WEBVTT

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With Laurent's segal and from London and
Gerard Reed from Berlin. This is redefining

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energy minutes minutes. It is one
twenty five and job, what's your number

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this week? My number this week? And I give you a clue,

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Lurn, It's not just a number. I'm going to add a metric unit

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onto it. One hundred and thirty
gigawatts and thirty kikia wetts can be only

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sot out batteries. It's solar,
and it's the guidance from one particular soda

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company must be well, one of
the Fab four, Like let's say Jinko

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very good guidance for this year is
one hundred and thirty gigawatts of a module

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deliveries. It is not insane,
it is it is. It's basically the

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wool market three years ago. Yeah, it's one manufacturer. It's incredible,

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absolutely incredible. I think that I
think talking about the solar thing is interesting

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because obviously if you look at Chinko
just put out their numbers for Q four

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and well, surprise, surprise,
what happened? Gross margins collapsed? Yeah,

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of course, see pricing is collapsed. Gross margins collapsed, so they're

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down to the in Q four they
were at guess what the gross margin is

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in Q four eight and no,
no, still two digits twelve percent good

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good, but just about broke even. I mean like operating margin one percent.

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I mean they used to be ten
percent operating margin. Business. It

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just gives you an idea that it
was a stress in the market, a

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present, right. Yeah, and
there are rumors about Lungey getting rid of

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one third of their workforce. Don't
know if it's true or not. Yeah,

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yeah, yeah, it's much clear
as there's going to be a shakeout

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and global solar And we've seen this
before, right, it's what it seems

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to happen every few years. Yeah, it's just the other Menutube are insane.

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Yeah, it is. I mean
it's hard to believe that if one

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manufacturing firm has one hundred and ten
of capacity that they have it is well,

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I mean add numbers of so this
week a lot, but the one

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that strick me was in the middle
of this week at some point in Belgium,

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the cost of imbalance was minus four
hundred europe and Maga what iur It's

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all about flex It's all about batteries. If you had batteries. People would

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have paid you four hundred europe and
mage what I were to charge. Well,

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when the air of volatility, We've
been talking about this in the last

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few days. Ear of volatility,
that's we live in. So this week

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there were three big conferences at the
same time, all about energy. There

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was one in Houston, Texas Sera
Week, which is where all the oil

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guys gather and massage themselves and oil
themselves and everything is great. And what

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I understood is that we're making a
lot of money, there's still growth in

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demand, and well, yes she's
dead and energy transition is too expensive,

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so let's go continue to drill.
They used to pay lip service to the

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Green but the Green movement or just
pepper Tiger, so they're just going to

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sail on. That's what I get
from the echoes from Cera Week. I'd

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like to hear the other conferences actually, because I think you're gonna leave out

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one really important. I'm just gonna
put up. I'm gonna I'm gonna bet

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with myself that you're gonna leave out
more. No. The second one is

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Bill Boo when you're up, I
didn't you didn't. I thought you're gonna

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forget about the wind guys, you
didn't a well on okay, god no,

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I mean so many people who went
there, and probably I would have

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come if we didn't have to go
to Berlin. And what my friends told

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me is that the Mohala is a
bit now, they're bouncing back. We'll

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back baby, Supply chain getting better, and apparently permitting is getting easier,

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and I think they've been through the
worst. That's what I get. So

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it's great to see some some optimism
in the wind sector. But maybe you

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heard something. No, no,
I heard the exact same I heard the

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exact same thing. So prices are
beginning to come down again, the value

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chains begin to sort itself out.
Supply chain a lot better than it was

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two years ago. Yeah, roads
in future, it's good. We neededre

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and offshore, yeah exactly. But
let's talk about the important one, the

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one we went to in Berlin,
the Global Infrastructure Summit. So it's not

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just energy, it's infrastructure. So
you have also data centers, transmission,

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road port bridges. And what I
got is, well, first of all,

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we were three thousand, which is
insane compared to even last year two

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thousand, five hundred, So it's
really it's still going to continue to grow

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fast. And for our listener,
the Berlin conferences where in the jargon LPs

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meet GPS, so LPs are investors
in funds and GPS are fund manager,

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limited partner, general partner. So
this is really where they meet and they

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discussed as strategians on The first thing
I got is raising money into twenty three

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was an absolute disaster. Well,
one of the biggest, biggest, top

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guy, they only raised four billion
last year and they used to raise twenty

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billion per quarter. Was the smaller
one the raise zero. Now, the

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good thing is since the beginning of
the year, it has shift and we're

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starting to raise money again. We
see valuation getting better and we see transaction

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happening. So the big freeze we
had because of the supply chain issue and

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especially the interest rate issue is beginning
to ease. And somehow it's the mirror

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of what's happened in Bilbao. Yeah, let's look at the positives this This

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conference was jammed and there was lots
of other people didn't even buy tickets.

