Interview with the Management Board: Handover in dynamic and challenging times

Energy markets around the world are undergoing rapid transformation. Growing electricity demand – rising by 4% annually according to the IEA – and the continued expansion of renewables are putting increasing pressure on existing grids. 2G provides relief and supply security with its decentralized, integrated power plants and large-scale heat pumps. CEO Christian Grotholt and CSO Pablo Hofelich explain 2G’s perspective and its competitive strategy.

Mr. Grotholt, Mr. Hofelich, it is rare to read about a partnership-based transition from the outgoing CEO to the designated new CEO – as we are currently experiencing at 2G. How did it come about, what are the motivations behind all this?

Christian Grotholt: We had already initiated the CEO succession process two years ago. As founders, it is important to Ludger Gausling and myself that the 2G DNA is retained under the new CEO. This should be an experienced manager who, given the international growth potential, has already been responsible for business on at least a similar scale. In our opinion, this is what Pablo Hofelich brings to the table. In his last post, he was responsible for sales of up to 800 million euros and a peak figure of 4,000 employees at ThyssenKrupp. Although he comes from a corporate background, he is an entrepreneur through and through. Consequently, we are convinced that we have found the right person in him.

Pablo Hofelich: After the initial introductory meetings, both sides wanted the transition phase to proceed as intensively as possible. On the one hand, to determine the extent to which we are on the same wavelength in terms of culture and contents. And secondly, so as to ensure the smoothest possible transition. We must not forget that 2G is growing strongly in a dynamic environment, which means that we cannot afford to stall! After six months, we all agree that this approach serves the cause tremendously. The commitment is there from both sides. I am delighted with the thorough induction and to be able to put myself at the service of 2G with such enthusiasm on the day of the Annual General Meeting.

Mr. Grotholt, Mr. Hofelich, let’s take a look back at the 2024 financial year. What were the defining characteristics?

Christian Grotholt: First of all: As expected, our new heat pump product was off to a good start in the reporting year, weighing in with incoming orders of around EUR 5 million. The newly assembled sales team had done a good job. In terms of CHP orders, 2024 was divided into two parts: In the first half of the year in particular, investment reticence prevailed among our customers in the core Western European markets. In Germany, the lack of planning certainty contributed to this, which fortunately has brightened up again at the beginning of 2025 with the adoption of the biomass package and the extension of the CHP Act. Outside of the Western European core markets, the already pleasing order intake of the first six months was significantly accentuated in the second half of the year. Major orders from the USA and Eastern Europe, and particularly from Ukraine, were most notable.

Pablo Hofelich: I was impressed by how much we can accomplish in a short time with our teams. Looking ahead, this will be a significant asset if the rising demands for electricity develop as we expect. We also used the year to press ahead with many internal issues, from the digitalization of products and services to the reorganization of IT systems and the Group structure itself. At the same time, we have prepared investments such as the production capacity expansion at the Heek site, possible acquisitions in the services sector and further partnerships.

Christian Grotholt: All in all, 2024 once again demonstrated that 2G is resiliently positioned with its diversified business model in terms of internationality, fuels and products. In the current volatile market environment, it is also crucial that we are able to mobilize resources and set priorities at short notice thanks to our flexibility as a medium-sized company and our standardized processes. For the first time, the foreign share of new system sales exceeded 50%. Earnings before interest and tax (EBIT) increased by around 21% to reach EUR 33.3 million. This corresponds to a profit margin of 8.9%. We also perceive a significant improvement in free cash flow compared to the prior year.

What dynamics do you see as having a significant impact on the energy markets in the medium term?

Pablo Hofelich: On the one hand, we are seeing a strong increase in demand for electricity in the key markets for 2G, propelled by new data centers, electric mobility and the electrification of the heating supply. On the other hand, electricity supplies will become significantly more volatile with the further expansion of renewables. As a result, the electricity grids are under stress, and actually overloaded in some cases. This means that, on the one hand, additional and, on the other hand, very flexible capacities will be needed to stabilize the supply – ideally also in a decentralized manner. That plays to our strengths.

Christian Grotholt: Precisely, because supplydependent renewables absolutely need flexible generators as a backbone. 2G has the right solutions to smooth out price peaks, or even better, to prevent them from occurring in the first place. Heat pumps can be operated costeffectively on windy and/or sunny days, thanks to the increasing number of dynamic electricity tariffs now on offer. During periods of low wind and low sunlight, the CHP plant comes into play. In this way, 2G products ensure an affordable, reliable, and environmentally friendly energy supply for our customers.

