1 00:00:00,720 --> 00:00:04,520 Speaker 1: Welcome to zero. I am akstra drati this week cables, 2 00:00:04,559 --> 00:00:20,320 Speaker 1: cables everywhere. Have you ever thought about how electricity gets 3 00:00:20,320 --> 00:00:23,479 Speaker 1: from where is generated to your home or to your office. 4 00:00:23,960 --> 00:00:26,640 Speaker 1: How when you flick a switch to turn on the lights, 5 00:00:26,720 --> 00:00:31,520 Speaker 1: the electricity just works. It's a form of modern day 6 00:00:31,720 --> 00:00:36,320 Speaker 1: magic that electricity runs through a series of cables. The 7 00:00:36,320 --> 00:00:39,200 Speaker 1: ones in your home running from your bedside electricity socket 8 00:00:39,280 --> 00:00:42,720 Speaker 1: into your phone are thin, just a few millimeters thick. 9 00:00:43,240 --> 00:00:46,599 Speaker 1: The ones connecting your building to a nearby transformer a 10 00:00:46,600 --> 00:00:51,040 Speaker 1: little bit thicker, and the ones connecting countries traveling hundreds 11 00:00:51,080 --> 00:00:56,880 Speaker 1: of kilometers across the seafloor are enormous. How big is 12 00:00:56,920 --> 00:00:57,520 Speaker 1: that cable? 13 00:00:57,680 --> 00:01:01,760 Speaker 2: Yet? Diameter wise you would say that perhaps it's twenty 14 00:01:01,800 --> 00:01:03,920 Speaker 2: five centimeters in diameters. 15 00:01:04,080 --> 00:01:06,320 Speaker 1: So I could literally be hugging. 16 00:01:06,319 --> 00:01:13,520 Speaker 2: A cable, absolutely, both literally and metaphorically. Definitely yes, Oh wow. 17 00:01:14,720 --> 00:01:19,080 Speaker 1: My guest today is Klau's Westerland, CEO of cable manufacturing 18 00:01:19,080 --> 00:01:23,800 Speaker 1: company n KAT, headquartered in Denmark and with manufacturing facilities 19 00:01:23,840 --> 00:01:27,320 Speaker 1: across Europe. NKAT is one of a handful of companies 20 00:01:27,400 --> 00:01:32,240 Speaker 1: that designs and builds these highly sophisticated high voltage electricity 21 00:01:32,280 --> 00:01:36,040 Speaker 1: cables that connect our world, and right now their products 22 00:01:36,120 --> 00:01:38,840 Speaker 1: are in huge demand, so and so that a lack 23 00:01:38,880 --> 00:01:42,120 Speaker 1: of cabling is considered a huge bottleneck to building the 24 00:01:42,160 --> 00:01:46,160 Speaker 1: clean energy transition. This week on Zero I go deep 25 00:01:46,360 --> 00:01:49,720 Speaker 1: with Klaus on the cable industry. How are these giant 26 00:01:49,720 --> 00:01:53,440 Speaker 1: cables made with so much demand? Why are cable manufacturers 27 00:01:53,440 --> 00:01:56,600 Speaker 1: so hesitant to expand? And is China about to eat 28 00:01:56,640 --> 00:02:00,000 Speaker 1: everyone's lunch. This is the third episode in the Botto 29 00:02:00,160 --> 00:02:02,400 Speaker 1: Next series. If you haven't listened to the first two, 30 00:02:02,600 --> 00:02:05,240 Speaker 1: please check out those episodes on the shortage of transformers 31 00:02:05,360 --> 00:02:09,120 Speaker 1: holding back electrification and the shortage of skilled workers holding 32 00:02:09,160 --> 00:02:14,120 Speaker 1: back the energy transition. Klaus, welcome to the show. 33 00:02:14,320 --> 00:02:14,640 Speaker 2: Thank you. 34 00:02:15,040 --> 00:02:19,440 Speaker 1: So Nkaty makes low, medium, high voltage cables to move electricity, 35 00:02:19,720 --> 00:02:22,120 Speaker 1: and you've been doing it for more than one hundred years. 36 00:02:22,560 --> 00:02:25,440 Speaker 1: Could you just start by explaining what goes into making 37 00:02:25,480 --> 00:02:30,000 Speaker 1: these cables and how do those differ based on the voltage. 38 00:02:30,400 --> 00:02:32,440 Speaker 2: Yeah. First, let me just say I'm pleased to be 39 00:02:32,480 --> 00:02:35,120 Speaker 2: here today, so very much looking forward to our conversation. 40 00:02:36,320 --> 00:02:38,840 Speaker 2: And as your question suggests, they are a little bit 41 00:02:38,840 --> 00:02:41,920 Speaker 2: different the types of cables that we make. What is 42 00:02:42,040 --> 00:02:46,120 Speaker 2: common for all of them is that they do transport electrons. 43 00:02:46,240 --> 00:02:49,240 Speaker 2: They do transport electrons from where they are generated to 44 00:02:49,280 --> 00:02:52,600 Speaker 2: where they are consumed. But if we start with the 45 00:02:52,800 --> 00:02:56,720 Speaker 2: maybe perhaps the most highest voltages cables that are in 46 00:02:56,840 --> 00:03:00,200 Speaker 2: essence part of our transmission grids across the globe, they 47 00:03:00,240 --> 00:03:03,160 Speaker 2: tend to look simple when you look at them. A cable. 48 00:03:03,200 --> 00:03:06,639 Speaker 2: I've come to appreciate and learn over the years that 49 00:03:06,720 --> 00:03:09,800 Speaker 2: it is significantly more complex than what just meets the 50 00:03:09,800 --> 00:03:13,200 Speaker 2: eye when you see these cables. Part of the complexity, 51 00:03:13,240 --> 00:03:15,480 Speaker 2: of course, is that if you look at a very 52 00:03:15,520 --> 00:03:19,919 Speaker 2: high voltage direct current cable able to carry roughly to 53 00:03:20,160 --> 00:03:24,120 Speaker 2: gigawatt through two pairs of cables, that means that the 54 00:03:24,160 --> 00:03:28,560 Speaker 2: equivalent of one nuclear power reactor is flowing through one cable. 55 00:03:28,919 --> 00:03:30,920 Speaker 2: And while it's doing that, you can also put your 56 00:03:30,960 --> 00:03:33,640 Speaker 2: hand on the cable. And that has to be a 57 00:03:33,680 --> 00:03:37,920 Speaker 2: product that can sustain a lot over the thirty years 58 00:03:38,000 --> 00:03:41,200 Speaker 2: or forty years lifetype that these cables are in service for. 59 00:03:41,880 --> 00:03:44,440 Speaker 2: So how do we then make them. At the center 60 00:03:44,600 --> 00:03:48,240 Speaker 2: of the cable is the conductor. Conductor is made of metal. 61 00:03:48,280 --> 00:03:50,400 Speaker 2: It can be of aluminium, it can be of copper, 62 00:03:50,520 --> 00:03:53,200 Speaker 2: and the role of the conductor is to carry the 63 00:03:53,240 --> 00:03:58,240 Speaker 2: electrons through that. The conductor you make basically in the 64 00:03:58,280 --> 00:04:01,320 Speaker 2: same way that you make a rope, so you twist 65 00:04:01,360 --> 00:04:05,320 Speaker 2: and turn metal wires or profiles together so that they 66 00:04:05,360 --> 00:04:08,360 Speaker 2: constitute a rope. Of of course, a much finer measure 67 00:04:08,440 --> 00:04:10,720 Speaker 2: than when you think about an ordinary rope, but yet 68 00:04:10,920 --> 00:04:14,240 Speaker 2: very similar. On top of the conductor we place what 69 00:04:14,320 --> 00:04:18,039 Speaker 2: we call the insulation system, and this is in the 70 00:04:18,080 --> 00:04:21,279 Speaker 2: cable world. That's the heart of the cable system. That 71 00:04:21,480 --> 00:04:24,600 Speaker 2: is the layer in the cable that gives its wedstand 72 00:04:24,680 --> 00:04:27,720 Speaker 2: capability so that you can put your hand outside the 73 00:04:27,760 --> 00:04:31,279 Speaker 2: cable while a lot of power is flowing inside the cable. 74 00:04:31,360 --> 00:04:33,800 Speaker 2: Basically you aret you avoid to get an electrical show. 75 00:04:34,120 --> 00:04:37,120 Speaker 2: This is being applied on the conductor for the larger 76 00:04:37,160 --> 00:04:40,159 Speaker 2: cables in what we call an extrusion tower. So it's 77 00:04:40,240 --> 00:04:44,040 Speaker 2: typically a very high building. I'm sitting and speaking to 78 00:04:44,080 --> 00:04:46,800 Speaker 2: you from Cosgrona and Sweden, where we have three towers, 79 00:04:47,040 --> 00:04:51,200 Speaker 2: the highest tower being two hundred meters above ground. So 80 00:04:51,320 --> 00:04:53,880 Speaker 2: the tower that we have here is the second highest 81 00:04:53,920 --> 00:04:56,800 Speaker 2: building in all Nordics, so that gives you an appreciation. 82 00:04:56,839 --> 00:04:59,520 Speaker 2: It's not a small building, and the cable goes up 83 00:04:59,560 --> 00:05:01,400 Speaker 2: into the town. In the top of the tower, we 84 00:05:01,440 --> 00:05:05,720 Speaker 2: are dressing it with three different layers of installation, and 85 00:05:05,760 --> 00:05:09,799 Speaker 2: we do that vertically because mother Earth otherwise would try 86 00:05:09,839 --> 00:05:12,359 Speaker 2: to make the cable oval instead of round, and we 87 00:05:12,440 --> 00:05:14,960 Speaker 2: need to have a perfectly round cable to be able 88 00:05:15,000 --> 00:05:18,160 Speaker 2: to sustain all the power within. On top of that, 89 00:05:18,400 --> 00:05:20,200 Speaker 2: and you can hear it is more complex than what 90 00:05:20,279 --> 00:05:23,719 Speaker 2: meets the eye. We do a process treatment of the 91 00:05:23,760 --> 00:05:27,000 Speaker 2: cables to get the right properties or residual products out 92 00:05:27,040 --> 00:05:30,200 Speaker 2: of them. We add sheets that will make them water 93 00:05:30,360 --> 00:05:33,440 Speaker 2: resistant so that you can lay them in our seas. 94 00:05:33,480 --> 00:05:37,080 Speaker 2: And we also mechanically armor the cables, so basically putting 95 00:05:37,120 --> 00:05:40,719 Speaker 2: wires around the cables to make them mechanically robust both 96 00:05:40,760 --> 00:05:44,560 Speaker 2: to be handled during installation, but also to be resilient 97 00:05:44,680 --> 00:05:47,800 Speaker 2: when they are at the bottom of our oceans or 98 00:05:47,839 --> 00:05:48,799 Speaker 2: wherever they are going. 