Grid-Scale Batteries in a Hydro Heavy Grid with Nicklas Bäcker (CSO @ Ingrid Capacity)

Hello, everybody, and welcome to Transmission.

It's me, Quentin. And this week, we've got Nicholas from Ingrid Capacity, and we're gonna talk all about the Nordics. Now we haven't covered the Nordics in great detail on this podcast before.

And this company, or Nikolaus and the company, have moved so, so quickly. So this is a company to watch. They've got hundreds of megawatts already built in Sweden, and they're making big moves in Finland and elsewhere.

And I think what's unusual is a lot of investors in Europe have been thinking about the Nordics but haven't yet passed investment decisions.

And Ingrid have really gone for it. Niklas really knows his stuff. He's a power markets guy, and I know you're gonna like this conversation. And while you're listening, if you enjoyed this conversation, please hit like, subscribe, or comment. It means we can increase our reach, and we can have a much bigger impact with all the stuff that we do. Now let's jump it.

Niklas, welcome to the podcast.

Thank you so much. Pleasure being here.

So Ingrid capacity. Let's start with the name. Who's Ingrid?

Ingrid represent, I mean, for us, it's a Swedish name. It's we're building a Swedish company with in Europe, but it's also, like, in in grid. It's a play with words. So that's the background of the name.

And and what I'm really excited about this conversation for, and I'm sure a lot of our listeners are gonna get a lot from this, is there's loads of development activity across Europe right now, especially in the UK, in Germany, Italy, Iberia.

But there's not that many folks really going hard at the Nordics, and Ingrid Capacity is one of the very few companies that has achieved scale. And I must I take my hat off to you. You've gone so quickly from founding only a a few years ago to where you are right now. Could you just share some data or some numbers around your operational assets in the Nordics? Because I think for some of our listeners, this will be extremely surprising how much scale there already is in the Nordics.

Yeah. Absolutely. I mean, we have, as of today, we have two hundred twelve megawatts under management in batteries. In in the Nordics, we have another roughly two hundred megawatts on the construction today. We're building our third asset portfolio in Finland of seventy megawatts, hundred and forty megawatt hours. And we raised as to this day roughly two hundred and fifty million euros in in assets in the Nordic grid.

I'm pleased if if I may. What what did you see in the in the Nordic market that ninety percent of other European investors missed?

I think that the first thing, of of course, if you look at the Nordic system, it's it's hydro based. And and, somewhere twenty twenty one, twenty twenty two, you could actually start with a drop in in best prices. You could actually start to outcompete the hydro. And I think that was kind of an aspect that no one really saw coming. But we, I mean, we we did the numbers, and we looked at, you know, what's the what's the revenue is gonna look like, and it looked pretty interesting. And then with the with the following development of of best prices, that's been a huge change in the system. And I think today, much of the ancillary service markets is actually covered by batteries in the Nordic.

And you've got some pretty lofty targets you're aiming for. I think you said eight gigawatts under management by the end of this decade. Is that correct?

Yeah. That is correct. And that's the that's the kind of North Star that we're aiming for as a company.

And before we talk about the different markets, and we're gonna get really deep on on those, a bit more about the company. So you've scaled headcount pretty quickly. You've scaled megawatts under management. You've raised two hundred fifty billion euros. Could you just talk a little bit about the last few years from founding, I think, in twenty twenty one or twenty twenty two to where you are right now?

I know scaling a business is extremely difficult to do and hold on to culture and making sure the talent bar is high and making sure the wheels don't fall off in the way. We haven't even got as fast as you have. So what's that been like?

I mean, it's it's been a bumpy ride, I I must say, but but it's also been a hugely, you know, challenging and development developing ride. I think that we're trying to build a build a fully integrated vehicle here. We're we're, yeah, we're developing best assets and best project, but we're also doing the trading on our assets. We're doing the commercial, structuring of our assets, and we're not only a developer with with sixty five people. We we are much more than that, and we have kind of seen the value of of having this full integration and get it getting the feedback loops from from doing more parts of the value chain quite early on. So that's that's been, of course, one of the reasons, but but, it's been a ride. Yeah.

Just from afar, massive kudos to you, and, really excited about where you can take this business.

