1 00:00:00,240 --> 00:00:02,800 Speaker 1: This is Tom Rowland's Reese, and you're listening to Switched 2 00:00:02,840 --> 00:00:06,120 Speaker 1: on the bn EF podcast. Today we're bringing you a 3 00:00:06,200 --> 00:00:09,000 Speaker 1: recording from our BNF Summit New York, which took place 4 00:00:09,039 --> 00:00:11,840 Speaker 1: on the twenty ninth and thirtieth of April. The panel 5 00:00:11,880 --> 00:00:15,520 Speaker 1: featured on this episode is titled Sustaining Momentum in US 6 00:00:15,640 --> 00:00:18,840 Speaker 1: Renewable Investments and it's all about the shifting sounds of 7 00:00:18,880 --> 00:00:22,240 Speaker 1: clean energy spending in the US. Conditions for investment appear 8 00:00:22,320 --> 00:00:26,640 Speaker 1: to broadly be improving, with interest rights easing, inflation in decline, 9 00:00:26,840 --> 00:00:30,479 Speaker 1: and growing renewable energy demand sources including power hungry AI 10 00:00:30,560 --> 00:00:34,000 Speaker 1: models and data centers coming online. Last year, US clean 11 00:00:34,080 --> 00:00:37,040 Speaker 1: energy investment grew by fifty billion dollars, a huge leap 12 00:00:37,080 --> 00:00:40,479 Speaker 1: over the average from the previous few years. Yet hurdles remain. 13 00:00:40,760 --> 00:00:44,920 Speaker 1: Price cannibalization, curtailment risks, and the tariffs and policy shifts 14 00:00:45,000 --> 00:00:48,839 Speaker 1: enacted by the Trump administration are all giving potential investors pause. 15 00:00:49,280 --> 00:00:52,520 Speaker 1: In this episode, the panelists discuss business models and strategies 16 00:00:52,520 --> 00:00:54,960 Speaker 1: that can allow investments in the US clean energy space 17 00:00:55,040 --> 00:00:59,480 Speaker 1: to keep growing. The panelists include Andrew Gongaware, Managing director 18 00:00:59,480 --> 00:01:03,640 Speaker 1: at bm Matt Reinsfeiler, Senior vice president for Finance and 19 00:01:03,680 --> 00:01:08,160 Speaker 1: Capital Markets at Invenergy, Miguel Pina, Managing director and head 20 00:01:08,160 --> 00:01:11,600 Speaker 1: of Project Finance for the Americas at BBVA, and Kareeine 21 00:01:11,640 --> 00:01:15,600 Speaker 1: still partner Apollo Global Management. The panel was moderated by 22 00:01:15,600 --> 00:01:18,280 Speaker 1: Paul ez Karno, a senior associate from our solar team. 23 00:01:18,319 --> 00:01:22,080 Speaker 1: For more information regarding BNF summits, including our upcoming BNF 24 00:01:22,120 --> 00:01:25,400 Speaker 1: Summit Munich on May twentieth, ant view recordings from previous 25 00:01:25,440 --> 00:01:29,279 Speaker 1: events had to about dot BNF dot com slash Summit. 26 00:01:29,640 --> 00:01:35,840 Speaker 1: Now let's hear from our panelists. 27 00:01:41,800 --> 00:01:46,959 Speaker 2: Thanks everyone for coming. Thank you also for you for 28 00:01:47,080 --> 00:01:50,840 Speaker 2: being here and taking some time to hear a little 29 00:01:50,840 --> 00:01:52,760 Speaker 2: bit more optimistic takes. 30 00:01:52,840 --> 00:01:53,960 Speaker 3: I'll try my best. 31 00:01:54,480 --> 00:01:57,160 Speaker 2: The clean energy industry in the US has gone through 32 00:01:57,240 --> 00:01:59,320 Speaker 2: lots of a lot of ups and downs. 33 00:02:00,040 --> 00:02:02,040 Speaker 3: I think we all. 34 00:02:01,800 --> 00:02:04,600 Speaker 2: Are very familiar that there's been policy uncertainty for a 35 00:02:04,600 --> 00:02:08,200 Speaker 2: long time, something sometimes for the good, sometimes. 36 00:02:07,760 --> 00:02:08,880 Speaker 3: For the worst. 37 00:02:09,480 --> 00:02:13,160 Speaker 2: So our goal here is to bring esteam clean energy 38 00:02:13,240 --> 00:02:17,600 Speaker 2: industry experts to really to really share with us how 39 00:02:17,639 --> 00:02:20,560 Speaker 2: they manage the risks, how they deal in times of 40 00:02:20,639 --> 00:02:23,720 Speaker 2: high uncertainty, and what's the silver lining what are the 41 00:02:23,760 --> 00:02:26,760 Speaker 2: reasons to remain optimistic. I mean, I'd love to start 42 00:02:26,800 --> 00:02:28,600 Speaker 2: with Andrew, because I have you so far away for me. 43 00:02:30,320 --> 00:02:33,760 Speaker 2: Can you set the stage for us and explain a 44 00:02:33,800 --> 00:02:36,239 Speaker 2: little bit what are the risks that the sector is 45 00:02:36,280 --> 00:02:41,359 Speaker 2: facing today and how are developers and financiers like yourself 46 00:02:41,400 --> 00:02:44,000 Speaker 2: managing those risks and trying to stay sane at the 47 00:02:44,040 --> 00:02:45,880 Speaker 2: end of the day as well. 48 00:02:45,919 --> 00:02:47,799 Speaker 4: I'm sure Matt will have a view here as well, 49 00:02:47,840 --> 00:02:53,280 Speaker 4: But I think the greatest risk is obviously uncertainty that 50 00:02:53,560 --> 00:02:56,440 Speaker 4: goes well beyond our industry, but I think in our 51 00:02:56,480 --> 00:03:01,840 Speaker 4: industry in particular with the anticipated attacks bill and tax 52 00:03:01,880 --> 00:03:05,560 Speaker 4: reform and the implications that that might have for things 53 00:03:05,680 --> 00:03:09,800 Speaker 4: like the Investment Inflation Reduction Act, there's just a lot 54 00:03:09,840 --> 00:03:13,920 Speaker 4: of uncertainty in front of decision making in the sector. 55 00:03:13,960 --> 00:03:19,320 Speaker 4: And so I think is as management teams and banks 56 00:03:19,400 --> 00:03:25,079 Speaker 4: like ourselves and investors like Corinn look at the landscape, 57 00:03:25,200 --> 00:03:27,320 Speaker 4: we have to think a little bit differently and look 58 00:03:27,360 --> 00:03:29,959 Speaker 4: for opportunities in different places and manage risk a little 59 00:03:29,960 --> 00:03:35,000 Speaker 4: bit differently. You know, for the developers, that's where am 60 00:03:35,000 --> 00:03:38,000 Speaker 4: I going to invest my dollars in development? You know 61 00:03:38,080 --> 00:03:43,440 Speaker 4: where there headwinds around permitting, what can I actually procure 62 00:03:43,560 --> 00:03:48,680 Speaker 4: for with some certainty around cost. There is in the 63 00:03:48,720 --> 00:03:50,880 Speaker 4: market a lot that's going to get built. There's been 64 00:03:50,880 --> 00:03:52,760 Speaker 4: a lot that's been safe Harbord, there's a lot of 65 00:03:52,800 --> 00:03:55,160 Speaker 4: equipment in country. There are a lot of projects that 66 00:03:55,200 --> 00:03:58,160 Speaker 4: are permitted and very far along you know that we're 67 00:03:58,160 --> 00:04:00,360 Speaker 4: going to I guess the question is really, are we 68 00:04:00,400 --> 00:04:02,600 Speaker 4: going to see you know, one hundred gigawatts of new 69 00:04:02,720 --> 00:04:05,960 Speaker 4: renewables over the next five years or so, or is 70 00:04:05,960 --> 00:04:08,480 Speaker 4: it going to be two hundred? So you know, either way, 71 00:04:08,520 --> 00:04:10,520 Speaker 4: there's a tremendous amount of capital that's going to go 72 00:04:10,520 --> 00:04:12,760 Speaker 4: into the sector and a tremendous amount of construction that's 73 00:04:12,800 --> 00:04:16,600 Speaker 4: going to happen. So I think it just becomes an 74 00:04:16,600 --> 00:04:21,960 Speaker 4: element of picking your spots. Whereas I think a broad 75 00:04:22,040 --> 00:04:24,760 Speaker 4: subset of developers could be very successful because there was 76 00:04:24,800 --> 00:04:28,120 Speaker 4: a wide open landscape. I think now where you have 77 00:04:28,320 --> 00:04:31,160 Speaker 4: the most talented management teams, you're going to see some 78 00:04:31,200 --> 00:04:36,560 Speaker 4: differentiation across platforms where high quality management teams who've lived 79 00:04:36,600 --> 00:04:40,960 Speaker 4: through cycles, who've managed through tax credit uncertainty, are going 80 00:04:41,000 --> 00:04:43,359 Speaker 4: to be successful. And those are the places where I 81 00:04:43,400 --> 00:04:46,560 Speaker 4: think we'll see folks like Corinn and folks like Miguel 82 00:04:46,600 --> 00:04:49,120 Speaker 4: and myself putting our capital. 