WEBVTT 1 00:00:04.240 --> 00:00:07.759 With Laurent's segle and from London and Gerard read from Berlin, 2 00:00:08.279 --> 00:00:10.400 this is redefining Energy. 3 00:00:10.560 --> 00:00:14.039 Today on Really Faking Energy, John, we had the privilege 4 00:00:14.320 --> 00:00:19.039 of recording live from Dly Piper, our good friends Jelly 5 00:00:19.120 --> 00:00:23.600 Piper the law Firm an episode with Copenhagen in Fast 6 00:00:23.640 --> 00:00:24.800 Job Partners. 7 00:00:24.600 --> 00:00:26.879 Who's one of the biggest investors obviously in the whole 8 00:00:26.920 --> 00:00:29.800 renewables era, and they've been not for a long, long while. 9 00:00:29.839 --> 00:00:32.159 It's a good conversation. I think we should just bring 10 00:00:32.240 --> 00:00:37.399 another show. How are you everybody? I'm Jared, that's Lauren, 11 00:00:37.479 --> 00:00:40.320 this is Rowan. It's really great to be here and 12 00:00:40.640 --> 00:00:43.520 we're going to talk really about investing in electrical infrastructure, 13 00:00:43.920 --> 00:00:46.799 the opportunities and I would say perils as well, because 14 00:00:46.840 --> 00:00:49.479 it's not an easy time to be investing. So it's 15 00:00:49.520 --> 00:00:50.159 great to be here. 16 00:00:50.439 --> 00:00:53.840 So we have as a guest, Owen Parkhauso is accepted 17 00:00:53.920 --> 00:00:56.880 to be in the middle. We have a lot of 18 00:00:56.960 --> 00:01:00.679 questions pre prepared as you can see here. Of course 19 00:01:00.719 --> 00:01:04.359 I'm gonna toss so that's going to make the conversation 20 00:01:04.519 --> 00:01:09.319 more interesting. And the first question, as you are our guest, 21 00:01:09.480 --> 00:01:15.000 is you are managing director at Copenhagen Infast your partner. Imagine, 22 00:01:15.040 --> 00:01:17.400 I'm an LP. I heard about you, but this first 23 00:01:17.400 --> 00:01:20.640 time I meet you, so introduced to me Copenhagen in 24 00:01:20.959 --> 00:01:21.480 your part. 25 00:01:21.920 --> 00:01:25.799 Thanks no, thanks for throwing away my notes. My IR 26 00:01:25.840 --> 00:01:29.480 team will love that. So yeah, Cobnagen Infrastructure Power the CP. 27 00:01:29.760 --> 00:01:33.799 We're a fund manager, but we're really an IPP at 28 00:01:33.840 --> 00:01:36.040 the same time. And so we're set up as a 29 00:01:36.040 --> 00:01:38.000 fund manager. We've raised money from our investors and we 30 00:01:38.079 --> 00:01:41.879 go and invested in greenfield energy infrastructure. But of the 31 00:01:41.879 --> 00:01:44.560 twenty three hundred people that we have employed, about seventy 32 00:01:44.560 --> 00:01:49.040 five percent of those are actually construction managers technology specialists. 33 00:01:49.359 --> 00:01:51.560 So we kind of even though we are a fund manager, 34 00:01:51.599 --> 00:01:53.640 really we're a little bit like an IPP platform, and 35 00:01:53.640 --> 00:01:56.359 we have all the kind of delivery engine and the 36 00:01:56.599 --> 00:01:59.439 sort of construction and procurement engine of an IPP or 37 00:01:59.439 --> 00:02:02.760 a utility. But we're a fund manager, so we have 38 00:02:02.799 --> 00:02:04.719 all of the kind of analytical rigor and so on 39 00:02:04.799 --> 00:02:06.719 of being a fund manager and all that all becomes 40 00:02:06.719 --> 00:02:11.439 with that. And so greenfield energy investing is, to put it, 41 00:02:11.479 --> 00:02:15.280 simply investing in projects during development and then taking them 42 00:02:15.319 --> 00:02:18.560 through development, doing all the procurement, the financing off take 43 00:02:18.759 --> 00:02:21.159 and then taking them through construction into operations, and then 44 00:02:21.159 --> 00:02:23.840 we will divest projects at some point in time, and 45 00:02:24.280 --> 00:02:27.560 we are primarily a direct project investors. Sometimes we'll buy 46 00:02:27.639 --> 00:02:30.319 businesses that also do this, but you know, in the end, 47 00:02:30.360 --> 00:02:32.080 what's really important for us is sort of to be 48 00:02:32.159 --> 00:02:34.560 close to the assets and try and deliver those assets 49 00:02:34.599 --> 00:02:37.240 in a good way, and then you know, the technology wise, 50 00:02:37.280 --> 00:02:40.960 we invest across sort of the energy transition. So Offstra Wind, 51 00:02:41.280 --> 00:02:43.639 our heritage actually is sort of coming out of the 52 00:02:43.680 --> 00:02:47.360 Senior partners, came out of allsted A commercialized the offual 53 00:02:47.400 --> 00:02:49.479 wind industry, so we have a lot big heritage in 54 00:02:49.479 --> 00:02:51.360 austral wind. But we also do a lot of ontore wind, 55 00:02:51.439 --> 00:02:55.479 solar batteries, a bit of transmission distribution across the range 56 00:02:55.479 --> 00:02:56.400 of different technologies. 