1 00:00:01,400 --> 00:00:04,559 Speaker 1: Hi, Mrs Dana Perkins, and you're listening to Switch It 2 00:00:04,640 --> 00:00:07,960 Speaker 1: on the b n OF podcast. So this winter there 3 00:00:08,000 --> 00:00:12,600 Speaker 1: have been some unusually warm and unusually cold weeks, and 4 00:00:12,760 --> 00:00:15,560 Speaker 1: certainly people are talking not just about the weather, but 5 00:00:15,800 --> 00:00:19,600 Speaker 1: the energy crisis. The conversation around natural gas and how 6 00:00:19,600 --> 00:00:22,320 Speaker 1: it fits into the future of the energy system and 7 00:00:22,400 --> 00:00:25,479 Speaker 1: really what that energy system overall looks like as the 8 00:00:25,560 --> 00:00:29,720 Speaker 1: energy transition gets underway, has something that has been front 9 00:00:29,760 --> 00:00:32,559 Speaker 1: of mine for many people, certainly the companies in the 10 00:00:32,680 --> 00:00:37,400 Speaker 1: energy transition and of course policymakers. So today we have 11 00:00:37,440 --> 00:00:41,560 Speaker 1: the opportunity to investigate the policy aspect more deeply. M 12 00:00:41,600 --> 00:00:45,040 Speaker 1: A Champion here at BNF is head of Regional Energy 13 00:00:45,080 --> 00:00:48,040 Speaker 1: Transitions Research, and she was able to sit down in 14 00:00:48,120 --> 00:00:52,080 Speaker 1: conversation with Dr Patrick Greign, State Secretary at the Federal 15 00:00:52,120 --> 00:00:56,000 Speaker 1: Ministry for Economic Affairs and Climate Action for Germany, and 16 00:00:56,040 --> 00:00:59,800 Speaker 1: they discuss the ongoing energy crisis. Even as the days 17 00:00:59,800 --> 00:01:02,200 Speaker 1: are longer and we can almost see spring approaching on 18 00:01:02,200 --> 00:01:05,240 Speaker 1: our calendars, this conversation is not going to stop when 19 00:01:05,240 --> 00:01:08,280 Speaker 1: we get to the summer. So what steps can and 20 00:01:08,319 --> 00:01:11,520 Speaker 1: should be taken? Well, I'm going to leave that conversation 21 00:01:11,560 --> 00:01:15,080 Speaker 1: with Emma and Dr Gregan. As a reminder, being a 22 00:01:15,120 --> 00:01:17,680 Speaker 1: F does not provide investment of strategy advice, and we 23 00:01:17,800 --> 00:01:20,520 Speaker 1: have a complete disclaimer at the very end of the show. 24 00:01:22,800 --> 00:01:25,520 Speaker 1: Hi everyone, my name is Emma Champion. I sit on 25 00:01:25,560 --> 00:01:28,759 Speaker 1: the analyst side at BENF working on our energy transitions 26 00:01:28,760 --> 00:01:32,120 Speaker 1: coverage of the European region, and today I am actually 27 00:01:32,160 --> 00:01:35,640 Speaker 1: so excited and in fact honored to be playing MC 28 00:01:35,880 --> 00:01:39,200 Speaker 1: for today's episode because we get to have a really 29 00:01:39,240 --> 00:01:43,039 Speaker 1: important conversation with an exceptional guest. So joining us on 30 00:01:43,040 --> 00:01:46,120 Speaker 1: the show today to discuss some of the policy responses 31 00:01:46,160 --> 00:01:49,720 Speaker 1: to the ongoing energy crisis here in Europe and transition 32 00:01:49,760 --> 00:01:52,640 Speaker 1: opportunities that might help us get out of this situation 33 00:01:53,320 --> 00:01:56,800 Speaker 1: is Germany's State Secretary of the Ministry for Economic Affairs 34 00:01:56,800 --> 00:02:00,480 Speaker 1: and Climate Action, Dr Patrick Gregn. Thank you so much 35 00:02:00,640 --> 00:02:04,760 Speaker 1: for joining us today, Patrick, and welcome to Switched On. Yeah, 36 00:02:04,800 --> 00:02:08,800 Speaker 1: thanks for having me, Emma. I'm really delighted to discuss 37 00:02:08,919 --> 00:02:12,720 Speaker 1: because there's so much going on. Absolutely, I think to 38 00:02:12,800 --> 00:02:15,480 Speaker 1: start with needless to say, at least from my perspective, 39 00:02:15,520 --> 00:02:18,480 Speaker 1: it's been a particularly eventful eighteen months to be an 40 00:02:18,520 --> 00:02:23,160 Speaker 1: analyst covering European energy markets. We've seen gas prices hit 41 00:02:23,240 --> 00:02:26,680 Speaker 1: those unprecedented highs energy costs adding to a lot of 42 00:02:26,720 --> 00:02:30,760 Speaker 1: the inflationary pressures that are facing European economies and governments 43 00:02:30,760 --> 00:02:35,160 Speaker 1: as a result, staging quite deep and unprecedented interventions into 44 00:02:35,200 --> 00:02:39,240 Speaker 1: our energy markets to help contain those costs, support the 45 00:02:39,400 --> 00:02:43,520 Speaker 1: struggling industries and households as well as utilities in some cases, 46 00:02:44,200 --> 00:02:48,079 Speaker 1: and markets have been almost haywire. Over two following Russia's 47 00:02:48,080 --> 00:02:52,480 Speaker 1: invasion of Ukraine, we've seen extreme volatility in energy prices. 48 00:02:52,480 --> 00:02:54,360 Speaker 1: So I kind of want to start off with a 49 00:02:54,440 --> 00:02:56,640 Speaker 1: really quite broad question, but one I think a lot 50 00:02:56,680 --> 00:02:59,720 Speaker 1: of people have been asking themselves at various moments over 51 00:02:59,760 --> 00:03:03,560 Speaker 1: this crisis. Patrick, do you think our energy markets are broken? 52 00:03:03,800 --> 00:03:05,519 Speaker 1: And I guess what we're really getting out here is 53 00:03:05,560 --> 00:03:07,639 Speaker 1: what do you think is the cause of the crisis. 54 00:03:08,040 --> 00:03:10,799 Speaker 1: The real cause of the crisis is very simple. We're 55 00:03:10,840 --> 00:03:16,360 Speaker 1: lacking one hundred third gbcm of gas from Russia, and 56 00:03:16,680 --> 00:03:22,040 Speaker 1: that of course has a substantial reaction from Europe to 57 00:03:22,320 --> 00:03:25,359 Speaker 1: somehow hope with that, and of course that means high 58 00:03:25,440 --> 00:03:31,840 Speaker 1: gas prices, it means public activity to increase the availability 59 00:03:32,080 --> 00:03:35,360 Speaker 1: of energy to Europe, and it will take a while 60 00:03:35,560 --> 00:03:40,080 Speaker 1: until global markets have rearranged, and of course, because the 61 00:03:40,160 --> 00:03:44,080 Speaker 1: power market is linked to the gas market in the 62 00:03:44,120 --> 00:03:46,960 Speaker 1: sense that gas power plants are setting the price in 63 00:03:47,000 --> 00:03:51,880 Speaker 1: the power market, we're seeing those high electricity prices. But 64 00:03:52,040 --> 00:03:57,440 Speaker 1: at the end of the day, I'd say markets are functioning. Yeah, absolutely. 