WEBVTT 1 00:00:04.759 --> 00:00:08.279 With Laurent's segle And from London and Gerard Reed from Berlin. 2 00:00:08.800 --> 00:00:10.720 This is Redefining. 3 00:00:10.199 --> 00:00:16.280 Energy today, on Redefining Energy, this is our annual episode 4 00:00:16.600 --> 00:00:19.719 on the state of the PPR market in Europe, and 5 00:00:19.879 --> 00:00:22.879 also going to talk a bit about the US and. 6 00:00:22.920 --> 00:00:25.960 We're going to have Luca Well, the co founder PEXA Park, 7 00:00:26.039 --> 00:00:27.839 to come out and have a chat about it. I mean, 8 00:00:27.839 --> 00:00:30.519 this guy's is knowledge as they can and around these areas, 9 00:00:30.559 --> 00:00:33.799 and they've also recently moved into the US, so we 10 00:00:33.840 --> 00:00:35.840 also learn a little bit about that market as. 11 00:00:35.719 --> 00:00:39.159 Well, and picks up Park for those who don't know 12 00:00:39.359 --> 00:00:44.640 who that company is, is really the leader in assessing 13 00:00:44.960 --> 00:00:49.840 the prices of PPA and they have accumulated so much 14 00:00:49.920 --> 00:00:52.920 database over the years, so whenever you want to do 15 00:00:53.000 --> 00:00:56.399 a PPA or you have a PPA, they're so important 16 00:00:56.439 --> 00:00:59.679 in pricing those long term assets. 17 00:01:00.600 --> 00:01:05.120 Absolutely critical service. It's all about data, data, data these days. 18 00:01:05.200 --> 00:01:10.120 Right, Let's bring Lucia in the show. Lucia, welcome to 19 00:01:10.159 --> 00:01:10.560 the show. 20 00:01:10.959 --> 00:01:12.120 Thanks for having me again. 21 00:01:12.920 --> 00:01:16.280 Yeah, you're a repeat of vendor. We like you very much, showed. 22 00:01:16.359 --> 00:01:19.799 That's your third time here and we'd like to have 23 00:01:19.879 --> 00:01:23.200 you first because your episode downloads a lot, and the 24 00:01:26.959 --> 00:01:30.480 second is because there's a lot of valuable information to share. 25 00:01:31.200 --> 00:01:34.959 So you just published your early report on the PPA 26 00:01:35.400 --> 00:01:38.799 market in Europe. What are your main takeaways. 27 00:01:39.200 --> 00:01:42.000 It was a kind of fascinating year in PPA last year, 28 00:01:42.560 --> 00:01:46.799 and what we're probably witnessing is the end of the 29 00:01:46.840 --> 00:01:50.640 simple PPA. We had five good years of doing one 30 00:01:50.680 --> 00:01:53.079 deal left to the other in Europe and now we 31 00:01:53.120 --> 00:01:57.200 see negative prices, low capture rate and possibly a big 32 00:01:57.239 --> 00:02:01.920 demand saturation for standard of solid and it creates significant 33 00:02:02.000 --> 00:02:04.000 changes to how PPAs are done. 34 00:02:04.519 --> 00:02:06.560 What you're saying is that we now have to deal 35 00:02:06.560 --> 00:02:08.240 with risk that wasn't there beforehand. 36 00:02:08.759 --> 00:02:11.639 Well, it has been changing always from year to year, 37 00:02:12.120 --> 00:02:15.759 but I think the market has solved cheap renewable production 38 00:02:16.479 --> 00:02:18.479 and there's now a new barrier. 39 00:02:18.560 --> 00:02:20.039 There's a new challenge. 40 00:02:19.639 --> 00:02:23.879 Ahead, which is we need to produce what the client wants, 41 00:02:24.080 --> 00:02:27.319 and there's this demand saturation for standalone sold the profile 42 00:02:27.360 --> 00:02:31.319 in certain markets and it takes more work to produce 43 00:02:31.759 --> 00:02:36.199 a firmer green profile and that's actually a very good development. 44 00:02:36.360 --> 00:02:38.280 It means the industry has matured. 45 00:02:39.080 --> 00:02:41.520 Could you dig into that a little bit more, because 46 00:02:41.840 --> 00:02:43.800 at the end of the day, there's a risk of 47 00:02:43.840 --> 00:02:47.479 what you're saying is sunny day, too much sun? You know, 48 00:02:47.479 --> 00:02:49.520 the price is zero. So then I sort of go 49 00:02:49.599 --> 00:02:52.919 as somebody's buying, I go, oh, why would I pay 50 00:02:52.919 --> 00:02:54.840 someone fifty euros when I can get it for zero? 51 00:02:54.919 --> 00:02:55.800 Right, that's number one. 52 00:02:56.199 --> 00:02:58.520 And I understand from the seller side they want to 53 00:02:58.520 --> 00:03:01.800 get fifty euros and not zero, So there's that mismatch. 