One Year After ElWG: Has Austrian BESS Lived Up to Expectations? | Boris Šešlija, Huawei

Yeah, hello everyone, my name is Boris, Boris Eschlia, and I'm very happy to talk with you on the topic one year after ELWG has best list lifted up expectation, let me allow just a short introduction of the company I work for, you may know Huawei from consumers, let's say from cell phones or maybe the 5G technology, but Huawei as well has a energy part which is the so-called digital power, which is the so-called digital power, so we are quite experts in let's say photovoltaics, electro mobility, and of course BESS. The other thing that's interesting about the company is that not most of our employees work in sales or marketing, we have more than 50% of people really working on R&D for the market. Talking about BESS, what's interesting is that BESS is really working on R&D for the market. Talking about BESS, what's interesting is that BESS is really working on R&D for the market. We deployed about BESS, we deployed about 60 gigawatt hours on BESS, we deployed about 60 gigawatt hours on BESS. Globally, this is a perfect Huawei slide, this is how usually our slides look like, a lot of information, but I just want to pinpoint BESS in general is a platform for many business models, so you can use it for, we heard about like capacity market, ancillary services, there's a BESS you can use for, off-grid solutions like a very big project in Saudi Arabia. All together BESS is system friendly, system supporting, and helping the grid, as you can see in some of these examples. This slide is just about three numbers, don't go too much into it. One number is how big is BESS in Europe, or how big can BESS be? Like in Bulgaria, we deployed this BESS with 500 megawatt hours, and please keep another number in there, we're talking about last year, so last year already, a huge project in the market. And this year, the market, the large-scale BESS got even bigger, we're talking about gigawatt hour projects, for instance, in the Philippines this year. So, what about us here in Austria? How does it work with BESS over here? As said, the ELWG, what was promised for BESS? Let's concentrate on BESS. It was a law that was introduced to the public pretty much like Austria's Christmas presents to the energy market, because it happened around Christmas last year, right? And it is a law that after 15 years of ELWG, the market really was waiting for, and was pretty much listed in the law itself, sounded very good. Like key facts, I'll just give you some grid-free exemption for system-supporting storages, and not for one or two or three years, no, pretty much for the whole lifetime of the project. We're talking about 20 years from commissioning. Then, it was talked before, capacity is a thing, grid capacity. So, it said, well, let's go first with flexible grid access, if that is okay for you. So, we'll get more large-scale BESS in the market, it will be faster, and then after clear deadlines, let's say grid level three is maybe interesting for large-scale BESS, well, wait two years, and you get full grid access. So, altogether, transparent, nice, it would reduce costly grid expansions. That is pretty much what it was all about. And when you make a law, sometimes you can really hit it good, sometimes certain things can stay unclear. So, there was something that was unclear. And I'll use the German word here, Systemdienlichkeit. It's just one word, but much room for interpretation. Because the law allowed everybody to know, okay, what are the benefits I'll get, but what actually brings me to the benefits would be, I would like to know what Systemdienlichkeit's supporting operation of BESS is. So, this is still lacking. We still don't have a fair way on the definition on that. But the law about the fees, the system usage fee, that's coming in three months, right, on the market. So, latest by that time, you know what is Systemdienlichkeit's supporting, we'll give you this fee. What is not supporting, we'll give you another fee. The e-control, our regulator, I think someone from the e-control is here too, they said, well, how about these conditions? I'll just read them out briefly in my own words. So, one would be like, be at the right spot. You know, you cannot just build it everywhere, it has to be an official grid plan. Sounds okay. Second one, well, be big enough. We're just talking about large-scale BESS. Fits. Sign a flexibility contract. Well, if you do business, you need contracts. Fine. Win a competitive tender. Well, tender. Okay, okay, yeah, we do tenders, all of us do tender. It's okay to accept operation limits. Well, we just talked about it. We have a capacity problem. So, of course, flexibility after. It's okay. Heard about it. And then, don't share a meter with consumption. There was a presentation on that. So, what about if there is a factory there? Yeah, just use a different meter. You cannot all be on the same meter. So, to me, it looks okay. Problem is, the idea was, no, no, all these conditions have to be carried out at the same time. So, it's a cumulative condition. So, let's see what actually happened on BESS. What