WEBVTT - A Coal-Free Europe Could Be Sooner Than You Think 0:00:00.280 --> 0:00:04.440 Before COVID nineteen Biennia, we're already looking at European coal 0:00:04.480 --> 0:00:07.800 having only five to ten years of life left, but 0:00:07.880 --> 0:00:11.920 that timeline is shortening further and it's possible that coronavirus 0:00:12.160 --> 0:00:15.000 may be something that the coal industry won't be able 0:00:15.040 --> 0:00:19.160 to recover from. We recently had a record breaking number 0:00:19.160 --> 0:00:21.640 of days without coal in the UK and it appears 0:00:21.680 --> 0:00:25.480 that these records are poised to continue as coal fired 0:00:25.560 --> 0:00:30.720 generation declines across Europe. Today we'll be speaking with Katherine Poseidon, 0:00:30.880 --> 0:00:33.880 a member of the AMIA Energy Transition Team whose work 0:00:33.920 --> 0:00:37.839 includes coal phase out, and Andrea Skendalfo, the head of 0:00:37.880 --> 0:00:40.640 AMA Power at b NF. Today will be calling upon 0:00:40.760 --> 0:00:45.040 a series that BIENNF produces, which are titled EU Power Weeklies. 0:00:45.800 --> 0:00:48.280 As of late, there have been several of these research 0:00:48.360 --> 0:00:51.720 notes that have touched upon the role of coal. These 0:00:51.720 --> 0:00:54.560 reports can be accessed at biennf Go, on the Bloomberg 0:00:54.640 --> 0:00:58.440 terminal at biennif dot com or on biennifs mobile app. 0:00:58.960 --> 0:01:02.960 They are titled YOU Power Weekly. Poland eyes German style 0:01:03.040 --> 0:01:06.520 Cole spinoff as well as coal industry is exposed by 0:01:06.560 --> 0:01:11.720 COVID nineteen and Poland clings to Cole Beyond B and 0:01:11.760 --> 0:01:14.640 E F does not provide investment strategy advice, and you 0:01:14.640 --> 0:01:16.640 can hear the full disclaimer at the end of the show. 0:01:17.200 --> 0:01:20.800 I'm Dana Perkins, joined by Mark Taylor and you're listening 0:01:20.840 --> 0:01:24.399 to Switched on the bn F podcast. Let's hear from 0:01:24.400 --> 0:01:37.400 today's guests regarding Cole Faceoff. Katherine Andreas, thank you for 0:01:37.480 --> 0:01:40.240 joining us today, Thank you, thank you for having us 0:01:40.319 --> 0:01:43.360 d So today is actually a pretty important day I 0:01:43.360 --> 0:01:45.560 think in the UK when it comes to coal. We 0:01:45.600 --> 0:01:48.240 are recording on the day that for the first time, 0:01:48.520 --> 0:01:52.720 the UK has not using any coal for power generation 0:01:52.880 --> 0:01:56.520 for two full months. This is pretty significant and maybe 0:01:56.640 --> 0:01:58.680 let's pring that back over to you guys to talk 0:01:58.720 --> 0:02:01.720 about why and a little history of last in here. 0:02:02.320 --> 0:02:05.880 Maybe we can start with the economics and why the UK. 0:02:06.360 --> 0:02:08.600 Even though it's a big mouston for the country, it's 0:02:08.639 --> 0:02:11.639 not the first time this has happened. So the UK 0:02:11.880 --> 0:02:14.839 has taken a lot of steps to kick call out, 0:02:15.480 --> 0:02:19.480 the most important one being that they actually have their 0:02:19.480 --> 0:02:24.000 own carbon price floor and so essentially UK coal generators 0:02:24.000 --> 0:02:27.680 need to pay extra for emitting, which it comes on 0:02:27.720 --> 0:02:30.200 top of what they really need to pay under the 0:02:30.200 --> 0:02:32.799 EU carbon price SKME. Just to be clear, what is 0:02:32.840 --> 0:02:36.960 that floor? No one really knows. It's said very vaguely 0:02:37.040 --> 0:02:39.959 by the government and they say, uh, we want to 0:02:40.040 --> 0:02:43.359 keep the whole, the entire carbon price at current levels. 