83 00:04:49,839 --> 00:04:53,640 Speaker 3: Absolutely Crean, that's Andrew named you as well. 84 00:04:53,720 --> 00:04:58,400 Speaker 5: Yeah, that recommendation go ahead. 85 00:04:58,480 --> 00:04:59,000 Speaker 3: How do you fund? 86 00:04:59,400 --> 00:05:03,000 Speaker 2: How do you find those those spots and opportunities in 87 00:05:03,040 --> 00:05:04,280 Speaker 2: these times of uncertainty. 88 00:05:04,640 --> 00:05:08,160 Speaker 6: Look, I think Andrew's spot on. We are in kind 89 00:05:08,200 --> 00:05:12,640 Speaker 6: of I would say, kind of the apex of uncertainty 90 00:05:12,880 --> 00:05:17,400 Speaker 6: for US renewables with the confluence of tariffs and the 91 00:05:17,400 --> 00:05:22,200 Speaker 6: ir and still honestly some supply teain dynamics that you know, 92 00:05:22,520 --> 00:05:26,560 Speaker 6: were we continue to work through, for instance, in the case. 93 00:05:26,440 --> 00:05:28,040 Speaker 5: Of highvoltage equipment, taking up to. 94 00:05:28,120 --> 00:05:32,040 Speaker 6: Kind of like five years to get for certain projects. 95 00:05:33,480 --> 00:05:35,440 Speaker 6: Look as we take a big step back and look 96 00:05:35,480 --> 00:05:35,839 Speaker 6: at it. 97 00:05:36,120 --> 00:05:38,040 Speaker 5: You know, we're Apollo. We're a large. 98 00:05:37,839 --> 00:05:41,040 Speaker 6: Alternative asset manager or six seven hundred and fifty billion 99 00:05:41,160 --> 00:05:43,360 Speaker 6: we invest across the capital structure. 100 00:05:43,400 --> 00:05:45,440 Speaker 5: We've made a huge commitment to. 101 00:05:45,440 --> 00:05:49,160 Speaker 6: Be investing in energy and energy transition over fifty eight 102 00:05:49,200 --> 00:05:52,760 Speaker 6: billion to day, and even during. 103 00:05:52,560 --> 00:05:53,640 Speaker 5: Times of uncertainty. 104 00:05:54,000 --> 00:05:57,040 Speaker 6: You know, we've always viewed ourselves as contrion and so 105 00:05:57,080 --> 00:06:01,160 Speaker 6: we seek to deploy capital even in time periods like this. 106 00:06:02,360 --> 00:06:06,280 Speaker 6: We see operating assets like near term operating assets as 107 00:06:06,520 --> 00:06:09,920 Speaker 6: pretty attractive today. We believe there's been a change in 108 00:06:09,960 --> 00:06:14,480 Speaker 6: the risk adjusted return for those very prudent underwriting of 109 00:06:14,880 --> 00:06:19,680 Speaker 6: kind of development development platforms. But the long term tailwinds, 110 00:06:19,680 --> 00:06:22,800 Speaker 6: in our mind, are still there. The need for energy demand, 111 00:06:23,640 --> 00:06:27,039 Speaker 6: it's still there, and renewables. 112 00:06:26,440 --> 00:06:29,320 Speaker 5: Continue to be one of the. 113 00:06:28,440 --> 00:06:32,400 Speaker 6: Most cost effective, quickst to market methods of delivery. 114 00:06:33,760 --> 00:06:35,240 Speaker 3: Migad, I'd love to bring it in here. 115 00:06:35,680 --> 00:06:37,640 Speaker 7: No, I mean a little more to say, I definitely 116 00:06:37,720 --> 00:06:42,520 Speaker 7: agree there are tailwinds. The renewable energy is efficient, is needed. 117 00:06:43,120 --> 00:06:45,760 Speaker 7: Everyone agrees we need more energy, and in the short 118 00:06:45,839 --> 00:06:48,360 Speaker 7: term definitely is one of the easiest way to get 119 00:06:48,960 --> 00:06:53,120 Speaker 7: very much needed energy. And we have been extremely focused 120 00:06:53,279 --> 00:06:55,800 Speaker 7: in the US in prayer finance, which is what my 121 00:06:55,880 --> 00:06:59,160 Speaker 7: department does in doing this type of transactions. And there 122 00:06:59,200 --> 00:07:02,640 Speaker 7: is no change of strategy at all, despite the obvious 123 00:07:02,920 --> 00:07:06,760 Speaker 7: headwinds that we've got right ahead of us. But it's 124 00:07:06,760 --> 00:07:08,760 Speaker 7: true there's going to be a PI can choose as 125 00:07:08,800 --> 00:07:12,360 Speaker 7: things are more complicated. You are not all the projects 126 00:07:12,440 --> 00:07:14,480 Speaker 7: are going to be built. Some which would have been 127 00:07:14,480 --> 00:07:20,720 Speaker 7: built in a more benign macroeconomic environment regulatory environment would 128 00:07:20,760 --> 00:07:23,360 Speaker 7: probably not be built, but there are there was such 129 00:07:23,400 --> 00:07:26,360 Speaker 7: a huge pipeline to be built, so many plans, so 130 00:07:26,400 --> 00:07:29,760 Speaker 7: many developers, that even if some of them do not materialize, 131 00:07:29,800 --> 00:07:32,400 Speaker 7: there's still a huge market which are going to keep 132 00:07:32,440 --> 00:07:35,360 Speaker 7: us very very busy. And I would say in the end, 133 00:07:35,480 --> 00:07:38,280 Speaker 7: prior finance is you know, you need to present a 134 00:07:38,320 --> 00:07:43,280 Speaker 7: fully funded sources and justice proposal. That is unavoidable. There's 135 00:07:43,280 --> 00:07:47,320 Speaker 7: nothing we can do to avoid that situation. So we 136 00:07:47,360 --> 00:07:51,000 Speaker 7: will need all the more the due diligence to make 137 00:07:51,040 --> 00:07:54,000 Speaker 7: sure that we can present a credible case to the committees. 138 00:07:54,440 --> 00:07:57,200 Speaker 7: And we I mean I have just been in a 139 00:07:57,200 --> 00:08:00,200 Speaker 7: committee for two big transactions which have been a proof, 140 00:08:01,760 --> 00:08:04,040 Speaker 7: but the level of the diligence is higher because the 141 00:08:04,040 --> 00:08:06,840 Speaker 7: committee wants to know what is the credible plan in 142 00:08:06,840 --> 00:08:09,760 Speaker 7: case things go wrong, which people are much more aware 143 00:08:09,960 --> 00:08:13,320 Speaker 7: to how things may get complicated just out of a 144 00:08:13,320 --> 00:08:16,200 Speaker 7: blue sky, and therefore you need a good answer for that. 145 00:08:16,280 --> 00:08:18,200 Speaker 7: If not me be final and it may be one 146 00:08:18,280 --> 00:08:21,600 Speaker 7: hundred percent bulletproof of course, otherwise what would be doing 147 00:08:21,760 --> 00:08:24,000 Speaker 7: very little business. But at the same time you need 148 00:08:24,040 --> 00:08:27,240 Speaker 7: to provide a good solution with a lot of the diligence, 149 00:08:27,320 --> 00:08:29,720 Speaker 7: making sure that you are working on those best projects, 150 00:08:29,720 --> 00:08:33,960 Speaker 7: products would have room to improve if anything doesn't go 151 00:08:34,000 --> 00:08:38,280 Speaker 7: according to plan. And surely, I say this again, working 152 00:08:38,400 --> 00:08:41,480 Speaker 7: with the best in class responsors which give you that 153 00:08:41,559 --> 00:08:44,960 Speaker 7: guarantee that they know and they have the experience to 154 00:08:45,080 --> 00:08:48,439 Speaker 7: manage through what can be definitely choppy waters. 155 00:08:48,800 --> 00:08:52,640 Speaker 2: And I love that you finished with working with best 156 00:08:52,640 --> 00:08:56,640 Speaker 2: in class developers and developing platforms and mat I'd love 157 00:08:56,679 --> 00:08:57,959 Speaker 2: to bring you in here. 158 00:08:58,880 --> 00:09:00,000 Speaker 3: Energy has been around for a while. 