Why Would A German Battery Agree To Switch Off? - Green Flexbility

I'm your host, Ed Porter. Welcome back. To transmission. We've seen 800GW of grid connection requests sitting in Germany's queue. Nobody expects it all to get built. So grid operators are now filtering out who's serious. Getting in the room is just the start. The batteries that make it through. Face new hurdles from ramp rates to flexible connection agreements once connected. Do you sell that flexibility away in a toll or do you stay fully merchant? My guest today and you'll hear there are two are Leandra and Christina. They plan to build and operate batteries in Germany at green flexibility, and are responsible for some of the country's earliest flexible connection agreements. This episode looks at what it actually takes to get a battery live in one of Europe's most congested grids, and if you want to see a forecast of what your assets are worth in Germany or track live benchmark data, head to modo.energy. Sign up for free. Take seconds. Let's jump in. Hello, Christina. Leandra, welcome to transmission. Thanks for having us. Our pleasure. And let's get straight into it. So what does everyone get wrong about building batteries in Germany? I think that's a great question, because if you're hearing around what the most attractive market is in Europe, Germany quickly comes to mind. And on PowerPoint it looks great. But if you're in the market and seeing the realities, trying to build, operate and actually plan the project, there's a lot of uncertainties around the grid connection point. So starting from access to the grid connection conditions to then actually operating the assets. So there's a lot of balls up in the air and that a lot of aspects are still falling into place, and the rules of the game are still being defined. So I think what looks easy on paper is actually in reality a little bit more complex. And does that extend from just the planning and sort of financial planning of the battery? Does that extend into the operational side? Yes, absolutely. So a lot of the operational conditions already kind of come early into the discussions. We're trying to manage different stakeholders, be it the grid operator who essentially gives you access and also defines how you can access the grid. So you already need to understand a lot of the operational aspects before you actually finance the project. Okay. Thanks, Christina. And then Leandra coming to you like what doesn't make it into that press release? Yeah. I think what's always crazy is really the the details. Right. You really have to remain flexible. And I think what Christina just mentioned is super important as well, that once you have all the relevant input for conducting an FID, from there on, it's typically rather smooth. Of course, there's some last minute firefighting on minor details here and there, but problem solving skills and lots of interdisciplinary teams really help them. But generally, having the FID prep properly understanding all the conditions is super important to then actually implement a really stable technology because from construction to commissioning, everything is standardised and that typically works as expected. However, what doesn't make it into the press releases is the huge amount you have to put in of work just before actually going live then. Yeah, it's one of those sort of famous things that gets said about batteries. They're kind of like Lego blocks and you can just drop them in. In reality, there's a lot more work to getting a battery on site than just sort of plugging them in. Um, maybe let's dive into some of those details. So, um, Christina, the the FCA problem, a flexible connection agreement. They are intended as a solution to Germany's grid constraints. Are they working? That's a great question. I think in theory, I. Definitely a great way to get batteries on the grid, because it's something we see as well that when we're talking about operational realities and the, let's say, the incentives the battery gets on how it actually operates in the grid are based on a really aggregated symbol or signal in the market. So the price signals we're seeing doesn't consider what's actually happening in the regional grids where a lot of batteries are being built. So the FCA's kind of help solve that mismatch, but also in terms of grid buildout, ensuring that maybe batteries can get onto the grid before the grid buildout actually happens. So in theory, a nice mechanism to do that. I think what we as a company started on very early is actually engaging with grid operators and discussing this problem, this mismatch. And we actually started an FCA before that term actually existed in the market. So our first asset live now over a year has an FCA from the very beginning. And it was it's actually quite a funny I guess picture to always use because the batteries in the south of Germany, near the Alps, where there's ski season in the winter and often snow isn't on the Alps yet when the ski season opens. So what we understood is that in the winter, all the ski cannons go on at once, and there's a lot of load on the grid. So we understood from the grid operator okay, in the winter, maybe the battery needs to behave a little bit differently to kind of help support the grid. So we added rules to our grid connection to be able to solve that problem. And that's where FCA's are trying to jump in, and I think