99 00:05:49,160 --> 00:05:52,920 Speaker 1: Well, that is a lot of complexity for what looks 100 00:05:52,960 --> 00:05:55,680 Speaker 1: like a simple idea just to be able to move 101 00:05:55,839 --> 00:05:58,520 Speaker 1: electricity through a conductor from one end to the other end. 102 00:05:58,640 --> 00:06:01,040 Speaker 1: And I want to break down those steps a little bit. 103 00:06:01,120 --> 00:06:02,760 Speaker 1: So let's do that first and then come to the 104 00:06:02,760 --> 00:06:06,840 Speaker 1: business side. You said, at the core is the conductor 105 00:06:06,880 --> 00:06:09,560 Speaker 1: could be copper, could be aluminium. But you also said 106 00:06:09,600 --> 00:06:12,320 Speaker 1: that it is made like a room, so it's not 107 00:06:12,480 --> 00:06:16,240 Speaker 1: a solid piece of metal. It's many wires joined together 108 00:06:16,320 --> 00:06:19,320 Speaker 1: and twisted like a rope. Why is that the case. 109 00:06:19,680 --> 00:06:22,719 Speaker 2: Yeah, typically you can also have solid conductors, but solid 110 00:06:22,720 --> 00:06:26,520 Speaker 2: conductors you would have for smaller power rating of cables. 111 00:06:26,560 --> 00:06:29,760 Speaker 2: And the simple reason is that the mechanical properties of 112 00:06:29,800 --> 00:06:33,800 Speaker 2: a solid conductor, it becomes very sturdy, very firmed, very fixed, 113 00:06:33,839 --> 00:06:37,279 Speaker 2: so it will become difficult to handle the cable itself 114 00:06:37,360 --> 00:06:40,280 Speaker 2: with a solid conductor, and that is why you would 115 00:06:40,320 --> 00:06:43,640 Speaker 2: move to what we call compacted conductors out of wires 116 00:06:43,720 --> 00:06:47,400 Speaker 2: or even profiled conductors. And it's basically just a lot 117 00:06:47,400 --> 00:06:52,680 Speaker 2: of different wires being strung together into one large conductor. 118 00:06:52,960 --> 00:06:55,680 Speaker 2: So if you look at it, it almost looks like 119 00:06:55,800 --> 00:06:59,320 Speaker 2: a solid metal surface, but in actual fact that it's 120 00:06:59,320 --> 00:07:02,480 Speaker 2: comprised out of a couple of different layers of wires 121 00:07:02,560 --> 00:07:03,560 Speaker 2: or profiles. 122 00:07:03,839 --> 00:07:07,080 Speaker 1: And then you said you have to have these cables 123 00:07:07,080 --> 00:07:11,440 Speaker 1: go in this large two hundred meter tower because if 124 00:07:11,480 --> 00:07:14,760 Speaker 1: you don't, the quoting that you're going to put on, 125 00:07:14,800 --> 00:07:16,920 Speaker 1: which is the insulation which is going to make the 126 00:07:17,000 --> 00:07:20,680 Speaker 1: cable safe will become oval rather than round. What does 127 00:07:20,720 --> 00:07:22,200 Speaker 1: that mean in essence? 128 00:07:22,240 --> 00:07:24,560 Speaker 2: And of course you can do it in smaller towers. 129 00:07:24,560 --> 00:07:26,640 Speaker 2: But let's say that you would do it in a 130 00:07:26,680 --> 00:07:31,280 Speaker 2: horizontal manner. So you spray plastic on or you squeeze 131 00:07:31,280 --> 00:07:33,280 Speaker 2: plastic on, and we do it in three layers, so 132 00:07:33,320 --> 00:07:36,360 Speaker 2: it's even more complex than only one layer. But for 133 00:07:36,400 --> 00:07:39,120 Speaker 2: the simplicity reason, if you just spray a layer of plastic, 134 00:07:39,280 --> 00:07:42,480 Speaker 2: then the gravity of Earth will of course try to 135 00:07:42,640 --> 00:07:45,400 Speaker 2: pull as much as this can, so that before you 136 00:07:45,440 --> 00:07:50,400 Speaker 2: get mechanical sturdy or fixed insulation layer, it will tend 137 00:07:50,560 --> 00:07:53,000 Speaker 2: to be oval in shape, just like a water drop 138 00:07:53,120 --> 00:07:56,320 Speaker 2: somehow is also affected by gravity. So while if you 139 00:07:56,320 --> 00:07:59,680 Speaker 2: do it vertically and then we heat the cable after 140 00:07:59,720 --> 00:08:03,720 Speaker 2: it gotten it plastic around itself, then the material we 141 00:08:03,800 --> 00:08:08,000 Speaker 2: call it it cross links, so it becomes mechanically fixed. 142 00:08:08,280 --> 00:08:10,800 Speaker 2: And after that process that we are then cooling the 143 00:08:10,880 --> 00:08:14,240 Speaker 2: cable also for a a fine period of time, and 144 00:08:14,320 --> 00:08:17,400 Speaker 2: at the end of that process then it is mechanically stable. 145 00:08:17,480 --> 00:08:20,440 Speaker 2: So then you can put the cable horizontally without the 146 00:08:20,480 --> 00:08:23,360 Speaker 2: cable deforming or changing its shape. 147 00:08:23,680 --> 00:08:28,080 Speaker 1: And you talked about making cables for different voltages. You explain. 148 00:08:28,200 --> 00:08:31,360 Speaker 1: I think the cable that you make for high voltages, 149 00:08:31,680 --> 00:08:34,480 Speaker 1: what is the difference with lower voltages. Is it just 150 00:08:34,720 --> 00:08:37,560 Speaker 1: the layers of insulation are smaller and the cable is smaller. 151 00:08:37,600 --> 00:08:39,120 Speaker 1: It's just just a shrunken version. 152 00:08:39,600 --> 00:08:41,960 Speaker 2: Yeah, in essence, I mean, I guess if you oversimplify, 153 00:08:42,000 --> 00:08:44,160 Speaker 2: you can say yes. But there is also even more 154 00:08:44,160 --> 00:08:48,160 Speaker 2: simplicity to lower power cables. If you compare these very 155 00:08:48,240 --> 00:08:51,200 Speaker 2: large cables being able to integrate an offshore wind farm 156 00:08:51,320 --> 00:08:54,080 Speaker 2: or a nuclear power station or whatever it may be, 157 00:08:54,200 --> 00:08:57,160 Speaker 2: with a cable or what I would call who comes 158 00:08:57,160 --> 00:08:59,719 Speaker 2: from the large cable word a cord, not that you 159 00:08:59,840 --> 00:09:03,640 Speaker 2: have in the walls of your house. That cable will 160 00:09:03,640 --> 00:09:07,360 Speaker 2: only basically effectively have two layers, or perhaps three layers. 161 00:09:07,400 --> 00:09:09,800 Speaker 2: It has a conductor in the middle, being a copper conductor, 162 00:09:09,840 --> 00:09:12,520 Speaker 2: which is solid in its nature to your earlier point, 163 00:09:13,080 --> 00:09:15,760 Speaker 2: and then it has its jacket and insulation on top 164 00:09:15,800 --> 00:09:18,000 Speaker 2: of that, so like a small plastic layer. And then 165 00:09:18,040 --> 00:09:22,080 Speaker 2: you put three or four small of these cords together, 166 00:09:22,160 --> 00:09:24,679 Speaker 2: and then you put a jacket around it, and that 167 00:09:24,760 --> 00:09:28,200 Speaker 2: will give you your what we call building wire. And of 168 00:09:28,240 --> 00:09:31,680 Speaker 2: course the process and speed to make such and also 169 00:09:31,720 --> 00:09:36,920 Speaker 2: the inherent allowed variance. Also in terms of quality, et cetera, 170 00:09:37,559 --> 00:09:39,679 Speaker 2: it is much much higher than when you look at 171 00:09:39,679 --> 00:09:41,720 Speaker 2: the very high voltage cable. If you go back to 172 00:09:41,760 --> 00:09:44,400 Speaker 2: the first cable I mentioned, if you have that cable 173 00:09:44,400 --> 00:09:47,600 Speaker 2: and you get an eyelash, for example, in that critical 174 00:09:47,640 --> 00:09:52,040 Speaker 2: insulation layer, you will immediately have a breakdown. So then 175 00:09:52,080 --> 00:09:54,320 Speaker 2: that means that the power of the nuclear reactor will 176 00:09:54,320 --> 00:09:57,840 Speaker 2: immediately find its way right through the insulation layer and 177 00:09:57,920 --> 00:10:01,200 Speaker 2: right into the ground and thereby maybe putting a city 178 00:10:01,240 --> 00:10:03,840 Speaker 2: out of its power or you know, causing a major 179 00:10:03,880 --> 00:10:04,679 Speaker 2: grid disturbance. 180 00:10:05,320 --> 00:10:09,400 Speaker 1: Now, before we go into understanding the business side, there's 181 00:10:09,440 --> 00:10:12,760 Speaker 1: one other technical aspect of this which most people don't 182 00:10:12,760 --> 00:10:16,720 Speaker 1: think about, which is our grid works on alternating current, 183 00:10:17,280 --> 00:10:20,160 Speaker 1: which means the power you sense is actually going back 184 00:10:20,200 --> 00:10:25,440 Speaker 1: and forth. The voltage is increasing and decreasing. But increasingly 185 00:10:25,480 --> 00:10:29,840 Speaker 1: we are also using high voltage direct current for transporting 186 00:10:29,880 --> 00:10:33,280 Speaker 1: electricity very long distances or from offshore on to on shore, 187 00:10:33,880 --> 00:10:37,320 Speaker 1: and you make cables for both. Can you explain what 188 00:10:37,400 --> 00:10:40,080 Speaker 1: is the difference between a high voltage AC cable and 189 00:10:40,080 --> 00:10:41,480 Speaker 1: a high voltage DC cable. 