WEBVTT 1 00:00:04.240 --> 00:00:07.759 With Laurent's segal and from London and Gerard read from Berlin. 2 00:00:08.279 --> 00:00:10.080 This is redefining energy. 3 00:00:10.599 --> 00:00:14.080 Do they on Rethink and Energy job. We're going to 4 00:00:14.080 --> 00:00:17.280 talk about the financial structure which has been very popular 5 00:00:17.399 --> 00:00:21.519 last a decade but have been more challenged in through twenties, 6 00:00:21.800 --> 00:00:24.160 and that's what we call the yield gos. 7 00:00:24.519 --> 00:00:26.960 Absolutely, ron I think it's probably a good idea to 8 00:00:27.039 --> 00:00:29.480 explain to people what yel CODs are. The idea of 9 00:00:29.519 --> 00:00:32.000 a yield cod really is that what you do is 10 00:00:32.159 --> 00:00:36.439 you buy and you manage renewable assets and you pay 11 00:00:36.439 --> 00:00:38.399 a dividend on it. Hence the idea you had a 12 00:00:38.520 --> 00:00:42.880 yield and these vehicles were listed on the stock market 13 00:00:43.439 --> 00:00:46.359 and actually to describe the best way just going their funds. 14 00:00:46.719 --> 00:00:48.799 So what you have as a fund and they pay 15 00:00:48.840 --> 00:00:52.200 this returnout and then they actually have a management company 16 00:00:52.439 --> 00:00:54.439 that takes care of the assets and stuff like that. 17 00:00:54.479 --> 00:00:56.560 So in the case of say, just example of who 18 00:00:56.600 --> 00:00:59.280 are going to invite someone in from Greencoat, what green 19 00:00:59.320 --> 00:01:02.079 Coat would have the will be the yel CoA just 20 00:01:02.200 --> 00:01:07.840 called green Coat Renewables and that is managed by Greencoat Schroeders. 21 00:01:08.280 --> 00:01:10.159 But first the world from my partner. 22 00:01:10.359 --> 00:01:13.719 A Bloco Energy is Europe's premier leaser of ten foot 23 00:01:13.799 --> 00:01:18.799 container mobile batteries built in Europe with coatl best LFP cells. 24 00:01:19.359 --> 00:01:24.680 A Bloco Energy serves fourteen European countries, including France, Germany 25 00:01:24.760 --> 00:01:27.959 and the UK. A Blocko's batteries can be leased for 26 00:01:28.000 --> 00:01:31.200 any duration between six weeks and six years and they 27 00:01:31.200 --> 00:01:35.040 are monitored by the Dutch award winning platform school A 28 00:01:35.120 --> 00:01:38.480 block O Energy make your life easier, make your business 29 00:01:38.480 --> 00:01:40.120 more flexible back to the show. 30 00:01:40.640 --> 00:01:43.439 And this has been very popular, particularly in the UK 31 00:01:43.719 --> 00:01:45.640 for the last decade, as you said, as a large 32 00:01:45.640 --> 00:01:49.079 amount of renewables that are sitting in these eel cores 33 00:01:49.719 --> 00:01:53.519 and allows people to the public markets to invest I 34 00:01:53.519 --> 00:01:56.599 suppose in these renewable asses in return and get a dividend. 35 00:01:57.519 --> 00:02:00.719 So if we take the case of Shodog Green and 36 00:02:00.799 --> 00:02:03.920 there are various funds, they have invested more than thirteen 37 00:02:04.200 --> 00:02:07.840 billion euro over the past decade and they managed four 38 00:02:07.920 --> 00:02:12.759 hundred energy set across Europe, Americas and Asia. And I 39 00:02:12.840 --> 00:02:16.199 guess today managers one of the funds chard it's a 40 00:02:16.199 --> 00:02:17.719 good friend of yours. 41 00:02:17.479 --> 00:02:20.840 Yep, and that's Paul O'Donnell from Greencoat Renewables which is 42 00:02:20.840 --> 00:02:23.080 the name of the eel Co And yeah, looking forward 43 00:02:23.120 --> 00:02:25.800 to the conversation in and around the future of VEHICO. 44 00:02:26.080 --> 00:02:29.919 Let's bring Paul on the show. Paul, welcome to the show. 45 00:02:30.360 --> 00:02:32.439 Thank you, Lauren, thank you Gerard. It's great to be 46 00:02:32.520 --> 00:02:33.479 here with you this morning. 47 00:02:34.199 --> 00:02:36.759 Yeah, looking forward to this conversation. Well, let's maybe kick 48 00:02:36.800 --> 00:02:40.439 off Paul. You've been investing in renewable infrastructure for well 49 00:02:40.479 --> 00:02:43.080 over a decade now at this point in time, would 50 00:02:43.159 --> 00:02:46.080 you give us all a sense of what's changed and 51 00:02:46.159 --> 00:02:47.840 what's different than when you started. 