Speaker 1: With Laurent segel And from London and Gerard Reed from Berlin.
Speaker 1: This is redefining Energy.
Speaker 2: Today.
Speaker 3: On Redefining Energy, we're going to talk about the state
Speaker 3: of the PPA market power purchase agreements, which are an
Speaker 3: incredibly important part of the electricity world around.
Speaker 2: Yeah, and new concept or so coming on FPAs flexibility
Speaker 2: Purchase Agreement. And for that we have our returning guest,
Speaker 2: Luc Aperti, co founder of Pixa Park, this.
Speaker 3: Time live from Texas. I think he last year he
Speaker 3: was in Texas as well, isn't he right?
Speaker 2: Okay, let's bringing on the show. But first of the
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Speaker 1: more flexible. Back to the shows, Luca, first of almost
Speaker 1: happy New year, chief. I know we're in February, but
Speaker 1: still I'm gonna saying Happy New Year to people till the.
Speaker 3: End of June.
Speaker 4: Happy New Year. Thanks, great to be here.
Speaker 2: And Lucia, it's your thirurth time here. Now we bring
Speaker 2: you back because you download a lot. That's the only reason.
Speaker 4: Yeah, you told me, thanks.
Speaker 3: And Luca, I bring you back because I like you.
Speaker 2: You're speaking from Houston, Texas, so probably explain first why
Speaker 2: you're there.
Speaker 4: Yeah, Texa Park, as you know, provides price intelligence for
Speaker 4: clean energy. Europe is big, the US is as big.
Speaker 4: So we have expanded our coverage last year and I
Speaker 4: wanted to be front up here in the US to
Speaker 4: accompany our expansion.
Speaker 2: Excellent. Now you say fair value pricing, and of course
Speaker 2: I've read in a lot of your papers there is
Speaker 2: this acronym who comes on a regular basis, and that's
Speaker 2: if S thirteen. So can you elaborate a bit what
Speaker 2: it is.
Speaker 4: Yes, I'm not an auditor, but these are new rules
Speaker 4: which are impacting the market. So what is high fors thirteen. Well,
Speaker 4: it's basically a standard describing how you need to value contracts.
Speaker 4: The way it used to be in the past is
Speaker 4: that PPAs were seen as level three type of contracts,
Speaker 4: so there is no observable price points. This has changed.
Speaker 4: There are observable price points, so you need to value them.
Speaker 4: Now the type of exemptions that are applied that you
Speaker 4: need to value them as fair value. They have changed.
Speaker 4: So if you're in a financial contract, to make it
Speaker 4: very simple, you need to apply fair value accounting. That
Speaker 4: means the value of your PPA might shift much more
Speaker 4: dramatically as when you don't need to update those prices
Speaker 4: so often.
Speaker 2: Okay, so it means if I sign right now, say
Speaker 2: ten yere PPA, I need to value it every year,
Speaker 2: and it's going to go up and down because beforehand
Speaker 2: they used to keep it in a drawer and you
Speaker 2: know whenever.
Speaker 4: The correct and that means, of course, if you're a CFO,
Speaker 4: you will have bigger swings and earnings volatility. This is
Speaker 4: something which is not liked, but irrespective of the regulatory aspect,
Speaker 4: it is good practice. We call this mark to market. Now,
Speaker 4: you want to know what is the actual market value
Speaker 4: of your assets, of your contracts. This is a basic
Speaker 4: principle for risk management and it helps you to learn
Speaker 4: to act to react. And there were a lot of
Speaker 4: bad surprises in the PPA space because this practice wasn't done.
Speaker 4: So there's the regulatory aspect, which means certain contrasts need
Speaker 4: to be valued like this now. And there's the practical
Speaker 4: aspect that this is good practice anyway, whether you're regulated
Speaker 4: and you need to apply it or not.
Speaker 2: This is a nightmare because I can tell you what
Speaker 2: the accountant's love is what they call mak to model.