190 00:10:42,040 --> 00:10:44,600 Speaker 2: Yeah, from the outset of it, it's quite simple. So 191 00:10:44,640 --> 00:10:48,280 Speaker 2: a DC cable typically, or a DC cable system will 192 00:10:48,320 --> 00:10:51,440 Speaker 2: have two cables. It will have one cable where the 193 00:10:51,480 --> 00:10:53,960 Speaker 2: current goes in one direction and another cable where the 194 00:10:54,000 --> 00:10:56,880 Speaker 2: current goes in the other direction. So it is in 195 00:10:57,040 --> 00:11:00,640 Speaker 2: essence only a single phase system, if you will, whereas 196 00:11:00,640 --> 00:11:04,480 Speaker 2: an AC cable it is part of an alternating current system, 197 00:11:04,520 --> 00:11:08,280 Speaker 2: as you rightfully said, and in modern society we have 198 00:11:08,320 --> 00:11:11,280 Speaker 2: a three phase system, and that's to avoid to be 199 00:11:12,120 --> 00:11:16,040 Speaker 2: having a ground cable. So our three phase cable systems, 200 00:11:16,080 --> 00:11:19,560 Speaker 2: they are basically three cables put into one big cable. 201 00:11:19,559 --> 00:11:22,439 Speaker 2: If you look at our C cables, there is also 202 00:11:22,480 --> 00:11:24,920 Speaker 2: other differences in it, so it's a different type of 203 00:11:25,000 --> 00:11:28,640 Speaker 2: material that you use for the insallation system in an 204 00:11:28,679 --> 00:11:34,040 Speaker 2: AC cable, respective DC cable system and DC by all 205 00:11:34,080 --> 00:11:38,160 Speaker 2: means and measure are also more complex cable to manufacture 206 00:11:38,240 --> 00:11:41,480 Speaker 2: because the field is constant over time, so you always 207 00:11:41,800 --> 00:11:44,080 Speaker 2: only have a plus and a minus and it will 208 00:11:44,080 --> 00:11:46,920 Speaker 2: never vary over time, whereas in an AC cable, as 209 00:11:46,960 --> 00:11:49,360 Speaker 2: you said, you know fifty times per second, you know 210 00:11:49,440 --> 00:11:52,959 Speaker 2: it varies all the time. And that also has the 211 00:11:53,080 --> 00:11:56,840 Speaker 2: bearing when it comes to fields building up inside the 212 00:11:56,840 --> 00:11:59,640 Speaker 2: cable system. So if you have an impurity. As an example, 213 00:11:59,679 --> 00:12:02,559 Speaker 2: in a DC cable system, the effect of that impurity 214 00:12:02,600 --> 00:12:05,800 Speaker 2: will increase over time because the field is constant, while 215 00:12:05,800 --> 00:12:08,520 Speaker 2: in the AC cable you may get away with a 216 00:12:08,520 --> 00:12:12,040 Speaker 2: little bit more impurities because of the field is always alternating, 217 00:12:12,080 --> 00:12:14,400 Speaker 2: so going up, going down, going up and going down, 218 00:12:14,440 --> 00:12:16,320 Speaker 2: you're charging and decharging the cable. 219 00:12:16,640 --> 00:12:19,520 Speaker 1: So coming to the business side, then how are you 220 00:12:19,760 --> 00:12:23,800 Speaker 1: seeing the field evolve when it comes to high voltage 221 00:12:23,840 --> 00:12:25,520 Speaker 1: AC versus high voltage DC. 222 00:12:26,040 --> 00:12:28,560 Speaker 2: The field that we are active within is of course 223 00:12:29,400 --> 00:12:32,840 Speaker 2: a fairly conservative field, so that the field of power 224 00:12:32,920 --> 00:12:35,719 Speaker 2: transmission and just the whole grid in society is a 225 00:12:35,760 --> 00:12:39,480 Speaker 2: conservative field. AC has been with us for more than 226 00:12:39,480 --> 00:12:43,160 Speaker 2: one hundred years or a round about that. The DC 227 00:12:43,640 --> 00:12:47,599 Speaker 2: technology as such was in fact invented by MKT or 228 00:12:47,640 --> 00:12:50,480 Speaker 2: the legacy parts of MKT back in nineteen fifty four. 229 00:12:51,080 --> 00:12:53,920 Speaker 2: Was the first DC cable. Then it was with paper 230 00:12:54,480 --> 00:12:58,000 Speaker 2: as insulation system drained in oil. And we claim our 231 00:12:58,040 --> 00:13:00,760 Speaker 2: first reference, which we are of course super proud of, 232 00:13:00,840 --> 00:13:03,400 Speaker 2: to the island of Gotland which is in Sweden, and 233 00:13:03,480 --> 00:13:05,719 Speaker 2: to the mainland. Later on in the end of the 234 00:13:05,800 --> 00:13:10,319 Speaker 2: nineties we also invented the excelpees of the plastically insulated 235 00:13:10,400 --> 00:13:14,160 Speaker 2: DC cables, and ironically again we had the first reference 236 00:13:14,200 --> 00:13:17,240 Speaker 2: on the island of Gotland with that. But that's just 237 00:13:17,440 --> 00:13:20,240 Speaker 2: to give you that both technologies had been existing for 238 00:13:20,320 --> 00:13:22,960 Speaker 2: a long time, one for about one hundred years and 239 00:13:23,000 --> 00:13:27,040 Speaker 2: the other one for about seventy years. Yet the big 240 00:13:27,080 --> 00:13:32,160 Speaker 2: shift in society where DC has really become much much 241 00:13:32,200 --> 00:13:35,640 Speaker 2: more prevalent in terms of use has only come, I 242 00:13:35,720 --> 00:13:39,840 Speaker 2: would argue, perhaps in the last five to ten years. 243 00:13:40,400 --> 00:13:42,880 Speaker 2: So it has been increasing over time, but the massive 244 00:13:42,920 --> 00:13:46,640 Speaker 2: volume applications of the HVDC cables have really started to 245 00:13:46,760 --> 00:13:49,959 Speaker 2: kick off from twenty to fifteen and onwards, and today 246 00:13:50,280 --> 00:13:52,360 Speaker 2: if you look at the big product masses which are 247 00:13:52,360 --> 00:13:56,440 Speaker 2: being awarded, I would say that eighty to ninety percent 248 00:13:57,000 --> 00:14:00,800 Speaker 2: are based on HVDC technology as a host to AC. 249 00:14:01,360 --> 00:14:04,400 Speaker 1: And why is that? Why is it that DC is 250 00:14:04,760 --> 00:14:09,040 Speaker 1: getting an upper hand now and is the area of 251 00:14:09,160 --> 00:14:09,920 Speaker 1: rapid growth. 252 00:14:10,320 --> 00:14:12,600 Speaker 2: There are a couple of different factors that contribute to 253 00:14:12,720 --> 00:14:18,040 Speaker 2: it's changed. One is of course the inherent not issue, 254 00:14:18,080 --> 00:14:21,680 Speaker 2: but the inherent disadvantage when it comes to power and 255 00:14:21,960 --> 00:14:25,440 Speaker 2: length of transfer capability with AC, so an AC cable 256 00:14:26,000 --> 00:14:28,120 Speaker 2: as the current is going back and forth, and the 257 00:14:28,200 --> 00:14:31,520 Speaker 2: cable as such is like a capacity, almost like a battery. 258 00:14:32,200 --> 00:14:35,160 Speaker 2: So in addition to transporting electrons from one side to 259 00:14:35,240 --> 00:14:37,800 Speaker 2: the other transporting power from one side to the other, 260 00:14:38,200 --> 00:14:41,320 Speaker 2: you also have to charge and discharge the cable all 261 00:14:41,360 --> 00:14:43,960 Speaker 2: the time. And that means that if you have a 262 00:14:44,040 --> 00:14:46,320 Speaker 2: very long AC cable, you have to do a lot 263 00:14:46,360 --> 00:14:50,000 Speaker 2: of charging, and you're ending up just charging and discharging 264 00:14:50,040 --> 00:14:53,000 Speaker 2: the cable instead of actually transporting electricity from one end 265 00:14:53,000 --> 00:14:56,600 Speaker 2: to the other. And that puts a physical limit for 266 00:14:56,680 --> 00:15:00,000 Speaker 2: how long distance you can use AC cables for. Every 267 00:15:00,240 --> 00:15:03,160 Speaker 2: depends on the power rating, et cetera, but you can 268 00:15:03,160 --> 00:15:05,560 Speaker 2: think about around one hundred kilometers if you want to 269 00:15:05,560 --> 00:15:08,200 Speaker 2: do large scale power transfer, that's what you can do 270 00:15:08,240 --> 00:15:12,200 Speaker 2: with AC cables. Everything above that or with a very 271 00:15:12,240 --> 00:15:14,400 Speaker 2: much higher power rating, then you need to go DC 272 00:15:14,960 --> 00:15:17,640 Speaker 2: because there you don't have to charge and decharge, and 273 00:15:17,720 --> 00:15:19,920 Speaker 2: on top of that, the DC also will offer you 274 00:15:20,120 --> 00:15:25,040 Speaker 2: significant less losses. It's also more advantageous in the grid 275 00:15:25,160 --> 00:15:28,360 Speaker 2: because you will also have an inherent capability to control 276 00:15:28,400 --> 00:15:31,800 Speaker 2: the power flow much much better to do emergency support 277 00:15:32,160 --> 00:15:35,120 Speaker 2: if the grids are in a constrained situation. You can 278 00:15:35,160 --> 00:15:39,000 Speaker 2: even with DC systems today do high landing or what 279 00:15:39,080 --> 00:15:41,560 Speaker 2: we call black start to start up a grid that 280 00:15:41,680 --> 00:15:45,840 Speaker 2: is completely dead or that has suffered a massive failure 281 00:15:46,080 --> 00:15:49,840 Speaker 2: through these DC cables and the DC converter stations. And last, 282 00:15:49,840 --> 00:15:52,080 Speaker 2: but not least, of course, the other angle, which is 283 00:15:52,120 --> 00:15:55,240 Speaker 2: also contributing to this major change is just also the 284 00:15:55,320 --> 00:15:58,640 Speaker 2: fact that the any D transition for the last ten 285 00:15:58,720 --> 00:16:02,480 Speaker 2: years has now really really taken off. While this has 286 00:16:02,520 --> 00:16:04,720 Speaker 2: been a