Soldera's Q1 GO Outlook | State of the GO Market | Soldera Markets #4

Transcript of the episode's discussion between Oliver Bonallack and Al William Tammsaar [00:00:03] Hey guys, and welcome to a special episode of Sodera Markets. [00:00:07] Today we're recording a state of the go markets. [00:00:09] It's an outlook for 2025, Q1 specifically. [00:00:13] So this will be a little bit of an overview, [00:00:15] what we think is going to happen, [00:00:17] what we think are the most exciting developments and trends that deserve to be [00:00:20] looked out for. [00:00:21] And yeah, we think it's going to be good. [00:00:23] So, you know, here with Al, but why don't we dive straight in? [00:00:26] What are you most excited for this year? [00:00:28] So most excited, especially in Q1, I am about the upcoming reporting requirements. [00:00:35] So we'll talk about CSRD later in the episode. [00:00:40] But before that, [00:00:41] I also want to talk about the overarching topic of supply and demand because [00:00:48] obviously as a free market mechanism, [00:00:50] it's very important to understand how both of these things work out because that [00:00:54] has a significant impact on the price. [00:00:56] When it comes to supply, [00:00:57] In terms of the international guarantees of origin market or, [00:01:01] well, [00:01:01] within the European market, [00:01:03] the biggest exporter is Norway. [00:01:05] In terms of demands, biggest importer is Germany. [00:01:09] So what happens in both of those places is extremely important for the entirety of the market. [00:01:14] And right now, [00:01:15] we're kind of in the state where last year we saw, [00:01:19] in addition to the year before that already being very strong in terms of [00:01:24] hydroelectricity production, [00:01:26] that has continued over into 2024. [00:01:30] And now we're kind of sitting in a state where the guarantees of our engine market [00:01:35] is somewhat oversupplied. [00:01:37] And in Norway, [00:01:39] the reservoir levels, [00:01:41] which is essentially stored up energy that they could use to create even more at [00:01:46] all time, [00:01:47] that is at relatively high, [00:01:51] unusually high levels right now. [00:01:53] So we're sitting in a situation where the market has a lot of supply available. [00:01:58] There's an expectation that supply is going to come online. [00:02:02] And that's really depressed the prices. [00:02:04] But what I'm really excited about in quarter one specifically is the fact that [00:02:11] thanks to European regulations, [00:02:13] we are expecting to see more corporations start reporting on their renewable energy consumption. [00:02:19] specifically larger ones, [00:02:21] because there's new regulation that says, [00:02:24] hey, [00:02:24] if you have over 500 employees and you're in a European company, [00:02:28] similar to how you get your finances audited once a year, [00:02:32] you need to get your sustainability report audited once a year. [00:02:37] So you don't have to do anything specifically. [00:02:39] We're not making you do anything, but you do have to disclose what's happening. [00:02:44] This is something called the Corporate Sustainability Reporting Directive or the CSRD. [00:02:50] So our expectation is that we're going to see some sort of impact for that. [00:02:55] And we're hoping that's going to balance out the relative oversupply in the market. [00:02:58] Now, [00:02:59] this other thing that's worth mentioning is that while some people in the market [00:03:04] feel that the market is somehow even more oversupplied than it was in 2024, [00:03:09] based on the analysis we've seen so far, [00:03:12] that does not feel like it is the case. [00:03:15] We are likely sitting at lower levels of oversupply than we were at the start of 2024, [00:03:20] which is somewhat positive, [00:03:22] especially considering the fact that we're expecting more demand to come online [00:03:26] this year. [00:03:26] A question about the capacity of Norwegian reservoirs and oversupply in general. [00:03:32] Is it kind of predictable when that supply is going to hit the market, [00:03:35] being a sort of stored energy source, [00:03:38] so to speak? [00:03:39] Or is it possible that those reservoirs won't be released in a fashion that will [00:03:45] completely flood the market with geos, [00:03:46] or is it almost a guaranteed? [00:03:47] It's complicated. [00:03:48] So