52 00:02:48.479 --> 00:02:51.599 So, when we started the business in Greencoat, looking back 53 00:02:51.639 --> 00:02:55.080 in twenty twelve twenty thirteen, there was no long term 54 00:02:55.120 --> 00:02:57.719 capital in the renewable infrastructure space. At that time. You 55 00:02:57.800 --> 00:03:01.800 had short dated private equity funds, and by creating some 56 00:03:01.840 --> 00:03:04.919 of the listed investment trusts that we did, we allowed 57 00:03:05.479 --> 00:03:08.960 investors to get exposure to the renewable energy asset class. 58 00:03:09.719 --> 00:03:12.879 At that time, the sector was really about long drating 59 00:03:13.000 --> 00:03:18.560 government contracts, inflation protection, very stable power grids, and investors 60 00:03:18.560 --> 00:03:20.639 were really getting a chance to get the benefits of 61 00:03:20.639 --> 00:03:24.280 stable dividends and businesses that had growth and embedded in 62 00:03:24.319 --> 00:03:26.879 the asset class. And so I would say the first 63 00:03:26.960 --> 00:03:30.759 six to seven years were really about allowing that type 64 00:03:30.800 --> 00:03:33.560 of long term capital to be mobilized into the sector, 65 00:03:34.080 --> 00:03:35.879 a sector that was going to need a lot of 66 00:03:36.039 --> 00:03:38.520 long term capital to support the investment that we can 67 00:03:38.560 --> 00:03:42.479 see clearly a lot has changed over the last five years. 68 00:03:43.000 --> 00:03:45.800 We've seen an energy crisis in Europe, We've seen a 69 00:03:45.840 --> 00:03:50.360 focus towards energy security, We've seen a lot of policy 70 00:03:50.439 --> 00:03:52.919 change in terms of the rise and the demand, and 71 00:03:53.479 --> 00:03:55.240 then the recent changes that have come out of the 72 00:03:55.319 --> 00:04:00.280 US and interesting we've also seen a significant rat interest 73 00:04:00.360 --> 00:04:03.599 rate environment change where the cost of capital changes have 74 00:04:03.639 --> 00:04:06.560 made material impacts in terms of how capital is allocated. 75 00:04:07.000 --> 00:04:09.639 All of that has created a more complex and a 76 00:04:09.639 --> 00:04:13.159 more challenging energy and environment in which we invest into today, 77 00:04:13.960 --> 00:04:17.959 but one also where you can see significantly new areas merging. 78 00:04:18.519 --> 00:04:21.120 You can see the opportunity within storage and how that 79 00:04:21.160 --> 00:04:24.319 interplays with the renewable infrastructure. You can see the growth 80 00:04:24.319 --> 00:04:27.560 of demand and in particular the AI impact that's going 81 00:04:27.600 --> 00:04:30.959 to require renewables to play a much greater role. And finally, 82 00:04:30.959 --> 00:04:33.319 there's a more complex need today in terms of how 83 00:04:33.319 --> 00:04:36.600 we all trade and manage power assets in an environment 84 00:04:36.680 --> 00:04:39.360 where the grid challenges are much more significant than they 85 00:04:39.360 --> 00:04:40.000 were previously. 86 00:04:40.879 --> 00:04:45.199 So pout ten fifteen years ago, your job was to 87 00:04:45.240 --> 00:04:49.360 buy one wind park at the time, one sort of 88 00:04:49.439 --> 00:04:53.519 park of the time, and now as you introduce it's 89 00:04:53.560 --> 00:04:57.000 getting more and more complex. Before we go into the 90 00:04:57.120 --> 00:05:00.639 new sectors, talk about how you we can take rate 91 00:05:01.040 --> 00:05:04.240 does spot for you. From a management perspective. 92 00:05:04.319 --> 00:05:07.120 We've been very active over the last ten years. We've 93 00:05:07.160 --> 00:05:10.240 invested about thirteen and a half billion into the sector. 94 00:05:10.879 --> 00:05:14.240 We manage at just under eight gigawatts of renewable assets 95 00:05:14.519 --> 00:05:16.920 and that's about four hundred and forty five assets in total. 96 00:05:17.199 --> 00:05:20.360 And we're active globally, so we've assets in all across Europe, 97 00:05:20.560 --> 00:05:23.920 in the US, and more recently we've been investing into China. 