we had the advantage of early engagement to understand what problems are actually trying to be solved and finding solutions how to do that. This is our first mention of Ski Cannons on this podcast, so it's good to get it in there. And what and what is that flexible connection agreement? What is it doing to help the grid meet the demand of those those snow cannons? So what's very important for us, and we want to have enough operational flexibility so we can actually serve different markets. So we have a rule in the contract that gives us a day ahead signal where the grid operator can go in and say tomorrow, I know ski season is going to open or the the weather is kind of able to produce snow at this moment in time. So they give us a signal the day ahead, um, saying and limiting the power we can put onto the grid and to make sure that we don't add additional stress during those times. And we implement that into our algorithms on the trading side to ensure we meet that criteria on the battery doesn't add additional stress. Okay. So you're you're sort of preventing, um, too much demand going onto the system at the same time as the snow cannons, but then you're also. Is that just a sort of an instruction from the system operator, or is it a financial thing as well? So are they instructing you through like a price premium or is it just you? You cannot do this. No. Um, it's not a price component. So it's really just an operating rule that we add on top of the normal operation. I think what's important to know about the German market as well, or I guess energy markets in general, it's quite a regulated environment. So it's not very easy to add these kind of mechanisms where a grid operator pays a battery operator just because they're very limited on what they're allowed to do. So all we're seeing today are not with financial components. Sometimes there may be on the grid connection costs a discount that you're paying because the grid operators understand I don't have full access to my grid access. So that's the only aspect we've seen. But generally it's a rule that we try to define together because that way we can help kind of translate what our needs are into the grid view, and we understand the grid view better. And it's just a rule that's in there. And we do it for the sake of the grid, because we want to be part of the solution. And we understand this mismatch. But there is no financial payment that gets paid out when we act like this. And that could be quite a win win, right. So like if you're able to get connected sooner because the grid operator now doesn't need to add in additional substations or additional lines, if they're happy that you're going to behave in the way they want you to, then they can get you connected earlier. So that feels like a win for both parties. Certainly it's important to quantify it, right. So of course we had to understand what exactly this would mean for our revenues. That's what we did. And only with considering that in the business case we were able to finance this asset and then get it into optimisation. It's now been operating for one year. So I can say that it worked out the way we expected it to. You're happy with it, but it feels like FCA's have been on a bit of a roller coaster in that your one was clearly quite well defined. It feels like. Then there came many options in terms of the look and feel of FTAs, in terms of different ramp rates or different restrictions at different times. It now feels like the market is kind of maturing a little bit, and we're starting to get more consistency in those. FCA's are you starting to see that or is that is that kind of just just rumor mill? Quite the opposite I'd say. Okay. I think at the moment the market is shaking up quite a bit because some of the really large DSOs are looking into bringing some standardisation in that is not so aligned with what batteries actually would like to see in the FCA. And we're currently trying to also bring our perspective in a bit more. So we've developed a blueprint as a company, um, together with a DSO actually, that has battery life in their grid, to really try to put in those details on what we think might be a good compromise, because it's a lot about being approachable and being able to understand each other's problems and not about putting solutions on the table, but really listening to each other in the first place. And that's something we're trying to solve with that. Okay, so to pressure you for an answer, our FCA is working. Once you have discussed them for months. Yes, in the first place or the first draft we see. Typically does not work fast. No, it's a lot of effort to negotiate them. But you'd rather have that than not get connected for sure. Yeah okay. And I would say we don't see unconstrained assets going forward. So if you do get an unconstrained asset, that's quite a unique thing in the grid. And we don't think there will be unconstrained assets. So we often even proactively kind of go to the grid operators. We've also been involved where they have a first draft and they say, hey, you have a lot of experience with this. Can you challenge this? If you look at it before it goes live? And that's actually something that applies to all batteries in the grid. So we're doing a lot of work on that. So we have 15 FCAs that we've now negotiated and agreed upon and some are already alive, some are in construction and others