what you have to keep in mind is that when you're producing electricity, [00:03:54] you're not necessarily doing it for the GOs, [00:03:56] and that's not the thing that's actually informing your decision. [00:03:59] Generally, [00:04:00] what ends up informing your decision is electricity supply and demand on the [00:04:04] physical grid. [00:04:05] And that essentially means that if the energy prices go too high, [00:04:09] you are just more likely to capture that opportunity and sell into the market [00:04:13] because that's the market essentially telling you, [00:04:15] hey, [00:04:15] there's not enough electricity on the grid right now, [00:04:18] right? [00:04:19] So if electricity prices are high, [00:04:22] then you would expect more renewable energy to get created, [00:04:25] especially in this way, [00:04:26] which does lead to more supply in the market. [00:04:28] In terms of predicting that, sadly, I don't have that kind of crystal ball. [00:04:32] It might be an exceptionally wet year. [00:04:34] I feel like it's going to be, [00:04:35] but if it is, [00:04:37] those reservoir levels are likely to stay where they are. [00:04:40] If it's an exceptionally dry year, [00:04:41] we might even end up with the reservoir level significantly lower than we saw last year. [00:04:46] So it's all ultimately going to come down to how the market behaves, [00:04:51] what is the electricity market doing, [00:04:53] and especially what is the general water cycle looking like, [00:04:56] especially when it comes to Norway. [00:04:58] So many factors to include. [00:05:00] Have you sort of thought about electricity markets more broadly when conducting a [00:05:03] Q1 sort of outlook, [00:05:06] or do you specifically sort of limit it to sort of policy demand and stuff like [00:05:11] maybe upcoming auctions and stuff like that as well? [00:05:14] When we're analyzing the markets in Soldera and trying to get a good outlook on [00:05:18] what we expect to happen currently, [00:05:21] we do not include a lot of context outside of the guarantees of origin market itself. [00:05:26] Mostly because eventually you get to a point where you're modeling the entire [00:05:31] economy and how it behaves. [00:05:32] And is that like a reasonable endpoint you want to end up in? [00:05:36] And is that going to inform your decisions better or worse? [00:05:39] In my opinion, keeping it simple gives you 80% of the insight that you're going to have. [00:05:45] And we do have to keep in mind that a lot of the inputs in some sense are random. [00:05:49] They aren't deterministic. [00:05:51] So there is this distribution of things that could happen over the next months, [00:05:56] over the next year. [00:05:57] Getting too caught up in the details probably isn't that helpful for getting to [00:06:03] reasonable results. [00:06:04] So in the short term, [00:06:06] the two biggest supply conditions you see are hydro reserves and upcoming auctions. [00:06:11] Yeah. [00:06:12] So auctions are a good indicator of how the market's behaving. [00:06:15] Well, at Soldera, we do do quite a lot of selling ourselves. [00:06:19] But there are also these big public government auctions. [00:06:22] There's one coming up again in France soon. [00:06:25] And these are very helpful price indicators because it kind of gets you a very [00:06:32] specific snapshot in a point in time of Java markets behaving this way. [00:06:36] We do expect more supply to come into government auctions this year than last year. [00:06:42] That's just this kind of natural process. [00:06:45] That doesn't necessarily mean anything bad or good. [00:06:49] It's just a fantastic source of information. [00:06:51] And we're already seeing sort of auctions happening of late 2024 volumes, correct? [00:06:57] Does that give any sort of insight into how the market's developing? [00:07:00] Or is it just sort of, you know, the final remnants of last year's market? [00:07:03] In my head, [00:07:04] I have written off like the ability of 2024 markets getting significantly better [00:07:09] than they are right now. [00:07:10] I'll be completely honest. [00:07:12] Mostly because 2024 was quite oversupplied. [00:07:15] The prices are pretty low and there is more supply expected to come onto the market [00:07:21] exactly through these auctions. [00:07:22] So my personal expectation is that we're going to see these price levels of like 20 [00:07:28] cents up to maybe 30 cents per megawatt hour. [00:07:32] But that's about the range we're going to continue seeing. [00:07:35] I don't have a lot of optimism that's going to change. [00:07:38] I think what we should focus on at this point is the 2025 market, how that's going to play out. [00:07:45] And very importantly, [00:07:47] are we going to end up at the end of this quarter in a situation where the [00:07:51] oversupply has gotten worse as a situation or has it somewhat resolved? [00:07:56] And there is a reason to expect that we can make pretty good informed deductions [00:08:02] based on what's going to be happening in the next couple of months, [00:08:06] mostly because of this thing called the disclosure deadline. [00:08:08] Disclosure deadlines are essentially, hey, you have this 2024 energy consumption. [00:08:16] And what is the specific date we're going to say, hey, you need to stop. [00:08:22] You can't buy geos on the market and use it for your 2024 energy consumption anymore. [00:08:28] So we have to have this lock-in moment of that's the state. [00:08:32] We're moving on to the next year. [00:08:33] We're going to think about the next year. [00:08:35] And where that need comes in to actually lock this in is something called the [00:08:39] residual energy mix. [00:08:41] And what that is, [00:08:43] is on a country by country level, [00:08:46] essentially a description of, [00:08:48] hey, [00:08:49] if you aren't using guarantees of origin, [00:08:50] if you aren't making any specific claims about the source of re-electricity, [00:08:55] This is what you got from the grid. [00:08:57] This is the carbon footprint. [00:08:59] These are the emissions. [00:09:00] These are the sources of all of the electricity on the grid that you consumed that year, [00:09:04] assuming you didn't make any claims about it, [00:09:06] right? [00:09:07] So it's essentially the leftovers of anything that didn't get used, [00:09:10] anything that didn't go into a specific claim. [00:09:13] And we need to lock that in at some point because otherwise this can keep shifting. [00:09:18] It can keep changing even later into the year. [00:09:21] And that gets really complicated to even think about what does that mean for a [00:09:26] company's or a country's emissions intensity? [00:09:31] What can we say about it? [00:09:32] Because if we keep revising it for multiple years in a row, it becomes quite chaotic. [00:09:37] So as companies look to secure their geo positions in the run up to the disclosure deadline, [00:09:42] that's when you expect the biggest sort of buy volumes to be occurring. [00:09:46] Historically, [00:09:46] quarter one is quite a trading intensive period of time, [00:09:50] mostly because we are trying to get rid of the previous year's guarantees of origin. [00:09:55] We're trying to find a buyer for all of the supply. [00:09:58] Buyers have a sort of deadline because after that, [00:10:01] they can't make any claims about renewable energy anymore when it comes to last year. [00:10:06] And that all comes together into being this last sprint before the market essentially locks in. [00:10:12] And why that is really important, [00:10:14] especially this year, [00:10:16] the disclosure deadline is the 30th of March. [00:10:18] So it's essentially the end of the quarter. [00:10:20] And what happens next quarter is the first audited sustainability reports for the [00:10:30] year 2024 have to be published by all of these large companies. [00:10:34] The corporate sustainability reports [00:10:36] reporting directive is going to come into force in the sense of, [00:10:41] hey, [00:10:41] now you actually have to put out the documents. [00:10:43] Companies that have over 500 employees are going to have to think about the [00:10:46] question of renewable energy use this quarter, [00:10:49] so they could actually be reporting it next quarter. [00:10:51] So how much of a difference are these incoming CSRD requirements in comparison to [00:10:56] sort of existing regulations? [00:10:58] Are we talking like complete overhaul here or just sort of like a basic amendment, [00:11:03] pushing people in the direction it goes or, [00:11:04] you know, [00:11:04] let's get into the actual nitty gritty of it. [00:11:06] What you have to understand about the CSRD is it doesn't prescribe, [00:11:11] it doesn't make you do anything. [00:11:13] It just makes you be very