0:02:43.400 --> 0:02:45.079 That's what they told us a couple of years ago, 0:02:45.120 --> 0:02:48.079 and that was around twenty five pounds per time. Uh. 0:02:48.120 --> 0:02:51.200 And so it looks like they're targeting something around twenty 0:02:51.240 --> 0:02:53.800 five pounds per time. And the second big thing that 0:02:53.840 --> 0:02:56.840 has happened in the UK is that essentially they have 0:02:56.960 --> 0:02:59.200 a core phase out there and they were the first 0:02:59.240 --> 0:03:02.640 ones to announce um, a big one like that, uh. 0:03:02.760 --> 0:03:07.400 And they started the trend and essentially within the matter 0:03:07.600 --> 0:03:12.720 of a few years from twenty fourteen to twenty eighteen, 0:03:13.000 --> 0:03:16.240 we saw core capacity in the UK declining very very 0:03:16.280 --> 0:03:20.480 quickly and core use also the calining very very quickly. 0:03:20.600 --> 0:03:23.640 And that coincides very well with the period when the 0:03:23.680 --> 0:03:27.280 carbon price floor was doubling, so it doubled in that period, 0:03:27.639 --> 0:03:31.480 and it also coincided with when the government announced the 0:03:31.520 --> 0:03:35.560 core phase outdate, which in retrospect looks more like they 0:03:35.560 --> 0:03:41.440 were just formalizing what utilities were later on going to do. Anyway, 0:03:41.480 --> 0:03:44.480 So that's great context regarding the UK specifically, but how 0:03:44.480 --> 0:03:46.720 about the rest of Europe. This is a European story, 0:03:46.800 --> 0:03:48.640 is it not. It is for sure. And one of 0:03:48.680 --> 0:03:51.480 the signals that we've seen from the UK that is 0:03:51.520 --> 0:03:56.000 reflected across the continent really is the speed with which 0:03:56.840 --> 0:03:59.400 coal is starting to move out of the system. And 0:03:59.480 --> 0:04:02.680 in the UK, for example, the first full day without 0:04:02.760 --> 0:04:06.920 coal was only in seventeen and at the time it 0:04:07.040 --> 0:04:08.760 was it was a huge deal. It was followed by 0:04:08.760 --> 0:04:11.360 the first week without coal, and then this year we 0:04:11.400 --> 0:04:13.920 saw a full month and that was a record at 0:04:13.920 --> 0:04:16.480 the time, and now here we are another month after 0:04:16.560 --> 0:04:20.200 that's still with no coal in the system. And the 0:04:20.200 --> 0:04:22.680 goal of the UK is to have no coal at 0:04:22.680 --> 0:04:26.520 all by three but we're already at a very very 0:04:26.520 --> 0:04:29.640 low share, something like two percent of total generation. And 0:04:29.640 --> 0:04:31.880 so what we're starting to see is really a momentum 0:04:31.920 --> 0:04:35.720 behind coal phase outs across the board, where a combination 0:04:35.960 --> 0:04:41.120 of policy drivers and economics are really making it clear 0:04:41.279 --> 0:04:44.680 that a cold phase out date is not necessarily you 0:04:44.720 --> 0:04:47.160 know the reason why this is happening, And in many 0:04:47.200 --> 0:04:50.200 cases it's likely that coal is going to, if not 0:04:50.279 --> 0:04:53.560 officially closed, at least fall very dramatically, even before some 0:04:53.640 --> 0:04:58.120 of those uh even optimistic dates of early twenties for 0:04:58.200 --> 0:05:00.360 some of the whore in whish its European country. Back, 0:05:01.120 --> 0:05:03.640 where do we start? In the UK? Roughly we presented 0:05:03.760 --> 0:05:06.679 generation if I remember while we're looking at something around 0:05:06.760 --> 0:05:12.120 twenty five coming from core. Wow, I mean, it's quite remarkable. 0:05:12.120 --> 0:05:14.520 It's it's a huge drop. Can we go into both 0:05:14.560 --> 0:05:17.239 of those drivers? So, Katie, you mentioned there's policy drivers, 0:05:17.279 --> 0:05:19.159 there's economics drivers. Why don't we take those each in 0:05:19.200 --> 0:05:22.560 turn and go through what those drivers are to explain 0:05:22.640 --> 0:05:25.440 this drop and call across Europe. So on the one hand, 0:05:25.600 --> 0:05:28.719 we have sort of a less well known policy driver, 0:05:28.920 --> 0:05:31.600 but one that is becoming more important right now, which 0:05:31.640 --> 0:05:36.640 is the use targets to reduce emissions, but not particularly 0:05:36.839 --> 0:05:40.440 carbon emissions in general, but actually the pollutants. And so 0:05:40.760 --> 0:05:45.960 the EU has been implementing gradually more strict limits on 0:05:46.040 --> 0:05:49.839 what kind of pollutants in what quantities power plants can emit, 0:05:50.520 --> 0:05:52.840 and just this year