WEBVTT - Green Energy Boom Driven by Trade War Supply Shift 0:00:00.120 --> 0:00:04.080 Artificial intelligence and cloud computing is sparking a rush to 0:00:04.080 --> 0:00:06.800 build data centers around the world, and some of the 0:00:06.800 --> 0:00:11.680 biggest areas of growth are in Asia. Earlier this year, 0:00:11.760 --> 0:00:15.440 Ali Baba announced it will spend over fifty billion dollars 0:00:15.440 --> 0:00:18.599 on data centers and other AI infrastructure. That's over the 0:00:18.680 --> 0:00:23.120 next three years. It's creating an insiciable demand for electricity. 0:00:23.079 --> 0:00:26.920 And here in Asia, countries from Japan to Vietnam are 0:00:26.920 --> 0:00:32.320 increasingly deregulating those energy markets, creating opportunities for renewable energy 0:00:32.560 --> 0:00:37.680 like solar and wind. You're listening to Asia Centric from 0:00:37.680 --> 0:00:39.800 Bloomberg Intelligence. I'm John Lee in. 0:00:39.840 --> 0:00:42.960 Hong Kong, and I'm Kadidmitrieva, also in Hong Kong. 0:00:43.479 --> 0:00:46.519 Here to discuss the renewable energy scene in Asia is 0:00:46.600 --> 0:00:50.440 Gavin Adda. He's the CEO of Peak Energy. It's a 0:00:50.479 --> 0:00:54.400 portfolio company under Stone, Peak the infrastructure giant with over 0:00:54.480 --> 0:00:58.400 seventy billion dollars in assets under management. Gavin, Welcome to 0:00:58.440 --> 0:00:58.840 the show. 0:00:59.200 --> 0:01:01.400 Thank you to be here now. 0:01:01.520 --> 0:01:05.280 Gavin, you're joining us from Singapore. One question I had, 0:01:05.319 --> 0:01:07.080 and this is for the lay listener who might not 0:01:07.280 --> 0:01:09.479 know a lot about this industry, but could you tell 0:01:09.560 --> 0:01:10.840 us you know what do you do? 0:01:11.760 --> 0:01:16.240 Yeah, okay, So I develop solar, wind and battery projects 0:01:16.280 --> 0:01:18.600 and sell renewable energy. 0:01:18.280 --> 0:01:19.880 To corporates across Asia. 0:01:20.600 --> 0:01:23.479 So that could either be building a system on top 0:01:23.520 --> 0:01:26.199 of their roof, on their facility or something like that. 0:01:26.400 --> 0:01:29.800 Or I'm taking a large solar farm or wind farm, 0:01:30.240 --> 0:01:33.639 constructing it and then pushing the electricity through the grid 0:01:33.760 --> 0:01:35.000 to large corporates. 0:01:35.440 --> 0:01:38.240 And this isn't sort of your solar panels on the 0:01:38.319 --> 0:01:40.720 roof of your house. Can you tell us about the 0:01:40.760 --> 0:01:43.160 size of these projects, like how big are these projects? 0:01:43.200 --> 0:01:44.360 Who are the players involved? 0:01:45.400 --> 0:01:49.320 So maybe a good example would be someone like Nike, Right, 0:01:49.360 --> 0:01:52.920 So Nike has about two million people working for them 0:01:52.960 --> 0:01:56.480 across Asia. You know, particularly in Indonesia and Vietnam, they 0:01:56.480 --> 0:02:00.400 have these big flat roofs with thousands of people inside. 0:02:00.520 --> 0:02:03.520 And you're taking those big flat roofs and basically covering 0:02:03.520 --> 0:02:06.919 them in solar panels, for example, and pushing that power 0:02:07.000 --> 0:02:10.200 directly into the building. That building is then using that 0:02:10.320 --> 0:02:13.960 electricity for their machines, for their air conditioning, for whatever 0:02:14.000 --> 0:02:17.480 they're using, and then any excess power ideal is being 0:02:17.520 --> 0:02:20.280 sent to a grid and being used by residential customers 0:02:20.360 --> 0:02:22.800 or whatever. But that's kind of the model for on 0:02:22.919 --> 0:02:24.880 site solar projects. 0:02:24.600 --> 0:02:28.000 And govin just how big is this industry? Just give 0:02:28.040 --> 0:02:30.519 us some numbers and tell us how fast it's growing. 