WEBVTT - Old Wind or Solar Farm: Run it Ragged, or Rebuild? 0:00:00.360 --> 0:00:02.960 Hi everyone. We all know wind and solar are intermittent. 0:00:03.240 --> 0:00:05.800 Eventually the sun stops shining and the wind stops blowing, 0:00:06.160 --> 0:00:09.400 but as wind and solar power unreliable. In a recent episode, 0:00:09.400 --> 0:00:11.399 we talked about how the government in Mexico is saying 0:00:11.480 --> 0:00:14.360 it is that intermittent wind and solar capacity puts the 0:00:14.360 --> 0:00:17.280 grid at risk? But is that true. To help us 0:00:17.320 --> 0:00:19.000 dig into this a bit this week on the show, 0:00:19.040 --> 0:00:22.120 We've got Nat Bullard, chief content officer for benf Our. 0:00:22.160 --> 0:00:24.000 Discussion is based on a couple of recent pieces he 0:00:24.000 --> 0:00:26.680 did for Bloomberg Green as part of his spark Lines series. 0:00:26.880 --> 0:00:29.760 One is peaker gas plants may have peaked after all, 0:00:29.960 --> 0:00:33.400 and the other is aging renewable energy assets are future options. 0:00:33.880 --> 0:00:36.320 You can get these reports on the Bloomberg terminal under 0:00:36.320 --> 0:00:39.159 an I Bullard, or you can actually subscribe on Bloomberg 0:00:39.200 --> 0:00:41.519 dot com as a reminder being if it does not 0:00:41.560 --> 0:00:43.640 provide investment or strategy advice. And you can hear the 0:00:43.640 --> 0:00:46.200 fullest claimer at the end of the show him Mark Taylor, 0:00:46.360 --> 0:00:55.680 and you're listening to switch on to ben f podcast. Nat, 0:00:55.680 --> 0:00:58.040 thanks for joining us, Thanks for having me here. Mark, 0:00:58.040 --> 0:01:00.480 It's nice to be back. You've done a couple of 0:01:00.480 --> 0:01:05.679 reports recently on renewable reliability. Can you kind of explain 0:01:05.840 --> 0:01:08.960 where those came from and why we're talking about this today. 0:01:09.200 --> 0:01:12.440 The history of renewable energy being integrated into grids is 0:01:12.480 --> 0:01:15.880 that for every few percent more renewable energy that gets 0:01:15.920 --> 0:01:18.880 integrated into the grid, people sort of tear their hair 0:01:19.000 --> 0:01:21.199 out and run around like the houses on fire, thinking 0:01:21.200 --> 0:01:23.240 that reliability is going to go through the floor and 0:01:23.280 --> 0:01:24.959 we're never going to be able to integrate more than 0:01:25.600 --> 0:01:28.039 the current percentage of renewable energy in the grid. You know, 0:01:28.120 --> 0:01:31.120 first it was five percent, that was ten minutes twenty. 0:01:31.280 --> 0:01:33.880 You can look at grids in say Germany for instance, 0:01:33.880 --> 0:01:36.640 that are able to handle the integrate more than renewable 0:01:36.720 --> 0:01:39.240 same in Denmark as well. When you get to some 0:01:39.319 --> 0:01:41.160 other grids, like in the United States, you start to 0:01:41.200 --> 0:01:43.800 have some real challenges and thinking about what are we 0:01:43.800 --> 0:01:46.039 gonna do with this much renewable energy in our grid? 0:01:46.120 --> 0:01:49.200 How is it going to impact reliability? How is a 0:01:49.240 --> 0:01:51.720 grid planner, how is the developer, how is an asset owner? 0:01:51.760 --> 0:01:53.400 Do I need to be thinking about that and what 0:01:53.440 --> 0:01:56.160 do I need to do? And California is a great 0:01:56.200 --> 0:01:58.240 sort of test bed for this as as you would imagine. 0:01:58.280 --> 0:02:00.680 One thing is big state in the big mark it too. 0:02:00.840 --> 0:02:03.440 It has a lot of renewable energy. And three, it 0:02:03.520 --> 0:02:06.600 has quite a lot of wind and solar that tend 0:02:06.640 --> 0:02:10.560 to arrive on the grid at specific times. Right. Wind 0:02:10.680 --> 0:02:13.400 tends to have its peaks in the early morning and 0:02:13.680 --> 0:02:16.880 in the late evening, whereas solar tends to have its 0:02:16.919 --> 0:02:19.200 peak obviously in the middle of the day. And what 0:02:19.240 --> 0:02:21.040 those what those things I'll do together is they make 0:02:21.040 --> 0:02:23.359 the grid more variable in terms of the generation that's 0:02:23.360 --> 