  In this paper the potential of high resolution spectroscopy of nearby AGN
with XEUS is discussed. The focus is upon the energy resolution that is needed
in order to disentangle the different spectral components. It is shown that
there is an urgent need for high spectral resolution, and that a spectral
resolution of 1 eV, if possible, leads to a significant increase in diagnostic
power as compared to 2 eV resolution.
