227. Wind + Grids = Energy Security - May26

With Laurent segle And from London and Gerard Reed from Berlin. This is redefining energy Today. On redefining energy, we're going to talk about Win. Laurent, Yes, yeah, because we took a lot about sach and let's not forget that your hope all the North is mostly powered by wind because unfortunately we have say one thousand five dollars of a sun per year.

So who's going to pick up the tab for the rest? Win is there? But first of all, from my partner. A Bloco Energy is Europe's premier leaser of ten foot container mobile batteries built in Europe with COTL best LFP cells.

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Yeah, and also be clear is that wind is real low cost and as I said, northern Europe the same. You're definitely right. But also if you go to the Midwest and the US, I mean, you won't get any cheaper form of power than than wind. So no, no, no, wind is a critical part of the system and we need to revisit and see what's going on in the industry.

And again it's very important to understand that now with the biggerto binds, whether they're onshore, now they reach six mega what each and if you look offshore and now they reach twenty megia wa each, we are reaching load factors into forty and of course with the weather prediction getting better and better, we really have a resource that's there, that's powerful and that's predictable. So we need power, we need wind absolutely wrong. What we decided to do really was bringing on the new CEO of WIN Europe, which is sort of the voice for the wind industry across Europe, Tina vander Stratten, and she was formerly the energy minister in Belgium in twenty twenty two during the Russian invasion of Ukraine.

You know, I always think it's good to actually have ex politicians or politicians on. They have a different view of the world and a different way of seeing it than we do. A wrong because we really are sort of finance people. We think about things in terms of numbers, right.

Yeah, Antine has the big picture of you, as you said, political angirl but also energy situaty youngirls. Let's welcome Tina on the show. Tina, great to have you on the show. Thanks for coming on board, Thanks for having me.

Tina. You're not CEEO when you're but before that you were the Minister of Energy have Belgium for five years and well now in an energy shock with Almoos and the Gulf. But you were at the Helm when the Ukraine crisis arrived. So I would say this is not your first audio.

Can you explain a bit what it was being inside the two twenty two Russia and Algae shock. It was hell of waking up with a full scale invasion of Russia in Ukraine. It was a real wake up call that we can be so vulnerable. And I've seen a first cent and I was, as you say, at the Helm to see how energy moved.

From a very technical department, do we have enough energy at any point in time? Do we have enough electricity at any point in time? To very strategic departments? Where do we buy?

How do we buy? How do we diversify? How can we be more secure? The twenty twenty two crisis was responsible for having a very huge legislative framework on fast tracking renewables, fast tracking permitting to deep our Europe.

And now four years later, it's like I've been it before, So it's a deja vu moment. Maybe it's also a touch point to say, are we now in a better place or not? And I think the answer is both. We are not enough progress as we should have been after the twenty twenty two crisis, and there was a lot of talking, a lot of goals that we put forward, specifically with regards to the deployment of renewables.

But we also need to realize today that on the ground, the deployment of renewables has not progressed as fast as it should have been. So we do not come from the same situation as we were in twenty twenty two. We have seen progress, but the wake up call is yet there. Again.

We are very, very vulnerable if we rely on the import of fossil fuels, if we rely on energy that we do not control ourselves. And specifically, when we now look to the situation in the Middle East, it's not our war, it's not a war of Europe, but we are confronted with the consequences and if we want to be more resilient, if we want to be more secure, then we have to take back control of our energy supply. And the only way forward, the only future proof strategy for Europe is homegrown electricity, because this is something that we can do.

We have our sea basins, we have also a lot of land on which we can build renewables, so we can provide abundant, clean electricity for our citizens, for our industries, for our companies, and so there is no upside in slow walking renewables that we should be really confident that we can now also use this crisis. Take this crisis as yet again wake up a moment, but also a moment to say, let's meet this moment, let's move forward, and let's really now focus on deployment of renewables and also increase the use of electricity so that we can be more resilient in the future.