65 00:03:57,760 --> 00:03:59,720 Speaker 1: I kind of want to reflect on some of the 66 00:03:59,800 --> 00:04:02,480 Speaker 1: lasts that we can and maybe should already be taking 67 00:04:02,480 --> 00:04:05,840 Speaker 1: away from crisis management, particularly from your perspective and time 68 00:04:05,880 --> 00:04:08,760 Speaker 1: now as a policymaker during this time, and so let's 69 00:04:08,800 --> 00:04:10,600 Speaker 1: dig into some of the measures that are already being 70 00:04:10,600 --> 00:04:14,360 Speaker 1: implemented for this winter. I'm in London. We've already seen 71 00:04:14,400 --> 00:04:16,640 Speaker 1: over some of this month, indeed across much of the 72 00:04:16,680 --> 00:04:20,440 Speaker 1: rest of Europe snow and sustain subzero temperatures. This is 73 00:04:20,480 --> 00:04:23,880 Speaker 1: generating more and more concern around energy costs and looking forward, 74 00:04:24,160 --> 00:04:26,920 Speaker 1: I guess I want to know what, in your mind 75 00:04:27,080 --> 00:04:31,440 Speaker 1: should governments be prioritizing to minimize the negative effects of 76 00:04:31,560 --> 00:04:36,880 Speaker 1: this crisis. It's very clear that we would need to 77 00:04:36,920 --> 00:04:41,320 Speaker 1: reduce our guest demand by some twent over the next 78 00:04:41,400 --> 00:04:45,080 Speaker 1: eighteen months in Europe, and essentially the price will do 79 00:04:45,360 --> 00:04:48,800 Speaker 1: part of this. We see already how a price have 80 00:04:49,160 --> 00:04:52,480 Speaker 1: driven down guest demanding industry. But then there are other 81 00:04:52,760 --> 00:04:56,440 Speaker 1: effects where we would also need to government intervention, lower 82 00:04:56,480 --> 00:05:00,200 Speaker 1: heat demand, to boost energy efficiency, to boost renewables, to 83 00:05:00,640 --> 00:05:04,400 Speaker 1: basically we did the call back online in order to 84 00:05:04,480 --> 00:05:08,800 Speaker 1: get basically gas our plants less full of ours. So 85 00:05:09,400 --> 00:05:12,120 Speaker 1: those are essentially all the things that we need to 86 00:05:12,160 --> 00:05:16,640 Speaker 1: do when it comes to basically gas flows. Then of 87 00:05:16,680 --> 00:05:20,960 Speaker 1: course we have the gas price issue, and there we have, 88 00:05:21,279 --> 00:05:25,600 Speaker 1: of course for customers huge price increases. We somehow need 89 00:05:25,640 --> 00:05:28,640 Speaker 1: to find a way that they can cope with it. 90 00:05:28,800 --> 00:05:32,240 Speaker 1: That's why a lot of governments have handed out subsidies. 91 00:05:32,600 --> 00:05:34,800 Speaker 1: But on the other hand, there are also people who 92 00:05:34,839 --> 00:05:37,800 Speaker 1: make a lot of money now and we should also 93 00:05:38,520 --> 00:05:41,840 Speaker 1: take some of those extra profits and give them back 94 00:05:41,880 --> 00:05:44,120 Speaker 1: to customers. I want to dig into some of those 95 00:05:44,160 --> 00:05:46,479 Speaker 1: ideas a little further, so maybe let's talk about the 96 00:05:46,520 --> 00:05:49,200 Speaker 1: demand and price dynamics. We've already seen to your point 97 00:05:49,320 --> 00:05:52,960 Speaker 1: that many consumers across the segments from residential to industry 98 00:05:53,000 --> 00:05:56,719 Speaker 1: are already responding to this higher price environment and reducing 99 00:05:56,720 --> 00:05:59,760 Speaker 1: that consumption. My colleagues on the BENF Gas team are 100 00:05:59,800 --> 00:06:02,520 Speaker 1: trying king gas demand destruction in Germany at over fift 101 00:06:03,080 --> 00:06:05,840 Speaker 1: even since it got colder over the recent weeks um 102 00:06:05,920 --> 00:06:08,320 Speaker 1: and that's according to our provision or kind of implied 103 00:06:08,360 --> 00:06:12,000 Speaker 1: demand data. But we've also seen to your point about 104 00:06:12,160 --> 00:06:15,960 Speaker 1: many governments, including in Germany, you're rightly putting in place 105 00:06:16,000 --> 00:06:19,040 Speaker 1: measures to help contain costs for consumers and support their 106 00:06:19,120 --> 00:06:21,800 Speaker 1: energy bills. I guess the question here is, is there 107 00:06:21,800 --> 00:06:24,800 Speaker 1: a dilemma where there are risks of going too far 108 00:06:24,960 --> 00:06:29,279 Speaker 1: in shielding consumers from price increases and thereby actually muting 109 00:06:29,279 --> 00:06:32,039 Speaker 1: the effect of some of those price signals to reduce demand. 110 00:06:32,240 --> 00:06:35,640 Speaker 1: I guess, like, what's the sweet spot? Well, what we 111 00:06:35,680 --> 00:06:39,640 Speaker 1: are doing is the shielding of customers has to still 112 00:06:39,760 --> 00:06:44,320 Speaker 1: have a full incentive to reduce demand, which is why 113 00:06:44,560 --> 00:06:46,799 Speaker 1: at the end of the day, it is a lump 114 00:06:46,920 --> 00:06:52,360 Speaker 1: some money calculated on previous demand, but it's a lumpsome 115 00:06:52,560 --> 00:06:56,680 Speaker 1: transfer that we're doing. That means you still have the 116 00:06:56,880 --> 00:07:01,239 Speaker 1: full incentive to reduce your gas demand because you still 117 00:07:01,320 --> 00:07:05,640 Speaker 1: see the gas high prices on your marginal demand. And 118 00:07:05,680 --> 00:07:10,600 Speaker 1: therefore I think that's what is needed, shield customers through 119 00:07:10,840 --> 00:07:15,680 Speaker 1: a mechanism which still gives the full incentive to reduce Yeah, 120 00:07:15,720 --> 00:07:18,360 Speaker 1: I understand it's certainly a tricky one though to get 121 00:07:18,400 --> 00:07:20,320 Speaker 1: the balance right, and I mean to be fair to 122 00:07:20,400 --> 00:07:23,000 Speaker 1: my point, we are still tracking demand destruction happening in 123 00:07:23,000 --> 00:07:25,520 Speaker 1: real time, so I think we're not quite at that 124 00:07:25,560 --> 00:07:29,040 Speaker 1: point where it's completely in elastic. If you look at 125 00:07:29,080 --> 00:07:33,400 Speaker 1: now the cold times, then essentially what is happening and 126 00:07:33,440 --> 00:07:38,160 Speaker 1: that is our problem. Because French nukes are down demand 127 00:07:38,400 --> 00:07:42,840 Speaker 1: from France and electricity is so high to the imports, 128 00:07:43,000 --> 00:07:46,400 Speaker 1: especially when it gets cold, that then gas power plants 129 