AGP Executive Report

FCAS Deadlock: France and Germany have scrapped their joint Future Combat Air System fighter jet project after months of disputes between Dassault and Airbus, with Merz advising Macron not to pursue the crewed jet further. Ukraine War & Power Hits: Russia and Ukraine traded deadly strikes as Kyiv reported net territorial gains in May; attacks also hit Ukraine’s energy infrastructure, leaving over 1,000 households without electricity, while drones targeted sites in and around Chernobyl. IAEA Iran Pressure: IAEA chief Rafael Grossi urged Iran to “re-engage” so inspections can resume at bombed nuclear sites, saying the communication channel is “broken.” Solar on Restored Peatland: A German state-funded study finds solar farms on rewetted peatland can support biodiversity while helping restore carbon-rich landscapes. Grid Storage Deal: Centrica Energy will optimize a 170 MW/340 MWh Belgian BESS (Project Volt) for market participation across day-ahead, intraday, balancing and ancillary services. Solar Records: Germany and other European markets set new daily solar generation records in late May, with lower wholesale prices linked to higher solar and wind output.

Ukraine War & Nuclear Safety: President Zelenskyy met UK PM Starmer in London with Macron and German Chancellor Merz expected to join E3 talks on air defence after Russian drones hit a spent-fuel storage site near Chernobyl; officials say radiation stayed within safe levels, but the incident is “deeply concerning” for the IAEA. EU–China Industrial Ties: German and European voices are pushing for pragmatic cooperation with China despite rising protectionism, warning that overly political rules could raise costs and uncertainty for energy, batteries, solar and other cross-border supply chains. Energy Security & Markets: The Middle East conflict is nearing 100 days and is again rattling global growth forecasts via energy supply risk, shipping uncertainty and inflation pressure. German Energy Watch angle: With Europe tightening security cooperation and debating China dependence, Germany’s energy system faces a double test—keeping critical infrastructure resilient while avoiding policy shocks that slow investment in power and storage.

Ukraine Peace Push: Zelenskyy is set to meet UK PM Starmer in London for emergency talks with European leaders after Putin rejected face-to-face negotiations, as drone strikes keep hitting Russian targets including St Petersburg. Grid Pressure: A growing backlash over power-hungry data centres is sharpening the debate over Germany’s squeezed national grid and what it means for energy security. Balcony Solar Storage: Lidl’s new low-cost balcony solar battery is driving interest, but readers are urged to check local rules and compatibility before buying. COP31 Energy Diplomacy: Australia’s climate and energy minister Chris Bowen is in Bonn to lead energy security talks ahead of COP31, highlighting clean power and electrification as the route to “sovereign” systems. Aviation Fuel Compliance: The EU has launched legal action against Cyprus and 12 others, including Germany, for missing penalty rules under ReFuelEU Aviation. Energy Storage in Focus: A German-linked floating solar project is highlighted as a clean-energy model, while broader storage demand is rising across Europe. World Cup Warm-Up: Germany beat the US 2-1 in Chicago, with Leroy Sané scoring the winner after Antonee Robinson’s equaliser.

Macro & Energy Prices: Fitch cut its 2026 global growth forecast to 2.4%, blaming an oil shock tied to US-Iran tensions that’s pushing energy costs up and squeezing consumption and business margins—while AI and tech investment is acting as a partial cushion. Security & Energy Infrastructure: Ukraine launched a large drone attack on St. Petersburg, targeting naval arsenals and a base in Kronstadt and hitting an oil depot; Russia reported heavy drone interceptions, underscoring how quickly energy and military assets are being pulled into the conflict. Hydrogen Corridor Watch: Gasunie backed Oman’s push for a liquid hydrogen import corridor from Duqm to Northwest Europe, with plans to link Oman’s hydrogen transport network and expand cooperation on CCUS know-how. Germany Grid & Renewables Signals: DNV certified a third milestone for Nordseecluster A offshore wind projects, a reminder that Germany’s build-out continues even as permitting and demand pressures rise. Local Energy Context: A German ministry says there are no fuel shortages in Germany, even as utility-cost concerns and data-center pressure keep showing up in public hearings.