159 00:09:00,000 --> 00:09:03,359 Speaker 2: Well, you're the private the biggest privately held developer. 160 00:09:02,960 --> 00:09:03,480 Speaker 3: In the country. 161 00:09:03,520 --> 00:09:06,560 Speaker 2: You've been pretty much doing everything you can build and 162 00:09:06,640 --> 00:09:11,360 Speaker 2: finance within the broader energy sector. Can you walk us 163 00:09:11,400 --> 00:09:17,240 Speaker 2: through what how you're approaching these next couple of years. 164 00:09:17,559 --> 00:09:20,160 Speaker 2: How are you focusing on projects, What are the key 165 00:09:20,200 --> 00:09:22,719 Speaker 2: things that you have prioritized when it comes to try 166 00:09:22,760 --> 00:09:27,839 Speaker 2: to bring projects to fruition and helping race at secure financing. 167 00:09:28,200 --> 00:09:31,479 Speaker 8: Sure happy to try to address that. I think the 168 00:09:31,520 --> 00:09:33,880 Speaker 8: biggest thing that's really helpful right now is the tailwinds. 169 00:09:33,920 --> 00:09:36,680 Speaker 8: Everyone mentioned. We're kind of living in the times of 170 00:09:36,679 --> 00:09:40,840 Speaker 8: an unprecedent amount of load growth. We're having utility customers 171 00:09:40,880 --> 00:09:44,320 Speaker 8: and large C and I customers coming to us, and 172 00:09:44,440 --> 00:09:48,440 Speaker 8: they don't really have, you know, projects that they're able 173 00:09:48,480 --> 00:09:50,360 Speaker 8: to buy. They don't have enough projects that they're able 174 00:09:50,360 --> 00:09:54,200 Speaker 8: to procure from. So the demand is real, and you know, 175 00:09:54,280 --> 00:09:58,000 Speaker 8: customers are really focused on certainty and making sure that 176 00:09:58,040 --> 00:10:01,800 Speaker 8: their projects are going to actually show up, and given 177 00:10:02,200 --> 00:10:05,480 Speaker 8: sort of the uncertainty everyone has mentioned, I think that 178 00:10:05,520 --> 00:10:08,200 Speaker 8: gives in entergy frankly a leg up because they know 179 00:10:08,240 --> 00:10:11,959 Speaker 8: that we have a long track record of execution and 180 00:10:12,240 --> 00:10:16,120 Speaker 8: being able to navigate periods of uncertainty and get projects built, 181 00:10:16,520 --> 00:10:20,000 Speaker 8: you know, on time and on budget. In terms of 182 00:10:20,360 --> 00:10:24,240 Speaker 8: risks around you know, IRA and potential tax credit reform, 183 00:10:24,280 --> 00:10:28,120 Speaker 8: I think as an industry, we're very accustomed to those 184 00:10:28,160 --> 00:10:32,160 Speaker 8: types of risks and it's something that we've been dealing 185 00:10:32,160 --> 00:10:34,800 Speaker 8: with for you know, the better part of two decades. 186 00:10:34,840 --> 00:10:37,880 Speaker 8: At this point, we thought that we were kind of 187 00:10:39,000 --> 00:10:40,840 Speaker 8: out of the woods in that front when the IRA 188 00:10:41,080 --> 00:10:44,520 Speaker 8: was passed, but now you know, people are speculating that 189 00:10:44,559 --> 00:10:47,960 Speaker 8: we might might be experiencing some changes there too, So 190 00:10:48,760 --> 00:10:51,680 Speaker 8: I think again it's it's a level of risk that 191 00:10:51,840 --> 00:10:55,400 Speaker 8: we're accustomed to as a developer, and assuming that if 192 00:10:55,400 --> 00:10:57,360 Speaker 8: you assume that kind of past precedent for how to 193 00:10:57,520 --> 00:11:01,720 Speaker 8: deal with these types of things will be kind of 194 00:11:01,800 --> 00:11:06,240 Speaker 8: what is expected of potentially grandfathering projects. I think we 195 00:11:06,320 --> 00:11:10,480 Speaker 8: have a pretty high degree of confidence as to how 196 00:11:10,520 --> 00:11:13,079 Speaker 8: you do that. And I guess the last piece I 197 00:11:13,120 --> 00:11:16,240 Speaker 8: would I would kind of mention is just kind of 198 00:11:16,280 --> 00:11:20,480 Speaker 8: now more than ever, I think it's really important just 199 00:11:20,520 --> 00:11:25,280 Speaker 8: to have kind of be working with strong relationship counterparties, 200 00:11:25,320 --> 00:11:30,640 Speaker 8: both from an off take perspective and also equipment procurement perspective. 201 00:11:31,600 --> 00:11:33,040 Speaker 5: I think it's very. 202 00:11:32,960 --> 00:11:37,040 Speaker 8: Clear that given there's a lot of uncertainty right now, 203 00:11:38,360 --> 00:11:40,560 Speaker 8: you really need to be kind of solutions oriented and 204 00:11:40,600 --> 00:11:44,160 Speaker 8: address issues that come up that neither party expects. And 205 00:11:44,240 --> 00:11:48,960 Speaker 8: so having counterparties that you're able to solve problems together 206 00:11:49,080 --> 00:11:53,120 Speaker 8: with is really important because at the end of the day, 207 00:11:54,080 --> 00:11:59,920 Speaker 8: one no part of the supply stack of that off taker, developer, supplier, 208 00:12:00,000 --> 00:12:02,480 Speaker 8: our ecosystem is going to want to take all of 209 00:12:02,520 --> 00:12:05,840 Speaker 8: the risk themselves, and so finding ways to work through 210 00:12:05,880 --> 00:12:07,920 Speaker 8: that and sharing in some of the risk that exists 211 00:12:08,520 --> 00:12:11,920 Speaker 8: is incredibly important to kind of solve problems and get projects. 212 00:12:11,920 --> 00:12:15,080 Speaker 2: Bill Yeah, and in our conversations and if you go 213 00:12:15,160 --> 00:12:19,199 Speaker 2: to a renewable conference in the US, the demand growth 214 00:12:19,480 --> 00:12:25,800 Speaker 2: and the load growth mantra is essentially you know, all 215 00:12:25,840 --> 00:12:28,000 Speaker 2: over the place, and it's another way of saying, we're 216 00:12:28,040 --> 00:12:31,160 Speaker 2: justifying higher PPA prices, higher prices. 217 00:12:30,679 --> 00:12:32,040 Speaker 3: For the end off taker. 218 00:12:32,520 --> 00:12:35,439 Speaker 2: How much room do we still have for the industry 219 00:12:35,480 --> 00:12:39,600 Speaker 2: to raise PPA prices further and how much more will 220 00:12:40,160 --> 00:12:43,679 Speaker 2: off takers be willing to absorb those higher prices? And 221 00:12:43,840 --> 00:12:46,439 Speaker 2: Karina love to start with you, and then I'll go 222 00:12:46,480 --> 00:12:47,400 Speaker 2: to Miguel and Andrew. 223 00:12:48,000 --> 00:12:51,160 Speaker 5: Yeah. I think what we found is that. 224 00:12:53,240 --> 00:12:56,960 Speaker 6: There is a significant amount of demand and that people 225 00:12:57,040 --> 00:13:03,560 Speaker 6: are going to price off take relative to the demand 226 00:13:04,000 --> 00:13:07,040 Speaker 6: the forward curve on the level of additionality that the 227 00:13:07,080 --> 00:13:09,560 Speaker 6: asset provides. And by additionality, I mean it's a new 228 00:13:09,600 --> 00:13:13,760 Speaker 6: renewables asset coming on the grid and it's providing kind 229 00:13:13,800 --> 00:13:16,240 Speaker 6: of new green energy to the grid. I think if 230 00:13:16,240 --> 00:13:21,080 Speaker 6: you're checking all those three boxes, it's near term, it's 231 00:13:21,120 --> 00:13:25,800 Speaker 6: providing kind of immediate demand relief, it's new green power. 232 00:13:26,000 --> 00:13:28,839 Speaker 6: Maybe it's even a hybridized asset. I think you're looking 233 00:13:28,840 --> 00:13:32,000 Speaker 6: at like a pretty significant premium to the forward curve, right, 234 00:13:32,040 --> 00:13:34,800 Speaker 6: But if the forward curve goes up twenty percent, does 235 00:13:34,840 --> 00:13:37,560 Speaker 6: that premium still stay the same as is it still 236 00:13:37,559 --> 00:13:39,559 Speaker 6: at twenty forty percent premium. 