So, Tina, from me, it's really interesting to actually have a formal politician. And the reason is I think myself and darn really we come from the finance worlds. We look at everything really economically right, and we share totally your vision that what we need to do is electrify energy, the whole energy system across Europe. And we also think it's if we look back, you had in the seventies, you had two oil crisis.

First ail Chris brit of a shock. The second one was when everything changed and you saw radical change. Obviously, for example in France in terms of the huge build out of nuclear they did. The UK obviously started drilling in the North seas, so you had huge change.

So we look at this opportunity now and we say huge changes needed. But for certainly from my perspective, this huge regulatory change that's needed because the reality is why are we going to electrify our energy system when electricity is so expensive? So I'd be really interested to hear where that you feel that there is the political appetite to actually really make change happen. There in this crisis, there was pulling being the on citizens support the energy transition, and the result of this balling was yes, citizens want this energy transition now to happen, and that is the basis of political appetite to move forward.

I do believe we need more both politicians that they let's move forward because we need to be in a better place tomorrow. Let's also acknowledge that the energy field is not an easy one for policy makers because you have to take decisions now for projects that are very intensive in kapics that need several years sometimes, for example with Regardo Offerin to be realized. So you say, you have one mandate to write rules and then one mandate to build. So an energy politician, an energy policy make, an energy minister, or an energy commissioner is taking decisions, but he will not or she will not see the results immediately, and that is for a politician, not something that is easy in itself.

What does that mean is that you need to have clear vision, not just projections, not just targets, but a vision on where are we in the midterm and on the long term, and then implement policies that go towards that direction. I do not have an issue with baby steps as long as you said many, many, many in the same direction. And that is something that is very specific to an energy policy maker. You are always challenged to address a crisis in the short term, but you need to work on measures that are more in the long run.

It's also interesting to me to talk to you coming from a financial world, because it also points to a dilemma that I often had is if you do big energy projects, intensive kypics that take multiple years to realize, everyone comes to see you and asks you as an energy policy maker to d risk to have legislation that is stable. It gives regulatory stability so that people can go talk to their banks to have the money to get that project financed. I sometimes felt frustrated that that they always came to the energy department to ask for the risking for everything.

So in this crisis that we are now and then the leap forward that we need to take, and I agree with your view, maybe it's this second crisis now that will radically change. We also need to come together from multiple perspectives, and we need to talk more also to each other, finance world, the offtaker world, also the generator site, to see how can we come together and work together to achieve this common goal, a future proof energy strategy, more homegrown electricity. How can we achieve this together?

Can I just maybe before we move away from the political situation. It's also intriguing me to look at one of the things that's really interesting about Europe and complex is that obviously each country has our own interest at heart. And what I see a present across Europe is you've got a country like France which has a view in terms of the future is nuclear. You've got a German view which view to be it's all about renewables to actually we need gas again, and then you've got Eastern Europe would have a different perspective.

So everybody has these different perspectives. How do you think we sort of move forward with regards bringing all this together? First a line on the general consensus based in facts that an energy system driven by renewables is the cheapest one, including also GRET investments. And the reason is simple because you don't have a fuel cost.

So if you reduce the fuel costs that comes from imported fuels, then you will have a radically more cheaper system. We should align at European level and we should embrace the fact that the national energy mix is something that is national. We should not fight it. And I give you a very specific example.

If Belgium would interconnect to Norway, would be very interesting for both Norway and for Belgium because the wind zones are not correlated, so that means that we can help each other with clean electricity yet at any point in time because our wind zones are not correlated. But Belgium is usually connected to France, and Norway has an issue in summer with low water in their hydrocapacity, well they can tap into the nuclear capacity that comes from France. So at one point in time we also need to accept that, yes we have different choices and different focus points, but this cannot divert our focus that it should be driven by renewables.

I've been in so many energy councils when there was a real fight about which is the preferred technology, and people fighting each other on national choices on energy mixes. But really this is water under the bridge because every MEMBA set can decide its own energy mix. But we have targets with regard to climate, with targets with regard to renewable energy. So let's focus on that.