are financed. So we think for us it can work. Okay. And that level of flexibility in the in the 15 what's what's the variety in that bag. Huge huge. Yeah. Yeah. But all the quantifiable. Right. And that's, that's I think the one thing they have in common. So we're always able to quantify them and we're always able to plan for them, because you need to know what the operational constraints will be in like 15 years time, for example, for in order to get financing for an asset. And that's something that some grid operators first need to understand that we also privately finance assets, know subsidies and so on, which is quite unique in the German power market as well. Right? Lots of subsidies have been around in the past, but not for batteries. And that's something we had to educate a bit up on. But now I think they are very different, but we understand all of them. We can choose optimisers for all of them, but it's quite a challenge and lots of internal competence we had to implement there. Yes okay, okay. Sounds like it's been a long story, but sort of getting there on FTAs and hopefully the industry follows. So Leandra, coming to you, you've just commissioned your second large project. Walk us through what the six months prior to energy actually looked like, what broke what surprised you. And when you do the next one, how are you going to do that differently as a result? So we're actually taking life I referred as it currently so within this week. So I can really speak from from. This is the 7th of July. So it's actually coming soon. Live life uh insights into commissioning at the moment, which from my perspective released the toughest phase. So the last month before actually being completely under under commercial operation is the toughest phase for sure, because it's a lot about integrating the last software pieces. Right. And from the hardware perspective, it's all smooth sailing. So of course you might have a warranty claim or something that needs to be swapped in the beginning, and that's fine. It's all standard operations. What's tricky is always integrating the EMS, the optimiser, all the communication infrastructure on site, which is something we've done in the past, so we're able to do it. But still it's always a challenge because the grid operator has a say in it. And just for our listeners in EMS, what's that? It's an energy management system. So essentially the software that controls the asset. So for example you send a dispatch signal and then for the asset to actually translate that into something physical, that's what the EMS does. And so you're putting on the EMS and you've got the optimiser and you've got the equipment that's there and you're sort of testing that, and that's all coming through as you, as you would expect. So you're then saying the part that then takes the time is, is sort of running tests with, with the grid. Is that the part. That's that's hard. Also with the grid you also have to certify your assets. Right. So we're still in Germany. So lots of standardisation, lots of certification everywhere. It's a German thing. Wonderful, wonderful. Um, so of course there's some certain requirements you have to conduct. And then there might be some relevant aspects, for example, for your FCA that you have to test. So there might be a special extra API for sending grid constraints through. And that has to be tested as well. So there's always. Like if the grid sort of says sorry to interrupt, but it says if the grid is constrained, you'll receive a signal perhaps the day before that says please don't export at this time. And then you need to make sure that your optimisation isn't pushing out right energy at that time. Right? Yeah. Okay. And maybe just then going on to like the parts you were saying were really difficult from software perspective. Obviously you have the tests with the the system operator. You also mentioned that there were other software parts that you were finding hard to test or are relatively more difficult. What's the what's what's happening there behind the scenes? I mean, generally we have test schedules, right? And we know exactly what we want to test. But during commissioning, there's always something that doesn't work. Like it's it's normal that there are small hiccups. And you need a lot of problem solving skills from so many different departments. And I think that's exactly what the challenge is. So really have the project team to have all the ownership. It's super crucial there because they can solve the problems best, right? They have the operational expertise and then having the engineering team, the technical asset management, commercial side, but also the optimiser, maybe the DSO actually be able to communicate together and solve the small issues that we might have somewhere really is then the crucial part. And that's just lots of effort. And from the outside it feels like, um, the more parties that are involved, like, the more potential there is for stuff to sort of fall between the cracks or there's more interfaces. Is it is it easier almost to have just like one EPC, one OEM almost doing everything, um, on site or like, is it possible to, to do something with sort of multiple interfaces, multiple parties on site? It certainly is easier when you have like one EPC or especially one EMS provider, one maybe battery manufacturer on site, which actually is the case for us. So our technical