public and audited and verifiably accountable for your emissions, [00:11:20] for how you are having an impact as a company on the environment. [00:11:24] And it doesn't actually ask you to do anything, right? [00:11:28] It just asks you to report on the activities that you're doing. [00:11:33] So what that means is if you are a company and you want to have that halo effect, [00:11:39] you don't want to potentially endanger your company by looking like you just don't [00:11:44] care at all. [00:11:45] You have to do a couple of things to achieve that. [00:11:48] And part of this is, hey, where does your electricity come from? [00:11:52] Because if it's all coal, [00:11:54] that's going to have a major impact on you if you are in any way energy intensive industry. [00:12:00] Do you think the big companies over 500 employees, [00:12:04] optics are a big focus, [00:12:05] but does that apply to everybody or there's some people who literally won't care? [00:12:08] Or I mean, [00:12:09] what sort of distribution of companies in the European Union do you think actually [00:12:13] not controlled by, [00:12:14] but inspired to do the right thing and make sure that they have good optics in this scenario? [00:12:18] I think that's a really hard call to make right now. [00:12:21] And I think this year is going to be very informative for us because we're actually [00:12:26] going to end up with a somewhat definitive answer to that, [00:12:30] right? [00:12:30] That's very exciting. [00:12:32] Because historically, [00:12:32] we don't really have this kind of cohesive, [00:12:36] standardized way of thinking about things or reporting about these things. [00:12:41] So this year is really going to be the first time we actually get good insight into that. [00:12:46] I am hesitant to make a call before that. [00:12:49] But what the CSRD did definitely achieve is that it started this conversation in corporations. [00:12:56] Because if they have to do this, they have to talk about it. [00:12:59] They have to ask the corporation, hey, what are our priorities? [00:13:03] What are we thinking about here? [00:13:05] Because we're going to have to say that we're doing something or nothing. [00:13:08] But it's important that we have an answer for that. [00:13:10] Given that all of these things are kind of on the horizon and we're talking about [00:13:14] 2025 being a year that really illuminates this space, [00:13:18] I'm particularly interested in how forwards have responded to this, [00:13:21] right? [00:13:22] I mean, [00:13:22] what is the market sort of signaling in terms of how important CSRD is going to be [00:13:26] for the geo market? [00:13:27] So one of the things that we definitely have seen more and more across the last [00:13:32] year is that there's been this larger interest in locking in guarantees of origin [00:13:37] prices into the future. [00:13:39] So having some sort of certainty that this is the price we're going to have to pay [00:13:43] in 26, [00:13:44] 27, [00:13:44] that's significantly increased. [00:13:47] I think we especially saw that in the end of last quarter. [00:13:50] We saw this drastic increase in trading activity, [00:13:53] mostly because of the depressed prices, [00:13:55] right? [00:13:55] But we also saw, [00:13:56] I think it was around 70% of the market's entire volume was traded on a forward basis. [00:14:02] So looking into 25, looking into 26, looking into 27. [00:14:05] So a lot of that got already locked in ahead of time. [00:14:09] And now we're still observing that there's increased demand and interest in getting [00:14:15] certainty on future prices. [00:14:17] I think part of this is many buyers see the current state of the market as being [00:14:22] relatively anomalous in terms of the current guarantees of origin spot market being [00:14:27] quite low. [00:14:27] While the expectation has been that the prices get better and better, [00:14:32] But as there's been this sort of knee-jerk reaction, [00:14:36] I think we're also seeing the forward curve slightly come down. [00:14:40] And I think this does signal that there's still a lot of way to go in terms of [00:14:46] locking in that demand and getting those prices fixed for an even larger amount of [00:14:52] people or organizations. [00:14:53] It's interesting that you mentioned sort of organization source in there because [00:14:58] CSID is going to be rolled out in like a tiered