237 00:13:39,960 --> 00:13:40,080 Speaker 2: Right. 238 00:13:40,320 --> 00:13:44,760 Speaker 6: I think the market will speak in the long run. 239 00:13:44,800 --> 00:13:48,240 Speaker 6: But today, if you are able to check a lot 240 00:13:48,280 --> 00:13:52,000 Speaker 6: of those boxes, I think there's a very robust market, 241 00:13:52,040 --> 00:13:56,359 Speaker 6: I believe. Speaking one of your colleagues last night, she said, globally, 242 00:13:57,080 --> 00:14:01,839 Speaker 6: sixty three gigs of corporatep is signed in the last year, 243 00:14:01,920 --> 00:14:05,000 Speaker 6: sixty three gigats like the whole US installed what forty 244 00:14:05,120 --> 00:14:09,840 Speaker 6: giga watts of power? Right, So it's pretty remarkable the growth. 245 00:14:10,080 --> 00:14:11,160 Speaker 3: Yeah, and me? 246 00:14:11,280 --> 00:14:14,800 Speaker 2: And what are in the deals you're underwrite when you're 247 00:14:14,800 --> 00:14:18,120 Speaker 2: looking at those up and coming you mentioned benign projects 248 00:14:18,200 --> 00:14:20,800 Speaker 2: essentially parts that have some weak spots. 249 00:14:22,000 --> 00:14:22,600 Speaker 3: How have you. 250 00:14:22,600 --> 00:14:26,720 Speaker 2: Seen PPA prices and the PPA contracts and the projects 251 00:14:26,720 --> 00:14:27,800 Speaker 2: that are coming at your desk? 252 00:14:27,920 --> 00:14:29,440 Speaker 3: How how much room. 253 00:14:29,240 --> 00:14:33,000 Speaker 2: Has a developer really had to renegotiate and bring a 254 00:14:33,040 --> 00:14:34,760 Speaker 2: deal to you that that is financiable. 255 00:14:35,000 --> 00:14:38,680 Speaker 7: No, we have seen quite renegotiations of PPA close and 256 00:14:38,800 --> 00:14:41,880 Speaker 7: market prices that they had stayed out of the market, 257 00:14:42,000 --> 00:14:44,320 Speaker 7: and they have been renegotiated with the companies because it 258 00:14:44,440 --> 00:14:48,040 Speaker 7: made all perfect sense. In the end is offer and demand. 259 00:14:48,200 --> 00:14:51,239 Speaker 7: The need that people have for energy that is unabated 260 00:14:51,440 --> 00:14:55,920 Speaker 7: so far. So it is going to be there, and 261 00:14:56,040 --> 00:14:58,280 Speaker 7: we have seen that, you know, for starting from the 262 00:14:58,360 --> 00:15:00,720 Speaker 7: very lowest on the twenties and twenty one, we're still 263 00:15:00,760 --> 00:15:03,920 Speaker 7: seeing some projects which can come back to us With 264 00:15:04,000 --> 00:15:07,280 Speaker 7: those PPAs. It's so difficult to justify because the prices 265 00:15:07,280 --> 00:15:11,840 Speaker 7: are so low. Now it's probably gone to the other side. 266 00:15:11,960 --> 00:15:14,440 Speaker 7: But I think as long as the demand say, it's 267 00:15:14,880 --> 00:15:19,080 Speaker 7: the offer definitely. I mean, the classic formula tells you 268 00:15:19,120 --> 00:15:22,320 Speaker 7: that prices should go up, and that's what we what 269 00:15:22,360 --> 00:15:24,680 Speaker 7: we expect. And with all these headwinds, there is not 270 00:15:24,760 --> 00:15:28,640 Speaker 7: going to be more offer but actually less offer if anything, 271 00:15:29,040 --> 00:15:32,880 Speaker 7: and the demand doesn't have any indication that is going on. 272 00:15:33,440 --> 00:15:37,040 Speaker 7: So I would think there should be a good opportunity 273 00:15:37,360 --> 00:15:41,080 Speaker 7: for prices to be renegotiated up. What especially there is 274 00:15:41,200 --> 00:15:44,960 Speaker 7: need because the final cost of the projects increases. 275 00:15:45,840 --> 00:15:47,120 Speaker 3: Yeah. Absolutely. 276 00:15:48,000 --> 00:15:50,600 Speaker 2: Let's let's switch gears a little bit to the broader 277 00:15:50,720 --> 00:15:53,360 Speaker 2: M and A market, and I'd love to bring Andrew in. 278 00:15:53,440 --> 00:15:56,680 Speaker 3: Now, how has the m and A, the. 279 00:15:56,640 --> 00:16:00,360 Speaker 2: Clean energy m and A market changed over the past Actually, 280 00:16:00,480 --> 00:16:04,000 Speaker 2: let's say since November, what are the notable differences. Who's 281 00:16:04,000 --> 00:16:08,640 Speaker 2: coming in, who's pulling out? How would you really describe it? 282 00:16:09,840 --> 00:16:11,640 Speaker 2: How would you describe the state that we are. 283 00:16:11,800 --> 00:16:16,880 Speaker 4: I would say it's highly varied across different investor bases 284 00:16:17,960 --> 00:16:24,000 Speaker 4: and different corporates, developer sponsors who made a capital. There 285 00:16:24,040 --> 00:16:29,240 Speaker 4: are certainly more questions today about should I be launching 286 00:16:29,240 --> 00:16:31,720 Speaker 4: in this market or should I not be launching into 287 00:16:31,720 --> 00:16:36,320 Speaker 4: this market then certainly we would have seen in November. 288 00:16:38,440 --> 00:16:41,360 Speaker 4: The conversations are more around what are the catalysts for 289 00:16:43,000 --> 00:16:47,560 Speaker 4: having more certainty or launching into a better environment. And 290 00:16:47,640 --> 00:16:50,040 Speaker 4: one of the big lynch pins for that is certainly 291 00:16:51,240 --> 00:16:55,120 Speaker 4: tax reform and the outcomes of tax reform and what 292 00:16:55,160 --> 00:16:58,960 Speaker 4: that means for the industry. But that's a big discussion 293 00:16:59,000 --> 00:17:02,560 Speaker 4: that's changed since so November is how do I map 294 00:17:02,800 --> 00:17:06,840 Speaker 4: launching a process to raise capital or sell my business 295 00:17:06,920 --> 00:17:09,000 Speaker 4: in the context to what's going on in the broader 296 00:17:09,000 --> 00:17:14,160 Speaker 4: macroeconomy and the regulatory environment. So that's a big change. 297 00:17:14,720 --> 00:17:18,760 Speaker 4: I think the other changes we have started to hear 298 00:17:19,000 --> 00:17:25,600 Speaker 4: some LP's foreign investors say there is a higher bar 299 00:17:25,800 --> 00:17:28,879 Speaker 4: for investing in the US today than there was before. 300 00:17:30,160 --> 00:17:31,080 Speaker 5: We need to have a. 301 00:17:31,000 --> 00:17:35,640 Speaker 4: Good story as to why this investment in this environment. 302 00:17:36,760 --> 00:17:43,399 Speaker 4: So without question, there is a little bit less I 303 00:17:43,400 --> 00:17:47,560 Speaker 4: guess movement the movement is slower in the market now. 304 00:17:47,560 --> 00:17:51,000 Speaker 4: Having said that's as we said before, there's a tremendous 305 00:17:51,000 --> 00:17:53,280 Speaker 4: amount of load growth, there's a tremendous amount of development 306 00:17:53,320 --> 00:17:53,679 Speaker 4: going on. 307 00:17:53,760 --> 00:17:55,400 Speaker 3: There are lots of. 308 00:17:55,359 --> 00:17:57,840 Speaker 4: Projects that need to get built over the next twelve 309 00:17:57,880 --> 00:18:01,359 Speaker 4: to twenty four months. That there are still people that 310 00:18:01,480 --> 00:18:03,680 Speaker 4: need to go out and raise capital, There are still 311 00:18:03,720 --> 00:18:07,639 Speaker 4: people that need financing for their projects, and so so 312 00:18:07,720 --> 00:18:09,560 Speaker 4: there's still a tremendous amount of activity. 313 00:18:09,600 --> 00:18:10,920 Speaker 5: It's just started. 