0:02:31.080 --> 0:02:33.720 Yes, So if I just deal with the on site side, 0:02:34.400 --> 0:02:37.160 if you look at a mature market, somewhere like the 0:02:37.280 --> 0:02:40.400 US is doing about ten billion dollars a year of 0:02:40.520 --> 0:02:43.960 on site solar projects, and we're starting to see that 0:02:44.080 --> 0:02:48.120 business building up now in Asia. So somewhere like Singapore, 0:02:48.240 --> 0:02:52.399 which is quite frankly, very small land mass, not much rooftop, 0:02:52.760 --> 0:02:55.080 they have a target to do about two billion dollars 0:02:55.160 --> 0:02:58.200 of solar rooftop. And then if you think about somewhere 0:02:58.240 --> 0:03:01.320 like Indonesia or Philippines, they could do many multiples of that, 0:03:01.560 --> 0:03:03.120 but todate have done very little. 0:03:03.360 --> 0:03:05.679 So it's a very new market that's just taking off. 0:03:06.000 --> 0:03:08.160 And I'm assuming that here in Asia it's growing much 0:03:08.200 --> 0:03:09.440 faster than the rest of the world. 0:03:10.000 --> 0:03:11.160 Yeah, I think that's true. 0:03:11.160 --> 0:03:14.040 I mean I think if you look at the forecasts 0:03:14.040 --> 0:03:17.880 for an analysts, they'd say that power demand in Asia 0:03:18.160 --> 0:03:20.800 expected to triple over the next five years, which is 0:03:20.840 --> 0:03:25.880 really an extraordinary growth rate, and at least fifty to 0:03:25.919 --> 0:03:28.160 sixty percent of that to come from renewables, and that 0:03:28.240 --> 0:03:30.880 kind of mirrors what we're seeing all across the world. 0:03:31.760 --> 0:03:35.600 So why renewables in Asia? Like, what is happening here 0:03:36.160 --> 0:03:39.280 that's really driving that demand? We talked about about data 0:03:39.280 --> 0:03:42.000 centers AI is it that? Is it something more? 0:03:42.720 --> 0:03:45.600 Yeah, there's a lot to unpack in there. So the 0:03:45.640 --> 0:03:49.520 situation is you've got massive increases in the demand side, 0:03:49.560 --> 0:03:52.560 and then you've got certain constraints on the supply side 0:03:52.800 --> 0:03:55.640 that have pushed us towards renewables. So if I start 0:03:55.640 --> 0:03:58.360 on the demand side, you've got your base growth, You've 0:03:58.360 --> 0:04:01.840 got you know, populations become wealthier and moving into cities 0:04:01.960 --> 0:04:03.360 using air conditioning TVs. 0:04:03.600 --> 0:04:04.800 The normal expectation. 0:04:05.240 --> 0:04:08.480 I think the second big driver is the move of 0:04:08.520 --> 0:04:12.760 the world's supply chains from China to Southeast Asia. So 0:04:13.080 --> 0:04:15.440 China is no longer as competitive as it was, and 0:04:15.480 --> 0:04:19.080 so you're seeing people moving into Vietnam and Indonesia and Philippines, 0:04:19.320 --> 0:04:22.160 And that's the second driver. Nike used to be in 0:04:22.240 --> 0:04:26.880 China now in Southeast Asia, and many of these global 0:04:26.920 --> 0:04:29.240 brands as they move out of China are looking for 0:04:29.279 --> 0:04:32.279 inneable energy. They've made commitments to anewable energine, so they're 0:04:32.279 --> 0:04:35.240 looking for which market can I go into and get 0:04:35.279 --> 0:04:38.200 that kind of supply. I think then the third driver 0:04:38.480 --> 0:04:41.840 is data centers and AI that's just starting to come 0:04:41.880 --> 0:04:44.760 online now in most markets as a broad range of 0:04:44.800 --> 0:04:48.960 different maturity. So somewhere like Singapore, seventeen percent of the 0:04:49.240 --> 0:04:52.760 entire country's power is going into data centers and so 0:04:52.920 --> 0:04:56.480 that's driven up grid prices very significantly, and it's starting 0:04:56.520 --> 0:05:00.440 to reach maximum capacity. So that's really on the outside. 