like hardware setup and also the EMS, that's completely standard for us now and we're taking life the third asset with this exact setup. Now that certainly helps. And yeah, still there's typically new partners, at least from the DSO perspective. So there's always some some new stakeholder involved. I think it would be trickier if there were like 20 new stakeholders for every single site. And maybe taking you out of that, sort of like, uh, crunch time of the month before going live. Let's go all the way back to your final investment decision or FID. Um, many of these battery projects coming through in Germany would come through with a toll in place. But with that toll, you are also sort of passing over revenue to someone else who's going to sort of de-risk your project, but they're going to take a slice of the pie for that effort. Um, do you think that that tolling market is working as you'd like it, as you'd like it to? And does it need to change? I believe it works because we've seen quite a few press releases about it. And I think it's really, yeah, kind of matured in the last six months, I'd say, because previously we have barely seen any, any tolls being signed in Germany. And that's really shifted. Um, I think partially because there was some standardisation as well. Like it was really new to contract assets in Germany. And historically it's been a fully merchant market. So I think since 2018 when the first critical assets were live, it really was just merchant. And that's kind of the standard way to do things. It's also where all the expertise lies. But now in tolling it's gotten better. And the Industry association of the German battery industry actually also started to put together some, some templates for the contracts. We've also been involved there to help standardise some of these aspects of the term sheet, for example. And that helped I think. I still believe, however, that like the prices and the risk premium you pay on other aspects and market risk once you're told actually is tricky. Plus, many offtakers are utilities which inherently are super conservative. Right. And they do price on like a P95 scenario. So like they to put it simply, they just want to lose in 5% of the scenarios that they look at. So in 95% of the scenarios they actually make a good deal, right? And then you really have to ask yourself if you build flexible assets, if you don't want to be somewhat flexible on those last five. I am sure an optimiser will be listening to this and saying, no, it's not that. It's it's far. It's far closer to the line. But maybe, maybe a more interesting question than sort of like where that line is, do you like. Do you like the tolling structures? Like if you're given free choice of where to go, would you go and get tolls for your assets today, or would you look for another route to bring in revenues for your assets? Yeah, it heavily depends on the price for sure. Regarding whether we're tall or not. So for us it does not make sense if the premium if the discount is too huge. Um, generally we also see quite a shift in the German market at the moment. Right. So new revenue streams coming up in Asia, for example. You also did a bit of research on that and also the capacity market coming up. And that's super interesting. Long term revenue structures that can be contracted via the government or via the TSOs. So if anything, that might also be an interesting thing not to give away today, but maybe have a bit of patience, look into those revenue structures and then have them maybe be your baseline might be a really considerable alternative to tolling today. And if you're a financier listening to this, right, if you can get a 15 year capacity market agreement or an inertia contract that's slightly longer, like those, um, those terms, you can you can gear quite high against them because they are backed by, say, German government. Right. Um, which is quite nice. Now, the downside is that they don't tend to be a huge slice of the revenues, but you can gear quite highly for, for that portion. It's a baseline. It's a baseline. Okay. All right. So and well I don't know whether it's public or not, but uh, your first assets uh, are you able to tell us whether they're told or merchants. Fully merged. Fully merchant. Okay. That's that's that's what I like to hear. Um, because I think it's the most interesting. Right. And if you, um, I was in a conversation yesterday, somebody was asking me about how do they de-risk their battery entirely. And they said, well, look, if we if we put a toll in place, like we still have like this risk about grid connections, what happens? The grid connection goes down, you go, well, look, if you if you don't want any battery risk, you could just sell the batteries and do something else. Like like at some point if you own batteries, you should, you should, you should hold some risk somewhere. And you should be really careful with what risk you actually think you lose when you're told. Right. It's only market risk and a bit of performance risk of your optimiser. But especially when you have like a market to market penalty system in your structures, you have a huge unavailability risk from any reason. Suddenly in your day, the grid connection goes down. How do you resolve that? Yeah, yeah. There's funds. There are some fantastic episodes on tolling in the past of transmission as well. So if you want to get into the