way, [00:15:00] right? [00:15:00] As it looks here from 2026, [00:15:02] it's going to be even sort of larger criteria of companies that are acquired. [00:15:07] So going from 500 employees down to 250. [00:15:09] You're saying that the futures market isn't quite as excited about that as it, [00:15:14] you know, [00:15:14] it sounds great, [00:15:15] but it's, [00:15:16] you know, [00:15:16] we're still too unsure at this stage. [00:15:17] That is a way to describe it. [00:15:20] So, yeah, you're right. [00:15:22] In terms of 2025, [00:15:23] we're going to see companies with either 250 employees, [00:15:29] 40 million euro net turnover or a 20 million euro balance sheet total. [00:15:34] Those are in 2026 going to have to report about 2025. [00:15:37] Then there's even smaller companies getting added in upcoming 2028, we can say. [00:15:44] So the rest is going to be on a much longer timeline. [00:15:48] But in that specific range, we're going to see more and more companies have to join in. [00:15:53] And I don't think we're seeing most smaller companies really thinking about that just yet. [00:15:58] Yeah. [00:15:58] I mean, [00:15:59] if you were a business owner within that sort of category, [00:16:04] size range, [00:16:05] would you even know where to start thinking about this stuff from a perspective of DOs? [00:16:09] If you're not already purchasing them, [00:16:10] you're going to be approaching this market for the first time. [00:16:14] That should bring a whole new sort of category, you know, segment of demand, right? [00:16:19] In some sense, [00:16:20] but you have to also think about how most companies approach this kind of problem. [00:16:25] And they end up approaching it very similarly to how your UI might approach this problem. [00:16:31] So you have somebody that supplies electricity to you and generally they offer this [00:16:36] green electricity package, [00:16:38] right? [00:16:38] So green electricity packages are backed with geos. [00:16:42] You don't really need to think about that. [00:16:44] It's just something that's tacked onto your electricity bill and that's it. [00:16:49] What happens in terms of market operations in the background, [00:16:52] that's a lot more complicated than I think most people or organizations really have [00:16:58] to think about. [00:16:59] But it does end up getting reported and resolved when we get into this reporting phase. [00:17:05] Moving on to sort of more policy, [00:17:07] it seems like it's not just CSRD that's going to be driving demands. [00:17:12] There's also hydrogen inclusion within RED3, correct? [00:17:18] There are very different opinions on how fast hydrogen is going to pick up in the [00:17:24] European markets in general. [00:17:26] So for context, in the Renewable Energy Directive's newest iteration, [00:17:31] there's been this clause that, [00:17:32] hey, [00:17:33] if you want to have green hydrogen, [00:17:36] here are our conditions. [00:17:37] You have to use green electricity for it. [00:17:39] It has to be probably sourced. [00:17:41] It has to be relatively closely produced in time to the actual moment in time [00:17:45] you're using all of this electricity to create pure hydrogen. [00:17:49] That's essentially what the Renewable Energy Directive says. [00:17:52] That's what's been confirmed in the last quarter. [00:17:54] Are we seeing a major pickup of hydrogen production this year? [00:17:59] I'm not completely convinced on that. [00:18:01] I think we're in a relatively early stage market. [00:18:05] I think that's going to play out in the next couple of years. [00:18:07] I don't know if it's going to have necessarily a big impact this year. [00:18:11] Yeah, [00:18:11] I guess that's a factor that just depends on the growth of the hydrogen market, [00:18:16] which is self-dependent on so many different factors. [00:18:18] But it could be an exciting catalyst if there are any big breakthroughs or [00:18:22] developments in hydrogen next year or this year even. [00:18:25] Yeah, exactly. [00:18:26] If the technology becomes a lot better, a lot more efficient... [00:18:30] What ultimately is the promise of hydrogen is that when the electricity market's [00:18:36] prices are very low, [00:18:37] this can be a way to store that energy, [00:18:40] right? [00:18:41] So you take electricity off of the grid, [00:18:43] you use that to produce hydrogen, [00:18:45] and then that hydrogen