54 00:03:01.879 --> 00:03:03.039 So how do you bring them together? 55 00:03:03.280 --> 00:03:05.560 I say, yeah, So first of all, we have to 56 00:03:05.639 --> 00:03:08.599 focus on what the buyer wants, and the buyer want 57 00:03:08.800 --> 00:03:12.719 different profiles. They want to procure during the night, during 58 00:03:12.719 --> 00:03:16.599 the morning hours, and there is a market there for 59 00:03:16.719 --> 00:03:20.520 green production. And the way you solve this or how 60 00:03:20.560 --> 00:03:23.319 the market is adjusting and already twenty percent of the 61 00:03:23.360 --> 00:03:26.080 deals last year we're like that is that you combine 62 00:03:26.199 --> 00:03:31.639 different renewable technologies. So very simply bring together wind solar, 63 00:03:32.039 --> 00:03:34.560 add a bit of storage, and with that you can 64 00:03:34.680 --> 00:03:39.680 create the profiles buyers want. Because the solar profile at 65 00:03:39.719 --> 00:03:43.080 noon this is over. I mean we have sufficient production 66 00:03:43.199 --> 00:03:46.879 then everyone is producing then, so that's served already. 67 00:03:47.639 --> 00:03:50.199 If I look at your data on I see number 68 00:03:50.240 --> 00:03:54.520 of PPAs going up, volume of PPA going down overall, 69 00:03:54.599 --> 00:03:58.599 which means each PPA is a big tinier and it's 70 00:03:58.800 --> 00:04:03.199 the corpyright who are really the big buyer. So the 71 00:04:03.319 --> 00:04:06.319 utilities are not really in the game anymore. Maybe they're 72 00:04:06.360 --> 00:04:08.639 going to come back. You're going to tell us is 73 00:04:08.680 --> 00:04:12.240 it just your average big tech or did you see 74 00:04:12.319 --> 00:04:13.960 new players coming on the market. 75 00:04:14.759 --> 00:04:16.120 This is really fascinating. 76 00:04:16.160 --> 00:04:18.439 So we have like eighty percent of all the deals 77 00:04:18.439 --> 00:04:20.879 are corporate, as you pointed out, it's more than three 78 00:04:20.959 --> 00:04:25.360 hundred deals. But extremely interesting is more than hundred and 79 00:04:25.360 --> 00:04:28.720 fifty of the corporate buyers are first time buyers in 80 00:04:28.759 --> 00:04:32.519 the market. And yes, we had a decrease in the 81 00:04:32.560 --> 00:04:36.759 reported PPA volume the last year because the deal size 82 00:04:36.800 --> 00:04:39.079 has got smaller, so the average deal is now below 83 00:04:39.120 --> 00:04:42.800 fifty megawatt used to be seventy eighty megavot. But the 84 00:04:42.839 --> 00:04:47.639 actual capacity realized on the PPAs has increased. So while 85 00:04:47.639 --> 00:04:50.879 the report the PPA volume is like fifteen gigawat, the 86 00:04:50.959 --> 00:04:55.720 capacity realized under this PPAs are twenty gigabot. So that's 87 00:04:56.360 --> 00:04:59.160 an interesting twist to how the market played out. 88 00:05:00.120 --> 00:05:05.439 I see also that the main market remains Spain and 89 00:05:05.480 --> 00:05:08.040 then you have Germany, Fronts, Italy. 90 00:05:08.240 --> 00:05:12.680 Gb We have been predicting for Germany to take it 91 00:05:12.720 --> 00:05:15.600 over in Spain, but I think it was just too 92 00:05:15.639 --> 00:05:18.680 good and too growing. On the Spanish side, I think 93 00:05:18.680 --> 00:05:20.680 it's now five years in a row where the market 94 00:05:20.720 --> 00:05:24.519 was the biggest. But that's actually a good case Spain 95 00:05:24.720 --> 00:05:29.319 where we do see barriers to growth. We can't just 96 00:05:29.480 --> 00:05:32.600 continue to do standalone solar anymore, so you will see 97 00:05:32.600 --> 00:05:37.240 an epic boom in co located project solar and storage. 98 00:05:37.720 --> 00:05:41.240 There's a huge premium or demand for wind profiles. You 99 00:05:41.360 --> 00:05:44.399 see basically already half of all the deals in Spain 100 00:05:44.480 --> 00:05:48.560 being combined solar and wind, so they are the frontier 101 00:05:49.279 --> 00:05:51.839 and this is something which you're gonna see then spreading 102 00:05:51.959 --> 00:05:56.519 across Europe. And right now it is all corporates. But 103 00:05:57.000 --> 00:06:00.160 I wouldn't be surprised to see a bigger role of utilities. 