314 00:18:10,520 --> 00:18:15,600 Speaker 4: To to focus more is I think Carin said around 315 00:18:16,200 --> 00:18:19,560 Speaker 4: near term operating and operating assets and things that are 316 00:18:19,560 --> 00:18:21,640 Speaker 4: going to get in the ground sooner rather than later, 317 00:18:21,840 --> 00:18:25,119 Speaker 4: versus you know, paying for a tremendous amount of growth 318 00:18:25,119 --> 00:18:29,400 Speaker 4: and a development pipeline. And so I think that's changing 319 00:18:29,440 --> 00:18:30,960 Speaker 4: the way that people approach the market. 320 00:18:31,119 --> 00:18:35,240 Speaker 2: Yeah, I'd love that you finished with that, because something 321 00:18:35,280 --> 00:18:37,879 Speaker 2: that Matt and I were talking about backstage is so 322 00:18:37,920 --> 00:18:39,960 Speaker 2: who's going to build those early stage pipelines. 323 00:18:40,000 --> 00:18:43,160 Speaker 3: Who's going to bring projects to to a status where. 324 00:18:43,080 --> 00:18:46,120 Speaker 2: Investors will be comfortable investing, banks will be. 325 00:18:46,160 --> 00:18:49,600 Speaker 3: Comfortable lending to So, Matt, I think we can just 326 00:18:49,640 --> 00:18:50,280 Speaker 3: recreate what. 327 00:18:50,240 --> 00:18:52,920 Speaker 2: We're talking about, like what do you need to bring 328 00:18:53,040 --> 00:18:59,199 Speaker 2: projects to a certain level of bankability, and who's going 329 00:18:59,280 --> 00:19:02,000 Speaker 2: to who's going to fill that gap now to sure 330 00:19:02,920 --> 00:19:04,560 Speaker 2: keep a new energy supply coming. 331 00:19:05,840 --> 00:19:07,679 Speaker 8: I mean, I think the people that are best suited 332 00:19:07,680 --> 00:19:11,040 Speaker 8: to do that are the ones that have a robust 333 00:19:11,080 --> 00:19:15,520 Speaker 8: pipeline because you're often having to make down payments on 334 00:19:15,560 --> 00:19:19,320 Speaker 8: equipment much sooner than you would otherwise like on projects, 335 00:19:20,000 --> 00:19:23,560 Speaker 8: and so having multiple avenues to deploy that equipment if 336 00:19:23,600 --> 00:19:27,080 Speaker 8: you have a project that is delayed or doesn't get 337 00:19:27,080 --> 00:19:30,720 Speaker 8: a permit, being able to redeploy it elsewhere is a 338 00:19:30,840 --> 00:19:35,440 Speaker 8: huge risk mitigation strategy that is really necessary when you're 339 00:19:35,600 --> 00:19:39,000 Speaker 8: you're ordering that type of equipment, not just transformers, but 340 00:19:39,280 --> 00:19:43,640 Speaker 8: solar panels, what other equipment you're ordering kind of well 341 00:19:43,680 --> 00:19:46,600 Speaker 8: in advance of when you would otherwise prefer for projects. 342 00:19:47,000 --> 00:19:49,160 Speaker 8: So that's one aspect, and I think the other piece 343 00:19:49,160 --> 00:19:52,280 Speaker 8: in order to make those kinds of long term procurement, 344 00:19:52,560 --> 00:19:54,359 Speaker 8: you actually have to have the capital to do that. 345 00:19:54,520 --> 00:19:58,000 Speaker 8: So kind of the well capitalized developers that you have 346 00:19:58,520 --> 00:20:02,119 Speaker 8: access to development capital, have the balance sheet to be 347 00:20:02,119 --> 00:20:04,480 Speaker 8: able to do that, I think are going to be 348 00:20:04,560 --> 00:20:06,960 Speaker 8: much better suited to take on those types of risks 349 00:20:07,000 --> 00:20:09,639 Speaker 8: than you know, a smaller developer that might only have 350 00:20:09,680 --> 00:20:12,040 Speaker 8: a couple of projects and not much of a balance sheet. 351 00:20:12,160 --> 00:20:14,280 Speaker 3: Yeah, yeah, Green, I'd love your take. 352 00:20:14,320 --> 00:20:16,000 Speaker 2: And if you sit on the board of a couple 353 00:20:16,280 --> 00:20:21,720 Speaker 2: renewable energy developers pretty diversified across the country, what are 354 00:20:21,720 --> 00:20:24,960 Speaker 2: the conversations with them, like, what are they talking about? 355 00:20:25,000 --> 00:20:26,600 Speaker 3: What are you telling them asking them? 356 00:20:27,200 --> 00:20:31,080 Speaker 6: Yeah, it's a great question. Look, I agree. I think 357 00:20:31,200 --> 00:20:38,440 Speaker 6: capitalization for DEVX and pre MCV spend fundamental today. Fundamentally, 358 00:20:38,440 --> 00:20:43,000 Speaker 6: it's really really tough with an absolute zero balance sheet. 359 00:20:43,880 --> 00:20:45,840 Speaker 5: All that being said, I mean, we're. 360 00:20:45,840 --> 00:20:49,840 Speaker 6: A highly active investor in the middle market for infrastructure 361 00:20:49,840 --> 00:20:53,639 Speaker 6: and for renewables, and we have found in some of 362 00:20:53,640 --> 00:20:57,200 Speaker 6: the conversations that we have with our businesses that are 363 00:20:57,600 --> 00:21:03,480 Speaker 6: active utility scale developers like Direct Renewables, is that they 364 00:21:03,480 --> 00:21:08,720 Speaker 6: have really strong knowledge in one market. They're really really 365 00:21:08,760 --> 00:21:13,359 Speaker 6: good in, for example, PGM, and they just have extraordinary 366 00:21:13,440 --> 00:21:18,840 Speaker 6: landowner relationships, and those landowner relationships catalyze other landowner relationships 367 00:21:18,880 --> 00:21:22,879 Speaker 6: and they lean into aggraboltaics and they lean into these 368 00:21:22,960 --> 00:21:26,320 Speaker 6: competitive advantages. They're not the size of Inventergy, and they're 369 00:21:26,359 --> 00:21:29,360 Speaker 6: not the size of next Era, right, but they're incredibly 370 00:21:29,440 --> 00:21:33,840 Speaker 6: highly successful in their own market right, and so whether 371 00:21:33,880 --> 00:21:36,760 Speaker 6: it be community solar, whether it be utility scale solar. 372 00:21:37,200 --> 00:21:43,480 Speaker 6: You know, having that local market knowledge, intel and superior 373 00:21:43,600 --> 00:21:50,400 Speaker 6: execution I think really can drive powerful outcomes for renewable 374 00:21:50,480 --> 00:21:53,200 Speaker 6: energy development businesses, even if you're not quite at the 375 00:21:53,280 --> 00:21:54,520 Speaker 6: same size and scale. 376 00:21:54,760 --> 00:21:58,720 Speaker 2: Yeah, and again what's an andrew Then same question, what 377 00:21:58,840 --> 00:22:00,680 Speaker 2: is the opportunity for outsiders? 378 00:22:00,840 --> 00:22:03,800 Speaker 3: What is the opport if that localized knowledge is so essential. 379 00:22:05,240 --> 00:22:07,840 Speaker 7: Well, it's essentially you need to play to your restrengt. 380 00:22:07,920 --> 00:22:09,399 Speaker 7: I mean, it's not a matter of size, it's a 381 00:22:09,400 --> 00:22:12,960 Speaker 7: matter of your expertise ability to take it forward to 382 00:22:13,080 --> 00:22:16,679 Speaker 7: sort out all the difficulties which exists always under any cycle. 383 00:22:16,840 --> 00:22:20,960 Speaker 7: They only change in size and scope. There are always difficulties. 384 00:22:21,480 --> 00:22:25,120 Speaker 7: Taking our pride finance to completion is never easy. So 385 00:22:25,359 --> 00:22:27,240 Speaker 7: you need to be working with people who know what 386 00:22:27,240 --> 00:22:29,959 Speaker 7: they're doing and have the real expertise and do it 387 00:22:29,960 --> 00:22:35,360 Speaker 7: efficiently and being sufficiently adapt at changing the strategy according 388 00:22:35,359 --> 00:22:38,439 Speaker 7: to whatever is happening in the market, whatever that is. 389 00:22:38,920 --> 00:22:41,680 Speaker 7: And that is the way we look at it from 390 00:22:41,880 --> 00:22:45,760 Speaker 7: us when we think of the great developers, we are 391 00:22:45,800 --> 00:22:48,320 Speaker 7: not thinking so much Astore right on the balance sheet. 