0:05:00.440 --> 0:05:03.440 Then on the supply side, the base growth was already 0:05:03.480 --> 0:05:06.040 too much for the utilities. Right, most of these countries 0:05:06.080 --> 0:05:10.600 are having regular brandouse, regular blackouts. If you think about Philippines, Indonesia, 0:05:10.600 --> 0:05:14.360 et cetera, constantly having problems getting enough power in to 0:05:14.480 --> 0:05:18.480 the demand side. And the structure is monolithic, right, if 0:05:18.520 --> 0:05:22.120 you go to Indonesia, there's one company that manages transmission, 0:05:22.520 --> 0:05:26.719 the grid, the generation. They have a very significant monopoly 0:05:26.839 --> 0:05:30.120 on the supply side, and they are regulated markets, so 0:05:30.160 --> 0:05:34.359 the government basically controls the price and it's a sensitive 0:05:34.440 --> 0:05:38.120 voting topic. There are in examples of riots as grid 0:05:38.160 --> 0:05:41.680 prices get increased. So that's made it very very difficult 0:05:41.760 --> 0:05:46.280 for utilities to increase the tariffs, increase the power prices. 0:05:46.520 --> 0:05:48.560 So we're now in a situation where the cost of 0:05:48.640 --> 0:05:52.120 power is actually higher than the revenue that they're getting 0:05:52.160 --> 0:05:53.320 from selling that power. 0:05:54.080 --> 0:05:54.919 So they're loss making. 0:05:55.200 --> 0:05:57.680 So they're loss making, massively loss making, and they've got 0:05:57.760 --> 0:06:01.359 to subsidize that loss. We're taxpayers money. So if you 0:06:01.400 --> 0:06:04.000 look at somewhere again like Indonesia is a good example, 0:06:04.279 --> 0:06:06.919 about five billion dollars a year of taxpayers money is 0:06:06.960 --> 0:06:09.880 going into the utility to keep it alife. This was 0:06:09.920 --> 0:06:16.120 all then exacerbated significantly by the conflict in Ukraine by COVID. 0:06:16.600 --> 0:06:19.239 You've seen commodity prices spike, You've seen. 0:06:19.160 --> 0:06:21.560 LNGG prices go up, and that's made it even more 0:06:21.600 --> 0:06:24.800 difficult for the utilities to survive. And meanwhile, they were 0:06:24.839 --> 0:06:27.280 really not able to invest into their infrastructure, they were 0:06:27.320 --> 0:06:30.200 not able to install renewables, and so that's really been 0:06:30.360 --> 0:06:33.120 the straw that broke the camel's back. And the reaction 0:06:33.240 --> 0:06:36.600 is government's saying, okay, I have to deregulate. Prices are 0:06:36.600 --> 0:06:39.279 going up. I can see that there's a way to 0:06:39.360 --> 0:06:43.040 bring in new power from someone else, from foreign investors. 0:06:43.279 --> 0:06:46.279 So I'm going to deregulate and allow independent power producers 0:06:46.320 --> 0:06:49.000 to come on board. So that's really been the big driver. 0:06:49.120 --> 0:06:51.320 That's been the really exciting thing that we're starting to 0:06:51.320 --> 0:06:54.400 see is all these different markets opening up and allowing 0:06:54.560 --> 0:06:56.240 independent power producers to come in. 0:06:56.760 --> 0:06:57.960 How competitive is it? 0:06:58.080 --> 0:06:58.159 Like? 0:06:58.279 --> 0:07:00.800 Can you paint us an image of what that looks 0:07:00.880 --> 0:07:03.839 like when you as a company go in and you 0:07:03.920 --> 0:07:06.760 want to supply that power? Is there an RFP like 0:07:06.800 --> 0:07:10.320 a bidding process? Are you in there like taking these 0:07:10.800 --> 0:07:12.800 governments out for meetings? 0:07:12.920 --> 0:07:15.440 Maybe like a beer? What does that look like? 0:07:16.720 --> 0:07:20.120 So? What I like about this is that it's a 0:07:20.200 --> 0:07:23.080 point to point discussion. Right, So it's me talking to 0:07:23.120 --> 0:07:26.040 a company. The company is running a tender. The company 0:07:26.080 --> 0:07:28.480 is then going through a process of evaluating all the 0:07:28.480 --> 0:07:31.720 different suppliers. How much power can you provide? What's your 0:07:31.760 --> 0:07:35.600 price of power? And Asia is really a grid parity market. 0:07:35.840 --> 0:07:37.760 We're not like Europe or the US where there are 0:07:37.800 --> 0:07:40.680 large substy is helping renewables. We need to be cheaper 0:07:40.680 --> 0:07:44.440 than the grid otherwise we struggle to install large volumes. 0:07:44.960 --> 0:07:47.280 What I like as a foreign investor is I'm not 0:07:47.520 --> 0:07:50.760 having to spend as much time with utilities and finding 0:07:50.840 --> 0:07:51.400 ways to. 0:07:51.440 --> 0:07:52.720 Build relationships there. 