00:07:46,400 --> 00:07:50,080 Speaker 1: in all neighboring countries are producing for France. That is, 130 00:07:50,120 --> 00:07:54,200 Speaker 1: in essence something that will be I think the major 131 00:07:54,280 --> 00:07:58,960 Speaker 1: risks throughout this winter how much cold spell will on 132 00:07:59,000 --> 00:08:02,240 Speaker 1: the one hand increased gas demand in the heating sector 133 00:08:02,600 --> 00:08:05,680 Speaker 1: and on the other hand city demanded France which they 134 00:08:05,720 --> 00:08:08,280 Speaker 1: cannot meet themselves. I think we would agree with you 135 00:08:08,320 --> 00:08:10,520 Speaker 1: here that at least the biggest priority has to be 136 00:08:10,560 --> 00:08:13,680 Speaker 1: focusing on gas demand and mechanisms to support the gas 137 00:08:13,680 --> 00:08:16,720 Speaker 1: price side of things. The question and risks around the 138 00:08:16,920 --> 00:08:19,560 Speaker 1: crazy power market dynamics we've seen over this year, especially 139 00:08:19,600 --> 00:08:22,080 Speaker 1: as you point out with French nuclear output being at 140 00:08:22,160 --> 00:08:25,560 Speaker 1: almost record loads, that they're all definitely things on our radar. 141 00:08:25,960 --> 00:08:28,280 Speaker 1: I guess maybe to dig in a little bit more 142 00:08:28,360 --> 00:08:30,480 Speaker 1: on the gas price side. You know, we've seen a 143 00:08:30,560 --> 00:08:33,520 Speaker 1: number of interventions being proposed and in some cases even 144 00:08:33,559 --> 00:08:37,439 Speaker 1: implemented across the region, but also not a lot of progress. 145 00:08:37,480 --> 00:08:38,960 Speaker 1: If I dare to say on on some of the 146 00:08:39,000 --> 00:08:42,120 Speaker 1: mechanisms that have been floated to support gas price to 147 00:08:42,240 --> 00:08:45,440 Speaker 1: actually mitigate some of the high gas price environment that 148 00:08:45,480 --> 00:08:47,880 Speaker 1: we're seeing, I kind of want to know your view 149 00:08:48,080 --> 00:08:51,360 Speaker 1: on what kind of interventions on the gas side are 150 00:08:51,400 --> 00:08:55,920 Speaker 1: likely to be most successful. And I'm particularly thinking post 151 00:08:56,040 --> 00:08:58,920 Speaker 1: this winter. So if we're thinking one to three years 152 00:08:58,920 --> 00:09:05,360 Speaker 1: out now, I think joint purchasing by Europe on the 153 00:09:05,480 --> 00:09:09,920 Speaker 1: global energy market would of course drive down producers rent 154 00:09:10,160 --> 00:09:14,320 Speaker 1: here and increase our buyer power here. So that's something 155 00:09:14,360 --> 00:09:17,240 Speaker 1: we should definitely do. And then, of course the second 156 00:09:17,320 --> 00:09:22,440 Speaker 1: thing is will we see in increased export capacity over 157 00:09:22,480 --> 00:09:25,520 Speaker 1: the coming months and years now? There are some projects 158 00:09:25,600 --> 00:09:29,280 Speaker 1: that are envisaged a lot I think will come only 159 00:09:32,000 --> 00:09:35,880 Speaker 1: and therefore we will I think I have to find 160 00:09:35,880 --> 00:09:40,800 Speaker 1: a way to keep efficiency, renewables and others really as 161 00:09:40,920 --> 00:09:44,760 Speaker 1: strong pillars over the next twenty four thirty six months 162 00:09:45,200 --> 00:09:48,800 Speaker 1: in terror to have gas demand lower than we had 163 00:09:48,800 --> 00:09:52,320 Speaker 1: it in with those measures we need to be able 164 00:09:52,360 --> 00:09:57,760 Speaker 1: to get the gas market back to normal. Yeah, I 165 00:09:57,800 --> 00:10:00,560 Speaker 1: guess it's definitely be inflated for a a while now. 166 00:10:00,640 --> 00:10:03,480 Speaker 1: The question of joint gas purchasing, are you optimistic that 167 00:10:03,679 --> 00:10:08,240 Speaker 1: will kind of progress? Well, used to be something where 168 00:10:08,280 --> 00:10:11,840 Speaker 1: also Germany was very hesitant. We have switched our position. 169 00:10:12,160 --> 00:10:16,240 Speaker 1: Given the high gas prices on the LNG market. I 170 00:10:16,280 --> 00:10:19,439 Speaker 1: think there is a very good cause and case which 171 00:10:19,480 --> 00:10:22,320 Speaker 1: is now different to other discussions that we had up 172 00:10:22,320 --> 00:10:27,680 Speaker 1: to one. So therefore I would say yes, three will 173 00:10:27,720 --> 00:10:30,880 Speaker 1: be the year where we see jo gas. And of 174 00:10:30,880 --> 00:10:32,880 Speaker 1: course you know that there have already been a range 175 00:10:32,920 --> 00:10:35,640 Speaker 1: of successful measures in some cases for the gas markets, 176 00:10:35,679 --> 00:10:39,200 Speaker 1: including support for the midstream gas storage targets. We saw 177 00:10:39,280 --> 00:10:41,760 Speaker 1: a kind of elect effectively rolled out across the region. 178 00:10:41,840 --> 00:10:45,040 Speaker 1: And also to the point you raised earlier about downstream 179 00:10:45,040 --> 00:10:48,160 Speaker 1: support to consumers, we already talked a little bit about 180 00:10:48,240 --> 00:10:51,120 Speaker 1: how the high gas price environment is also having spill 181 00:10:51,160 --> 00:10:55,079 Speaker 1: over consequences for our power markets because electricity prices are 182 00:10:55,200 --> 00:10:57,839 Speaker 1: very often set by gas as the marginal supply source 183 00:10:57,880 --> 00:11:00,440 Speaker 1: in the region. So maybe want to dig a little 184 00:11:00,440 --> 00:11:03,000 Speaker 1: bit into some of the measures on the electricity side 185 00:11:03,000 --> 00:11:06,480 Speaker 1: of things. Now. Back in October for those listening, the 186 00:11:06,520 --> 00:11:09,480 Speaker 1: European Commission did set the stage for the EU to 187 00:11:09,679 --> 00:11:13,320 Speaker 1: implement measures, including things like the levies on fossil fuel 188 00:11:13,320 --> 00:11:17,640 Speaker 1: production as well as clawbacks on electricity generators profits, namely 189 00:11:17,720 --> 00:11:22,960 Speaker 1: those inframarginal technologies like nuclear and renewables and nignite. But 190 00:11:23,080 --> 00:11:26,920 Speaker 1: in practice been a analysts have been tracking kind of 191 00:11:26,920 --> 00:11:28,760 Speaker 1: some of the measures that have actually started to be 192 00:11:28,840 --> 00:11:33,440 Speaker 1: rolled out, and we've noticed a real mixture of measures 193 00:11:33,480 --> 00:11:36,800 Speaker 1: starting to take effect