Soldera Markets #5 | Taavi Veskimägi, Former Elering CEO, on Energy & Security

Transcript of the episode's discussion between Oliver Bonallack, Stenver Jerkku, and Taavi Veskimägi [00:00:03] Hey everyone, welcome to another episode of Soldera Markets. [00:00:07] Today we're joined by Tavi Beskimagi. [00:00:09] He is an ex-Estonian MP. [00:00:11] He's also ex-Estonian Ministry of Finance. [00:00:14] But most interestingly and relevant to energy, [00:00:16] he was the CEO of Estonia's primary TSO called Ellering. [00:00:20] And he was also a member of the board of ENSOE, [00:00:24] which is like, [00:00:24] correct me if I'm wrong, [00:00:25] but it fosters cooperation amongst the different TSOs in the European Union. [00:00:30] Tavi, [00:00:31] we're super excited to have you on the show and to learn everything we can about geos, [00:00:36] the history of geos, [00:00:37] where you see the market now and how it relates to broader energy trends in Europe [00:00:42] and Estonia. [00:00:43] So Tavi, welcome and feel free to correct me if I got any part of that introduction wrong. [00:00:47] In case anybody doesn't know, so TSO is transmission system operator. [00:00:51] It's the guys that control the grid. [00:00:53] When S-Link 1 was severed a few weeks ago by the Russian ship, [00:00:58] then TSO were the guys that, [00:01:01] you know, [00:01:02] went to panic and started fixing it fast. [00:01:04] Thank you very much for having me. [00:01:05] So, [00:01:05] yeah, [00:01:06] I mean, [00:01:07] my initial question is, [00:01:09] it sounds like a huge amount of responsibility running the TSO for an entire nation. [00:01:14] On top of that, [00:01:15] I thought that you were instrumental in actually activating geos as a tool inside Estonia. [00:01:21] So can you talk us a little bit through the history of geos and what that was like [00:01:25] trying to get them implemented? [00:01:27] Yeah, happy to do that. [00:01:28] Once again, thank you very much for having me. [00:01:30] If I'm going back when we started with the NGO introduction here in Estonia, [00:01:36] the basic idea was very much to bring more renewables to the market based on a more [00:01:43] market-driven approach. [00:01:45] Because before that, [00:01:47] we also supported here in Estonia renewables very much based on different grants [00:01:53] and peaking tariffs. [00:01:56] But the general concept behind to really incentivize and then more granularly [00:02:03] incentivize for renewable production and introduce the geos that basically exactly [00:02:11] match this demand supply real time. [00:02:14] And I'm very happy that [00:02:16] The general market right now is moving that direction, [00:02:20] give more precise locational signals and more precise time signals for the [00:02:26] renewable producers, [00:02:28] make new investments, [00:02:30] really ramp up their production capacity. [00:02:32] that I've always seen, [00:02:34] because I'm very much a market-minded guy myself, [00:02:36] basically when we liberalized Estonian power market already back at 11, [00:02:40] much before many others, [00:02:42] always been very much this kind of market view. [00:02:45] And I very much see the GEOs exactly this kind of complementary tool for the power [00:02:51] market encourage more renewable producers market-wise come online. [00:02:57] Sure. [00:02:57] And in terms of the landscape of geos at the time, [00:03:01] was Estonia one of the first or what did that look like? [00:03:05] Were other countries implementing geos? [00:03:08] I'm actually not too well versed on the history of geos. [00:03:11] So if you could share any insights there, that would be great. [00:03:13] Definitely. [00:03:14] We've been one of the first DSOs who start to introduce the geos in the Estonian power market. [00:03:23] Definitely not the first one. [00:03:24] Nordics started much earlier and the association of the issue in Polis were also. [00:03:29] Ellering is the member being established much before that. [00:03:35] But anyway, I think at least in the region, we've been definitely this kind of first move. [00:03:44] And exactly based on the logic that I described beforehand. [00:03:49] And I see that it also worked out like we really expected at that time. [00:03:55] That if you look at the Estonian renewable production portfolio, then definitely... [00:04:03] Most of 2024, [00:04:05] the largest share of damp and produced energy already came from the renewable sources, [00:04:10] from wind and solar. [00:04:12] And I still believe that also GEUS has played quite a significant role to achieve this startup. [00:04:18] I'd also like to add that I think Elering, [00:04:20] you know, [00:04:21] it really brought this innovation mindset to