Let's talk about Sweden for a second. You're, of course, in Stockholm at the moment. You've got a couple of hundred megawatts in Sweden, and I know you've committed another four hundred megawatts, is it, to SE three and SE four in Sweden? So can you can you just share an overview of the Swedish maybe maybe the the whole electricity market in Sweden and then where batteries fit in and then where Ingrid fits in?

Yeah. Absolutely. I mean, might start at the point where s f four in Sweden, the southern part of Sweden, is probably the most imbalanced, electricity region in in Europe, and I think most of our assets in Sweden is focused on s f three or s f four by the that reason. The portfolio we have built and the full portfolio we're building now has been really focused on speed to market.

It's usually smaller systems with with more ancillary service, design to it. Looking a bit ahead, what we're gonna do in Sweden, we're gonna do bigger projects, scale it with more, you know, arbitrage in today structured on the revenue side. And that would probably I mean, we see these imbalances in the market. We see in the market opportunity to scale it.

But I think we passed the first phase of the best development cycle where, you know, you you can make a lot of money on the cellular service markets, and that's super interesting from the start. Now we're coming into probably the next phase where ancillary is getting more saturated. The revenues are more stabilized.

The more energy intensive structures is becoming the the lead star for the revenues of of the future.

Niklas, a few minutes ago, you said something that I thought was really interesting. Was that you you framed your battery assets around competing with hydro. I think we should talk about that a little bit. How do you think about that?

They are very different asset classes. Right? Because batteries are shorter duration and hydro much much longer. The Nordic regions have got tons of hydro.

So how are you thinking about your assets coming up against hydro?

Well, I think I think the Nordics are blessed with the amount of hydro that we're having, and it's kind of the core fundamentals of of why we actually had a low stable electricity price for for a very long time. What I do believe now is we're seeing a situation where, shorter services, like ancillary service markets and and everything within the hour, that's probably more or it's it is actually much more efficient to solve that with batteries.

That makes the hydro be able to run more, more optimal on on their optimization curves. And it's also you know, it saves a bit of a bit of hydro for the more longer periods of volatility and wherever it's not a wind, we when we where we were out of the wind in in the northern part of Sweden. And so I think what we're doing is we're making the hydro production to be more efficient and work more on balancing the long term volatility in the in the system.

Just coming back to your assets in Sweden then, so are they predominantly in ancillary services right now?

Yes. As of now, I mean, we we we built our assets fully merchant. So we we're all of the time, steering it towards the most attractive part of the market. Still, we see a lot of opportunities in the ancillary service markets or for assets online and being under construction.

But but long term, we'll probably see a more diverse revenue stream where you have a bit of, you know, typical arbitrage wholesale structures, but you also see partly ancillary servicing combination of, of different services. Also, a bit of, you know, we work a lot with local capacity as well to make sure that the the DSO has the capacity they need to run the system and to increase utilization rate of the existing infrastructure. That is a super important revenue stream that we see.

So coming back to the Nordics then, you obviously have a a large footprint in Sweden. Is it the largest? Are you the biggest operator in Sweden?

I think on an asset base, we're absolutely the largest yet.

And you've just made a big commitment in Finland too. Can you just talk about the Finnish market and the opportunity that you see there?

Yeah. Absolutely. I mean, the the Finnish market is quite similar to the Swedish market and the Nordics market. So quite structured in the same way.

What we see in Finland as of today is is that the the challenges of of their transmission lines as well. I mean, they have wind usually or, usually in the in the northern part, and they have the loads mostly on the southern coastal cities.

So they need flexibility into the grid today. And our approach to the Finnish market has been I mean, it's quite for us, it's been quite a plug and play market where we actually can can use the same processes for connection. And I think also they have a very good TSO in FingerID that that is a pleasure of with of working with, every time.

You don't hear that very often.

No. No. I I I don't think you do, but but I must give them that, actually. They're they're incredibly, you know, client or in oriented and and, good to work with and really transparent as well. What we're seeing in Finland as well is that the spreads in the market and the volatility in in spot prices is, I think, one of the highest in in Europe.

I I think, you know, when the disconnection from Russia also put in the more into an island mode grid or not not fully an island mode grid, but they they become more exposed to volatility in the market. And the introduction of of a more base load in the nuclear side is is also, you know, having quite big impacts on the market where the top prices are quite high and the bottom price are are really low. So and we absolutely, we see it as a very interesting market.

So we've talked about Sweden and we talked about Finland. Are you also looking at Norway?