weeds of of tolls then then do check those out. And I think to add on that we only build and operate batteries. So we went into the market saying we see the gap and we see the need for batteries. So we really believe in that flexibility business case, which is also one of the reasons why those assets are also fully merchant. And the market in Germany is still in, as we would say in German, in the kid shoes. It's not yet a grown up. So we're still in that ramp up phase of the market where we don't have a lot of batteries, nearly three gigawatts today and a lot more renewables on the grid. So there's still a lot of room for batteries in Germany. Okay. We're sort of in the kids shoes. Yes, I'm learning. The right fundamentals. With the right fundamentals. I'm learning lots of German expressions. We had Philipp man on and he was telling us about through the back of the chest into the eye. I think it's a German expression. I'm learning all sorts of things. So this is this is great. We're going to switch a little bit off the fiddly process. And Christina, we're going to come to you. You developed a model called REGIOlink which is a framework for integrating best into distribution networks in a sort of grid supportive way to help the nose. What problem is that solving? And is there an appetite from the system operators to say I want this? Yeah. So as we mentioned a little bit earlier in our first project, we already looked at the grid site, I think all of us. And when we found that the company, we have a background in the energy space. So even I started my studies with flexibility. So we already knew a little bit of those problems that we might have on the grid today. And we always said we want to have a be part of the solution. So that's kind of where this all of these exchange and discussions like, um, grew out of. And within that, the types of problems we saw that are being solved is things in the original grid, like voltage control, um, or even the fact that today is assets that are doing ancillary services tend to be on the higher grid level. So a lot of dsos in Germany actually have never had an asset in their grid that does ancillary services. So they don't know kind of the pattern of these assets and how to understand and put them into their grids and operation. And, and batteries are just super flexible. So if we look at today's general, if we look at a day like today where there's a lot of sun, you can predict how the PV generation would look like. You can generally predict load in terms of there's a pattern, but batteries are there to be flexible and jump in when the grid needs it. So that's something that's very difficult on the DSO side, who are coming from an old energy system that was a lot more easy to predict. And now we're all throwing a lot of batteries onto the grid. So helping them understand how the battery operates was kind of how we initiated a lot of discussions to say, this is what the optimisation schedule looks like, as well as why the battery operates the way it does. And then understanding on their side, what does it mean to have voltage control or what kind of timing do they have to do their own grid prognosis in terms of how long does it take to understand when there's going to be constraint and their reaction time? Yeah. So these are kind of like the bases. And then as well understanding what kind of grid am I in? Am I in a grid where there's a lot of generation assets a lot of renewables. Is it a grid where there's a lot of industry? Because that also changes, like the pattern in that grid and where their constraints are already today, as we know, a lot of grids across Europe are constrained, and we want to understand that problem behind them. And then we developed a link to kind of standardise the way we look at these different grids and having a solution for solving those problems. And we've kind of evolved REGIOlink further, which Leandra mentioned earlier. We have a blueprint now. So we are actively approaching a lot of grid operators, even them approaching us. So it goes both ways to say, hey, I want to understand what you've developed because they see the benefits something like an FCA could have. And that's essentially what's behind REGIOlink. Then in the end, we have an FCA in a contract that works for both sides and helping them develop a solution for their grids. And we do think there are aspects you can't standardise. You can't standardise everything in the sense you would have a cookie cutter system system where one FCA works across all of Germany just because, as I've said, the grids tend to be very different, and the way they're being managed or the way today they are, constraints in the grid are very different. So we think you can't have one solution for all of Germany, but we do think there are certain aspects you can standardise in terms of what both sides need in order to also have a bankable project in the end. And that's where the whole REGIOlink problem or solution. Kind of out of the problem, where it evolved into where we are today, to really have a framework with which we can kind of shape the way the market views FCA's as well. And this is really interesting, right? So, um, in Germany for transmission network operators in an 800 plus distribution network operators, if you look at grids like GB or Ercot, so Texas or Australia, you can look at individual assets and you can see how they're