Dear Mr DI (FH) Mag. (FH) Graf, thank you very much in advance for taking the time for this interview as a member of the Management Board of Energie Steiermark AG and thus providing interested readers with more insights into the exciting activities of your innovative company.

P2M: In your postings online, you very often express your appreciation for your employees and you "clear" many awards - such as the seal of approval for the promotion of women within the company. How do you manage to motivate your team so well - at the end of the day, complex tasks in a dynamic, fast-changing environment have to be fulfilled to a high standard. Do you also offer internal qualification opportunities, training courses, etc.?

MG: Our employees are crucial to the success of our company. A motivated and qualified team enables us to open up new business areas, offer innovative solutions and lead Energie Steiermark successfully into the future.

Our approach places the personality of each and every individual at the centre. New employees receive support from experienced mentors and as part of a comprehensive onboarding curriculum (including "Welcome Day", seminars such as "Know Your Company" and interesting e-learning courses), they gain an understanding of the company's values, structures and processes. We support them throughout their careers with our further training programme, the E-cademy. Here, we offer numerous seminars that teach specialist, methodological and digitalisation skills; we also focus on leadership skills, sustainability, inclusion, communication and personal development.

We set standards in training: Energie Steiermark is one of the leading training companies in Austria. With our E-Campus in Graz, we have created one of the most modern training centres, where we offer young people a strong basis for their professional future with dedicated trainers and a wide range of development opportunities.

In line with Energie Steiermark's mission statement and values, Energie Steiermark's corporate culture is also characterised by fundamental principles such as gender sensitivity, equal opportunities, personnel development and promotion, work-life balance, preventive healthcare, occupational health and safety.

With our new "Powered by you" campaign, we show how colourful and multifaceted working at Energie Steiermark is. Our aim is to continue to be recognised as one of the top employers in Styria and in the energy sector in order to attract the right talent for future projects.

P2M: You also never tire of emphasising on Linkedin that the rapid development of energy grids is essential for the energy transformation (keyword: meeting climate targets). Do you see the timely expansion of the relevant energy infrastructure as a question of financing and/or the complexity of the authorisation procedures? In your opinion, how could the process of such projects be accelerated?

MG: Energie Steiermark is committed to the energy transition. It is one of the greatest challenges of our time - and at the same time an enormous opportunity for our region. We are planning to invest around 5.5 billion euros in the energy transition by 2035. In addition to the expansion of renewable energy plants with a focus on wind power and photovoltaics, we are also accelerating the expansion of the grid - because the expansion of the grid is the basis for the success of the energy transition. In this way, we are creating independence from fossil fuels and fluctuating prices as well as sustainable jobs for the people of Styria.

In Austria, investments (replacement and new investments, transmission and distribution grids) totalling EUR 53 billion are expected for the energy grids alone by 2040. The energy sector has made a clear commitment to these promising investment requirements.

However, the energy transition will only succeed through the triad of politics & regulation, the energy industry and the capital market.
Furthermore, more favourable financing costs are one of the key levers for reducing the system costs of the transformation. The lower the financing costs, the lower the overall burden. In this context, faster processes are crucial in order to drive forward the expansion of the energy infrastructure and make the transformation of our energy system economical and efficient.
With this in mind, we welcome the fact that the federal government recently announced a reform package to speed up approval procedures (Renewable Energy Expansion Acceleration Act (EABG) including reforms to the Environmental Impact Assessment Act (UVP-G) and the General Administrative Procedure Act (AVG)).

Examples of key points include an efficient concentration of procedures (one-stop shop) and the legal anchoring of "overriding public interest" (in accordance with RED III) so that projects can be implemented more quickly.
In addition, another important step has already been taken in Styria with the Styrian Renewable Energy Expansion Acceleration Act (StEABG) to lower the hurdles for the expansion of green energy in the state.

Furthermore, the long-awaited reform of the Austrian electricity market is taking shape through the amendment of the Electricity Industry Act (ElWG) with the recent initiation of the public review of the legislation.

P2M: Styria is home to major industrial companies, including heavy industry, in which the energy carrier hydrogen (H2) is to be used in the medium to long term. How is Energie Steiermark AG positioning itself in the ramp-up to a hydrogen economy?

MG: As Energie Steiermark, we are clearly positioning ourselves as an energy and decarbonisation partner for Styrian industry. In cooperation with recognised Austrian science and research institutes, the Styrian Federation of Industry and 22 Styrian industrial companies, which together account for around 85% of natural gas consumption and around 44% of electricity consumption in Styrian industry, a survey was conducted as part of the "Green Energy Masterplan 2040" to determine which energy sources will gain or lose relevance for companies by 2040. With regard to hydrogen, the survey revealed an increase in demand for green hydrogen of 5.6 TWh by 2040. The recent establishment of our subsidiary Energie Steiermark Wasserstoff GmbH, which bundles all Group activities and expertise in the field of hydrogen (with the exception of hydrogen grids) and serves as a central point of contact, emphasises the strategic importance of hydrogen as an energy source.

P2M: In your opinion, will green H2 first replace hydrogen produced from fossil fuels (grey hydrogen) - i.e. without changing the production technology, such as in refineries - or will production technologies be changed in parallel - such as in steel production - in order to achieve a high demand for green H2 as soon as possible?

MG: In my view, the two options are not mutually exclusive. As I explained, it is possible to substitute grey hydrogen with green hydrogen. The availability of cheap, green hydrogen also provides the opportunity to establish new production technologies. The mandatory substitution of grey hydrogen with green hydrogen, for example, is a key requirement of the European RED III Directive. Industrial companies are currently faced with the question of whether investments in natural gas steam reformers (production of grey hydrogen) are still economically viable in the medium term, as grey hydrogen will have to be replaced by green hydrogen in the foreseeable future anyway. We see Energie Steiermark Wasserstoff GmbH as a partner for Styrian industry in this transformation process.