happened? Like, the law itself took place, as I said, Christend 225. What is before? How was the BESS market in Austria? And there is BESS. There's a lot of BESS. But it is mainly residential in 224. Like the year before. We're going to have a look on 224, 225, 226. Just to see what the impact was. So, 70,000 new battery storages. Then, what about large-scale BESS? The biggest project was in Corinthia with 24 megawatt hours deployed. You remember my numbers from before. So, still some room. Let's say it in our large-scale BESS. Maybe 25 got better, right? Because when you're about to make a law, then you have drafts on that law. Actually, to be fair enough, the draft on the ELWG is way older. It's already in 224 in January, if I'm not mistaken. So, of course, you wake expectations in the market. And as we saw before, in other countries, a lot of BESS is installed. So, what happened in 225? Well, believe it or not, large-scale BESS stayed the same. Yeah, seriously. Large-scale BESS, and I was kind of shocked by that. 80% is coming, again, from the residential CNI storage. The biggest really deployed one that year is in Corinthia with 44 megawatt hours. But this was a second-phase one. First phase already happened in the year before. 20 megawatt hours were deployed. So, at the end, actually, the biggest one would have been, again, 23.2 percentages. So, now that we learned, okay, it has been around for a while, and we learned that the market itself pretty much interpreted the conditions, how to be, let's say, system-friendly or system-supporting, more as alternatives. You saw like six conditions, right? What is actually going on this year? Surprise, surprise. No breakthrough. No breakthrough this year until now, in September. The federal states may vary, but the result remains the same. So, let's go to another federal state. Let's have a look at Burgerland, which is the most interesting now here. Why? Because the biggest, really deployed BESS is there, the so-called super-hybrid power plant. It has 68 megawatt hours. You remembered my numbers from before, you know, what's going on in neighboring countries. So, okay, well, if that's a large-scale BESS, I know about that project pretty well, because it's based on Huawei technology. But what else is happening in Burgerland? So, look, five megawatt hours in Meidenstadt, five megawatt hours over Polndorf. So, not so big. Maybe, until the end of the year, Güssing will come up with 50 megawatt hours, but still, then we are under 68, right? 68 is still the best. So, who will get the title? Who will be this year named the largest project? Maybe, maybe we go to Upper Austria. Maybe it's going to be Wagenham. Yeah? 170 megawatt hours is in the room. Honestly, I doubt it. I think it's going to be deployed next year, but who knows? And the fact sheet says something sad to me, you know. The biggest large-scale BESS in Upper Austria, like the industrial heart of our country, is one-tenth, not even one-tenth of what Wagenham would come up with. Current status, it's as well very interesting. Like, you see the numbers that what is really deployed, and then let's see what about the media, you know. What is the media talking about? Well, pretty much everyone likes the topic, so everyone focuses a little bit more on the future. This is good, right? But so much in the future. I'll just give you an example. There's one project in Lower Austria. So, that was covered in 224. You can count with me, you know. 224. Then in 225 was covered again. Then in 226, big press releases. But it will first, or it's firstly planned to be deployed in Q3 27. And who knows? Maybe it's not going to work out. What about if it comes to 28? Five years. Five years we're talking about the project of the size of 140 megawatt hours. Let me tell you, you remember my Bulgaria slide? Five months. We needed five months to get that on the ground. So, five months for 500 megawatt hours in neighboring countries versus five years over here in Austria. Of course, you know, if you have big numbers circulating around, you read in a newspaper, 600 megawatt hours here, 500 megawatt hours there, 300 megawatt hours in Burgenland, wherever that may bring a catalysation with it for, let's say, newcomers that may speculate with grid capacity, so-called grid flipping, could all be. Like, it's around, and it's been talked about. Now, look at this number. Because you could be like, well, come on, Boris, maybe no one has an interest in this. Maybe it's, you know, it's just, maybe people found it as interesting, but they lost track on it. Well, let me tell you, I doubt it. These are huge numbers again. We're talking about 24 gigawatt hours pending grid connection in Austria. Like, so, between expectations, between pipelines of companies, and that what is really deployed and installed, what we see, there seems to be a very big gap. I'll take Karinthi as an example. There was an interview in Kleine Zeitung by its CEO the other day. So he said, like, guys, come on, I have 4,000 MV requests. But that is five times my province peak. And then, from that, I have 130 MV approved so far. So you see, between what