Speaker 2: So you know they do an excel sheet wonderful and
Speaker 2: that's how they mark their book and a lot of
Speaker 2: people have avoided a lot of losses or managed to
Speaker 2: push them forward by doing this mack to model.
Speaker 3: It's okay, look one thing and this is IFS, which
Speaker 3: is at the end of the day, this is non US, right,
Speaker 3: this is Europe. But when I hear this, what I
Speaker 3: think of is the big data center companies and hyperscalers
Speaker 3: because at the end of the day, what they're doing
Speaker 3: is they're going to have to sign long term PPAs
Speaker 3: to go and you know in and around the power,
Speaker 3: which means they have a liability on the balance sheet,
Speaker 3: and that liability if it was a UK or a
Speaker 3: European based business, what would actually happen is you would
Speaker 3: have volatility in its earnings because you're changing the value
Speaker 3: of this. Just dig into what impact you think this has.
Speaker 3: Does it mean that these companies are going to do
Speaker 3: less PPAs or more PPAs, or what does it mean
Speaker 3: for people?
Speaker 4: It means that financial PPAs need to be definitely marked
Speaker 4: at fair value where you have this earning volatility. This
Speaker 4: is something which typically companies that are not trading companies'
Speaker 4: utilities companies don't want to do. But if you have
Speaker 4: a physical PPA, if the power is for own use,
Speaker 4: then these rules do not apply. Also, there's more precise
Speaker 4: language on nature dependent electricity contracts because we know that
Speaker 4: it is not clear exactly how much volume will come
Speaker 4: and this volume maybe need to be sold back, which
Speaker 4: would automatically have caused fair value treatment. This is now exempted,
Speaker 4: so there is an approach trying to accommodate this. Definitely,
Speaker 4: what we can say crossboarded PPAs of financial nature will
Speaker 4: fall under these rules, and this is some sort of
Speaker 4: disincentive for those types of contracts.
Speaker 2: Excellent, before we go to the new report that just
Speaker 2: went out, maybe rolling back a few months, because you've
Speaker 2: got a huge analysis on IPPs. They were like no
Speaker 2: eight podcasts to came up all of a sudden in December,
Speaker 2: which and I can tell you I've listened to none
Speaker 2: of them, but I'm sure they were great. Can you
Speaker 2: summarize in two minutes what you're finding on IPPs, because
Speaker 2: that's very interesting.
Speaker 4: Yes, IPPs are becoming revenue managers. Have we seen consolidation
Speaker 4: in the space. There's more value being accrude down the
Speaker 4: value trend, There's more value post the contract, that is
Speaker 4: in the optimization of the revenue. There's more value on
Speaker 4: portfolio level if you aggregate the assets and manage them,
Speaker 4: and that's a key driver in the IPP field. So
Speaker 4: what we're seeing is IPPs becoming bigger and piece becoming
Speaker 4: a bit like utilities. So they're adding structuring, trading, physical
Speaker 4: optimization desks because this is where the value is now accrude.
Speaker 4: And we're expecting a further consolidation in this space. But
Speaker 4: these are the principal actors next to utilities and developers
Speaker 4: and the off takers of course in the energy transitions.
Speaker 3: And Luke difference between North America and Europe or do
Speaker 3: you see them the same?
Speaker 4: A very good question. Very similar. The big difference is
Speaker 4: what we see is definitely in the US the ipp
Speaker 4: is making more use of third parties for portfolio management
Speaker 4: versus in Europe companies trying to build everything in house.
Speaker 4: But otherwise it is a consolidation which is also across
Speaker 4: the continent. It makes sense to spread and have assets
Speaker 4: in multiple jurisdictions.
Speaker 3: Can I just I give you my thesis for the
Speaker 3: year and you can just tell me you think this
Speaker 3: is mad or not. My thesis is that what you've
Speaker 3: got in Europe is the majority of renewables is owned
Speaker 3: by financial institutions in the form of funds, and then
Speaker 3: you have a fund manager and basically ninety percent of
Speaker 3: these guys have not the capabilities that you're talking about,
Speaker 3: which means that there's going to be massive amount of
Speaker 3: stress first and foremost and eventually needs to M and A.
