Good morning everybody and welcome to this investor call focusing on our power plants business. My name is Hanna-Maria Heikkinen and I'm in charge of the investor relations. I have the pleasure to have Anders Lindberg, my colleague who is leading our energy business here on this call today. Anders has delivered very well on the promises given on our last capital market day. We will start with the presentation, and after the presentation there's an opportunity to ask questions. In the case you have a question, please use a raise your hand functionality on Teams. Alternatively, in the case you cannot use the Teams functionality, you can send an email for me so I will then moderate the Q&A session. Anders, please, time to start.
Thank you and welcome everybody. I am pleased to be here to discuss the performance and how we have improved the business performance of the engine power plant. We will today focus on the engine power plant business end to end, so both equipment and services. We will not discuss the energy storage and optimization business as this is on the strategic review. Some key reflections from my side are that today we have a stronger and more resilient engine power plant business. We have also worked on our product portfolio and it has been improved and is more future-proof today than what it was one year ago. We also have strong long-term growth prospects in our balancing, and I will come back to that in the presentation today. We also have a culture of continuous improvement where we are working on continuously improving our business.
Let's now go back one year in time and see what has happened since we had the CMD in 2023. Looking at what we have done, starting on profitability, we have successfully implemented our new organization and the governance in energy already in 2023. We have also, with this, improved our risk-reward balance. Today we have 80% EQ and 20% EPC, which have de-risked our portfolio. We also have had very good growth in order intake, 14%. We have already seen that we have started to also pick up on the sales due to that. It is about 12-15 months on the new build before we see that being effect on the sales side, what we have done on the order intake side. We have continued to improve our products and service delivery with the continuous improvement program that we have.
Also on the service side, we continue to move up the service value ladder. We have increased with 15% agreements and also the agreement coverage with 5%, and we have more than 90% renewal rate. All of this supporting profitability. When it comes to the growth, we have seen a 7% since one year ago, the service sales growth. We have a book-to-bill ratio of 1.1, and I will come back to that in the presentation. We see on the balancing order intake, which we discussed already in the CMD, and we will come back to this because it is a very interesting growth prospects in this area. We have had a 260% increase in the order intake since one year ago.
On the hydrogen side, we launched in mid this year, we launched our 100% hydrogen engine power plant, which we also have had certified by DNV. That is also on track. Now let's look at the performance over the year financially, starting with the order intake, where you can see the order intake has grown, starting already in Q4. This is the 12 months rolling, starting already to grow in Q4 last year, but then have continued to grow. The equipment sales, which is part of this growth, because this is also including service that you see on the screen, but the equipment sales growth is up 13% compared to one year ago.
On profitability, that is of course also very much increased, the 12 months rolling, also up in Q4 already last year, and then continuing in Q1, Q2, and Q3 with even slightly higher 12 months rolling profitability. Fourteen percent in the last quarters versus 6.5% in 2023, except in the last quarter. The profitability drivers that have really done the increase here in this year compared to one year ago is that we have recovered profitability in our equipment sales. This we have done by improving the risk-reward balance and also how we select the projects and by the better governance that we have in our organization. We have also had the continuous improvement and the higher operating leverage with order intake being higher on the equipment sales. As well, of course, the growth in service sales have also contributed to the higher margin.
Let us now look a little bit more into detail on some of these. Here I want to show our book-to-bill ratios. Starting with the equipment, we can see that we were below one all the way until Q4 last year. This is 12 months rolling, I want to say. We have continued being on a very good book-to-bill ratio of the equipment, being above 1.25, both in Q1, Q2, and Q3 this year on the equipment sales. If we look on the service part and the different parts we have in service, we have the parts, the field service, and service agreements, which you can see that they have all been above one, going a little bit up and down, but basically being quite stable compared to the retrofits and upgrades where you have a lumpy business. It is like our product business on equipment.
We have the same thing on the retrofit and upgrades. Those vary quarter to quarter. You can see that also that there is much more ups and downs here, but still being well above one also on retrofits and upgrades. In summary, we are having a good book-to-bill ratio, both on the service side and also, of course, on the equipment side, where there has been a major increase during this period we are looking at on this graph. I would like to talk a little bit about one of the other drivers, which is, of course, the improved profitability through risk management. First of all, I want to say that the new organization and governance that we implemented last year has improved the risk management. We have a more thorough and better governance on the risks in our products.
Also, of course, we have, as you can see in the graph to the left, and this is net sales. We have rebalanced between EQ and EPC, meaning that the extended equipment supply we are using when we can, this is the preferred offering. You can see that we have gone from, like, 50% or below if we take 2020, 2021, and 2022. I think we had an all-time low there in this time period in 2022, climbing up to the 50% or slightly above in 2023. Now we are at 80%. This is a clear shift in our sales on EQ and EPC. Of course, EPC, we will continue doing EPC. We have taken in new EPC products also this year as part of our order intake.
We do this in selected markets where we see that we can have a right risk-reward balance with a premium. Also, where we have capability and capacity to do both strong in the sales phase, but also that we have a strong product management to guarantee that we have a good execution of the project once we take them in. We are more selective. For sure, on markets where there is a clear EQ standard and there are very good partners to do the EQ products with, like the U.S., we will continue to do EQ and there is not a question of that. It is more in markets where we have a tradition and where we also have a good position to do EPC, like in South and Central America, Caribbean.
We have also done Middle East and I also see in Africa, in some countries we have a good opportunity to do this. I also want to say that EPC has a higher revenue potential, obviously, per kilowatt of engines since we deliver more of the balance of plants. We also have higher end-to-end margins in the total life cycle of the products since we also have more revenue coming in the service phase when we have EPC than EQ. Here we show the sales, but also if we look on the order book, we have also improved there. We have more EQ in the order book going forward. We will keep more to where we are today. It will vary between the years depending on which big projects we have.
We can say that we have at 80% now and we foresee that in the future we will be in the range of 70-80% of EQ versus EPC. Now let's talk about the general market trends. This was very much about how we have performed and what the status is today and following also what the transition has been in the last couple of years. Now we will talk about the market trends going forward. In general, they are very positive. We still have some uncertainties that I will touch upon here. First of all, the energy transition is happening. It is accelerating. It needs to accelerate if we want to reach our climate goals that we've decided upon in Paris. It needs to accelerate. We can see that on the graph here in the middle of the screen.