German Energy & Climate Diplomacy: Germany signals it’s ready to provide direct financial support for Ghana’s Climate Change Action Now (CCAN) initiative, with talks on the funding package underway after World Environment Day discussions in Accra. Renewables & Grid Innovation: A German lake in Bavaria is being turned into a clean-energy showcase with floating solar panels, using a vertical floating design aimed at spreading generation across more of the day. Offshore Wind Delivery: DNV has cleared key milestones for Nordseecluster A offshore wind projects ahead of turbine installation, reinforcing momentum for Germany’s North Sea build-out. Energy Security & Markets: A consultancy warns global LNG demand destruction is accelerating amid Middle East disruption, with major supply losses tied to Qatar output issues and Strait of Hormuz shipping constraints. Ukraine War Spillover: The UN Security Council is set for an emergency session after a massive Russian strike hit Ukrainian cities and energy-linked infrastructure, underlining how conflict risk keeps feeding Europe’s energy stress.

Nord Stream Politics: AfD foreign-policy lawmaker Markus Frohnmaier met Russian energy figures at SPIEF and urged reopening Nord Stream, arguing Germany’s energy costs demand “all options” be back on the table. Energy Demand & Permits: In the US, lawmakers are pushing offshore permitting reform to keep up with rising demand and prices, with renewed momentum after stalled talks. German Grid & Storage Angle: A DNV certification update clears a key milestone for Nordseecluster A offshore wind projects, underscoring how fast Germany is trying to move from build-out to delivery. Energy Prices Backdrop: Markets tracked renewed Middle East risk and oil volatility, with Brent down sharply in one report as investors weighed the fragile Iran-related ceasefire outlook. EU Solar Policy: Germany’s inheritance tax rules are flagged as a potential drag on ground-mounted PV on agricultural land, adding another layer to the permitting and finance squeeze. Geopolitics With Fuel Impacts: Putin rejected Zelensky’s face-to-face meeting proposal while drone strikes hit Russian oil infrastructure, keeping energy-security concerns front and center.

Germany–Mexico Cooperation: Germany and Mexico agreed to deepen ties on organized crime and drug trafficking, with talks also covering the energy transition and sustainable development. US–Germany Security Tension: Trump’s plan to withdraw 5,000 US troops from Germany over 6–12 months raises fresh uncertainty for NATO posture. Balcony Solar Push (Germany link): US states Maryland and Virginia are moving to allow plug-in balcony solar, citing Germany’s scale of adoption as a model. China Solar Shift to Storage: China’s biggest solar makers are ramping battery output as PV margins soften, with Germany among major battery importers. Grid Storage Race: Switzerland is building a large underground vanadium flow battery aimed at multi-day power support for hundreds of thousands of homes. German Power Plant Demolition: Uniper’s Ratcliffe-on-Soar demolition in the UK (with German involvement) is set to take up to four years, freeing space for low-carbon energy and storage plans. Hydrogen Ambition vs Reality: A proposed SoutH2 pipeline corridor would move green hydrogen from North Africa to Italy/Austria/Germany, but the energy losses are a major constraint. Energy Industry Pressure: Germany’s chemical sector warns recovery isn’t sustainable as Middle East supply risks keep energy and raw material costs high. German Energy Politics: AfD figures at SPIEF urged restoring energy cooperation with Russia, including renewed gas flows to Germany. Offshore Wind Outlook: A new study suggests offshore wind could cover about 11% of the North Sea by 2050.

Floating Solar Test in Germany: A German project has shown floating PV on a Bavarian lake can generate power while covering just 4.65% of the surface—enough to avoid major ecosystem damage concerns. Grid & Storage Moves: Latvia’s AdvanGrid is pushing smarter energy management, while Germany’s Kyon Energy is building a 146.5 MW battery storage project and Eco Stor/Next Kraftwerke are advancing a 700 MWh Germany BESS deal. Solar Policy for Households: Lidl is rolling out a low-cost “balcony solar” battery aimed at helping renters and households store rooftop power. Offshore Wind Buildout: DNV cleared Nordseecluster A for offshore wind turbine installation, and Van Oord completed Windanker cable work—both supporting faster North Sea deployment. Hydrogen Funding: European Energy and other players won major hydrogen grants, including support for Danish plans and Meppen repowering. Energy Security Context: With oil prices and growth risks tied to the US-Iran conflict, Germany’s energy-cost pressure remains a backdrop for industry and grid investment decisions.