Speaker 3: Do you see something similar or how do you look
Speaker 3: at it?
Speaker 4: I see the opportunity aspect of it, because more value
Speaker 4: is moving downstream those IPPs, those players that have these
Speaker 4: competencies are very well placed to grow. And yes M
Speaker 4: and A can be part of that story. But Jared,
Speaker 4: I think to mention stress this is the right word.
Speaker 4: The key thing is we are now in renewable dominated
Speaker 4: markets in ever more markets and this is causing stress.
Speaker 4: It's causing stress on capture rates, negative prices, price volatility,
Speaker 4: technical curtailments, balancing cost. But this is all temporary and
Speaker 4: this is driving the players to add more intelligence. You
Speaker 4: need more intelligence, you need commercial management to deal with
Speaker 4: those effects of the energy transition. And this is a
Speaker 4: massive value game. The value is just occurring at a
Speaker 4: different area in the value chain, and this is driving
Speaker 4: this IPP consolidation. This is driving this next generation of players.
Speaker 3: And do you think, because again just taking a step
Speaker 3: beyond what you're saying there, do we move back to
Speaker 3: virtual integration in other words, that you also not just
Speaker 3: have that mondetization and risk management part, but you sort
Speaker 3: of go, well, if I'm really going to be in
Speaker 3: this game, I need to actually have customers.
Speaker 4: We don't see yet. On the IPP side, there is
Speaker 4: a good argument to make in less liquid market, especially
Speaker 4: to sell to smaller clients as an IPP. But this
Speaker 4: is not something which we're seeing it. We're seeing smart
Speaker 4: place in the aggregation space. So you're seeing new intermediation companies,
Speaker 4: so to say, stepping up aggregating demands smartly and connecting
Speaker 4: it with producers. There is real value there because they
Speaker 4: are from a renewable perspective underserved.
Speaker 2: Okay, maybe it's time to dive into your findings because
Speaker 2: you published this incredible amount. I mean, there's more and
Speaker 2: more slides every year. I mean the other first year
Speaker 2: was like five slides and now we're like sixty or something.
Speaker 2: You've become more intelligent, the market has become more complex.
Speaker 2: What are the big big findings? Because you start talking
Speaker 2: about them, so let's dive into it.
Speaker 4: The key finding of the report is just a matter
Speaker 4: of fact that we are living in ever more markets,
Speaker 4: in renewable dominated environments, and this is changing how markets
Speaker 4: work and where value is accrude and we call it
Speaker 4: the big repricing. We can show where value is going
Speaker 4: and it's definitely moving downstreams. There's more value in the optimization,
Speaker 4: there is more value in structuring, there's more value in
Speaker 4: the arbitrot and this is shaping and impacting the players
Speaker 4: we just talked about the ippiece. These are some of
Speaker 4: the key structural trends which we're observing.
Speaker 3: Can I ask your relation to that, because ultimately part
Speaker 3: of the issue is the fact that what we've got
Speaker 3: is huge volatility in the pricings and you could say
Speaker 3: this is largely caused by the fact that we've just
Speaker 3: got too much, in particular too much solar or at
Speaker 3: certain parts of the day and obviously when it's sunny.
Speaker 3: Surely what's going to happen going forward is that's just
Speaker 3: going to be armed out because we're just going to
Speaker 3: be lots and lots of batteries in there right correct,
Speaker 3: And do you have any sense of that in terms
Speaker 3: of unity extent of it.
Speaker 4: We do expect no easing of the pressure in terms
Speaker 4: of negative prices and price volatility in twenty twenty six.
Speaker 4: When you just look at fundamentals, how many more gigabots
Speaker 4: of a flexible capacity we can build to have an effect.
Speaker 4: This will at least for the next two three years
Speaker 4: keep us or the industry busy to end this flexible capacity.
