic growth or if weather conditions are in a certain manner, it could be a slightly increase. Then a slightly decrease again. But for example gasoline diesel consumption peak was in 2018. Gasoline consumption peak was maybe last year, maybe this year. But still they're growing in petrochemicals, you know, in Nafta and in some jet fuel also. So we don't really know exactly when it'll be, some people think it's already been, but also I'm open that it could still grow for a few more years.
Richard Sverrisson - Editor-in-Chief, Montel News:But it's coming. That's Yeah, absolutely. What, in terms of coal and gas use in China what's the outlook there? I mean, you're saying that certainly petroleum and diesel uses has peaked, but what about the other Yeah, fossil fuels.
Jarand Rystad - CEO and Founder, Rystad Energy:As I mentioned, thermal generation of electricity is basically coal and gas and in addition you have a use of gas at some coal also for in the industry, for not power consumption reasons, I think gas is starting on a quite low level actually in China. So I think it gas and natural gas will continue to grow. You also need it as peaking plants to back up some of the renewable electricity system. I think coal is. Peaking as we speak also in China overall. Coal is been a blessing and a curse for China. You know, the blessing is en basically enabled the industrial growth that have had over the last two, three decades. But also it's a curse since it is local pollution, lot of health problems, and you cannot really export it. The technology cannot really export and that's why China want to get rid of it. And the clean air policies, city after city is going from being with a lot of fog and s smoke and everything to clean air, and they want that, they want to see more of that. Depends on the regions, but it, you will see a decline in coal consumption.
Richard Sverrisson - Editor-in-Chief, Montel News:In terms of, so you say you've been in the energy sector since the eighties. Jarand, but what are the, what has most surprised you over the last, maybe we could stick to maybe the last 15, 20 years, but what is something that's taken you by, taken you aback? I thought, wow, this is,
Jarand Rystad - CEO and Founder, Rystad Energy:yeah, again, I need to go to solar, because. Back in the 1970s, we were open for many versions of the Future Energy Society. We talked about the hydrogen society, that everything, propulsion of vehicles. Hydrogen will be the answer to everything. This hydrogen society is never going to happen. You will have some niche applications of hydrogen still, with green ammonia for shipping or e fuel for aviation and steel making, et cetera. So there is clearly some markets for hydrogen, but beta, the niche market is, it'll not be the dominant energy carrier. Electricity will be. The dominant carrier of energy and solar will be the dominant producer in combination with batteries.
Richard Sverrisson - Editor-in-Chief, Montel News:That's, I mean, we've seen in recent years a lot of hype around hydrogen, specifically green hydrogen. There's talking in Germany about hydrogen ready gas plants. There's talk of a whole hydrogen network be replacing the gas network. Do you think this is ever gonna see the light of day,
Jarand Rystad - CEO and Founder, Rystad Energy:yes, I think so. But in less volumes and slightly later, but there is clearly projects happening. It's final investment decision has been actually quite much at the Iberian Peninsula. And then you have some good business models where you have renewable power directly linked to Electrolyzer that are placed inside refineries. And then they already have a market for their hydrogen. They can use it basically as a, as natural part of the refinery feedstocks, and they can only they don't need a lot of backup systems or other expensive kind of systems around it because they already have all the infrastructure for getting hydrogen in other ways than from renewable energy. When the wind is not blowing or the sun is not shining. These cases are actually economically quite sound cases. And this is where we are seeing it, that is taking off as we speak.
Richard Sverrisson - Editor-in-Chief, Montel News:Yep. The they the kind of the ray of lights in the hydrogen world, if you see, if you like, because we're often seeing a lot of cancellations and projects as were announced. Were slowly being spiked or canceled. But but I think there, there are challenges, but as you say, there are a lot of use cases of hydrogen, certainly in industry, in some kind of fuels. But yes, as it being the magic potion or the panacea, maybe that's a bit more problematic.
Jarand Rystad - CEO and Founder, Rystad Energy:We are tracking all of this, I think, more than total hydrogen projects, you know, name projects. And in total, these projects will generate 110 million tons of hydrogen new green, hydrogen, both blue and green. So new low carbon, hydrogen, both blue and green. But if you start to risk these projects on the likelihood to actually get the financing to be see the final investment decision, we are at a fraction of it. So we can be quite certain about projects now 10, 15 million tons, but above that all need additional kind of strengthening the business case basically.
Richard Sverrisson - Editor-in-Chief, Montel News:Yeah, and hydrogen or green, hydrogen is certainly not cheap and the costs are in greasing as well.