niche industry that a few of us have 287 00:16:04,920 --> 00:16:08,080 Speaker 2: really been in love with, I think now the realization 288 00:16:08,200 --> 00:16:11,040 Speaker 2: has come by society in general and by the world 289 00:16:11,120 --> 00:16:14,760 Speaker 2: in general, how fundamental electrons are for our modern way 290 00:16:14,880 --> 00:16:19,640 Speaker 2: to sustain life, and us making these systems more resilient, 291 00:16:20,280 --> 00:16:22,800 Speaker 2: us also taking care of our climate and you know, 292 00:16:22,840 --> 00:16:24,760 Speaker 2: making sure that we will have also a world to 293 00:16:24,800 --> 00:16:27,920 Speaker 2: handover to our kids. Has put much more focus on 294 00:16:27,960 --> 00:16:30,920 Speaker 2: you know, both solar power, offshore wind power, any the 295 00:16:31,040 --> 00:16:35,360 Speaker 2: trading between countries as well, and that also has increased 296 00:16:35,360 --> 00:16:38,360 Speaker 2: the demand. And then the last part, which I think 297 00:16:38,400 --> 00:16:41,560 Speaker 2: personally is quite sad, but also the recent amount of 298 00:16:41,600 --> 00:16:45,320 Speaker 2: conflicts in the world have also raised the awareness around 299 00:16:45,520 --> 00:16:49,640 Speaker 2: security around these kind of grids, and of course with 300 00:16:49,800 --> 00:16:53,560 Speaker 2: that also putting cables instead of overhead lines makes you 301 00:16:53,640 --> 00:16:58,520 Speaker 2: also more resilient towards potential easy tempering or attacks, etc. 302 00:16:59,200 --> 00:17:02,280 Speaker 2: But also just that hardening of the grid and making 303 00:17:02,360 --> 00:17:05,200 Speaker 2: the grid more resilient through more investments in the grid 304 00:17:05,840 --> 00:17:10,280 Speaker 2: is very very important these days also considering the security situation. 305 00:17:14,520 --> 00:17:17,720 Speaker 1: We'll be back with more of my conversation with Klaus Westerland, 306 00:17:18,000 --> 00:17:21,840 Speaker 1: CEO of NKAT after this short break. And Hey, if 307 00:17:21,880 --> 00:17:24,240 Speaker 1: you're enjoying this episode, please take a moment to rate 308 00:17:24,280 --> 00:17:27,000 Speaker 1: and review the show on Apple Podcasts and Spotify. Your 309 00:17:27,040 --> 00:17:30,680 Speaker 1: feedback really matters and helps new listeners discover the show. 310 00:17:31,000 --> 00:17:41,159 Speaker 1: Thank you. You also build projects that are on the 311 00:17:41,200 --> 00:17:44,879 Speaker 1: ground and under the sea. Is there a difference between 312 00:17:44,920 --> 00:17:47,720 Speaker 1: the cables that go on the ground versus under the 313 00:17:47,720 --> 00:17:48,840 Speaker 1: sea and what is the difference? 314 00:17:48,960 --> 00:17:51,800 Speaker 2: Yeah, there are a couple of important differences. What is 315 00:17:52,080 --> 00:17:54,320 Speaker 2: very specific for a cable that is to be put 316 00:17:54,480 --> 00:17:56,440 Speaker 2: under the sea is the fact that it will be 317 00:17:56,680 --> 00:18:01,560 Speaker 2: submerged and exercised to high pressure from a water perspective. 318 00:18:01,600 --> 00:18:04,879 Speaker 2: So with that, it is very critical that the conductor 319 00:18:05,080 --> 00:18:08,480 Speaker 2: is water tied from a longitudinal perspective, so that if 320 00:18:08,640 --> 00:18:11,040 Speaker 2: a cable will be torn by an anchor or you know, 321 00:18:11,080 --> 00:18:13,840 Speaker 2: physically tempered with. Then you don't want the water to 322 00:18:14,040 --> 00:18:16,639 Speaker 2: ingress alongside the cable to destroy a large part of 323 00:18:16,680 --> 00:18:19,800 Speaker 2: the cable. So that's what's one aspect. The other aspect 324 00:18:19,960 --> 00:18:23,160 Speaker 2: is that it's very critical that it's also water tight, 325 00:18:23,200 --> 00:18:26,240 Speaker 2: from a radial perspective, that water cannot get into the 326 00:18:26,280 --> 00:18:31,200 Speaker 2: cable from the surface. And then lastly, from a physical 327 00:18:31,240 --> 00:18:34,840 Speaker 2: integrity perspective, a cable that needs to be installed below 328 00:18:34,920 --> 00:18:40,159 Speaker 2: seabed has to be physically more resilient than a cable 329 00:18:40,200 --> 00:18:43,040 Speaker 2: that to be installed in land. For many different reasons, 330 00:18:43,040 --> 00:18:45,000 Speaker 2: but the obvious one is, of course, if you are 331 00:18:45,119 --> 00:18:48,919 Speaker 2: to hang a cable from a ship one hundred meters 332 00:18:48,960 --> 00:18:51,440 Speaker 2: down to the sea bottom, or why not six hundred 333 00:18:51,440 --> 00:18:54,119 Speaker 2: meters or one thousand meters or even over and beyond, 334 00:18:54,640 --> 00:18:57,640 Speaker 2: then the cable needs to be able to sustain its 335 00:18:57,680 --> 00:19:01,480 Speaker 2: own weight down There will also trench the cable so 336 00:19:01,600 --> 00:19:05,520 Speaker 2: to bury the cable underneath the seabed. And these trenchers, 337 00:19:05,560 --> 00:19:08,280 Speaker 2: you know, they would look like for a normal person, 338 00:19:08,440 --> 00:19:10,439 Speaker 2: like like a monster, like a sea monster, like a 339 00:19:10,480 --> 00:19:13,000 Speaker 2: big tank that runs on top of the cable on 340 00:19:13,040 --> 00:19:15,399 Speaker 2: the bottom fount and the sea bottom floor, and the 341 00:19:15,480 --> 00:19:18,359 Speaker 2: cable of course has to be also sustained to be 342 00:19:18,480 --> 00:19:22,520 Speaker 2: handled and buried underneath the seabed. So I think these 343 00:19:22,560 --> 00:19:26,639 Speaker 2: are the typical differences from a manufacturing perspective. You also 344 00:19:26,800 --> 00:19:30,560 Speaker 2: manufactured them in much much longer lengths, so a land 345 00:19:30,600 --> 00:19:35,199 Speaker 2: cable there you're limited by also transportation onshore. So you 346 00:19:35,280 --> 00:19:39,040 Speaker 2: cannot take a drum that weighs five thousand tons on 347 00:19:39,160 --> 00:19:41,240 Speaker 2: a normal road. There is no truck that can carry it. 348 00:19:41,280 --> 00:19:43,240 Speaker 2: There is no road that can carry it. So typically 349 00:19:43,840 --> 00:19:47,000 Speaker 2: a normal cable drum will entail about a kilometer of 350 00:19:47,040 --> 00:19:51,040 Speaker 2: cable and perhaps way you know, everything between fifty and 351 00:19:51,160 --> 00:19:54,159 Speaker 2: I think our heaviest drums are up towards one hundred tons, 352 00:19:54,680 --> 00:19:57,000 Speaker 2: but that's what the limit is. If you look on 353 00:19:57,080 --> 00:19:59,800 Speaker 2: sea cables, on the other hand, they are being spooled 354 00:19:59,800 --> 00:20:03,080 Speaker 2: from the factory directly onto one of our cable a vessels, 355 00:20:03,680 --> 00:20:07,080 Speaker 2: and there you can load ten thousand tons of cables 356 00:20:07,400 --> 00:20:09,439 Speaker 2: in one go on a vessel, or like our new 357 00:20:09,520 --> 00:20:12,520 Speaker 2: vessel that we are now manufacturing, she will be able 358 00:20:12,520 --> 00:20:16,719 Speaker 2: to carry twenty three thousand tons of cables in one go, 359 00:20:16,880 --> 00:20:20,040 Speaker 2: which is very different of course to fifty two hundred tons. 360 00:20:19,880 --> 00:20:23,680 Speaker 1: And that's why you and your competitors like Nexan's Prismian, 361 00:20:24,160 --> 00:20:30,280 Speaker 1: these companies build these manufacturing facilities, these huge towers close 362 00:20:30,359 --> 00:20:33,000 Speaker 1: to deep water ports, so you're able to make the 363 00:20:33,040 --> 00:20:36,880 Speaker 1: cable and directly load it onto a ship. But tuck 364 00:20:37,040 --> 00:20:41,439 Speaker 1: me through the cost now, because obviously the cable going 365 00:20:41,520 --> 00:20:45,280 Speaker 1: under the sea needs to have all these extra properties 366 00:20:45,359 --> 00:20:49,560 Speaker 1: and that requires extra effort. But then they're easier in 367 00:20:49,600 --> 00:20:53,840 Speaker 1: a way to move and then to deploy because you're 368 00:20:53,840 --> 00:20:56,239 Speaker 1: not having to deal with the challenges that come with 369 00:20:56,640 --> 00:21:01,920 Speaker 1: land deployment. So on a per kilometer, how much does 370 00:21:01,960 --> 00:21:06,160 Speaker 1: it cost to lay down a undersea high voltage DC 371 00:21:06,280 --> 00:21:09,960 Speaker 1: cable versus and ground high voltage DC cable. 