0:07:53.000 --> 0:07:57.440 It's a pure performance kind of conversation price and volumes. 0:07:57.600 --> 0:08:00.600 So you said you mentioned grid parody. Are you saying 0:08:00.640 --> 0:08:04.040 that if you source your energy or you're from solar 0:08:04.320 --> 0:08:08.840 or wind, it's actually cheaper than traditional sort of fossil fuels. 0:08:09.560 --> 0:08:09.840 Yeah. 0:08:10.000 --> 0:08:12.440 I mean that's been the really exciting point that I 0:08:12.480 --> 0:08:15.080 think is not that well known in the region. So 0:08:15.520 --> 0:08:19.680 if I install a solar system for a customer in Thailand, 0:08:20.040 --> 0:08:22.280 I'm going to be fifty percent cheaper than the grid. 0:08:22.320 --> 0:08:24.680 Wow, fifty five zero. 0:08:24.760 --> 0:08:28.000 Fifty percent, right, So we have customers who are saving 0:08:28.000 --> 0:08:30.800 two million dollars a year by installing solar systems on 0:08:30.840 --> 0:08:35.040 their facilities. And then even in Indonesia, where taxpayers money 0:08:35.080 --> 0:08:37.360 is being used to subsidize the price of the grid 0:08:37.400 --> 0:08:40.040 and keep it low, even there we're thirty percent cheaper 0:08:40.040 --> 0:08:41.800 than the grid. So when you look at that, you think, well, 0:08:41.840 --> 0:08:44.840 hold on a second, why isn't there more renewables coming 0:08:44.840 --> 0:08:45.640 into these markets? 0:08:45.679 --> 0:08:48.040 And that's really been about regulation and deregulation. 0:08:48.920 --> 0:08:52.240 Asia Centric is produced by Bloomberg Intelligence. We're more than 0:08:52.280 --> 0:08:56.120 five hundred experienced analysts and strategists work around the clock 0:08:56.200 --> 0:08:59.680 to bring you timely world class research. Our coverage spans 0:08:59.679 --> 0:09:04.040 too hundred market industries, currencies, commodities, and industries, as well 0:09:04.040 --> 0:09:07.040 as over two thousand equities and credits. To learn more 0:09:07.080 --> 0:09:11.319 about Bloomberg Intelligence, visit b I go on the Bloomberg terminal. 0:09:11.840 --> 0:09:14.359 If you like what you're here, don't forget to subscribe 0:09:14.360 --> 0:09:17.360 and share. Yeavin, I'm going to ask a really stupid 0:09:17.440 --> 0:09:21.880 question here, like how reliable is solar Like, for example, 0:09:22.160 --> 0:09:25.079 if you've got solar panels and it suddenly rains days 0:09:25.120 --> 0:09:27.760 on end. You sometimes see that in Southeast Asia. Does 0:09:27.800 --> 0:09:30.240 that mean that you don't get the solar or is there. 0:09:30.760 --> 0:09:33.320 Just that's the key point, right, So you've got your 0:09:33.320 --> 0:09:36.000 solar system on your roof, you're sending the power into 0:09:36.040 --> 0:09:39.360 that building. You know, you're forecasting what the power is 0:09:39.400 --> 0:09:41.920 going to look like for the next ten or twenty years. 0:09:42.200 --> 0:09:44.760 Retake the risk. And this has been the problem historically 0:09:44.880 --> 0:09:46.960 is you need an investor, an expert who's willing to 0:09:47.000 --> 0:09:50.280 take the risk of that weather. And that has been 0:09:50.320 --> 0:09:52.240 something that has stopped the market from taking off in 0:09:52.240 --> 0:09:56.240 the past. But generally speaking, and I'm sitting in Singapore 0:09:56.280 --> 0:10:00.319 and it's been raining NonStop for three days, non stop 0:10:00.400 --> 0:10:05.360 right day and night, and your solar system gets less sunlight, 0:10:05.600 --> 0:10:09.040 but it gets better performance. It's cleaner, it's cooler, and 0:10:09.080 --> 0:10:12.080 it performs better in that situation. So you might see 0:10:12.080 --> 0:10:14.760 a thirty percent drop in performance or a forty percent 0:10:14.800 --> 0:10:18.720 drop in performance, But the quality of the technology means 0:10:19.120 --> 0:10:21.640 now that there's not that much of a difference. 