0:02:26.000 coming in. They also mean that you have to still 0:02:26.040 --> 0:02:29.840 plan for reliability in a time of greater variability, especially 0:02:29.880 --> 0:02:32.360 as California looks out towards a hundred percent renewable energy 0:02:32.360 --> 0:02:36.080 at some point zero carbon electricity. Then you have to 0:02:36.360 --> 0:02:38.919 you have to start thinking, how is a grid full 0:02:38.960 --> 0:02:42.200 of these variable assets going to play well with all 0:02:42.200 --> 0:02:44.720 the other children? Right? How is solar or wind going 0:02:44.800 --> 0:02:49.720 to maintain the integrity and quality of the grid as 0:02:49.720 --> 0:02:52.560 you reach very high penetrations. And so California ran the 0:02:52.639 --> 0:02:56.280 study on a term that I would imagine, honestly, not 0:02:56.320 --> 0:02:58.799 that many people are familiar with, which is the effective 0:02:58.880 --> 0:03:03.000 load carry in capable, which is how much of a 0:03:03.120 --> 0:03:06.920 plant's total theoretical capacity of any kind can you be 0:03:07.160 --> 0:03:11.240 counted on to provide when the grid needs it most? So, 0:03:12.080 --> 0:03:14.040 if you've got a hundred megawat wind or a hundred 0:03:14.040 --> 0:03:16.399 megawat soilar plant at the time when the grid needs 0:03:16.400 --> 0:03:18.240 it most, how much of that energy can you count on? 0:03:18.480 --> 0:03:20.360 And this is where things start to get a little 0:03:20.360 --> 0:03:23.000 bit interested before we get into that more deeply, can 0:03:23.040 --> 0:03:25.720 we put something to bed the grids in Germany and Denmark? 0:03:25.760 --> 0:03:29.280 Are they fundamentally different than what we find in California 0:03:29.360 --> 0:03:31.880 or the US? Or is it more of a dogma 0:03:32.080 --> 0:03:35.720 you know that more renewables equals less reliable grid. It's 0:03:35.720 --> 0:03:37.880 a bit of both. But but on the technical side, 0:03:37.920 --> 0:03:42.360 the grids are just better integrated, like they're better built interact. 0:03:42.440 --> 0:03:45.120 But it very plainly and very candidate. And also they're 0:03:45.200 --> 0:03:47.600 very different different they're very different types of systems. I mean, 0:03:47.640 --> 0:03:50.480 California is sort to buy its nature, long and linear 0:03:50.600 --> 0:03:54.000 in many cases, and they're still designed around central station 0:03:54.040 --> 0:03:56.960 generation historically, right, you know, the grids of the US 0:03:56.960 --> 0:04:00.000 are designed around a small number of large and then 0:04:00.040 --> 0:04:04.480 then eventually very large bulk generation plants way far out 0:04:04.480 --> 0:04:09.280 of town, and then a large number of small assets, 0:04:09.280 --> 0:04:13.400 probably closer into load centers, but they're not designed for 0:04:14.400 --> 0:04:17.680 hundreds of thousands or millions of generators like in the 0:04:17.800 --> 0:04:20.080 really distributed fashion, or even for that matter, they're not 0:04:20.120 --> 0:04:24.400 really designed for I don't know, potentially thousands of utility scale. 0:04:24.400 --> 0:04:28.479 It's the relatively small solar projects that have variability in 0:04:28.520 --> 0:04:31.680 their output, even though that variability is pretty well known 0:04:31.839 --> 0:04:34.400 at this point. Okay, so let's go into that variability 0:04:34.440 --> 0:04:38.600 and reliability. So the effective load carrying capacity or capability, 0:04:38.800 --> 0:04:41.360 what is that for wind and solar. The study which 0:04:41.360 --> 0:04:44.000 looked out to the end of this decade in California 0:04:44.360 --> 0:04:47.839 shows that the effective load carrying capability for wind it's 0:04:47.880 --> 0:04:50.560 been nineteen cent next year, meaning if you have a 0:04:50.600 --> 0:04:53.839 hundred megawat project, you could ring eye on nineteen megawats 0:04:53.880 --> 0:04:55.840 and that when the grid needs it most, and it's 0:04:55.839 --> 0:04:59.760 it's fairly stable measure out to the end of this decade. 