Pablo Hofelich: Put simply, this means that both the 2G heat pump with a low electricity price and the classic 2G CHP system with a corresponding gas and high electricity price are “in the black”. In terms of the 2G business model, this means that we are well positioned for the future thanks to the diversification of our products – regardless of the current electricity price scenarios.

Diversification is a good keyword. When will the already announced peak load unit be launched?

Pablo Hofelich: We will be actively marketing the demand-response aggregate this year, initially in the USA. In that market, system quality and low exhaust emissions are decisive. Our product with up to 650 kW of electrical power is configured for this purpose. Primary use cases will comprise peak load coverage with annual operating times of between a few hundred and up to 2,000 hours for energy suppliers, municipal utilities, microgrids, data centers, universities and industrial districts. Our aggregates are very well suited for short-term relief of the grids or for handling price peaks. This holds great potential worldwide in all markets with rapidly growing demand for electricity or increasing shares of renewable energies.

In which areas and products can 2G deploy artificial intelligence and what impact will this have?

Christian Grotholt: AI is already in use in our plant service as part of predictive maintenance. In this way, we want to drive the predictive maintenance and servicing of machines forward. The objective remains that we let the power plants and heat pumps manage themselves by way of our software solutions, which include AI. Teaming up with RWTH Aachen University, we are developing the “2G Conductor” – a kind of conductor that orchestrates the locally organized resources such as heat pumps, CHP units, buffer storage tanks as well as the powerto-heat systems, etc. – depending on weather conditions and the electricity exchange prices. This results in a highly attractive combination reconciling economic efficiency, supply security and decarbonization. We will continue to invest in AI so as to score points worldwide as a solution provider distinguished by efficiency and intelligence.

Pablo Hofelich: In particular, 2G is also directly linked to AI enablement: AI requires tremendous volumes of electricity in the corresponding data centers, which grids can no longer supply in many places today. In addition to the sheer amount of electricity, we are also experiencing tremendous and rapid load jumps with AI solutions. Gas engines can provide very fast, easily scalable and, in connection with hydrogen, sustainable solutions. We are currently seeing surges in demand, particularly in the USA and Western Europe, in order to achieve the stellar expansion targets for data centers. In addition, we are already experiencing the benefits of AI solutions for greater efficiency in internal processes and administrative work. The topic is also being very well received thanks to our still very young management team with an average age of under 38.

Let’s stay on the subject of engine technology. There is frequent mention of “2G’s own engines”. Sounds exciting. Can you explain that?

Christian Grotholt: Our expertise and innovations are at the heart of every 2G reciprocating piston drive, the core of our power plants: We supply our components, some of which are protected by patents, to the assembly line of an engine manufacturer. We have been equipping the engines with our own solutions since 2008. Thanks to our growing expertise in gas engine construction, we are now ranking as a market leader. The lowest possible life cycle costs and the associated economic advantages ensure the customer benefits of our applications. In the class up to 1 MW, there is a close partnership in place with Liebherr, in which both sides contribute components. You could say that we have become secondary engine manufacturers. All further value creation and distribution, however, are the sole responsibility of 2G. This reciprocating piston drive – with its own nameplate and IP – is not available anywhere else.

Battery storage systems are currently a big buzzword. Won’t the increasingly affordable battery technology make the backbone function of CHP superfluous?

Pablo Hofelich: I can give you a definite no. CHP works all year round to support the grid as an active, highly flexible producer of electricity and heat. Batteries, on the other hand, are designed to handle a few hours of bridging power. One should also keep in mind that batteries are not power generators themselves. This means that the more cost efficient option is generally a solution that uses as little battery power as possible, while maintaining grid stability. This is another reason why we are convinced of decentralized energy generation combined with electricity marketoriented control concepts, also in conjunction with batteries.

Christian Grotholt: We believe that hydrogen will become increasingly significant in the future, both for grid stability and as a long-term supply reserve. It is likely that the new transformer stations to be built for PV and wind farms will be equipped with electrolyzers that may produce 40 to 60 MW of hydrogen and feed it into storage facilities or existing infrastructure. In this way, hydrogen will be available for months as a renewable fuel to safely supply people and the economy. 2G CHP systems, in turn, convert hydrogen into electricity and heat with high efficiency and in line with demand.

Pablo Hofelich: The hydrogen capability of our power plant solutions is increasingly paying off. We are participating in tenders for peaker/ reserve power plants, such as those provided for in Germany's power plant strategy. Therefore, we are very confident that power plant types with a larger number of medium-sized H2-ready units will also be implemented in the coming years. And once again, we have just the right products!