57 00:02:56.759 --> 00:02:59.080 So maybe we're just staff for true the different technologies, right, 58 00:02:59.080 --> 00:03:01.680 because as you said, came out of wind. When I 59 00:03:02.080 --> 00:03:04.800 compare the wind and the solar investors, the wind investors 60 00:03:04.800 --> 00:03:07.639 for me are always people that just in terms of mentality, 61 00:03:07.680 --> 00:03:10.960 they're different because they take longer, the plans take longer, 62 00:03:11.280 --> 00:03:12.560 and if I look at the world that we're in 63 00:03:12.960 --> 00:03:15.680 a present, we sort of need people that are really fast, 64 00:03:16.039 --> 00:03:18.919 which lends itself to the solar guy, because the solar 65 00:03:18.960 --> 00:03:21.039 guy tends to be They just tend to be quicker 66 00:03:21.080 --> 00:03:23.719 in developing, get to the next project. Do you see 67 00:03:23.719 --> 00:03:25.280 the same when you're investing. Do you think of it 68 00:03:25.280 --> 00:03:27.159 in a different way now or how do you look 69 00:03:27.199 --> 00:03:27.479 at it? 70 00:03:28.520 --> 00:03:30.719 You need to be very thorough as an infrastructure investor 71 00:03:30.719 --> 00:03:33.360 because really being a good infrastructure investor for me, means 72 00:03:33.400 --> 00:03:35.159 of being a little bit neurotic, a little bit. Sort 73 00:03:35.159 --> 00:03:38.120 of attention to detail is extremely important. Control is important 74 00:03:38.159 --> 00:03:41.520 getting into the weeds because the small chinks in your project, 75 00:03:41.560 --> 00:03:43.879 small weaknesses can have a big impact. So you have 76 00:03:43.919 --> 00:03:46.879 to be really thorough, which is probably what you're talking 77 00:03:46.879 --> 00:03:49.599 about when you're saying wind investors have that sort of mindset. 78 00:03:50.039 --> 00:03:53.120 I think solar you can do a little bit more standardization, 79 00:03:53.199 --> 00:03:55.039 You can sort of cookie cutter it a little bit more, 80 00:03:55.080 --> 00:03:56.719 so then you can turn the handle a bit faster. 81 00:03:57.400 --> 00:03:59.280 I think we try to be agile and sort of 82 00:03:59.560 --> 00:04:02.039 understand and that there are different ways of doing different things. 83 00:04:02.560 --> 00:04:06.560 I don't think anybody can complain about us being too slow. 84 00:04:06.759 --> 00:04:09.520 Where definitely sort of being a fund manager kind of 85 00:04:09.520 --> 00:04:11.919 brings with it a level of intensity and speed and 86 00:04:11.960 --> 00:04:14.759 sort of drive to want to go faster, which naturally 87 00:04:14.800 --> 00:04:17.360 means that where there are opportunities to do it without 88 00:04:17.399 --> 00:04:20.160 compromising on the thoroughness that's required, we are trying to 89 00:04:20.160 --> 00:04:22.319 move pretty fast. I mean that, honestly. Is the reason 90 00:04:22.399 --> 00:04:25.600 I joined CIP was because of the level of ambition 91 00:04:25.759 --> 00:04:28.360 and sort of the desire in the organization, in the 92 00:04:28.360 --> 00:04:30.959 culture to go fast and really sort of deliver at 93 00:04:30.959 --> 00:04:33.319 the speed that's needed for the energy transition. 94 00:04:33.399 --> 00:04:35.279 So where I'm coming from more is what I'm seeing 95 00:04:35.279 --> 00:04:37.839 now is there's a need for battery storage right across 96 00:04:37.839 --> 00:04:40.879 the system. It lends itself to solar and you need 97 00:04:40.920 --> 00:04:43.360 to go quick. Yeah, that's the way it would look 98 00:04:43.399 --> 00:04:45.519 at it. So how do you see storage and how 99 00:04:45.560 --> 00:04:46.879 do you invest in storage? 