We can see that actually in 2023, we had a record year of delivering in the world on renewables, especially solar went up, but also wind continued to increase. We foresee that in 2024, we will go even higher than we did in 2023. Obviously, in 2025 and to 2030, which we show here, is the forecast based on BNF. What we can see is that 2023 is a fact and also 2024, I think, is quite certain considering at time of the year we have this presentation. Renewables remain the lowest cost of energy in the far majority of all countries around the world and on all markets.
That means that this is very easy to continue and is not so dependent on subsidies, etc., as some of the other initiatives with new fuels and other things with hydrogen and other carbon capture and other things that are being invested in, where it's still very dependent on incentives. For solar and wind, the basic renewables and also battery storage, we basically see that this already today makes very good commercial sense and will continue. Also looking to the right, we have the spikes in natural gas prices with the Russia invasion of Ukraine and everything around that. Their prices went up, but they have come down again, which is improving, of course, the competitive for gas and balancers supporting and enabling the implementation of renewables.
Also we see that the regulatory changes are largely supportive of thermal balancing, and I will come back to that in my presentation. The uncertainties and headwinds that we see is, of course, the rising protectionists and using the industrial policy to secure energy and also production. Of course, we also saw in the U.S. election results that with that and Trump coming into office in the beginning of the year, he's very often discussing about increasing trade and tariffs. That is also causing some uncertainty what will be actually the results of the different increases in tariffs that Trump has talked about and to which countries and between which countries. We will see, and it's causing some uncertainty.
Overall, we are very positive on the transition, the renewables that we show on solar and wind, which is driving the transition and also the balancing where we are involved, and that will enable further implementation of renewables. Moving over to the next page. Yesterday, some of you might have seen that we launched our global modeling study. We have done studies of different systems, more than 200 markets around the world. Now we did a study of the global world just to show what is the impact of the whole world when it comes to balancing. What we did was that we compared two scenarios to come to net zero in 2050, as was outlined in the Paris Agreement. The first scenario, we use renewables and energy storage to make the energy transition and come to net zero.
In the second scenario, we also added thermal balancing. The model basically shows that there are a number of effects if you do scenario two where you add the thermal balancing versus if you only do renewables and storage. This, in summary, is that in the time period between 2025 and 2050, we save for the world EUR 65 trillion in costs if we use balancing since we do not need to overbuild so much renewables to manage all weather conditions and all demand and supply. In fact, we also achieve a faster reaction of CO2 if we do add the balancing, the thermal balancing.
This is by being able to take out coal and oil much faster if we add thermal balancing, even if it is in the beginning using gas as fuel because we do not need to overbuild again so much on the renewable and storage side to deal with the capacity that coal and oil has. What is also very interesting is that since we do not need to build out so much of the renewables to have this overcapacity to deal with the weather conditions, we also use 50% less renewables in scenario two. That means that we need 50% less land needed in 2050. Overall, we waste also less energy by renewable curtailments, which will happen if we build out so much renewables as we need to do in scenario one to cover all the different weather conditions.
A very big difference and showing very much on a global scale how important it is to not only have 100% renewables and storage, but add a little bit of thermal balancing to what effect that has. Very important. Looking at the growth opportunity that we then see, and here again, we have based this on the BloombergNEF forecast buildout of wind and solar because this is what's driving, of course, the buildout of the balancing or need of the balancing. We see here that we have a very good growth from 2023 to 2030 on the balancing side, so 17% per year during this period, where we see that the base load is basically stable but growing a little bit. We see huge growth on the balancing side. Of course, you don't only need to build out the renewables.
You also need to have good conditions for adding balancing as well. I will come back to that. You also need gas until the new fuels, the sustainable fuels become available. You need gas as well as a transition fuel, and it is very important that that is recognized up until 2035 or when the sustainable fuels will become available. Showing then on the right graph here, we can show our order intake in megawatts. As you can see, this year we are up very much compared to 2023. We were higher in 2022 than 2023, but I think that we can say that the overall trend is increasing on the balancing, and this year is a very good year that we can see already in Q3. We have now also, when we look into the pipeline, we see a good pipeline also continuing for balancing.
Clearly on the balancing side, it is North America and Europe, which is also leading in the implementation of renewables that we see as interesting markets for us going forward where we will see this growth. There is also some states in Australia, which is also very interesting as well. As I mentioned, the need for thermal balancing is driven by the increased renewable penetration. As I mentioned, if we keep inflexible power plants that we have today in the system, which we have had historically with combined cycle and also coal power plants and also turbines that are not flexible, then we will lead to a lot of curtailment and therefore also destroying the business cases for adding new renewables going forward. We have seen increases of auctions in Chile, for example, where prices actually came in higher than they did in the previous auction.
That is due to increased curtailments, of course, destroying the business cases. Engines very much is very good, and I will come back to that and show how good they are in supporting both on minute, hour, and daily. They are very flexible in supporting the renewables. We can see that we do not only need from a system point of view the thermal balancing in the system and storage as well. We do not only need that from a system point of view, but the one investing in thermal balancing also need to get paid for that since they are not running so many hours. Traditionally, you have been paid for delivering and running many hours and delivering a lot of energy. You also need to make sure that there are good incentives to build this thermal balancing.
We can say that introducing the five-minute intervals for dispatch, which is done in the U.S., and I think Europe is now going down to 15 minutes. We also see in Australia the five-minute and U.K. This is a very important incentive for the ones that want to invest in building balancing thermal. Of course, if you design markets with capacity mechanisms and ancillary services, this is also helping the business cases. I will come back to show that how that can be done. Also how big a role the different market mechanisms play. Looking on the right side, as I mentioned, we have done more than 200 markets around the world where we have studied, we can see that they always go through the same phases. The first phase is always to add renewables.
The second is then when you have added renewables, you need to start adding thermal balancing and storage in order to help the renewables perform and in order to add more renewables. The third phase is then to phase out the inflexible power plants that actually do not allow the renewables to make their business cases because they need to do a lot of curtailment. In the future, when you have done these three first steps, you can also, when these new sustainable fuels become available, convert the thermal balancing to sustainable fuels and finally then phase out all the fossil fuels. We think that even though we will have our products technical capable of doing this, the fuel will not be available until 2030.
We think 2035 probably is a good time to see that these fuels become so much available that they will play a significant role. In this graph, I also put in some of the data. We can see adding renewables, we added 510 gigawatt renewables additions in 2023. In thermal balancing, 5 gigawatt was added in the first half of 2024. 21 gigawatt of capacity in coal was retired in 2023. The step one, two, and three is actually very much happening. Of course, it is different in different parts of the world. Some have gone further in adding renewables and now work more on step two and three, while others are still on step one by basically starting to add renewables. These are the steps to go through.