Speaker 4: But you see already the early science you see in
Speaker 4: markets where we add quickly best how it is impacting
Speaker 4: price setting. It was very nice to see here in Urcot.
Speaker 4: Approximately ten gigabots were added off flexible capacity in twenty
Speaker 4: twenty five and it had an immediate impact on price volatility,
Speaker 4: reducing those breads. And that's exactly the purpose of this
Speaker 4: and this is what we're seeing in every market. It's
Speaker 4: just a question of time how fast this will go.
Speaker 2: Well, look, because you're Swiss, you're very moderating your statement.
Speaker 2: But if I look at the numbers the batteries in
Speaker 2: twenty five in RCOT, they made ten times less money
Speaker 2: than three years ago. So everybody went merchant like, yeah, yeah, yeah,
Speaker 2: it's a bit of a disaster, or or it only
Speaker 2: works if there is a cold snap or a heat wave,
Speaker 2: which was not really the case in two twenty five.
Speaker 2: You know, we can talk about the price of gas.
Speaker 4: Yeah, but that's the nature of a free market. And
Speaker 4: this is how it also works on renewables. At some
Speaker 4: point you have cannibalization, and you have the same effect
Speaker 4: on storage. You build more at the same location, it
Speaker 4: will have an impact on the revenue. Where we see
Speaker 4: stability is when you aggregate it on portfolio. So yes,
Speaker 4: we have cannibalization on single asset perspective, but if you
Speaker 4: are a smart large ipp or utility, you can construct
Speaker 4: a portfolio which is stable and can serve the grid
Speaker 4: and the customer. And this is where we see the
Speaker 4: value going. Yes, it's cannibalizing, but overall it can be stable.
Speaker 2: Okay. So here I'm going to show the audience that
Speaker 2: have done a lot of research because there is this
Speaker 2: new thing called RTC plus B in Acott launch in December.
Speaker 2: Is complaining about that?
Speaker 4: Yeah, a rule chain, how very specific question. A rule
Speaker 4: change how batteries are operated in aircut the major change.
Speaker 4: It's now five minute coptimization and previously ancillary services were
Speaker 4: locked in during the day ahead market and now aircut
Speaker 4: the operator will optimize every five minutes. And if you
Speaker 4: had awarded a battery in a regulation service, but energy
Speaker 4: prices suddenly spike, the system swaps for the energy production instantly.
Speaker 4: So from a system perspective, this is all about higher efficiency,
Speaker 4: better management. The short term impact is of course a
Speaker 4: lower arbitrage what is being expected. But from a system
Speaker 4: perspective it it does sound very sensible.
Speaker 2: And of course if we compare to Europe, you have
Speaker 2: the mechanismod A Provigianamento Decapacita di stoccagio Electrico bravo bet
Speaker 2: are known as MAXI in Italy, and that's the dream
Speaker 2: point Fossil to invest are because basically it's a giganteque
Speaker 2: tooling contract at national level.
Speaker 4: Yes, and we have different schemes in Europe. So definitely
Speaker 4: we see in Spain and Italy more regulated capacity mechanisms
Speaker 4: versus other markets like in GB in Germany which are
Speaker 4: very successful with flexibility purchase agreement which are tools and floors,
Speaker 4: as well as optimization agreement. So more the private route.
Speaker 4: I think it will be like in the renewable space,
Speaker 4: you will have multiple route to markets which serve different purposes.
Speaker 4: You have auctions and you have private contracts and they
Speaker 4: are complementary. But overall, actually Italy has been a great market.
Speaker 4: It has been not just on the storage side, on
Speaker 4: the ppa side that was real progress. It was one
Speaker 4: of the hottest market in Europe twenty twenty five.
Speaker 5: OK.
Speaker 3: What I see with bascheries is we talked about the cannibalization.
Speaker 3: That's just like the batteries are just becoming a mature
Speaker 3: asset class now. Is that the way you look it, right?
Speaker 3: Because if I look the way it was at the beginning,
Speaker 3: you go into a battery, you run into the UK market,
Speaker 3: you get your three year payback, then you run somewhere else.