0:05:00.000 --> 0:05:02.200 If you add four hours of energy storage to it, 0:05:02.200 --> 0:05:05.920 it performs better, but it doesn't do like amazingly well. 0:05:06.440 --> 0:05:08.560 It's definitely very far from like the kind of load 0:05:08.560 --> 0:05:11.000 carrying capability you would get out of a natural gas plant. 0:05:11.320 --> 0:05:13.880 Just to clarify, four hour storage is a battery, right, 0:05:14.080 --> 0:05:16.320 that's about well, they say say four hours of energy 0:05:16.360 --> 0:05:19.280 storage in the study, so we we I think it's 0:05:19.279 --> 0:05:21.720 safe to assume in most cases that that is a battery, 0:05:21.720 --> 0:05:25.720 but that could be a gigantic kinetic energy storage system, 0:05:25.839 --> 0:05:28.159 that could be pump hydros And about that, the study 0:05:28.279 --> 0:05:32.359 very deliberately does not specified batteries. However, let's be honest, 0:05:32.400 --> 0:05:34.200 most people that they're going to be developing four hours 0:05:34.200 --> 0:05:37.320 of storage right now are probably developing it using a 0:05:37.400 --> 0:05:41.360 lithi ion storage battery. Now, let's talk about solar, which 0:05:41.480 --> 0:05:45.480 is not wind solar. Even the big industrial scale installations 0:05:46.080 --> 0:05:50.000 are pretty much useless from an effective load carrying capability 0:05:50.440 --> 0:05:55.240 in two it's it gets even worse as you go 0:05:55.320 --> 0:05:58.480 further into the future, because you've got you have more 0:05:58.520 --> 0:06:00.200 of you have more in the grid, you have more 0:06:00.200 --> 0:06:04.480 sort of collected variability. Reliability of each individual assets is 0:06:04.560 --> 0:06:08.640 less significant over the breadth of this entire grid. But 0:06:08.760 --> 0:06:11.440 where it gets interesting and where it gets sort of fundamental, 0:06:11.560 --> 0:06:13.440 I think, is that if you add storage to that 0:06:14.560 --> 0:06:16.320 four hours of storage to get doesn't say that it's 0:06:16.320 --> 0:06:18.440 a battery, but not just assume that it's a battery, 0:06:18.880 --> 0:06:21.000 you get to an effective load care and capability of 0:06:22.800 --> 0:06:27.040 which i'll call it pretty close to a hundred in 0:06:27.080 --> 0:06:30.599 this case. So basically, at the time when the grid 0:06:30.640 --> 0:06:33.240 is most going to need power from solar, if you 0:06:33.279 --> 0:06:35.440 have a battery attached to it for four hours of storage, 0:06:35.839 --> 0:06:37.640 you can pretty much treat it as if it was 0:06:37.760 --> 0:06:39.920 any kind of other, any kind of other high quality 0:06:39.960 --> 0:06:42.240 asset on the grid. And there's a little bit of 0:06:42.279 --> 0:06:45.560 decline in that overtime, but really not very much, like 0:06:45.600 --> 0:06:52.039 it goes down slightly to about nine. So that must 0:06:52.080 --> 0:06:55.120 make solar plus storage, you know, something we've seen kind 0:06:55.120 --> 0:06:58.200 of emerging right now. It's kind of a no brainer 0:06:58.240 --> 0:07:00.200 for the future. I think it may. It may. It's 0:07:00.240 --> 0:07:03.279 the case very clear if there is any sort of 0:07:03.320 --> 0:07:06.920 concern about how an asset is going to interact with 0:07:06.960 --> 0:07:10.640 the grid, it makes it very clear that storage is probably, 0:07:10.680 --> 0:07:13.520 if not essential, then at least very very important. You 0:07:13.560 --> 0:07:16.040 would probably be leaving benefit on the table to not 0:07:16.120 --> 0:07:19.400 be doing storage in a in a situation like this. 0:07:20.080 --> 0:07:23.440 You know, and if you compare the effective mode carrying 0:07:23.480 --> 0:07:28.960 capability in tracking PV with four hours of storage to 0:07:29.040 --> 0:07:32.520 tracking PD without storage, one point seven percent. I think 0:07:32.520 --> 0:07:35.840 you'll probably find that there is sufficient reason from a 0:07:35.880 --> 0:07:39.360 developer's perspective to go ahead and build that storage, and 0:07:39.360 --> 0:07:42.480 and to make it even even perhaps more compelling, you 0:07:42.520 --> 0:07:46.400 may find regulatory imperative to do so. It may be 0:07:46.560 --> 0:07:49.160 a requirement that if you were to be building, you know, 