Jarand Rystad - CEO and Founder, Rystad Energy:It, you need for one megawatt. You are producing 18 kilos, and typically the price of a megawatt in the market is $100 dollars. Maybe the best industrial price is 40 50, so still it's between two, three and six $7 per kilo of hydrogen only for electricity needed, and then you need a capital cost, so it's very hard to get green hydrogen projects below seven $8 today.
Richard Sverrisson - Editor-in-Chief, Montel News:No that's the business case. Absolutely. It's very challenging. So if we're talking about the energy transition and the energy transition in Europe in particular, Jarand what do you see as the greatest challenges going forward?
Jarand Rystad - CEO and Founder, Rystad Energy:Yes, of course. It's a lot of headwind for the green shift global and all driven by the policies in America. Still, there's some surprising breakthroughs also that has happened. And let me mention a few things that are also related to Europe and inspired by Europe. I think in April it was a meeting in the International Maritime Organization that for the first time it was a meeting where it was really hard debate. People voted against or for the proposed proposal. Usually it's only consensus because they proposed a very ambitious target for green for shipping to become green and net zero by 2050 Russia and United States walked outta the room. They didn't want to participate. And then the, this majority of the countries approved a very ambitious plan, basically penalizing. Fuel oil and regular LNG gradually in, in a very smart in a very kind of thought through process. And then promoting, subsidizing bio LNG and biodiesel, for example, so that from 2028 it's a very good business case for ship owners to use this new type of low carbon fuels. This was surprisingly aggressive policy in as a part of the green shift. So this and this policy was very thought through. For example, they have, you can use to a balance sheet. So if you are over, over compliant, meaning that you're building a new ship with a better machine than what you need according to compliance, you can pull that into your into your balance sheet in a way so that you can be under compliant in the future. And this logic make people want to over invests from the start because you can if you're at a very early stage, invest in a very green technology, you will have a benefit long term from that. This is creating a new logic. So I think this could be inspiration for other sectors, but just about Europe. Yes. Yesterday actually, I was in Bristol discussing this with the DG energy and so on. The policy makers there, and they're looking at this and they're looking at finding similar ways, and they have asked the same ambitions as they had a year ago or five years ago. For a green transition also in EU and to making policies that make it economical sound to invest in all these new technologies. So it's absolutely not dead in Europe. But policy wise is completely dead in the United States at the moment.
Richard Sverrisson - Editor-in-Chief, Montel News:Yeah. When you have the president of the United States first putting a stop to Equinor´s, big offshore wind power and then restarting, and the, that, that does something for investors. Does it not in in the country. You're looking at the situation there. You dunno what's gonna happen from day to day and especially in the midst the tariff war. This must make it very challenging to invest in the green transition in the United States.
Jarand Rystad - CEO and Founder, Rystad Energy:Yeah. So I think it's more stability and predictability for the Norwegian policies, even if there's still some decisions to ma be made there. But in terms of renewables is growing very fast. Of course still in Europe. I think also Nordic countries I would highlight as as a very good case. Examples, Finland, Sweden, and Denmark has gone from 25 years ago. Being almost very much relying on fossil fuel and then some nuclear and hydropower. Today there are 97% non fossil, and they have made this with all major breakthroughs breakdowns, on, on their power grid. Not any big outages. And not huge investments. Of course, they have invested quite much. But this just shows that the grid has a lot of hidden capacity. It was designed for peak overs. And it was designed to avoid overheating of all the electrical equipment with a lot ma many kind of standard deviations of security. So when you are starting to monitor each component and starting more smart, smart grid and smart operations, so the grid, you can actually get much more auto grid than than what it was designed for or originally. And this is just showing that it is possible. Integrate a green power supply into a system with a, without getting too much risks. But of course we saw what happened in, in Spain. I was there also, just when it happened that was of course a, a shock to the system.
Richard Sverrisson - Editor-in-Chief, Montel News:Absolute. I wanna come back to the Spanish example later. Ya. But if we stick to the Nordic example, when you've had huge expansion of wind in certain parts of Sweden, Finland, as well as new nuclear plants coming online. On the other side, you have seen a massive increase in negative prices. So how do you cope with the issue of negative prices in these kind of markets where you have an abundance of renewable energy at the same time of day often?
Jarand Rystad - CEO and Founder, Rystad Energy:Yes, and that's a very good point. I just refer to a recent conference I was at and. First topic was how to deal with a negative crisis. Mm. And the next topic in a completely different part of the conference were how to deal with overcapacity of battery production. You see that late?
Richard Sverrisson - Editor-in-Chief, Montel News:Yeah. Yeah, yeah. Absolutely.
Jarand Rystad - CEO and Founder, Rystad Energy:Yeah, of course. That is, it's is, of course you need to install much more battery energy systems battery energy storage systems in the grid. This is already exploding. The latest number I saw it was, uh, average cost for the most recently announced plans was$260 per kilowatt over very low. And then you really start to get the good business case to install batteries. Basically it's been very profitable also because you are not only doing the daytime arbitrage, you're also doing, grid stabilization and you get paid for that as well.