Build a system that is based on renewables. It will be the cheapest, it will save European economy and society as a whole a lot of money, and just don't fight on specific choice in specific member states. So Tina, now you're the head of when you're up, and of course we like wind a lot can you explain a bit the situation of the wind industry right now, because if I look the past two years un Tour twenty five, there was a wind root because there's a lot of stories around the supply chain.

So the vision is that from the outside that we have is that yeah, solar is going youang buster, but whin it's kind of struggling or maybe it's at a costcold. So explain a bit what's the situation of the industry right now. First, I'd like to say that we are absolutely stepping up the task. If we are looking back at twenty twenty five, what happened last year.

We saw in twenty twenty five an increase of wind capacity. Wind is now twenty percent of all electricity consumed in Europe. But the most important number that I wanted to cite here is the billions that we have invested in twenty twenty five. If it's forty five billion in final investment decisions so euros for projects that are final and that we will be built the coming years, that means there is confidence from the industry that indeed they can take these decisions, that there is confidence in the regulatory frameworks that this project that can be built.

It also points to the fact that it's a scalable industry. Germany, for example, is one third of all installations because they had this fast permitting that they worked so beautifully. In Germany, they implemented overriding public interest and we saw the industry followed. Also in the years to come, one third of the installations on shore wind installations will be built in Germany.

So we are generally up to the task. We have the technology for onshore winds, for offshore wind We see more and more auctions coming. There is consensus that we can work with CfDS. We have a market design that is working that gives also this price signal.

And these forty five billions are invested. Why because there is regulary stability, so they can easily go away. If we are now back peddling on existing rules that exist. We need a second leap.

We need to move from crisis to confidence, and we can not do so if there is regulatory instability to come, if existing rules based on which investment decisions are taken, if they are continuously put into question. Yes, we are up to the task and the state of the industry is rather good. We have our challenges we'll see more projects coming. If there is a more predictable project pipeline, you'll also see that costs will come down.

We see a challenge in moving these competitive wind energy. To pass this through to off takers and we s is particularly a challenge with regard to electrification. We need to consume more electricity. We need to electrify transport, we need to electrify housing.

We need to electrify industrial processes for which it's already possible to electrify today, for example, medium and low temperature heat processes. If we meet this challenge one at a time and are able to address this once, then we will see a further increase of wind in the years to come. Maybe we just dive a little bit more into the numbers, because if I look at the numbers for twenty twenty five, if I just look at onshore wind, it looks like you're certainly at a ten year record in terms of installations.

I must have been. I'm a little bit surprised. And the reason I'm a little bit of surprise is because does you generally feel that there's resistant to these larger turbines. Explain a little bit where that numbers come from on shore windy.

Is just a very cost competitive technology. On Shore windys and ninety percent of all the installations that we have today, and even if they're SketchUp by offshore winds, the ratio will remain more or less the same. It will be eighty percent of onshore and twenty percent of offshore. There is resistance to these higher turbines, but this is resistance that we need to overcome, and we need to build confidence that energy transition is supported by citizens.

Because if we reap ower existing on shore windy installations, we can reduce the number of turbines, we can double the capacity, but more importantly, we can triple the generation. Let's look at Italy. Italy has thirteen gigawatts of onshore wind installations. Six gigawatts will be having a lifetime of twenty years between now and five years.

So if we focus on these six gigawatt of projects, if you can decrease the number of turbines, double the capacity and triple the generation, the Italian energy system will be in a far better place. Italy is so gass dependent today and we see this is in an electricity prices in Italy today and the only go to way for Italy is to increase renewable electricity in the energy mix, and they can easily do so if they have a dedicated approach to repowering. What does it look like a dedicated approaches specifically with regard to permitting.