EU Tech Sovereignty: The EU rolled out a “tech liberation” package to curb reliance on U.S. Big Tech in sensitive cloud tenders and speed up data centres using at least some European hardware/software, with German industry group Bitkom urging faster, concrete follow-through. Solar & Storage Momentum: New market outlooks keep pointing to big growth for solar PV across Europe, while separate coverage highlights how grid-relevant storage and battery projects are becoming central to keeping renewables usable. Hydrogen in the Cold: A German-supported project is testing a hybrid solar-plus-batteries-plus-hydrogen setup at a Chilean Antarctic base, aiming to cut fossil fuel use in extreme conditions. Energy Shock Watch: With Middle East tensions still in the background, airlines say jet-fuel supply is stable for summer, easing fears of widespread flight disruption. Germany-Linked Energy Finance: INNIO, a Munich-based gas engine maker, priced an upsized $2.43bn U.S. IPO, underscoring investor appetite for firms tied to power and AI infrastructure. Policy & Grid Costs: EU moves to ease spending rules to tackle an energy shock, while Germany’s grid fee and storage rules remain a live topic for developers and investors.

Nuclear Deterrence Debate: Lithuania is in talks with the US about hosting American nuclear warheads, with constitutional limits under review as NATO’s eastern flank worries about shrinking US presence. Geopolitics Meets Energy: Ukrainian drones hit oil and military targets around St Petersburg as Russia’s “Russian Davos” SPIEF gets underway, underscoring how conflict keeps pressure on energy infrastructure and markets. Markets & Oil: Stocks slid as US-Iran hostilities flared, lifting crude prices toward the $100 area and adding uncertainty for European growth. Grid & Storage Push: Europe’s utilities are leaning harder into “grid intelligence” and longer-duration battery storage as solar and wind drive more complex grid balancing needs. German Energy Finance (BESS): R.Power secured major project finance for a 150 MW/300 MWh BESS in Poland, a sign that large-scale storage is becoming bankable in Central and Eastern Europe. Hydrogen Innovation (UK): University of Aberdeen spin-out Hychor is advancing low-cost on-site hydrogen production for off-grid coastal communities. German-Azerbaijan Energy Ties: Azerbaijan and Germany discussed cooperation across natural gas, renewables, hydrogen, heat pumps, and energy storage during Baku Energy Week.

Baltic Security Drills: The US will run a smaller BALTOPS naval exercise in the Baltic Sea (June 4–20) with 20 ships and 6,000 troops, underscoring Germany’s growing political role via the multinational command in Rostock. Grid & Power Market Signals: Siemens Energy is set to buy Lisburn electrical specialist Camlin Group, aiming to expand its monitoring tech footprint and add “several hundred” jobs—an indicator of continued investment in the future grid. Energy Prices & Inflation Pressure: Euro area inflation hit 3.2% in May, with energy inflation up 10.9%—keeping ECB rate-hike expectations alive and reinforcing how Middle East-linked oil and gas risks feed into German and EU household costs. German Gas Supply Worry: Uniper is reported to be preparing for winter gas shortage risks if storage rates don’t improve, keeping pressure on Germany’s security-of-supply planning. Storage & Flexibility: A deal for 300 MW German BESS capacity (Next Kraftwerke and Eco Stor) points to continued momentum for batteries as renewables integration grows. Tech for Energy Systems: German researchers at RWTH Aachen report a teardown of commercial sodium batteries, suggesting a potential lithium rival for cars and grid storage.

Energy prices & inflation: Eurozone inflation ticked up to 3.2% in May as energy costs stayed elevated, keeping pressure on households and the ECB. Geopolitics and supply risk: The Hormuz crisis is reshaping policy debate in Southeast Europe, with governments treating energy security as a long-term geopolitical and industrial challenge, not just a market issue. Germany-Russia political heat: Former German chancellor Gerhard Schröder was spotted in Moscow amid renewed talk of EU-linked mediation—an issue Berlin and Kyiv reject. EU grid & charging build-out: Hubject and Road expanded e-roaming across Benelux, Germany, the UK and the Mediterranean, aiming to make more charging stations interoperable. EV charging hardware: XCharge appointed Albina Iljasov as co-CEO to push European expansion, including a Spain assembly plant for high-power chargers and storage. German industry & jobs: Reports say German metal and electrical bosses warn of potential destruction of 300,000 jobs, underscoring how energy costs and competitiveness remain central.