later can be released back into the market in the form of [00:18:50] electricity again, [00:18:51] right? [00:18:51] Yeah. [00:18:52] So it can function as a sort of battery if the markets are volatile enough, [00:18:57] especially because of renewable energy production, [00:18:59] where you see very low prices at some points in time and you see very high prices [00:19:04] because there's just no renewable energy production happening. [00:19:08] You know, there is this question of what happens in those dark winter nights with no wind. [00:19:14] And well, [00:19:15] that's essentially the time where you're going to have very high prices in a very [00:19:19] renewable energy dependent market, [00:19:21] right? [00:19:21] So you need to figure out the storage and you need to have ways to actually take [00:19:26] advantage of the fact that you're going to know, [00:19:29] hey, [00:19:29] this point in time, [00:19:31] there are going to be very high prices. [00:19:33] How do we move electricity over to actually take advantage of that? [00:19:36] And another factor that you've included here is local sourcing. [00:19:40] Do you think that's going to play a bigger role in 2025 than it has in the past? [00:19:45] Or do you think it's still kind of a niche interest for people who are more [00:19:48] informed as to what makes a, [00:19:50] you know, [00:19:51] renewable energy claim more credible? [00:19:52] I think we're seeing these kind of requirements evolve over time. [00:19:56] I think the best example of that is in Germany. [00:20:00] Essentially, for certain subsidies, you have to use renewable energy. [00:20:04] 80% of that renewable energy has to be sourced from the closer local area around [00:20:10] Germany and including Germany. [00:20:12] Those kind of requirements, [00:20:13] as governments start thinking about these things, [00:20:15] those are going to create these kind of local premiums. [00:20:20] So, [00:20:20] hey, [00:20:21] to get the subsidy, [00:20:22] no, [00:20:22] you need to use renewable energy from Estonia or, [00:20:24] you know, [00:20:25] you need to use renewable energy in the country that you're actually in. [00:20:28] Can happen. [00:20:29] We'll see. [00:20:30] I think there's an argument to be made, [00:20:32] especially in addition to temporal matching of, [00:20:35] you know, [00:20:36] your consumption and the production should be closer in time. [00:20:40] Those are two trends that we are seeing people be quite interested in, [00:20:44] especially large corporations. [00:20:47] So in Denmark, [00:20:48] for example, [00:20:49] we are seeing Google and Better Energy collaboration on temporal matching renewable [00:20:56] energy over there. [00:20:57] And specifically, [00:20:58] this all ties into the new renewable energy directive additions, [00:21:02] which also require or ask governments to start looking into what do hourly geos [00:21:08] look like on this kind of higher resolution data of it was produced here and [00:21:14] consumed here in a relatively close time period. [00:21:18] But yeah, experiments are happening in terms of hourly matching. [00:21:22] There are some emerging requirements in terms of matching, [00:21:26] closer matching the actual area the energy is being consumed in. [00:21:31] And these are all developments that I don't expect to have a major impact on 2025. [00:21:37] But it is going to be something on the radar of we're going to see how this evolves [00:21:42] and moves into 26 and 27. [00:21:44] So with Red 3, [00:21:46] there's also a sort of push towards making it easier for domestic permeable [00:21:51] installations such as rooftop solar. [00:21:54] Again, I guess that depends on how large that market continues to be. [00:21:58] Do you see that significantly impacting Geos? [00:22:01] I actually don't have a good feeling on... [00:22:04] how that's specifically going to impact the geomarket as a whole. [00:22:08] But I definitely do see how that's going to affect Soldera specifically, [00:22:12] or our ability to enroll customers. [00:22:15] Because one of the things that we've seen in a couple of countries is that they [00:22:18] make it extremely hard for rooftop solar type of producers to actually benefit from [00:22:23] the system. [00:22:24] In Estonia, [00:22:24] we're very blessed to have pretty good systems around this that make it very [00:22:31] streamlined for small producers. [00:22:33] But