392 00:22:48,560 --> 00:22:51,199 Speaker 7: We're not thinking because it's pride finance in general. So 393 00:22:51,280 --> 00:22:53,600 Speaker 7: I'm not thinking so much Astre who has the big 394 00:22:53,680 --> 00:22:55,800 Speaker 7: pocket so that they can give me a double a 395 00:22:55,920 --> 00:22:59,000 Speaker 7: guarantee or whatever. I'm thinking of Toll, Who's going to 396 00:22:59,040 --> 00:23:01,720 Speaker 7: give me the guarantee that whatever plan I'm present into 397 00:23:01,800 --> 00:23:04,760 Speaker 7: committee that is deliverable because they know how to do it. 398 00:23:04,800 --> 00:23:08,840 Speaker 7: They have studied properly. The contingencies are sufficient and everything 399 00:23:08,920 --> 00:23:11,840 Speaker 7: is going to be probably not according to plan that 400 00:23:11,920 --> 00:23:16,000 Speaker 7: never happens, but surely sufficiently close to the plan so 401 00:23:16,040 --> 00:23:18,200 Speaker 7: that we are going to get to the completion without 402 00:23:18,200 --> 00:23:21,040 Speaker 7: any drama and the prayer will start producing energy as 403 00:23:21,040 --> 00:23:24,439 Speaker 7: suspected and as promised. That is the way we normally 404 00:23:24,480 --> 00:23:26,919 Speaker 7: do it. So for us, the sponsor is key. But 405 00:23:27,119 --> 00:23:30,520 Speaker 7: is the expertise, the name and the ability of the 406 00:23:31,040 --> 00:23:33,919 Speaker 7: e sponsor to deliver the completion of the project and 407 00:23:33,960 --> 00:23:37,440 Speaker 7: a successful operation. That is the real key aspect that 408 00:23:37,480 --> 00:23:38,320 Speaker 7: we are looking. 409 00:23:38,040 --> 00:23:41,360 Speaker 3: On, right, Yeah, Andrew, same question. Yeah. 410 00:23:41,400 --> 00:23:41,920 Speaker 5: I think. 411 00:23:43,600 --> 00:23:48,399 Speaker 4: The opportunity for outsiders is vast and it's differentiated. These 412 00:23:48,440 --> 00:23:53,960 Speaker 4: developers in energy Durrell salit Ridge. They need to recycle 413 00:23:54,040 --> 00:23:59,040 Speaker 4: capital from d risk assets into growth and new development assets. 414 00:23:59,440 --> 00:24:03,160 Speaker 4: So there's a big opportunity to invest in de risked 415 00:24:03,560 --> 00:24:09,240 Speaker 4: operating renewable assets forty nine percent stakes, you know, eighty percent. 416 00:24:09,119 --> 00:24:10,800 Speaker 3: Stake, you know, what have you. 417 00:24:10,880 --> 00:24:13,399 Speaker 4: There's a lot of that product in the market for investors. 418 00:24:13,960 --> 00:24:14,440 Speaker 3: Number one. 419 00:24:14,520 --> 00:24:18,520 Speaker 4: Number two, I think, as Karin said, you know, it's 420 00:24:18,520 --> 00:24:20,639 Speaker 4: great to be in energy and to have you know, 421 00:24:21,280 --> 00:24:25,800 Speaker 4: open ended capital like Blackstone and CITYPQ behind you. But 422 00:24:25,880 --> 00:24:29,240 Speaker 4: I think the Karin's absolutely right. There's lots of regional 423 00:24:29,280 --> 00:24:34,000 Speaker 4: expertise and there's there's lots of competitive advantages beyond capital 424 00:24:34,040 --> 00:24:37,920 Speaker 4: that people can establish and exploit. I think where management 425 00:24:37,920 --> 00:24:39,960 Speaker 4: teams gets in trouble is when they start to move 426 00:24:40,000 --> 00:24:43,240 Speaker 4: away from their competitive advantage. And so as you think 427 00:24:43,280 --> 00:24:45,960 Speaker 4: about you know, as as we give advice to people 428 00:24:46,000 --> 00:24:48,040 Speaker 4: and thinking about where to put your money, it's it's 429 00:24:48,600 --> 00:24:50,399 Speaker 4: in those management teams that know what they're good at, 430 00:24:50,520 --> 00:24:52,199 Speaker 4: know what they're not good at, and they're focusing the 431 00:24:52,200 --> 00:24:55,439 Speaker 4: capital in the right places. I think more often than not, 432 00:24:55,560 --> 00:24:59,840 Speaker 4: where we've seen folks get into trouble is where they 433 00:24:59,880 --> 00:25:04,480 Speaker 4: go greatly expand teams and SGNA burn and in the 434 00:25:04,560 --> 00:25:07,320 Speaker 4: hopes that all of this development is going to come 435 00:25:07,359 --> 00:25:11,280 Speaker 4: to fruition or start to place too many bets on 436 00:25:11,320 --> 00:25:14,120 Speaker 4: the development side without bringing home the. 437 00:25:14,119 --> 00:25:15,600 Speaker 3: De risk assets first. 438 00:25:16,960 --> 00:25:20,080 Speaker 4: So I think having the discipline to really work through 439 00:25:20,720 --> 00:25:27,439 Speaker 4: management team diligence and execution diligence is the key to 440 00:25:27,480 --> 00:25:29,480 Speaker 4: taking advantages of those opportunities. 441 00:25:29,520 --> 00:25:34,960 Speaker 2: Yeah, so Korean, where's the next Inventergy going to come from? 442 00:25:35,080 --> 00:25:37,280 Speaker 3: What's Is it going to be a. 443 00:25:37,240 --> 00:25:40,399 Speaker 2: Merger of a bunch of smaller developers with very well 444 00:25:40,880 --> 00:25:46,359 Speaker 2: recognized presence in different markets, or is someone organically going 445 00:25:46,440 --> 00:25:50,200 Speaker 2: to grow with a deep balance sheet, deep backers and 446 00:25:50,359 --> 00:25:54,240 Speaker 2: going to slowly but steady keep growing across the entire country. 447 00:25:54,440 --> 00:25:56,680 Speaker 5: Do you have a crystal ball to tell me? Because 448 00:25:56,720 --> 00:25:57,840 Speaker 5: then we can just invest rate. 449 00:25:58,240 --> 00:25:59,880 Speaker 3: I just left it. I just left it in the back. 450 00:26:00,920 --> 00:26:02,840 Speaker 5: Uh, look at it. 451 00:26:03,600 --> 00:26:07,879 Speaker 6: It's kind of unwritten and hard hard to know. 452 00:26:08,080 --> 00:26:08,280 Speaker 5: Right. 453 00:26:08,400 --> 00:26:11,960 Speaker 6: Had we rewound the clock ten years, would we have 454 00:26:12,040 --> 00:26:13,680 Speaker 6: known that Inventergy was. 455 00:26:13,600 --> 00:26:15,720 Speaker 5: Gonna What did you say you owed thirty gigs? I 456 00:26:15,760 --> 00:26:17,960 Speaker 5: think we've commercialized over thirty three commercialized. 457 00:26:18,200 --> 00:26:23,520 Speaker 6: Congratulations, amazing, Like we were. You know, Andrew and I 458 00:26:23,600 --> 00:26:26,480 Speaker 6: used work work a g together, you know, over a 459 00:26:26,480 --> 00:26:30,399 Speaker 6: decade ago and we we financed in entergyes, you know, 460 00:26:30,480 --> 00:26:34,000 Speaker 6: transactions then and I would have never have guessed that. 461 00:26:33,960 --> 00:26:36,920 Speaker 5: You guys would have emerged into this powerhouse, right. 462 00:26:37,480 --> 00:26:40,200 Speaker 6: And it's a function of you know what Andrew said, 463 00:26:40,320 --> 00:26:43,560 Speaker 6: like discipline and management team and leaning into your strengths. 464 00:26:43,760 --> 00:26:49,280 Speaker 6: It's also a function of capitalization. I to be honest, 465 00:26:49,320 --> 00:26:51,160 Speaker 6: I don't I don't know. 466 00:26:51,359 --> 00:26:53,040 Speaker 5: It could be mergers. 467 00:26:53,480 --> 00:26:56,600 Speaker 6: There's a lot of companies in the United States doing this. 468 00:26:56,680 --> 00:26:58,280 Speaker 5: Could could some of them come together? 469 00:26:58,920 --> 00:26:59,200 Speaker 3: Sure? 470 00:26:59,320 --> 00:27:04,280 Speaker 6: It could be or growth, Yeah, I mean, I think 471 00:27:04,320 --> 00:27:07,640 Speaker 6: it can go a multitude of ways. It's just it's 472 00:27:07,720 --> 00:27:13,080 Speaker 6: just about it's about execution through these uncertain times and 473 00:27:13,080 --> 00:27:15,320 Speaker 6: and kind of keeping the vision and the capitalization in the. 474 00:27:15,320 --> 00:27:16,840 Speaker 5: Right place right. 