Now, let me take an example from Southern Australia because this gives us a very good idea of what other markets will come to in the future. This is really showcasing the future. In the CMD, I show Texas in the U.S., which has also come quite far. Now I show Southern Australia this time as another example. Here we can see on the left side what has happened since 2014 to 2023. I think that the first thing you see in the top is, of course, the wind and solar that had been added. We are now at 74% renewable energy in delivered energy in Southern Australia. The coal could already then be phased out. That is, the black could be phased out already in 2016-2017. The coal was phased out completely. Of course, you see the gas.
This is both flexible and inflexible gas that you see here, but basically stayed stable. Maybe come down a little bit, but stayed stable and supporting, of course, new renewables to be added. At the bottom, you can also see then imports and exports happening as well. That is why we go below the zero line, is when it was exports. Otherwise, it is also net imports to Southern Australia. They are on a five-minute electricity market, which I mentioned before is important. They have the gas as a balancing. Looking to the right side, balances can then tap into Southern Australia into different value streams. If you want to invest in thermal balancing that is very flexible, you have then these different value streams. Capacity revenues, just to have dependable capacity available, you see in the bottom, the blue.
You have on seller services, which in this case is not so much, but it also varies from market to market. In this case, it is 3%. You, of course, have cost savings, savings from lower fuel and O&M costs, 9%. You have energy revenues where you deliver normal, so to say, energy. You have the merchant revenue where you catch price spikes on the spot market, which is then 12%. This is how you can make up the revenue if you build a new thermal balancing. This is just an example. It can look different in other markets with other mechanisms or values on these mechanism drivers. Let us look at this. This is also Southern Australia, where you can see the ICs, actually our engines, and how they work.
On the right axles, you can see the price signals. You can see here basically that the engines are following the price signals, not completely, because there are also other things that the owner of the balancing plant has to consider. It is not only the price, but price is very important. You can see that basically when the price is high, the engines, the thermal power plants, are producing. When the price goes low, during the daytime, basically when you have a lot of the renewables with the solar, you stop. You can then start again in the evening when you need support. You can also go up and down. You do not just turn it on in the night. You can also see it is going up and down depending on how the wind is performing.
You can run with different levels of the power plants. It continues the same thing next day where you stop it when the price signals go down and you have other renewable in the system. We can look at the aeroderivatives, which is also then running on gas. You can see that they are basically operating in an on-off pattern. You turn them on, and when they are on, they stay on. You do not go up and down, so to say, with percentages. Either they are on or off, the gas turbines. You basically here show two levels. Also, you cannot follow them so much. They are less used than the engine power plants because you cannot turn them on and off as quickly. They are used much less than the engine power plants.
Showing the battery energy storage. Here you can basically see that they are loading during the day when the price is very low. You are loading the battery, and you have a lot of sun. In the evening, when the sun disappears and the demand goes up and the prices go up, you basically then discharge the battery. The same thing happens the next day. Basically working as it should. Last here, down to the right, you can see combined cycle gas turbines. Basically, they continue to run. They ramp down a little bit when the price signals are very low, but they continue to run.
By actually doing damage to the system, because when they do not go down to zero, even if the price goes down to zero, they do not go down to zero, which means that they will curtail the wind and solar, which is not good for the system. You cannot stop them because you need them again in the evening. You basically continue to run them through the whole day where you do not need them. They do not follow very well the price signal at all. This is basically showing the advantages of engine thermal power plants and also the battery storage versus if you look on the turbine side. As I said, the price signal is a very important signal, but it is not the only consideration. It is also the total portfolio that the power provider has and what they want to do with that.
Talking about the different technologies that we are competing against, I would say that we have a sweet spot in size when we have between 50 and 400 megawatt plants. The reason for that is that we can run with a very high efficiency. We have multiple units, so we can also not be highly efficient only at full load or no load, so to say, but we can be very efficient also with 10%, 20%, 30%. Since we have a modular design of our engine power plants, we can be efficient at all times. We have this fast start and stop, so we can really follow what is needed by the system and adapt to the price signals. We can do this many times a day without implication on maintenance.
We are most cost competitive with a high number of starts and stops. We really see some of these markets are hundreds of starts and stops in a year. It is really important. The high-speed engines, the other engine technology that we are competing against, have a very low CapEx, but also low efficiency, and is basically best suited for small scale and also when only used for backup, where there are very low running hour applications due to the lower efficiency. If I look on the gas turbines, which is not a direct competition technology, we are competing with the turbine technology, and it is actually our main competitor on many of the markets. If we start then with the aeroderivatives, they have a lower CapEx than engines, but it is less fuel efficient.
We are back on the fuel when running with engine power plants. They are more flexible than the heavy-duty gas turbines, but still not as flexible as the engine power plants as we saw also in the other example of Southern Australia. We also saw that in the Texas example one year ago when we have compared two gas turbine power plants with two engine power plants in Texas. We see the open-cycle gas turbines with low efficiency, and they are not so well suited for balancing. They mainly can compete on these peaking applications when you start them and then you continue to run them, so you avoid starts and stops. The combined cycle gas turbines are very good for efficiency.
They are high, high, high on efficiency, but they are high on capital cost, and they are not good at all for balancing. They are basically, if you need the base load, they still are good, but only for that. This was talking a little bit about where we see the sweet spot and why we believe that we have a very good opportunity in this range, 50-400 megawatt when balancing power plants are needed. Talking a little about now coming back to service part of the business. Here we can see to the left in the left graph, we can basically see since 2020 up until today, the last 12 months we have taken here. 2024 plus the last quarter of 2023 in order to have a comparable four quarters.
The service sales is up 17% from 2022, and it's up 9% per annum if we look at the whole period since 2020. We can also see that service agreements have continued to increase, 22% up from 2022 until the last four quarters that we have. To the right, you can see that the total order book value from 2020 is up 40% until 2023. Of course, the last 12 months still a little bit higher. You can also see that our strong book-to-bill all the time being well above one and continue to be there, varying a little bit as I showed basically because of the more variable on the upgrade side of the service business that varies between quarters. We have big order intake last year on that side. Looking at the drivers, they remain solid.
Of course, the installed base and what I just described about the importance of the new builds is also important. It takes approximately two years until we basically see an effect on the service side. If it takes on the new build, 12-15 months to deliver the new build, it takes an additional time before it basically has an impact on the service. I would say two years' time from order intake until it affects our service, that installed base. Increasing the agreement coverage is something we're working, the total agreement coverage. The outcome-based decarbonization agreements is very important to continue to move up the service value ladder. We also have the upgrade projects and sustainable fuel conversions in there, the decarbonization agreements.