Elering and it still has the same edge, [00:04:26] right? [00:04:26] The hourly based guarantees of reaching, which is the next step for guarantees of reaching. [00:04:32] Currently, [00:04:33] guarantees of reaching, [00:04:34] you know, [00:04:34] they're based on month and then can be used throughout the years. [00:04:38] but the regulators want to move to hourly-based guarantees of origin. [00:04:42] And Elering is one of the five, [00:04:45] now actually I think six countries, [00:04:47] but they were one of the first that come into the group to start driving the [00:04:51] hourly-based guarantees of origin. [00:04:53] And Elering has their own registry built and they're really trying to stay ahead of [00:04:59] the game over there and being like the innovators and pilots to help us push this [00:05:05] market to the next stage. [00:05:08] And I think it's very much, [00:05:10] we should look at a wider context than if we 2011 liberalized the market and [00:05:16] basically introduced the central data hub together with remote readers for all [00:05:21] Estonian electricity consumers. [00:05:24] And in that respect, [00:05:25] we're definitely in one of the first countries who introduced this kind of central, [00:05:31] exactly national-wise data hub, [00:05:34] which really allows very [00:05:36] easy and fast change of your balance provider and retail electricity seller. [00:05:44] I think we also basically looked this CEO introduction basically as a part of this [00:05:50] wider package, [00:05:51] how to incentivize, [00:05:53] how to basically also [00:05:55] give the consumers more power on the power market really because for me also she [00:06:02] owes not only the tracking tool but also the basically consumer empowerment tool [00:06:08] that consumers really know that which kind of electricity they consume from which [00:06:14] sources that there are no this kind of green washes that we know that all basically [00:06:20] electricity, [00:06:21] very much labeled, [00:06:23] and I think that's also very much important for the consumer disability point of view. [00:06:28] And just looking here, it says that Ellering became an independent TSO in 2009. [00:06:34] Is that roughly the time when you came on board? [00:06:36] Could you speak a little bit to the difference? [00:06:38] A bit later, [00:06:38] definitely, [00:06:39] a bit later, [00:06:39] because as I described this granularity exactly, [00:06:44] that when European third energy packet being... [00:06:48] passed and forced. [00:06:53] We started in 2009 and I believe their commission which unbundled Ellery from that [00:06:59] time main Estonian Vertically Integrated Incumbent, [00:07:02] SDNFC. [00:07:03] First we established this kind of independent [00:07:06] the system operator, [00:07:09] and we did a way that basically both the system operation part and transmission part, [00:07:15] basically we owned and owned the high-voltage transmission grid with [00:07:20] interconnectors with other countries, [00:07:22] as Stenwer described. [00:07:24] For instance, [00:07:25] these SD cables with Finland, [00:07:28] that this was basically the first step to establish this kind of independent [00:07:32] Pali, who really lead all this market transformation. [00:07:36] The second, [00:07:37] we built the central data hub to really allow the market liberalization process [00:07:44] that consumers can very easily switch their energy and producer, [00:07:49] not because where we are coming from. [00:07:51] We are coming from the past, and I think all you are coming from [00:07:54] From that stage where the large, [00:07:58] mostly state-owned energy governments basically owned most of the market share as well. [00:08:04] Right now, we are basically a very liberal market. [00:08:09] And exactly, I think, if you have also touched this... [00:08:13] geopart and then definitely there are different producers with different value [00:08:18] propositions to their customers and then some of them exactly also highlight this [00:08:23] kind of clean content very low co2 footprint of their production portfolio what [00:08:29] they provide to the consumers and i think this is a really really important one [00:08:35] that we have different products, [00:08:36] different value propositions on the market, [00:08:39] on the electricity market for the final customers and basically the data hub. [00:08:44] And after that, all which is related with the guarantees of regions as well. [00:08:49] And right now, of course, this is not maybe the topic for today's discussion, but not exactly. [00:08:56] February 2025, we make next very big leap. [00:09:00] We basically desynchronize all Baltic power systems. [00:09:03] It means also like the Lithuania