100 00:04:47.319 --> 00:04:49.720 Yeah, so we first invested in battery storage about five 101 00:04:49.800 --> 00:04:52.199 years ago, and at the time, I think in retrospect 102 00:04:52.240 --> 00:04:54.399 it seems like it was a really sort of obvious 103 00:04:54.439 --> 00:04:55.759 thing to do, But at the time it was a 104 00:04:55.759 --> 00:04:58.199 bit sort of non obvious. I think we saw high 105 00:04:58.199 --> 00:05:01.519 cap x you needed to go and chase after sort 106 00:05:01.560 --> 00:05:04.720 of scarcity pricing and ancillary services and markets in order 107 00:05:04.759 --> 00:05:07.839 to justify the high capex. We couldn't contract many of 108 00:05:07.920 --> 00:05:10.800 the revenues very well. There wasn't sort of opportunities to contract. 109 00:05:11.160 --> 00:05:13.240 The technology was getting better, but it was still quite 110 00:05:13.240 --> 00:05:15.079 early in a way, and I think we took a 111 00:05:15.079 --> 00:05:17.920 bet at that point, and the bet was really that 112 00:05:17.959 --> 00:05:21.240 the EV market would drive down with the technology. And 113 00:05:21.279 --> 00:05:23.319 you know, last year it's something like sixty billion or 114 00:05:23.319 --> 00:05:26.240 something that was invested global in battery storage. It's just nothing. 115 00:05:26.560 --> 00:05:28.839 The EV market is forty five times larger, so that 116 00:05:29.000 --> 00:05:30.759 the R and D spend and stuff that the technology 117 00:05:30.759 --> 00:05:34.360 development that goes into into batteries is all driven by evs. 118 00:05:34.560 --> 00:05:36.639 So we said that the technology is going to get 119 00:05:36.639 --> 00:05:41.160 better fast. That was the first thing we thought. Utilities 120 00:05:41.519 --> 00:05:44.959 are structurally short peak power and they're structurally short balancing, 121 00:05:45.000 --> 00:05:47.000 and so even though they're not offering a lot of 122 00:05:47.000 --> 00:05:50.480 opportunities to contract now that will improve. And so we 123 00:05:50.800 --> 00:05:52.399 had this thesis that it would work out, and we 124 00:05:53.000 --> 00:05:56.920 entered those development projects and then started constructing a few 125 00:05:56.959 --> 00:05:59.360 years after that, once the thesis sort of was panning out. 126 00:06:00.000 --> 00:06:01.959 We've now invested about three and a half billion euros 127 00:06:02.000 --> 00:06:08.439 into battery projects in the UK, the US, Chile, South Africa, 128 00:06:08.560 --> 00:06:10.439 and we've got a forty gig with our pipeline, So 129 00:06:10.680 --> 00:06:13.000 we're big believers in the kind of in the need 130 00:06:13.040 --> 00:06:15.040 for it, and I think we move pretty fast when 131 00:06:15.079 --> 00:06:16.839 it comes to batteries because it is a bit different 132 00:06:16.839 --> 00:06:19.360 from wind as I mentioned earlier. So we've been able 133 00:06:19.399 --> 00:06:23.639 to acquire projects and take them into construction extremely fast. 134 00:06:24.040 --> 00:06:27.759 If I look at your website, cip dot com, exce 135 00:06:27.879 --> 00:06:31.199 a lot of good information in it. So you've been 136 00:06:31.199 --> 00:06:34.720 founded forty years ago and now you've grown to thirty 137 00:06:34.759 --> 00:06:38.639 five billion of AUM, which ranks you, depending who you 138 00:06:38.759 --> 00:06:42.639 talk to, anywhere between the tenth and twenty years ranking 139 00:06:42.680 --> 00:06:47.120 in the world. You invest a lot, have fifteen funds. Well, 140 00:06:47.160 --> 00:06:50.720 I guess a lot of different strategy. So you talk 141 00:06:50.759 --> 00:06:53.560 about batteries and somehow five years ago there were a 142 00:06:53.560 --> 00:06:58.279 lot of difficult things which now probably are easier. So 143 00:06:58.600 --> 00:07:02.000 let me return the question, what was easy five years 144 00:07:02.000 --> 00:07:04.199 ago and now it's much more difficult. 