0:10:21.720 --> 0:10:22.680 I think that's one point. 0:10:22.720 --> 0:10:25.520 Then the second point is you're still connected to the grid, 0:10:25.720 --> 0:10:27.800 so it just means that you take less power from 0:10:27.840 --> 0:10:30.120 the grid than you would from the solar system. And 0:10:30.160 --> 0:10:33.480 then I think the third point is that batteries are 0:10:33.480 --> 0:10:36.920 coming in, and batteries change the complete sort of scheme 0:10:37.080 --> 0:10:41.080 of this because we now install larger solar systems, especially 0:10:41.120 --> 0:10:44.200 if you can do a solar farm, large batteries, and 0:10:44.240 --> 0:10:46.800 then you're able to provide power right the way through 0:10:46.840 --> 0:10:47.920 the night and it's firm. 0:10:47.960 --> 0:10:49.400 It behaves just like a guest clut. 0:10:49.640 --> 0:10:51.840 And you said you're willing to take the risk because 0:10:51.840 --> 0:10:54.160 there's not a lot of companies, the investors who would 0:10:54.160 --> 0:10:56.840 be willing to take that risk. Why are you guys able. 0:10:56.640 --> 0:11:01.240 To do that? I think that we have the engineering team, 0:11:01.400 --> 0:11:05.000 we have the data sources, so we basically are connecting 0:11:05.040 --> 0:11:10.160 into people like NASA and downloading multiple decades of data 0:11:10.160 --> 0:11:13.160 to know exactly how well a solar system is going 0:11:13.200 --> 0:11:17.480 to perform in any given scenario. So rather than trusting someone, 0:11:17.559 --> 0:11:21.120 we have our own ground up, you know, prime research 0:11:21.200 --> 0:11:23.320 that we're doing to understand exactly what a solar system 0:11:23.400 --> 0:11:26.120 is going to do. First part, and then the second 0:11:26.120 --> 0:11:29.040 part is the team and I have run billions of 0:11:29.040 --> 0:11:31.600 dollars of solar plants in Asia, so we would be 0:11:31.640 --> 0:11:34.600 one of the more experienced. So we're quite comfortable that 0:11:34.640 --> 0:11:37.400 we know how to operate and maintain that system. So 0:11:38.000 --> 0:11:39.920 can we get out there clean it? Can we make 0:11:39.920 --> 0:11:41.079 sure the cabling is working? 0:11:41.120 --> 0:11:41.480 Okay? 0:11:41.800 --> 0:11:44.640 Do we see the problem before it happens. These kind 0:11:44.640 --> 0:11:47.920 of things are really important in terms of actually running. It's 0:11:47.960 --> 0:11:49.800 a very simple system, but it's still a. 0:11:49.720 --> 0:11:52.040 Power plant and you need somebody who knows what they're doing. 0:11:52.559 --> 0:11:55.560 So Gavin Asia is pretty diverse. You know, what are 0:11:55.559 --> 0:11:59.280 the most hottest areas in your world? In Asia? Which 0:11:59.280 --> 0:11:59.880 countries are they? 0:12:00.120 --> 0:12:04.319 Yeah, that's a good question. The challenges that it changes 0:12:04.640 --> 0:12:06.520 year to year, and I would like to say that 0:12:06.520 --> 0:12:09.120 I'm able to forecast what's going to happen next year. 0:12:09.360 --> 0:12:11.080 But the one thing I've learned in the last twenty 0:12:11.160 --> 0:12:14.400 years in Asia, you can't, so I would say, you know, 0:12:14.440 --> 0:12:17.600 we've added maybe half a billion dollars worth of projects 0:12:17.640 --> 0:12:20.560 in Korea. There's a huge amount of demand there. There's 0:12:20.559 --> 0:12:22.760 a lot of manufacturing, a lot of export, and so 0:12:23.040 --> 0:12:25.560 a lot of the corporates there are looking to buy 0:12:25.640 --> 0:12:28.960 renewable energy in order to be able to fulfill some 0:12:29.040 --> 0:12:33.160 of the sustainability requirements that you get from Europe. 0:12:33.320 --> 0:12:35.480 So that's really sustainability driven at the moment. 