How do you assess the competitive situation in the CHP market? According to the latest survey by the newspaper “Energie & Management”, four companies have emerged that serve the majority of the market.

Christian Grotholt: That is indeed the case, and the consolidation in the industry is progressing. For us, this offers the opportunity – with the necessary commercial caution – to look for companies whose performance portfolios suit us, particularly in the area of services. We are pursuing the goal of broadening our position in Germany and Europe. To help you understand our competitive position, I would like to briefly recapitulate how we have risen to the top league of combined heat and power generation. I am convinced that this is largely due to our own reciprocating piston drive concept – which is our unique selling point. The 2G systems are not only H2-capable, but also offer customers significant added value thanks to maximum efficiency, high power density, long maintenance intervals and their digital equipment. This has helped us tremendously in asserting ourselves internationally. We have been selling to Japan for over 20 years – and believe me, they have a keen perception for efficient, innovative and durable products. And so we have consistently grown into the larger performance range. After all, we now offer 2G’s own solutions for outputs of up to 1,000 kW. This not only helps us to grow in the area of new installations, but also to achieve different margins in the service business over the long term.

How do you see the energy transition progressing internationally?

Pablo Hofelich: In conjunction with the latest political volatility, we are seeing an energy transition at different speeds, depending on the market. The USA is obviously increasingly reverting to oil and natural gas, meaning that we could definitely benefit from our gas engines in the US market. And with a higher LNG export share, natural gas prices on the global market should be significantly less prone to wild fluctuations than in recent years. The energy transition continues to advance in Europe and Asia. But here, too, we are seeing adjustments. In Germany, for example, we will probably see a new federal government with an energy policy that is more open to technology, if only for budgetary reasons, which we welcome. Of course, this still includes our biogas and hydrogen solutions. In addition, natural gas remains a viable H2-ready bridge solution for certain areas of strategic economic importance, such as backup power plants and the rapid rampup of data centers. We will continue to live in such a field of tension for a while – but it can be managed well with pragmatic approaches and investments in sustainable solutions. Therefore, we also assume that the H2 core network will continue to be built in order to replace natural gas with blue and green hydrogen molecules in the medium term.

Christian Grotholt: And we are increasingly receiving feedback from customers that securing their own power supply takes a high strategic priority. The mere fear that stressed grids could lead to supply bottlenecks is prompting companies to rely on decentralized solutions as a preventive measure. This is not only the view of Europe’s most valuable technology group from the Netherlands, which we had the pleasure of supplying, but also that of numerous energy suppliers in the USA who are investing in decentralized supply structures. This means that we are currently receiving more and more tangible evidence that decentralized energy generation is being demanded for stabilization, thereby relieving stressed grids.

Mr. Grotholt, you represent over 30 years of 2G: from a two-man undertaking to a successful, internationally active mediumsized company. What are your plans after your “active” time?

Christian Grotholt: The entrepreneurial development that 2G has undergone would be inconceivable without strong teams and personalities who are both integrative and leaders. I would like to take this opportunity to thank two people in particular: Ludger Gausling, who made it possible for us to get started in the first place and has supported us ever since with his entrepreneurial advice and network. And we also owe a great deal to Ludger Holtkamp, who is leaving the Executive Board. Without him, 2G would not be in such a good position today. He and his teams have systematically advanced many of our unique selling points in project management, procurement, container construction and production with their clever solutions. Our ability to deliver and our adherence to delivery dates are a genuine asset in the industry. I will remain closely associated with the company, but in a new role. Pablo Hofelich will make the business decisions with his colleagues on the Executive Board, while I will be active on the advisory side. Otherwise, I will try to get by with a 40-hour week in the future. Let’s see if that works.

Mr. Hofelich, in concluding, let’s look ahead. Can you outline 2G’s corporate goals for the next two years?

Pablo Hofelich: We want to continue to grow strongly across all areas – using our own resources and in collaboration with our sales partners. Specifically: 10 to 15% sales growth plus further gains from possible acquisitions. Our aim is to establish ourselves among the top 3 competitors in all the markets in which we operate. To this end, we want to position ourselves more strategically. In addition to CHP, we want to be recognized as a manufacturer of power plants, as a manufacturer of heat pumps as stand-alone solutions, and as a system provider. Consequently, in future, communication and marketing will therefore focus on electricity generation, heat generation and the combination of both. We will also pay a lot of attention to our service portfolio, which is set to grow internationally at least as fast as the new installations business. Because also in five years’ time, a modern range of services for sales work and system operations will continue to offer our customers substantial added value – the best argument at any negotiating table.