across the regions. So Germany announced 194 00:11:37,080 --> 00:11:40,800 Speaker 1: it's when for clawbacks on electricity generation, which go actually 195 00:11:40,840 --> 00:11:43,080 Speaker 1: deeper than the EU threshold of a hundred and eighty 196 00:11:43,240 --> 00:11:46,160 Speaker 1: euros Permegawa tower. Germany's, i believe is a hundred and 197 00:11:46,200 --> 00:11:49,760 Speaker 1: thirty threshold with a ninety cent tax rate. And France 198 00:11:50,080 --> 00:11:53,320 Speaker 1: has a perhaps even more aggressive and different clawback as well, 199 00:11:53,400 --> 00:11:56,440 Speaker 1: starting from a hundred years permegawa tower, and they're planning 200 00:11:56,440 --> 00:11:58,640 Speaker 1: to implement that for an even longer period of time 201 00:11:58,679 --> 00:12:01,640 Speaker 1: than recommended by the Commission. And I think for start 202 00:12:01,760 --> 00:12:05,720 Speaker 1: is these clawbacks are creating some discussions among the utilities 203 00:12:05,720 --> 00:12:08,360 Speaker 1: around you know, use of these proceeds, And I want 204 00:12:08,400 --> 00:12:11,000 Speaker 1: to ask you in particular, do you see any risks 205 00:12:11,040 --> 00:12:14,880 Speaker 1: to so many differentiated response is now taking place among 206 00:12:15,080 --> 00:12:20,520 Speaker 1: EU member states? Not really. I mean we see huge 207 00:12:20,720 --> 00:12:25,400 Speaker 1: extra profits out there, and no one was planning with them. Honest, 208 00:12:25,480 --> 00:12:28,079 Speaker 1: no one would have predicted the power cries of some 209 00:12:28,559 --> 00:12:31,240 Speaker 1: have heard the euros promegoad hours or who or even 210 00:12:31,360 --> 00:12:34,000 Speaker 1: higher that we have seen this summer. And if you 211 00:12:34,520 --> 00:12:39,600 Speaker 1: take basically the three expectations were also well above three 212 00:12:39,640 --> 00:12:42,880 Speaker 1: hundred euros permego at our I've seen a lot of models, 213 00:12:42,920 --> 00:12:46,000 Speaker 1: but none of them have really kind of had those numbers. 214 00:12:46,040 --> 00:12:47,840 Speaker 1: People out there are making a lot of money and 215 00:12:47,880 --> 00:12:50,680 Speaker 1: if governments say a part of that should be given 216 00:12:50,720 --> 00:12:53,800 Speaker 1: back to customers, then that's fair enough. The question is 217 00:12:53,920 --> 00:12:58,280 Speaker 1: rather how long will those measures last and what happens afterwards. 218 00:12:58,480 --> 00:13:03,200 Speaker 1: We have said they should end the end of April four. 219 00:13:03,640 --> 00:13:07,360 Speaker 1: I think others in Europe also saying the crisis is 220 00:13:07,400 --> 00:13:11,080 Speaker 1: not over in somewhere twenty three, but I'm in twenty 221 00:13:11,120 --> 00:13:14,120 Speaker 1: four it will be over. And therefore the question is 222 00:13:14,160 --> 00:13:17,120 Speaker 1: really what is the investment environment and when do we 223 00:13:17,200 --> 00:13:20,040 Speaker 1: go back to normal? And there I would say everyone 224 00:13:20,080 --> 00:13:24,800 Speaker 1: can be expecting that in four we will be returning 225 00:13:24,840 --> 00:13:27,880 Speaker 1: back to normal markets. Yeah, I think we agree in 226 00:13:27,960 --> 00:13:31,880 Speaker 1: terms of the investment signal, particularly for new technologies like 227 00:13:32,480 --> 00:13:35,360 Speaker 1: on shore windom PV, which are now very much cheaper 228 00:13:35,480 --> 00:13:38,240 Speaker 1: to run even to build new than even running the 229 00:13:38,240 --> 00:13:42,120 Speaker 1: existing colon gas fire fleet, especially in this commodity price environment. 230 00:13:42,160 --> 00:13:45,360 Speaker 1: So I think the investment signal question, like the fundamentals 231 00:13:45,360 --> 00:13:48,840 Speaker 1: are there um everything in our models agrees build renobles 232 00:13:48,880 --> 00:13:52,160 Speaker 1: to displace that existing generation, and definitely agreed with you 233 00:13:52,240 --> 00:13:55,679 Speaker 1: as well on the question around duration at these mechanisms. 234 00:13:55,720 --> 00:13:58,520 Speaker 1: I know, at least here in the UK, the clawback 235 00:13:58,600 --> 00:14:01,679 Speaker 1: that's now been proposed by our government is planned to 236 00:14:01,760 --> 00:14:04,679 Speaker 1: run through CHILL, at least in the press release that 237 00:14:04,720 --> 00:14:07,560 Speaker 1: they announced last month, So that's definitely a question mark 238 00:14:07,600 --> 00:14:10,840 Speaker 1: around around duration. And I think in some cases, if 239 00:14:10,840 --> 00:14:14,360 Speaker 1: we're talking about measures that may extend over the kind 240 00:14:14,400 --> 00:14:17,240 Speaker 1: of six to eight month time horizon and into the year, 241 00:14:17,360 --> 00:14:19,120 Speaker 1: maybe even five years in the case of the UK, 242 00:14:19,560 --> 00:14:22,360 Speaker 1: we do kind of reflect on the question around will 243 00:14:22,400 --> 00:14:26,240 Speaker 1: there be perhaps slightly stronger signals for investment in new 244 00:14:26,240 --> 00:14:30,720 Speaker 1: build renewables in certain markets over others, especially given things 245 00:14:30,760 --> 00:14:34,560 Speaker 1: like supply chain constraints that many renewable energy developers are facing. 246 00:14:34,920 --> 00:14:37,640 Speaker 1: I think the question mark around whether there will be 247 00:14:37,680 --> 00:14:42,160 Speaker 1: slightly different decisions made is an interesting one still. I agree, 248 00:14:42,160 --> 00:14:46,520 Speaker 1: of course, and the European Commission will now propose some 249 00:14:46,640 --> 00:14:50,600 Speaker 1: market design reforms, and I guess a lot will be 250 00:14:50,680 --> 00:14:54,360 Speaker 1: injuring towards for difference all over Europe, which the UK 251 00:14:54,600 --> 00:14:58,640 Speaker 1: has as a standard model for renew renewables because that 252 00:14:58,840 --> 00:15:02,160 Speaker 1: then gives to teacher investors. But at the same time 253 00:15:02,320 --> 00:15:07,040 Speaker 1: it also has some sort of automatic cap on extra 254 00:15:07,200 --> 00:15:10,680 Speaker 1: profits there in build So that is something I would 255 00:15:10,680 --> 00:15:14,080 Speaker 1: expect to be coming out of Russells and to be 256 00:15:14,280 --> 00:15:19,080 Speaker 1: also debated and discussed aboung members states throughout twenty twenty three. 