0:07:49.200 --> 0:07:52.000 more than fifty megawatts of somewhere in any good installation, 0:07:52.080 --> 0:07:55.560 you have to build with it four hours of energy storage, 0:07:55.720 --> 0:07:57.680 or you have to in one way another contract for 0:07:57.720 --> 0:07:59.520 the same thing. It doesn't have to be on site. 0:08:00.040 --> 0:08:03.760 But developers being developers, it's probably pretty easy to bundle 0:08:03.920 --> 0:08:06.680 rather than to do separate parallel tracks for development. And 0:08:06.720 --> 0:08:09.040 guess you're a fewer place storage developer. So what does 0:08:09.080 --> 0:08:11.840 this mean for build? Maybe I'm just not thinking about 0:08:11.880 --> 0:08:15.160 this right, but would you build more capacity than you 0:08:15.240 --> 0:08:17.400 than you think you would need or would you right 0:08:17.480 --> 0:08:20.000 size it to supply the grid for when it needs 0:08:20.000 --> 0:08:22.240 it most? I mean, I think you're you're gonna build 0:08:22.360 --> 0:08:24.480 my math and this super reductive. You're gonna build basically 0:08:24.480 --> 0:08:26.720 what you get paid for it, right, if you're gonna 0:08:26.760 --> 0:08:28.680 if you can get paid, if you're gonna get paid 0:08:28.680 --> 0:08:30.560 for reliability, and you build the storage to do that 0:08:30.600 --> 0:08:34.439 if you're gonna get paid to shift your generation curve 0:08:34.559 --> 0:08:36.720 right to times when it's more valuable than you might 0:08:36.760 --> 0:08:38.680 do that as well. I mean, there there would be 0:08:38.720 --> 0:08:41.319 many dueling imperatives. One would be the imperative to make 0:08:41.360 --> 0:08:43.840 more money by selling more lectrons at certain times. The 0:08:43.880 --> 0:08:46.800 other imperative would be preserved whatever contract you've established by 0:08:46.840 --> 0:08:49.720 increasing your load carrying capability. We tend to not see 0:08:49.760 --> 0:08:53.440 these conversations happening, you know, I live were at real time, 0:08:53.440 --> 0:08:55.760 but they definitely are happening, Like these are conversations that 0:08:56.080 --> 0:08:58.839 developers and utilities are having, that grid operators are having 0:08:59.080 --> 0:09:02.240 with asset owners, and so I think that we need 0:09:02.280 --> 0:09:04.559 to sort of view them in a fairly supple fashion, 0:09:04.679 --> 0:09:06.320 which is a good thing. I mean, I think that 0:09:06.600 --> 0:09:08.320 you can build for it out four hours of storage 0:09:08.400 --> 0:09:11.120 for multiple sets of benefits. You could do it to 0:09:11.240 --> 0:09:12.800 make more money at certain times, or you could do 0:09:12.840 --> 0:09:15.760 it because you have to either Either way, I think 0:09:15.760 --> 0:09:18.360 there will be imperatives to do so. So who's taking 0:09:18.360 --> 0:09:20.719 the lead on this. Are there developers that are saying, hey, 0:09:20.800 --> 0:09:23.679 give me storage, or their storage companies that are approaching developers. 0:09:23.840 --> 0:09:26.560 How's the corpor dynamic playing out. It's a good question. 0:09:26.960 --> 0:09:29.440 We see a bit of both. I think that the 0:09:29.440 --> 0:09:32.000 most common right now is that you have a large 0:09:32.000 --> 0:09:35.720 soilar developer that has essentially embedded storage as part of 0:09:35.720 --> 0:09:38.680 its development process and proposition. So you know, we also 0:09:38.720 --> 0:09:43.080 see some large puer play storage developers who are also 0:09:44.080 --> 0:09:48.960 developers of of large steel generation assets. So it's kind 0:09:48.960 --> 0:09:51.360 of difficult to say which, you know, is it a 0:09:51.400 --> 0:09:54.000 separate development track, are they separate groups, or are they 0:09:54.040 --> 0:09:57.959 just sort of making this assumption that they're the kind 0:09:57.960 --> 0:09:59.960 of thing that you can integrate if you want or debt. 0:10:00.400 --> 0:10:02.040 I think it will be very curious to see how 0:10:02.040 --> 0:10:05.400 in future you have an interplay between the off site 0:10:05.679 --> 0:10:08.480 sort of like third party four our storage that could 0:10:08.480 --> 0:10:13.360 be contracted alongside the generation asset, a solar generation asset. 