These are existing projects That means they are already in a place where there has been looked at environment for example, how close they are to where people lives and for ands. For of course we will be adding capacity, but let's then do environmental permit for the capacity that you add, and not treaties as completely new green field projects. Onshore wind is a beautiful technology and it's often underestimated what can be done with it. And you know, by the way, I be one hundred percent in agreement, which in terms of onshore wind, I also would share the vision actually that what we need to do is repower all these old turbines et cetera, et cetera.

And if let's take the case of early movers like Spain, Germany, Ireland, you say, okay, you take all these onshore turbines and you upgrade them, and then a sort of begs the crystom do we need offshore wind at all we do. Spain is a beautiful example what can be done with onshore wind. They basically repower their whole system. But Spain with regard to offshore winds may be more difficult situation off sure wind, it's very deep waters in the Mediterranean, so that's a beautiful case for floating.

Floating very expensive today, but it's an innovation field. So we do hope that we see the first offshore wind auction in Spain soon, but that will not be from the beginning of very big projects. But in the North Sea, for example, of your wind is very easy, very easy, is maybe a little bit too strong, but it's no regrets, it's an absolute can do. You can build the interconnections, you can interconnect it.

You can do this in a hybrid way. You can interconnect so different countries with each other. There is already a lot of offshore winds the North Sea, but also the Baltic Sea really can be the power engines of the North Sea has a very large energy intensive countries like Germany, like Belgium for example, so it's beautiful add on to the energy system. Specifically, if you have your mesh grits, if you interconnect more.

Let's look at Poland for example, it's very ambitious with regard to off sure wind. Poland will be across a Baltic Sea, an emerging leader. They have done their first auctions that are building today offshore wind and we also see in our outlook it's the third market. You have UK, you have Germany and then you have Poland.

They have seen in the northern part of Poland a lot of investments in supply chain. They show in reality and if you do an auction with a CFD, the project is being built that the supply chain follows and it's creating a lot of jobs. But Poland with regard to onshore winds, they have basically no installations also because of a distance rule. That's something that really I cannot understand.

In a country like Belgium, which is so densely populated, we do have onshore wind. So if Belgium can build onshore wind, then then certainly Poland can do it. So it's also important for policy makers that they do and efforts, consistent efforts to have both technologies, both onshore and both offshore, that they develop ways to have them both in their countries, we. Follow absolutely what you say.

But at the same time you have country like Sweden who I've decided to cancel all of the off shot wind and I can tell you why. I mean, it's the nuclear looby. Period is nuclearloby. They say off shore wind is too expensive, so let's go nuclear, and two months later they say, oh, can we have a lot of subsidies for nuclear.

Those people you can't say it. I can't say it. They are nefarious because you can have both. And the same speech have been used in the US to block off short wind in the northeast and in Sweden.

So I'm sorry to say Swedish. I love Sweden, but here this is a massive, massive stupid move. It's ideology. And when you have ideology, ideology is expensive.

You don't want to show wind. Okay, people are gonna pay if you don't develop off shot win in Sweden. Okay, sorry, that's. My Errand it's set if ideology comes away.

And it's really something that we should be very conscious about. What do we need as Europe today? As Europe, we need Europe to be a place to invest. Why because people need jobs, people need to pay their rents and so on.

So we can beautifully combine the needs for having access to homegrown electricity with Europe being a place to invest. So this is not about ideology. It's about feeling safe not to worry where electricity is coming from, because we build it ourselves, we control it ourselves, not be worrying about the price because we are dependent on someone else, and we know if our system brands on our newals, it will be the cheapest one. We should really also call it as it is that there are people that make this about ideology, and when making this about ideology, it will also hurt us as a wind industry because basically we have to put the money on the table to build this project.

Forty five billion twenty two twenty five were put on the table. We cannot afford this if it's purely about ideology. We are an industry. We are not a political party.

We are not a lobby group, We are not an NGO. We are people that decided that our business is wins and we put the money next to it. So give us stability and give us decisions that are grounds in facts and not on mere beliefs. Well, Tina, thank you so much for this message of resilience and fight because.