98 00:05:24.519 --> 00:05:27.160 Each of those markets provides a sort of different challenge 99 00:05:27.160 --> 00:05:29.959 in terms of asset management, in terms of how we 100 00:05:30.000 --> 00:05:32.839 manage the integration of them as a business overall, and 101 00:05:32.959 --> 00:05:36.639 at times we take different approaches. We have in some 102 00:05:36.720 --> 00:05:39.480 cases very large joint venture partners with some of the 103 00:05:39.480 --> 00:05:43.759 biggest global utilities. Those can be large offshore WinForms in Germany, 104 00:05:43.800 --> 00:05:46.480 in the UK, etc. But then we also have our 105 00:05:46.519 --> 00:05:48.839 own asset management team, who are the guys who are 106 00:05:48.879 --> 00:05:51.800 on the ground, who are the engineers who can work 107 00:05:51.839 --> 00:05:54.519 with different asset management teams to make sure the project's 108 00:05:54.600 --> 00:05:57.519 run well, that we have the right availability, that with 109 00:05:57.639 --> 00:06:00.920 the right trading arrangements, and ultimately that the projects can 110 00:06:00.959 --> 00:06:02.920 deliver the output that we expect from them. 111 00:06:03.480 --> 00:06:05.920 Paul, if I look from the outside, and I look 112 00:06:05.959 --> 00:06:08.120 and I go, and it's not just looking at you, 113 00:06:08.199 --> 00:06:10.600 it's just looking if I look at the whole renewables. 114 00:06:11.040 --> 00:06:14.120 You know, renewables have basically been financed and owned by 115 00:06:14.399 --> 00:06:17.839 funds for the last fifteen years, and then suddenly you're 116 00:06:17.879 --> 00:06:20.680 in a world where you're not able to manage your 117 00:06:20.680 --> 00:06:22.639 power plant with an Excel sheet anymore. 118 00:06:23.120 --> 00:06:23.680 You have to. 119 00:06:23.720 --> 00:06:26.759 Really go and do it actively. And what I see 120 00:06:27.439 --> 00:06:29.240 is just a huge amount of stress in the market 121 00:06:29.240 --> 00:06:31.519 because there's lots of people who can't do it. And 122 00:06:31.560 --> 00:06:33.160 if I look at what you're doing, you seem to 123 00:06:33.160 --> 00:06:35.279 be at the front foot of it, which is that 124 00:06:35.519 --> 00:06:38.639 what you're doing is you're hiring yourself for it. And 125 00:06:38.639 --> 00:06:40.639 I'd be interesting to hear just your view of how 126 00:06:40.680 --> 00:06:44.120 you see that landscape and what that means in terms 127 00:06:44.160 --> 00:06:45.720 of an opportunity for you. Guys. 128 00:06:46.079 --> 00:06:49.560 It's very true Jared. For the first ten fifteen years 129 00:06:49.560 --> 00:06:52.759 of this industry, we've basically benefited from selling our power 130 00:06:52.959 --> 00:06:57.160 under government back contracts and so the need for trading expertise, 131 00:06:57.560 --> 00:07:00.279 the need to manage that risk was limited, so we 132 00:07:00.360 --> 00:07:04.279 weren't as dependent on trading within the market to essentially 133 00:07:04.480 --> 00:07:07.000 manage that risk. But a lot has changed in the 134 00:07:07.120 --> 00:07:09.839 last five years as we move out of that government 135 00:07:09.879 --> 00:07:12.839 backed regime, and so we've been taking a couple of 136 00:07:12.879 --> 00:07:16.040 different approaches to make sure we are well positioned. We 137 00:07:16.079 --> 00:07:19.120 are now directly selling our power to tech companies, so 138 00:07:19.160 --> 00:07:21.879 we enter into long term PPAs with the new industrial 139 00:07:21.920 --> 00:07:25.240 companies to sell them the power. We're looking at ways 140 00:07:25.240 --> 00:07:28.079 that we can hybridize our assets, so not just have 141 00:07:28.240 --> 00:07:32.160 a single technology operating on our sites, but adding storage, 142 00:07:32.639 --> 00:07:35.120 adding different technologies to make sure we've a more balanced 143 00:07:35.160 --> 00:07:38.199 set of power coming from that asset. And we're working 144 00:07:38.240 --> 00:07:42.399 closely with the new providers of off take ultimately who 145 00:07:42.439 --> 00:07:45.360 are the tech companies, to see how we can solve 146 00:07:45.399 --> 00:07:49.360 their needs. Because it's very clear as you move this 147 00:07:49.439 --> 00:07:51.879 asset class out of being one that was dependent or 148 00:07:52.040 --> 00:07:55.480 work on long term government contracts into one that's playing 149 00:07:55.519 --> 00:07:58.600 more into a more trading environment that you need to 150 00:07:58.600 --> 00:08:01.560 have relationships with your often akers, You need to have 151 00:08:01.639 --> 00:08:04.439 capability to understand the trading that will be needed on 152 00:08:04.519 --> 00:08:07.240 these