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I know. Let's say one large
investment bank in Europe where there was one

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particular character and he had three copies
of his ticket. So the point about

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it is there was actually much more
on. I mean, you just couldn't

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move within the event itself, and
then you had all the side events,

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and so that's you can say it's
good because there's a lot going on.

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But I thought, if you just
want to take give me that, I'd

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give you the summary of the different
days, because it's not just about energies.

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You said the property thing. There
was a day of property, and

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what I got out of that was
property is very difficult. The general view

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is commercial property in a difficult situation. So that was the property day.

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The big boom was digitalization. Everyone's
just talking about data centers, data centers,

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AI data centers. That's where like
there was so much activity, and

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I thought, if I look at
our own energy transition space, what I

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got out of that was there was
a big question on people's lists, which

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was, well, listen, it's
been really clear that this has been an

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infrastructure as a class for the last
ten fifteen years. The question is is

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it still And I think that was
a big question that people were asking me.

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I had really big investors sort of
saying this to me, so what

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do you think you know? And
I just think the market is changing.

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I don't know what you think first
about the data centers. Data centers is

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just about energy. You used to
connect data center with ten megawat or twenty

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megawat, and then you go to
fifty megawa, one hundred megawat, and

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now people are talking about hyper scale
at five hundred megawat. Even I heard

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about a gigawat. So the old
data center play isn't energy play, and

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it's growing. So it's always easier
to have a growing pie than a stable

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pie where everybody fights for market share. That's number one, number two,

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and you said it, well,
the all revenue models were for twenty years,

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you would have guaranteed government subsidies.
This is gone. So in fact,

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you have to be much more sophisticated
in the reve new model. You

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have new models and you're going to
integrate portfolio, you're going to inteke grate

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batteries, short term trading hedging PPAs
tail risk. I mean, it's becoming

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very, very sophisticated. So the
question the infrastructure investors have to ask themselves

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is can we educate ourselves and can
we swallow a revenue model that's not going

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to be as stable as before,
So certain years you'll have less, other

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years you'll have more. Probably on
average you still have a good return,

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but as you said, the volatility
of the returns is going to increase.

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Hence, infrastructure investors, is it
still the type of return profile you're looking

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for now? I believe that the
bigger you digitize and the more diversified your

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portfolio, you will level to good
returns. But some smaller investors are not

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as sophisticated. They're asking themselves that
question. I have a question for you,

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and I came out of this which
was if we look at the last

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fifteen years, the people who have
built and who own still today renewable assets

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are financial institutions and developers back by
them. That's really what it is.

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Our wonders are going to be the
case in the future. In other words,

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is it going to be companies that
are on these assets and manage them

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or is it going to be a
funded answer? That's the question I have,

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and I don't know the answer to
wish, but I'd love to hear

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your thoughts. That's an excellent question
for another episode because we can we can

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oh yeah yeah, yeah, yeah
yeah. But what I got is that

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better times are coming without a doubt. Yeah, yeah, okay, it's

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linked to interest rates and supply chain
and as you said, inalition to AI

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and data centers. We are now
short generation, well even shorter flex.

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The power consumption is going to go
up, which didn't happen in the past

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twenty years, because of evs,
because of AI, because of the eating

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system, and even if they have
new mothers are going to be more sophisticated.

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There is a lot of opportunities in
our sector. You made the point

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the other day when we're talking,
we have to answer the other question,

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which is why is electricity demand not
gone up in the last decade despite all

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these digital devices lighting you very good, amazing people. Just think of it

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is you've gone from one hundred what
bulb to a six WAP bulb. Good,

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as simple as that. But the
world is changing going forward because what

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we've got is energy demand is going
to increase at a greater rate than energy

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efficiency. Yeah, is electricity space
Absolutely good? Seeing you, my friend,

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I really enjoyed it. It was
good fun and talk to you next

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week. Thank you for listening to
Redefining Energy. Don't forget to rate the

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show and subscribe on Apple podcast,
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