104 00:06:00.199 --> 00:06:03.519 And we have been forecasting this already for two years. 105 00:06:03.560 --> 00:06:07.839 It didn't materialize. But when you need more intelligence, because 106 00:06:07.879 --> 00:06:12.360 you need to combine and synthesize production to produce therma profile, 107 00:06:12.800 --> 00:06:16.360 you need more energy intelligence and this is something which 108 00:06:16.800 --> 00:06:20.879 utilities and modern retailers can provide. So I wouldn't be 109 00:06:20.920 --> 00:06:24.439 surprised to see a stronger role of utilities or modern 110 00:06:24.480 --> 00:06:26.680 intermediaries in the next years. 111 00:06:26.439 --> 00:06:29.920 Ahead, which means that also that's going to combine with 112 00:06:30.240 --> 00:06:34.439 twenty four to seven trucking and probably trading or optimizing. 113 00:06:34.600 --> 00:06:36.199 I guess correct. 114 00:06:36.279 --> 00:06:38.439 You need intelligence for that, So first you need the 115 00:06:38.480 --> 00:06:41.160 infrastructure to track, but then you need to have the 116 00:06:41.199 --> 00:06:46.160 ability to combine intelligently. Twenty four seven is the holy grail. 117 00:06:46.360 --> 00:06:49.199 It's still a wallet buster in most markets where the 118 00:06:49.319 --> 00:06:54.000 underlying physical realities are still that you have a fossil stock. 119 00:06:54.560 --> 00:06:57.079 But right now we're at the stage of just simply 120 00:06:57.639 --> 00:07:02.600 doing a deal having soul and wind together, which are 121 00:07:02.639 --> 00:07:06.120 not yet a firm profile. So where the real value 122 00:07:06.199 --> 00:07:09.920 is in is to guarantee an hourly or a fixed 123 00:07:09.920 --> 00:07:14.160 shape green and this is then where you need really size. 124 00:07:14.240 --> 00:07:17.800 So you need bigger investors that can do multiple technologies 125 00:07:17.839 --> 00:07:21.480 in multiple markets. You need investors that can have a 126 00:07:21.560 --> 00:07:25.360 team optimizing and planning this, or if you don't have that, 127 00:07:25.879 --> 00:07:28.639 you have third parties providing this service. And this is 128 00:07:28.680 --> 00:07:33.360 what I call the utilities or modern intermediaries or retailers. 129 00:07:33.759 --> 00:07:36.839 So it's pretty much the death of the independent develobo 130 00:07:37.160 --> 00:07:38.000 that's what you're saying. 131 00:07:38.680 --> 00:07:41.560 Probably not the death, it's basically we have witnessed over 132 00:07:41.600 --> 00:07:45.279 the last two years the end of the independent portfolio manager. 133 00:07:45.439 --> 00:07:50.079 So you have KK and large private equity companies buying 134 00:07:50.120 --> 00:07:54.759 all the platforms providing scale because just doing development for 135 00:07:54.839 --> 00:07:58.199 a single technology, I think this there is a certain 136 00:07:58.199 --> 00:07:58.759 limit to that. 137 00:08:00.079 --> 00:08:03.600 What you're really saying is like scale matters. It's now 138 00:08:03.600 --> 00:08:04.839 became on a big boys game. 139 00:08:05.240 --> 00:08:08.480 It's scale and it's energy intelligence. So there is a 140 00:08:08.560 --> 00:08:13.160 play for smart intermediation. So if you have an edge 141 00:08:13.439 --> 00:08:18.199 in combining, in planning, in forecasting, in synthesizing, there is 142 00:08:18.240 --> 00:08:22.439 a much more value now in the actual delivery of 143 00:08:22.639 --> 00:08:26.240 these screen products than it used to be before because 144 00:08:26.319 --> 00:08:29.920 right now it is basically you just sell whenever there 145 00:08:29.959 --> 00:08:33.000 is some and wind this energy is sold. You don't 146 00:08:33.039 --> 00:08:35.200 need to do anything actively. 147 00:08:35.440 --> 00:08:37.840 Okay, which of course is going to change going forward. 