What we can see is that we still have stable total running hours, and we also expect that for the next years as well. Good performance on service side and expect to continue good service performance. Looking at the fuel flexibility in the energy transition, it is very important. If we look at our technology roadmap, looking at the left side of this slide here, I mean, the lifetime when we deliver new engine power plants is 25-30 years. It goes all the way up until 2050. It will change during this time, the fuel available, the new sustainable fuels. Fuel flexibility is important and makes our engines future-proof. We see a lot of interest in fuel flexibility. We can also say that there will not be one single solution as a global green fuel.
We know that hydrogen is highly interesting, but it depends on where you are because the transportation and also the storage of the hydrogen is not so easy. We clearly can see that there are also good prospects for ammonia and other green fuels, both carbon-neutral and carbon-free fuels. We have launched this year, as I mentioned before, the 100% hydrogen-ready power plant in Q2 this year. It will be released for sales in 2025. We did the market-ready release this year. Already today, we have tried this also in the U.S. with an existing plant and showed that actually our gas plants can already run on 25% hydrogen, more or less as they are today. Already that can be blended in if you want to increase the amount of hydrogen in the fuel consumption today.
We clearly see that these sustainable fuels like hydrogen also, of course, come with conversion losses. With that, I mean, first you have the losses when you have electricity with electrolyzers to make the fuel. Then, of course, when you convert back to electricity again, you have again losses in the system. We see this fuel as a fuel for doing balancing and not for running base load. Base load should be done with solar and wind. We see that these fuels will be used for doing balancing. Also, of course, to hard abate sectors as well, where there is no other possibility, so to say, to use wind and solar. We think this is actually a good case showing the advantage for balancing with these new fuels.
Looking to the right side, you see the order intake we have had in 2020 to 2024 in Wärtsilä. We can see that 91% of the engines we have sold are either natural gas only or also made for dual fuel. 91% can take gas fuels. We see that we have done in the period 140 fuel upgrades of engines. 140 engines have been converted to gas in 18 different countries. There is a clear interest to convert to gas and, so to say, have that option going forward. This is an important part of our service business as well. We, of course, all the time want to be close to our customers and also keeping the power plants high in performance, also avoiding obsolescence issues, making them sustainable, and also making the best performance in terms of cost over the life cycle.
We are working closely with our customers doing fuel conversions, repowering, automation upgrades, obsolescence upgrades when that is needed all the time. I think we have a really strong offering and also a good value proposition to our customers and also creating good revenue for our customers as well, of course. We see that we have, since 2021 to Q3 in 2024, EUR 449 million of net sales in these terms of upgrades. We have 1.68 gigawatt of capacity that we have upgraded to gas from liquid fuels. As I mentioned, I think I mentioned ENV. It is TÜV SÜD certified H2 conversion available since mid this year as well, which is a future fuel conversion that will be possible with our engines.
Also on the base load side, we have one segment, even though we see that the overall base load, traditional base load is not growing. We see data centers as a very interesting base load opportunity. The reason for that is that we see that with the bigger, more need, and it is a lot more need due to AI and more digitalization, we see that there is an additional 45 gigawatt power capacity expected to be added in 2024 to 2027. Some of these gigawatts typically do not have access to a good grid in this time.
It can take up to five years and even longer in some rare cases, but at least up to five years to be connected to the grid, which basically means that in order to have these data centers running, they need basically base load for at least five years, which is a substantial time to have the power supply. This is clearly interesting for us. Looking also a little bit at comparing what has been in the past and what we see going forward is that historically it has been basically backup power. Size has been typically 20 megawatts-100 megawatts. Customers focus very much on CapEx and high availability, but very much on the CapEx served by high-speed engines, therefore, since efficiency has not been a very big issue and with quite limited life cycle service opportunities since they are not running very much either.
While moving forward, we see much higher demand, 50-300 megawatts. It's a typical power need. As I mentioned, grid connection, five to seven years in some markets, which means that it's basically base load. That means that the customer now will focus on efficiency, OpEx, delivery time, and also what the emissions are. Very much favoring our engines, medium-speed engines and gas turbines compared to what it has been in the past. I think we have a high competitiveness in this area. It's basically what I showed before. It's the good sweet spot for the size and also with our engines fulfill the requirements that we see that these IPPs or data providers see needed. Also what is then important is that we have a high life cycle sales potential since it is working as base load. We see very much U.S. and Europe.
Here is some data on the U.S., which is the most interesting market. It was more than 50% of all the data centers there in the worldwide. We also see that more than 10% of the electricity in some of the five states in the U.S. is coming from electricity consumption to data centers and $22 billion of investments in data centers. It is massive. Summing up then, how we see the business in Wärtsilä is if I start on the profitability side, on the equipment margins, we see that we have very much improved the margins, as I showed in the beginning of the presentations. We are well set up for having continued good margin on the equipment. We can see that from our order backlog and also the pipeline of products.
With good risk management, we can continue, especially on the EPC side, improving operational leverage from growth. Obviously, since we have a good order intake, we will also now see more and more operational leverage on the new build side coming from that. We are working on reducing our total installed cost. For a whole power plant, how can we reduce the cost? We have made good progress, and we still have a good pipeline of ideas to implement. This is also important in order to increase margins. We are working with continuous improvement, making our operations even more lean and better in terms of the flow. We implemented a new organization that has already had a big effect. Of course, there are tweaks we still can do to make it even better.
We continue to work with our customers on predictive maintenance and also autonomous operation, which will make it also more efficient and increase profitability both for our customers and for ourselves. Cost and index and value-based pricing, of course, we continue to work with that and making it better and better. Looking on the growth side, on the equipment side, we see this very strong thermal balancing growth happening now. We see the opportunity in data centers where we still have to figure out exactly how big of an impact can that have. It is clearly an interesting segment for the next years. We have a future-proof portfolio with sustainable fuels prepared for sustainable fuels, which we also can drive equipment sales. On the service side, we see the same drivers as have taken us where we are today.
Also going forward, continue to grow the installed base, very much back to the equipment sales, but also continue to increase the agreement coverage and also continue to climb the service value ladder, mentioning with upgrades, decarbonization, etc. That was the end of the presentation. From here, I think we can move into Q&As. Thank you,
Anders. Thank you for a great presentation. For information, this presentation material is available on our IR website in case somebody wants to flip it through. Now we have good time for Q&A. It seems like there are already quite many thumbs up. We will start with Daniela Costa. Please go ahead, Daniela.