0:10:13.720 --> 0:10:18.640 That will come down to wonky bits of technical specification 0:10:18.840 --> 0:10:23.280 I think, or requirements written by regulators. So at the 0:10:23.360 --> 0:10:25.880 end of the day, are we saying that wind and 0:10:25.920 --> 0:10:29.400 solar are reliable that you can factor in you know, 0:10:29.440 --> 0:10:32.199 a high percentage of renewables and deer mix. So I 0:10:32.240 --> 0:10:34.079 think we're getting we're getting to this point. I mean 0:10:34.120 --> 0:10:37.440 we we in a sense look at the lead presented 0:10:37.480 --> 0:10:41.160 to us by the regulatory bodies in the In this sense, 0:10:41.200 --> 0:10:44.280 I think that like studies that have been commissioned by 0:10:44.559 --> 0:10:48.280 the grid operators and by the regulators are important guidance 0:10:48.360 --> 0:10:52.920 to us because that internal shape what developers are able 0:10:52.960 --> 0:10:55.760 to do, which in turn will help shape the grid. 0:10:55.920 --> 0:10:58.360 I think on an economic basis, we certainly see this 0:10:58.440 --> 0:11:00.840 being possible, like we already you see the case that 0:11:01.640 --> 0:11:05.839 there's an overlap between the levelies cost of energy from 0:11:05.840 --> 0:11:08.560 four hours of battery storage and from a gas speaker plant, 0:11:08.679 --> 0:11:12.520 depending on where you are in the world, and that 0:11:12.679 --> 0:11:15.400 certainly is the kind of compelling market signal that makes 0:11:15.400 --> 0:11:17.520 people want to go out and start developing like this. 0:11:18.480 --> 0:11:21.920 But greater reliability, just I think we're greater effective mode 0:11:21.960 --> 0:11:25.720 carrying capability. Think of that as a proxy for greater reliability. 0:11:25.760 --> 0:11:30.880 Here enables people that have confidence in in in planning 0:11:30.920 --> 0:11:35.240 for greater penetration to renewable energy. Having having witnessed as 0:11:35.280 --> 0:11:37.319 you have as well more than a decade of these 0:11:37.320 --> 0:11:43.800 development cycles. They go from seeming crazy outlandish and definitely 0:11:44.840 --> 0:11:48.720 pushing the boundaries of what's technically capable to business as 0:11:48.800 --> 0:11:52.480 usual within a couple of years. So you're in washing 0:11:52.480 --> 0:11:56.240 in DC. Tell me about how this can or can't 0:11:56.240 --> 0:11:59.559 play out in an area that's not California. Well, it's 0:11:59.559 --> 0:12:02.040 all about it's all about what what's the imperative at 0:12:02.040 --> 0:12:04.880 the moment in time. So I think if you were building, 0:12:05.000 --> 0:12:09.120 for instance, song or in Nebraska, you may not particularly 0:12:09.200 --> 0:12:12.840 have this kind of requirement early on in the in 0:12:13.000 --> 0:12:17.680 the life cycle of greening the grid. At the same time, 0:12:17.760 --> 0:12:20.640 you have to look very closely at what the nature 0:12:20.679 --> 0:12:23.240 of that individual grid is. Like if if the rest 0:12:23.240 --> 0:12:26.880 of the generation assets do not ramp very quickly, you know, 0:12:26.920 --> 0:12:29.320 if they're mostly plants that have a snower ramping rate 0:12:29.360 --> 0:12:31.280 and comes of how much power they can add permitted 0:12:31.320 --> 0:12:34.520 to the grid, then maybe you do end up sort 0:12:34.520 --> 0:12:37.440 of ahead of time having some kind of some kind 0:12:37.480 --> 0:12:40.559 of storage assets there to enhance the good carrying capability 0:12:40.600 --> 0:12:42.680 because you need it earlier. I also just think that 0:12:42.760 --> 0:12:44.800 it's it's the sort of useful guidance as you think 0:12:44.840 --> 0:12:46.240 else sort of like, if this is the trend that 0:12:46.280 --> 0:12:50.040 has begun in California, will probably propagate elsewhere. You know, 0:12:50.080 --> 0:12:51.480 if this is if this is the sort of thing 0:12:51.520 --> 0:12:54.480 that begins, it begins in one of the world's biggest, 0:12:54.840 --> 0:13:01.680 highest renewable penetration, multi resource power markets that's very