0:12:36.320 --> 0:12:39.320 I'd say a lot is happening in Japan, so we're 0:12:39.320 --> 0:12:43.600 seeing a similar model, and Japan is very aggressively deregulating 0:12:43.640 --> 0:12:47.680 to encourage more foreign investors into their market. Then go 0:12:47.760 --> 0:12:50.760 across to Malaysia, and Malaysia is exploded. It's come from 0:12:50.760 --> 0:12:54.959 a very monolithic, very monopolized market where it was really 0:12:55.000 --> 0:12:57.880 difficult to get into even on the rooftop side, and 0:12:57.960 --> 0:13:01.280 now with the spillover of data center is from Singapore, 0:13:01.679 --> 0:13:05.079 you're seeing very significant demand and we're looking at sort 0:13:05.120 --> 0:13:08.400 of multi hundred million dollars solar farms in Malaysia. 0:13:08.960 --> 0:13:10.400 But it moves all the time. 0:13:10.440 --> 0:13:13.040 If you'd ask me last year I think Philippines would 0:13:13.080 --> 0:13:15.720 have been probably the most interesting market last year. 0:13:15.920 --> 0:13:16.680 Yeah, oh wow. 0:13:16.720 --> 0:13:18.079 So it really does change year t year. 0:13:18.360 --> 0:13:21.320 It changes year to year so very rapid because what's 0:13:21.360 --> 0:13:24.840 happening is the governments are all fighting against each other 0:13:25.000 --> 0:13:28.839 deregulating to try and make their country more attractive for 0:13:28.880 --> 0:13:30.680 the investment, not just for people to come in on 0:13:30.720 --> 0:13:32.920 the infrastructure side, but then on the customer side. So 0:13:33.280 --> 0:13:39.520 you've seen very interesting sort of geopolitical wrangling. Singapore is 0:13:39.559 --> 0:13:42.840 a good example because you've got the data center sort 0:13:42.840 --> 0:13:46.760 of explosion. Now seventeen percent of the country's energy supply 0:13:46.880 --> 0:13:50.040 going into data centers. It's getting to the stage where 0:13:50.040 --> 0:13:52.360 its difficult to see that being sustainble on the long term. 0:13:52.880 --> 0:13:54.440 Singapore was then trying. 0:13:54.120 --> 0:13:56.920 To pull in renewable energy for its neighbors, and you 0:13:57.000 --> 0:14:00.400 saw Malaysia and Indonesia basically come out and say we 0:14:00.440 --> 0:14:05.280 are flat out banning any supply of renewable energy to Singapore. 0:14:06.160 --> 0:14:09.480 And I was in meetings with senior officials in those 0:14:09.480 --> 0:14:13.440 countries and saying, then why don't you sell power from 0:14:13.480 --> 0:14:15.839 your country to Singapore at a higher price. 0:14:16.080 --> 0:14:17.360 You're going to make a lot of money. 0:14:17.559 --> 0:14:20.960 And the response was we know that those data centers 0:14:21.120 --> 0:14:24.080 manufacturers are in Singapore. We want to bring them to 0:14:24.160 --> 0:14:26.160 our country and we will do whatever we can to 0:14:26.200 --> 0:14:29.640 get the jobs and the investments of those manufacturing sites here. 0:14:30.000 --> 0:14:33.200 If that means strangling renewable supply for Singapore, that's what 0:14:33.200 --> 0:14:35.720 we're going to do. So you've definitely seen those kind 0:14:35.760 --> 0:14:37.320 of geopolitical battles going on. 0:14:37.760 --> 0:14:39.280 Oh well, and that's quite interesting. 0:14:39.280 --> 0:14:39.440 You know. 0:14:39.480 --> 0:14:43.280 I know that energy security is a big issue in Europe, 0:14:43.360 --> 0:14:45.920 especially with the Russia Ukraine war, but it sounds like 0:14:46.320 --> 0:14:49.560 energy security and geopolitics is becoming a big factor in 0:14:49.600 --> 0:14:50.720 Southeast Asia as well. 0:14:51.760 --> 0:14:52.080 Yeah. 0:14:52.120 --> 0:14:57.080 Absolutely, I think that the last few years of commodity 0:14:57.200 --> 0:15:01.000 spikes has rocked a lot of the region. Like Philippines 0:15:01.080 --> 0:15:04.000 is an energy importer, Indonesia's becoming more and more of 0:15:04.040 --> 0:15:07.120 an energy importer. So you have no choice but to 0:15:07.160 --> 0:15:11.400 take your energy or energy from whoever's supplying and solar 0:15:11.520 --> 0:15:14.280 and wing the batteries. It's pretty exciting because once you've 0:15:14.280 --> 0:15:17.760 installed your system, it just sits there. It's more expensive 0:15:17.840 --> 0:15:20.560 to turn a solar system off than to have it 0:15:20.720 --> 0:15:24.400 just running. The costs of solar systems are reducing so 0:15:24.680 --> 0:15:27.280 fast that you've now got to a stage where you know, 0:15:27.880 --> 0:15:30.680 like for like there as I say, for fifty percent cheaper. 