Richard Sverrisson - Editor-in-Chief, Montel News:The ancillary services. Yeah, exactly. Yeah. But so batteries are the answer to the issue of negative prices. But if we stick to the topical batteries, there's, the Nordic region has had a lot of. Should we say with with companies going under or moving production abroad, I'm thinking of North Volt. I'm thinking of Freyr and other such companies. What's. What's the underlying issue here? Why, how and how can that be resolved?
Jarand Rystad - CEO and Founder, Rystad Energy:I think it's very difficult to become competitive in a commodity market like this already led by China and partly Korea. I think, but I think we need to think like we are doing for electronics, so some people say you can never produce electronics in the Nordic countries, but still you have companies like others that are quite successful. They're finding niche applications. Low low number of units produced, high sophisticated units, niche niche applications, early office areas, close to the customers, et cetera. And for example, within marine maritime shipping, we are building a lot of electric fer, et cetera. These are just examples of of the kind of production I think we have, that we can still do in the Nordic countries. It's very difficult to compete on the mass market. Electric planes even. Yeah. Yes, we have quite some, shortness in Spains, they're very well suited actually for electricity.
Richard Sverrisson - Editor-in-Chief, Montel News:But maybe if we could touch on some of the sort of headwinds in, in and if you, pardon pun, offshore wind is facing some problems. Does it have signs coming from the Norwegian government about it can't be subsidized forever. We've had some cancellations in the uk other countries thinking twice about investing in offshore wind. What do you make of this? Is this a kind of, is the pendulum, pendulum swinging against offshore wind? Jarand.
Jarand Rystad - CEO and Founder, Rystad Energy:Of course it's done. So for the last two years it was a perfect storm, post COVID inflation in all the supply chains combined with increased interest rates et cetera. And, but, we have a database for this l let's be fact-based. We looked at the 2030 potentially in Europe, for example. That was 120 gigawatt. In 2030 with named projects two years ago. Today it is 98, so yes, it's taken down by 22 gigawatt, but that is it's 20%. Yeah, so it's some reduction. It is some business cases that were no longer business cases, but still there is a lot of activity. And then you have a debate about what about floating wind, because clearly floating wind is much more expensive. I know what is really exploding is a shallow water. The Baltic Sea, it's the near Germany, near Netherlands, Belgium, all these places. Fantastic places to build cheap offshore wind energy. Why should we build it at very expensive places? But long term it's actually reasons to do that. It's because they are partly, they can have achieve higher revenues because they're partly. Opposite correlated. So we have to look at the revenue side also, but also, of course it's very scalable if you, when it's when it at some point takes off. But I think we need more innovation here. I've seen many new concepts now that are indicating that they can produce a floating wind and much cheaper than today. But of course I think it's not really, we are not really in a hurry for it. It'll be very important in the 2030s and forties. For the winter supply of electricity in the Northern Hemisphere in, Japan, Korea China north America, and Europe. But we are not in a rush to do it, but we have to we, so we need some intelligent ways to make people take some technology risks to develop these new concepts that we need.
Richard Sverrisson - Editor-in-Chief, Montel News:Is the way of saying, you know, so I think you also, the point is that, hybrid solutions, so you have co-location of solar and batteries or with wind as well, where you have, so you can make the use of the sun and the wind and then you can save it when there isn't no sun or wind for later use. But is there, I want to return to what you said about, you mentioned Spain or the Iberian blackouts. What do you think? It's too soon to draw any conclusions about what exactly happened, but.'cause we're talking at the end of May. But what, are there any lessons to be learned here? Do you think It's maybe too much renewables can we point the finger at any one one cause or is it, is there something to be said for making the grids as resilient as we can?
Jarand Rystad - CEO and Founder, Rystad Energy:We are going to have a big energy shift. We're in the middle of it. It's almost completed. In the Nordic countries. Yes. I think it's a lot of learnings. I think there's a lot of, we, we will have similar accidents. I think we, it'll be children's diseases of the new energy system. Basically. So of course we need to use all kind of intelligence estimations, simulations to avoid these events to happen, which I'm sure it'll happen. Because that's the way we are learning in a way. But in the end, we will end up with a electricity system that is actually. Robust for even more, much more growth, no emissions and stable supply and at lower prices for end users. A problem with this new also with the energy transition for the energy business is that a lot of the value is leaking to the end users in terms of lower energy prices for a Norwegian family, going from a gasoline car to an electric car. Typically the bill for, that you're paying for fuel is 10% of what it used to be. I've just looked at some data now and a family, they used to pay 15,000 are now paying 1500 for the fuel cost for your car.