475 00:27:18,280 --> 00:27:23,600 Speaker 2: And that's I like that to maybe pivot into some 476 00:27:23,760 --> 00:27:28,400 Speaker 2: of the structural market obstacles, setting aside you know, craziness 477 00:27:28,440 --> 00:27:31,760 Speaker 2: in DC tariffs, yes, tariffs no, I ra yes, Ira No. 478 00:27:32,840 --> 00:27:35,960 Speaker 2: Over the past couple of years, permitting transmission has become 479 00:27:36,359 --> 00:27:40,040 Speaker 2: central part of the conversation. And you we were not 480 00:27:40,119 --> 00:27:43,159 Speaker 2: hearing about transmission as much as we do today a 481 00:27:43,200 --> 00:27:47,080 Speaker 2: few years ago with the reforms that without having to 482 00:27:47,080 --> 00:27:49,720 Speaker 2: look at whether the reforms will work out whether there's 483 00:27:49,760 --> 00:27:53,800 Speaker 2: going to be permitting reform. What what have you seen 484 00:27:53,840 --> 00:27:56,760 Speaker 2: i'l star with Matt. What have you seen an interconnection 485 00:27:56,920 --> 00:28:00,399 Speaker 2: cues that has anything changed at all since it different 486 00:28:00,800 --> 00:28:05,560 Speaker 2: regional grid operators started introducing que reforms. Has there been 487 00:28:05,560 --> 00:28:07,760 Speaker 2: a notable improvement or are we still in a wait 488 00:28:07,840 --> 00:28:09,160 Speaker 2: and see approach. 489 00:28:10,480 --> 00:28:12,920 Speaker 3: Where we just still don't. 490 00:28:12,680 --> 00:28:15,840 Speaker 2: Know whether there's going to be any any improvement anytime soon. 491 00:28:16,240 --> 00:28:18,600 Speaker 8: Yeah, I mean, I think just from like an interconnection 492 00:28:18,720 --> 00:28:22,320 Speaker 8: queue perspective, it still seems like it's really kind of 493 00:28:22,359 --> 00:28:26,000 Speaker 8: the main bottleneck in these projects in terms of you know, 494 00:28:26,200 --> 00:28:29,760 Speaker 8: data submission to having an actual interconnection agreement in hand. 495 00:28:30,400 --> 00:28:33,160 Speaker 8: It can be you know, a number of years before 496 00:28:33,200 --> 00:28:38,360 Speaker 8: you have that, and I don't see that changing anytime soon, 497 00:28:38,520 --> 00:28:43,400 Speaker 8: frankly for onshore generation. But it's one of the reasons 498 00:28:43,400 --> 00:28:47,440 Speaker 8: why we think that development of you know, long distance 499 00:28:47,560 --> 00:28:53,440 Speaker 8: HVDC transmission is really important to enable continued load growth 500 00:28:53,720 --> 00:28:56,560 Speaker 8: and being able to serve that load with additional not 501 00:28:56,600 --> 00:28:59,800 Speaker 8: just renewable supply, but but you know, all forms of supply. 502 00:29:01,200 --> 00:29:04,840 Speaker 8: And so we have a number of large HBC transmission 503 00:29:04,880 --> 00:29:08,200 Speaker 8: projects that we're in the process of developing that you know, 504 00:29:08,240 --> 00:29:12,160 Speaker 8: we think, will you know, be really impactful being for 505 00:29:12,200 --> 00:29:16,000 Speaker 8: being able to unlock that you know, that load potential, 506 00:29:16,080 --> 00:29:18,800 Speaker 8: that load growth that's happening, and being able to supply 507 00:29:19,080 --> 00:29:23,600 Speaker 8: additional uh, you know, reliable, low cost power to those users. 508 00:29:23,760 --> 00:29:27,040 Speaker 3: Yeah, and let's stay with you for a second. 509 00:29:27,400 --> 00:29:30,720 Speaker 2: Why we all know it doesn't matter how deep you 510 00:29:30,760 --> 00:29:34,240 Speaker 2: are in the industry, building transmission is extremely challenging and 511 00:29:34,280 --> 00:29:37,160 Speaker 2: you're going to be waiting decades, even like at least 512 00:29:37,200 --> 00:29:39,720 Speaker 2: more than ten years. What was a rationale behind In 513 00:29:39,840 --> 00:29:43,800 Speaker 2: Energy's bed on building transmission. Was it as a as 514 00:29:43,840 --> 00:29:46,640 Speaker 2: a compliment to you know, all of the onshore wind 515 00:29:46,640 --> 00:29:47,800 Speaker 2: that you brought to operation. 516 00:29:48,080 --> 00:29:51,080 Speaker 3: Was it for new development? What was it logic? There? 517 00:29:51,120 --> 00:29:53,240 Speaker 3: Can you walk us through a little bit of you know, 518 00:29:53,280 --> 00:29:56,720 Speaker 3: what the broader vision is for transmission in the company? 519 00:29:57,640 --> 00:30:00,200 Speaker 8: I mean, I think it's really just responding to a 520 00:30:00,240 --> 00:30:03,280 Speaker 8: problem that we identified that needs to be solved and 521 00:30:03,360 --> 00:30:06,680 Speaker 8: wanting to to have a say in controlling the way 522 00:30:06,720 --> 00:30:10,800 Speaker 8: that it solved. We see a lot of opportunity to 523 00:30:10,880 --> 00:30:16,000 Speaker 8: create new generation opportunities through additional transmission, and at the 524 00:30:16,080 --> 00:30:17,440 Speaker 8: end of the day, that's what we're looking to do 525 00:30:17,520 --> 00:30:22,360 Speaker 8: is develop more more generation, and so you really create 526 00:30:23,720 --> 00:30:28,280 Speaker 8: additional load opportunities for yourselves by creating being able to 527 00:30:28,320 --> 00:30:33,400 Speaker 8: deliver into markets and and access really customers that need 528 00:30:33,400 --> 00:30:37,080 Speaker 8: the load or that need the supply, you know. And 529 00:30:37,120 --> 00:30:41,200 Speaker 8: obviously the demand growth has really kind of helped accelerate 530 00:30:41,480 --> 00:30:44,800 Speaker 8: that need. And you know, we're seeing a lot of 531 00:30:44,840 --> 00:30:50,680 Speaker 8: opportunities to to you know, supply different large, large load users. 532 00:30:51,320 --> 00:30:56,120 Speaker 2: Yeah, and there's often the talk about, on the one hand, 533 00:30:56,120 --> 00:30:58,760 Speaker 2: we should build more transmission, on the other hand, we 534 00:30:58,800 --> 00:31:01,400 Speaker 2: have no other option, but more battery storage come to 535 00:31:01,440 --> 00:31:01,800 Speaker 2: the grid. 536 00:31:02,760 --> 00:31:04,080 Speaker 3: What how does screen? 537 00:31:04,120 --> 00:31:09,680 Speaker 2: How does battery storage complement the broader strategy that you're 538 00:31:09,760 --> 00:31:13,240 Speaker 2: the companies you're involved in, How does that complement that? 539 00:31:13,480 --> 00:31:16,880 Speaker 6: Yeah, Look, battery storage has been a place we've been 540 00:31:16,920 --> 00:31:20,000 Speaker 6: active for a long time, through our involvement with Broader Reach. 541 00:31:19,880 --> 00:31:24,600 Speaker 5: Power a few years ago, which was. 542 00:31:24,600 --> 00:31:27,360 Speaker 6: A standalone front of the meter battery storage company with 543 00:31:27,400 --> 00:31:32,120 Speaker 6: assets in California and Texas UH and then in conjunction 544 00:31:32,200 --> 00:31:35,160 Speaker 6: with many of our renewables investments today either hybridized assets 545 00:31:35,240 --> 00:31:39,840 Speaker 6: or stand alone battery storage is incredible and honestly, what 546 00:31:39,880 --> 00:31:44,080 Speaker 6: it's done for the URCOT grid has been incredible helping 547 00:31:44,840 --> 00:31:50,000 Speaker 6: manage you know, both ancillary services and periods of you know, 548 00:31:50,160 --> 00:31:55,440 Speaker 6: rapid power increases in power demand. I think in any 549 00:31:55,560 --> 00:32:00,880 Speaker 6: market where we're seeing traumatic renewable penetration, the addition of 550 00:32:00,920 --> 00:32:06,560 Speaker 6: storage has proven to quell volatility and provide ancillary services 551 00:32:06,600 --> 00:32:10,840 Speaker 6: that are helpful forward stability, and so, you know, I 552 00:32:11,480 --> 00:32:12,600 Speaker 6: think we'll continue to see. 553 00:32:12,440 --> 00:32:13,360 Speaker 5: Battery storage deployment. 