from the Russian power system. [00:09:09] And of course, there are many other ingredients that what comes with that. [00:09:14] But I think this has been this kind of awesome transition from 2008 basically up to [00:09:21] next February 2025 when we desynchronize the Baltic power grid from the Russian [00:09:27] power system. [00:09:28] And I think this also consists of those kind of measures that we need to enhance [00:09:34] the renewable production here in Estonia. [00:09:38] This is a huge milestone for the Baltics. [00:09:42] I remember when I was a kid in school, in high school, that was like more than 15 years ago. [00:09:47] Then my parents and teachers and everybody were talking how we need to become [00:09:51] energy independent and not be reliant on Russia. [00:09:54] And it's quite exciting to see that happen now, right? [00:09:57] So it's becoming a reality. [00:10:00] And it's a huge move because there's been a lot of work. [00:10:03] done to achieve that, [00:10:04] you know, [00:10:05] connecting with all the Sweden and Finland and all these nations and making sure [00:10:10] that the cables are there and we can like buy the electricity from all over Europe. [00:10:14] By the way, [00:10:14] I think it also has been very good for consumers because all those interconnectors [00:10:20] also basically able to control quite a long time, [00:10:24] very efficiently energy prices here in the Baltics, [00:10:27] not because those cables has been quite sufficient for transitional [00:10:32] flows between countries up to the moment where we noticed very high price peak for [00:10:40] the emission trading allowances and of course and I think it basically [00:10:48] This is what we should look together, [00:10:49] the one hand the guarantees of reaching and the other hand the basically emission [00:10:54] trading scheme allowances for the power producers when those prices really went up. [00:11:00] Of course, in the past, most of the electricity produced here in Germany. [00:11:05] in Estonia came from the oil shale and of course very efficiently these high [00:11:12] allowance prices shut down electricity production from the oil shale sources and of [00:11:20] course it immediately caused the situation that those interconnectors what we built [00:11:27] not sufficient basically even bring more green energy from the Nordics where the [00:11:32] generation very much based on the [00:11:35] hydro and wind and a bit nuclear as well. [00:11:38] And currently we have a split between different price areas. [00:11:41] But anyway, I think it's basically a decade or so. [00:11:45] We and Estonian consumers enjoy the very low, [00:11:49] mostly renewable powered electricity supply banks for those interconnections. [00:11:57] What do you think that the desynchronization with Russia will do with the prices [00:12:04] and volatility on the energy markets in Estonia? [00:12:07] Are the cables right now enough to cover the gaps or do we need to build more of them? [00:12:14] Where do you see this point? [00:12:16] I think this is really important to distinguish that we operate synchronously with [00:12:23] a Russian power grid, [00:12:26] but we never, [00:12:27] time of last two decades, [00:12:29] bought any energy from Russia. [00:12:31] The frequency is the same, but no energy trading already at least last two decades or so. [00:12:39] It means that there are no impact for a day ahead price. [00:12:44] Where these impacts come from, [00:12:46] that definitely the Russian system operator mainly has regulated the frequency. [00:12:53] Right now, we have to start to control frequency by our own. [00:12:59] It means that we need more reserves, [00:13:01] especially frequent containment reserves and frequency restrictions. [00:13:05] restoration reserves, the automatic frequency restoration reserves. [00:13:10] And of course, [00:13:11] those units are a costly one, [00:13:12] especially if we do not have so much conventional power generation left anymore. [00:13:18] We have a more basically solar-based power system. [00:13:22] And if you do not have those conventional generators, [00:13:25] which really can give you the frequent containment reserve and automatic frequency [00:13:31] restoration reserve, [00:13:32] you basically have to [00:13:34] buy it and most probably those reserves are coming from the gas fire power plants [00:13:40] and as we know that gas fire power plants are quite expensive one it means that [00:13:46] main add-on cost coming from the frequency regulation [00:13:52] And this is right now, [00:13:53] I think the Australian government made the right decision that it's not right now [00:13:59] goes on the shoulders of the consumers, [00:14:02] but Ellering is going