Hi. Hi. Good morning. This is really helpful. Thank you for putting it together. I have two questions.
They're somewhat related, but I guess referring back to slide 13, where you had the pros and cons of the various types of technology, I guess ultimately it is all in total cost of ownership, basically you're saying it is better for engines. Can you help us sort of size through relative magnitudes, maybe sort of what's the—yeah, if you could put in some numbers to help us understand, especially on the technologies that are a little bit closer.
No, I think that, I mean, what we say on slide 13 is, of course, that we have the sweet spot in terms of size. Obviously, we have engines with single engines, so to say, I would say 10-20 plus megawatts. Obviously, if you have many, many engines, it gets too many engines to be, so to say, having a sweet spot.
That is why I say up to 400. Basically, 20 engines makes a lot of sense in terms of how many engines you have in a power plant. That is what I try to say with the sweet spot of 50 to 400 megawatts. When you come to the faster startup and shutdown, it basically means that we better can follow. I do not recall the number now, but last year, I showed when we had a capital markets day, the example of Texas. I quantified how much better, how much more revenue we could capture than the gas power plants in that. There we did quantify how much more revenue we can capture being better in starting and stopping, so to say. If I recall correctly, it was like 1.6 or 1.7, but we can check that number and confirm that.
Yeah. I guess sort of like another way to put it, I was thinking is for that sweet spot, the 50 to 400 megawatts, sort of if you use an engine-based solution versus a turbine or an air derivative, sort of what's the magnitude of cost reduction that the client has more from your customer's point of view. I can refer back to the CMV if you.
I can confirm it is 1.6 times higher real-time market revenue potential for engines than gas turbines in this example. This was two plants, gas turbine plants, and it was two engine power plants in Texas that I showed last year. 1.6 times better for the engines.
Okay. For the customer. Got it.
This will vary from market to market, obviously, depending on the market design.
Okay. Thank you. My second question is related to you showed the mix where it was sort of the mix shifting in favor, I guess, of balancing versus base load. Can you talk about sort of your market share, where you think it is in both, how that's been evolving so that we can think about market share shift going forward?
Yeah. This year, we have had a very high amount of balancing, as I showed also with the 260% increase. This year, I think we have had up until Q3, 70% have been balancing. This is very high compared to what we have had traditionally. Seventy percent of order intake of new build engine have been balancing up until Q3 this year.
How is your market share on balance versus base load?
I think that we show only market share, so to say, in total.
Typically, if we look on engines only, it has varied ups and downs based on that it's big projects. Typically, we have had 50-70% market share of engines to engines if I compare that. Of course, if we look at market share together with turbines, it varies a lot over time, but I'd say it's more like 15% range if we also include turbines. While if we only do engines to engines, it's more 50-70%.
Got it. Thank you.
Thank you, Daniela. Next question comes from Antti Kansanen. Please go ahead, Antti.
Yeah. Thanks. Couple of questions from me as well. I'll actually follow up kind of with Daniela's questions regarding kind of the different technologies.
If you look at kind of the customer cases that are firmly what you believe is your sweet spot and you have a pretty compelling argument, is the competition more against the turbine makers or against the other engine makers? What's kind of the counterargument for the clients who ended up going to an aero derivative turbine or an open-cycle gas turbine? Is it only about the CapEx or what is the reason you sometimes as well lose a case?
Yeah. Overall, U.S. is very important for our order intake on new build. I would say that majority of cases, the competition is against gas turbines. I think also if you look traditionally, many of the big utilities have been used to working with gas turbines, and they are not so traditionally, so historically, they have not so much experience of engines.
I think we always have that, so to say, uphill battle to get in. Once our customers get in and see, especially now with the energy transition and the need for flexibility, they are really happy. I think we have a good and better opportunity to sell again to the same customer. It is to get them over that first time, so to say, to get the experience with engines since many of them have traditionally been using gas turbines, and especially know GE very well since 30 years. You cannot do something wrong if you take another gas turbine, so to say, where we always have to be introduced in many cases.
I also think that, as you say, there are some customers that basically say, "Yeah, future is uncertain." We very much go with the lowest CapEx, and we care less about the end-to-end cost, so to say. We have other customers that very much, even if there is an uncertainty in the future, there are still things that are predictable and where we have good forecasts. They basically say that even within five or ten years, I can get a payback on having an engine instead of a gas turbine. Therefore, I look at the end-to-end, so to say. I would say that historical tradition and upfront CapEx, in those cases where they go with gas turbines, is the main cases.
Maybe also if there are cases being outside the sweet spot where it is 800 megawatts, it is also those stocks to get more sense to use gas turbines.
Okay. That makes sense. The other question I had was on kind of the future aftermarket potential in the sense that you are seeing both a shift to more balancing, which means less running hours, and also doing more EQ. You mentioned that that has a certain kind of negative impact on the lifetime earning. How do you kind of model the long-term aftermarket growth when you take into account that, yes, the installed base is growing, but then you have these certain kind of negative elements as well regarding use of spare parts and so forth?
Yeah. There are many things to consider, as you mentioned. You mentioned a few of them.
Of course, most important is the installed base, as I mentioned, as a driver, that that is increasing and not going down. That is the most important. We have worked a lot this year due to the increase in balancing to develop a very good proposal for our customers when it comes to balancing power plants as well. By having an agreement with our customers, we can, of course, also make sure that we have a good, still a good business with balancing. We have developed that this year. We also seen a lot of interest of new customers on actually signing agreements directly when we sell the new builds, which traditionally have not been the case also. That is actually positive. You are right. Of course, we see that balancing have fewer running hours than base load.
Now, we should also say that base load is also not constant over 25 years. We can see that if we go to older base load plants, of course, they also run much less hours than new base load power plants are doing. If the plant is 20 or 25 years old, maybe they do not run so many hours even if it was sold and had been used as a base load power plant for many years. The opposite. We also see many customers saying, "Yeah, this will be a balancing plant." Due to conditions on the market, they run many, many hours and many more hours than they predicted. Obviously, you know that we have a definition where we say 3,000 hours and below is balancing and above is base load. There is no such, it is our definition.