We are looking at Norway. I mean, Norway is a very specific grid. It has some really interesting character characteristics to it.

Also, it has, you know, I think ninety eight percent hydro, so it's a really hydro based, grid. But I think I believe that, long term, there will be, grid scale best in in Norway as well, and we'll probably be we'd be one of the parties that that are building and operating it.

And to cover the last two then, are you also looking at Denmark and and Iceland? What are your thoughts on those markets? Iceland, obviously, very small. But how about Denmark?

I mean, Denmark is divided in two. So for for me, mainly, you know, the one part is Sweden and one part is Germany and and then Danish market. So so that's hasn't been a focus, although I know that the d k two is a super interesting market, but that size of itself is too small for us. And, I yeah. Iceland, that's, we do want to have a battery market of at least one gigawatt to to entry the market. That's kind of a guardrail that we work with. So that kind of excludes the smallest markets as of today.

So so taking what you know about the Nordic countries as a whole, how how does this region compare to other European markets? For example, we think about grid need or or market support or regulatory support.

What what are the key differences?

Yeah. It's a it's a good question. It's a big question because I think that all markets usually have their specificities, and and you need to work around that, and you need to be smart about it. But I think, you know, having a hydro based market, that is, of course, making you less you you you will naturally have a lesser bit or less need of of kind of a capacity market structure. You can solve most of those more residual load handling structures with with the existing assets on the market.

I do believe from a regulatory side, it's not been promoted that that we like, in in many markets, it's it's actually the TSO or the reg regulatory side that works actively with integrating best into the market and building different subsidy schemes or structure with that. We have enough seen that in in Sweden, but to be honest, I don't think we need it either. I think that the ancillary service markets has been good enough to to cover the the expansion in the Nordic markets as for mostly or for at least Finland as Sweden.

Let me ask you about the elephant in the room then because one of the big problems is grid access at the moment in pretty much every market around the world. How do you get a connections to grid in if we just think about Sweden and Finland, where you're making big moves at the moment, how's the interconnection process?

Is it really congested, and how is that being managed?

Grid is the main point for project development if you look at it that way. So so that's probably the the thing we're spending most of our time thinking about. And and I think here, we have a really good value of being a fully integrated player with more I mean, we do the trading. We do the optimization.

We do we do the commercial, structuring as well. And that gives us, you know, the feedback loop to understand the grid even more because we know how we actually operate the systems in the grid. But to start with, I mean, we do we do quite intensive grid analytics in all countries we're active in. I mean, we do it in the Nordics.

We do it in Germany, Poland, and try to look at, you know, how is topology of the grid formed, how where is the strong grid points, where is the constraints, Where's the weaknesses?

Where do you have existing infrastructure that can reduce CapEx on the connection, for example? I mean, I would say that probably fifty percent of your capacity in some way work with grid grid analytics and process around that because it it is the key point when you develop projects.

That that has also been kind of a part of the success story that we're really you know, we we are grid nerds, many of us, and I think it it's quite beneficial to to try to understand, you know, both how the grid structure is working, but also the counter parties and the DSOs and the DSOs. You know, their what's their problems? What's what's their what's the situation and status of the of each grid you're you're trying to connect to.

So are there any specific problems that you only really find in Sweden or Finland with good connections? Are there I know that you guys are operating across Europe now. So any little bits of advice that you have for our listeners?

I mean, Sweden is is an interesting point because we have the, you know, different sizes of DSOs. We have very many DSOs. It's it's quite similar as Germany for that aspect. But if you compare it to France or UK, it's something completely different because then the the competence levels of the DSOs are usually, in in general, very much higher because they have the the mass to to actually cover most of the points. So so I think that is a really specific thing in Sweden that you need to you need to work with the DSOs really close. You need to put a lot of effort into actually educating the DSOs on how your systems can operate and, how the it it will have implications of of each specific grids. I mean, we see it in some other countries, but it's quite it's usually on on the countries where you have a lot of DSOs compared to number of trials.

And how about Finland then?

Finland is pro probably more structured, and I think that's the main difference between Finland and Sweden that that most of the products we're doing in Finland is towards, DSOs with deeper knowledge of the questions or it's directed towards the TSO FinGrid. And it's I mean, the availability and the speed to get the connection to towards FinGrid is very, very much faster compared to Sweden.

