Top Manager in Discussion: Marie-Theres Thiell, chairwoman of ELM?
Marie-Theres Thiell has been at the helm of the Budapest electricity works ELM? NyRt. for just over a year now. She spoke to The Budapest Times about current questions of Hungarian energy policy and a use of electricity that is particularly close to her heart: E-mobility.
How happy are you with the government’s energy policy?
The main thrust of the new government’s energy policy is right. In Hungary, particularly when it comes to the heating of buildings, there are still enormous reserves in energy efficiency. Energy efficiency and diversification of energy sourcing play a considerable role in reducing Hungary’s energy dependency. The focus on renewable energies and reduction of CO2 emissions are important elements of the European energy policy. Hungary too needs to make its contribution to our joint European climate policy. As to concrete talks with the negotiator on pricing, we are on good track. Now we have to wait and see. The government has said that it would like a rise in electricity prices for end users to be avoided if possible. That is a challenge for us. The costs of the energy business need to be covered and a certain degree of inflation needs to be priced in to be able to maintain and improve the level of supply security. The stability of the regulatory system remains very important to us. That is the precondition for further investments in the Hungarian networks, which still require considerable modernisation.
How willing is the state to compromise?
We are engaged in positive talks. Now we have to see how we can manage. Of course pricing also hinges to a great extent on how the price of electricity develops. It is to be expected that prices will rise Europe-wide based on Germany’s withdrawal from nuclear power.
So Hungary is negatively affected by the German renunciation of nuclear power?
Yes, undoubtedly. Germany will lose considerable electricity production capacity, roughly in the order of magnitude of the entire Hungarian capacity. Since Germany cannot make up that shortfall from its own resources, it needs to import electricity. Consumption will not fall. Prices rise on a market where the product is in shorter supply . Of course there is excess electricity production capacity in Europe, particularly in the Czech Republic and in France. There all the nuclear power stations are still running. But, wait until the winter comes, when the cold strikes and more electricity is needed, as the generation from wind power in Germany falls because of the weather conditions. That situation will push European electricity prices up. European electricity prices are determined to a great extent on the Leipzig energy exchange. Hungarian electricity prices are strongly tied to that, not least because Hungary is a net importer.
What does the future of the Hungarian energy mix look like?
The Hungarian government clearly supports the expansion of the Paks nuclear power station. It is also certain that the proportion of renewable energy sources is to be increased. We ourselves will contribute to Hungarian energy supply for the foreseeable future with the coal-fired power station at our Mátra site, which our parent companies, RWE and ENBW, have a majority share in. The coal supplies there will be sufficient for at least 60 years. We are continuously investing to increase the efficiency of this power station and to lower waste emissions by co-firing biomass, including agricultural waste of the region.
Are you planning further power stations?
We would like to invest in a pumped-storage power station, which would provide balance energy at our Mátra site. The more renewable and decentralised energy Hungary has, the more the country needs balance energy. An appropriate consultation phase ahead of a permit procedure is currently underway. If everything goes ahead at a good pace, the groundbreaking could take place in 2013 and the completed power station could deliver its first electricity from 2015. Incidentally, it would be the first Hungarian pumped-storage power station.
You seem to be relatively content with the energy policy conditions overall.
We have said from the beginning that we understand what concerns the Hungarian state has. On the other hand, the Hungarian state also needs to appreciate that we invest annually around HUF 30 billion [EUR 111.70 million] through our two companies ELM? and ÉMÁSZ, mainly in modernising the Hungarian electricity network. We continued to invest similar sums during the crisis years too. We create a large number of jobs in our company and indirectly through our subcontractors. Judging by our constructive talks so far with representatives of the Hungarian state, I am firmly convinced that our Hungarian partners are fully aware of our significance to the national economy. Our relations with the Hungarian capital are good too.
How much local autonomy do you have as a subsidiary?
We have a very high degree of local decision-making power. My Hungarian colleagues and I are fully responsible for the operative side of the business in Hungary. It is not the case that we are told what to do from Germany. Our profit so far has never been fully distributed. We have also ensured that a large proportion of it is invested here locally. The pejorative sense of the word “multi” has never resonated with us.
E-mobility
The opening of Hungary’s first charging station for cars.
What about the topic of e-mobility?
Last September we inaugurated Hungary’s first charging station for cars. We continue to place a great deal of emphasis on the subject, although we will not make any money out of it in the foreseeable future. The company has to decide what direction to take in its PR, marketing and sponsoring. Our group – in full accord with Hungarian energy policy – places great importance on energy efficiency and new technologies. That is our message, and it is one that is also conveyed in our advertising. Instead of sponsoring sports, for example, we have decided in favour of something that is directly linked to our own business and that benefits the country.
In the long term your company alone will surely not be sufficient to ensure the breakthrough of E-mobility.
That is certainly true, which is why I would like the Hungarian government to take up and support our initiative. It would be an excellent way of underlining Hungary’s self-image as an innovative automotive location. Aside from that, Budapest is ideally suited to the widespread use of E-vehicles because most drivers in Budapest travel only short distances – 24 km on average. It is clear that use of such cars would benefit the quality of the air in Budapest.
How is the developing of a network of charging stations progressing?
By the end of the year we will hand over six more charging stations in Budapest, as long as everything goes to plan with the permits. Locations such as Clark Ádám tér by the Chain Bridge are being discussed with the Budapest city council. It’s very important for us for the charging stations to be in prominent positions. There is also an advertising effect. We will also acquire more cars. Currently we have two electric cars. Three more will follow shortly, which will be used in our fleet on an everyday basis
What makes are those?