372 00:21:10,320 --> 00:21:12,560 Speaker 2: It's a good question. You know. The lawyers would always 373 00:21:12,560 --> 00:21:14,840 Speaker 2: tell you it depends so that they cannot give you 374 00:21:14,840 --> 00:21:16,679 Speaker 2: a straight answer, and I'm afraid I would have to 375 00:21:16,680 --> 00:21:19,119 Speaker 2: resort to the same kind of answer here. And the 376 00:21:19,200 --> 00:21:22,040 Speaker 2: reason is, of course that the designs of these cables 377 00:21:22,080 --> 00:21:24,760 Speaker 2: will always be different from case to case. But what 378 00:21:24,840 --> 00:21:27,399 Speaker 2: you have to keep in mind for onshore cables and 379 00:21:27,440 --> 00:21:31,960 Speaker 2: offshore cables, they are solving a completely different task. So 380 00:21:32,080 --> 00:21:34,680 Speaker 2: a C cable, it's solving a task that a land 381 00:21:34,720 --> 00:21:38,880 Speaker 2: cable cannot solve. So that's why it's difficult to compare them. 382 00:21:38,920 --> 00:21:42,359 Speaker 2: It's like comparing the task of a you know, a 383 00:21:42,480 --> 00:21:45,119 Speaker 2: normal car with a case of maybe a truck. They 384 00:21:45,119 --> 00:21:47,880 Speaker 2: are solving two different tasks. I think what you could 385 00:21:47,880 --> 00:21:51,119 Speaker 2: compare is, of course onshore cables versus overheadlines, you know, 386 00:21:51,160 --> 00:21:53,479 Speaker 2: because they are solving a similar task, and there are 387 00:21:53,480 --> 00:21:57,399 Speaker 2: differences into that. But when it comes to a c cable, 388 00:21:57,440 --> 00:22:00,800 Speaker 2: there just isn't any other solution for it. Now that 389 00:22:00,920 --> 00:22:05,000 Speaker 2: being said, a sea cable is obviously more expensive than 390 00:22:05,040 --> 00:22:10,359 Speaker 2: a land cable, that's clear, but it's not significantly more expensive, 391 00:22:10,400 --> 00:22:13,199 Speaker 2: so it's not three times more expensive or something like this. 392 00:22:13,320 --> 00:22:16,040 Speaker 2: And this goes to the fact that the conductor and 393 00:22:16,200 --> 00:22:19,280 Speaker 2: copper is something which is perhaps the most expensive and 394 00:22:19,359 --> 00:22:22,280 Speaker 2: precious part in a cable as such, and if you 395 00:22:22,320 --> 00:22:24,720 Speaker 2: make the conductor the same, the majority of the cost 396 00:22:24,760 --> 00:22:27,119 Speaker 2: base is the same. And then of course there are 397 00:22:27,400 --> 00:22:29,600 Speaker 2: layers that you need to add on the sea cable, 398 00:22:29,680 --> 00:22:33,280 Speaker 2: such as steel armoring versus just a plastic jacket on 399 00:22:33,320 --> 00:22:35,959 Speaker 2: an on shore cable, where the costs are pretty different. 400 00:22:36,200 --> 00:22:38,480 Speaker 2: It's not fair to compare them. Just like by like 401 00:22:38,520 --> 00:22:40,080 Speaker 2: because they're solving different problems. 402 00:22:40,240 --> 00:22:42,320 Speaker 1: But one thing you can do is put a dollar 403 00:22:42,400 --> 00:22:45,840 Speaker 1: number on it, and roughly a million dollars a kilometer 404 00:22:46,200 --> 00:22:49,360 Speaker 1: is a number that gets quoted quite a bit when 405 00:22:49,359 --> 00:22:54,000 Speaker 1: it comes to having high voltagityc cables being deployed. Is 406 00:22:54,040 --> 00:22:56,880 Speaker 1: that a good range, even if you don't have exact figures? 407 00:22:57,280 --> 00:22:59,360 Speaker 2: Yeah, I think you know the numbers you find out there, 408 00:22:59,400 --> 00:23:01,600 Speaker 2: I think you can use them, and you know, as 409 00:23:01,600 --> 00:23:04,480 Speaker 2: some sort of an approximation. I would be careful, knowing 410 00:23:04,520 --> 00:23:07,520 Speaker 2: a little bit about the industry, to use it to 411 00:23:07,560 --> 00:23:11,240 Speaker 2: provide some sort of an exact indication of what it 412 00:23:11,280 --> 00:23:13,160 Speaker 2: will cost to solve a certain problem. 413 00:23:13,520 --> 00:23:16,800 Speaker 1: Is there a range that you would advise to somebody 414 00:23:16,800 --> 00:23:18,919 Speaker 1: who's considering a project, Now, I. 415 00:23:18,920 --> 00:23:21,280 Speaker 2: Would say that I think that's that's also a part 416 00:23:21,320 --> 00:23:24,439 Speaker 2: of this industry, Like standardization. You could think about why 417 00:23:24,520 --> 00:23:27,840 Speaker 2: don't be standardized cables to get exactly what the question 418 00:23:27,920 --> 00:23:30,200 Speaker 2: that you ask here? So what's the cost per kilometers? 419 00:23:30,280 --> 00:23:33,040 Speaker 2: Let's make it simple? But the reason is that doesn't 420 00:23:33,040 --> 00:23:34,720 Speaker 2: make sense to do it is, of course, if you 421 00:23:34,760 --> 00:23:38,399 Speaker 2: can save just you know, two hundred grams of copper 422 00:23:38,440 --> 00:23:41,199 Speaker 2: for every meter of cable and then you multiply that 423 00:23:41,240 --> 00:23:44,359 Speaker 2: by seven hundred kilometer, or you know, connecting Singaport to 424 00:23:44,359 --> 00:23:48,560 Speaker 2: Australia multiplied by three and a half thousand kilometers, it's 425 00:23:48,640 --> 00:23:52,240 Speaker 2: always worth it. So that's why this industry it's all 426 00:23:52,280 --> 00:23:56,240 Speaker 2: about customization. Every cable we make from a high voltage 427 00:23:56,280 --> 00:24:01,240 Speaker 2: perspective is purpose designed, purpose tested, purpose built to solve 428 00:24:01,280 --> 00:24:04,000 Speaker 2: exactly that job. Because the amount of megawats to be 429 00:24:04,040 --> 00:24:07,720 Speaker 2: transferred are different, but also the soil compositions are different, 430 00:24:07,920 --> 00:24:11,520 Speaker 2: the landing points to onshore is different, and it all 431 00:24:11,680 --> 00:24:15,080 Speaker 2: speaks into the thermal properties and just the power ratings 432 00:24:15,119 --> 00:24:18,200 Speaker 2: being different, and therefore the cost of the system will 433 00:24:18,240 --> 00:24:19,439 Speaker 2: become very, very different. 434 00:24:19,920 --> 00:24:23,960 Speaker 1: But then this is creating a bottleneck in electrification, right. 435 00:24:24,080 --> 00:24:27,639 Speaker 1: We've heard from customers that being able to get cables 436 00:24:27,680 --> 00:24:30,960 Speaker 1: for these projects is a hard challenge. Many of these 437 00:24:30,960 --> 00:24:34,159 Speaker 1: factories have been booked out for years altogether to be 438 00:24:34,200 --> 00:24:39,200 Speaker 1: able to build these cables for those specific applications. So 439 00:24:39,400 --> 00:24:42,280 Speaker 1: how do you resolve that bottleneck? How do you scale 440 00:24:42,359 --> 00:24:45,199 Speaker 1: up this industry if you're going to stick with having 441 00:24:45,920 --> 00:24:47,560 Speaker 1: these custom built cables. 442 00:24:47,800 --> 00:24:50,280 Speaker 2: Yeah, I think this is an excellent question, and it's 443 00:24:50,280 --> 00:24:53,000 Speaker 2: a question also that I've been privileged to be asked 444 00:24:53,040 --> 00:24:55,880 Speaker 2: by member states of the EU, also by the EU Commission, 445 00:24:56,040 --> 00:24:58,560 Speaker 2: and there is a lot of the discussions and debates 446 00:24:58,600 --> 00:25:01,840 Speaker 2: also with Europe Cable with a cable association where we 447 00:25:01,960 --> 00:25:06,240 Speaker 2: organize ourselves. And I think we have a responsibility as 448 00:25:06,240 --> 00:25:10,080 Speaker 2: the industry to increase capacity to meet the raising demand 449 00:25:10,240 --> 00:25:12,840 Speaker 2: if you look at IA and what they are forecasting 450 00:25:13,240 --> 00:25:16,680 Speaker 2: between now and twenty forty, to be able to fulfill 451 00:25:18,040 --> 00:25:21,000 Speaker 2: the visions or the political targets and ambitions when it 452 00:25:21,040 --> 00:25:24,200 Speaker 2: comes to clean energy or just energy society in general, 453 00:25:24,680 --> 00:25:27,840 Speaker 2: and also to refurbish whatever needs to be refurbished in 454 00:25:27,880 --> 00:25:31,640 Speaker 2: the existing grid. IA estimates that we need to build 455 00:25:32,080 --> 00:25:36,320 Speaker 2: an equivalent of eighty million of kilometers of grid infrastructure 456 00:25:36,359 --> 00:25:38,680 Speaker 2: between now and twenty forty. Now, how much is eighty 457 00:25:38,720 --> 00:25:42,600 Speaker 2: million kilometers? That's basically the equivalent of the entire existing 458 00:25:42,600 --> 00:25:45,520 Speaker 2: grid that we need to build in fifteen years. That's 459 00:25:45,560 --> 00:25:47,880 Speaker 2: equivalent to what we have built in one hundred years. 460 00:25:48,160 --> 00:25:51,879 Speaker 2: So I agree to your point that the need, the 461 00:25:51,920 --> 00:25:54,920 Speaker 2: demand of grid infrastructure is massive. What have we then 462 00:25:54,960 --> 00:25:56,760 Speaker 2: done as an industry? I can say what we have 463 00:25:56,800 --> 00:26:00,000 Speaker 2: done as a company, just taking the last two years 464 00:26:00,080 --> 00:26:02,480 Speaker 2: that I have been privileged to be the CEO of MKTOF. 