So now I wanna ask you about the structure of the company because you mentioned earlier you've raised two hundred and fifty million euros. And I know that the strategy for you is to be vertically integrated. So do you think of yourselves as a as a fund or as a, as a a distributed power plant? Or, you know, what's your thinking around that?

Yeah. I I guess I would say that we're thinking about ourselves as kind of the new type of energy company to come. I mean, flexibility is the problem that you need to solve in most European grids today. I strongly and do believe that that, you know, the future energy companies, even if it's utilities or IPPs or whatever it's gonna be, it's it's it's gonna look a lot like more like like Ingrid than compared to the legacy companies.

And as a structure, I mean, what we do, we work with financial partners and investors to to co own assets together with, which is proven to be a really, you know, a good model for this to scale because you have on one side, you have, you know, a really, I mean, we're we're kind of a tech company. We're doing a lot of I I'm not the expert on this, but we're do we're doing a lot of tech development and software development on that parts of the company. And then you have a really tactics heavy infrastructure.

So we try to, you know, from an ownership perspective, try to separate this. But, of course, with the caveats that we we want to operate the assets, see, of question, and we do believe that we want to co own them as much as possible because we we think that, you know, the value of having this kind of synergies that you get you only get by actually being able to operate your own assets is so high. So and I think it's it's very beneficial for the investors as well, so it's it's served us well.

Well, I was gonna ask you about that technology side. So I understand that Ingrid has decided to build their own trading platform. I mean, the first thing is that Nordic countries historically are excellent at building trading companies and power market companies. So it doesn't surprise me that you've decided to do it in house, but you've decided to build your own proprietary trading platform as well as developing and operating assets. And that that that must be a big challenge and a big decision.

What drove that decision?

Yeah. It was a big decision, but but I think it drove it was it is it came out of the, you know, realization that we didn't believe that the market as the status when when we take took the decision had any good enough alternatives.

So we there was mainly out of need that we saw that we need to develop this our ourself because we we didn't see the the the market maturity wasn't there, and and the transparency that we needed wasn't either available on the market. So that was probably the driver of the decision from the beginning.

And then, I mean, I must say that I was a bit surprised on the performance of the of the platform as well. So I think, you know, from that side, it's been a really good decision. But but it's only I mean, it's one part commercially, but it's also I mean, we see the benefits in our development process or when we do, when we look at commercial structures or PPA structuring or stuff like that. And then we also see the value of having actual real data on the assets that we're taking out to the market. So it's it has many, you know, upsides that that I I must admit I didn't see in the beginning, but I clearly see it now.

And how does that work in practice then? If you if you're building hundreds of millions of euros of assets and you do the market access and trading yourselves, How do you think about structuring the projects commercially?

Because we're moving from contracts to revenues or ancillary services into a merchant model. A lot of asset owners are considering more flexible or more structure in their PPAs.

So how do you think about applying the kind of risk management parts of merchant versus contracted versus hybrid? What do you do all of it in house?

Yeah. I I think we will do the things that we I mean, if we feel that we can compete with the market and are hopefully better than the market on the parts, then we will do it to sell for but if we see that there are, you know, off the shelf solutions for it, then we probably will go out to the market also to find this to be smart from an IRR you know, weighted IRR perspective, I think, is the key here. And then our assets as of today, we're built fully merchant, but we're always looking out for opportunity to contract parts of it. I think that, you know, it's it's a moving target, but probably would long term, we'll probably see a contracted part of, you know, thirty to fifty percent on our assets total.

I think that's usually where you get the bankability you need. But but it's changing constantly. But but we won't be able to build eight gigawatts on fully merchant. We we're very aware of that.

So talking about contracted capacity, I understand that in Sweden, we don't yet have a robust capacity market or equivalent. So how do you think about the role of other revenue sources of balancing services, ancillary markets, wholesale trading, as core parts of your revenue strategy?

The Swedish system usually solve the residual load issues with the strategic reserve, and it's quite a cost effective way of solving it. But I don't I don't see the the capacity market long term in Sweden either. But what I do see and what that opens up for us is kind of the because there will be players on the market that has a need for securing capacity for some hours, for example. So so there will probably be a more bilateral market for that where you see by or trilateral contracted revenue structures towards assets, owners, or loads. And, I mean, it's also been one of the reasons why we're building up kind of a market's function in the company that we we see that the probability of having a capacity market in Sweden is is quite low, but the fundamental need of the of, you know, structuring capture rates and structuring, PPAs towards more, maybe not twenty four seven PPAs, but at least seven eleven PPAs.