0:15:31.080 --> 0:15:34.120 And I think that where you had some resistance from 0:15:34.600 --> 0:15:38.720 the incumbent utilities historically, the governments are now cutting through 0:15:38.720 --> 0:15:42.040 that because the costs of subsized utilities is too much. 0:15:42.240 --> 0:15:45.120 So a lot of these countries are thinking, I build 0:15:45.200 --> 0:15:48.920 large solar farms or wind farms or whatever resource you've got, 0:15:49.320 --> 0:15:52.080 and I reduce and I hedged my exposure to the 0:15:52.360 --> 0:15:53.560 global commodity markets. 0:15:55.120 --> 0:15:58.560 And you mentioned earlier that there's a lot of global companies. 0:15:58.720 --> 0:16:01.320 I think you mentioned Nike, but maybe it's like companies 0:16:01.360 --> 0:16:04.640 like Samsung that are moving out of mainland China to 0:16:05.040 --> 0:16:09.600 Southeast Asia. How influential are these companies in driving the 0:16:09.680 --> 0:16:11.720 agenda for renewable energy. 0:16:12.640 --> 0:16:16.640 Yeah, that's definitely a huge, huge topic, and it's much 0:16:16.680 --> 0:16:21.560 more driven by them than by the developers. So you know, 0:16:21.640 --> 0:16:24.960 I've again had those meetings with regulators, et cetera, where 0:16:24.960 --> 0:16:30.560 they're complaining and saying, please get these Western American or European. 0:16:30.080 --> 0:16:31.240 Companies out of my office. 0:16:31.240 --> 0:16:34.440 They're in every day saying I'm going to leave your 0:16:34.480 --> 0:16:36.760 country if I don't get renewable energy. 0:16:37.000 --> 0:16:38.400 You have a regulated market. 0:16:38.640 --> 0:16:40.800 You know, there's no way for independent power producers to 0:16:40.800 --> 0:16:42.640 come in, and your local utility is not giving me 0:16:42.680 --> 0:16:46.080 the renewables I need. So there's huge influence. I mean, 0:16:46.160 --> 0:16:49.320 Samsung is twenty percent of Vietnam's. 0:16:49.040 --> 0:16:50.160 Energy production. 0:16:51.360 --> 0:16:58.400 One fifth, yes, yes, and Samsung has moved a lot 0:16:58.440 --> 0:17:03.320 of their sensitive technology out of China into Vietnam, specifically 0:17:03.360 --> 0:17:05.760 to reduce the potential exposure. 0:17:05.440 --> 0:17:09.280 On technology transfer. So it's a huge factor. 0:17:09.400 --> 0:17:12.159 And the amount of money that's going in around data centers, 0:17:12.160 --> 0:17:15.760 and then some of the regulations whereby countries are requiring 0:17:16.480 --> 0:17:19.640 their data to be kept in their country, it means 0:17:19.640 --> 0:17:21.840 that you then have to spread of data centers into 0:17:22.160 --> 0:17:25.320 markets like Indonesia, et cetera. So there's a lot of 0:17:25.320 --> 0:17:26.199 influence that they have. 0:17:26.640 --> 0:17:29.440 Well, it seems like a long term trend, like as 0:17:29.480 --> 0:17:33.000 you see more companies pulling out of China, I don't 0:17:33.040 --> 0:17:35.320 think it's going to change anytime in the next four years, 0:17:35.400 --> 0:17:38.920 at least with tariffs, but it does kind of leave 0:17:38.960 --> 0:17:42.840 you with the question of what happens if these companies leave, right, 0:17:42.960 --> 0:17:46.320 Like all these companies that have moved to Malaysia, Vietnam, 0:17:46.640 --> 0:17:50.119 Thailand to diversify or do a China plus one strategy. 