465 00:26:03,160 --> 00:26:06,440 Speaker 2: We have committed and launched investment equivalent to one point 466 00:26:06,480 --> 00:26:12,000 Speaker 2: eight billion euros into extending our capacity. This is extending 467 00:26:12,000 --> 00:26:15,439 Speaker 2: our capacity for high voltage DC cables, it's extending our 468 00:26:15,480 --> 00:26:18,920 Speaker 2: capacity for high voltage AC cables, for medium voltage cables, 469 00:26:19,119 --> 00:26:22,400 Speaker 2: so it's across the span the industry in Europe when 470 00:26:22,400 --> 00:26:25,840 Speaker 2: it comes to high voltage cables, have announced investments for 471 00:26:25,960 --> 00:26:30,800 Speaker 2: roughly about four billion euros so to increase the European 472 00:26:30,840 --> 00:26:34,360 Speaker 2: capacity to sustain and increase the demand as such. So 473 00:26:34,800 --> 00:26:38,040 Speaker 2: I think in our opinion we have made significant investment 474 00:26:38,080 --> 00:26:40,280 Speaker 2: from twenty twenty to day and we are still on 475 00:26:40,320 --> 00:26:43,360 Speaker 2: that investment journey now. We have been able to do 476 00:26:43,400 --> 00:26:47,320 Speaker 2: that because of society has also taken a step forward 477 00:26:47,640 --> 00:26:50,359 Speaker 2: with the transmission system operators in Europe backed by the 478 00:26:50,440 --> 00:26:54,960 Speaker 2: regulators also being able to give us a better predictability 479 00:26:55,040 --> 00:26:58,280 Speaker 2: in the demand needed going forward. Because of course, as 480 00:26:58,320 --> 00:27:00,919 Speaker 2: you can appreciate, for a company like us to do 481 00:27:01,040 --> 00:27:03,800 Speaker 2: investments in the realm of one or two billion euros, 482 00:27:03,880 --> 00:27:07,120 Speaker 2: it's a massive commitment. It's a massive amount of money 483 00:27:07,160 --> 00:27:09,879 Speaker 2: that we are spending. But it's also a massive amount 484 00:27:09,920 --> 00:27:13,040 Speaker 2: of demand that is needed for this investment to actually 485 00:27:13,080 --> 00:27:16,280 Speaker 2: makes financially sense over the next not five years, not 486 00:27:16,400 --> 00:27:19,280 Speaker 2: ten years, but over the next twenty to thirty years. 487 00:27:19,680 --> 00:27:22,800 Speaker 2: So we have gotten better visibility, we have gotten some 488 00:27:22,880 --> 00:27:26,520 Speaker 2: larger frame volumes, and I think for us to be 489 00:27:26,680 --> 00:27:30,040 Speaker 2: able to sustain these investments or maybe even to make 490 00:27:30,119 --> 00:27:34,040 Speaker 2: even further investments, this is exactly what we need, a 491 00:27:34,119 --> 00:27:38,640 Speaker 2: predictable and safe and sound demand in Europe for these 492 00:27:38,720 --> 00:27:41,800 Speaker 2: kind of products and system because the industry has also 493 00:27:41,880 --> 00:27:45,360 Speaker 2: learned more than what we wanted to about a decade 494 00:27:45,720 --> 00:27:48,760 Speaker 2: ago when we did make investments, but the demand never came. 495 00:27:49,000 --> 00:27:52,840 Speaker 2: And expensive as these investments are, it becomes very very 496 00:27:52,840 --> 00:27:55,359 Speaker 2: painful then when you are not able to actually produce 497 00:27:55,400 --> 00:27:56,240 Speaker 2: cables in them. 498 00:27:56,359 --> 00:27:58,680 Speaker 1: But this is something that comes up again and again 499 00:27:59,200 --> 00:28:03,480 Speaker 1: vade different types of device makers when it comes to electrification. 500 00:28:03,920 --> 00:28:08,600 Speaker 1: We've written about a shortage of transformers in especially Europe 501 00:28:08,600 --> 00:28:12,720 Speaker 1: and America, and it's the same point that manufacturer series, 502 00:28:12,760 --> 00:28:16,320 Speaker 1: which is we see there is demand, but we don't 503 00:28:16,359 --> 00:28:18,439 Speaker 1: know if there is guaranteed demand for us to be 504 00:28:18,480 --> 00:28:21,639 Speaker 1: able to make the investment. How can both things be true? 505 00:28:21,800 --> 00:28:24,440 Speaker 1: Because if you can see the demand, how much more 506 00:28:24,480 --> 00:28:27,240 Speaker 1: guarantee do you need to be able to make the investments. 507 00:28:27,960 --> 00:28:29,680 Speaker 2: I think for us, as I said, we made a 508 00:28:29,760 --> 00:28:33,240 Speaker 2: learning ten fifteen years ago where we did make investments 509 00:28:33,280 --> 00:28:36,560 Speaker 2: based on the anticipation of demand, and since the demand 510 00:28:36,600 --> 00:28:40,480 Speaker 2: didn't come, we had a utilization problem, which was very 511 00:28:40,480 --> 00:28:43,240 Speaker 2: expensive learning for the industry. But I think I want 512 00:28:43,280 --> 00:28:45,120 Speaker 2: to give credit. I want to give credit to the 513 00:28:45,120 --> 00:28:46,840 Speaker 2: member States, at least some of them. I want to 514 00:28:46,840 --> 00:28:49,360 Speaker 2: give credit to some of the tsos who have actually 515 00:28:50,320 --> 00:28:54,680 Speaker 2: dared backed by the regulator to make anticipatory investments, so 516 00:28:54,800 --> 00:28:58,400 Speaker 2: to make commitments to companies like NKT we will buy 517 00:28:58,480 --> 00:29:01,240 Speaker 2: cables from you. We don't know exactly for what project, 518 00:29:01,320 --> 00:29:04,800 Speaker 2: exactly what design, but we will buy projects over the 519 00:29:04,840 --> 00:29:08,120 Speaker 2: pig course of maybe five years or ten years, and 520 00:29:08,160 --> 00:29:11,320 Speaker 2: that gives us enough comfort to dare to take a 521 00:29:11,320 --> 00:29:13,960 Speaker 2: step forward and also take a risk. Then, so I 522 00:29:14,000 --> 00:29:18,480 Speaker 2: think that part of anticipatory investments, to make commitments that 523 00:29:18,520 --> 00:29:22,600 Speaker 2: we will use roughly this much capacity for the next 524 00:29:22,600 --> 00:29:25,600 Speaker 2: ten years. That gives us enough And of course, going 525 00:29:25,640 --> 00:29:28,560 Speaker 2: back to IA from a global perspective, we all know 526 00:29:28,960 --> 00:29:31,440 Speaker 2: it has to be done, and of course when it 527 00:29:31,440 --> 00:29:35,200 Speaker 2: comes to grid infrastructure and generation in general, these are 528 00:29:35,400 --> 00:29:39,200 Speaker 2: large investments. They are very expensive investments. So also the 529 00:29:39,280 --> 00:29:43,320 Speaker 2: governments have to have a part in also enabling these 530 00:29:43,360 --> 00:29:47,320 Speaker 2: anticipatory investments and then making it possible for the tsos 531 00:29:47,360 --> 00:29:49,200 Speaker 2: to actually carry forward with them. 532 00:29:49,440 --> 00:29:52,280 Speaker 1: So we are starting to see investments from cable makers, 533 00:29:52,280 --> 00:29:56,120 Speaker 1: including yourself, But we are seeing Japanese cable makers coming 534 00:29:56,600 --> 00:30:00,640 Speaker 1: into Europe. We are seeing South Korean cable ma going 535 00:30:00,680 --> 00:30:04,959 Speaker 1: into the US. The country that has deployed the most 536 00:30:05,040 --> 00:30:08,400 Speaker 1: amount of high voltage DC cable is China. Are you 537 00:30:08,520 --> 00:30:13,880 Speaker 1: worried that Europe and the US are losing the ability 538 00:30:14,240 --> 00:30:18,560 Speaker 1: the competitive edge to China when it comes to electrification 539 00:30:18,640 --> 00:30:19,400 Speaker 1: in general. 540 00:30:19,320 --> 00:30:21,600 Speaker 2: I would maybe nuance the statement. I think maybe China 541 00:30:21,640 --> 00:30:24,960 Speaker 2: has has launched or built the most amount of HVDC 542 00:30:25,640 --> 00:30:30,440 Speaker 2: line kilometers potentially but not necessarily cables, so insulated cable systems. 543 00:30:31,080 --> 00:30:34,120 Speaker 2: Am I worried in the way that we in the 544 00:30:34,160 --> 00:30:37,479 Speaker 2: Western world have interacted with China in the past with 545 00:30:37,600 --> 00:30:42,640 Speaker 2: respect to technology ownership, with respect to allowing them to 546 00:30:42,720 --> 00:30:45,960 Speaker 2: act freely in our markets, while we have been locked 547 00:30:46,000 --> 00:30:49,840 Speaker 2: out of theirs with respect to them being allowed to 548 00:30:50,360 --> 00:30:55,400 Speaker 2: tender and win and execute products which are obvious on 549 00:30:55,480 --> 00:30:59,080 Speaker 2: unreasonable price and cost levels, so hence with the risk 550 00:30:59,120 --> 00:31:02,560 Speaker 2: of being subsidized. Yes, I think the Western world and 551 00:31:02,600 --> 00:31:06,760 Speaker 2: Europe in particular, we have been a little bit too 552 00:31:06,920 --> 00:31:10,400 Speaker 2: naive in the past around this topic, and that of 553 00:31:10,440 --> 00:31:14,160 Speaker 2: course has also then allowed them to gain quite a 554 00:31:14,160 --> 00:31:16,880 Speaker 2: bit of ground. I would not say that from an 555 00:31:17,120 --> 00:31:20,400 Speaker 2: HVDC cable perspective, they are close to where we are. 556 00:31:21,440 --> 00:31:23,120 Speaker 2: But then, if I want to be turned a little 557 00:31:23,120 --> 00:31:25,520 Speaker 2: bit positive, I think if we have learned anything now 558 00:31:25,560 --> 00:31:30,640 Speaker 2: for the last one two years under very tragic circumstances, 559 00:31:30,800 --> 00:31:36,480 Speaker 2: is the fact that strategic autonomy is very important. It's 560 00:31:36,600 --> 00:31:40,280 Speaker 2: very important when it comes to the core parts and 561 00:31:40,280 --> 00:31:43,920 Speaker 2: the fundamental parts of your society where the grid backbone 562 00:31:43,960 --> 00:31:47,080 Speaker 2: is one. And we talked earlier about electrons meaning for 563 00:31:47,160 --> 00:31:50,120 Speaker 2: our modern way of life, etc. And there I see 564 00:31:50,160 --> 00:31:53,680 Speaker 2: a very different sentiment today in Europe, and I would 565 00:31:53,680 --> 00:31:56,760 Speaker 2: imagine just the same without being an expert on the US. 566 00:31:57,600 --> 00:31:59,800 Speaker 2: You know, with respect, how much do we want to 567 00:31:59,840 --> 00:32:03,360 Speaker 2: make make ourselves dependent on foreign states very very far 568 00:32:03,400 --> 00:32:07,280 Speaker 2: away for the most noble, and you know, the spinal 569 00:32:07,320 --> 00:32:10,160 Speaker 2: and backbone parts of our society being the backbone grid 570 00:32:10,600 --> 00:32:13,120 Speaker 2: because things can happen. You know, whom was your friend 571 00:32:13,200 --> 00:32:16,280 Speaker 2: yet yesterday is not necessarily your friend today. And you 572 00:32:16,400 --> 00:32:18,440 Speaker 2: just need to make sure that we can feed ourselves, 573 00:32:18,440 --> 00:32:20,800 Speaker 2: that we can have heating at home, et cetera. So 574 00:32:20,880 --> 00:32:22,760 Speaker 2: I think that there has also been a little bit 575 00:32:22,800 --> 00:32:24,960 Speaker 2: of change in insight and reflection. 