and next year essentially there will 0:05:52.880 --> 0:05:57.359 be much stricter limitations coming into force where a number 0:05:57.400 --> 0:06:01.200 of power plants are likely going to realized that putting 0:06:01.200 --> 0:06:03.880 an investment into making you know, the the improvements to 0:06:03.920 --> 0:06:08.000 reduce those pollutant emissions is probably just not going to 0:06:08.080 --> 0:06:09.720 be worth it in the end, it's going to make 0:06:09.800 --> 0:06:13.520 sense to actually close. But the other major policy driver 0:06:13.760 --> 0:06:16.800 is really just the the e use move to a 0:06:16.839 --> 0:06:19.599 greener economy. And of course we've heard a lot about 0:06:19.680 --> 0:06:22.599 the Green Deal and now the Green Recovery Package, but 0:06:22.680 --> 0:06:26.479 even before that, the EU had twenty targets to reach 0:06:26.520 --> 0:06:31.520 a certain share of renewables in energy consumption overall. And 0:06:31.600 --> 0:06:34.400 did we reach those numbers by this year, Well, we 0:06:34.480 --> 0:06:37.680 won't know for sure until sometime next year, but it 0:06:37.800 --> 0:06:40.320 is looking like we are going to definitely reach the 0:06:40.360 --> 0:06:43.839 EU level target. And then each country has had to 0:06:44.600 --> 0:06:48.279 adopt its own overall target and then also granular targets 0:06:48.279 --> 0:06:52.039 for power, transport and for heat. And one thing that 0:06:52.279 --> 0:06:56.880 is pretty important is that the electricity sector targets tend 0:06:56.920 --> 0:06:59.599 to be a lot easier because usually it's a case 0:06:59.640 --> 0:07:02.800 of retiring some coal plants adding for renewables, and the 0:07:02.880 --> 0:07:06.560 share of renewables in the mix increases pretty rapidly. So 0:07:06.839 --> 0:07:09.720 that has been sort of one of the easier ways 0:07:09.840 --> 0:07:13.080 for countries to reach their overall targets. And so we're seeing, 0:07:13.240 --> 0:07:16.320 you know, more and more renewables are competing with coal, 0:07:16.480 --> 0:07:19.200 and if we're talking about the economics and can say 0:07:19.240 --> 0:07:22.920 more about why coal is becoming less and less competitive. 0:07:23.400 --> 0:07:26.760 But the EU now is in a very much sort 0:07:26.760 --> 0:07:29.840 of one directional path towards a greener economy overall, and 0:07:29.880 --> 0:07:33.000 it's becoming very clear that the role that coal has 0:07:33.040 --> 0:07:38.200 to play in a greener futures minimal and falling fast. 0:07:39.160 --> 0:07:42.520 So there is coal and then there are renewables, but 0:07:42.600 --> 0:07:45.080 actually between the two there's something that's actually a lot 0:07:45.160 --> 0:07:48.640 cheaper than coal that maybe a little bit easier to 0:07:48.720 --> 0:07:51.520 mix in, which is gas. And economics for gas have 0:07:51.640 --> 0:07:56.000 actually come down dramatically very recently, making it very competitive 0:07:56.120 --> 0:07:59.080 in number of contexts in locations, can you guys address 0:07:59.320 --> 0:08:03.640 gas And it's into the future of coal in Europe. 0:08:03.960 --> 0:08:06.840 The reason why the UTS was initially set up, so 0:08:06.920 --> 0:08:10.560 the carbon pricing scheme for Europe. The first goal was 0:08:10.640 --> 0:08:16.040 to actually at some point make coal expensive enough so 0:08:16.120 --> 0:08:19.360 that it can no longer compete with gas, and we 0:08:19.440 --> 0:08:22.520 achieved that about two years ago when we saw the 0:08:22.560 --> 0:08:26.480 economics of coal around Europe turning a combination of cheap 0:08:26.760 --> 0:08:31.920 gas coming from the US and carbon price modifications in policy. 