assets, and you need to be ultimately much more 153 00:08:07.279 --> 00:08:09.920 active in terms of how humanite these assets day to day. 154 00:08:10.519 --> 00:08:13.639 Well, can you give a bit of an examples, and 155 00:08:13.720 --> 00:08:18.279 especially I'm interested in your hybridization talk about batteries, talk 156 00:08:18.319 --> 00:08:21.839 about probly your relationship with COTL. Yeah. 157 00:08:22.160 --> 00:08:24.920 Most recently we've been looking at a number of partnerships 158 00:08:25.000 --> 00:08:27.720 I guess to extend our capability, both in terms of 159 00:08:27.759 --> 00:08:30.319 hybridization and in terms of who we also sell our 160 00:08:30.360 --> 00:08:33.799 power to. One of those partnerships that we've recently created 161 00:08:33.879 --> 00:08:36.519 is a joint venture with Coato. We see them as 162 00:08:36.559 --> 00:08:38.919 one of the best players in the battery storage market, 163 00:08:39.279 --> 00:08:41.559 and I think they've recently won something like eighty percent 164 00:08:41.600 --> 00:08:44.080 of the Italian options, so they are clearly one of 165 00:08:44.080 --> 00:08:47.440 the leading global technology companies. What that allows us to 166 00:08:47.440 --> 00:08:49.679 do is to have access to the best pricing and 167 00:08:49.720 --> 00:08:52.440 the best innovation in the storage market. We think that 168 00:08:52.480 --> 00:08:56.039 plays really really well to our existing asset portfolio. It 169 00:08:56.080 --> 00:08:59.039 gives us the chance to hybridize them to essentially allow 170 00:08:59.120 --> 00:09:01.279 us to have a more different shape of power that 171 00:09:01.320 --> 00:09:04.360 we will generate. It also allows us to use the 172 00:09:04.399 --> 00:09:08.039 existing infrastructure that we have, the existing grid, the existing land, 173 00:09:08.519 --> 00:09:11.320 to make sure we're optimizing the sites and optimizing the 174 00:09:11.360 --> 00:09:14.480 grid for the overall and we think that will ultimately 175 00:09:14.480 --> 00:09:17.320 provide a better shape of generation that we can then 176 00:09:17.360 --> 00:09:19.639 sell on our long term ppa to our clients. 177 00:09:20.159 --> 00:09:22.679 Paul, just dig a little bit more into the whole 178 00:09:22.919 --> 00:09:26.159 storage area, because what I think myself and Lauran obviously 179 00:09:26.240 --> 00:09:29.120 been very active in that space for many years, and 180 00:09:29.200 --> 00:09:32.440 what we sense is really it's just a complexity in 181 00:09:32.480 --> 00:09:35.279 and around the revenue models of this. So I'd love 182 00:09:35.320 --> 00:09:38.600 to just look at how you, as an infrastructure investor, 183 00:09:39.159 --> 00:09:41.159 how you look at storage. In other words, do you 184 00:09:41.360 --> 00:09:43.759 base your pricing on the worst case scenario in terms 185 00:09:43.799 --> 00:09:47.360 of revenues? How could price these assets? And then you 186 00:09:47.399 --> 00:09:49.200 have to go to your investment committee and say, hey, guys, 187 00:09:49.240 --> 00:09:51.919 I need money for this, So what do you tell them? 188 00:09:52.279 --> 00:09:54.399 For a long time, we stayed out of storage because 189 00:09:54.399 --> 00:09:56.799 we didn't think the returns were attractive enough of the 190 00:09:56.840 --> 00:10:00.320 early stage to support an investment case. And I think 191 00:10:00.360 --> 00:10:03.159 the second aspect that we could see was that essentially 192 00:10:03.200 --> 00:10:05.519 the revenue mix that you were going to be generating 193 00:10:06.120 --> 00:10:08.399 was going to be less about contracted cash flows and 194 00:10:08.519 --> 00:10:10.679 was going to have a higher degree of volatility in that. 195 00:10:11.639 --> 00:10:14.279 And so I think you can see on both the 196 00:10:14.320 --> 00:10:17.639 pricing in terms of the access point of adding storage 197 00:10:17.679 --> 00:10:21.120 to your portfolio, but in addition to that the revenue 198 00:10:21.159 --> 00:10:24.320 streams that you can generate today, that the business case 199 00:10:24.360 --> 00:10:25.440 is starting to make sense. 