There is no black and white here. We have the gray stable. Some balancing run 500 hours, other ones run 2,000 hours. We have the same thing on the base load side. We have 7,000 hours, but we also have those that maybe only run 3,000 hours then. We continue to make sure we sell agreements and also that we climb the service value ladder, that it is important drivers. By doing that, we think we still can have a good future also for our lifecycle services, even if the basic of balancing is reducing the number of hours.
When it comes to EPC, obviously, and EQ, obviously, also there, we are, of course, trying to capture, even if we have EQ, we are trying to capture with a good agreement also the balance of plant and supporting our customer on that, even if it is more difficult than if you sell the whole thing with EPC from the beginning. We are doing and using the drivers we can to make sure we keep up. So far, we have shown that we can continue to grow. Actually, if we look at the hours, they have remained stable. It is not that they have gone down, so to say. We have seen that, and we also believe that going forward, with these drivers, we can continue to make sure that we have growth in our service business.
Okay. Thank you, Anders. I'll jump back to the queue.
Thank you, Antti. The next question comes from Sven Weijer. Please go ahead, Sven.
Yeah. Good morning. I hope you can hear me. The question I asked, the first one is on when we look at the energy business since before the pandemic, the business is down 50% roughly still in terms of order intake. I guess most of that is probably due to base load and the shift to EQ from EPC. I mean, when I look at your Bloomberg forecast, then it seems like base load is not really going to come back. Is that also your expectations that it has come down and it won't come back? What's your view on base load from here? Thank you.
Basically, if you go back before 2020, you're absolutely right. I mean, it's a total different situation today with the energy transition, with the introduction of renewables.
I also showed in one of the slides the increase of renewables. Yes, it's a very different situation. We do not see that the base load is going to come back, so to say, to how it used to be. We see a very moderate increase of base load going forward. We have the opportunities with the data centers. Let's see what that is doing. As you rightly point out, we have a pretty slow growth of the base load while we see a very high increase in balancing. Absolutely, that's how we see it.
Why is it not coming back? I remember most of the base load was emerging markets, countries like Indonesia, Brazil, Bangladesh. I mean, they still have power needs, also base load power needs. Are they going for something else? No longer the engines or what's changing there?
No, but I think that, yes, there is a lot of power needs in many of the emerging markets. I think the question is what can be financed, so to say, of building this out. Also, when you then have the money to build out, you basically invest in renewables for that base load. Also in those countries. It is quite clear that also in emerging markets, we see base load being the cheapest form of energy. Why would you build your base load with other forms if the cheapest form of energy is still solar and wind?
Second question I had was just on balancing power because we know that you have a good business in the U.S. We have always been talking about the potential in Europe, right? It does not really seem to happen.
I mean, is that still because of the legacy installed base of coal and turbines? Or are you seeing more momentum in the markets outside the U.S.?
Yeah. Clearly, the U.S. is our highest momentum market if you look at the size also. We see in some parts of Europe also interest for balancing like the U.K. I mentioned also parts of Australia, like Southern Australia, where I had the example from. We also see the momentum in other countries with balancing. I was also in Chile and Brazil a month ago. Also there, there is a big need from a system point of view for balancing. As I tried to say, one thing is that the system needs the balancing. That is not enough. It also needs to pay off to make the investment in a thermal balancing power plant with engines.
In order for that to happen, you also need the right financial incentives. Not only that, it is good from a system point of view. It does not help me as an investor in a thermal balancing power plant if I cannot make revenue. I showed in here an example of different revenue streams. We see that the important thing happening now is that a lot of the countries are reducing the window of energy, so to say, of how they buy energy to five minutes markets, like in the U.S., like in Australia. Also in Europe, going down to 15 minutes is still a bit better than what has been in the past.
The more of this that we have, and also with capacity markets where they are trying to reallocate money from the system, so to say, since the system needs it to the one that provides this capacity. Also there, of course, the capacity market, there are different capacity. You can say you have a dispatchable capacity, but you cannot start and stop. That is not very good for the balancing. It will still lead to curtailment of renewables since it is not good for renewables. You need the right incentives. This is happening more and more. We can see also on capacity. You have the SPP market in the U.S. where we also have kind of capacity market. We see that there are countries in Europe now discussing capacity markets, and we already have some ancillary services, etc. We see this happening. It takes time.
It takes time to change the market mechanism. But we can see that happening also outside the U.S.
Thank you, Anders.
Thank you, Sven. The next question comes from Uma Sanlin.
Hi, Anders. Thank you so much for the presentation. It's been very, very helpful. I guess my first question is on the EQ and EPC transition. Would you be able to perhaps quantify a bit of the margin difference that the project business versus the EQ? How should we think about also going forward? How do you balance keeping your market share on that market versus having better margins? Do you risk losing some of the projects that you could have got for the better profitability? Also, just following up on the previous question, would you be able to perhaps quantify a bit on the impact on the service revenue post-project as well?
Yeah. Starting on the margin side, I did show the total portfolio, so to say, that we have a higher margin now in 2024 than we have had in 2023. I showed the increase in margin. This is to a large extent the recovered profitability in equipment sales. We have had a higher margin on the EQ side than we have had on the EPC side. I will not quantify how much. Clearly, we have seen now the improvement and also the improvement of the business when we moved over to more EQ. We, of course, have a plan also, and we are working on improving also the margin on the EPC side because it should have as high margin as the EQ side, considering our values, so to say, that we provide to the customers. We should have had the same margin.
We are working on improving the margin on the EPC side as well. Going forward, we should have both a good profitability on the EPC and the EQ side. That was the first part of your question. You had one on the service side. What does it mean? As I said, profitability in terms of margin is actually not different between EQ and EPC in the lifecycle services. The volume of profit is obviously a little bit higher with EPC in the lifecycle services due to our higher scope also affecting the lifecycle services. That is what is the difference. It is not the margin, but it is the volume due to having more scope delivered from us in the EPC when we do EPC than EQ.
Thank you very much.
The third part of the question, which I must admit I forgot. What was that?
Yeah, sorry. I was asking that how do you balance between your market share versus the need to have better margins?
Yeah. I mean, this is always a balance. I said we have strengthened the governance, and we have a good discussion. Of course, we look end-to-end also, what does it mean for our end-to-end business. These are the things we consider when we make that judgment and also the competitive situation, of course. What I can say is that we will not, so to say, sacrifice margin, making unprofitable business just to get volume, so to say. That we will not do. Of course, there is a trade-off, clearly. How much margin do you want to have versus what is your chances of winning? We will not significantly drop margins just to get a lot of order intake now.