professionally run, 0:13:02.000 --> 0:13:06.199 that has a way of propagating elsewhere. So California also, 0:13:06.280 --> 0:13:07.400 I mean, I guess we have to talk about the 0:13:07.360 --> 0:13:09.160 elephant the room, right, California also has a lot of 0:13:09.160 --> 0:13:11.720 gas that that serves this role is to supply power 0:13:11.840 --> 0:13:14.800 and when the grid needs it most. How does that 0:13:14.960 --> 0:13:17.040 play out into the future. So I think this is 0:13:17.160 --> 0:13:19.600 this is very worth watching, you know, on on a 0:13:19.640 --> 0:13:23.840 pure economics basis, right now, we definitely anticipate the world's 0:13:23.880 --> 0:13:27.800 development shift in gas assets goes from combined cycle plants 0:13:27.840 --> 0:13:33.440 meeting basically baseload and to some extent shoulder generation too, 0:13:33.840 --> 0:13:38.280 mostly speakers because you get so much cheap, variable renewable 0:13:38.360 --> 0:13:41.679 energy in the grid that that that basically sets your 0:13:41.720 --> 0:13:44.360 merit order. But there are the times of day and 0:13:44.400 --> 0:13:46.599 the times of year in which you probably need to 0:13:47.360 --> 0:13:49.560 quickly ramp up generation and the best way to do 0:13:49.600 --> 0:13:51.880 that historically has been with an open cycle or peak 0:13:51.960 --> 0:13:55.719 or gas plant. But if it turns out that a 0:13:56.000 --> 0:13:59.360 renewables have a much higher load carrying capability sol with 0:13:59.400 --> 0:14:03.240 storage typically than previously anticipated, then that means that you 0:14:03.280 --> 0:14:06.760 probably have fewer of those moments uh in in in 0:14:07.240 --> 0:14:11.120 the grid operation space wherein you definitely need to turn 0:14:11.160 --> 0:14:13.760 something on with a few minutes notice, especially because the 0:14:13.800 --> 0:14:18.280 battery can respond pretty much instantaneously. And two, it doesn't 0:14:18.280 --> 0:14:21.080 mean that you're necessarily having your revenue go away from 0:14:21.120 --> 0:14:25.400 doing operations with say peaker cast plan. But I think 0:14:25.400 --> 0:14:27.640 it's our view that you you are going to compress 0:14:27.680 --> 0:14:32.760 the operational sphere of that plant from hundreds of hours 0:14:32.840 --> 0:14:34.960 a year or two maybe dozens of hours a year. 0:14:35.440 --> 0:14:38.320 I believe that that's going to be a challenging development proposition. 0:14:38.840 --> 0:14:42.000 Why any hours per year? Well, that's that's another fair 0:14:42.120 --> 0:14:45.360 question is at what point is this not viewed as 0:14:45.400 --> 0:14:48.640 necessary at all? And I think again you're looking at 0:14:48.920 --> 0:14:52.200 you have to think about the where the decision making 0:14:52.320 --> 0:14:55.240 is distributed. So the development the wind and solar and 0:14:55.320 --> 0:15:01.240 predicting the solar development decision making is highly distributed amongst 0:15:01.320 --> 0:15:05.240 hundreds of different players. There's relatively smaller number of players 0:15:05.280 --> 0:15:08.000 doing the same on gas, right, And so what I 0:15:08.040 --> 0:15:09.400 tend to think is that like you'll have a kind 0:15:09.440 --> 0:15:12.160 of you'll have a kind of high mind approach and 0:15:12.160 --> 0:15:15.200 sol we're moving much more quickly than you will developing 0:15:15.240 --> 0:15:18.960 thermal assets. So what does this mean for for solar 0:15:19.000 --> 0:15:21.120 and wind developers? What are some of their options going 0:15:21.160 --> 0:15:23.600 forward to put more power under the grid. So I 0:15:23.600 --> 0:15:25.920 think the most basic one if you're a solar developer 0:15:26.560 --> 0:15:29.000 is that you will be operating under the assumption that 0:15:29.000 --> 0:15:32.760 you're probably going to add some quantum of energy storage 0:15:32.760 --> 0:15:35.760 to your projects in the future. I think that it 0:15:35.760 --> 0:15:40.160 would be probably a challenging proposition to say we don't 0:15:40.160 --> 0:15:43.800 plan on doing this at all anywhere in our future 0:15:43.840 --> 0:15:47.120 development life cycle. I think