That's really important. So and and but it but it's it takes, you know, you you need people that has the experience of of structuring this kind of products to be able to do it.

And just rewinding for a second. Coming back to at the beginning of the conversation, we talked about batteries and hydropower, and I I mentioned maybe they would come up against each other or compete. And you framed it quite nicely that they that the batteries will complement hydropower.

Where do you see this heading? So we've talked about CapEx coming down for batteries, and it seems like the cross curves, there there doesn't seem to be a clear end in sight for how low the price of sales can go. So if you fast forward now to Ingrid in ten years' time, what do you think the the Nordic power markets look like? Because they're so heavily dominated by hydro right now, and there's there's quite a lot of discussion at the moment about extending, life essentials on hydro or expanding reservoirs or even some new hydro. How do you think about batteries and hydro working together or competing in a world where CapEx has come down for another ten years?

I think it's gonna be, you know, one of the key factors for a really cost efficient, grid in the future. For the grids that has the the opportunity to actually combine in a smart way, hydro and batteries. Because, I mean, yeah, prices will go down on on batteries, but we're pretty much on a level now where cell the cell part of the battery or the best cost is is, reducing all the time. So now the the biggest cost post in the future might probably be, you know, more the power components on the inverters, for example.

And I don't see the price development as much on on that kind of components. So there will be a diminishing return on CapEx, kind of reductions on best as well. But back to your question, I think that, yes, batteries would probably be the take major technology to deal with all the short to mid term volatility and also, you know, every every kind of service to make sure that the grid grid runs stable and, and as it should. And then Hydro will be there to to cover.

You know? Now I mean, we are heavily inflated by the German market as well, and I think that the Swedish hydro can probably do a lot of help to, on the and and the the situation where you actually don't have enough production. So Ingrid Capacity and and myself as well is is looking at this as, you know, we need to solve the European grid problem. This is not a Nordic problem.

It's not a Ukraine problem. It's it's actually making sure that we, as a European Union and as a European region, will be able to have the the industry of the future as well. And for that, we need, you know, cost efficient grid infrastructure and low prices on electricity.

Yeah. I think it's gonna be fascinating to see how hydro generation competes with renewables long term.

Of course, hydro is part of renewables. I must say that's there's a there's a Venn diagram somewhere with that within it. But, I mean, versus, you know, Swedish, Swedish wind or Swedish solar or European solar and wind, we shall see. But there's one of the cool things about hydro in the Nordics is how beautiful those generating plants are. And so, I hope that they they continue for a long, long time. Okay. So so so thinking more about the future then and where Ingrid is head heading, we talked about your North Star being eight gigawatts of batteries on the grid by the end of this decade, which is a hell of a job to get done.

How is the mission evolving as you you you head towards that? What do you need to do to make that happen? You're at sixty five people today. You've raised two fifty million euros What's the scale that you need to achieve to deliver that mission?

Yeah. It's like I mean, it's a good question, and and I think that we will we will continue to grow, and we will continue to enter countries. And we will I mean, we need to do it fast. We need to do it, with with an m and a approach as in many markets as well. I think being able to operate that amount of of gigawatts, it it will take, you know, a lot of work with the bankability of of projects, the bankability of the portfolio structures, and it will need a lot of of CapEx funding, to be honest as well. So from our perspective, making sure that we we re really reap the benefits of being a fully integrated player, I think that's a key part. I think, you know, making also making sure that we have the tools and understanding to make projects in scale bankable in all markets, super important as well.

But, you know, last but not least, probably, is, you know, we also need as a company to be super agile with the market movements because what we're seeing, you know, is best markets move fast.

They move extremely fast. I mean, you can take the just recent example from the Polish capacity market, for example, where the next round was quite not as compelling for batteries as some have might or might thought it would be.

So and that that, of course What what do you mean by that, Niklas?

Just just for our listeners, can you share what you mean by that?