Richard Sverrisson - Editor-in-Chief, Montel News:Yeah. And that's a phenomenal change. So it is bringing those,
Jarand Rystad - CEO and Founder, Rystad Energy:but that is leakage from the players of in the energy supply chain. So they not, don't necessarily like that kind of, that all these revenues going away.
Richard Sverrisson - Editor-in-Chief, Montel News:Yeah. But Exactly. And I think that's a very clear development. We're saying in terms of. The grid and the resilience there. I think what you're saying is to make this omelet that we're making, or the energy transition, pardon the metaphor, but you have to break those eggs and that sometimes that there will be a certain instance brownouts or blackouts. But I think the key is, if I understand you correctly, Jarand is we learn from those and we move on and make sure that the grid is more robust in the future. A final real question or topic that I'd like to touch with you, Jarand is the role of nuclear. There's been talk, norway for a couple of years, Denmark, Poland, Italy. What do you make of this discussion at the moment and certainly, the move towards a small modular reactors or SMRs.
Jarand Rystad - CEO and Founder, Rystad Energy:Yes. Wake me up when something has happened. I'm very positive if someone can wake me up and point on something, but, still there, the big picture is that the development of nuclear actors has gone. From the West in the 1970s and eighties to the East, Novi, China and India and also Russia. And the attempts you have in the west has been big failures. Cost increase has been between 50% and 500%. And time increase between five and 20 years. So it's been disasters. So then we had to find out something new, something smart. Yes. The concept of a small modular reactors sounds fantastic. The point is we haven't seen any one of them, even in a, in an investment decision. As I said, wake up when something is happening. Hopefully they will be able to make an investment decision in KAA this year. Da, that's we closest to do something. Personally, I think maybe it's more realistic to look at a p 1000 concept from Westinghouse. It's a slightly bigger one because, small model reactors still they need from the regulations, they need, for example, they need to be airplane crash, secure. They need that kind of protection that is not really scalable. So if you build a small reactor, still you need all that stuff around it. Then it would be even more expensive. Just know they're not even close to be competitive from a cost point of view. But as I said if. If they are in 10 years, yes, I would welcome that. But it's a hard competition.
Richard Sverrisson - Editor-in-Chief, Montel News:Absolutely. Massively hard. I'd just like to round off in a way where we started the, and then talking about China. What should Europe do to try and compete, to try and keep pace with what's happening in China? What can it learn from what's happening over the, over in north Asia?
Jarand Rystad - CEO and Founder, Rystad Energy:Yeah, maybe we can try to do re-engineer what China did to learn from Europe or the last two, three decades. If you can't beat them, join them but maybe try to partner and try to, of course, on one hand China's a complex, it's a business partner, an important supplier. It's a competitor from business and it's also a strategic challenge from a geo political point of view. So we have to have all of these three topics in the head or head at the same time. But it could. Of course we can take the benefit of them delivering a lot of cheap goods to us. But in general, in trade, you shouldn't, you should avoid that. Some people get too dominant because then you could have all kind of monopoly, arrogance, et cetera. So if you're able to keep their market shares at least below 70% maybe through some kind of incentives for European producers, I think it is a benefit. But this need to be done on a pan-European level. I think because it is difficult for one government or Norway or something to do something to try to play this geo political game is need really, need to be a big picture. Incentives. So let's try to cooperate but also not be completely dependent.
Richard Sverrisson - Editor-in-Chief, Montel News:Jarand Rystad. Thank you very much for being a guest on Plugged In - Montel News podcast.
Jarand Rystad - CEO and Founder, Rystad Energy:Thank you.
Richard Sverrisson - Editor-in-Chief, Montel News:I hope you found my chat with Jarand informative. Join us next week for the fifth and final episode of our summer CEO series where I speak to Annegret Groebel President of the Council of European Regulators.
Dr Annegret Groebel - President of the Council of European Energy Regulators & Director of International Relations at BNetzA:Germany is not ready to accept a split of the German bidding zone. The German bidding zone is one of the biggest or probably the biggest, and is one of the few that has a high liquidity, and we doubt that this brings in the end more benefits than it does damage.
Richard Sverrisson - Editor-in-Chief, Montel News:Thanks for listening to this episode of Plugged In. If you enjoyed this discussion, please like rate and follow to make sure you get the latest podcast episodes as soon as we release them every Friday. We'd also love to read your reviews of the podcast. It helps us to keep up to date with what you, our listeners, think of our podcast and what content you want to receive more of. Finally, you can head to montelnews.com for more news and analysis from our team of journalists across Europe and beyond. See you next time.