to cover this based on the income, [00:14:08] what they have earned based on the bottlenecks between different price areas, [00:14:13] this is some kind of... [00:14:15] which is in Europe in place that the system operators earn money to reinforce the [00:14:23] greed if there are bottlenecks, [00:14:26] this kind of bottleneck fee, [00:14:28] if there are bottlenecks between different price areas. [00:14:31] And right now, [00:14:31] the Australian government really incentivizes LRE to use this money to cover extra [00:14:38] costs coming from the desynchronization due to more frequent reserve demand. [00:14:45] And that's the start of the frequency market that's coming, right? [00:14:49] Yeah, that's right. [00:14:50] That's definitely right. [00:14:51] And this is definitely something also interesting that how renewables and basically [00:14:57] renewables-based storage capacity is going to participate in different markets, [00:15:05] new markets, [00:15:06] which just get introduced. [00:15:08] for manual restoration reserves, automatic restoration reserves. [00:15:13] Let's see that this is definitely very much a new, very interesting market. [00:15:17] What we see right now get off the ground here in the Baltics. [00:15:21] That's amazing. [00:15:22] Just out of my own interest, [00:15:23] is the frequency market also somehow connected to the rest of the Nordics? [00:15:29] And how are the prices and frequency, how are they connected basically? [00:15:34] And how do they impact each other? [00:15:35] Not directly, [00:15:36] because we interconnected with the Nordics based on the direct current subsea cables. [00:15:44] There are not the same frequency area in the Nordics. [00:15:48] There are different frequency area, [00:15:51] and we get the part of the continental Europe frequency area that we can exchange [00:15:57] the frequency reserves with the continental Europe transmission system operators. [00:16:03] But I think this is the main difference compared to the Russian power system and [00:16:09] Central Europe power system. [00:16:10] The Russian system, [00:16:11] it was a centrally controlled system, [00:16:14] as most of the stuff in former Soviet Union. [00:16:17] It was centrally controlled by Moscow, [00:16:20] but the continental Europe power system, [00:16:23] basically every single transmission system operator inside the same synchronous area, [00:16:29] basically... [00:16:31] as to control frequency and participate in frequency control inside the control area. [00:16:39] This is the nature of the difference between those two and definitely the [00:16:45] responsibility of the system operator here in Estonia, [00:16:50] same luck in Lithuania, [00:16:51] is much, [00:16:52] much larger to keep lights on as it was in the past. [00:16:57] I'm curious, [00:16:57] it sounds like to me, [00:16:59] you know, [00:16:59] Estonia for a long time has been thinking about questions of grid resiliency. [00:17:04] You know, [00:17:04] you have a long and contentious history with a very challenging, [00:17:08] difficult, [00:17:09] expansionary neighbor. [00:17:11] So surely renewables have been part of the conversation for a very long time. [00:17:15] And it feels to me like the rest of Europe only really kind of recently has the [00:17:19] discussion of energy sovereignty and grid resiliency come into play. [00:17:24] Like they've had the luxury of not having to think about it for a long time, right? [00:17:28] So in that sense, was Estonia ahead of the curve? [00:17:30] Yeah, somehow. [00:17:32] We always know that basically if you look at the history of last 1000 years, [00:17:37] then you always know that you must be well prepared, [00:17:41] that you never know what comes next. [00:17:45] And definitely this kind of greed and system resilience and independence. [00:17:50] has been the top priority for us and we also talk with Denver that Denver very well [00:17:57] knows that this kind of risk assessment is in my blood that I always basically look [00:18:04] all through lenses of the risk assessment and do not [00:18:09] To get risk really mitigated and not keep them too high. [00:18:14] Exactly. [00:18:15] I think we have done this risk mitigation exercises last decade or so. [00:18:20] Definitely. [00:18:21] And to get rid of them and definitely this desynchronization of exactly one of the [00:18:26] risk mitigation measures. [00:18:28] Not somehow being in place where in Ukraine. [00:18:32] Wars when full-scale invasion, Putin war started against the Ukraine. [00:18:38] And I've been happy to help Ukraine also part of the NCE port that time when we [00:18:44] synchronized very fast manner Ukraine with the continental Europe power system. [00:18:49] basically do it