200 00:10:26.200 --> 00:10:27.039 So if I just. 201 00:10:27.000 --> 00:10:29.559 Developed that out, when you think today of the costs 202 00:10:29.600 --> 00:10:32.559 down that we're seeing in the price of storage, availabilities 203 00:10:32.679 --> 00:10:36.759 of batteries and also the cost of development, particularly when 204 00:10:36.759 --> 00:10:39.600 you're adding it to your existing sites, that you have 205 00:10:39.639 --> 00:10:43.440 a very low incremental capex cost to add that storage 206 00:10:43.440 --> 00:10:46.519 into your existing portfolio. If I then take the example 207 00:10:46.559 --> 00:10:49.360 in Ireland where we have been adding storage to our assets, 208 00:10:49.799 --> 00:10:52.919 you're starting to build out a more diversified revenue base case. 209 00:10:53.120 --> 00:10:57.159 So you're no longer just dependent on essentially revenue streams 210 00:10:57.159 --> 00:11:01.279 from the grids, so for providing flexibility services, capacity services, 211 00:11:01.679 --> 00:11:05.440 but ultimately you're benefiting from strong trading revenues where you 212 00:11:05.480 --> 00:11:08.440 have the ability to arbitrage the low prices that we 213 00:11:08.480 --> 00:11:11.320 can see in Arland's case at Night, I guess in 214 00:11:11.360 --> 00:11:13.919 Spain's case, during the day and then you're able to 215 00:11:13.960 --> 00:11:16.840 release that power back into the grid when prices are higher. 216 00:11:17.279 --> 00:11:20.679 That's what's ultimately underpinning our long term investment case. We 217 00:11:20.759 --> 00:11:23.639 can see the arbitrage revenues that are going to exist 218 00:11:23.840 --> 00:11:26.200 both in terms of the day ahead market, in terms 219 00:11:26.200 --> 00:11:29.480 of the balancing market, and also the ability to provide 220 00:11:29.519 --> 00:11:32.399 different types of services as a more integrated solution to 221 00:11:32.440 --> 00:11:35.600 the grid in terms of flexibility and capacity. And you 222 00:11:35.759 --> 00:11:39.080 have to take a much more informed view across each 223 00:11:39.080 --> 00:11:42.080 of those revenue streams to allow you to capture what 224 00:11:42.120 --> 00:11:44.200 we think will be a higher long term return for 225 00:11:44.240 --> 00:11:45.159 the assets. 226 00:11:45.559 --> 00:11:49.240 Well, but it's a good segue to enter into the 227 00:11:49.360 --> 00:11:53.279 eight hundred pound gorilla sector, which are data sentels. When 228 00:11:53.279 --> 00:11:55.960 did you first started to look into it, and probably 229 00:11:55.960 --> 00:11:58.799 because of your client and what type of services are 230 00:11:58.799 --> 00:12:00.039 you developing a wrong. 231 00:12:01.320 --> 00:12:04.240 We've been looking at the data center sector really since 232 00:12:04.240 --> 00:12:07.879 we listed Greencoat Renewables in twenty seventeen. At that stage 233 00:12:07.919 --> 00:12:10.679 we could see in Ireland that data centers were going 234 00:12:10.720 --> 00:12:14.000 to be the largest energy user and that has turned 235 00:12:14.039 --> 00:12:17.240 out to be the case where today data centers represents 236 00:12:17.279 --> 00:12:20.200 twenty two to twenty three percent of all electricity used, 237 00:12:20.879 --> 00:12:24.000 and when you step back and think about the consequences 238 00:12:24.039 --> 00:12:26.960 of that, it essentially means that you need to have 239 00:12:27.000 --> 00:12:30.720 a very very clear policy around how you're going to 240 00:12:30.759 --> 00:12:34.759 allow data centers to operate alongside the renewables and into 241 00:12:34.759 --> 00:12:37.320 the grid system. For a long time, we were seeing 242 00:12:37.320 --> 00:12:40.000 this as as an opportunity to sell power directly to 243 00:12:40.039 --> 00:12:42.639 the data centers, so just as an off taker allowing 244 00:12:42.720 --> 00:12:45.799 us to provide that. But increasingly we could see a 245 00:12:45.879 --> 00:12:49.720 need for investors like ourselves to take a further step 246 00:12:50.000 --> 00:12:53.159 and to start to create the type of projects that 247 00:12:53.279 --> 00:12:57.000 data center owners or technology companies would need, which are 248 00:12:57.080 --> 00:13:00.759 much more integrated solutions in terms of provide them access 249 00:13:00.799 --> 00:13:03.679 to sites as well as selling the power that they're 250 00:13:03.679 --> 00:13:04.759 going to need to them. 251 00:13:05.080 --> 00:13:07.919 Because at the beginning, the data center of thelopower or 252 00:13:07.960 --> 00:13:11.879 mostly a real estate guys, So you come to that 253 00:13:12.080 --> 00:13:15.840 sector with a probably much more better understanding of the 254 00:13:16.240 --> 00:13:18.559 energy component of the data sitel. 