Speaker 3: This is the way it's gone. But now it's really
Speaker 3: becoming a serious as a class. Is that the way
Speaker 3: you see it or I'm missing it.
Speaker 4: Absolutely, it just went much faster than in the renewable space,
Speaker 4: where this took six seven eight years. In the battery space,
Speaker 4: it took just two three years.
Speaker 3: Okay, great, that sort of gives me a little bit
Speaker 3: of sense of where we'll go.
Speaker 2: Now, you just introduced the new term FPA flexibility purchase agreement,
Speaker 2: and now you put that at the same level as PPA.
Speaker 2: So now we're gonna talk. So first of all, maybe
Speaker 2: a broad definition of FPA.
Speaker 4: It's basically industry consultation. What shall we use? What is
Speaker 4: the battery off take? In broad lines, we have flexibility
Speaker 4: purchase agreement, which means an off taker is taking on
Speaker 4: price risk, that's a floor, that's a toll years, seven years.
Speaker 4: And then we have optimization agreements which give a root
Speaker 4: to the market, which provide the intelligence and algorithm which
Speaker 4: helped to optimize the battery on various markets. So these
Speaker 4: two broad categories of battery off takes, optimization agreement and
Speaker 4: flexibility purchase agreements.
Speaker 2: So ppafpas, can you explain a bit who signed what
Speaker 2: and how did it change to a twenty five versus
Speaker 2: to twenty four.
Speaker 4: On the star side, we have utilities and optimizers. On
Speaker 4: the optimizer side, we have a lot of new companies
Speaker 4: which didn't exist a few years ago, so these are
Speaker 4: new players on the market. On the PPA side, we
Speaker 4: have two differentiate between the US and Europe, but in
Speaker 4: both markets we saw lower figures than twenty twenty four
Speaker 4: for different reasons. During Europe we see definitely saturation of
Speaker 4: PPA demand, mainly also due to set for solar profiles.
Speaker 4: It's not generally just lower demand. Data center's a huge
Speaker 4: factor of thirty five percent of the demand in corporate
Speaker 4: PPAs from data centers. The other big notable change in
Speaker 4: Europe is utilities are back. So it used to be
Speaker 4: over the last five six years that the role of
Speaker 4: utilities in PPAs became smaller, smaller, smaller in absolute and
Speaker 4: relative terms, and now they're back. So they just doubled
Speaker 4: the volume, going from one point seven to three point
Speaker 4: eight gigawatt. And it's a sign of the times that
Speaker 4: it takes more work, it takes more optimization to do
Speaker 4: good deals, and this speaks to the strength of utilities.
Speaker 4: A big thing on the off take side is of
Speaker 4: course not just PPA, but the big demand pulled data
Speaker 4: centers they want to go direct. So a big trend
Speaker 4: is bring your own capacity, co locate directly, get exemptions.
Speaker 4: We could probably cover PGM, which is the largest market
Speaker 4: in the world where we have all those data centers,
Speaker 4: and it's dramatic there. Just imagine we have a market
Speaker 4: with one hundred gigawatt of peak demand and we just
Speaker 4: had a capacity auction where the margin which was left
Speaker 4: was one hundred and thirty nine megawatts and prices of
Speaker 4: course shot up, and this has huge political implications. Affordability
Speaker 4: is a big topic here. What does it cost five
Speaker 4: hundred bucks more a year on a household level, so
Speaker 4: very big stress.
Speaker 2: And what to do.
Speaker 4: And basically there was just a ruling from the regulator
Speaker 4: co location ruling and what they allow is, among others,
Speaker 4: some very sensible things like enabling fostering non firm demand.