Thank you so much. That's super helpful. My second question is on the data centers. I guess it's a relatively new market for Wärtsilä. I think it seems like for the past year, most of the data center engine orders are on the smaller, higher-speed engine side. Would you be able to give us a bit more color on how your data center pipeline looks into the next, perhaps next year, next two years? How should we think about what are the magnitude of orders you're expecting? Yeah.
No, I think we have established a cooperation, which we also announced in the middle of this year in Europe with data center provider, EVIC K. We have also got order intake, three orders on data centers already in our backlogs, so to say. We, of course, now see also opportunities in the U.S.
We have not, so to say, selected. We are working with several different opportunities with different customers in this field. We see a huge appetite and opportunities in this area. We have not, so to say, selected one single or a few. We are working with several different customers in this field. We see a lot of interest and really a good fit for our products where we can offer good value to the customers based on this base load application, at least for the first five years. Also, being able to do backup and balancing after grid connections are coming. That is what I can say. I mean, let's see how big we can make this opportunity, what we can make out of it in the U.S.
Following up on that, sorry.
Would you be able to tell us a bit more who are the competitors that you bid against for the larger data center base load projects? Or typically the, yeah, the competitor.
What I see as competitors is gas turbines. I also see competitors, other engine suppliers, also medium-speed engine suppliers. To some extent, again, to history and tradition, I also see the high-speed, at least for the little bit smaller size of the big data centers because also there you have a range, I mentioned, 50-300 megawatts. Of course, if you go down to the 50 megawatt, I still see the high-speed as a potential competitor, basically because of historical ties.
Thank you very much.
We have a 10-minute time left. I would like to give an equal opportunity for all of the analysts to raise questions.
Let's take one question per analyst going forward. Next question comes from John Beekin. Please go ahead.
Hi, morning. Can we stay on data centers for a second? When we look at your orders last four years, it feels very gas-heavy. In a base load application for a DC, what would need to be true to be using a selection of engines versus a smaller turbine? If you think about the data center opportunity called the next five years, how much of that is base load versus balancing given the shape of the market today? Thanks.
As I mentioned, we are still, so to say, very early in the data center build-up. I am very careful in giving numbers for the data centers. I think we have a good opportunity.
I showed the overall demand, how much of that we will be able to capture versus high-speed versus the other medium-speed versus gas turbines. I think it's simply too early to give numbers on that. I see we have a good opportunity. It is very well in line with our sweet spot. That is what I can say on that. Obviously, if we capture a big part of that, a bigger part of that, it will be favorable for our base load versus balancing overall ratio. You are absolutely right in that. If we capture less, of course, we will have more balancing applications going forward based on the data center part. Obviously, there is also a difference, as I mentioned, in the world.
If we continue to do a lot of business, as we have done this year with market in the U.S., it is going to be heavy on balancing. If we do a lot with other markets in the world, in the Middle East or in Africa or in the Caribbean, we are going to see also more base load. Also, it's not only with data centers, but also what parts of the world do we save investments in? Depending on that, it will also change between balancing and base load. One segment that we haven't talked so much about, but which is very important also to us, is the CNI segment. We provide already today to mining, cement, textile, and other CNI providers. They typically have required base load, probably will require base load for some time.
We also there see a lot of interest in moving to balancing because they invest in renewables as well since it is the cheapest form of energy. However, when they do that, they typically come to us and ask us to help with the decarbonization and managing these different assets. We also see opportunity with decarbonization there. I think with all of this, we see typically a threat based on what you say, that we lower number of running hours and balancing versus base load. We also have opportunities with data centers. Also, when they go to balancing, we also have decarbonization, especially with the CNI customers. There are many pluses and minuses.
We did run a year ago a little bit what happens with energy transition, what is the speed of energy transition, what happens if we see more and more protective, and we do not see so much build-out or lower-scale build-out of renewables. We see that we are really well placed also then with our base load and our type of customers. We actually see that independently of what happens in the world, we have a good position with our capabilities and our products. I think that is important to say.
If you should clarify what CNI is.
Oh, sorry, CNI. Yeah. Basically, industrial customers, like I mentioned, cement could be mining. These are, in many cases, far away or have a very weak grid. There we have typically done base load in the past, but also they will increase with renewables as well.
There we have a good chance with decarbonization. Just like we have with the islands around the world, which also typically want to increase the amount of renewables in order to become greener. We see this with customers in the Caribbean, in the Pacific Ocean. We also there have very good opportunity to do decarbonization projects.
Thank you. The next question comes from Agas Gupta. Please go ahead.
Yeah. Hi. Thank you. Thanks for your time. I have a question regarding book-to-bill in the equipment side of power plant business. When I strip out, and again, the background here is that last couple of years for fossil fuel engine provider, or not just engine, but equipment provider, has been pretty good or maybe a golden year, so to speak.
When I look at your book-to-bill, and if I take cumulative orders since first quarter of 2022 and then divide by revenues, I get a book-to-bill of like 0.94. This was a period when you were shifting your focus on orders from EPC to EQ. I can imagine there would be some potential headwind coming from the scope effect. Basically, the two questions I have, the first one is why you haven't been able to have a strong book-to-bill if you look at the last two and a half years in the equipment side of business in power plant. What is keeping you not capitalizing on some of the opportunities?
Secondly, if you can quantify the drag which is coming from your focus on equipment order from EPC order, like let's say if the scope in EPC order is 100, what is the typical scope do you get in EQ order? Is it 50, 60, or 70, so to speak? Thank you.
Yeah. Maybe start with the last part. I mean, again, sorry to say, but also here, it's not black and white. We talk about EPC and EQ, but it's like balancing and base load example I gave that it's actually grayscale. We happen to draw a line between 3,000 hours between balancing and base load. It's the same thing with EPC and EQ. We have EQ where we basically do the engines and the most important modules around the engine.
We have what we call extended EQ, where we also do quite a lot of the equipment around the engine. On the EPC side, we have full EPC, or we have process EPC, where we actually do not do, for example, we do not do below zero, what we say, all the groundworks, etc. We do not do that. It is different types of EPC and EQ products. If I should give you some number, but you have to be very careful using that number, it is like 70% EQ versus an EPC product on average. Again, there are varying EQ products and there are varying EPC products. It is not something that can be used always. I hope I answered that part of the question. Looking at the book-to-bill, I am confident. Again, it varies between quarter and quarter.