maybe the market would like to see and what really the DSOs right now can provide, it's a huge gap. So we were talking about islands before. So I like that. So I'll talk about non-islands again. You know, Austria is definitely not an island, and we don't have the sea anyway. So let's go to Eastern Europe. Same years, 224, 225, 226. What happened over there? You remember my example from Bulgaria? Look, Bulgaria in 25, where it is. You know which project we had. And now look where Bulgaria is now. Skyrocketing. Amazing, really. And then what, for me, actually, is the most interesting one I have to be, is Ukraine. Ukraine, war-troned country. And look at the numbers from zero to hero, right? And the most interesting thing about Ukraine is, well, all the infrastructure gets bumped, but one thing you cannot really bump that easy, which is nuclear plants. It may affect you too. So nuclear plants are there. So nuclear plants are there. They're there for the baseload. But without BESS being flexible, nothing would work over there. Oh, well, some of you may say, wait, wait, wait, wait, wait. Weren't you talking about what is helping the system? System friendliness? System supporting? Grid system supporting? Well, isn't that exactly, like, in real time what's happening there? You can decide yourself. Let's challenge and check what is Western Europe doing. Okay, Eastern Europe, some may be like, well, you know, in emerging markets, regulation is not so tough, you know. Let's go to Western Europe. Western Europe, same thing. Multiple, multiple in numbers. Netherlands, same size in inhabitants, let's say. Tripled, tripled. Yeah? Germany, France. And now, of course, analysts, all of us, you know, we love to go for explanations. Okay, what can explain it, you know. What's interesting, I can tell you, like, they had the same thing with laws coming up at the same period as we have ELWG, as we have our system fields, same time, 24, 25. But look, over there, the numbers multiplied. So let's say maybe regulation over there seems a little bit more understandable, let's put it like that, than over here. Since there will be a panel discussion, let's conclude. Let's conclude a little bit about what were the expectations on this law, and, of course, what that law will bring, right? So it was supposed, the whole thing was supposed to be an alternative to grid expansions. We don't want that out of different reasons. This is, well, very expensive, yeah? And with it, rapid rollout should come with a large-scale BAS, as we have it in other countries. As you could see, like real numbers, the outcome so far, only a handful of large projects really got deployed. And most capacity is still in permitting. Now, that's as well a positive thing, right? It looks like there's a lot of potential. Maybe it's not going to come this year. Maybe it's going to come in two or three years. So I see that as a positive thing. But anyway, it doesn't really help someone if you're an investor and waiting and waiting and waiting for the permitting, right? Austria has the demand. We saw it. Like, otherwise, people wouldn't ask for it at the DSOs. The investors are here. Like, we're not a poor country, yeah? But I believe that without pragmatic regulation and a little bit faster DSO approvals. And I'm sorry to put it that way. As some of you know, like, I used to live in Germany, right? And in Germany, DSOs have as well a big problem with capacity, yeah? For many years, the problem was so big that they split the price zone, yeah? Because they couldn't stand it anymore. So I don't want to just put it on, okay, it's over here. It's such a huge problem. Somewhere else it isn't. No, in other countries, you have this too. So let's put it all in one sentence. Clear rules. Efficient compliance. Less over-regulation is the thing that at the end of the day makes all shareholders more happy. And with these words, I would like to thank you all for listening. Thank you, Budis. There are for sure some challenges you pinpoint here in Austria. What was the biggest obstacle for battery storage than in Austria? Is it economics permitting or the grid connection? Well, I think what I tried to explain in that thing is when uncertainty enters the room, then, of course, things don't happen. So certainly comes, what is the law there for? A law is there for people to understand what are the rules, then, of course, to people to comply to that rules to then officially get something. I mean, this is very, very easy words. It looks like, well, that didn't really happen, you know, because you saw all the other countries, they have similar problems, but somehow it happened there. So I guess we have to be fair on that, which, you know, it's still not over. We can still change it, but that's the fact right now, yes. Any questions from the floor to Boris on the best issue here in Austria? Okay. I think we can end there, Boris. There will be topics around this also in the next session, I would believe, but here is also a small present from us. And I think you know. Thank you. Thank you. Yes, I know part of it, for those of you who are interested in coffee, step by. Thank you.