I have seen in a couple of countries, [00:22:36] for example, [00:22:37] Finland, [00:22:38] where while it is physically possible to enroll yourself into getting guarantees of origin, [00:22:45] it is possible, [00:22:46] but it does require a couple hundred euro audit to actually achieve. [00:22:52] And when you just start putting those things together, it stops making sense, right? [00:22:57] So there's this unreasonable barrier to entry compared to any benefit you're [00:23:02] expecting to get from it. [00:23:04] And that's what you see in Breadfree in terms of phrasing. [00:23:09] They're essentially saying, [00:23:10] hey, [00:23:11] if you're under 50 kilowatts and you're a producer of renewable energy, [00:23:16] it should be possible for you to benefit from these kind of systems in a more simplified, [00:23:22] streamlined manner. [00:23:24] And we're going to see regulations get updated in various countries to actually achieve this. [00:23:30] So that is something at Soldera that we're really excited about happening in the [00:23:36] upcoming months. [00:23:37] And hopefully by the end of the year, [00:23:39] we will have multiple countries that have actually changed their policies, [00:23:42] especially when it comes to smaller producers. [00:23:44] So I guess onboarding smaller producers is going to be a sort of a fresh priority for 2025. [00:23:50] Do you think, I mean, this is a kind of a loaded question. [00:23:54] Does Soldera have enough sort of momentum and capacity to change the domestic geo supply, [00:24:02] you know, [00:24:02] on the European scene? [00:24:03] Probably not within 2025, I'll give you that. [00:24:05] But, you know, in the long term, what do you think? [00:24:07] Well, [00:24:08] in Estonia, [00:24:08] where we launched at the start of last year, [00:24:12] I think you can see our contribution actually to the supply charts when they come [00:24:16] out this year. [00:24:17] And that does end up being our ability to enroll various sizes of renewable energy [00:24:24] producers into getting guarantees of origin. [00:24:27] We go the extra mile to make sure that it's as simple for you as possible, [00:24:32] that it's streamlined, [00:24:33] that you don't have to do much. [00:24:35] We want to take the paperwork out of the question. [00:24:37] We want to make it [00:24:40] relatively minimal effort for you so you could get everything done in under an hour [00:24:44] and then you can just step away and everything's fine. [00:24:47] I think there is a major need for this and the smaller and smaller you get the more [00:24:54] real the need is because otherwise you just won't participate. [00:24:57] I do think we have already had an impact in the countries that we're operating and [00:25:02] I think as we expand we're going to see this impact magnify. [00:25:05] I'm curious now about sort of national programs within various European countries, [00:25:10] besides those that are enhancing access to renewables for the domestic market. [00:25:16] Is there anything that's sort of looking at the more energy intensive industries [00:25:19] either an assistance or a firmer push towards renewable production? [00:25:24] There are a couple of examples of this on the market. [00:25:27] Italy has been looking at this quite specifically. [00:25:30] They released this policy that essentially says, [00:25:32] hey, [00:25:33] if you're a really energy-intensive industry, [00:25:36] we're actually going to subsidize your electricity, [00:25:38] but that's going to require you to start building or repowering renewable energy [00:25:44] plants or contribute in other ways into... [00:25:47] solving this question of how do energy intensive industries actually get the [00:25:51] electricity that they need. [00:25:53] I find that to be super interesting. [00:25:55] I'm unsure how that's again going to affect the market in the short term. [00:26:01] But in terms of how that's going to affect the market in the long term, [00:26:05] I'm very excited to see how these national programs can affect supply and demand [00:26:09] and how they can make participating in this renewable energy market a lot more [00:26:14] attractive and interesting. [00:26:16] Another key area that seems to be popping up a lot is the German elections, right? [00:26:20] As Germany is the biggest importer of geos in the European market. [00:26:23] Curious what you think and