0:08:32.000 --> 0:08:35.240 So that they actually reduced the over supply of carbon 0:08:35.280 --> 0:08:39.680 emissions that we had as a hangover from the two 0:08:38.559 --> 0:08:43.720 thous financial crisis. The combination of these two essentially suddenly 0:08:43.760 --> 0:08:47.520 made gas plants really competitive with coal. We were right 0:08:47.559 --> 0:08:50.320 there at that point where running a gas plant and 0:08:50.360 --> 0:08:54.040 running a coal plant was one and the same. Before that, 0:08:54.280 --> 0:08:58.560 running a coal plant was dirty. Now with the COVID crisis, 0:08:58.600 --> 0:09:02.600 in fact, we have a new status where gas prices 0:09:02.800 --> 0:09:05.880 in Europe have collapsed to record levels. I think we're 0:09:05.920 --> 0:09:09.800 talking about something like four euros per megawuath tour in 0:09:09.960 --> 0:09:14.600 the Netherlands compared to like sixty euros per megat are 0:09:14.720 --> 0:09:18.079 about a year ago. And what this is essentially doing, 0:09:18.160 --> 0:09:22.920 it's saying that we don't need call for everything. And 0:09:23.080 --> 0:09:25.360 one thing you need to keep in mind is that 0:09:25.800 --> 0:09:29.800 many gas fleets around Europe have been sized to actually 0:09:29.800 --> 0:09:32.880 be able to take over code for most of the time. 0:09:33.080 --> 0:09:35.760 So what ends up happening is coal plants are now 0:09:35.840 --> 0:09:39.199 asked to service the eight am to eight p m 0:09:40.120 --> 0:09:43.560 and that area that like eight am to eight pm 0:09:43.640 --> 0:09:46.440 because of COVID is lower because people are staying at home, 0:09:46.480 --> 0:09:49.040 they're not going to work, and so cord plants are 0:09:49.040 --> 0:09:52.360 not saying, well, no, we can't do that, like we 0:09:52.440 --> 0:09:55.440 can't turn on for three or four hours and then 0:09:55.440 --> 0:09:59.720 go away. So economics combined with the fact that these 0:10:00.000 --> 0:10:04.640 assets are not built to service a few hours in 0:10:04.679 --> 0:10:07.400 the day. They're built to run flat out like a 0:10:07.480 --> 0:10:10.800 coal plant hates to turn on and off. The combination 0:10:10.800 --> 0:10:13.839 of these two things has essentially completely pushed them out 0:10:13.840 --> 0:10:17.360 of generation in countries like not just the UK, but 0:10:17.640 --> 0:10:20.000 it is Spain. Wherever we have a large gas feat 0:10:20.080 --> 0:10:23.280 you see this happening in Greece, a country that was 0:10:23.320 --> 0:10:26.280 in love with lignite, and lignite was the beginning and 0:10:26.360 --> 0:10:30.679 end all of everything. Now it's like we there is 0:10:30.720 --> 0:10:33.920 speculation that has been like lignite three days or or 0:10:34.120 --> 0:10:37.839 days when lignite contributed so little to the generation, it's that, 0:10:37.920 --> 0:10:40.040 you know, it wasn't heard of. Is anyone still in 0:10:40.040 --> 0:10:42.560 love with lignite? Are there countries that are are still 0:10:43.120 --> 0:10:47.360 really resisting this, either for economic or political reasons? Definitely, 0:10:47.600 --> 0:10:51.280 and I think the political sort of pushback is one 0:10:51.280 --> 0:10:54.600 of the main reasons why a call plays out in 0:10:54.679 --> 0:10:58.880 those words, is still not in discussion in several European countries. 0:10:59.400 --> 0:11:02.120 It's just become a political kind of hot potato than 0:11:02.280 --> 0:11:05.280 that nobody really wants to touch. One of the reasons 0:11:05.280 --> 0:11:08.640 for that is, you know that lignite and hardcore power 0:11:08.720 --> 0:11:12.160 production and especially in Eastern Europe still is linked to 0:11:12.240 --> 0:11:16.320 the mining sector. So unfortunately the economic impact is being 0:11:16.400 --> 0:11:20.000 felt very heavily in those places and countries such as Poland, 0:11:20.920 --> 0:11:27.400 Czech Republic, Romania, Bulgaria, even Greece, where the government still 0:11:27.880 --> 0:11:30.600 may not want to discuss col phase outs increase. They 0:11:30.640 --> 0:11:33.720 have it has been announced, but the utilities in those 0:11:33.760 --> 0:11:37.000 areas still need to come up with some kind of 0:11:37.480 --> 0:11:41.560 option going forward, because although those regions may rely on jobs, 0:11:41.880 --> 0:11:44.800 as Andreas said, the economics are putting more and more 0:11:44.800 --> 0:11:49.120 pressure on that industry to the point where whether there's 0:11:49.280 --> 0:11:53.160 political will or not, the industry is