255 00:13:19.519 --> 00:13:22.360 If you look at the data center sector, historically, it 256 00:13:22.399 --> 00:13:25.279 has been the capital that's flown into the data center 257 00:13:25.320 --> 00:13:28.320 sector has come from either real estate investors or it 258 00:13:28.360 --> 00:13:31.279 has come from digital investors. So we haven't really up 259 00:13:31.360 --> 00:13:33.879 until now had a role for energy investors to play 260 00:13:33.879 --> 00:13:36.679 into that. When you look at what's happened in Ireland 261 00:13:36.679 --> 00:13:40.600 as an example, where the policy has moved towards requiring 262 00:13:40.679 --> 00:13:45.519 data centers to both provide eighty percent new renewable power 263 00:13:46.279 --> 00:13:50.120 but also to provide backup capacity plans to manage and 264 00:13:50.159 --> 00:13:53.240 operate with the grid. What you now have today is 265 00:13:53.279 --> 00:13:56.200 a different type of requirement in terms of the development 266 00:13:56.240 --> 00:13:58.679 of the new sites, and they are going to be 267 00:13:58.759 --> 00:14:02.039 much more dependent on people who can understand the renewable 268 00:14:02.159 --> 00:14:05.399 energy system, but people who also can understand the smart 269 00:14:05.440 --> 00:14:08.879 rood system. We think that creates a significant opportunity for 270 00:14:08.919 --> 00:14:12.399 investors like ourselves to play a more leading role in 271 00:14:12.480 --> 00:14:15.440 unlocking the type of sites that technology companies are going 272 00:14:15.480 --> 00:14:18.000 to needy. 273 00:14:16.919 --> 00:14:19.080 Jump in there, just ask when you're doing this, is 274 00:14:19.120 --> 00:14:23.639 your business model only going to be providing the energy 275 00:14:23.639 --> 00:14:27.320 solution going forward or do you also integrate into the 276 00:14:27.440 --> 00:14:29.399 data center zone. And where I'm coming from this is 277 00:14:29.679 --> 00:14:31.919 I'd have a view that at some point they do integrate. 278 00:14:31.919 --> 00:14:34.600 And the reason they integrate is because if you think 279 00:14:34.639 --> 00:14:37.639 I have an AI data center, you're actually putting storage 280 00:14:37.720 --> 00:14:39.600 almost at the chip level at this point in time 281 00:14:39.639 --> 00:14:41.639 right in the form of a capacitor, and you're doing 282 00:14:41.679 --> 00:14:43.639 it at the rack level. So it will be more 283 00:14:43.679 --> 00:14:46.159 more integrated going forward than has been in the past. 284 00:14:46.360 --> 00:14:47.360 Or am I seeing it wrong? 285 00:14:48.080 --> 00:14:51.000 No, I totally agree with you, jerv. This is going 286 00:14:51.039 --> 00:14:53.799 to continue to integrate much further into the power system. 287 00:14:53.960 --> 00:14:56.639 And when we look forward, the type of sites that 288 00:14:56.679 --> 00:14:59.440 we're going to see data centers developed on will need 289 00:14:59.480 --> 00:15:03.399 to have full integrated energy systems. Fully integrated energy centers, 290 00:15:04.080 --> 00:15:06.879 we'll need to understand how to trade power. Whether there's 291 00:15:06.879 --> 00:15:10.600 a low carbon power grid system, the data centers will 292 00:15:10.639 --> 00:15:12.519 take that sort of power, and you have a high 293 00:15:12.519 --> 00:15:14.720 carbon intensity on the grid system, they should be able 294 00:15:14.759 --> 00:15:17.399 to release their own power and use that. So the 295 00:15:17.440 --> 00:15:20.399 way we see this moving as a much more energy 296 00:15:20.440 --> 00:15:23.759 dependent and a much more trading dependent solution as we 297 00:15:23.799 --> 00:15:27.080 look forward today is only the starting point of where 298 00:15:27.080 --> 00:15:29.120 that journey is going to go in the next ten years. 299 00:15:29.759 --> 00:15:32.840 And when you talk to the technology companies today, they're 300 00:15:32.879 --> 00:15:36.279 looking for partners who can help them to solve that problem. 