0:17:50.560 --> 0:17:53.159 There are reciprocal tariffs that are in the books, and 0:17:53.200 --> 0:17:56.840 we know that President Trump is looking to target a 0:17:56.880 --> 0:18:00.399 lot more countries than just China. So is there like, 0:18:00.440 --> 0:18:02.639 how do you think about the risk of these companies 0:18:02.680 --> 0:18:05.439 who are driving the agenda right now kind of pulling 0:18:05.480 --> 0:18:06.720 back or pulling out. 0:18:07.800 --> 0:18:12.359 Yeah, it's something that I'm watching very closely. And we 0:18:12.520 --> 0:18:17.440 definitely needed sustainability support to get the business, to get 0:18:17.480 --> 0:18:22.880 the industry going. When I first started developing solar projects 0:18:22.920 --> 0:18:26.200 in Asia, I was previously developing projects in the US 0:18:26.240 --> 0:18:29.600 and Europe sort of twenty years ago, and you could 0:18:29.640 --> 0:18:32.960 see even back then that with the cost curve on 0:18:33.080 --> 0:18:36.360 solar so twenty percent per year reducing over the last 0:18:36.400 --> 0:18:40.119 twenty five years and very significant drops every now and then. 0:18:40.160 --> 0:18:41.920 So we had a fifty percent drop in the last 0:18:41.960 --> 0:18:45.240 twelve months, you could see that it was going to 0:18:45.280 --> 0:18:47.440 come under the grid. I meanwhile, the grid is going up. 0:18:47.560 --> 0:18:50.040 So for me, the important part is we as an 0:18:50.040 --> 0:18:55.040 industry need to behave like mature energy players, not always 0:18:55.080 --> 0:18:58.920 looking for the subsidy. So and sustainability is I think 0:18:59.040 --> 0:19:03.560 going to get hit. We've also seen CSRD regulations in Europe. 0:19:03.600 --> 0:19:06.800 So the regulations around how you report who needs to 0:19:06.840 --> 0:19:12.040 report on their sustainability and carbon footprint reduced very significantly 0:19:12.080 --> 0:19:15.000 in the last two three weeks. So I'm watching it 0:19:15.080 --> 0:19:18.600 very closely. But I believe and I'm driving the team 0:19:18.680 --> 0:19:22.280 to focus on cost as the main driver, and that's 0:19:22.359 --> 0:19:23.320 perfectly viable. 0:19:23.560 --> 0:19:26.240 We do need some more regulation reduction in orders for 0:19:26.359 --> 0:19:26.840 us to do that. 0:19:27.960 --> 0:19:30.560 You brought up some interesting points, so it's more cost 0:19:30.640 --> 0:19:36.240 focus rather than sustainability goals. Cat did mention President Trump. 0:19:36.560 --> 0:19:39.000 Now since he's become the president, there's been a big 0:19:39.080 --> 0:19:43.840 backlash against ESG. Trump has got a really famous policy 0:19:43.920 --> 0:19:48.480 like you know, drill, baby drill. How is this change as. 0:19:48.320 --> 0:19:52.200 Opposed to sun baby son or wind baby wind? 0:19:52.520 --> 0:19:55.399 This is changing at ordinarrative for renewable energy. 0:19:56.359 --> 0:19:57.760 I don't see it yet. 0:19:57.960 --> 0:20:00.640 So what I'm seeing at the moment is is if 0:20:00.680 --> 0:20:04.399 you think about Amazon, it's very interesting. So Amazon was 0:20:04.400 --> 0:20:07.119 one of the first people that went into sustainability. It 0:20:07.280 --> 0:20:11.440 was primarily driven by the employees, right. The employees pushed, 0:20:11.680 --> 0:20:15.399 consumers have pushed, and that has pushed the regulation right, 0:20:15.720 --> 0:20:17.240 and so that that fundamental driver. 0:20:17.359 --> 0:20:18.399 I don't think it changed. 0:20:18.440 --> 0:20:22.800 So We're definitely going to see fluctuations towards and away 0:20:23.040 --> 0:20:26.480 from sustainability. That's been the case for the last twenty years. 0:20:27.040 --> 0:20:30.679 This is a particularly relevant one, but I think that 0:20:30.760 --> 0:20:32.879 we just need to stay the course, focus on the 0:20:32.920 --> 0:20:36.760 cost differences, and quite frankly, I don't see any change 0:20:37.160 --> 0:20:40.880 from our customers right so Amazon or Microsoft or Google 0:20:41.040 --> 0:20:46.200 or Nike or Samsung, they're all very actively looking for 0:20:46.520 --> 0:20:49.719 renewable procurement from us. So I haven't seen any of 0:20:49.720 --> 0:20:51.960 that kind of But you know, no, right a year 0:20:52.000 --> 0:20:53.879 down the line, you want to watch Abe Kefley. 0:20:54.560 --> 0:20:56.639 So no pullback yet, is what you're saying. It hasn't 0:20:56.640 --> 0:20:58.760