VI-STRATEGIE TRIFFT Ulf Heitmüller

I can gladly do that. I mean, which father doesn't do that? I assume from the outside. Well, my father was active for many years at BEB, the operating company for those who grew up in gas, that is still a well-known name, a fully integrated oil and gas company with parent companies Shell and Esso, and that was formative. Many people who worked at our home came and went, especially from the export area, so the Americans, whom I got to know and appreciate through that, this international flair that came with the company, even though it was actually a very North German-rooted firm. My father strongly urged me to study mining, which I rejected because that would have been in Clausthal-Zellerfeld at the time, and the proportion of women there was not particularly attractive. So the decision to go into the oil and gas industry was more of an independent decision. But I think you have to layer that a bit. I started in industry in 1994, and in 1994, I was a trained electrical engineer. You can hardly imagine it today, but electrical engineers or engineers in general had no jobs. I believe that for the position I then got, there were over 250 applications for a single job advertisement in the Hannoversche Allgemeine Zeitung. That gives you a feeling of what was going on. When you said you had a job, the first question was 'What?'. So for me, getting a job was the priority, relatively regardless of where. So there was a bit of chance involved.

If you are not perhaps the leader of a globally operating company, then I think it is first of all local action that you have. And I think it is good to look at what you can achieve in your own environment, each in the position you are in. But that should not prevent you from considering the larger context, be it global or also a bit clearer: Europe-wide, Germany-wide, company-wide. I think you can layer many things, a bit like peeling an onion, to see where your own activities actually have an effect. So very good local grounding is also good for a global perspective. I only say: absolute, I believe, standing with both feet on the ground helps in any case.

Yes, you have to say that. And I would also say, first of all, very personally, for me homeland is particularly where my family is, where my people are. That is something that is very dominant for me. There is another view that I also consider very important: the topic of values. And I believe that you can only feel at home and rooted where you notice that you are moving with values that are consistent with yourself. I find that is something that is very formative or very important when you think about it. That means that a part is relatively far-reaching because I have found that you can be in many places and find that people per se have very similar assessments of the world, which also means that you can then feel a bit at home and comfortable. So not necessarily tied to a place or time in terms of values. And besides, that you can communicate with each other culturally, linguistically, and so on. Yes, exactly. I also have to admit that I recently had a situation here where a photographer who helps us with our image collection showed me a photo book that he values very much, with pictures of the North German landscape. There I have to honestly say I notice that this connection to landscapes and regions comes emotionally, that it is deeply rooted, so the emotional side is not completely avoidable.

It is already a very different world that we have now. I think that there has been a complete change in what we do and how we do it. We are in the gas industry, which I think is a special situation compared to other energy industries, especially if you were very focused on gas, as I was for most of my career. Then you are in the special situation that we as gas people always lagged a bit behind. That means the electricity people, everything that was done in electricity, was much further ahead, and the gas people tried for a long time to preserve traditions, but also tried to really preserve them. In hindsight, I think that was financially quite successful, one must say fairly, because the industry also protected itself for a longer time. On the other hand, it made the change that we need later all the more difficult because the ossification in the companies was sometimes even greater than in the electricity companies, and it was already very pronounced there. You can see it from the big names in the gas industry that no longer exist. We will come to VNG later, but you can also see what a cultural change has taken place.

So from that point of view, it will certainly be observed with great interest. But I think one has to note that the project, if you want to call it that, the German Energiewende was started as something that also means change into a positive future, also with a clear idea behind it that it was not only about the pure exit from nuclear energy, which was an essential pillar, but also about climate neutrality or climate protection, and thus about the topic of CO2. And I think that is something where one has to note that the way we set it up in Germany did not lead to a significant CO2 reduction. All the CO2 reduction we actually have has ultimately happened here in the region, and that in the course of a tendency towards deindustrialization. So from that point of view, nothing has happened that I would call a success. But it is not that it doesn't work with Brandt, but it is state-installed changes. So I think that the perspective has changed away from a project that tried to actively address climate change and create something positive, to a situation where one says, well, just with funding mechanisms it won't work. You also run the risk of making real mistakes that can be very expensive. So in that sense, the German Energiewende will probably not be the same anymore. There are various states that deal with it differently, whether in America, South America, or China. They are in the same boat. Possibly we need a new state or new compromises of this German Energiewende, or do we need companies, also large companies, that can perhaps set impulses and support politics a bit? I have the feeling that politics is sometimes a bit at a loss. I think we, especially as the gas industry, have put our finger in the wound in recent years because we saw that this pure focus on 'we need more windmills and more power grids and then it will somehow work' cannot be effective. And this realization has also seeped through a bit. So I would not necessarily speak of a restart, but I believe that this evolutionary development that has taken place in the last 24 to 36 months, where we see that politics is open to the arguments that gas, gas networks, renewable gases need their place in this energy transition, that one can deduce that if we focus this race on renewable energies that are fundamentally superior, we try not to achieve in terms of CO2 savings, to bring that more to the forefront and to see how we can use this currency CO2 to steer the overall project. I think that is already asserting itself. At least I see clear movement in this direction. On the technical side, it is also asserting itself. If you look at the broader public, I think there is still some development work needed, civic discussions and the like. I think we need transmission to get there. That's my feeling when I look at it.