301 00:15:36.519 --> 00:15:39.879 We think that creates significant opportunities also for companies like 302 00:15:40.000 --> 00:15:42.000 us to partner. We're not going to be able to 303 00:15:42.000 --> 00:15:44.240 provide a full end to end solution on this ourselves, 304 00:15:44.320 --> 00:15:48.320 and that's why we're partnering with storage companies, It's why 305 00:15:48.399 --> 00:15:50.679 we're partnering with trading companies who can help us to 306 00:15:50.759 --> 00:15:53.919 unlock that solution. And part of our solution is to 307 00:15:53.919 --> 00:15:56.799 be able to offer that end to end solution to 308 00:15:56.840 --> 00:15:59.000 the tech companies that they are going to need to have. 309 00:16:00.960 --> 00:16:02.759 Why don't you just virtually integrate and do it all 310 00:16:02.799 --> 00:16:03.200 in house. 311 00:16:03.840 --> 00:16:05.960 The scale of capital there that's going to be needed 312 00:16:06.480 --> 00:16:09.399 is just off the charts. Take for example, one hundred 313 00:16:09.440 --> 00:16:12.399 mag work data center. It roughly needs about one point 314 00:16:12.440 --> 00:16:14.840 five billion of capital to build the data center, put 315 00:16:14.840 --> 00:16:17.360 the racks in, and that will always be a real 316 00:16:17.440 --> 00:16:20.960 estate type solution. But when you look around the enabling 317 00:16:20.960 --> 00:16:23.519 infrastructure that is going to be needed, you probably have 318 00:16:23.600 --> 00:16:25.559 someone in the region of three to five hundred million 319 00:16:25.600 --> 00:16:29.080 of infrastructure assets that will be needed alongside that. Where 320 00:16:29.120 --> 00:16:32.720 we see our value add is essentially unlocking and developing 321 00:16:32.720 --> 00:16:36.159 those energy enabling infrastructure, energy assets that can feed into 322 00:16:36.200 --> 00:16:39.879 the data center. And we see that our capability to 323 00:16:39.919 --> 00:16:43.720 be able to partner with those people like the storage companies, 324 00:16:43.879 --> 00:16:47.200 like the utilities who today aren't in a position to 325 00:16:47.240 --> 00:16:50.519 offer that end to end solution. So we are in 326 00:16:50.639 --> 00:16:53.600 essence offering a platform solution to the tech companies, but 327 00:16:53.639 --> 00:16:56.000 we think we will do so alongside other players in 328 00:16:56.039 --> 00:16:56.559 the industry. 329 00:16:57.120 --> 00:17:00.240 Well, you're sitting in Dublin, which really has one of 330 00:17:00.240 --> 00:17:03.080 the biggest concentration of data centers in yourb so do 331 00:17:03.159 --> 00:17:06.079 you see the same type of solution that you're developing 332 00:17:06.119 --> 00:17:07.519 in other European countries. 333 00:17:08.359 --> 00:17:12.960 Absolutely, we're already seeing this happening in other markets the UK, 334 00:17:13.119 --> 00:17:15.880 for example, when you look at the recent partnership between 335 00:17:15.880 --> 00:17:20.559 Amazon and or We the disposal of old thermal plants 336 00:17:20.680 --> 00:17:24.200 and turning those into digital data centers. When you look 337 00:17:24.240 --> 00:17:27.119 at Spain as an example, what's happening down is Alaborta 338 00:17:27.559 --> 00:17:30.240 and the partnerships that we're seeing between utilities and real 339 00:17:30.319 --> 00:17:33.240 estate companies down there. When you look at what's happening 340 00:17:33.359 --> 00:17:37.079 in the Nordics today and the significant growth in data 341 00:17:37.119 --> 00:17:40.319 centers in those markets because of the access to low 342 00:17:40.359 --> 00:17:44.000 cost and low carbon renewable electricity in those countries, this 343 00:17:44.200 --> 00:17:49.400 is becoming increasingly pan European solution. But the solution is 344 00:17:49.519 --> 00:17:52.039 essentially embedded in the fact that you need access to 345 00:17:52.240 --> 00:17:55.519 renewable power and you need to deeply understand the grids 346 00:17:55.680 --> 00:17:57.240 where these projects will be located. 347 00:17:57.880 --> 00:18:01.359 Well, just change the team tinly bit in an erect 348 00:18:01.400 --> 00:18:03.839 but it is still relate to AI. Just can you 349 00:18:03.839 --> 00:18:06.240 give me your view in and around the whole hype 350 00:18:06.400 --> 00:18:09.279 in and around this in the sense that when you're 351 00:18:09.279 --> 00:18:14.119 deploying a billion euros into a data center, huge amounts 352 00:18:14.119 --> 00:18:16.920 of money going forward, do you, as an infrastructure investor 353 00:18:17.160 --> 00:18:19.920 do you look closely at these whether this is a 354 00:18:19.960 --> 00:18:22.559 reality or not? Or how do you measure the risk 355 00:18:22.759 --> 00:18:24.559 and deal with the risk of a really bit a 356 00:18:24.559 --> 00:18:26.000 bubble that sort of implodes. 