148 00:08:37.879 --> 00:08:40.320 Right that's the whole point. Okay, very interesting, Okay. 149 00:08:41.080 --> 00:08:43.639 I continue to scroll down your report and there are 150 00:08:43.759 --> 00:08:49.159 very interesting price signals, you know, around negative prices, capture 151 00:08:49.200 --> 00:08:51.720 rate and so on, and it looks really like it's 152 00:08:51.759 --> 00:08:55.200 going worse. And well, so if we think about the 153 00:08:55.279 --> 00:08:58.919 start of including more batteries. Now I know GB has 154 00:08:59.000 --> 00:09:03.639 as taken lead and now Germany is pretty hot. I mean, 155 00:09:03.720 --> 00:09:07.360 Spain looks like it would be a natural, but I 156 00:09:07.399 --> 00:09:11.240 guess here it's more a regulation bottleneck than anything else. 157 00:09:11.559 --> 00:09:12.759 What do you hear from the market. 158 00:09:13.480 --> 00:09:17.759 Every country is trying a bit by itself how to regulate, 159 00:09:18.000 --> 00:09:19.919 how to do so. I think this is going to 160 00:09:19.919 --> 00:09:22.080 be figured out in the end. It's just going to 161 00:09:22.120 --> 00:09:25.720 be plain economics. Costs have been falling on the investment 162 00:09:25.840 --> 00:09:30.679 side for standalone renewables. Low capture is becoming a pain 163 00:09:30.960 --> 00:09:34.919 at negative power prices are adding value to storage, so 164 00:09:34.960 --> 00:09:38.519 it's just a factor of time that this will be resolved. 165 00:09:39.000 --> 00:09:41.120 The big question for me is whether we will see 166 00:09:41.159 --> 00:09:44.759 more co location or whether we'll be more a standalone 167 00:09:45.000 --> 00:09:47.919 storage play like in the US where most of the 168 00:09:48.000 --> 00:09:52.840 deals are tolls, so basically a PPA for a standalone 169 00:09:52.879 --> 00:09:57.240 battery adding services to the grid, or just pure arbitrage. 170 00:09:57.679 --> 00:10:00.200 And that's something which is not yet fully clear how 171 00:10:00.240 --> 00:10:01.440 this will play out. 172 00:10:01.720 --> 00:10:04.720 Well, from what I've seen in a recent conference in 173 00:10:04.799 --> 00:10:07.799 London and the story show Meet all the race is 174 00:10:07.840 --> 00:10:10.960 on tolling. You could hear it everywhere. Everybody wanted to 175 00:10:11.039 --> 00:10:14.960 do tolling. On one hand, as an infrastry investor, I'm 176 00:10:15.000 --> 00:10:17.600 happy to leave a lot of the optionality on the 177 00:10:17.639 --> 00:10:21.960 table provided I get my nineteen percent return. And on 178 00:10:22.039 --> 00:10:23.960 the others there's a lot of Yeah, as you say, 179 00:10:24.159 --> 00:10:29.399 begin a trader who are happy to swap fix for 180 00:10:29.559 --> 00:10:34.240 viable and optimize that portfolio. Whereas co location, there's a 181 00:10:34.240 --> 00:10:37.480 lot of opportunities you miss because you are co located, 182 00:10:38.039 --> 00:10:41.279 so in fact you're sharing the same pipe with your set. 183 00:10:41.759 --> 00:10:44.039 Yeah, this will be very interesting. 184 00:10:44.120 --> 00:10:47.720 So first on the tolls, we will see what is 185 00:10:47.759 --> 00:10:50.720 the role of utilities, like who is providing those tolls? 186 00:10:50.879 --> 00:10:52.080 So these are not corporate. 187 00:10:52.679 --> 00:10:55.279 That's why we actually believe there is a bigger role 188 00:10:55.320 --> 00:10:58.559 for utilities to play. And then again this is a 189 00:10:58.600 --> 00:11:02.080 matter of scale and aggregate. Batteries make a lot of 190 00:11:02.120 --> 00:11:05.600 sense on single assets, as you pointed out, but they're 191 00:11:05.679 --> 00:11:08.639 even more interesting if you have a bigger portfolio of 192 00:11:08.960 --> 00:11:13.279 multiple assets, of various storage units, so that you can 193 00:11:13.759 --> 00:11:16.600 look at it from a portfolio size and you have 194 00:11:16.720 --> 00:11:19.519 much more optionality in what you want to deliver and 195 00:11:19.600 --> 00:11:22.639 where you can extract value on the various markets. So 196 00:11:22.759 --> 00:11:26.519 PPA is just one outlet that's a long term supply, 197 00:11:27.279 --> 00:11:30.519 but there are of course multiple additional markets. If you 198 00:11:30.559 --> 00:11:33.200 go down the timeframe ontel delivery. 