145 00:07:04.720 --> 00:07:07.800 Projects have got a lot more complex. I think it 146 00:07:07.839 --> 00:07:10.920 is a lot harder to navigate. And it's not even 147 00:07:11.079 --> 00:07:13.600 one part of the project that's got more complex. You know, 148 00:07:13.600 --> 00:07:16.319 we're looking at co located projects with hybridization now, whereas 149 00:07:16.319 --> 00:07:19.399 before its single technology projects have got larger, and so 150 00:07:19.439 --> 00:07:22.480 you know, you're trying to move enormous turbines or even batteries. Right, 151 00:07:22.519 --> 00:07:25.480 we had some projects where the first projects we built 152 00:07:25.480 --> 00:07:27.560 in batteries, they were sort of two and a half 153 00:07:27.639 --> 00:07:30.480 mega with our containers, which way about thirty tons. The 154 00:07:30.560 --> 00:07:32.600 latest ones are sort of double that, if not more, 155 00:07:32.720 --> 00:07:34.639 and they weigh forty five tons, which sounds like nothing, 156 00:07:34.680 --> 00:07:36.680 but then actually when you try and move that over bridges, 157 00:07:36.720 --> 00:07:39.040 suddenly the bridges can't handle it. So there's just like 158 00:07:39.079 --> 00:07:41.920 a lot of complexity. And then I think even when 159 00:07:41.920 --> 00:07:43.879 you go into the sort of easy things like ordering 160 00:07:43.879 --> 00:07:47.079 transformers and switch gear, managing lead times on those sorts 161 00:07:47.120 --> 00:07:49.720 of things has become really difficult. It plays a little 162 00:07:49.720 --> 00:07:51.439 bit to our strength because we have the scale so 163 00:07:51.480 --> 00:07:54.319 we can order transformers, and then we have some optionality 164 00:07:54.360 --> 00:07:57.439 where we place those transformers into different projects. So you know, 165 00:07:57.439 --> 00:08:01.000 we found ways to navigate that complexity. But sure it's 166 00:08:01.040 --> 00:08:04.040 a more complex environment to work in. I think the 167 00:08:04.079 --> 00:08:05.680 sales pitch fast is a little bit, you know, it 168 00:08:05.720 --> 00:08:08.040 plays to our strengths. We're an energy specialist. We're all 169 00:08:08.040 --> 00:08:10.160 a bunch of energy nerds. We really just this is 170 00:08:10.160 --> 00:08:11.959 what we do day in, day out. So if you 171 00:08:12.000 --> 00:08:14.240 want anyone who can manage the complexity, I think we've 172 00:08:14.240 --> 00:08:16.160 got to believe that we're able to do that. 173 00:08:16.839 --> 00:08:20.800 And generally your addition was grid connection that's tougher. 174 00:08:21.720 --> 00:08:24.759 Yeah, I think good connection has become more difficult across 175 00:08:24.800 --> 00:08:28.160 the board. I have a lot of sympathy for grid operators. 176 00:08:28.199 --> 00:08:30.240 Before grid reforming the UK, it was a seven hundred 177 00:08:30.240 --> 00:08:32.879 giga what pipeline of connection requests they had? It was 178 00:08:32.919 --> 00:08:35.240 obvious to everybody that that wasn't needed. So how do 179 00:08:35.279 --> 00:08:38.080 you plan a system with seven hundred giga? What's asking 180 00:08:38.159 --> 00:08:39.879 to be connected? So that I have a lot of 181 00:08:39.879 --> 00:08:43.519 sympathy for how they're managing things. I think they're still 182 00:08:43.519 --> 00:08:46.120 inundated and they're still trying to work through how do 183 00:08:46.159 --> 00:08:50.320 you actually reliably deliver good connections on time. For us, 184 00:08:50.559 --> 00:08:52.360 we would like to help build the grid. We think 185 00:08:52.399 --> 00:08:56.120 that there's a lot of opportunities there or need for 186 00:08:56.200 --> 00:08:58.559 private capital. I think the UK has quite a forward 187 00:08:58.639 --> 00:09:01.200 thinking regime, but in the rest of continental Europe we 188 00:09:01.240 --> 00:09:03.960 do not see quite the same regulatory framework that lets 189 00:09:04.000 --> 00:09:05.720 us do that. So in the UK, for example, we're 190 00:09:05.720 --> 00:09:09.159 building transmission in Wales we're building, you know, we're developing 191 00:09:09.159 --> 00:09:11.679 an interconnector. I think in the rest of Europe it's 192 00:09:11.720 --> 00:09:13.320 more difficult to do that, so we'd like to be 193 00:09:13.360 --> 00:09:16.200 part of the solution. But overall it is much harder 194 00:09:16.279 --> 00:09:18.759 from a project perspective though. It's just I don't have 195 00:09:18.799 --> 00:09:21.159 a really sort of any secret source. You just look 196 00:09:21.200 --> 00:09:23.879 at what was the date the grid operator told you 197 00:09:23.919 --> 00:09:26.279 they could connect you, and you can work back from 198 00:09:26.279 --> 00:09:28.600 that and say, Okay, have you bought your equipment, have 199 00:09:28.720 --> 00:09:31.279 you done your permitting, have you got the land rights? 