in advance. [00:18:52] Of course, [00:18:53] we hope that this kind of situation will never be here in the Baltics, [00:18:56] but I think the best way to really build a deterrence to be ready for such [00:19:02] situations and definitely the energy resilience, [00:19:05] energy security is a very large part of that and definitely renewables to play [00:19:11] As a local energy source, [00:19:13] because we have, [00:19:14] as I described, [00:19:15] historically, [00:19:17] Estonia produced most of its energy from the oil shell. [00:19:22] This is quite the same as brown coal, [00:19:25] quite the same type of primary energy source, [00:19:28] very polluting. [00:19:29] Of course, we do not like to use it. [00:19:31] And basically, the alternatives are renewables, solar, wind, and also the hydrogen. [00:19:38] Of course, basically produced by green electricity. [00:19:43] But I think the green hydrogen is definitely a large opportunity for Estonia [00:19:50] because this is really fuel, [00:19:53] what you can store. [00:19:54] And this is really local fuel. [00:19:56] The electricity, what you generate for the green hydrogen production is generated in Estonia. [00:20:03] And of course, water also, what we have. [00:20:05] This is also something what we should use even more here in Estonia to build more [00:20:12] this kind of hydrogen. [00:20:13] economy and other derivacs around the hydrogen, ammonium, methanol, etc. [00:20:21] I guess speaking of energy future, green hydrogen is a very hot topic, right? [00:20:26] Because it's considered one of the storage solutions. [00:20:29] There recently came news that a lot of the green hydrogen projects were canceled. [00:20:34] Was that overblown or was that what's the state there right now? [00:20:39] And where do you see this going? [00:20:40] Yeah, I think that's correct. [00:20:42] Many, many projects, large-scale projects are really canceled all around Europe. [00:20:47] And definitely, [00:20:48] I think this brings us to a very important discussion point right now, [00:20:54] and it's related to the customer and customer demand. [00:20:57] that which kind of and how strong is the end customer demand for the green energy, [00:21:03] whichever type it is, [00:21:06] from green electricity up to the green hydrogen, [00:21:09] that this is really very much an important point, [00:21:13] especially after Trump is back in the office. [00:21:18] If the US really withdraw from the Paris Climate Accord, very much. [00:21:25] Looking further, more production from shale oil and gas resources in states. [00:21:34] And if Europe also speaks more about the competitiveness, I don't know. [00:21:38] You had a chance to look at the underlying speaks in Davos last week. [00:21:44] But she also very... [00:21:47] much pointed out the competitiveness and not so much the green deal anymore as we [00:21:52] see this kind of rhetoric switch really between Wanderlei and two commissions, [00:21:57] previous and the current one, [00:22:00] that this is something what we should really very closely [00:22:04] follow what is the pace for the green transition right now basically and I think [00:22:09] that's the right one to basically bring more European competitiveness on the plate [00:22:15] because otherwise if we really stagnate it and we lose our competitiveness there [00:22:23] are huge consequences for elections what we see because inflation and [00:22:29] unsatisfaction among the population is basically a very key driver [00:22:33] Right now, it means that we even have to look more at this kind of price market fit. [00:22:41] In that respect, [00:22:41] that whatever we do around the clean sources, [00:22:46] that there is really this kind of price market fit as well. [00:22:52] And I think for the onshore wind, this is definitely already there, that we know that [00:22:57] The onshore wind is right now, [00:23:00] based on the marginal price, [00:23:02] the lowest, [00:23:03] basically the power source. [00:23:05] And this is, I think, where the market goes to. [00:23:10] I think in the Baltics, [00:23:11] because we are not very much inhabitants in the region, [00:23:14] that there are huge room for onshore wind as well. [00:23:17] And I think this is [00:23:18] what we should harvest first. [00:23:20] There is no point to go offshore before we not utilize all onshore opportunity. [00:23:26] There are also challenges, [00:23:28] not in my backyard type of challenges still, [00:23:31] but I think we should really overcome for the cause of the wider public good. [00:23:37] For us, [00:23:37] this is a very interesting topic because this is a question of where do the [00:23:42] guarantees of origin prices go, [00:23:44] right? [00:23:44] If the renewable