199 00:11:33.919 --> 00:11:36.200 Could you talk a little bit about the role of 200 00:11:36.840 --> 00:11:39.799 batteries within PPAs, and I don't mean totaling, and I 201 00:11:39.799 --> 00:11:43.080 mean as part of a PPA in other words, back 202 00:11:43.120 --> 00:11:45.559 to this whole idea of firming wind and sola up. 203 00:11:45.639 --> 00:11:48.519 Are you seeing strong developments in that area and it's 204 00:11:48.559 --> 00:11:50.639 so could you just give an example of how that works, 205 00:11:50.679 --> 00:11:52.720 because I'm trying to get my head around is it 206 00:11:52.759 --> 00:11:54.799 that you're doing it when the sun goes down? Just 207 00:11:54.879 --> 00:11:58.000 describe how the power is being developed. Is it for 208 00:11:58.080 --> 00:12:00.240 ten hours a day, five hours? How do these work 209 00:12:00.519 --> 00:12:02.279 or is a certain amount of a week or is 210 00:12:02.320 --> 00:12:05.440 it just whatever I produce you take? Just talk a 211 00:12:05.480 --> 00:12:07.440 little bit a bit about that and how batteries then 212 00:12:07.559 --> 00:12:08.360 changes everything. 213 00:12:08.799 --> 00:12:12.679 There are a few principal structures emerging. One is shaping, 214 00:12:12.879 --> 00:12:16.200 so you agree with the off taker that for certain 215 00:12:16.240 --> 00:12:19.000 hours during the day, typically the high value hours, you 216 00:12:19.080 --> 00:12:23.080 have a certain commitment of volume, which is basically enabled 217 00:12:23.080 --> 00:12:26.600 by the battery. The other way is basically you just 218 00:12:26.679 --> 00:12:30.159 hand over both assets to the off taker, who then 219 00:12:30.200 --> 00:12:33.960 optimizes and you just get a premium on top of 220 00:12:34.000 --> 00:12:37.639 your PPA price. So these are the two extremes which we. 221 00:12:37.600 --> 00:12:40.240 Are seeing and how do you see it going forward. 222 00:12:40.879 --> 00:12:43.879 It depends a bit on which market we look at 223 00:12:44.200 --> 00:12:47.720 and how regulation plays out, but we would probably see 224 00:12:48.120 --> 00:12:52.200 a fast growing market for standalone tolls and the main 225 00:12:52.559 --> 00:12:56.840 play they are going to be basically arbitroge, so red 226 00:12:56.919 --> 00:13:01.360 services are quickly saturated because those markets are limited. And 227 00:13:01.440 --> 00:13:04.279 you see this in the advanced markets like in urcutt 228 00:13:04.679 --> 00:13:08.320 or in the UK where batteries within two three years 229 00:13:08.480 --> 00:13:12.559 took over the ancillary service market and basically have flattened 230 00:13:12.559 --> 00:13:15.480 that out, which is the great development. And what then 231 00:13:15.600 --> 00:13:19.639 remains really after those grid services are provided is the 232 00:13:19.759 --> 00:13:22.080 arbitrush play by low sell high. 233 00:13:22.799 --> 00:13:24.840 Okay, can I also just to ask you a little 234 00:13:24.879 --> 00:13:27.759 bit about the duration of the contracts in other words, 235 00:13:28.120 --> 00:13:29.600 and where I'm coming from and this at the end 236 00:13:29.600 --> 00:13:32.519 of the day, is the longer the duration, the lower 237 00:13:32.559 --> 00:13:36.000 the cost. It is the finance staring renewables project. So 238 00:13:36.159 --> 00:13:37.720 talk a little bit about that and how you see 239 00:13:37.759 --> 00:13:38.440 that going forward. 240 00:13:39.159 --> 00:13:41.679 We just can look at markets which are more advanced 241 00:13:41.720 --> 00:13:45.240 in the tolling space in Urcotte textas where we see 242 00:13:45.480 --> 00:13:49.399 typical tenors of five to seven years on tolls and 243 00:13:49.480 --> 00:13:52.759 this is also what we would expect in Europe, so 244 00:13:53.120 --> 00:13:57.039 slightly shorter than typical PPAs where we talk ten twelve 245 00:13:57.159 --> 00:13:58.440 years of duration. 246 00:13:59.000 --> 00:14:02.240 And the prices so the process have gone down. And 247 00:14:02.279 --> 00:14:04.720 of course there's always that problem that you have those 248 00:14:05.000 --> 00:14:10.840 government options, which generally are basically a best produced no margining, 249 00:14:11.000 --> 00:14:12.440 so they're pretty good. 250 00:14:12.960 --> 00:14:15.919 Yes, there will be an interplace. You see this very 251 00:14:15.960 --> 00:14:19.399 similar on the PPA market. So the PPAs stand in 252 00:14:19.440 --> 00:14:24.000 competition with options, and you clearly see an interplay prices. 