how you've incorporated that into your outlook. [00:26:27] So it is something we had to look at, [00:26:30] obviously, [00:26:30] because of them being the biggest importer of guarantees of origin on the market. [00:26:35] Their policy... [00:26:36] Very important. [00:26:37] When it comes to the upcoming elections, [00:26:39] under the assumption that the AFD party doesn't end up forming a coalition, [00:26:45] which based on everything we've seen so far seems highly unlikely, [00:26:48] the other configurations of how a government's going to end up getting formed with [00:26:54] the CDU and SPD participating, [00:26:57] they generally all have a very supportive perspective when it comes to renewable [00:27:02] energy and when it comes to free market frameworks. [00:27:06] So we're expecting the German elections to not have a major impact on the [00:27:12] guarantees of origin market as they are right now. [00:27:15] And there might be an upset, [00:27:18] but even in that upset scenario of somehow the AFD coming into power, [00:27:23] thanks to the European regulations placing already quite significant requirements [00:27:30] on how things have to [00:27:33] have to be done we don't expect any short-term impacts from that really being that [00:27:41] measurable but you know in in a long-term kind of fashion if the AFD came into [00:27:48] power I think I would say a lot about where the European Union in general is headed [00:27:53] and I I'm not quite sure I'd be a fan of the outcomes over there [00:27:57] Yeah, [00:27:57] I don't think you have to be particularly political in any direction to sort of [00:28:02] agree that that would be quite damaging for the overall sort of frameworks of the EU. [00:28:09] And it would set a precedent, [00:28:10] especially given recent political developments globally about renewable energy. [00:28:15] So I'd say from a renewable perspective, [00:28:18] it's not that we're hoping for one particular outcome for any political sense, [00:28:21] but we're just hoping that the market retains its sort of integrity, [00:28:24] right? [00:28:25] If we do end up in this world where Europe start doubling or tripling its coal usage, [00:28:31] I think that would be a long-term problem. [00:28:34] Definitely wouldn't be a great thing that happening. [00:28:37] Outside of essentially this scenario where the AFD comes into power, this won't happen, however. [00:28:43] So there is a small likelihood that it would. [00:28:47] Anything that we've seen so far doesn't really point in that direction. [00:28:50] Coal, [00:28:51] I mean, [00:28:51] I read the recent EMBA report, [00:28:53] they specified that solar's just overtaken, [00:28:57] it was a gross output of coal in any one particular global region, [00:29:01] this being the EU. [00:29:02] And wind is also trending to do the same for 2025. [00:29:05] So I think it's good, but not if this happens, right? [00:29:08] Best we could do is just hang in there and just see what happens. [00:29:12] So I guess on that note, [00:29:13] we've kind of looked at all of the major variables that could play a role in 2025, [00:29:17] you know, [00:29:18] not giving a speculative opinion either way. [00:29:22] Yeah, so I think that that wraps up our Q1 market outlook. [00:29:25] I guess we'll be making these a new feature, which I think is a nice thing. [00:29:30] Yeah, we'll keep you updated on a quarterly basis. [00:29:33] But essentially, [00:29:34] to summarize what we're expecting to see this quarter in particular, [00:29:38] we are entering into the market with quite a lot of supply. [00:29:41] We want to see that get reduced. [00:29:43] There is quite a high likelihood of that getting reduced due to the corporate [00:29:48] reporting requirements that we're going to see really get acted on at the start of [00:29:54] this quarter. [00:29:55] How that plays out in this quarter is going to be a big decider on how the rest of [00:29:59] the year is going to play out. [00:30:00] So something to keep in mind. [00:30:02] How are the sustainability reports going to end up looking? [00:30:07] What's the rain in Norway? [00:30:09] And how do the German elections play out? [00:30:12] I think those are the three major questions that are going to decide the general [00:30:16] direction and vibe of this year. [00:30:17] Thanks for listening, everybody. [00:30:18] And yeah, stay tuned for more geo-related content.