554 00:32:13,400 --> 00:32:15,640 Speaker 6: I think it's it's been really interesting. I sat through 555 00:32:15,640 --> 00:32:18,680 Speaker 6: a panel here on tariffs and seeing, you know, what 556 00:32:18,720 --> 00:32:21,040 Speaker 6: the range of outcomes are on change of cost of 557 00:32:21,120 --> 00:32:24,320 Speaker 6: batteries may impact batteries storage. 558 00:32:23,960 --> 00:32:25,760 Speaker 5: Deployment on a go forward basis. 559 00:32:25,840 --> 00:32:29,800 Speaker 6: But I think it's it's always been kind of hypothetically 560 00:32:29,920 --> 00:32:33,360 Speaker 6: very complimentary to battery to renewables, and then as the 561 00:32:33,400 --> 00:32:36,720 Speaker 6: cost has come down and the technology has improved and 562 00:32:36,760 --> 00:32:41,800 Speaker 6: the software has improved, now it's it's definitively complimentary. 563 00:32:42,280 --> 00:32:48,840 Speaker 2: Yeah, And how does that the despite the clearly the 564 00:32:48,880 --> 00:32:52,920 Speaker 2: obvious benefits of batteries. And there's been pretty good years 565 00:32:52,920 --> 00:32:56,080 Speaker 2: for battery operators in Texas where they've been able to 566 00:32:56,120 --> 00:33:00,680 Speaker 2: capitalize in a lot of volatility, but the revenue start 567 00:33:00,120 --> 00:33:05,680 Speaker 2: and especially a long term beyond five years, it's extremely unpredictable, 568 00:33:05,720 --> 00:33:09,960 Speaker 2: and a lot of financing assumes like five year payback periods, 569 00:33:10,000 --> 00:33:13,120 Speaker 2: which in the world of long term clean energy soid 570 00:33:13,240 --> 00:33:14,880 Speaker 2: WENT projects, is very very short. 571 00:33:15,200 --> 00:33:17,760 Speaker 3: How do you, especially in the current situation. 572 00:33:17,440 --> 00:33:20,320 Speaker 2: That we're at now, how are you looking at batteries it? 573 00:33:20,560 --> 00:33:22,400 Speaker 7: Yeah, well, I think there's a lot of interests. We're 574 00:33:22,440 --> 00:33:25,800 Speaker 7: very comfortable, we are very active. So is the banking world. 575 00:33:25,840 --> 00:33:31,000 Speaker 7: I mean, there's nothing especial off BVVA presently, as Kareem 576 00:33:31,120 --> 00:33:33,800 Speaker 7: was mentioning, because there is so much into is so 577 00:33:33,920 --> 00:33:37,240 Speaker 7: much value in when you add a lot of renewables 578 00:33:37,240 --> 00:33:40,320 Speaker 7: in all the balancing act and all the ancillary service 579 00:33:40,400 --> 00:33:42,440 Speaker 7: that the battery we can provide. But at the same time, 580 00:33:42,480 --> 00:33:46,560 Speaker 7: it is true trading revedeos it's difficult to take. I 581 00:33:46,600 --> 00:33:50,400 Speaker 7: think we banks have got more comfortable with merchant risk 582 00:33:50,880 --> 00:33:52,720 Speaker 7: over the years. It was not an easy one, but 583 00:33:52,800 --> 00:33:55,360 Speaker 7: we got there, and I think surely we can take 584 00:33:55,440 --> 00:33:59,520 Speaker 7: an amount of trading merchant risk, which is not what 585 00:33:59,640 --> 00:34:02,520 Speaker 7: we use two ten years ago. With the batteries. We're 586 00:34:02,560 --> 00:34:05,160 Speaker 7: still struggling with it, and I think it's the banking 587 00:34:05,240 --> 00:34:08,759 Speaker 7: industry in general, some more than others, but overall, you 588 00:34:08,800 --> 00:34:13,120 Speaker 7: can say that the industry is not completely comfortable because 589 00:34:13,160 --> 00:34:17,279 Speaker 7: it's very difficult to predict and you don't want to 590 00:34:17,480 --> 00:34:20,360 Speaker 7: just to rely on an independent study which you cannot 591 00:34:20,400 --> 00:34:23,120 Speaker 7: follow and which is a kind of black box. Still 592 00:34:23,160 --> 00:34:25,200 Speaker 7: have what's going to be the price of the energy 593 00:34:25,239 --> 00:34:28,640 Speaker 7: at eight in the morning or versus three pm in 594 00:34:28,680 --> 00:34:32,600 Speaker 7: the afternoon on the fifth of July of twenty thirty three, 595 00:34:33,200 --> 00:34:37,120 Speaker 7: which is like maybe not, but I'm not capable of 596 00:34:37,160 --> 00:34:39,360 Speaker 7: going to committee and try to explain what's the logic 597 00:34:39,480 --> 00:34:42,480 Speaker 7: is to make sense or not. So we are struggling 598 00:34:42,520 --> 00:34:44,239 Speaker 7: one way of doing it, and that's what we have 599 00:34:44,440 --> 00:34:48,640 Speaker 7: started working. Is all right, the closer you are to 600 00:34:48,760 --> 00:34:51,799 Speaker 7: the current date, the easier is to have a good 601 00:34:51,880 --> 00:34:54,759 Speaker 7: visibility as to how it's going to work, because I mean, 602 00:34:55,120 --> 00:34:58,480 Speaker 7: all those things take time to change. The whole energy 603 00:34:58,520 --> 00:35:01,359 Speaker 7: metrics doesn't change over line, and therefore we have been 604 00:35:01,400 --> 00:35:04,759 Speaker 7: taking some merchant risk, trade and risk in the short term, 605 00:35:04,840 --> 00:35:07,720 Speaker 7: let's say five years. But then you need to switch 606 00:35:08,520 --> 00:35:11,320 Speaker 7: sooner rather than later to something of a tolling agreement 607 00:35:11,400 --> 00:35:15,000 Speaker 7: so that you can get your investment repaid even if 608 00:35:15,040 --> 00:35:18,960 Speaker 7: for whatever reason the overall picture changes and those revenues 609 00:35:19,000 --> 00:35:19,640 Speaker 7: and those. 610 00:35:21,120 --> 00:35:22,280 Speaker 3: Duck curve is. 611 00:35:22,160 --> 00:35:26,080 Speaker 7: Not as as high as you would expect, So we're 612 00:35:26,080 --> 00:35:28,279 Speaker 7: playing with that well, we get more comfortable with the 613 00:35:28,320 --> 00:35:32,000 Speaker 7: way the model works. What are the assumption and leaving 614 00:35:32,000 --> 00:35:35,480 Speaker 7: aside all this discussion about headwinds stir winds. I think 615 00:35:35,480 --> 00:35:37,280 Speaker 7: it's going to take time. We're going to get there, 616 00:35:37,719 --> 00:35:40,440 Speaker 7: but we banks. I think we need to still to 617 00:35:40,520 --> 00:35:43,120 Speaker 7: learn more what is the in and out of those 618 00:35:43,160 --> 00:35:46,040 Speaker 7: models to make sure that we can do a good, 619 00:35:46,920 --> 00:35:50,479 Speaker 7: thorough responsible decisions to what kind of risk we are taken. 620 00:35:50,600 --> 00:35:51,080 Speaker 3: Interesting. 621 00:35:52,480 --> 00:35:55,799 Speaker 2: Please join me in thanking all of our speakers here 622 00:35:55,800 --> 00:35:56,320 Speaker 2: and thank. 623 00:35:56,160 --> 00:35:57,120 Speaker 4: You for listening. 624 00:36:07,000 --> 00:36:10,120 Speaker 6: Today's episode of Switched On was produced by Cam Gray 625 00:36:10,320 --> 00:36:12,720 Speaker 6: with production assistance from Kamala Shelling. 626 00:36:12,840 --> 00:36:16,000 Speaker 7: Bloomberg NIF is a service provided by Bloomberg Finance LP 627 00:36:16,160 --> 00:36:19,200 Speaker 7: and its affiliates. 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