253 00:14:24.200 --> 00:14:26.879 So if there is an option from the government in 254 00:14:26.960 --> 00:14:30.440 Germany for solar, this will have an immediate impact on 255 00:14:30.519 --> 00:14:34.120 PPA prices and vice versa. The same thing would happen 256 00:14:34.159 --> 00:14:36.080 as well in the battery space. 257 00:14:36.159 --> 00:14:37.799 If a government puts up. 258 00:14:37.759 --> 00:14:41.720 A nice option with artificially high prices, it will not 259 00:14:41.840 --> 00:14:47.360 allow a private market to develop, just because the private 260 00:14:47.399 --> 00:14:51.279 market will work on commodity prices. And the main value 261 00:14:51.360 --> 00:14:54.720 driver here is not the absolute price level, but the 262 00:14:54.759 --> 00:14:58.480 price volatility and the spreads. And it's very dynamic and 263 00:14:58.559 --> 00:15:01.679 can change very quickly. Right now everyone is looking at 264 00:15:01.720 --> 00:15:06.559 those charts where we have exploding negative prices, but this 265 00:15:06.720 --> 00:15:09.919 can go away very very quickly. I mean we add 266 00:15:09.960 --> 00:15:13.879 four or five kikabottes of storage to Germany and a 267 00:15:13.879 --> 00:15:16.000 lot of negative prices. Will beck On again. 268 00:15:17.000 --> 00:15:22.279 You started referencing Texas got a bit because the great 269 00:15:22.279 --> 00:15:27.039 news is that Pixa Park is now going to America. 270 00:15:26.399 --> 00:15:30.440 So before you go into your special move, can you 271 00:15:30.799 --> 00:15:34.360 compare a bit the size of the market in your 272 00:15:34.399 --> 00:15:38.080 hope and in America. Although we all know America is California, 273 00:15:38.279 --> 00:15:42.159 Racote PGM, it's a bit of a spaghetti play, So 274 00:15:42.240 --> 00:15:43.600 what can you share with us? 275 00:15:44.159 --> 00:15:47.759 Roughly the markets are similarly sized. I would say the 276 00:15:47.799 --> 00:15:51.559 storage market is much bigger in the US overall, but 277 00:15:51.720 --> 00:15:54.879 the PPA market Europe would be like we were fifteen 278 00:15:54.919 --> 00:15:58.960 gigawatt last year in the US it was twelve fourteen gigawatte. 279 00:15:59.279 --> 00:16:02.080 The market element is much smaller in the US. So 280 00:16:02.159 --> 00:16:06.080 you have aircots, which is really a traded market where 281 00:16:06.120 --> 00:16:09.039 there's a lot of dynamic price changes. You have a 282 00:16:09.080 --> 00:16:11.159 wholesale element, and it's very similar to. 283 00:16:11.320 --> 00:16:13.000 What we would see in Europe. 284 00:16:13.320 --> 00:16:15.279 But in the US we have a lot of regulated 285 00:16:15.320 --> 00:16:21.039 markets where a utility owns the entire value chain from generation, 286 00:16:21.159 --> 00:16:25.159 transmission to distribution and they do PPAs. But it's basically 287 00:16:25.279 --> 00:16:28.600 an action and then of course the biggest element. In 288 00:16:28.639 --> 00:16:32.320 the US, it's all fueled by tax credits. That's the 289 00:16:32.360 --> 00:16:36.080 main instrument how the energy transition has been put forward, 290 00:16:36.120 --> 00:16:38.799 and this can amount to forty fifty sixty percent of 291 00:16:38.879 --> 00:16:42.679 the capex of a renewable asset or a storage, whereas 292 00:16:42.679 --> 00:16:46.440 in Europe two thirds of the renewable capacity realized is 293 00:16:46.600 --> 00:16:49.840 under options and the third is onder ppa. So these 294 00:16:49.840 --> 00:16:53.000 are more or less the big differences, maybe one more. 295 00:16:53.200 --> 00:16:55.879 The sizes of the deals are much bigger in the US, 296 00:16:55.919 --> 00:16:58.759 and it's probably just a space factor. When we top 297 00:16:58.960 --> 00:17:03.720 forty seven mega in Europe, the sizes in Aircutt are 298 00:17:03.840 --> 00:17:07.519 easily two hundred macawatts, and I guess it's really just 299 00:17:07.559 --> 00:17:08.799 the availability of space. 300 00:17:09.720 --> 00:17:12.000 Well, on the top of that, in the US you 301 00:17:12.160 --> 00:17:15.759 often have a nodule prices, which is another layer of complexity. 