Yes, and that is also something we try to convey: that this master plan as such exists in its basic orientation, but in its manifestations, I think we have to accept that we simply have to try things here and there, knowing that some of the paths we take may be dead ends that we have to turn back from. In that context, it might also be useful to have national champions that could help shape it, but there are different opinions on that. Large energy suppliers that can show how to achieve economies of scale, and alternatively, there are very strong decentralized discussions. We will only be able to implement this in the regions with central possibilities, so again socio-political discussions arise. And I think we also have to blame ourselves a bit, because especially in the early days of the energy transition, we as large companies were not exactly the ones driving it forward, and accordingly, the whole topic largely passed us by. So there is a natural mistrust on the political side that we suddenly, as converts from Saul to Paul, are the ones who support and drive everything forward. I have a certain sympathy for that, or at least understanding. Only those who change remain true to themselves. And we would come back to that later.

Yes, it is one of the topics that we try to make transparent, especially in the political environment, that you cannot talk about changing individual parts of the energy system, but that you have to have a holistic view and a realistic view of what is feasible in this energy policy triangle between climate compatibility, social compatibility (i.e., the cost factor), and the topic of security of supply, which is immensely important for us as an industrial nation. That is why I very much appreciate the work that the dena (German Energy Agency) is doing now; I think it is exactly the right direction. I recently, I think I also quoted it at your event, a numerical example from Mr. Herrmann that was very memorable. He said we have on the order of 2,500 terawatt-hours of primary energy consumption in Germany that we need. About 1,000 terawatt-hours run through the gas systems, which shows the relevance of what we have in gas. In electricity, we have about 500, of which about 180 are renewable energies. That means the step to decarbonization, if we talk about 80-85% decarbonization, is actually a step from currently 150-180 to 2,500. It is still an immense amount that needs to be done to trim the entire system in a significantly climate-neutral direction.

20 30 plus is naturally always focused on looking beyond 2030. There is still a long way ahead of us, and there is still a lot to do. We have also, within the framework of the strategy, I would like to say, this basic idea that we must also be willing to fail. We have also embedded that. That means it is not that we say this is simply the property, probably not so simple. But the strategy is coordinated with the owners, so at least the basic understanding is there. It is a timely price, I don't know yet, we'll see. So far, we are on a good track, so the question may not even arise. Nevertheless, I think one of the answers that the strategy also gives to the general question of where we want to go is, so to speak, don't commit yourself too much in the sense of 'this is it and that's appropriate', but also to have variability and flexibility in mind to say okay, I have to adapt here and there, and if something doesn't work, I will look for something else that ultimately serves the purpose. Generally, we have made some really good progress. We have made a few major decisions. We sold our Norway business, which was a momentous decision for us because we had invested a lot there for a long time, both financially and emotionally, and in terms of knowledge. So I think that was an important step, and it also showed that we are capable of acting, that we are not just reacting to what happens, but are able to take our destiny into our own hands and move forward. So that was an important cornerstone. In the designated growth areas where we are active – biogas, neighborhood developments, digital infrastructure – we have each made good steps forward. These are completely different areas in which we are active, and they also challenge the company in very different ways. So I think that with the way we approach it, we are also seeing a cultural change in the company that in turn leads to us having more of this flexibility that I mentioned earlier. Although I am very aware of the downsides of flexibility. The winged word 'open to all sides' is not quite tight, and there is something to that. So we try to balance it sensibly. But at the moment, I must honestly say, we are strengthened. It is really going quite well in these new areas, and that is also extremely helpful in the established areas. In the area of gas transport, gas storage, and gas trading, where we traditionally come from, we simply have an excellently positioned organization that has also managed to modernize significantly in recent years, to become much more efficient, and accordingly provides a foundation that also enables us financially to do a few experiments here and there to see what actually works and what doesn't.