We need to fight solutely. But also I like your positive vision and how wind integrates with grids. We need more interconnection, we need more collaboration, and you know that we are working on this crazy but doable project of building an interconnector across the advantage because that's the way the two forties needs to work. We need to extend agreed as much as possible.

And if you look at the economics, they are like extraordinary because you took non correlation here. The non correlations are absolutely perfect. So it would strengthen the nausea Basin and Canada together. So I saw that when you hope a few days ago in Madrid with a great success.

So congratulation and keep on the great fight. Absolutely, and I consider myself being a happy warrior to do this fights. In nineteen twenty six, Churchill already said that you cannot afford to look back, and that is I think what drives me also in this job. We have to look forward, we have to imagine how the future will be, and we cannot afford to look back.

Well said, thank you, thank you very much for covering of the shows. Yes, thank you for having. Me so Joab, Well, we thank Tina for coming on the show. And I'm always sometimes frustrated after I took to politicians the past lows the fixed target and the industry the investor will follow, and they don't understand that passing laws that easy part.

Yet the hard part of the execution. Right it is in the short term politician can only act on prices. We have our energy crisis right now, so okay, they're going to throw subsidies, and the amount of subsidies put on the fossilful sector really upon the puke or the tax. They actually on price, but volume, that's a one.

It takes time, takes years. I understand politician one short term result. But we are industry people who are financed people. We need time to enact.

And I can tell you we're working very hard. Absolutely. I mean the capital is available and as we've got huge competencies. Is an area in Europe and this whole area so which I know.

Yeah, I want to share with you a funny anecdote while I was at paneticsis more than twenty years ago we were launching the first debt fund for wind in France. It was one of the first in Europe. It was in partnership with the government via the environmental agency called ADAM. So we had structure a kind of mezzanine where the ADAM would take the first loss and then private banks would finance the senior trunch.

And that was very successful. But unfortunately the good idea turned a bit of a disaster because all the developers were pumping up their P fifty and P ninety and I think the fund ended up owning a third of top wind firm because equally went to the old Anyway, Nadi Sis and Adam we organized a seminar for the industry to explain the strategy. You present the fund, give advice and so on. Tips were one hundred and eighty five participants, so ADAM got very pumped up and decided to organize their own seminar, you know, with the list of people and to follow up, and only twelve people coming, so they called us.

They were really pissed off, and my boss at the time told them laughing, last time we came with the government money to cash out, everybody was willing to support her pontification, but now you want to lecture the industry with no money, so nobody's interested. Anyway, wind. I think what a conclusion all over the is wind as a future and an important, very important role in Europe, whether it be from the electricity production side or also from jobs perspective and production.

You know, we've Obvioside got the best as the Sammans of this world, etc. Overall, I think she was excellent when we talk about repowering. That's how a lot of new wind is going to be developed because these are the best sites and they already connected. So repowering found you a superb I think I'm floating she's totally delusional.

Is it's one of the technology that is an engineer dream and a financi nightmare. I think i'd agree with another a great totally. You know, like I'm a technologist at the end of the day, and for me a technology to be scalable, you need to be producing millions of us and you need to be doing it again and again and again. And you ain't doing this.

When it comes to offshore floating wind, I can't. It's what that means is it's very difficult to get the cost there it economic. At the end of the day. The success of the North Sea and the Baltic Sea is shallow waters very good win regimes, but especially a supply chain.

You know, people who are used to go on the sea and you know from the oil and gas industry, right exactly exactly. I think the attempts in the Meidanian are going to be tougher. You get the wind, but it's deeper. I don't think you have the supply chain.

The last point I want to make, and I think that's very positive for us, is that you really get the fact that you will need more interconnections. You know, there's always my message. So our pairs were with batteries and wing pair wears with transmission. Yeah, ye're absolutely right on that.

All right, my friend as ever, could have a good conversation. Yeah, and Joe, I'll talk to you next week. Look forward to Thank you for listening to Redefining Energy. Don't forget to rate the show and subscribe on Apple, Podcast, Spotify, or the platform of your choice.