200 00:09:31.279 --> 00:09:34.320 Like it's simple stuff, and often you can see these 201 00:09:34.320 --> 00:09:36.759 delays coming because you say, okay, actually they are behind 202 00:09:36.799 --> 00:09:38.919 on these things. We just have to try and navigate 203 00:09:38.960 --> 00:09:40.840 it when we're looking at projects from sort of in 204 00:09:40.879 --> 00:09:43.879 a very practical way. But it has become way way 205 00:09:43.879 --> 00:09:44.600 more difficult. 206 00:09:44.960 --> 00:09:47.320 Ron you said earlier on that actually you were an 207 00:09:47.320 --> 00:09:49.679 independent power producer. I thought that was very interesting you 208 00:09:49.720 --> 00:09:54.120 started with that, because if I look, my criticism of 209 00:09:54.279 --> 00:09:57.159 everybody that's in this industry is that they have been 210 00:09:57.240 --> 00:10:00.120 running power plants with Excel sheets for the last twenty 211 00:10:00.799 --> 00:10:03.440 and the reason they've done that is because financial investors 212 00:10:03.440 --> 00:10:07.480 have seen them as annuity products. They're not. When you 213 00:10:07.480 --> 00:10:11.360 suddenly get zero prices every second day, then you realize, oh, 214 00:10:11.399 --> 00:10:13.080 I have to manage them in a different way and 215 00:10:13.120 --> 00:10:16.360 you have to change it. So I have a view 216 00:10:16.440 --> 00:10:18.440 certainly that you have to go and you have to 217 00:10:18.480 --> 00:10:20.720 virtually integrate, you have to go into trade and you 218 00:10:20.759 --> 00:10:23.519 have to which means you move towards independent power produce. 219 00:10:23.600 --> 00:10:25.559 But you started the conversation with that, so maybe you 220 00:10:25.559 --> 00:10:28.759 could explain how you see that and what you or 221 00:10:28.919 --> 00:10:29.919 how you think about it. 222 00:10:30.919 --> 00:10:33.759 I completely agree the age where we saw them as 223 00:10:33.799 --> 00:10:36.960 annuities is over to a large degree. I mean, if 224 00:10:37.000 --> 00:10:39.600 you bought a new solar project today with CfDS and everything, 225 00:10:39.919 --> 00:10:41.679 it feels a little bit like an annuity for a 226 00:10:41.679 --> 00:10:44.159 short period of time. But the reality is you're like 227 00:10:44.159 --> 00:10:46.879 you're missing a lot of levers and underperformance and issues 228 00:10:46.919 --> 00:10:49.039 that unless you get oily hands and you go on 229 00:10:49.080 --> 00:10:51.240 the site and you really figure it out, it's just 230 00:10:51.320 --> 00:10:54.039 not being optimized properly. And then there's this sort of 231 00:10:54.320 --> 00:10:58.279 window of sort of easier operation and you're out of that, 232 00:10:58.440 --> 00:10:59.960 not quickly, but you're out of that at some point. 233 00:11:00.159 --> 00:11:02.639 And so then you need to really be a sophisticated 234 00:11:02.679 --> 00:11:05.720 owner of those assets and manage all of the merchant risk, right, 235 00:11:05.759 --> 00:11:07.200 And I think if you look at some of the 236 00:11:07.399 --> 00:11:09.919 listed funds for example, this is a little bit the 237 00:11:09.919 --> 00:11:10.519 issue they've had. 238 00:11:10.600 --> 00:11:10.759 Right. 239 00:11:10.759 --> 00:11:13.559 They've raised this money into this vehicle, sold it as 240 00:11:13.559 --> 00:11:16.279 a financial product, but it's gone from being an annuity 241 00:11:16.399 --> 00:11:19.679 like product into something that really requires you know, blade 242 00:11:19.679 --> 00:11:22.960 replacements and the cell kind of you know, refurbishments and 243 00:11:23.240 --> 00:11:26.039 repowering and hybridization and all of this stuff. And they're 244 00:11:26.080 --> 00:11:29.159 kind of then having to build into that to becoming 245 00:11:29.200 --> 00:11:31.840 more of an IPP. But they unfortunately have a base 246 00:11:31.879 --> 00:11:34.200 of retail investors who didn't really decide to buy an 247 00:11:34.200 --> 00:11:35.879 IPP at the beginning. So then there's a bit of 248 00:11:35.879 --> 00:11:38.000 a disconnect, which I think is a lot you know 249 00:11:38.120 --> 00:11:40.360 in some part why they sort of trapped a little 250 00:11:40.399 --> 00:11:42.399 bit trading at this discount to lab that we're seeing. 