I mean, they they reduced the the rating factor for best quite a lot in the next round, and and, of course, that has implications on the business cases. And, I mean, for for us, it was, I mean, we pretty much maybe saw it coming, not not in the size that it actually went, but, I mean, there was, warning signs. But the importance as a company for us, I mean, that it you need to be one, you need to understand the markets and be smart about what is actually going on and not not not not only, you know, what what are people saying, but also, you know, being able to act fast on changes. We see it,

you know, everything from whenever a new market open up in, let's say, Sweden or Finland or or anything like that to towards, you know, the big swings in either if I mean, capacity market, there there will always be a political risk in capacity markets because it's it's it's not a fundamentally needed structure. It's it's one structure that you can use, but you can use it you can you can solve the issue in many ways. Ancillary service, you can't solve in that many other ways. I mean, you you you probably need a disturbance reserve, and you need a normal reserve, and you need a kind of a forecasting error reserve, and then you can call it whatever you want.

But that's that's the fundamental needs for for grids. And we as a company, I think that that's one of maybe the the key benefits we have towards bigger utilities that we can we can be super agile. We can be super fast, and we can adapt really, really fast. And I think that that's to reach our goal, it's gonna be a a major key as well.

And then lastly, maybe, also making sure that we use all all new kind of digital tools that are being developed and are active now. I mean, I'm starting to feel old now when when, you know, you can use use helpful tools to actually increase the the, you know, the output of your own work quite drastically, and it's, I'm humbled to the fact that that there is apparently ways to to optimize my own work and others' work. So that that is, of course, gonna be a key for the future as well.

Yeah. You could you could do a lot more with less these days.

I think our software our our software team would probably be four times as big without, like, it's probably not chat GPT, but, you know, the the the coding version. Is it cursor maybe? I don't know.

There's not really much space for us humans left, in in the medium to long term. Now to the last two questions.

Is there anything that you want to plug for our listeners who tend to be empty storage people based in Europe, Australia, and the US.

Yeah. I I don't know. I'm I'm probably preaching for the choir, but but I think, I mean, flexibility is is key for, optimized grids. I think, you know, we we all know it, but, I mean, it's so cool to see it in become reality, and it's so cool to see, you know, the the grids. If you if you look at the re I mean, if you if you look at live data on how grids are actually operating today, there is big difference compared to just five years ago. And it's kind of, you know, the the scale of difference that, at least, I didn't think was possible.

So I think that that's and and and I think it's gonna be just the key for optimized grades of the future, and then you can you can combine it with everything. You can have them on response. You can have a bit of, you know, gas pickers or heating plants or whatever it be. But but you need not only planability, you need controllability of the of the production and loads.

It's great you describe it as really cool, and I totally agree with you. And now you're a contrarian view. So, Nicolas, what do you believe that not a lot of other people believe?

It's a really good question. I think I mean, maybe maybe I'm not, you know, it's not only me, but I I don't I truly don't believe that Europe can compete if we do a lot of, nuclear in into the grids. I I don't believe we will we will never be most cost efficient of building nuclear in the European Union.

Unfortunately, I think it's a it's a good way to, reduce the competitiveness of the European grid, I think, today.

But but, I mean, might might not be as contrary, and I think your viewer your your listeners and viewers probably agree a bit more than the general public, but but I I do believe that I'm not against nuclear as such, but I'm against stupid financing structures, and that's where we're aiming for in many European countries right now. And it's, kind of scares me.

Yeah. Who couldn't be pro cheap nuclear?

But Yeah. Exactly.

We just haven't managed to make it work in the western world.

I don't know what we're doing wrong, but something I mean, we we we apparently can't do it fast or cheap. So might maybe we should think about that.

I wonder whether we I'm gonna get into trouble for saying this, but I I I think the root cause of the problem is bureaucracy, and the root cause of that is fear mongering on the safety side. I think there's there's just far too much worst case scenario planning. I know that this test will say yes, but what about Fukushima and Chernobyl and and all of these? And, yes, they are terrible, but I did a brief brief stint in nuclear at the start of my career, and I couldn't believe how difficult it was to get anything done.

I don't know how you roll that back. You've got a whole all of the expertise in nuclear is also entwined with a over in-depthing on the safety case, some of which is totally valid and the right thing to do. You know, getting fired for not holding the handrail as you walk down the stairs probably doesn't count. That's not a nuclear incident.

Right? Parking the wrong way around in a parking bay is not a nuclear incident because it's on a nuclear site. And these are these are ridiculous examples, but if you extrapolate them, they're they're everywhere, say, with security and access to documents and people might all of it. But I I do think if we could solve that, then I would have a totally different opinion.