demand is stopping or reducing, [00:23:49] then that can have big consequences on the guarantees of origin prices as well. [00:23:55] There was a webinar done by Weight Analytics, [00:23:58] which is a firm that specializes in guarantees of origin prices and forecasts. [00:24:07] painted a bullish outlook for the market. [00:24:10] There's a couple of things. [00:24:11] First, [00:24:12] a lot of the solar investments have reduced in Europe last year, [00:24:17] while at the same time on the demand side, [00:24:20] the cancellations have actually increased year on year. [00:24:23] And even last year, they increased. [00:24:26] And at the same time, [00:24:27] now that the corporate sustainability reporting standards came out, [00:24:32] they're expected to drive a lot more demand towards renewable energy, [00:24:37] as a lot of corporates are looking to use renewable energy. [00:24:42] Lots of government subsidies and ESG requirements and investor pressure. [00:24:47] Still, the private market wants you to use renewable energy in many places. [00:24:53] So the cancellations and demand is expected to increase. [00:24:57] But one big thing in that formula, [00:25:00] which was not discussed by Wade this year, [00:25:02] was green hydrogen. [00:25:04] Because in the past, [00:25:05] green hydrogen was advertised a lot as one of the big drivers of future guarantee [00:25:10] operation demand. [00:25:12] But I guess now there's questions like how much will there actually be built green hydrogen? [00:25:18] And it's an exciting topic. [00:25:20] Yeah, exactly. [00:25:21] That this is green hydrogen as green ammonium, green methanol. [00:25:26] They are commodities and very much priced by Rotterdam. [00:25:31] Port price, for instance, that there are really these kinds of strong prices [00:25:36] price points and the market are really there. [00:25:41] I think more question concerning the input prices, [00:25:47] because if you like to produce, [00:25:49] for instance, [00:25:49] the green ammonium, [00:25:51] basically 70% of green ammonium price based on the electricity price. [00:25:57] And I think this is [00:26:00] exactly the issue that what is the price of electricity and the most or the largest [00:26:05] issue that that we have especially in this region and i think it's relevant for all [00:26:11] europe that we have a quite a lot of electricity very cheap price available based [00:26:18] on the solar and wind profiles but we know that in our region [00:26:24] Solar covers, I think, 11% of all hours. [00:26:28] Wind, maybe 35, 37, depends. [00:26:34] But if you like to run the large hydrogen production plant, [00:26:40] for instance, [00:26:40] you need the green baseload product, [00:26:43] basically, [00:26:44] for all... [00:26:45] 8,760 hours per annum. [00:26:48] And this is exactly this kind of weak point that you couldn't basically ramp up, [00:26:54] ramp down your hydrogen production based on only the solar wind profile. [00:26:59] You need a baseload, but this baseload is not available. [00:27:02] Basically, [00:27:03] those hours where sun's not shining and wind not blowing, [00:27:07] there are basically very high prices. [00:27:10] And basically no one able to provide this green power purchase agreements to really [00:27:17] those guys like to fix their electricity price because they are so price sensitive. [00:27:23] And we say that we see many, [00:27:26] many hours, [00:27:27] very low prices in the region, [00:27:29] but same times there are still too many hours. [00:27:33] with too high price to produce market-based hydrogen or ammonium or methanol. [00:27:41] Basically, I think for the future, but also I mentioned for electricity, exactly that kind of [00:27:48] price the market fit maybe is more important if we talk about less green deal and [00:27:57] more European competitiveness and this is more under the political agenda that I [00:28:04] think this is maybe this kind of state of play at least from my point of view right [00:28:09] now concerning the green hydrogen. [00:28:12] But I really, [00:28:13] I think you really touched a very important point and this is also all this which [00:28:18] related to regulation and which kind of taxonomy I place in Europe. [00:28:23] And I think that's right now very much important. [00:28:26] If I look... [00:28:28] those different initiatives somehow echoing what's coming from stage and also based [00:28:33] on this competitiveness agenda that to basically also reduce the red tape for [00:28:39] European businesses especially for European SMEs and right now I think this is a [00:28:44] very delicate balancing act [00:28:47] To one hand, [00:28:48] really reduce the red tape for reporting for industry, [00:28:53] for