251 00:11:42.559 --> 00:11:44.519 So dig into it a little bit. Does this mean 252 00:11:44.559 --> 00:11:47.639 that you're going into trading? Does it mean that you're 253 00:11:47.639 --> 00:11:50.399 going to go into customers? How do you go and 254 00:11:50.960 --> 00:11:54.399 hedge your portfolio going forward when you move into a 255 00:11:54.440 --> 00:11:58.320 world beyond subsidies, and even when you do have subsidies, 256 00:11:58.360 --> 00:11:59.480 you have power price risk. 257 00:12:00.120 --> 00:12:02.399 Yeah, it's a bit of a nuanced picture from market 258 00:12:02.440 --> 00:12:04.399 to market. I don't think we'll go sort of big 259 00:12:04.440 --> 00:12:06.879 into energy trading. And we're also in the end, once 260 00:12:06.879 --> 00:12:08.879 we've developed sites and sort of built them out, we 261 00:12:09.399 --> 00:12:12.000 do exit those projects at some point. Right, We don't 262 00:12:12.080 --> 00:12:14.759 end up building an enormous book of power that we 263 00:12:14.799 --> 00:12:16.399 need to go and optimize ourselves, but we do have 264 00:12:16.440 --> 00:12:18.440 an energy management team. We are sort of thinking about 265 00:12:18.440 --> 00:12:21.440 trading and optimization. The flip side to all of it 266 00:12:21.480 --> 00:12:24.000 is that the trend over the last few years has 267 00:12:24.039 --> 00:12:27.759 been for off takes to extend the duration. And that's 268 00:12:27.799 --> 00:12:29.519 partly because you know, we've had a lot of inflation, 269 00:12:29.559 --> 00:12:31.480 We've had sort of capleex increases, and we've just got 270 00:12:31.799 --> 00:12:34.039 higher interest rates at the moment, so you know, so 271 00:12:34.080 --> 00:12:37.519 that has increased slightly the power PPA prices that you 272 00:12:37.600 --> 00:12:40.039 need and the way a lot of people have reacted 273 00:12:40.039 --> 00:12:43.960 to that. UK government included, but also of corporates have said, well, 274 00:12:44.200 --> 00:12:46.000 can I get an extra couple of euros off my 275 00:12:46.080 --> 00:12:47.840 PPA price if I give you a fifteen or a 276 00:12:47.840 --> 00:12:50.559 twenty year contract whereas before I was giving you tens. 277 00:12:50.720 --> 00:12:52.879 So we do see that there's this complexity around power, 278 00:12:52.919 --> 00:12:56.840 but also our opportunity to contract that power for longer 279 00:12:57.320 --> 00:12:59.320 is also kind of improved quite a lot in the 280 00:12:59.360 --> 00:12:59.960 last few years. 281 00:13:00.080 --> 00:13:05.320 Okay, you recently are quite osted. You're on show business. 282 00:13:05.840 --> 00:13:08.360 What does it says about the value in the market. 283 00:13:09.240 --> 00:13:11.879 Yeah, so, I mean the business. It's now rebranded as 284 00:13:11.879 --> 00:13:14.600 Peragus Energy, which I won't hear a word against it. 285 00:13:14.600 --> 00:13:17.120 It's a great name. It's a portfolio of some operating 286 00:13:17.120 --> 00:13:19.320 assets but also a development pipeline, so it's not sort 287 00:13:19.320 --> 00:13:21.840 of completely one or the other. We really like the 288 00:13:21.840 --> 00:13:25.960 business because they're really experienced operators. They've been through these cycles. 289 00:13:25.960 --> 00:13:27.559 Like what we talk a lot about in CIP is 290 00:13:27.600 --> 00:13:29.679 like how many reps have you done, because it's not 291 00:13:29.879 --> 00:13:31.759 just sort of, oh, I'm a smart engineer, but I've 292 00:13:31.759 --> 00:13:33.679 never built anything and then seen it go wrong, And 293 00:13:33.960 --> 00:13:36.240 you need to actually do two, three four reps in 294 00:13:36.320 --> 00:13:38.639 order to get good as an individual and as an 295 00:13:38.720 --> 00:13:42.159 organization sort of institutionally, and they've been through that under 296 00:13:42.200 --> 00:13:44.840 the ownership of Austair. Before that, they were with Brookfield, 297 00:13:44.879 --> 00:13:46.720 you know, so it's been a business that's been around 298 00:13:46.720 --> 00:13:48.440 for a long time. It's got a lot of war stories, 299 00:13:48.480 --> 00:13:50.799 so we liked that they had that and they were 300 00:13:50.840 --> 00:13:53.679 sort of all this complexity that I mentioned earlier. We 301 00:13:53.720 --> 00:13:55.919 felt they were a really good team to help deliver 302 00:13:56.000 --> 00:13:59.399 projects even given that more complex environment. But they do 303 00:13:59.399 --> 00:14:01.399 still have a pipe. They are going to go off 304 00:14:01.440 --> 00:14:03.919 and grow the business, and we think that team is 305 00:14:03.960 --> 00:14:06.600 will placed to do that. I think if it tells 306 00:14:06.600 --> 00:14:10.120 you anything about what has changed over the last few years, 307 00:14:10.120 --> 00:14:14.000 it probably is that there's now greater value placed on 308 00:14:14.279 --> 00:14:17.120 experienced teams that are having at his extinct operating base. 309 00:14:17.879 --> 00:14:20.440 Whereas in the past we saw sort of astronomical value 310 00:14:20.480 --> 00:14:23.879 being placed on development pipeline. I think now it's matured. 311 00:14:24.120 --> 00:14:26.399 You know, five years ago, there was just an oversupply 312 00:14:26.440 --> 00:14:28.879 of capital into the space, and I think people were 313 00:14:28.919 --> 00:14:32.080 pricing risk in a sort of very irrational way. Now 314 00:14:32.080 --> 00:14:34.840 it's very rational because oil and gas is kind of 315 00:14:34.919 --> 00:14:37.440 out of the market largely, there's still funds I mentioned, 316 00:14:37.440 --> 00:14:39.519 they're trapped at a discount, and ab utilities that have 317 00:14:39.559 --> 00:14:43.120 network businesses are having to ration capital to generation to 318 00:14:43.159 --> 00:14:46.360 fund their networks. Right, So actually the people clearing all 319 00:14:46.399 --> 00:14:48.279 of these M and A processes tend to be more 320 00:14:48.320 --> 00:14:51.639 financials who were balancing the risks and pricing it and 321 00:14:51.639 --> 00:14:55.559 competing for capital with transport and social infra and you 322 00:14:55.600 --> 00:14:57.759 know digital and so there's just like a lot more 323 00:14:57.799 --> 00:15:00.440 rational pricing of risk that we're seeing. So that's why 324 00:15:00.519 --> 00:15:03.519 we're getting this more mature approach to how you value 325 00:15:03.840 --> 00:15:08.080 development pipeline versus how you value operational assets. What we 326 00:15:08.159 --> 00:15:10.840 really like about Paragris in particular is that there's also 327 00:15:10.840 --> 00:15:13.600 a lot of opportunity to do sort of value creation 328 00:15:13.799 --> 00:15:18.960 in the operating base through recontracting assets, through repowering of assets, 329 00:15:18.960 --> 00:15:21.279 which by the way, is harder than people think. But 330 00:15:21.639 --> 00:15:23.919 you know, they have existing good connections and they're the 331 00:15:23.960 --> 00:15:26.399 Windyer site, so there is a lot of value there 332 00:15:26.519 --> 00:15:29.000 and then sort of co location, hybridization, that sort of stuff. 333 00:15:29.000 --> 00:15:31.399 So if you sort of had to bucket, where will 334 00:15:31.440 --> 00:15:34.480 we create value here? In the past, people probably thought 335 00:15:34.480 --> 00:15:36.080 it was all in the development pipeline. Now I think 336 00:15:36.120 --> 00:15:37.480 it's a little bit more nuanced. 337 00:15:37.480 --> 00:15:41.679 Picture can askulously how you view behind the media as 338 00:15:41.720 --> 00:15:43.720 opposed in front of the meter. So in front of 339 00:15:43.720 --> 00:15:45.480 the meter is really where you come from. But when 340 00:15:45.480 --> 00:15:46.960 you look at behind the media, and when I don't 341 00:15:46.960 --> 00:15:49.320 mean behind the meta, I don't mean that just residential. 342 00:15:49.399 --> 00:15:53.639 I mean it may be a creating industrial parks, digital parks, 343 00:15:53.679 --> 00:15:55.000 all that types of how do you view that. 344 00:15:55.879 --> 00:15:58.960 We actually have a small microgrid fund where we're sort 345 00:15:58.960 --> 00:16:01.080 of trying to get more into into the space, so 346 00:16:01.360 --> 00:16:04.080 we think there's a lot of opportunities there for us 347 00:16:04.120 --> 00:16:07.440 to do more. It gets pretty complex when you look 348 00:16:07.440 --> 00:16:10.200 at the different regulatory regimes that there are in different markets. 