the second option is to 0:15:47.400 --> 0:15:51.280 is to start considering putting storage into existing assets. And 0:15:51.280 --> 0:15:54.560 that's something that we haven't really seen quite yet because 0:15:54.600 --> 0:15:56.560 most assets are not really yet at the point in 0:15:56.560 --> 0:15:59.440 their operational lives where they might where they might be 0:15:59.480 --> 0:16:01.760 ready for that. Right, But we generally think about the 0:16:01.760 --> 0:16:05.240 inverter the inverter replacement cycle being about ten years. We 0:16:05.320 --> 0:16:07.640 really don't have that many ten year old assets yet, 0:16:07.680 --> 0:16:10.160 at least in wind and so where in wind in 0:16:10.200 --> 0:16:12.600 the United States, we have some wind projects that are 0:16:12.960 --> 0:16:15.360 my age, but they're not big and there aren't that 0:16:15.400 --> 0:16:18.600 many of them. We have solar projects that are ten 0:16:18.720 --> 0:16:21.360 years old, but not yet at the point in their 0:16:21.400 --> 0:16:24.760 operational life would probably make sense to replace them yet completely, 0:16:25.440 --> 0:16:28.560 but that's probably coming and I think that is where 0:16:28.560 --> 0:16:33.600 you'll find developers essentially viewing their in existing asset as 0:16:34.520 --> 0:16:37.800 an embedded option on doing something different in the future. 0:16:38.160 --> 0:16:40.440 So let's stick into that a bit. So just to clarify, 0:16:40.520 --> 0:16:45.200 you're not saying adds storage or battery to an old asset. 0:16:45.320 --> 0:16:49.760 You're saying effectively repower or tear down and rebuild an 0:16:49.760 --> 0:16:52.440 existing asset. Is that right, I'm saying a bit of both. 0:16:52.480 --> 0:16:55.720 There's definitely the possibility for the former. I'm going to 0:16:55.760 --> 0:16:59.040 go to my hundred megawatt project in the Central Valley 0:16:59.080 --> 0:17:02.160 of California and add I'm gonna add a four hundred 0:17:02.200 --> 0:17:05.720 meg one hour battery. Do it? Okay, that's one possibility. 0:17:05.760 --> 0:17:09.120 But the other is to look across that site essentially 0:17:09.119 --> 0:17:13.639 look at the package of permitted land and interconnection agreement 0:17:13.760 --> 0:17:17.960 and off take agreement a solar resource, and look at 0:17:17.960 --> 0:17:20.199 the grid of the future, what's it going to be 0:17:20.240 --> 0:17:22.000 in five ten years time and say, you know what, 0:17:22.920 --> 0:17:26.399 I could probably make more money by ripping up what 0:17:26.480 --> 0:17:28.800 I have here and building something different. I'm probably going 0:17:28.840 --> 0:17:31.320 to generate more power. I also have a load that 0:17:31.359 --> 0:17:33.760 I can shape better with a battery, may be able 0:17:33.760 --> 0:17:36.959 to enhance my load care and capability by adding a battery. 0:17:37.000 --> 0:17:39.400 So maybe it's time to sort of re envision this, 0:17:39.400 --> 0:17:42.080 this asset that I have. This is an idea that 0:17:42.119 --> 0:17:45.359 I've been I've been pushing. I think it's fair to say, 0:17:45.600 --> 0:17:48.560 pretty pretty hard in the last couple of months, is 0:17:48.600 --> 0:17:52.080 that we should probably start thinking about assets as they 0:17:52.080 --> 0:17:54.520 approach the end of their life, well before they approach 0:17:54.560 --> 0:17:56.080 the end of their life, so to speak, we should 0:17:56.080 --> 0:17:58.680 start thinking what would I do with this right now? 0:17:58.840 --> 0:18:01.080 Knowing what I knowing the tech knowlogy at hand, and 0:18:01.160 --> 0:18:05.119 knowing the market, how does a ten year old solar 0:18:05.160 --> 0:18:07.240 project or a fifteen year old or twenty year old 0:18:07.240 --> 0:18:10.720 wind project look like? What else can I do with this? 0:18:11.400 --> 0:18:13.159 You mentioned this in your latest op ed that you 0:18:13.200 --> 0:18:15.560 said with an old wind project, you just let it 0:18:15.800 --> 0:18:18.240 run like an old used car. Is that right? Until 0:18:18.240 --> 0:18:19.920 it start to fall apart and then you think about 0:18:19.960 --> 0:18:22.920 replacing