Speaker 4: Data center is not baseload. They can ramp. They don't
Speaker 4: want to do it, but they can and this has
Speaker 4: tremendous value if you can reduce by fifty hours or
Speaker 4: seventy hours or whatever the figure is. And then another
Speaker 4: which is called interim service, which we just give you
Speaker 4: an exemption to build gas or whatever in an island
Speaker 4: at your site. So there are all desperate means to
Speaker 4: make capacity available as fast as possible, and unfortunately in
Speaker 4: PGM it is not renewables. The market is maybe at
Speaker 4: ten percent. There would be fantastic values on the PPA
Speaker 4: side for those PPAs, but the queue is so long
Speaker 4: and you don't get it permitted. So that's a bit
Speaker 4: what we see on the mid demand side, and definitely
Speaker 4: most interesting on can we make firm demand interruptible? And
Speaker 4: this island strategy that they bring their own capacity directly.
Speaker 5: Luca, what's it like in the Texas market.
Speaker 4: Well, it's just a fascinating market because huge demand growth,
Speaker 4: huge everything, So building lots of renewables, still building lots
Speaker 4: of storage. I just mentioned ten gigabotes, data centers being
Speaker 4: built and served, everything done, everything fast, everything big. And
Speaker 4: then Europe, Europe complicated. I think we don't have demand
Speaker 4: growth as a first, we see the energy transition progressing.
Speaker 4: We are in the wobbles of the energy transition, so
Speaker 4: we see the stresses and we're reacting now to those stresses,
Speaker 4: which means new business models, new pools of value. So
Speaker 4: some of the innovation, the way of doing this is
Speaker 4: actually happening here. We are more advanced along the energy transition,
Speaker 4: and you see this especially markets like gb and Germany.
Speaker 4: This is where actually the future is being built. But
Speaker 4: there are very big structural barriers I mentioned already in
Speaker 4: the next two three years, we can't build as fast
Speaker 4: as possible the storage to improve capture and reduce negative prices.
Speaker 4: Gas remains the marginal price center in many markets, so
Speaker 4: system costs are up. We need so much more intelligence
Speaker 4: we need to incorporate and you covered it the distribution grid,
Speaker 4: which is something different than the transmission. It's under utilized
Speaker 4: with just twenty percent. So there's so much more to do.
Speaker 4: But there are some structural questions in the markets which
Speaker 4: need to be answered. And Laura, was you saying the
Speaker 4: energy transition is made deal by deal. I stick to
Speaker 4: this for ten years, this is where it happens. But
Speaker 4: maybe twenty twenty five was for the first time for
Speaker 4: me where I needed to step back and say, Okay,
Speaker 4: there is politics to it. There is structural constraints which
Speaker 4: cannot be solved deal by deal.
Speaker 2: Luca. Two twenty six is the year of the revision
Speaker 2: of the green as gas POTOCOLO. We need to count
Speaker 2: those electrons on an hourly basis, and do you see
Speaker 2: this going through or do you feel this too much resistance?
Speaker 4: First, we need modern market infrastructure, which is we need
Speaker 4: to assign hourly green value in markets dominated by renewables.
Speaker 4: We need this as a paradigm shift. I have no
Speaker 4: prediction of whether it is going through, but it's just
Speaker 4: essential transparency for the modern functioning. What we're worried a
Speaker 4: bit is just we're making deal making more complicated. We
Speaker 4: have IFS thirteen, we have greenhouse gas protocol, we're having
Speaker 4: SABAM rules for non European companies. From a corporate perspective,
Speaker 4: we can just risk to delay and reduce deals where
Speaker 4: they say this is just too complicated, We're not doing it.
Speaker 4: So it's a fine balance. But for me it is
Speaker 4: unavoidable that we need a modern infrastructure to assign value
Speaker 4: to firm green hourly production.
Speaker 5: Luca, maybe just you know, to end, can.
Speaker 3: You talk about the trends you see in twenty twenty
Speaker 3: six and twenty seven And actually, really what I like
Speaker 3: is I want to hear what really excites What do
Speaker 3: you say?
Speaker 5: Jesus, I can't wait for that.
Speaker 4: Oh man, we could do another podcast. I'm most excited
Speaker 4: about how the players change. So the rise of next
Speaker 4: generation IPPs. This is for me something which I love.