257 00:15:19,480 --> 00:15:24,840 Speaker 1: And we've just increased the auction price on wind and 258 00:15:24,880 --> 00:15:30,720 Speaker 1: solar by twenty because of higher prices of raw materials 259 00:15:30,800 --> 00:15:34,080 Speaker 1: and steel and everything that we see out there. So yes, 260 00:15:34,160 --> 00:15:39,720 Speaker 1: inflation is there. We will see for probably some years 261 00:15:39,920 --> 00:15:43,000 Speaker 1: higher prices, but that will also trigger new investment and 262 00:15:43,040 --> 00:15:45,840 Speaker 1: then prices will come back down again. So these are 263 00:15:45,960 --> 00:15:49,160 Speaker 1: special times we need to adapt and react, but I 264 00:15:49,520 --> 00:15:53,040 Speaker 1: would see that Europe does that. Yeah. I think we 265 00:15:53,120 --> 00:15:55,840 Speaker 1: agree on on this point a lot about the need 266 00:15:56,120 --> 00:15:59,000 Speaker 1: to reflect on how the market design is laid out, 267 00:15:59,040 --> 00:16:02,520 Speaker 1: particularly as we moved to technologies in the energy system 268 00:16:02,560 --> 00:16:04,920 Speaker 1: that you know very much increasingly become based on their 269 00:16:04,920 --> 00:16:08,880 Speaker 1: fixed costs, unless on their variable costs. I guess maybe 270 00:16:08,920 --> 00:16:11,800 Speaker 1: just to dig one level deeper on on that, maybe 271 00:16:11,800 --> 00:16:14,200 Speaker 1: just thinking about the renewable side of things. You mentioned 272 00:16:14,480 --> 00:16:18,600 Speaker 1: CFD auction designs which have been very important in bringing 273 00:16:18,960 --> 00:16:21,040 Speaker 1: lots of new renewables to the markets, and we have 274 00:16:21,240 --> 00:16:24,640 Speaker 1: various designs across Europe. I guess we're we're actually facing 275 00:16:24,800 --> 00:16:28,120 Speaker 1: similar reforms or at least proposals for reforms to how 276 00:16:28,160 --> 00:16:31,480 Speaker 1: this happens in the UK here, and we have governments 277 00:16:31,520 --> 00:16:33,800 Speaker 1: starting to think about how do we balance the need 278 00:16:33,920 --> 00:16:38,720 Speaker 1: for keeping the incentive for new investment in renewables to 279 00:16:38,800 --> 00:16:41,800 Speaker 1: also balance the needs of the power system itself to operate. 280 00:16:41,840 --> 00:16:45,320 Speaker 1: You know, have operational signals that enable things like flexibility 281 00:16:45,400 --> 00:16:48,120 Speaker 1: and other things. What do you think is most important 282 00:16:48,160 --> 00:16:50,480 Speaker 1: to get right in the immediate term for kind of 283 00:16:50,520 --> 00:16:55,920 Speaker 1: market design changes. You've been highlighting that this is about 284 00:16:56,520 --> 00:17:00,040 Speaker 1: first of all, getting investments done. At second, the what 285 00:17:00,360 --> 00:17:04,480 Speaker 1: market to be I think the key price signal that 286 00:17:04,520 --> 00:17:08,399 Speaker 1: we need in order to have flexibility and everything to 287 00:17:08,520 --> 00:17:12,400 Speaker 1: have a real time dispatch to the supply and demand work, 288 00:17:12,840 --> 00:17:16,280 Speaker 1: and that's essentially what we need to solve those See 289 00:17:16,280 --> 00:17:19,480 Speaker 1: if these whether or not they are towards killer what 290 00:17:19,720 --> 00:17:23,080 Speaker 1: hours or maybe rather killer what's what is it that 291 00:17:23,359 --> 00:17:28,760 Speaker 1: basically insures investment certainty at the same time gives the 292 00:17:28,840 --> 00:17:34,679 Speaker 1: incentive to optimize yourself towards a very variable spot market. 293 00:17:35,240 --> 00:17:38,320 Speaker 1: And there are answers to that if you ask economists, 294 00:17:38,320 --> 00:17:41,200 Speaker 1: and we should listen to them. But I'm quite confident 295 00:17:41,280 --> 00:17:44,120 Speaker 1: that we will get that also done within Europe as 296 00:17:44,160 --> 00:17:47,520 Speaker 1: part of the negotiations in three Yeah, and I know 297 00:17:47,600 --> 00:17:49,720 Speaker 1: that this has been on the agenda for the Commission 298 00:17:49,720 --> 00:17:52,240 Speaker 1: in the wider member states for a while now, at 299 00:17:52,320 --> 00:17:55,160 Speaker 1: least since I've been covering the onset of the European 300 00:17:55,160 --> 00:17:57,560 Speaker 1: Green Dale, the market design reforms have been on the agenda. 301 00:17:57,600 --> 00:18:01,360 Speaker 1: So hopefully one of the shall I benefits that are 302 00:18:01,400 --> 00:18:03,919 Speaker 1: there in this whole crazy environment that we find ourselves 303 00:18:03,920 --> 00:18:06,960 Speaker 1: and is that it's accelerating that discussion. One more thing 304 00:18:07,600 --> 00:18:10,920 Speaker 1: we've been pushing very hard the last year, and that 305 00:18:11,080 --> 00:18:14,240 Speaker 1: looks like now we will really be able to implement 306 00:18:14,320 --> 00:18:21,280 Speaker 1: it to eason permitting processes to have everything really fast 307 00:18:21,320 --> 00:18:25,120 Speaker 1: and speedy when it comes to wind and solar installation 308 00:18:25,359 --> 00:18:29,479 Speaker 1: and permitting really is basically get to those six months 309 00:18:29,520 --> 00:18:33,480 Speaker 1: of permitting process which the European Commission has been announcing 310 00:18:33,600 --> 00:18:37,760 Speaker 1: the repower you and therefore I would say this is 311 00:18:37,800 --> 00:18:41,200 Speaker 1: the moment to really kick start the renewable revolution in Europe, 312 00:18:41,400 --> 00:18:44,639 Speaker 1: because it's very clear that is the only real sustainable 313 00:18:44,680 --> 00:18:48,040 Speaker 1: answer to this higher gas prices at crisis. It's not 314 00:18:48,080 --> 00:18:51,199 Speaker 1: going to be elergy from elsewhere. It's going to be 315 00:18:51,520 --> 00:18:54,360 Speaker 1: wind and solar produced in Europe. Yeah, you've actually very 316 00:18:54,400 --> 00:18:56,639 Speaker 1: well preempted the next question that I had for you, 317 00:18:56,680 --> 00:18:59,760 Speaker 1: which is very much about the transition opportunities that are 318 00:18:59,800 --> 00:19:02,360 Speaker 1: in urging in response to this crisis. We've long had 319 00:19:02,359 --> 00:19:05,680 Speaker 1: this discussion around solving the energy trilemma. You know that 320 00:19:05,800 --> 00:19:11,040 Speaker 1: our optimal