it. There's certainly, certainly that's been that's been the case. 0:18:22.960 --> 0:18:26.280 You you work it hard, right like you you probably 0:18:26.520 --> 0:18:30.359 you're maximizing your internal rate of return out of the 0:18:30.359 --> 0:18:33.440 project for the sake of your investors. But there may 0:18:33.440 --> 0:18:36.560 come a time when sort of running at ragged is 0:18:36.640 --> 0:18:40.640 no longer the best way to generate a return. Right, 0:18:40.800 --> 0:18:42.840 you may find that you're able to make more money 0:18:43.480 --> 0:18:45.760 on a returns basis, on a cash flow basis by 0:18:45.800 --> 0:18:48.280 doing something different. And certainly there are reasons, you know, 0:18:48.400 --> 0:18:50.199 in the next couple of years to be to be 0:18:50.240 --> 0:18:55.840 repowering a wind project for financial reasons like getting the 0:18:55.880 --> 0:18:58.720 production tax credit again and things like that. But also 0:18:58.800 --> 0:19:00.800 just think that's be clear that the technology is just 0:19:00.960 --> 0:19:03.800 much much better. Hey, can you explain some of that. 0:19:03.840 --> 0:19:05.560 You mentioned some of the numbers there that were just 0:19:05.640 --> 0:19:08.560 kind of jaw dropping, certainly, so like like if you 0:19:08.680 --> 0:19:11.680 if you look at a project in another project in California, 0:19:11.720 --> 0:19:15.080 there was a wind farm not far from Palm Springs, 0:19:15.920 --> 0:19:17.960 that is that is in the process of being of 0:19:18.000 --> 0:19:21.639 being repowered, and it's set to be replacing four hundred 0:19:21.640 --> 0:19:26.480 and sixty turbines and in order to doing like from 0:19:26.520 --> 0:19:30.480 like replacement on an energy capacity basis to get the 0:19:30.600 --> 0:19:32.880 thirty megawatts about but that comes from these four hundred 0:19:32.920 --> 0:19:35.800 and sixty turbines. The new to the developer was looking 0:19:35.800 --> 0:19:40.520 at building at most eleven new turbines or sixty four 0:19:40.560 --> 0:19:43.919 eleven swap uh. And that's because well, look, the new 0:19:43.960 --> 0:19:47.840 ones are bigger, much much bigger. You couldn't put four 0:19:47.920 --> 0:19:50.320 hundred and sixty new turbines on the same plot as 0:19:50.320 --> 0:19:53.159 Warrington sixty old turbines. There's always other issues you have 0:19:53.200 --> 0:19:55.240 to look at, like how much more generation would you 0:19:55.240 --> 0:19:58.439 be allowed to integrate? Like would you be about to 0:19:58.560 --> 0:20:01.600 enhance your your your connection to the transmission grid and 0:20:01.600 --> 0:20:03.440 therefore put in a lot more power, which case you 0:20:03.480 --> 0:20:06.280 might build more. But this just gives an indication that 0:20:06.680 --> 0:20:10.440 you know, the new technology is better. Definitely you will 0:20:10.480 --> 0:20:13.600 generate probably more power from these new assets, um though 0:20:13.640 --> 0:20:15.399 you may not be able to get more peak power 0:20:15.480 --> 0:20:19.120 out of it given the great connection issues. But there's 0:20:19.119 --> 0:20:20.679 also other stuff, I mean, like they're just going to 0:20:20.720 --> 0:20:23.400 perform better, Like a fourty year old winter turbine generator 0:20:23.680 --> 0:20:29.040 has probably got zero semiconductors in it, whereas a new 0:20:29.080 --> 0:20:32.280 one was going to have dozens of sensors. It's going 0:20:32.320 --> 0:20:37.640 to have all kinds of sophisticated telemetry and communication capabilities. 0:20:38.520 --> 0:20:41.119 It's going to be far easier to maintain in a 0:20:41.200 --> 0:20:44.600 predictive maintenance kind of fashion. Uh, it's it's going to 0:20:44.680 --> 0:20:48.560 be a power quality. It's probably less and likely to 0:20:48.640 --> 0:20:52.600 surge power at times. And so you know, you're, you're, you're, 0:20:52.800 --> 0:20:56.880 you start to view this wind turbine project as an 0:20:56.880 --> 0:21:00.119 embedded in an embedded option. As I said before, like 0:21:00.800 --> 0:21:04.119 the asset isn't the forgency turbines, it's their grid connection, 0:21:04.359 --> 0:21:09.000