really struggling. I 0:11:53.160 --> 0:11:55.240 actually used to live next to a giant coal plant 0:11:55.240 --> 0:11:57.920 in Romania. The air quality from from for me personally, 0:11:58.000 --> 0:12:01.120 was not that good, so I I personally, I think 0:12:01.120 --> 0:12:03.720 I would welcome this change. The air quality is a 0:12:03.720 --> 0:12:06.120 really interesting point because that is sort of the one 0:12:06.320 --> 0:12:09.480 area where governments are starting to be able to gain 0:12:09.559 --> 0:12:12.280 traction to discuss cold phase out. You know, just talking 0:12:12.320 --> 0:12:15.320 about closing coal is very unpopular. But once you start 0:12:15.679 --> 0:12:19.400 to actually speak with people and you know, they realize 0:12:19.400 --> 0:12:21.520 that the reason the air quality is for is because 0:12:21.520 --> 0:12:24.280 of cold power generation. That's been one of the sort 0:12:24.280 --> 0:12:27.800 of main factors, especially in Eastern Europe, that is driving 0:12:27.800 --> 0:12:31.680 the conversation towards moving beyond. I thought EU Power Weekly 0:12:31.720 --> 0:12:34.680 was really interesting. And in terms of company strategy that PGE. 0:12:35.360 --> 0:12:38.280 What is that Poland's utility? Is that right? I think 0:12:38.280 --> 0:12:40.880 it is the biggest utility in Poland? Yea, right, Okay, 0:12:40.880 --> 0:12:42.439 So they have a strategy. They have an answered the 0:12:42.480 --> 0:12:44.319 strategy to to phase out coal over the next twenty 0:12:44.320 --> 0:12:47.600 five years, but also they're starting to entertain a strategy 0:12:47.640 --> 0:12:50.920 of divesting or spinning off their coal assets into a 0:12:50.920 --> 0:12:54.640 separate company to make PG itself more investable. Can you 0:12:54.679 --> 0:12:57.719 describe some of the longer term utility strategies here? I 0:12:57.720 --> 0:13:00.520 guess it's air quality, but it's also just utility strategy. Yeah. 0:13:00.559 --> 0:13:03.200 I think on the one hand, utilities are feeling the 0:13:03.240 --> 0:13:07.079 economic pressure that at this point, in many cases, if 0:13:07.160 --> 0:13:10.360 we're looking for, you know, a new source of power generation, 0:13:10.440 --> 0:13:12.439 it makes a lot more sense to build new renewables 0:13:12.480 --> 0:13:15.680 plants rather than new fossil fuel plants, but we're also 0:13:15.760 --> 0:13:18.800 at a point now where new renewables are even more 0:13:18.800 --> 0:13:23.720 competitive with existing fossil assets. So replacing some of the 0:13:23.760 --> 0:13:28.880 oldest and dirtiest, you know, coal powered plants, especially in 0:13:28.920 --> 0:13:33.920 places like Poland, with renewables is actually makes just good 0:13:34.000 --> 0:13:37.360 sense from an economics point of view. At the same time, 0:13:37.520 --> 0:13:40.240 the EU level targets are making it clear that the 0:13:40.280 --> 0:13:42.720 future is going to be with renewable and so utilities 0:13:42.760 --> 0:13:45.280 are starting to realize that, you know, if if they're 0:13:45.320 --> 0:13:48.560 looking to expand, renewables are going to be the place 0:13:48.600 --> 0:13:52.320 to look, especially in Poland, is starting to investigate offshore 0:13:52.320 --> 0:13:55.960 wind um. They're looking at more stable source of generation 0:13:56.000 --> 0:13:59.080 that's still renewable, but also as a way to generate 0:13:59.440 --> 0:14:01.559 jobs and you know a little bit more I on 0:14:01.679 --> 0:14:04.680 my activity in the areas that are bordering to see 0:14:04.880 --> 0:14:08.160 trying to bring more activity back to courts to Utilities 0:14:08.200 --> 0:14:11.360 are trying to basically if they can't get away from 0:14:11.400 --> 0:14:14.559 those costly assets that are really pulling them down, and 0:14:14.640 --> 0:14:17.520 they're sending signals across the board that they're looking at, 0:14:17.720 --> 0:14:21.440 you more sustainable options there. They've understood where the wind 0:14:21.520 --> 0:14:25.480 is blowing and it's their pockets ultimately that are taking 0:14:25.760 --> 0:14:28.960 the hit from from costly coal generation. I do sometimes 0:14:29.000 --> 0:14:31.920 hear though from proponents of coal, and they point out 0:14:32.000 --> 0:14:35.800 that we need baseload power and that's essentially what coal provides. 