302 00:17:16.440 --> 00:17:17.079 Good point. 303 00:17:17.200 --> 00:17:20.720 Yes, this is definitely a different pricing system. We have 304 00:17:21.119 --> 00:17:24.119 very large price zones in Europe, so Germany is one 305 00:17:24.200 --> 00:17:28.200 price zone wherever you feed in the same price. That's 306 00:17:28.400 --> 00:17:30.799 completely different in the US, where you have a nodal 307 00:17:30.880 --> 00:17:35.359 system which adds a different Yeah, they call it basis 308 00:17:35.440 --> 00:17:39.799 risk at different price and cost structure into your revenue. 309 00:17:40.759 --> 00:17:43.039 Look, the other thing is I read with interest your 310 00:17:43.039 --> 00:17:46.200 five predictions and I'd love you to go through them again. Right, 311 00:17:46.279 --> 00:17:50.920 So negative price clauses, standardize, multi technology PPA is double 312 00:17:51.519 --> 00:17:56.400 best off, takes expand utility, PPA volumes flatten and go 313 00:17:56.640 --> 00:18:00.799 to corporate PPA is volumes uncertain. Now the one actually 314 00:18:00.799 --> 00:18:02.440 a little bit the start with is that growth of 315 00:18:02.599 --> 00:18:06.160 corporate PPA volumes on certain to explain a little bit 316 00:18:06.200 --> 00:18:07.799 about that, and then you can just talk in general 317 00:18:07.799 --> 00:18:08.480 about your protection. 318 00:18:08.599 --> 00:18:12.240 There the easy volume on the corporate side has gone, 319 00:18:12.480 --> 00:18:15.359 so the easy credit to go to credit has been contracted, 320 00:18:16.079 --> 00:18:19.359 and most corporates now in the market are either smaller 321 00:18:20.160 --> 00:18:24.119 or they would like to have a profile matching more 322 00:18:24.200 --> 00:18:28.519 their consumption. So in anything we do in the corporate 323 00:18:28.519 --> 00:18:33.359 PPA market absent absolute growth, which we don't have in Europe, 324 00:18:33.839 --> 00:18:38.960 we need to deliver different profiles. So the innovation is 325 00:18:39.000 --> 00:18:44.119 happening on two front. Either synthesizing green profiles so we're 326 00:18:44.160 --> 00:18:47.400 adding different renewables, adding storage so we can deliver a 327 00:18:47.480 --> 00:18:52.319 green profile, or selling two smaller corporates. And I think 328 00:18:52.319 --> 00:18:54.839 this is the two big innovations which we're seeing in 329 00:18:54.920 --> 00:18:59.160 Europe where you have players active trying to solve those challenges. 330 00:19:00.000 --> 00:19:01.880 Way in relation to that, I mean, what's your view 331 00:19:01.920 --> 00:19:04.279 on the US market that's Europe right in terms of 332 00:19:04.279 --> 00:19:06.200 the PPA is that do you see that as a 333 00:19:06.240 --> 00:19:07.079 growing market. 334 00:19:07.599 --> 00:19:09.920 I mean, that's a big difference. That there is headline 335 00:19:10.480 --> 00:19:13.720 growth on demand. That's something which we don't have in Europe. 336 00:19:14.240 --> 00:19:17.000 It is not just AI, but it's a broad band 337 00:19:17.160 --> 00:19:21.160 that you have reshuring of industrial activities and this is 338 00:19:21.519 --> 00:19:25.000 just overall you have growth year on year on the 339 00:19:25.039 --> 00:19:25.960 absolute demand. 340 00:19:26.440 --> 00:19:28.039 Okay, very helpful, thank you. 341 00:19:28.839 --> 00:19:31.079 And the other predictions, maybe. 342 00:19:30.920 --> 00:19:33.640 The whole thing about best which is obviously batteries at 343 00:19:33.680 --> 00:19:35.319 the end of the day, talk a little bit about that, 344 00:19:35.359 --> 00:19:37.319 and also the Europe your US, how you see. 345 00:19:37.200 --> 00:19:39.079 That on the other predictions. 346 00:19:39.119 --> 00:19:44.920 So we're quite firm on basically doubling the multi technology deals. 347 00:19:45.440 --> 00:19:49.240 So the biggest challenges were we mapped out our negative prices, 348 00:19:49.359 --> 00:19:54.200 low capture value, and demand saturation for standalone renewable profiles. 