SMEs, [00:28:55] but at the same time, [00:28:56] keep these sustainability codes. [00:28:58] And basically, [00:28:59] exactly as we started the discussion, [00:29:01] that CEOs are a really great instrument to really disclose of the source of their [00:29:07] energy production and basically inform the customer. [00:29:11] that we basically also keep this kind of full disclosure environment, [00:29:15] at the same time basically reducing the red tape for European businesses. [00:29:20] I think this is something which is still growing even in the agenda of the European Commission, [00:29:29] the European Parliament, [00:29:30] the Council. [00:29:31] This is what we should follow very closely right now. [00:29:34] Agreed. [00:29:35] And Europe should actually demand this outside Europe as well for everything that's [00:29:43] brought in to Europe to make sure that all the imported goods are following the [00:29:48] same rules and same standards. [00:29:51] Otherwise, [00:29:52] it will create uncompetitive environment internally and make the outside [00:29:56] environment competitive. [00:29:57] Border carbon adjustment, which is in place, but I think not properly implemented. [00:30:05] I agree very much that we should build level playing field for European businesses. [00:30:10] But same time, [00:30:12] of course, [00:30:12] we understand that if we basically add on different tariffs, [00:30:18] it means the higher price of different goods and products, [00:30:22] and it might cause even more inflation. [00:30:25] What we see... [00:30:26] right now in Europe and this is the same time also basically reduce the consumption [00:30:33] power of European consumers that this is pretty complex stuff what is on the table [00:30:39] right now that how to really keep this sustainable agenda really alive and get the [00:30:45] green deal and decarbonization done because this is [00:30:49] Definitely important for the long run, not for only Europe, but for globally. [00:30:54] And at the same time, [00:30:56] not to lose competitiveness and we adapt to not lose European citizens back up [00:31:04] European agenda for decarbonizing the whole economy. [00:31:08] Agreed. [00:31:09] Agreed. [00:31:10] I'm curious, [00:31:11] specifically when it comes to EU regulation, [00:31:13] you know, [00:31:14] there's a lot of heat online that the only thing Europe leads in is regulation. [00:31:19] In your opinion, [00:31:20] in stuff like, [00:31:21] say, [00:31:21] energy, [00:31:21] for example, [00:31:23] how much of that is actually just the challenge of standardization, [00:31:26] right? [00:31:27] I mean, Europe's a huge continent. [00:31:29] Some people are going to consider new standards that they have to adhere to as red tape, [00:31:34] whereas others are just going to see it as a way forward to get everybody on the [00:31:37] same page, [00:31:37] right? [00:31:38] So that's my question is, how much of it is standardization? [00:31:41] How much of it is standard overregulation? [00:31:43] I think a couple of times already mentioned time of this conversation that I'm very [00:31:47] much a market-minded person and not so much maybe the regulations are driven. [00:31:52] That definitely, [00:31:54] if I look right now, [00:31:56] the business Europe made 68 proposals for the new commission how to reduce the rate [00:32:03] date for European businesses. [00:32:05] Definitely, if you look even this kind of list of different proposals that you even... [00:32:12] Maybe beforehand not recognized which kind of regulations there are already in place. [00:32:18] Definitely, I think we have over-regulated our life. [00:32:23] I'm definitely on that side that we do not need more regulation. [00:32:27] We need less regulations also here in Europe. [00:32:31] Fully agreed on that one as well. [00:32:33] And when I found out about the AI Act that's coming up, I was honestly in shock. [00:32:39] I mean, [00:32:40] it's like you don't even have companies to regulate and you're putting a regulation [00:32:44] in place. [00:32:45] And it's way too early to do that. [00:32:49] Some regulation is always necessary, right? [00:32:52] But I'm also a firm believer that Europe should liberalize the markets a lot more. [00:32:57] And originally it was a trade union, right? [00:33:00] And that's a massive bonus for the entire market. [00:33:04] But yeah, [00:33:05] we need to make sure as Europe that we keep our internal environment competitive [00:33:10] and won't just push all the industries outside of Europe because it's just easier [00:33:14] to do business there. [00:33:15] standardization also always inhibits innovation. [00:33:20] So you need to re-improve for innovation as well, not just overly standardized. [00:33:24] And