0:14:35.920 --> 0:14:38.440 So maybe this is a question for you andres from 0:14:38.440 --> 0:14:41.640 an economic standpoint and just from a general grid mix standpoint, 0:14:41.800 --> 0:14:44.800 is everything else all added together? Is that going to 0:14:44.840 --> 0:14:48.040 be consistent enough? And when we all start back at work, 0:14:48.200 --> 0:14:50.080 we are physically going to the office, is there going 0:14:50.080 --> 0:14:52.200 to be some sort of a rebound or a yoyo 0:14:52.240 --> 0:14:54.880 effect that is going to put us exactly back where 0:14:54.880 --> 0:14:59.440 we were regarding coal and everything else in the generation mix. 0:14:59.800 --> 0:15:02.240 So I want to start by clarifying a thing that 0:15:02.360 --> 0:15:04.760 I think a lot of people in the industry no, 0:15:05.120 --> 0:15:09.239 but the people who work in coal often don't distinguish. 0:15:09.440 --> 0:15:12.840 And you said, oh, coal is base load power. Also 0:15:12.960 --> 0:15:15.840 is gas and if cause it's cheaper like it is 0:15:15.880 --> 0:15:18.880 in the US, why should code be base or power. 0:15:19.160 --> 0:15:22.680 So yes, coal is baseload power, but it's not the 0:15:22.720 --> 0:15:25.320 only technology. And you look at the country like France 0:15:25.360 --> 0:15:28.160 and your career is basedload power. So from that point 0:15:28.160 --> 0:15:30.360 of view, I want to make that distinction that the 0:15:30.400 --> 0:15:33.120 fact that core can do baseload power to me is 0:15:33.160 --> 0:15:36.520 actually UH deficiency because if you ask me, well, core 0:15:36.680 --> 0:15:40.320 gas can do both baseload and peak, so um, that 0:15:40.520 --> 0:15:43.440 is a that is like the first thing to keep 0:15:43.480 --> 0:15:46.680 in mind as far as the rebound for coal, if 0:15:46.720 --> 0:15:49.640 you ask me, I struggled to see how core could rebound. 0:15:49.760 --> 0:15:54.480 In Europe. Demand will rebound and UH probably will start 0:15:54.520 --> 0:15:57.520 burning more gas, but we need to clear up the 0:15:57.560 --> 0:16:00.720 gas over supply. It is clear that at the carbon 0:16:00.840 --> 0:16:05.440 price will keep call out and I think increasingly utilities 0:16:05.480 --> 0:16:08.640 are like well, policies against us, right, Like, it's pretty 0:16:08.680 --> 0:16:11.640 clear we have called phaseouts in most of europe economics. 0:16:12.440 --> 0:16:14.880 Whether they are against us or in our favor, it's 0:16:14.920 --> 0:16:17.840 probably more against us than in our favor. And so 0:16:18.080 --> 0:16:20.840 you see companies saying, well, let's call it quits, let's 0:16:20.960 --> 0:16:25.720 you know, why have this bleeding wound running just like 0:16:25.920 --> 0:16:28.360 cut it off and and and and throw away. Like 0:16:28.520 --> 0:16:32.400 I'm sorry to be so so dramatic, but but that's 0:16:32.400 --> 0:16:35.440 how they see it. And you know, we've been talking 0:16:35.480 --> 0:16:39.240 about the UK, but we haven't touched, for example, in 0:16:39.320 --> 0:16:42.760 Germany where there's like a cold phase out there going 0:16:42.840 --> 0:16:47.000 on and right now in the crisis, lignite, right, a 0:16:47.120 --> 0:16:51.440 fuel that costs nothing, is essentially still more expensive to 0:16:51.520 --> 0:16:54.520 run than gas because of low gas prices and the 0:16:54.560 --> 0:16:58.280 carbon price. You go to Italy and l announced early 0:16:58.800 --> 0:17:01.400 closure of one of its plans. You go to Portugal, 0:17:01.640 --> 0:17:05.320 sorry Spain e DP announced uh the early closure of 0:17:05.359 --> 0:17:08.400 another coal plant there. The PPC in Greece has been 0:17:08.440 --> 0:17:11.679 asking the government to shut down the core plants, and 0:17:11.720 --> 0:17:14.359 the government's the one that's saying, hey, how about we 0:17:14.480 --> 0:17:17.240 take this step easier than what you want to do 