If you could bring the the real cost of nuclear down to kinda less than, let's say, fifty cents, forty cents, then maybe you'd consider it. Yeah. Yeah. And even that is expensive.

Right? Even that is expensive.

No. But, I mean, you will need baseload. I I strongly believe that. But but you will need to solve I mean, you can solve base load in many many ways, but but I do believe that I I'm more against you know, whenever whenever it's structured similar to kind of a cost plus model that's introduced for this kind of infrastructure, then I think, yeah, that's the best way of keeping stuff expensive, and and no one will never do efficiency on on that kind of structure. So I think that that's, maybe UK has had a kind of a value based structure for it. Although it seems to be, gotten getting a bit expensive.

But You can say that again.

It's Nicholas is it's the most expensive object on the planet. And, Yeah. Yeah. Nobody's making money from it.

Right? Okay. Apart from I'm I'm starting to sound like an old man at the pub here. But EDF's not happy about it.

The taxpayer's not happy about it. The government's not the power power sector's not happy about it. But the question is, what do you do when you lose all of that nuclear base load in the UK that is that is gonna disappear probably this this decade?

You guys are lucky. You've got loads of hydro. We don't have that Yeah. Luxury.

No. No. And, I mean, you we need to solve the base of a problem. That's that's a fact. And the misconception about nuclear as of today is that it's, cheap and scary or cheap and unsafe, but it's probably just I mean, right now, it's expensive and quite safe.

But but that's, I mean, we need to be innovative. We can't just replicate what we did in the nineteen seventies. That will take us nowhere. We need to use, you know, whatever kind of new development that has been going on the last fifty years.

I think it's quite much. So I and use that to do stuff more efficient. And even if it's nuclear, I think, you know, the I mean, this is not my field, but but I I I strongly believe that if you if you get kind of structures where the feeling is that kind of a monopoly or oligopoly players has set the rules for the future oligopoly, that will not be cost efficient. But they got no incentives to do that.

It's it's crazy.

So how do you solve the baseload problem in Europe then? Because many countries in Europe are pivoting to nuclear, and there's this exciting unicorn of small modular reactors, which we probably won't touch right now. But some hope there, but also quite a lot of noise. So in in that case, how do you solve the base load problem in Europe while we're on it?

I mean, one is probably the way the way it's done now with the with the very expensive nuclear structures that are pre being presented, then it's about just, you know, managing the the damage and reduce I mean, how little base load do you actually need? That's the kind of question we need to ask because right now, if we're if we're coming to low levels of base load, which, you know, where that kind of prices actually has an impact on the system, then then there there won't be any clients for the electricity. That's that's the basics. I mean, no one's gonna buy that. So say and the and and the industry will move to other regions with with cheaper electricity.

So it's then we just we'd be producing a lot of electrons or not producing electrons, but, yeah, I don't wanna I don't wanna, you know, mess with my former electrical engineers.

But but, yeah, I think it's thinking about how little actual base load do you need, how can you structure base load in other ways. I mean, wind wind solar and batteries is kind of a, you know, compelling baseload structure as of now. We won't solve it all, but I think it can reduce the cost and the needs for baseload quite drastically. And I think it's a good way a good point to start.

Yeah. It's like whichever way you look at it, Europe's gonna have to pivot to China, I think, because the entire supply chain in order for industry to be so this is the funny thing. For for Europe to compete with China on industry, they need to bring electricity costs down. In order to bring electricity costs down, they need to buy generation from the cheapest supply chains, which is China. So whatever you do, we need to Europe needs to cosy up to China, I think. Yep. It's quite an uncomfortable thing to say out loud, but, maybe it's not such a bad thing.

Well, I I I hope we we can avoid it, but, yeah, who knows?

Alright. And on that note, Nicholas, I wanna say a massive thank you for joining us on the podcast. That was awesome. If you, if you haven't heard about Ingrid Capacity, I'm gonna put some links in the show notes. This is a company to watch, and I know a lot of our listeners with operations in Europe are thinking about the Nordics.

Go check these guys out. They've moved so quickly, and, they've got a really compelling story. So, Niflis, thanks for joining joining us on the podcast. Really enjoyed this one.

Thank you so much for having us, and a pleasure. Good discussion. I I really enjoyed it.