Actually, if you look at 2023, we have 40% of our order intake of new build in the last quarter. While this year in 2024, we have had a very steady order intake with approximately EUR 200 million per quarter this year. A very steady order intake like you want it to be. This is not something we are fully in control over because this is single products and products are lumpy. It could very easily be that we have one quarter more orders and one quarter less. It has been very steady this year, actually, Q1, Q2, Q3. Now we are up against a big quarter last year in Q4 because, as I mentioned, we had 40% of the new build order intake in Q4 last year. I think it is looking good, the order intake for Q4.
We have a good pipeline going forward. Again, lumpy with big orders. When I say good, I mean, I think we should be able to continue having a 200 on average. It can vary quarter by quarter, but we look good on order intake pipeline for new bids.
Next question comes from Sebastian Koenen. Please go ahead.
Thank you for allowing me a question here. My question is on China. China totally dominated the build-out of renewables in the past two years, totally dwarfing whatever happens in Europe and the U.S. My question is, how does China currently balance their renewable power, given that Wärtsilä does not have any big business there? What is your strategy to get more attractive to Chinese customers? Thank you.
Clearly, we are interested in China.
China is a huge market, and they are building out renewables a lot and storage a lot. They're also building out the coal and fossil fuel power plants as well. They are doing a lot of everything due to the build-out of the system. We see China as an interesting market, but we don't see at the moment opportunity short-term for the type of balancing power that we would like to provide in building out. Basically, they have bigger power plants. They keep the coal power plants. They keep the newer coal power plants active. They even give them capacity payments, the new coal power plants. As long as they do that, it's very difficult to compete.
I think they will face more and more difficulty with curtailing of all the renewables that they are also putting in if they keep the coal power plants and give them capacity payments. I think that they will start seeing more and more problems when they build out the renewables. Therefore, there will become a time when they will become interested in having more flexible balancing than traditional coal power plants have been.
Yeah. No competitor really, additional competitor or a me-too player that takes the business away from you at the moment.
We do not see any competitor doing this fast start and stop with the technology in the sweet spot where we are present.
Thank you.
I guess we are already over time, but can you continue still for a while so we could take the last three questions?
Yeah. A few minutes more.
Okay.
Next question comes from Vivek Midha.
Thank you very much. And good morning. Thank you for the presentation. I just had a follow-up on the data center opportunity. We've heard from GE last night, for example, that they have some slot reservation agreements for potential order intake in 2025, 2026. In terms of the timing of when this opportunity could materialize for you, could we be thinking a similar kind of time frame, or could it potentially take longer given that it's still at an early stage? Thank you.
No, I think we can see potential order intakes already next year. I think we also have capability. We still have slots as well. We can see delivery already. From our production point of view, so to say, we can take slots already in the second half of next year.
Thank you.
Next question comes from Johan Eliasson.
Please go ahead.
Yeah. Hi. Thanks for taking my question very briefly. I attended Wärtsilä's capital markets a decade ago or so when you were pushing the backup power story quite strongly, and nothing happened, and you were downplaying the battery storage deal as well, obviously not you personally. Today, we are sort of seeing seemingly that the balancing power is taking off together with the battery part. One reason I've learned over these years is that the headwind from coal was basically the reason for the renewable backup, the thermal solutions you have, not really taking off beforehand. You mentioned coal being closed down last year as well here. Are we sort of at an inflection point now that coal will sort of be a tailwind rather than a headwind, you think, going forward? Not in China seemingly, but elsewhere.
Looking at the composition of renewables, does it matter for you if it is wind or solar? Finally, I mean, battery storage today, I mean, that has a price per megawatt hour going down. I guess the price per your thermal megawatt is not going down at the same pace. Is there a risk that storage could sort of take away some of your opportunities in the years ahead? Thank you.
Yeah. Thank you very much. Starting with the last question, I see still storage and engine power plants as very complementary businesses. One is not competing really with the other. They offer very different. Yes, with storage, we have now gone from one-hour systems to two-hour systems to four-hour systems.
If we look at seasonal variations, you could see on the markets where we have shown these examples, both Texas and Southern Australia, you have significant storage there as well. There is still very much room for engine power plants, and they are not really doing exactly the same thing. I do not see that competition being a problem at all. Going back to the question about coal being a tailwind, I think coal is already a tailwind on some markets, meaning that closing down coal power plants basically opens up for our opportunity of delivering flexible thermal power plants that fit much better with the renewables. This we already see on the markets that have matured and come very far. I still think it will take some time before all markets are there.
Obviously, we will see, so to say, fixed inflexible coal power plants still being in other markets where it will take longer time. It is a market per market, but I think we can say that there is already a tailwind on some markets today that closes down coal power plants.
The solar, is it?
I mean, the solar, yeah. Yeah. Of course. Solar is, I would say, in a way, in many cases, more predictable because you know when the sun is shining during the day, and you know for sure that it is not shining in the evening when demand is normally going up, when people come home from an internal air condition and start cooking and putting other household appliances on. Typically, you know that you have that issue.
Therefore, I think battery fits very well covering that part, so to say, the tail end of the demand in the day. While wind is, of course, varying more with low pressures, high pressures, day and night. Actually, we know certainly in the Nordics that we can have two weeks of no wind at all and very cold temperatures when a high pressure comes in the winter. There, storage cannot do anything to help on that. That is purely flexible engine power plants that can help with that. We also see that another component that is important is, of course, hydro. Also there, we see very different hydro. We see hydro like you have in the Nordics, where you always have hydro available more or less, while we see other countries where Brazil has now had droughts.
Yes, you have hydro, which should normally be able to help with the balancing of wind and solar. However, due to the droughts that you have there, you actually do not have hydro always. That is an important component with wind and solar as well.
Thank you.
Thank you, Jan. The last question comes from Anders Roslund. Yes.
You may have answered that already. My question is simply, is there a risk that better battery technology will reduce the need for balancing power? The storage technology sort of increases performance so much that you do not need the balancing technology that much.
No, I do not foresee that. It is a simple and short answer. I think we will see improvements in battery storage. As I said, we will be able to then do more four-hour systems than one-hour systems and things like that.
It will not fundamentally take away the need for storage because if you do the calculation, especially if you start talking about days and weeks and seasonable, we are far, far, far, far away with batteries to cover that. That is other long-term storage like pumped hydro, etc., that can help with that. That will not change our competitive situation with our balancing engines.
Okay. Thanks.
Yeah. Thank you very much.
Thank you, everybody, for very active dialogue. The next large IR call that Wärtsilä is pre-silent call on January together with our CFO, Arjen Berends. Before that, I hope that you will have a Merry Christmas and a Happy New Year. Thank you.
Thank you. Bye-bye. Thank you very much.