behaving. And so sort of anyone can start to picture like how particular batteries are behaving. You can start to get an idea of how they're going to trade in Germany. Obviously that information is sort of more hidden away. This is sort of part of the solution, of course, but do you think there's sort of a something like a shared database that needs to start existing, where for the 800 plus distribution network operators. That there can be something that exists that allows them to better understand how batteries behave. Or is that like, should that remain hidden away because it's a little bit of your secret sauce? Um, I'm not sure if a shared data space would be the solution I would look for. I think what we also see in our blueprint is that there is a sort of responsibility on the grid operator side. We've seen a lot of proposals as well, where there's a suggestion that the battery owner and operator predicts what the grid needs, and we just think that's not our responsibility because we don't have the same knowledge or experience in terms of the grid itself, and B that certain station substations, understanding what that looks like in detail or even understanding any sort of maintenance in the grid. So there is a certain responsibility on that side in terms of understanding and being able to, um, forecast their own grid. I don't think that needs to be in a shared data space for everyone to view. It is a very sensitive topic in Germany. We do have a very safe grid in terms of it's super reliable. We don't have a lot of blackouts, but cybersecurity is a real concern that a lot of the grid operators say, I don't want to share all my data. And I understand that. And for us, it's just having one data point, maybe on understanding when is the constraint and what do you need. Something like that could be in a shared data space. But we don't need to understand all of the grid. We've been asked many times to actually provide like an annual schedule of a battery for like so many grid operators. And we've always pushed back on this request because what happens when you provide data, right. They do their own analysis and the result will be nope, that's better. It does not fit in our grid. Yes. Been there than that. And the issue is that then when you actually look at the grid data, we can actually then overlay or like look at the max power that a battery actually has installed. And we will see that if we maybe constrain our battery in like 10% of the hours in a year, we will actually be able to not put any additional stress on the grid in crucial times, but still be able to like, finance a really good business case, because maybe these 10% only translate in like 5% less revenues, because there's of course typically quite a bit of a correlation between market prices and grid situation. This is this is the this is the classic thing. So is a battery going to be responsive or is it going to be sort of non-responsive. And if you just provide the annual profile they'll treat it as sort of non non-responsive. And they'll try and squeeze it in and they'll go oh it does it, it doesn't fit. So it's not working. Whereas you're saying look it doesn't really matter what it did last year. Like what matters is that it responds to signals. And tells us what we like to do tomorrow. Right. We can stick to that. We have to limit it. There has to be a maximum in a year because otherwise we can't finance it. But usually it's like 1 or 2 small boundaries that we need to send. And then we be able to operate under pretty much any constraint. Okay. Positive stories so far. Christina I'm going to come to you. We have Christoph Ostermann. Your CEO has said that the German project development market is heading towards a shakeout, with grid operators starting to filter out non-serious developers. Where do you sit? And does that feel true? I think it does. I think we recently, a few months ago, saw a shift already in the way I get access to the grid. So until today, there has been no hurdle. Anybody can place a request on a grid access and try to build a battery there. So that meant the market was quite crowded and quite full. And the TSOs. So the four TSOs in Germany introduced a new process based on maturity criteria. So and so to date in Germany we had a first come first serve. So you just had to make sure you were the first in line to get that grid access. And that led to huge stacks on the grid operator side of multiple gigawatts. I think we were even at half over half a terawatt of grid connection requests that obviously the grid doesn't need. And on our side, we don't just develop, we acquire projects as well. So we see a multitude of projects, different degrees of maturity. So this new process in the sense of it's not only you're the first in line, but also the first to be ready. So in terms of do I have the land rights, do I have building permit? Do I have the financial capabilities to actually put that asset live is something that we actually welcome, because we also selectively pick our sites and also make sure the municipality is on board the. The landowners are on board. Very important stakeholders that maybe sometimes get left out of the equation when developing. And we think that that helps kind of clean the queues because they are too full. And we are already seeing that today that some players are leaving the market also because it's just massively complex understanding