P2M: As a future H2 supplier, where do you see the risks and opportunities in the H2 ramp-up in terms of timeline, H2 off-take volumes and H2 prices - given that many of Styria's industrial companies are in global competition?

MG: The challenge with the hydrogen ramp-up is that infrastructure and customers are mutually dependent. Without an adequate infrastructure, there will be no off-take and without customers, there will be no necessary infrastructure investments. In this context, as things stand today, there is regrettably no robust legal framework, for example for upgrading the existing natural gas infrastructure to make it suitable for hydrogen.

A dedicated hydrogen network is an essential building block for ensuring security of supply and competitive prices in the long term. However, waiting until an Austrian or European hydrogen network is available to implement the first projects is not a viable option, also in view of the urgency of decarbonisation. This means that at the beginning of the hydrogen ramp-up, we expect to see isolated networks with local hydrogen production to supply individual businesses. As the expansion of the hydrogen grid progresses, the isolated grids will continue to grow together to form an interconnected grid.

For this reason, around 150 km of dedicated H2 grids (rededication and new construction) will be created in Styria by 2030 and a further 50 km by 2040 to enable local connections to European H2 corridors. In this context, a suitable regulatory framework (H2 infrastructure financing regime) is essential for the development of a hydrogen start-up network in Austria.

P2M: The current focus is on the provision of the H2 infrastructure, i.e. grids, storage facilities and H2 production. What risks does the potential H2 customer - for example, a steel-producing company - take? In other words, how could hurdles such as the unavailability of sufficient H2 quantities at all times during the start-up phase be overcome if the industrial company in question has already switched technologies?

MG: It is true and we are aware that even a short to medium-term interruption in supply can lead to serious operational consequences. It is therefore understandable that an industrial company will only switch to green hydrogen if the availability of green hydrogen and, subsequently, production is secured in a resilient manner. In order to ensure a secure supply, a redundant island design of the hydrogen supply in combination with storage is necessary. In order to further increase resilience, a rapid hydrogen ramp-up (production, consumers, storage, grid, import) is necessary.

P2M: In your view, is it realistic that natural gas will continue to be used as an energy source in industrial operations for a relatively long period of time and that H2 and natural gas infrastructures will therefore be in operation in parallel? If so, this would mean that both grids will not be utilised to 100% capacity during a transitional phase, meaning that higher grid usage fees will have to be paid for each grid. How could this transition phase be managed without the relevant industrial companies losing competitiveness?

MG: The majority of a future hydrogen network will be created by upgrading and utilising existing natural gas infrastructure. New hydrogen pipelines will only have to be built in sections. Austrian Gas Grid Management (AGGM) has already developed very detailed conversion paths for the transformation of the natural gas grid in cooperation with gas grid operators, which can be tackled by the gas grid operators once a regulatory framework is in place.

P2M: With regard to the regulation of the expected H2 economy, the question of the depth of regulation - i.e. "light touch regulation" versus "heavy-handed regulation" - arises, particularly in the start-up phase of an H2 market. What are your ideas/demands in this regard?

MG: Two points should be differentiated here: On the one hand, it is essential for grid operators to have a regulatory framework that enables both the conversion of existing natural gas pipelines to hydrogen pipelines and selective new constructions at attractive conditions for grid users and grid operators. On the other hand, analogous to the liberalisation of the electricity and gas markets, producers, consumers and storage facilities should operate on the free market. For example, there are already legislative proposals for the demand side (RED III), which stimulate a corresponding demand for green hydrogen, which is ideally served on the free market at optimal cost. Over-regulation that hinders the emerging market ramp-up for producers, consumers and storage facilities must be avoided.

P2M: How do you estimate the price development for natural gas in the late storage refuelling phase in 2025? In your opinion, would it make sense to extend the refilling period or use other hedging instruments to counteract expected natural gas price peaks resulting from the strict EU requirements in this regard?

MG: Since November 2024, we have observed negative summer-winter spreads in some cases - in other words, gas is more expensive in summer than in winter. The main reasons for this include an expected supply shortage and the fact that some new liquefied natural gas projects will not go into operation until the second half of 2025.

In July 2025, the EU member states agreed to more flexible requirements for filling European gas storage facilities. As a result, the Gas Storage Regulation will be extended by two years. With the extension of the Gas Storage Regulation, the previous filling target of 90 per cent will remain in place, but it must be reached "between 1 October and 1 December". Previously, gas storage facilities in the EU had to be 90 per cent full by 1 November at the latest. In addition, further exceptions are to be possible in the event of "difficult conditions for filling the storage facilities".

The filling level of gas storage facilities in Austria is currently (23 July 2025) around 71% and is slightly below the levels of recent years at the same time.

P2M: Could it happen that - due to the Austrian Carbon Management Strategy (CMS) - H2 and the intended CO2 capture and storage option could stand in each other's way - compete for users of the respective network infrastructure, so to speak?

MG: I see the conflict of interest you describe as centred on the use of porous rock formations (= extracted natural gas fields) and not on the grid infrastructure. Extracted natural gas fields already serve as cost-effective and large-volume natural gas storage facilities, which can be used for hydrogen storage in the future and are essential for security of supply. Austria is a global pioneer in the storage of hydrogen in former natural gas fields in particular. This creates a conflict of interest for the utilisation of porous rock formations as energy storage or "CO2 repositories". It should be noted that the potential for "CO2 final storage" (CCS) in Austria is very limited and should therefore at best be accessible for "hard to abate" sectors.

Thank you again for the interview and for your valuable time.