I think there are also, on another hand, and where I also see concerns that especially [00:33:32] after the COVID, [00:33:35] after the Russian invasion, [00:33:38] to keep this internal market really consistent and together. [00:33:42] Because I've been the firm believer when we started what I described as the [00:33:50] Estonian market liberalization process, [00:33:53] I've never done this just as an Estonian market. [00:33:58] I think I've repeatedly also received a lot of critics about that at home. [00:34:04] I never built the Estonian power market as a separate isolated island. [00:34:12] Definitely, [00:34:13] I've always been the key believer that in Europe we have a common grid, [00:34:18] one grid from Gibraltar to the North Cup, [00:34:21] and we have a common market from Gibraltar to the North Cup. [00:34:25] This is something which really gives the best prices for all consumers all over [00:34:32] Europe and gives also the best energy resilience as we try now to talk about [00:34:40] talk a lot about the European defense capabilities exactly, [00:34:46] the energy security is a very important part of that. [00:34:51] And we never can build sufficient just country by country. [00:34:55] I think exactly the same applies for the energy. [00:34:59] I really hope that we can keep this Europe energy market project together, [00:35:05] that not this kind of protectionist movement, [00:35:09] what we see [00:35:10] here and there that basically we do it just for our own that is very much a short [00:35:16] focus actions that this is something what we get rid of and definitely I very much [00:35:22] like to support European Commission but really to act bold and keep internal energy [00:35:28] market all together without this kind of exemptions here and there even cut more [00:35:35] those exemptions away [00:35:36] We're stronger together. [00:35:37] We're stronger together. [00:35:39] Exactly. [00:35:40] Never alone. [00:35:41] Tavi, I've noticed we're coming up on time, so I just have maybe one or two more questions. [00:35:46] Yeah, please. [00:35:47] I also noticed that you are a partner at a clean tech venture firm focusing on [00:35:52] Northern Europe called 2C Ventures. [00:35:54] Yes. [00:35:54] This might be a little bit of a controversial question. [00:35:56] Do you think that, [00:35:57] let's say, [00:35:58] somebody who was building a company in the geo space, [00:36:01] do you think that's a venture sort of scale opportunity in 2025? [00:36:06] Which space, please repeat, I don't catch. [00:36:08] So if you're building software, [00:36:10] you know, [00:36:10] maybe to manage geos, [00:36:12] do you think that's a venture-backable company or not? [00:36:15] Yeah, definitely. [00:36:17] I think Soldera is a really good case here. [00:36:20] I think Denver and his team are really doing great. [00:36:25] I definitely see the trap. [00:36:27] huge opportunity to optimize and use also the AI tools to make geo-trading over the [00:36:35] borders much easier for both for traders or for producers and then for consumers. [00:36:43] Definitely. [00:36:43] I see there are [00:36:44] huge opportunity and then maybe even beyond the euro also basically the global wise [00:36:50] to even do more this kind of guarantees of origin type of not definitely not under [00:36:56] european regulation but but all which relates labeling of the renewable energy [00:37:02] sourcing and really keep the confidence of the consumers that they know that which [00:37:07] kind of energy from which sources they are really consumed yeah definitely i see [00:37:12] this great [00:37:14] opportunity and especially if we talk about further automatization and use of AI for that. [00:37:21] Appreciate that. [00:37:22] Thank you. [00:37:22] And speaking of Europe or outside Europe, [00:37:26] we are in the process of going currently to Sweden, [00:37:29] UK, [00:37:30] US, [00:37:31] India, [00:37:31] and we're very interested in Latin America as well. [00:37:34] So if you're anywhere in Europe or those other countries I mentioned, [00:37:38] and especially if you have a renewable energy park or plant, [00:37:43] solar, [00:37:43] wind installations, [00:37:44] even hydro, [00:37:45] it doesn't matter. [00:37:46] We'd love to talk and reach out to us and we'll help you. [00:37:50] gas and green hydrogen and all, this might be also, I think, a huge interest of you. [00:37:56] Yes, yes, it actually is. [00:37:58] But I can't put out too many messages at the same time. [00:38:00] All right. [00:38:01] Well, I think that's a natural stop. [00:38:03] So thank you so much. [00:38:04] It was a great conversation. [00:38:05] I learned a lot, personally. [00:38:06] Me too. [00:38:07] Have a nice day.