what the grid fees mean post 2029, what are these? How do I finance a business case that is just a very complex market, and that's to have a long breath and kind of understand and get through all the nitty gritty also takes some time. So I think there is a let's say, cleaning of the queue happening. And we're also happy to work together with other developers and we call it elevate. So we tend to like to acquire projects that are ready to build. But the market has very varying definitions of what that means. So we also come in and help kind of tackle those new processes, because often it means paying a down payment on the grid, which can be quite expensive for many players who maybe don't have that, um, let's say capital laying around to be able to do that. And you said half a terawatt, right. I think I think the last number I heard was 800GW of grid connection requests in the German market. Yeah, it's kind of a crazy number, right? It's almost like totally non realistic. And yeah, and I think it's also not only educating grid operators. We talked to a lot of politicians and they come here. But the battery market's doing great. Everybody is like interested in investing. It's not doing great if you add 200 or 300GW. Exactly. And just also understanding a lot of those pipelines just are overstated. How many batteries will actually come onto the grid, I think is a good question. And everybody has the greatest pipeline out there, if you ask them. But how much of that actually materialises, I think is a question for the next months, actually. Can you also execute on those projects? One thing I quite liked on the the sort of scoring framework for bringing projects online, was that there was an additional sort of score that was allocated for co-located projects. I think that's quite an interesting angle. Um, when we're starting to think about how do we how do we run these systems with effectively greater utilisation on grid connection points? I quite like that the the German system was thinking about that. Is that something that you've seen and are you sort of thinking about how you could look at Co locating some of your projects? We've seen a lot of it in theory. So I think using grid access points more effectively obviously is a good thing. And it takes time to build out the grid. We don't maybe have enough grid connection points to date that in theory, it's a nice idea. We see a lot of complexities, actually, if you look into the reality of that as well, even for grid operators, it doesn't mean that it's easier to calculate what the battery is going to do. So there's not generally, let's say, a favour for a certain type of setup. Maybe a battery that's just behind the renewable asset is nice because it's easier to predict. And I think some of the market will move in that direction. I don't think we will ever choose standalone over co-location or co-location over standalone that the two exists. I think other markets have that as well. And from our perspective, what we've learned through Linq and our discussions with grid operators. Not every grid constraint is going to be solved by putting the battery next to the renewable asset, because maybe it's not the solar feedin that's the problem. And I'm inherently constrained by the renewable asset already as a battery. So I do have a little bit of less flexibility in my market access anyhow. So from our perspective, maybe it's also a little less attractive from a business case perspective. So I think there's different aspects that need to be considered when trying to discuss what's better for the grid. And I think in my eyes it would be good if like both have their rights in the market, because any asset that we constrain for the grid side is already helping, maybe push back grid buildout a few years. I don't think we can not have no grid build out, but at least you buy some time. So you're open to it. But you wouldn't say you wouldn't just sort of run co-location everywhere. And it's obviously on a project by project basis and maybe, maybe just to kind of carry this on onto sort of one sort of more sort of regulatory question. But it's a big, juicy one and it's a fun one, which is around price zones in Germany. So, um, there were rumours of Germany looking to adopt a zonal market. And you can kind of see why, because the parts of Germany operate very differently. You have wind in the north, you have solar in the south, and then you're trying to resolve this kind of increasing constraints that are coming through in the system. So what is your feeling as a battery operator? Would you be happy to see a price split come through in Germany? I think from our perspective, um, yes. I think even with the grid fee structure now, there's an opportunity to also change the system. And we always brought ourselves in with a lot of the problems. Maybe an FCA solving is actually due to the fact that we don't have regional price signals. So if I can give my battery a signal that's more localised, that's helpful and is also a way for us to actually adapt the battery operation more easily because there are certain restrictions when we're talking about really good friendly, where I proactively operate my battery in a way that helps solve the congestion, the high opportunity costs, and maybe we can't do that for free. And so it would be helpful to have a price signal that's a little bit more local, um, just to solve a