Those of our strategic partners Citroen, Peugeot and Mitsubishi. We asked them to submit offers. So far only those makes offer E-vehicles in series production locally. We only want to present vehicles that any Hungarian can purchase from a car dealer here. Otherwise there is little point. Of course the existence of an appropriate service background is just as important.
What is the situation regarding further E-cars in Budapest?
On 14 July we formed a so-called E-Community, whose members include the dealers of the three makes I mentioned. There are three additional membership categories. There are regular members who have to commit to purchasing at least a car and a charging station. Supporting members make a certain financial contribution. And then there are also members that support the idea as guests of the network. . The company ABB is our first regular member. Currently we are in talks with other candidates.
What is the incentive for the regular members?
One source of motivation is the positive effect on their image if the public becomes aware that the company uses E-vehicles. After all such cars stand for environmental awareness and innovation. Because of their rarity, they also attract a lot of looks. Another advantage is that we are providing the electricity for the vehicles free of charge until the end of the year, but we are sure to extend that.
What are the costs for regular members?
They have to buy a car and a charging station. At Citroen the e-models cost between HUF 11 and 12 million [EUR 41,000-44,700]. At Mitsubishi they are around HUF 10 million [EUR 37,200]. They can also be leased. In terms of charging infrastructure solution, ELM? offers a wide spectrum, from a simple charging box that can be mounted on a wall, such as in a garage, to an intelligent charging station outside with automatic activation and accounting software. Depending on the infrastructure solution chosen and the associated extras, the net prices without installation costs are between HUF 250,000 [EUR 930] and around HUF 1.3 million [EUR 4,840].
How long is the charging time?
It takes around six hours at the current charging stations. There are, however, already ultra-fast charging stations on the market and offered by us. In that case it takes less than an hour for the car to be charged, but these innovative technologies are still very expensive.
Six hours! You have to really be a big fan of E-Mobility!
Yes, you have to be behind it. Currently E-Mobility is something mainly for enthusiasts and technophile drivers. Charging the car needn’t be a problem. You simply have to adjust your habits and charge and park at the same time. That is possible! Consider that almost all vehicles spend more time stationary than driving. Charging up the car and parking simply need to be connected.
What support do you expect from the government?
Not direct subsidies like in France or the USA, but rather various indirect measures like in Germany such as tax breaks and positive discrimination. In the cities it would be possible to have preferential parking spaces for E-cars. Drivers of E-cars could also be given the right to use the bus lanes.
Has the government reacted?
I only presented concrete proposals to the government at the beginning of July. Until the government takes action, we will continue from the ground up. Somebody has to start. Simply waiting for the other parties to take action achieves nothing. If the infrastructure suppliers wait for the dealers, and the dealers wait for the infrastructure suppliers, and car buyers wait for both, there will be no progress. It would fit perfectly the government’s concept if Hungary as an important automotive location in the region would play a leading role in the E-mobility movement. Hungary could be a trailblazer in Central and Eastern Europe. We would support that fully. We will take part intensively through ELM? in a comprehensive European project named “Green E-motion” among other initiatives.
Presumably it is not particularly conducive to the expansion of E-mobility in Hungary that Hungary’s main automobile investors have not made such great advance with E-vehicles…
That is just a matter of time. Opel already has E-vehicles and Mercedes will bring its E-Smart onto the market in the coming year. Volkswagen, Audi and Suzuki will surely also bring out E-cars in the foreseeable future.
What is the reaction like from customers?
There is a lot of interest. Everyone thinks it’s wonderful at the beginning. The steps after that are not so easy. E-cars are something entirely new. They need to be built into the company car policy, and a lot of internal approvals are required.
Ideally the E-cars would be charged with green electricity.
We have two small hydropower stations. We could also make a green electricity product. That is also in progress. But the main thing is to get started. If we wait until we have enough green electricity, valuable time will be lost.
Where will you go from here?
At a board meeting last week we established the next steps. We have determined the tasks for our project team until the end of the year. Almost all areas of the company are contributing to the project. We even have two members of staff who deal exclusively with this topic. Our logo and a website with up-to-date information in the topic will be ready by the end of September. We will also purchase more vehicles. The whole thing so far is more a question of time than of money. The project consists of a lot of detailed work and intensive talks with those interested. I myself have really embraced this project in addition to my regular management board tasks and with my personal involvement would like to ensure that it will be a success. Before we enter a more intensive commercialisation phase, I would like to make sure first that the processes and infrastructure are in place.
If somebody were to contact you based on this interview…
…then I would immediately give my help. People are welcome to approach me directly about this topic. Somehow we have to get the ball rolling. I don’t have any illusions. There won’t be any quick chain reactions that lead to a breakthrough within a few months. We need a lot of patience.
But you are convinced that there will be a breakthrough in the long term?
Yes, 100 per cent. I am convinced that Hungary will go through the same development as the rest of Europe in terms of E-mobility with a certain time lag. The aim in Germany is to have at least a million electric vehicles on the roads by 2020, while our long-term strategy plan for Hungary envisages 60,000 electric cars by that same date, roughly 25,000 of those on the roads of Budapest. The whole thing will stand or fall with the carmakers. The faster they manage to produce affordable vehicles, the sooner there will be a breakthrough. However at the beginning those firms that can and want to take the first steps need to set the pace. I would like to see many Hungarian and foreign large enterprises supporting our initiative together with the Hungarian government.