energy system should balance one lowest cost for consumers. Too, 321 00:19:11,080 --> 00:19:14,080 Speaker 1: it should be clean, it should be sustainable. Three, it 322 00:19:14,080 --> 00:19:17,480 Speaker 1: should be reliable and secure. And actually, for me personally, 323 00:19:17,480 --> 00:19:19,240 Speaker 1: I would add a fourth dimension there, which is we 324 00:19:19,240 --> 00:19:21,840 Speaker 1: need to be talking about pace of delivery. Now. From 325 00:19:21,840 --> 00:19:24,679 Speaker 1: my perspective, energy security has never been so high on 326 00:19:24,680 --> 00:19:28,040 Speaker 1: the agenda, and it is increasingly clear that transition is 327 00:19:28,359 --> 00:19:32,440 Speaker 1: part of energy security, especially with the need to cultivate 328 00:19:32,480 --> 00:19:38,560 Speaker 1: accelerated deployments of local renewables. However, unfortunately, our analysis continues 329 00:19:38,600 --> 00:19:41,879 Speaker 1: to find that there is actually just a really sizeable, 330 00:19:42,160 --> 00:19:45,359 Speaker 1: huge disconnect between what's needed in terms of scale up 331 00:19:45,400 --> 00:19:48,560 Speaker 1: of clean energy capacity and the reality of what's happening 332 00:19:48,600 --> 00:19:52,280 Speaker 1: on the ground. You've mentioned permitting. We know that there 333 00:19:52,280 --> 00:19:55,440 Speaker 1: are a number of challenges facing the scale up of renewables, 334 00:19:55,440 --> 00:19:59,160 Speaker 1: and I know Germany has quite recently updated its own 335 00:19:59,320 --> 00:20:00,960 Speaker 1: clean energy to how it gets as part of that 336 00:20:01,040 --> 00:20:05,520 Speaker 1: Easter package earlier in two What beyond just getting the 337 00:20:05,520 --> 00:20:08,560 Speaker 1: permitting right do you think is key to addressing those 338 00:20:08,640 --> 00:20:12,240 Speaker 1: challenges in accelerating deployments at the pace that we actually need. 339 00:20:14,040 --> 00:20:17,600 Speaker 1: So permenting is one thing alluded to that. The second 340 00:20:17,680 --> 00:20:21,440 Speaker 1: thing is also to increase the capacity along the whole 341 00:20:21,720 --> 00:20:26,960 Speaker 1: value chain. I've talked to winds producers and asked them, 342 00:20:27,000 --> 00:20:30,640 Speaker 1: so are you prepared for that huge demand that will 343 00:20:30,720 --> 00:20:35,480 Speaker 1: come all over Europe for additional wind mills, for additional pillars, 344 00:20:35,560 --> 00:20:39,760 Speaker 1: for additional technologies that are associated to that, like grid 345 00:20:39,960 --> 00:20:44,040 Speaker 1: connection and stuff, and there I was astonished that they were. 346 00:20:44,440 --> 00:20:48,359 Speaker 1: So it's it is also about industrial policy here, because 347 00:20:48,400 --> 00:20:50,679 Speaker 1: if I add up the wind off floor targets for 348 00:20:50,720 --> 00:20:56,040 Speaker 1: example of the UK, Germany, Denmark, Netherlands and now also 349 00:20:56,480 --> 00:21:01,680 Speaker 1: Poland and Poltics, then we're talking about quadrupling the factory 350 00:21:02,080 --> 00:21:05,439 Speaker 1: sizes that we need to produce all that. So I 351 00:21:05,480 --> 00:21:09,320 Speaker 1: think that will be the next real challenge, basically the 352 00:21:09,400 --> 00:21:13,200 Speaker 1: capacity to build that stuff, and not just the market design. 353 00:21:15,680 --> 00:21:20,359 Speaker 1: How important do you think the energy security dimension to 354 00:21:20,440 --> 00:21:24,800 Speaker 1: the supply chain is in that equation? As a policymaker, 355 00:21:24,840 --> 00:21:28,240 Speaker 1: how do you think about that? We didn't pay enough 356 00:21:28,280 --> 00:21:30,720 Speaker 1: attention to that in the past. I would say I 357 00:21:30,760 --> 00:21:34,880 Speaker 1: would feel a lot safer if we knew that let's 358 00:21:34,880 --> 00:21:40,520 Speaker 1: say some or so of European demands on wind, solar 359 00:21:40,800 --> 00:21:45,480 Speaker 1: and batteries and grids technologies and everything it can also 360 00:21:45,520 --> 00:21:48,760 Speaker 1: be produced within Europe, and the European Commission I think 361 00:21:49,280 --> 00:21:52,840 Speaker 1: is now waking up to that we will need additional 362 00:21:52,880 --> 00:21:56,679 Speaker 1: instruments that FUNDA Lion has said we will for a 363 00:21:56,720 --> 00:22:00,679 Speaker 1: few years need to relax our strict state it rules, 364 00:22:00,840 --> 00:22:04,680 Speaker 1: and A totally agree because we need in this context, 365 00:22:05,080 --> 00:22:08,399 Speaker 1: also as a response to the Inflation Reduction Act in 366 00:22:08,560 --> 00:22:12,879 Speaker 1: the US, have a strong industrial policy. In Europe that 367 00:22:13,480 --> 00:22:16,960 Speaker 1: delivers on all of those targets. That's really interesting. I 368 00:22:17,000 --> 00:22:20,159 Speaker 1: guess beyond clean power, we know that other parts of 369 00:22:20,160 --> 00:22:23,080 Speaker 1: the economy also need to transition, especially when we talk 370 00:22:23,080 --> 00:22:25,720 Speaker 1: about sectors like heating, and we need to strike the 371 00:22:25,800 --> 00:22:29,840 Speaker 1: right balance between supporting industries and companies and even households 372 00:22:29,840 --> 00:22:33,800 Speaker 1: with their energy costs while still encouraging them to decarbonize. Now, 373 00:22:33,840 --> 00:22:37,520 Speaker 1: as you will well know, the European Commissions Repower EU plan, 374 00:22:37,600 --> 00:22:40,200 Speaker 1: which was kind of set up in response to the 375 00:22:40,280 --> 00:22:44,240 Speaker 1: invasion of Ukraine earlier in the year, set some pretty 376 00:22:44,359 --> 00:22:48,640 Speaker 1: lofty targets to structurally cut gas demand by over half 377 00:22:48,720 --> 00:22:52,639 Speaker 1: across our entire economy. By that would require us to 378 00:22:52,720 --> 00:22:55,679 Speaker 1: drive down gas use, not just in power where you know, 379 00:22:55,760 --> 00:22:58,360 Speaker 1: relying on renewables, but also in heating an industry too. 380 00:22:58,920 --> 00:23:03,679 Speaker 1: What are your source on Repower EU now and what 381 00:23:03,800 --> 00:23:06,199 Speaker 1: kind of measures do you think will be required to 382 00:23:06,480 --> 00:23:11,320 Speaker 1: actually deliver on it. I'm very grateful for the European 383 00:23:11,320 --> 00:23:14,679 Speaker 1: Commission to have put forward Repower you because it was 384 00:23:14,800 --> 00:23:18,119 Speaker 1: clear we needed an response in this crisis, and not 385 00:23:18,200 --> 00:23:22,800 Speaker 1: just AFT package, which in itself was already very ambitious, 386 00:23:22,880 --> 00:23:29,000 Speaker 1: and then the additional two ordinances that they proposed. Now 387 00:23:29,440 --> 00:23:33,880 Speaker 1: what is key is heat pumps so quick, a lot 388 00:23:33,920 --> 00:23:37,159 Speaker 1: of heat pumps all over Europe. That reduces gust demand 389 00:23:37,200 --> 00:23:41,040 Speaker 1: in the heating sector. Second, what is needed is, as 390 00:23:41,040 --> 00:23:44,879 Speaker 1: I've said, quick permitting procedures, and there we need to 391 00:23:45,000 --> 00:23:49,600 Speaker 1: change European legislation in order to be quicker on national levels. 