576 00:32:25,400 --> 00:32:27,760 Speaker 1: Can you give examples of projects that you are proud 577 00:32:27,840 --> 00:32:32,640 Speaker 1: of and perhaps projects that you lost to a Chinese competitor. 578 00:32:32,720 --> 00:32:36,240 Speaker 2: You know, happily on the HVDC side, we haven't lost 579 00:32:36,440 --> 00:32:39,160 Speaker 2: any products to them because they are simply not there 580 00:32:39,440 --> 00:32:41,880 Speaker 2: from a technical perspective where we are. So I think 581 00:32:42,040 --> 00:32:44,840 Speaker 2: that in that that high end of the product range 582 00:32:44,920 --> 00:32:47,880 Speaker 2: they are not present. We have seen from a distance 583 00:32:47,960 --> 00:32:50,640 Speaker 2: where they have won AC cables, you know, one hundred 584 00:32:50,640 --> 00:32:54,160 Speaker 2: and fifty five KB, so so much much more standardized 585 00:32:54,200 --> 00:32:59,640 Speaker 2: technology levels, and there they have shown extreme aggressiveness in 586 00:32:59,720 --> 00:33:02,920 Speaker 2: terms surprising and it is for some you know, and 587 00:33:02,960 --> 00:33:05,320 Speaker 2: of course maybe not in the opinion of a court, 588 00:33:05,400 --> 00:33:07,520 Speaker 2: but I think in the opinion of myself and many 589 00:33:07,560 --> 00:33:11,080 Speaker 2: of our competitors, it's obvious that price dumping is being 590 00:33:11,160 --> 00:33:13,600 Speaker 2: used as one of the leavers to really get in 591 00:33:13,640 --> 00:33:16,800 Speaker 2: and buy your way into a market. But luckily we 592 00:33:16,960 --> 00:33:21,000 Speaker 2: haven't met them head on in these very very noble, 593 00:33:21,320 --> 00:33:24,840 Speaker 2: high end products, partly because they're not there technically, but 594 00:33:24,960 --> 00:33:29,200 Speaker 2: partly because also slowly insight is actually striking society that 595 00:33:29,640 --> 00:33:32,800 Speaker 2: we have to think twice before we put this very 596 00:33:32,840 --> 00:33:35,960 Speaker 2: critical infrastructure in the hands of foreign states far away. 597 00:33:36,280 --> 00:33:38,440 Speaker 1: And what are the projects that you are very proud 598 00:33:38,440 --> 00:33:39,320 Speaker 1: of Here. 599 00:33:39,160 --> 00:33:41,080 Speaker 2: You keep me going for a long time, I have 600 00:33:41,160 --> 00:33:45,160 Speaker 2: to say. Right now, NKT is installing cables in the 601 00:33:45,280 --> 00:33:49,720 Speaker 2: United States of America coupling Canada down to the city 602 00:33:49,760 --> 00:33:52,840 Speaker 2: center of New York, so through Lake Champlain, through the 603 00:33:52,920 --> 00:33:56,000 Speaker 2: Hudson River, through the Harlem River, and the cable is 604 00:33:56,080 --> 00:33:59,840 Speaker 2: terminating in a storia right on the other side from Manhattan. 605 00:34:00,920 --> 00:34:03,840 Speaker 2: This is a cable system that will carry more than 606 00:34:03,840 --> 00:34:08,680 Speaker 2: the equivalent of a nuclear reactor of clean hydropower coming 607 00:34:08,719 --> 00:34:12,239 Speaker 2: from Canada, feeding the city center of New York, a 608 00:34:12,280 --> 00:34:14,759 Speaker 2: cable that will turn on and a system that will 609 00:34:14,800 --> 00:34:17,680 Speaker 2: be used starting next year. So twenty percent of New 610 00:34:17,760 --> 00:34:21,560 Speaker 2: York City's power consumption will come through this cable from Canada. 611 00:34:21,960 --> 00:34:24,640 Speaker 2: And this is through the hands of the technology developed 612 00:34:24,960 --> 00:34:30,680 Speaker 2: by NKT and produced and nurtured, engineered, and tested in Cascrona, 613 00:34:30,719 --> 00:34:33,480 Speaker 2: you know, a very small city in Sweden. That's something 614 00:34:33,480 --> 00:34:35,000 Speaker 2: that we are immensely proud of. 615 00:34:35,360 --> 00:34:38,959 Speaker 1: But these days you can't get away from geopolitics. There 616 00:34:39,080 --> 00:34:41,359 Speaker 1: was a risk at one point when the trade war 617 00:34:41,520 --> 00:34:44,920 Speaker 1: was heating up between the US and Canada, where Donald 618 00:34:44,920 --> 00:34:47,919 Speaker 1: Trump was demanding that Canada become the fifty first date 619 00:34:48,400 --> 00:34:52,440 Speaker 1: that Doug Ford, who's the Premier of Ontario, said, we 620 00:34:52,600 --> 00:34:57,080 Speaker 1: will stop sending you power from Canada if you do 621 00:34:57,200 --> 00:35:01,120 Speaker 1: not back down. Not to stick to the specific example 622 00:35:01,200 --> 00:35:04,440 Speaker 1: because things have sort of resolved for now, but in general, 623 00:35:04,719 --> 00:35:07,360 Speaker 1: with the work that you're doing where there'll be cross 624 00:35:07,400 --> 00:35:12,520 Speaker 1: border transport of electricity in increasing amounts, how do you 625 00:35:12,640 --> 00:35:18,520 Speaker 1: think about the geopolitics of energy transport specifically when it 626 00:35:18,520 --> 00:35:19,480 Speaker 1: comes to electricity. 627 00:35:19,800 --> 00:35:22,080 Speaker 2: I think it's a it's a very good reflection and 628 00:35:22,120 --> 00:35:25,399 Speaker 2: it's of course something that will impact the company like KT, 629 00:35:25,600 --> 00:35:27,759 Speaker 2: it will impact the world, etc. And let me say 630 00:35:27,800 --> 00:35:33,000 Speaker 2: start by saying that conflicts and trade barriers it's not 631 00:35:33,040 --> 00:35:35,880 Speaker 2: good for business just in general period. That applies to 632 00:35:35,920 --> 00:35:38,920 Speaker 2: all companies and all countries. Now, with that said, we 633 00:35:38,960 --> 00:35:41,880 Speaker 2: are a non political organization of course, Also we are 634 00:35:42,680 --> 00:35:45,600 Speaker 2: you know, a humble technology provider if you allow the expression. 635 00:35:46,320 --> 00:35:50,600 Speaker 2: But I would also say that cross border electricity trading 636 00:35:51,480 --> 00:35:54,880 Speaker 2: and just being interconnected from a grid perspective, it's just 637 00:35:54,960 --> 00:35:59,239 Speaker 2: from a physics perspective necessary for the grid to be 638 00:35:59,320 --> 00:36:02,719 Speaker 2: able to operate in the stable matter and physics maybe 639 00:36:02,800 --> 00:36:07,120 Speaker 2: is one of the few things that even Trump's politics 640 00:36:07,200 --> 00:36:09,600 Speaker 2: in a sort of way. Now. I think one of 641 00:36:09,600 --> 00:36:13,200 Speaker 2: the big paradox in our industry is the fact that 642 00:36:13,760 --> 00:36:18,160 Speaker 2: any of these systems are designed, constructed, and operated with 643 00:36:18,400 --> 00:36:23,360 Speaker 2: decades in mind from an horizon perspective. Politicians, on the 644 00:36:23,360 --> 00:36:26,520 Speaker 2: other hand, are elected on a four year term basis, 645 00:36:26,640 --> 00:36:28,319 Speaker 2: and of course they have to gather votes, they have 646 00:36:28,360 --> 00:36:30,439 Speaker 2: to get re elected, and they have to do what's right, 647 00:36:30,520 --> 00:36:32,879 Speaker 2: you know, during you know, with the wins that are 648 00:36:32,920 --> 00:36:34,879 Speaker 2: in force at that moment in time. And I think 649 00:36:34,920 --> 00:36:39,960 Speaker 2: this paradox between the two is a difficult one. And I, 650 00:36:40,040 --> 00:36:42,920 Speaker 2: you know, sadly also think that that's why sometimes we 651 00:36:43,000 --> 00:36:46,720 Speaker 2: are also not making the best decisions for for example, 652 00:36:46,719 --> 00:36:50,000 Speaker 2: for a specific discipline like the anergy system, or you know, 653 00:36:50,080 --> 00:36:53,160 Speaker 2: how should we operate the world in five, ten, fifteen years, 654 00:36:53,600 --> 00:36:56,759 Speaker 2: simply because that does not get you votes. And I 655 00:36:56,800 --> 00:36:59,560 Speaker 2: think there is no way around this paradox. But I 656 00:36:59,600 --> 00:37:03,040 Speaker 2: would just again from a humble technology provider perspective, of 657 00:37:03,080 --> 00:37:05,960 Speaker 2: course we see that when it comes to any d policy, 658 00:37:06,040 --> 00:37:09,879 Speaker 2: if there was one point which deserves you know, by 659 00:37:10,080 --> 00:37:12,840 Speaker 2: parties and agreements or like in Sweden, you know, cutting 660 00:37:12,840 --> 00:37:15,360 Speaker 2: across the different blocks and the same thing in Europe. 