357 00:18:26.759 --> 00:18:29.680 It's a great question and I guess for us when 358 00:18:29.720 --> 00:18:32.640 we think about the risk for us is the pace 359 00:18:32.680 --> 00:18:35.559 at which AI will emerge and the countries in which 360 00:18:35.559 --> 00:18:38.160 we're developing that does that happen. We spend a lot 361 00:18:38.160 --> 00:18:40.759 of time with the technology companies today, Jared, so we're 362 00:18:40.759 --> 00:18:43.640 talking directly to their infrastructure teams, was talking to their 363 00:18:43.680 --> 00:18:48.039 sustainability teams. Now what we see is the commitment both 364 00:18:48.079 --> 00:18:51.279 in terms of growing into Europe, but in addition to that, 365 00:18:51.880 --> 00:18:55.319 the growth being linked to having access to some mounstantial 366 00:18:55.359 --> 00:19:00.039 amounts of renewable electricity. So we think the solution that 367 00:19:00.079 --> 00:19:04.039 we're offering is one that is exactly where the technology 368 00:19:04.039 --> 00:19:06.960 companies need to go by not just having access to 369 00:19:07.039 --> 00:19:10.759 sites and then making those investments, but more importantly having 370 00:19:10.839 --> 00:19:14.680 access to rebel energy enabled sites and sites that have 371 00:19:14.759 --> 00:19:18.000 the grid flexibility that they will need to get projects 372 00:19:18.039 --> 00:19:20.559 both quickly. If you look at this sector two three 373 00:19:20.640 --> 00:19:23.720 years ago, people felt that the growth would emerge in 374 00:19:23.759 --> 00:19:26.400 the European cities, so this growth would all be driven 375 00:19:26.440 --> 00:19:31.720 across London, Paris, Amsterdam, Frankfurt, Dublin. But what we're actually 376 00:19:31.799 --> 00:19:34.480 seeing is the opposite trend happening, that the growth is 377 00:19:34.519 --> 00:19:37.799 now happening outside of those regions. And once you take 378 00:19:37.799 --> 00:19:41.240 yourself outside of those urban regions, you're looking for areas 379 00:19:41.240 --> 00:19:44.200 which have the right type of enabling infrastructure to allow 380 00:19:44.240 --> 00:19:48.119 the projects to happen quickly. While there is some questions 381 00:19:48.119 --> 00:19:50.880 at the pace of growth in AI, there's no question 382 00:19:50.920 --> 00:19:54.359 that we're going to continue to see data centers being 383 00:19:54.359 --> 00:19:57.680 a strategic gaser class across each of the European countries, 384 00:19:58.200 --> 00:20:01.519 and one that is critical not just from the technology 385 00:20:01.519 --> 00:20:04.839 company's perspective, but also as a critical piece of national 386 00:20:04.839 --> 00:20:08.319 industrial policy. And so When you link that back together, 387 00:20:08.920 --> 00:20:13.799 you essentially have industrial policy supporting the investment in this space. 388 00:20:14.279 --> 00:20:17.480 You have climate policy linking the need for newble electricity, 389 00:20:18.160 --> 00:20:21.119 and you have grid and regulatory policy saying that the 390 00:20:21.160 --> 00:20:24.640 technologies in the data centers must not be damaging the grids, 391 00:20:24.759 --> 00:20:27.880 They must provide flexibility and must provide balance those grids. 392 00:20:28.440 --> 00:20:31.039 So we think that is a new sector and creating 393 00:20:31.039 --> 00:20:33.039 a new set of opportunities for us to consider. 394 00:20:33.480 --> 00:20:35.880 Can I maybe just ask one other question that data 395 00:20:35.880 --> 00:20:39.000 center which is in and around the whole area of 396 00:20:39.000 --> 00:20:42.279 off grade as opposed to on grid, and particularly seeing 397 00:20:42.319 --> 00:20:45.039 this trend in the United States, and I know it's 398 00:20:45.079 --> 00:20:48.200 surely not off grade because usually what happens is you're 399 00:20:48.200 --> 00:20:50.960 connected into a gas grid and then you're providing the 400 00:20:51.000 --> 00:20:53.960 power with gas and renewable. So how do you see 401 00:20:54.000 --> 00:20:56.599