Local Climate Currency: In Bavaria’s Chiemgau, locals still use the “Chiemgauer” play-money notes—born as a school project in 2003—to keep spending local and now also support lower-carbon choices. UN Reform Debate: Foreign Minister Annalena Baerbock says UN reform is overdue, but insists the UN remains indispensable ahead of Germany’s bid for a Security Council seat. Eurozone Inflation Pressure: The ECB warns eurozone consumers expect inflation to stay elevated after the Iran war shock, with markets watching for possible rate hikes on June 11. Pricing Power Check: A Reuters review finds only about a third of eurozone’s biggest firms plan to raise prices in response to the Iran war—unlike 2022’s inflation surge. Energy Diplomacy in Focus: The second day of Baku Energy Forum opens with talks on gas markets, efficiency, and regional integration, as Azerbaijan pushes more supply and electricity links. Offshore Wind Watch (France): France launches tenders for 10 new offshore wind farms, aiming for 15GW by 2035—though electricity prices may not fall due to fixed returns tied to nuclear economics. Hydrogen/CCS Grid Planning: A North Sea CCS and hydrogen report urges integrated cross-border infrastructure planning to unlock scale-up in Germany and neighbors. Energy Security & Markets: Iran war headlines keep oil and bond markets jumpy, while European and global investors weigh geopolitical risk against AI-driven stock strength.

Iran-US Talks: Iran is pushing for a limited interim deal with the US to ease economic pressure and “buy time,” while avoiding major concessions on its nuclear programme, as the Strait of Hormuz remains a key risk for oil and LNG flows. Market Mood: European stocks slipped and oil ticked higher amid renewed Middle East escalation and uncertainty over whether diplomacy can hold. Industrial Shock: Surveys point to Iran-war-driven supply disruptions and rising raw material costs hitting Eurozone factories, with Germany’s manufacturing stalling. German Energy & Hydrogen: OXEA and Air Liquide renewed their Ruhrchemie Oberhausen synthesis gas and hydrogen supply partnership, with Air Liquide investing €20m to modernize capacity. Hydrogen Support: European Energy secured up to €228m in German hydrogen auction backing for additional 150MW capacity in Denmark. Grid Bottlenecks: A study flags distribution grid connection queues blocking about 455 GW of battery storage and 375 GW of renewables across Europe, with Germany among the worst hit. EV Uptake: New Europe-wide data shows BEVs jumping 42% year-on-year to 23% market share in April. Water Stewardship: Electro Scan joined the Alliance for Water Stewardship, aiming for auditable water replenishment solutions as AI data centres and industry expand.

Hydrogen & Industry: Lhyfe and STRABAG signed a strategic co-development deal to push green hydrogen projects in Germany, aiming to turn RED III RFNBO rules into clearer long-term demand for industry. Nuclear & Security: Ukraine denied a drone hit at the Zaporizhzhia plant after Rosatom claimed damage to a turbine hall; the IAEA said radiation stayed normal and requested access for further checks. Grid & Winter Risk: Germany’s gas grid operators warned they may not secure enough supplies for the coming winter, keeping pressure on storage and import planning. Energy Prices & Markets: Gulf tensions around US-Iran talks kept oil supported (Brent back near $93-99 range in the week’s coverage), feeding broader market jitters including higher bond yields before easing on peace-talk signals. LNG & Supply Chains: Canada-Germany LNG cooperation continued to move forward, with new supply agreements highlighted as a rare “security of supply” win for Europe. EU Energy Transition Industry: GE Vernova marked a 25 GW wind manufacturing milestone in Salzbergen, underscoring Germany’s role in scaling the transition. Defense-linked Energy Demand: INNIO filed for a US IPO targeting up to ~$20bn valuation, betting on data-centre power growth—another reminder that electricity demand is driving new investment cycles.

Synthetic Aviation Fuel Push: At a plant near Frankfurt, Ineratec is turning hydrogen and CO2 (from a chlorine factory and biogas) into e-SAF jet fuel, with the Iran war boosting Europe’s case for cutting oil dependence; Brussels wants blending to rise to 1.2% by 2030 and 35% by 2050, but the sector still struggles with high costs and limited investment. German Wind Manufacturing: GE Vernova hit a 25 GW wind turbine production milestone at its Salzbergen site, underscoring Germany’s role in scaling the energy transition. Ukraine Energy Under Fire: Ukraine says it has struck Russian energy sites tied to the invasion, while also denying claims about attacks on the Zaporizhzhia nuclear plant—another reminder that energy infrastructure remains a key target. Grid & Security Context: A report highlights Russia’s intensified efforts to steal Western technology and probe European infrastructure via shell companies, spies and hackers, including a prior cyberattack on a Swedish power plant. Nuclear Safety Watch: Lithuania earned praise from IAEA experts for its “robust and mature” nuclear and radiation safety oversight during an IRRS review.