Speaker 4: There's more intelligence, there's new actors, so the solutions are there,
Speaker 4: and this is what always has excitingly focused on the
Speaker 4: players that shape the energy transition, and this keeps me
Speaker 4: always optimistic. Whatever struggles we have, whatever roadblocks they are,
Speaker 4: we're basically creating problems to solve them. Again, this is progress.
Speaker 3: I agree told you with you actually, and it's also
Speaker 3: it's such an exciting time that we're living in.
Speaker 2: Well, Luca to us a treat to our view, so
Speaker 2: much great information. So we're going to put the link
Speaker 2: of your report indu show notes, and I wish I
Speaker 2: can see you soon if you come back to Europe
Speaker 2: from time to time.
Speaker 4: Thank you, Laura, thank you, shut up, and.
Speaker 3: I wish you a great year.
Speaker 5: Well job.
Speaker 2: So much information and so much understanding of what's going on.
Speaker 3: Yeah, and actually he's the data. I just have a feeling,
Speaker 3: and he's come from my feeling, which is we're going
Speaker 3: into a period of consolidation in and among owners of
Speaker 3: renewable assets, whether that be in North America Europe.
Speaker 2: What is very clear is that there's a lot of
Speaker 2: PPAs signed a few years ago which are totally in
Speaker 2: the red, and I think a lot of people are
Speaker 2: busy trying to renegotiate them. But that's a tough one now.
Speaker 2: So there's a lot of embedded risk inside portfolios and
Speaker 2: I guess if the manager are not very sophisticated, they're
Speaker 2: carrying a lot of loss.
Speaker 3: Yeah, And it's back to it's an interesting thing because
Speaker 3: a lot of these companies or the owners of renewables,
Speaker 3: particularly in Europe, back to that change in ifrs. They're
Speaker 3: probably lucky that their private companies because they'd otherwise be
Speaker 3: you know, a lot of them could be in significant
Speaker 3: issues in around the revaluation of their PPAs. You know,
Speaker 3: there's one thing that he didn't sort of talk about,
Speaker 3: which is, let's talk about extreme stress in the market,
Speaker 3: because if you look in Europe, what you've got is
Speaker 3: in an Ordics, you've got a whole pile of wind
Speaker 3: assets that are really underwater. And actually you're seeing the
Speaker 3: same thing in Spain as well, because the Spanish grid
Speaker 3: operator has been curtailing and not paying renewable owners and
Speaker 3: you could see this spreading into other markets.
Speaker 2: As long as the demand does not grow in your rope.
Speaker 2: Everybody's going to fight for a slice of pizza. And
Speaker 2: if you put more people around the table for pizza
Speaker 2: the same size, there's going to be a lot of suffering.
Speaker 2: And the thing is the incumbents, they always find a
Speaker 2: way to look at the government to get a kind
Speaker 2: of support mechanism for cold plant or gas plant. But
Speaker 2: the renoble's owner, they're on their own.
Speaker 3: Oh, if you're telling me that they're going to play
Speaker 3: the system relevant cards, I know that. I We've heard
Speaker 3: that perform in the banking industry. So you tell me
Speaker 3: it's coming into the energy space as well. By the way,
Speaker 3: I think you're right. I think you're absolutely right.
Speaker 2: Yeah, Okay, great conversation. So we put the link in
Speaker 2: the show notes, the link on the ipp and the
Speaker 2: link on their VPA review.
Speaker 5: And by the way, it's always great to have a
Speaker 5: look on. And it's just brilliant, really yes, really pleasure. Yeah,
Speaker 5: And what is done with SPECSA park over the years,
Speaker 5: It's remarkable, absolutely, Okay, John, Always a pleasure to do
Speaker 5: you next week.
Speaker 3: Looking forward to what us one.
Speaker 5: Thank you for listening to Redefining Energy.
Speaker 1: Don't forget to rate the show and subscribe on Apple Podcast, Spotify,
Speaker 1: or the platform of your choice.