349 00:16:10.399 --> 00:16:13.919 So it's not particularly well regulated today. I would say 350 00:16:14.320 --> 00:16:17.519 there are some places where it's very attractive to do it, 351 00:16:17.559 --> 00:16:20.559 but really it's attractive because you're arbor charging against network charging, 352 00:16:20.840 --> 00:16:23.120 and so you know, if I can sort of add 353 00:16:23.159 --> 00:16:25.120 soilar and batteries on site and I can just avoid 354 00:16:25.159 --> 00:16:27.879 all my network charges, that can make the economics of 355 00:16:27.879 --> 00:16:31.799 that behind the meter solution sort of extremely attractive. But 356 00:16:31.960 --> 00:16:34.320 the network chargers need to get paid by somebody, and 357 00:16:34.399 --> 00:16:36.399 so if you are the ones sort of avoiding them, 358 00:16:36.440 --> 00:16:38.600 they'll just go up and someone else will have to 359 00:16:38.600 --> 00:16:40.919 pay them. So I think long term there are some 360 00:16:41.120 --> 00:16:44.320 really good reasons to do it, but when you look 361 00:16:44.320 --> 00:16:46.639 at what's driving and in different markets, sometimes it can 362 00:16:46.679 --> 00:16:49.519 be a little bit The regulations are not sort of 363 00:16:49.559 --> 00:16:51.679 you know, in terms of how the cost of networks 364 00:16:51.679 --> 00:16:54.480 in particular are allocated and not as developed as they 365 00:16:54.480 --> 00:16:57.320 should be. That said, I think there's a huge opportunity. 366 00:16:57.600 --> 00:16:59.440 If you've got demand on one side, and you've got 367 00:16:59.480 --> 00:17:03.840 the space and you've got the capital to do it, it's 368 00:17:03.279 --> 00:17:06.039 a huge growth area. It does compete a little bit 369 00:17:06.039 --> 00:17:08.920 within front of the meta. On the battery side, for example, 370 00:17:09.559 --> 00:17:12.480 we see that there's sort of in all of our models, 371 00:17:12.480 --> 00:17:14.680 we're assuming that that happens, that there is some competition 372 00:17:14.799 --> 00:17:17.079 coming in front of the met is anormalness, and so 373 00:17:17.160 --> 00:17:20.240 you have sort of capex that's probably like half the cost. 374 00:17:20.519 --> 00:17:23.079 So there's some advantages to doing very large projects with 375 00:17:23.119 --> 00:17:24.960 economies of scale in front of the meta. So I 376 00:17:24.960 --> 00:17:27.200 don't think the solution will be entirely one thing or 377 00:17:27.319 --> 00:17:29.640 entirely the other, or that one behind the meter will 378 00:17:29.720 --> 00:17:32.759 kill in front of the meta. But we think there's 379 00:17:32.759 --> 00:17:33.559 a big opportunity. 380 00:17:33.759 --> 00:17:36.160 Can I ask as well, you talked a little bit 381 00:17:36.160 --> 00:17:39.279 about complexity earlier on. I would say there's massive stress 382 00:17:39.279 --> 00:17:42.400 in the market, And for me, massive stress comes about 383 00:17:42.400 --> 00:17:45.640 when I see massive volatility. So I look, for example, 384 00:17:45.640 --> 00:17:48.319 tomorrow at the continental European power prices, it's going to 385 00:17:48.319 --> 00:17:51.200 be zero, and then right across the continent it's going 386 00:17:51.240 --> 00:17:53.440 to be two hundred and fifty euros in the evening, right, 387 00:17:53.799 --> 00:17:57.039 So that for me says stress. And the second thing 388 00:17:57.200 --> 00:18:00.160 is you're seeing these zero prices every day because it's 389 00:18:00.200 --> 00:18:04.599 sunny outside, which means nobody's gonna invest in solar go forward, right, 390 00:18:05.079 --> 00:18:07.519 And we can begin to see that in solar pipelines 391 00:18:07.519 --> 00:18:09.759 that have been sold, where if there will be sold 392 00:18:09.759 --> 00:18:11.960 at one hundred thousand a megawa, now you can't give 393 00:18:11.960 --> 00:18:14.599 them away. Do you see us going into this era 394 00:18:14.680 --> 00:18:17.119 of stress or the next eighteen months of stress in 395 00:18:17.119 --> 00:18:19.079 this market? Or how do you look at that? And 396 00:18:19.119 --> 00:18:21.119 you look at as an opportunity or a trayer for or. 397 00:18:21.839 --> 00:18:24.319 Yeah, I mean we spend a lot of time looking 398 00:18:24.400 --> 00:18:26.119 at it, right, and so we have not gone into 399 00:18:26.160 --> 00:18:29.039 say Spanish solar, or or we spend a long time 400 00:18:29.039 --> 00:18:31.400 looking at German solar and we've sort of decided not 401 00:18:31.480 --> 00:18:34.640