392 00:23:49,680 --> 00:23:53,360 Speaker 1: So that is key and crucial in that regard. And 393 00:23:53,520 --> 00:23:57,600 Speaker 1: the third is that industrial policy approach to those key 394 00:23:57,600 --> 00:24:02,520 Speaker 1: technologies like wind, solar, battery and grips technologies. I think 395 00:24:02,560 --> 00:24:05,600 Speaker 1: we need more of reducink gas demand in the hurry. 396 00:24:06,119 --> 00:24:09,879 Speaker 1: There are some things that are just switching from gas 397 00:24:09,920 --> 00:24:14,400 Speaker 1: to oil, which is the short term measure, but when 398 00:24:14,520 --> 00:24:18,800 Speaker 1: it's really transformatory is switching from gas to electricity, not 399 00:24:18,880 --> 00:24:23,040 Speaker 1: only private households but also within industry, and of course 400 00:24:23,280 --> 00:24:27,080 Speaker 1: ramping up everything we can on the renewable electricity side. 401 00:24:27,359 --> 00:24:29,280 Speaker 1: And I mean that that also does have to be 402 00:24:29,359 --> 00:24:32,399 Speaker 1: somewhat of a discussion around the risks to our carbon 403 00:24:32,440 --> 00:24:35,320 Speaker 1: footprint of things like the repowery package which do more 404 00:24:35,320 --> 00:24:39,600 Speaker 1: heavily rely on cold generation, for example in Europe. And actually, 405 00:24:39,640 --> 00:24:42,520 Speaker 1: while prepping for this interview with you, I spent a 406 00:24:42,520 --> 00:24:44,920 Speaker 1: lot of time talking to many being analysts and people 407 00:24:44,920 --> 00:24:48,800 Speaker 1: in our teams. And one of the questions that came up, 408 00:24:48,920 --> 00:24:51,080 Speaker 1: and this is maybe a little bit broader step away 409 00:24:51,080 --> 00:24:54,840 Speaker 1: from repower EU specifically, but more about the role of 410 00:24:54,960 --> 00:24:58,200 Speaker 1: climate policy and our targets in light of this energy 411 00:24:58,280 --> 00:25:02,040 Speaker 1: crisis and the example that Europe has to be setting 412 00:25:02,119 --> 00:25:04,359 Speaker 1: to the rest of the world. And maybe to be 413 00:25:04,560 --> 00:25:07,239 Speaker 1: quite simple on the question, but something that came out 414 00:25:07,240 --> 00:25:11,640 Speaker 1: out of CORP recently in Egypt is the whole how 415 00:25:11,680 --> 00:25:14,360 Speaker 1: do we keep one point five alive? I guess that's 416 00:25:14,400 --> 00:25:18,600 Speaker 1: my question for you. How do we admite of this situation? Well, 417 00:25:18,680 --> 00:25:21,520 Speaker 1: it is of course the challenge, and let's not show 418 00:25:21,560 --> 00:25:24,399 Speaker 1: away from it. We're using more cold than we thought 419 00:25:24,640 --> 00:25:27,520 Speaker 1: and we've prolonged the lifetime of a cold power plants 420 00:25:27,560 --> 00:25:31,400 Speaker 1: which we all were shutting down up until in Mark 421 00:25:31,480 --> 00:25:35,880 Speaker 1: twenty four. So these are teen months of additional cold 422 00:25:35,960 --> 00:25:38,800 Speaker 1: power which we have to take. But the good news 423 00:25:38,920 --> 00:25:43,119 Speaker 1: is we're not changing anything on the emissions trading system. 424 00:25:43,240 --> 00:25:47,639 Speaker 1: The Canadas up and negotiations in Brussels have really delivered 425 00:25:47,800 --> 00:25:51,280 Speaker 1: on a strict reform of the t S, which is 426 00:25:51,320 --> 00:25:55,880 Speaker 1: why we see high prices. High prices on you as 427 00:25:56,000 --> 00:26:00,320 Speaker 1: you two allowances, and at the moment gas prices go 428 00:26:00,440 --> 00:26:03,760 Speaker 1: back down, we will see the COD phase out just 429 00:26:04,000 --> 00:26:08,440 Speaker 1: happening faster than you have ever thought. I would expect 430 00:26:08,440 --> 00:26:14,560 Speaker 1: the second half of this decade six onwards that you'll 431 00:26:14,600 --> 00:26:18,280 Speaker 1: see basically the whole call phase out happening in Europe, 432 00:26:18,680 --> 00:26:21,320 Speaker 1: and therefore the signal to the rest of the world is, 433 00:26:21,400 --> 00:26:25,080 Speaker 1: in essence, we're continuing on the energy transition. You'll see 434 00:26:25,520 --> 00:26:28,840 Speaker 1: I think the fastest you roll out ever in this 435 00:26:28,920 --> 00:26:31,600 Speaker 1: year and the last year, the COD phase out will 436 00:26:31,640 --> 00:26:34,600 Speaker 1: happen the second part of this decade faster than you 437 00:26:34,680 --> 00:26:37,879 Speaker 1: ever thought. Yeah, I think I think this alligans with 438 00:26:37,920 --> 00:26:40,760 Speaker 1: a lot of the internal thinking that we're doing as well. 439 00:26:41,119 --> 00:26:44,479 Speaker 1: I guess my very last question for you for today 440 00:26:44,960 --> 00:26:48,040 Speaker 1: is again a slightly broader one, stepping back in light 441 00:26:48,080 --> 00:26:52,160 Speaker 1: of the current geo political situation, and you've already mentioned 442 00:26:52,160 --> 00:26:56,159 Speaker 1: several quite game changing perspectives that actually started to shift 443 00:26:56,280 --> 00:26:59,600 Speaker 1: across Europe. Just as one example, the relaxing potentially of 444 00:26:59,640 --> 00:27:02,720 Speaker 1: stating rules to be able to kind of support domestic 445 00:27:02,760 --> 00:27:06,840 Speaker 1: manufacturing of clean energy components within the region. I guess, 446 00:27:06,920 --> 00:27:10,520 Speaker 1: in light of our current geopolitics, are those principles that 447 00:27:10,600 --> 00:27:13,159 Speaker 1: sat at the heart of European energy policy for the 448 00:27:13,240 --> 00:27:16,960 Speaker 1: last few decades of the liberalized clean energy market now 449 00:27:17,280 --> 00:27:21,399 Speaker 1: really at odds with delivering on our energy security goals. 