0:17:17.320 --> 0:17:20.160 because it's you know, okay, we agree to a phase out, 0:17:20.200 --> 0:17:24.879 but it's still political. So I think that there is 0:17:24.920 --> 0:17:27.920 not going to be there's there might be an apparent rebound, 0:17:28.160 --> 0:17:31.399 but the trend is set, is like this thing is 0:17:31.520 --> 0:17:34.639 going away and it's going away fast. Are the same 0:17:34.680 --> 0:17:36.639 companies that are shutting down co plants? Are those the 0:17:36.720 --> 0:17:39.000 same ones that own the gas and renewable plants that 0:17:39.040 --> 0:17:40.520 are that are taking in their place? Or they are 0:17:40.520 --> 0:17:42.359 winners and losers here? Is it all just kind of 0:17:42.880 --> 0:17:45.240 hera No, I wouldn't say there are winners and losers. 0:17:45.240 --> 0:17:48.840 There are emerging strategies everywhere right. There are the ones 0:17:49.280 --> 0:17:53.000 who bet on compensation for having to close core plants 0:17:53.040 --> 0:17:56.800 are because that's a thing, right like, and so they say, 0:17:56.880 --> 0:18:00.000 let's take the core assets and probably will get paid 0:18:00.040 --> 0:18:02.040 to do that. A very good example is e p 0:18:02.280 --> 0:18:06.240 H from the Czech Republic. They've been buying up all 0:18:06.359 --> 0:18:09.960 coal plants and all glass plants for very cheap prices, 0:18:10.000 --> 0:18:14.080 hoping that either they get used or they get paid 0:18:14.080 --> 0:18:16.880 for that. R W to a certain extent, also bet 0:18:16.880 --> 0:18:20.080 on that when it essentially decided to take all of 0:18:20.680 --> 0:18:23.119 all of the coal generation and and and keep it 0:18:23.119 --> 0:18:25.560 on its books. And then you have the companies who say, look, 0:18:25.600 --> 0:18:29.720 I want nothing to do with code. Ian was well inside, 0:18:29.720 --> 0:18:32.640 I want nothing to do with generation in general. But 0:18:32.960 --> 0:18:36.120 maybe we can think of like Vatonfel that a few 0:18:36.200 --> 0:18:39.080 years ago essentially paid e p H to take to 0:18:39.240 --> 0:18:42.439 lignite plants away from its books. And then you have 0:18:42.560 --> 0:18:46.080 the companies that like an L or e DP, very 0:18:46.200 --> 0:18:49.920 large European utilities that have a mix, have a very 0:18:50.040 --> 0:18:53.560 low call in their mix, and essentially they're saying, look, 0:18:53.600 --> 0:18:56.280 we're looking to phase it out. We're looking to free 0:18:56.359 --> 0:18:59.720 up money to then invest in new technologies. If you 0:18:59.760 --> 0:19:04.240 ask me, obviously, anyone who's like massively exposed to code 0:19:04.240 --> 0:19:09.240 today's suffering. But even you know, there are counter examples 0:19:09.240 --> 0:19:12.439 to that, like the Greek formerly state owned utility, the 0:19:12.560 --> 0:19:16.639 public Park Court. Now it's created. Everyone was betting that 0:19:17.080 --> 0:19:20.280 we're going to have a very bad first quarter and 0:19:20.560 --> 0:19:23.439 because of the coronavirus crisis and a second quarter, and 0:19:23.520 --> 0:19:27.160 in fact, for some iraculous reason, you managed to post 0:19:27.160 --> 0:19:29.800 a profit. If I'm not wrong, Katic and correct me there. 0:19:30.240 --> 0:19:34.280 And it was because of their grids division. So there 0:19:34.320 --> 0:19:37.639 are surprises everywhere, and and and I think this is 0:19:37.640 --> 0:19:42.199 a period where companies like our w or PPC or 0:19:42.240 --> 0:19:45.400 others that are heavily exposed to CODE are discovering new 0:19:45.440 --> 0:19:50.760 profit making sectors of their business. This is definitely involves 0:19:50.800 --> 0:19:53.080 a lot of economic signals, but I want to know 0:19:53.240 --> 0:19:58.960 at the end of the line emissions targets, how much 0:19:59.160 --> 0:20:02.159 of that success or failure of hitting those targets it 0:20:02.200 --> 0:20:04.399 has to do with coal? How big is it as 0:20:04.440 --> 0:20:06.840 a part of the whole when it comes to emissions, 0:20:07.160 --> 0:20:10.040 coal is going to play a key role in whether 0:20:10.160 --> 0:20:11.840 or not the EU is able to meet its twenty 0:20:11.920 --> 0:20:16.200 thirty target. And then it's it's ultimate goal of economy 0:20:16.240 --> 0:20:20.159 wide net zero emissions. So cole in the power sector 0:20:20.280 --> 0:20:24.840 accounts for about two thirds of total power sector emissions 0:20:24.920 --> 0:20:29.080 in the EU now, and so if if the Block 0:20:29.160 --> 0:20:31.960 is really serious about reducing you know, that that chunk 0:20:32.000 --> 0:20:33.879 of emissions, it's going to have to take a very 0:20:33.880 --> 0:20:36.960 serious step towards reducing emissions from cold But as they 0:20:37.040 --> 0:20:40.439 mentioned earlier as well, the electricity sector is one of 0:20:40.480 --> 0:20:44.280 the more straightforward sectors of the economy to de carbonized. 0:20:44.640 --> 0:20:47.439 And so the EU, if they want to meet net zero, 0:20:47.640 --> 0:20:49.399 is going to have to do quite a lot of 0:20:49.400 --> 0:20:54.400 work in buildings and heating and transport, and that's gonna 0:20:54.440 --> 0:20:56.480 be harder. So it's gonna make a lot more sense 0:20:56.560 --> 0:21:00.920 to try and take bigger, more straightforward steps in decarbonizing 0:21:00.960 --> 0:21:04.560 the power sector. Um, the you has put you know, 0:21:04.640 --> 0:21:08.080 this green recovery really front and center in its post 0:21:08.160 --> 0:21:12.440 COVID stimulus plans UM and especially it has set out 0:21:12.560 --> 0:21:16.640 this mechanism that is really designed to help bring the 0:21:16.680 --> 0:21:18.840 countries and regions that are going to have, you know, 0:21:18.920 --> 0:21:21.919 a much steeper path towards decarbonization on board. So the 0:21:22.359 --> 0:21:24.960 Just Transition mechanism was set up as part of the 0:21:24.960 --> 0:21:28.240 Green Deal announced at the end of twenty nineteen. But 0:21:28.680 --> 0:21:32.200 from seven and a half billion euros that were meant 0:21:32.320 --> 0:21:35.760 to go towards that fund in the Green Deal, the 0:21:35.800 --> 0:21:39.240 new recovery package has increased that by more than four times, 0:21:39.240 --> 0:21:42.760 so it's now forty billion euros that will go to 0:21:42.920 --> 0:21:46.679 making sure that you know, no, no regions or or 0:21:46.800 --> 0:21:50.320 areas are left behind from the transition. One of the 0:21:50.400 --> 0:21:53.160 key points though, is that no funding will be available 0:21:53.240 --> 0:21:57.560 unless those regions produce a just transition plan, so they'll 0:21:57.600 --> 0:22:01.240 have to actually, you know, lay out targets concrete steps 0:22:01.320 --> 0:22:04.320 on how to de carbonize, and it's very unlikely that 0:22:04.800 --> 0:22:07.680 they'll be receiving funds if they don't acknowledge at least 0:22:07.680 --> 0:22:10.080 it needs to move past cold and start taking steps 0:22:10.560 --> 0:22:13.159 concrete steps in that direction. Andreas, you mentioned you had 0:22:13.160 --> 0:22:14.800 a sum up thought can you bring us on home? 0:22:15.480 --> 0:22:18.199 So yeah, like, I think what we're seeing here is 0:22:18.200 --> 0:22:20.600 that call is on the way out in Europe. What 0:22:20.800 --> 0:22:23.840 what we're essentially seeing is, you know, low gas prices, 0:22:23.960 --> 0:22:29.600 high carbon prices are making the economics of coal plants unbearable. However, 0:22:29.640 --> 0:22:32.119 as we've seen in the past, gas prices do not 0:22:32.320 --> 0:22:34.760 need to stay low and carbon prices do not need 0:22:34.840 --> 0:22:37.440 to stay high. And I think this is where European 0:22:37.520 --> 0:22:44.000 policy comes in. European policies essentially the continents insurance to say, 0:22:44.240 --> 0:22:48.359 no matter what the economics do, we are kicking this 0:22:48.520 --> 0:22:52.240 thing out. And I think this period right now gave 0:22:52.280 --> 0:22:55.359 a future vision. The COVID period gave a vision of 0:22:55.400 --> 0:22:59.080 the future to call operators. But there are still the 0:22:59.119 --> 0:23:02.160 ones let's say, well, well, maybe things change for us, 0:23:02.600 --> 0:23:05.280