As I said, it is constantly being adjusted. You just mentioned the topic of green gases. We are trying, as part of our strategy, because the foundation is simply that we have an excellently developed infrastructure in gas, natural gas. This can already do much more than we actually use it. The topic is always the exchange of oil heating for gas heating. With existing technology, we can do an enormous amount that we have not yet exhausted. But looking ahead, if we want a decarbonized society by 2050, then natural gas must also be replaced, and we need ideas on how we can make this gas stream renewable. There are many activities that we subsume under that. We are currently writing a green paper for green gases, where we try to address the entire topic and then break it down into individual projects. And we have already started some. You just mentioned one thing that I think will come, I am quite sure of that, though we also hope that through the real lab we can get a bit better financial footing: the topic of Bad Lauchstädt. In Bad Lauchstädt, we have a large cavern storage with many caverns. We will convert one of these caverns to hydrogen in the future. We want to store green hydrogen produced from a nearby wind farm via an electrolyzer in this cavern, and then via a converted pipeline, essentially supply this hydrogen to the refinery site of TotalEnergies, so that we can present a closed hydrogen system for the first time, covering the entire logical chain from green production, storage of energy in the form of hydrogen, to marketing. That would be a great project. But these are still laboratory conditions; we are still learning. Financially, it is currently all difficult because the business models simply do not exist yet. However, and this is something we are watching with eagle eyes, the topic of business model is always an essential component for us. But, as history shows, some technologies simply need start-up financing, and it is important to use tools like real labs or the funding that can be obtained from structural funds in a targeted manner. But not for pipe dreams, I must say clearly; there must be a veritable business model at the end.

You certainly also have approaches to participate in this entire structural change process in the Central German lignite areas, I think, or also to get involved with such examples within the real lab. Yes, we are. The one I just mentioned, the other is naturally where it is about possibly replacing capacities with natural gas power plants at some point, we are also called upon to at least provide the capacities for that. We will do that; that is our bread and butter business. But we are also working on other topics. We are, with cooperation partners, thinking about the topic of mobility, hydrogen mobility, and looking at how we can provide fuel cells where routes cannot be electrified, how to get the hydrogen there. So these are all the topics we are dealing with. There is probably also a feeling of possible networking opportunities. Just last week at the presentation of a similar project in Ilmenau, TU Ilmenau, CO2-neutral supply for industry, similar thoughts are being made. Here one probably has to consider how to think in Central German terms or even further. That brings me to the topic of GI, which was in the freedom also a bit the energy industry voice in the Central German region. In the sports area, there is RB Leipzig, which could be seen in this way. How is it with this pioneering role from the perspective of VNG? Well, I think that is not a goal per se. I don't think we have to be pioneers; quite the opposite. I would be very happy if others also take over some of that. I have to say there is no other in that sense. One would rather have it like with cyclists: one at the front and the others benefit from the slipstream. I think the potential that lies dormant in the region – and I would now include the entire East – is immense, both in terms of creativity and the availability of research, etc. It is truly outstanding, and I place a lot of hope in this topic of structural change because I believe it can be an excellent starting point for politics in the East to use this topic of structural change, to use the money that is made available for it, to unleash the forces. It allows you to say that you are not only continuing old traditions, but old tradition here around the corner is the colleagues from Asylgründe? I come into the old energy world and there is a door in that sense. So there is also a lot of entrepreneurial spirit and engineering spirit that can be used by encouraging people to do something. When you travel through the country, you also see that. The professor is very often, then there is a considerable echo. So we want to create a Central German energy storage association now. You will say we already have that nicely in Munich or Karlsruhe with their models, but when you travel through Central Germany, many say they would like to participate. So these are topics where one perhaps has the desire to build up and see if they follow. For example, that is one example that just came to mind. Another example is here in Leipzig, there is a very lively startup scene that is very active, and we also look to include the topic of energy in startups and to support them. It works wonderfully; it is very refreshing to talk to the people there. We have also started cooperative beginnings with the Fraunhofer Institute in Dresden. So you can see many little plants sprouting, and I am confident that some really strong trees can grow from them. So we don't need to worry about this region, nor about the women, I think. Thank you very much. I think we could reflect on these things and talk much more. Thank you very much for dedicating this time to us. May you continue to have success, and a bit of luck, which you occasionally need. Many thanks, thank you.