450 00:27:23,400 --> 00:27:26,600 Speaker 1: I do think that the European Commission, and it's basically 451 00:27:26,600 --> 00:27:31,320 Speaker 1: safeguarding the competition rules they have put two little emphasis on, 452 00:27:32,080 --> 00:27:36,080 Speaker 1: but we need that stuff with factories in Europe. And 453 00:27:36,119 --> 00:27:39,639 Speaker 1: I think what we're now needing is this is not 454 00:27:39,720 --> 00:27:44,400 Speaker 1: about an individual member state having that now advantages these 455 00:27:44,400 --> 00:27:46,920 Speaker 1: are the other member states. That's not what we want. 456 00:27:47,440 --> 00:27:50,639 Speaker 1: What we want is that within Europe we have the 457 00:27:50,720 --> 00:27:55,439 Speaker 1: industrial capacity for all those technologies. So what this is 458 00:27:55,560 --> 00:27:59,880 Speaker 1: really about is finding new state rules and also European 459 00:28:00,000 --> 00:28:07,600 Speaker 1: instruments that allow for government funding for new factories in Europe. 460 00:28:08,200 --> 00:28:11,840 Speaker 1: And that's then the European answer to the Inflation Reduction Act. 461 00:28:12,160 --> 00:28:14,960 Speaker 1: While the focus has very much been on we don't 462 00:28:15,000 --> 00:28:18,160 Speaker 1: want competition between member states and we need to basically 463 00:28:18,240 --> 00:28:22,119 Speaker 1: ensure that, and that has been led to two little investments. 464 00:28:23,200 --> 00:28:26,400 Speaker 1: Will now be how do we ensure that investment takes 465 00:28:26,400 --> 00:28:30,320 Speaker 1: place in Europe? And of course also this shouldn't lead 466 00:28:30,440 --> 00:28:34,440 Speaker 1: a one member states to be more about than others. 467 00:28:34,480 --> 00:28:38,160 Speaker 1: But I see a convergence on these issues, I think 468 00:28:38,200 --> 00:28:41,080 Speaker 1: I tend to agree, especially on the alignment between energy 469 00:28:41,120 --> 00:28:44,640 Speaker 1: security and decombanizing the energy systems. Perhaps the question of 470 00:28:44,680 --> 00:28:47,360 Speaker 1: how to do this well in terms of liberalizing markets 471 00:28:47,440 --> 00:28:50,360 Speaker 1: is a slightly different question, and it definitely aligns with 472 00:28:50,400 --> 00:28:53,360 Speaker 1: some of the This one question that honestly, I think 473 00:28:53,400 --> 00:28:55,880 Speaker 1: every single client has asked a being affair at some 474 00:28:55,920 --> 00:28:59,520 Speaker 1: point over this last year, is will this crisis accelerate 475 00:28:59,720 --> 00:29:03,280 Speaker 1: or decelerate the transition? And I think there is no 476 00:29:03,360 --> 00:29:05,640 Speaker 1: simple answer to that other than to say it's mixed 477 00:29:05,640 --> 00:29:08,840 Speaker 1: and it depends what we're really we're really talking about. Well, 478 00:29:09,200 --> 00:29:12,360 Speaker 1: I would say it does accelerate if you look at 479 00:29:12,400 --> 00:29:14,680 Speaker 1: what the i A has just put out in their 480 00:29:14,960 --> 00:29:18,880 Speaker 1: report of how they expect a renewable accelerating. Of course, 481 00:29:18,920 --> 00:29:23,720 Speaker 1: we will have higher emissions in the power sector three 482 00:29:24,120 --> 00:29:28,200 Speaker 1: because of short term measures on oil and coal, But 483 00:29:28,320 --> 00:29:32,720 Speaker 1: at the same time, structurally this is driving renewables and 484 00:29:33,120 --> 00:29:37,920 Speaker 1: just driving electrification, and that's what the energy transition is about. 485 00:29:38,360 --> 00:29:41,360 Speaker 1: I would be very confident that if you look at 486 00:29:41,360 --> 00:29:45,120 Speaker 1: short term indicators you might have a different due to this, 487 00:29:45,440 --> 00:29:48,560 Speaker 1: But if you're looking at what happens structurally. Then this 488 00:29:48,720 --> 00:29:52,160 Speaker 1: is speeding up the energy for sire, and that also 489 00:29:52,200 --> 00:29:54,200 Speaker 1: aligns with many of the key findings of our new 490 00:29:54,280 --> 00:29:57,320 Speaker 1: energy outlook as well. I could have asked so many 491 00:29:57,320 --> 00:30:00,280 Speaker 1: more questions to you today, but unfortunately we are getting 492 00:30:00,280 --> 00:30:02,520 Speaker 1: towards the end of our time. Patrick, I want to 493 00:30:02,560 --> 00:30:05,800 Speaker 1: thank you for such an insightful conversation today. I think 494 00:30:05,840 --> 00:30:08,840 Speaker 1: it's a really critical time for us to be reflecting 495 00:30:08,840 --> 00:30:11,200 Speaker 1: on the responses that are taking place to the energy 496 00:30:11,240 --> 00:30:14,240 Speaker 1: crisis while taking the time to think forward about the 497 00:30:14,240 --> 00:30:18,320 Speaker 1: emerging energy transition opportunities. UM, thank you so much again 498 00:30:18,360 --> 00:30:21,080 Speaker 1: for joining us today, Patrick, Yes, thank you, I'm up 499 00:30:21,120 --> 00:30:24,560 Speaker 1: for having me and let's see what three you will bring. 500 00:30:29,640 --> 00:30:32,680 Speaker 1: Today's episode of Switched On was edited by Rex Warner 501 00:30:32,760 --> 00:30:34,680 Speaker 1: of gray Stoke Media. Bloomberg an e f A is 502 00:30:34,680 --> 00:30:37,640 Speaker 1: a service provided by Bloomberg Finance LP and its affiliates. 503 00:30:37,920 --> 00:30:40,440 Speaker 1: This recording does not constitute, nor should it be construed 504 00:30:40,480 --> 00:30:44,080 Speaker 1: as investment advice, investment recommendations, or recommendation as to an 505 00:30:44,080 --> 00:30:46,520 Speaker 1: investment or other strategy. Bloomberg an e f should not 506 00:30:46,560 --> 00:30:49,200 Speaker 1: be considered as information sufficient upon which to base an 507 00:30:49,200 --> 00:30:52,800 Speaker 1: investment decision. Neither Bloomberg Finance LP, nor any of its affiliates, 508 00:30:52,840 --> 00:30:55,560 Speaker 1: makes any representation or warranty as to the accuracy or 509 00:30:55,600 --> 00:30:58,400 Speaker 1: completeness of the information contained in this recording, and any 510 00:30:58,440 --> 00:31:01,040 Speaker 1: liability of this recording is expressly disclaimed