661 00:37:15,600 --> 00:37:18,120 Speaker 2: I think it really is the energy system because there 662 00:37:18,160 --> 00:37:21,200 Speaker 2: you need to have the long, long term strategies in 663 00:37:21,280 --> 00:37:24,400 Speaker 2: mind when you're making the decisions. But to your point, 664 00:37:24,640 --> 00:37:27,160 Speaker 2: is there a risk in this industry because of you know, 665 00:37:27,200 --> 00:37:30,480 Speaker 2: political taking decision left and right, changing, rolling back or 666 00:37:30,560 --> 00:37:33,880 Speaker 2: rolling forward. I don't think I can be ignorant to 667 00:37:33,880 --> 00:37:36,480 Speaker 2: say that there is not. But I think on the 668 00:37:36,480 --> 00:37:38,840 Speaker 2: long term, medium to long term, I'm less worried. You know, 669 00:37:38,920 --> 00:37:42,720 Speaker 2: the fundamentals of electrons as a way to consume energy, 670 00:37:42,800 --> 00:37:45,640 Speaker 2: the fundamentals of electrons as a way to transport energy, 671 00:37:46,200 --> 00:37:48,920 Speaker 2: is there so in the medium to long term. Sadly, 672 00:37:48,960 --> 00:37:51,359 Speaker 2: with the impact on climate that we are having on 673 00:37:51,400 --> 00:37:53,680 Speaker 2: this planet, I think we feel that we are in 674 00:37:53,680 --> 00:37:56,440 Speaker 2: a robust industry and we feel strong with the portfolio 675 00:37:56,440 --> 00:37:57,600 Speaker 2: and the capabilities we have. 676 00:37:58,120 --> 00:38:01,279 Speaker 1: Well, the robust growth in your store price speaks to 677 00:38:01,320 --> 00:38:07,640 Speaker 1: that point. Thank you, Klaus, thank you so much. I'm 678 00:38:07,680 --> 00:38:10,160 Speaker 1: now speaking with Will Mathis, my colleague here in London 679 00:38:10,239 --> 00:38:13,479 Speaker 1: and the reporter who worked on the story that told 680 00:38:13,520 --> 00:38:15,840 Speaker 1: us about the shortage of cables and how it became 681 00:38:15,960 --> 00:38:16,640 Speaker 1: a bottleneck. 682 00:38:17,000 --> 00:38:18,520 Speaker 2: I Will Hi Aksha. Thanks. 683 00:38:19,320 --> 00:38:22,120 Speaker 1: You've spoken to Klaus in the past. You also went 684 00:38:22,160 --> 00:38:25,720 Speaker 1: and saw one of these massive towers where these cables 685 00:38:25,760 --> 00:38:30,120 Speaker 1: are manufactured. But one thing that I am still puzzled 686 00:38:30,120 --> 00:38:34,360 Speaker 1: by is if there's such a demand for these cables, 687 00:38:34,800 --> 00:38:39,279 Speaker 1: and these companies are minting money, why is it that 688 00:38:39,320 --> 00:38:42,840 Speaker 1: they are not able to resolve these bottlenecks more quickly. 689 00:38:43,239 --> 00:38:47,120 Speaker 3: Well, one reason is just that it's very hard to 690 00:38:47,200 --> 00:38:52,120 Speaker 3: get into this business. If NKT, Nexon's Prism and some 691 00:38:52,239 --> 00:38:55,520 Speaker 3: of the other Asian suppliers that know how to make 692 00:38:55,560 --> 00:38:59,799 Speaker 3: these cables don't want to massively scale up, then it's 693 00:38:59,800 --> 00:39:02,160 Speaker 3: hard for someone else to get into the business and 694 00:39:02,200 --> 00:39:06,239 Speaker 3: start doing it. It's a deep moat, as people say, 695 00:39:06,280 --> 00:39:10,640 Speaker 3: that's hard for new companies to start building HVDC cables. 696 00:39:10,800 --> 00:39:15,399 Speaker 3: You know these towers, they're weird structures, and if you're 697 00:39:15,480 --> 00:39:18,319 Speaker 3: some other business who's never done that before, you're going 698 00:39:18,400 --> 00:39:22,279 Speaker 3: to think twice before deciding to build one, and even 699 00:39:22,320 --> 00:39:24,920 Speaker 3: if you could find a location and find the materials, 700 00:39:25,040 --> 00:39:28,160 Speaker 3: it's just going to be hard to do. So these 701 00:39:28,160 --> 00:39:31,759 Speaker 3: companies are investing in new capacity, but they are doing 702 00:39:31,800 --> 00:39:34,640 Speaker 3: so very carefully, and they want to make sure that 703 00:39:34,920 --> 00:39:37,080 Speaker 3: every dollar they spend that they're going to be able 704 00:39:37,120 --> 00:39:39,000 Speaker 3: to profit from for a long time to come. 705 00:39:39,360 --> 00:39:41,799 Speaker 1: But there's a risk with this, which is if it's 706 00:39:41,800 --> 00:39:44,080 Speaker 1: a big moat and you have these limited number of 707 00:39:44,080 --> 00:39:48,320 Speaker 1: companies making those cables, they can get into price fixing, 708 00:39:48,360 --> 00:39:50,359 Speaker 1: which they have done in the past and have been 709 00:39:50,440 --> 00:39:53,239 Speaker 1: caught and have been fined as a result. Talk as 710 00:39:53,280 --> 00:39:55,759 Speaker 1: to why that scandal happened in the first place and 711 00:39:55,960 --> 00:39:58,479 Speaker 1: what could be done to ensure it doesn't happen again. 712 00:39:59,040 --> 00:40:02,000 Speaker 3: Yeah, this is something that really surprised me when I 713 00:40:02,040 --> 00:40:04,920 Speaker 3: was researching the cable industry that going back as far 714 00:40:04,960 --> 00:40:09,560 Speaker 3: as nineteen oh one, there is documented collusion among cabling 715 00:40:09,560 --> 00:40:13,760 Speaker 3: companies in Germany. That behavior basically continued up until pretty 716 00:40:13,760 --> 00:40:16,600 Speaker 3: close to the present day. You know, back in twenty fourteen, 717 00:40:17,000 --> 00:40:20,279 Speaker 3: the European Union find all the big cabling companies for 718 00:40:20,560 --> 00:40:24,360 Speaker 3: collusion and I read through those documents and they're you know, 719 00:40:24,640 --> 00:40:27,280 Speaker 3: go around the world and stay at hotels and talk together, 720 00:40:27,320 --> 00:40:30,600 Speaker 3: and they basically say, okay, you Europeans, you stay in 721 00:40:30,640 --> 00:40:33,800 Speaker 3: your market, and we Asians will go in our market. 722 00:40:33,840 --> 00:40:37,399 Speaker 3: And if they got a you know, request for proposals, 723 00:40:37,680 --> 00:40:40,360 Speaker 3: then they would let each other know and make sure 724 00:40:40,440 --> 00:40:45,600 Speaker 3: that the right bidder one the contract and they've been fined. 725 00:40:45,640 --> 00:40:49,200 Speaker 3: And today they would say, you know, that's all in 726 00:40:49,200 --> 00:40:52,160 Speaker 3: the past. And I think if you look there, you know, 727 00:40:52,480 --> 00:40:55,440 Speaker 3: there's no evidence that's still going on. But if you 728 00:40:55,480 --> 00:40:58,600 Speaker 3: look at it, there's kind of no reason to continue coluting. 729 00:40:58,719 --> 00:41:03,400 Speaker 3: There is so much demand and constricted supply, so you know, 730 00:41:03,480 --> 00:41:06,319 Speaker 3: one of the CEOs I spoke to for the story 731 00:41:06,400 --> 00:41:08,600 Speaker 3: asked him, you know, what do you think of competition, 732 00:41:08,840 --> 00:41:10,880 Speaker 3: and he said to me, you know, everyone is behaving. 733 00:41:11,200 --> 00:41:15,440 Speaker 3: So if everyone is behaving, everyone is trying to keep 734 00:41:15,480 --> 00:41:18,840 Speaker 3: prices at a good level for everyone else, there's not 735 00:41:19,200 --> 00:41:22,600 Speaker 3: so much expansion of supply, then there's really no wouldn't 736 00:41:22,640 --> 00:41:26,359 Speaker 3: be a need toclude even if they wanted to take 737 00:41:26,400 --> 00:41:26,799 Speaker 3: that risk. 738 00:41:26,840 --> 00:41:29,600 Speaker 1: Again, thank you Will, and please do check out the 739 00:41:29,680 --> 00:41:31,920 Speaker 1: story that Will has written. We'll link it in the 740 00:41:31,920 --> 00:41:39,760 Speaker 1: show notes. Thanks Socshean, Thank you for listening. To zero. 741 00:41:40,160 --> 00:41:42,760 Speaker 1: This is the third and for now the final episode 742 00:41:42,760 --> 00:41:45,200 Speaker 1: in the Bottleneck series. Let us know what you think 743 00:41:45,239 --> 00:41:47,160 Speaker 1: of the series and if you'd like us to cover 744 00:41:47,400 --> 00:41:50,880 Speaker 1: more of these bottlenecks. Please also take a moment to 745 00:41:50,920 --> 00:41:53,360 Speaker 1: rate and review the show on Apple Podcasts and Spotify. 746 00:41:53,840 --> 00:41:57,080 Speaker 1: Share this episode with a friend or with your local electrician. 747 00:41:57,920 --> 00:42:11,360 Speaker 1: And now for the sound of the week. That was 748 00:42:11,400 --> 00:42:14,320 Speaker 1: the sound of a nuclear reactor starting up and producing 749 00:42:14,440 --> 00:42:18,360 Speaker 1: what is called charon cough radiation. This episode was produced 750 00:42:18,400 --> 00:42:21,120 Speaker 1: by Oscar Boyd. Bloomberg's head of podcast is Saige Bauman 751 00:42:21,320 --> 00:42:24,000 Speaker 1: and head of Talk is Brendan newnham. Our theme music 752 00:42:24,080 --> 00:42:28,120 Speaker 1: is composed by Wonderly Special Thanks to Will Mathis, Amon Farhat, 753 00:42:28,239 --> 00:42:34,239 Speaker 1: Eleanor Harrison Dngate, Samersadi, Moses Andim and Sherwan Wagner. I'm 754 00:42:34,239 --> 00:42:35,959 Speaker 1: Akshadrati back soon.