349 00:19:55.000 --> 00:19:59.400 The solution to that is combining technology and adding intelligence, 350 00:19:59.400 --> 00:20:04.559 which is stored. So we're bullish on expanding storage and 351 00:20:04.799 --> 00:20:09.559 expanding multi technology deals for these reasons and on the 352 00:20:09.599 --> 00:20:12.519 actual volume we have to see, but we were pretty 353 00:20:12.519 --> 00:20:17.960 Polish Just to have basically strong structural growth in these areas. 354 00:20:17.680 --> 00:20:20.119 Good and the price going up because I see the 355 00:20:20.119 --> 00:20:22.440 price of gas, it's not the same as last year. 356 00:20:23.279 --> 00:20:26.720 Well in Europe definitely, the gas is still a major 357 00:20:26.799 --> 00:20:32.319 contributor to wholesale prices, and wholesale prices contribute to PPA prices, 358 00:20:32.359 --> 00:20:35.039 so there's a very strong link there for time being, 359 00:20:35.079 --> 00:20:37.599 as long as gas plays such a big role in Europe. 360 00:20:37.640 --> 00:20:41.519 Still to conclude, look, our congratulation to your first acquisition 361 00:20:41.759 --> 00:20:44.519 in the US. So Pisa Park is a quite a company. 362 00:20:44.720 --> 00:20:48.319 I can't pronounce his name, sorry, what is it? What 363 00:20:48.400 --> 00:20:50.960 is it doing and what are the impact for Pisa 364 00:20:51.000 --> 00:20:51.640 Park Group. 365 00:20:52.519 --> 00:20:55.640 Yeah, we're very happy it's our first acquisition. It's a 366 00:20:55.680 --> 00:20:59.119 company called renew Afi. They're based in New York and 367 00:20:59.319 --> 00:21:05.200 they provide price assessments for batteries and PPAs, so same 368 00:21:05.240 --> 00:21:08.640 business as PECSA Park. They also run a very active 369 00:21:08.680 --> 00:21:13.119 marketplace where you can transact on tolls and PPAs and 370 00:21:13.200 --> 00:21:16.240 they cover so far air cut which was a perfect 371 00:21:16.240 --> 00:21:20.640 match for our PEXA Park plans and now together with 372 00:21:20.880 --> 00:21:24.440 renew OFFI we will be able to cover most of 373 00:21:24.480 --> 00:21:28.319 the US much quicker. That's basically our plan with the 374 00:21:28.359 --> 00:21:32.240 acquisition to be able to cover most of the US 375 00:21:32.279 --> 00:21:33.839 markets by end of the year. 376 00:21:34.400 --> 00:21:39.079 Well, that's really brilliant. You're very, very smart, Lucas. Great 377 00:21:39.079 --> 00:21:39.839 to have yonder show. 378 00:21:39.839 --> 00:21:41.400 I wish you all the best. I wish you all 379 00:21:41.400 --> 00:21:42.000 the best this year. 380 00:21:42.559 --> 00:21:44.400 Thank you, Laura, thank you shared. 381 00:21:45.519 --> 00:21:48.000 Well, y'all, it's good to have Luca once a year 382 00:21:48.079 --> 00:21:50.119 because the market is moving so fast. 383 00:21:51.000 --> 00:21:55.000 Yeah, I suppose they reflective Laurent, which is a little 384 00:21:55.000 --> 00:21:56.599 bit like I took it out of it that the 385 00:21:56.720 --> 00:21:59.480 US market is going to be very strong, demand picking 386 00:21:59.519 --> 00:22:01.960 up except et cetera. But the Europe market a lot 387 00:22:01.960 --> 00:22:04.799 of uncertainly, which I'm surprised that actually, if. 388 00:22:04.720 --> 00:22:07.119 You don't build any new data centers in Europe or 389 00:22:07.160 --> 00:22:11.759 you don't true industrialize, there's no new comer for those PPAs. 390 00:22:11.799 --> 00:22:15.240 So right now we're just replacing, you know, some fixed 391 00:22:15.240 --> 00:22:18.440 contract with PPA on the back of probably getting a 392 00:22:18.440 --> 00:22:24.720 better price and of course ESG standards. We'll see how 393 00:22:25.119 --> 00:22:28.559 that PPA market is going to evolve, because on the 394 00:22:28.599 --> 00:22:33.559 other hand, governments are intervening more and more, so there's 395 00:22:33.559 --> 00:22:36.920 probably less room for the private market around those PPAs, 396 00:22:37.240 --> 00:22:40.559 which is bad on one hand, On the other, the 397 00:22:40.599 --> 00:22:44.200 fact that you get batteries coming in big times. That's 398 00:22:44.240 --> 00:22:49.440 something that has been purely managed by private actors, so 399 00:22:49.559 --> 00:22:52.039 that might give a boost to the PPA. 400 00:22:52.160 --> 00:22:55.000 Now, what we didn't start to talk about, but which 401 00:22:55.039 --> 00:22:57.880