lot of those constraints. And that's exactly what Leandra was saying. Right. Which is that if, if you, if you, if you take my battery and you treat it as like a static thing, a static profile, then it's not going to look great. But if you understand that actually I've got the flexibility within it to react to dynamic pricing or to react to a specific signal that comes onto the grid, then I can I can react in a way that can help your system to run at a high utilisation level. Let's say. That correct. And I think our politicians made it very clear they don't want a zonal price split. So when we were engaging in the whole grid reform, we said, well, maybe this is an opportunity. If we're not having a nodal pricing, then maybe we have a dynamic grid fee that gives a locational signal to give to the battery. And it's quite interesting that that sort of dynamic grid fee looks to be coming through. For me, it seems like very similar to a nodal system that looks on first pass to be rejected. Um, but it feels like we might be getting a more locational signal anyway. Yeah, I think a lot of people have said it's like nodal pricing through the back door and that you kind of push it in. I think a market will always be better. And then a price signal that said day ahead, because that's the current understanding review of the regulator, that it is a signal that's sent before the day ahead. Markets closed. So generally I personally think markets are better able to regulate. So I think you would have a more efficient market. But at least it's better than what we have today, right? Yeah. You can't run these national dispatch systems in a system where you've got batteries and all kinds of flexibility that exists around each of the meter points. I think a lot of grids are starting to understand that more and more, uh, which is fascinating. Let's come on to our final question, though. So let's come on to a contrarian view. Leandra, I'll come to you first. What's a contrarian view you hold about batteries? Germany, whatever it might be. It may actually be what we discussed first. Right. So all around our commercialisation strategy. So we, as mentioned currently run our assets fully merchant. The two we have operational. We are a bit hesitant regarding tolling further assets. Um generally that is because we really build like flexible assets for an inherently volatile and super deep market in Germany that builds up onto strong fundamentals, and we don't really want to give that momentum away. And I do believe our other peers that they also don't really want to do that. But luckily, we're in a situation where we actually are able to manage to get equity and debt financing for merchant assets. And I think that also thanks to the banks and also our equity partners really trusting us and our abilities to actually manage those assets in the operational environment, and also them really seeing the risks of contracted revenues, but also the opportunities that lies in a merchant super, super attractive market at the moment. Right. We're speaking at about 200 to €250,000 per megawatt per year that you can currently make. And of course, we are aware that we can't be making the same amount of revenue in five years time, but that's priced in. And still the revenue in the business case still looks a lot more attractive than actually giving away all those upsides. Um, you always have to ask yourself if you actually de-risk something, who's actually benefiting from that? Yeah, because the conventional logic would be like, I the the best way of operating would be de-risk it as much as possible, bring in lots of debt. And then with my with my low risk project, I can make good returns. But you're saying, actually, if you believe in the market and you don't want to give away a slice of those returns to a third party, then actually you might end up in a better position with that provider. You can bring some dead end to the project. I am so significantly higher for fully merchant projects projects. Yeah. Even if you have a bit less attractive financing conditions on the debt side of things like the, the share that you give away when you're told is actually quite significant. This is definitely a contrarian view. Yeah. For the German market I'm sure. And also for other markets. Christina I'd like to get your take on it, but a slightly different angle. I know recently you were doing a panel and you were asked to compare the German power market to a movie. What movie would you say is the German power market and why? Yep. So the battery market in Germany, it was asked to be compared, and a lot of the other panelists picked like dramatic movies like The Day After Tomorrow are like a race to record connections. And I picked the movie Barbie just because I think it's a very like interesting view on maybe social dynamics, but it kind of works in the market. From what we said initially on PowerPoint, everything looks great and Barbie Land, everything is fantastic. And then you head to the real world and realities are a little bit different. And trying to navigate that world as well, I think quite nicely represents where we're at in the market today and where realities kind of meet what people might want in the market. I love that. Christina, Leandra, thank you very much for coming on. You've been wonderful guests and I've learned a huge amount about German market. Thank you. Thank you so much.