10 - Building a 3800km interconnector with Richard Hardy (Project Director @ Xlinks)

[MUSIC PLAYING]

Hey, guys. Quentin here for Modo. I'm here with Richard Hardy. And we are here to talk about a mega project. So this is a bit of a special episode. We're going to talk about energy storage and other stuff on possibly the most exciting, crazy, biggest, awesome project the world has ever seen. And we are not overestimating.

So let's get to it. Richard, thanks for coming on. And welcome to whatever this setting is.

Firstly, who's Richard Hardy?

What have you done until now? And then let's talk about Xlinks.

Sure.

So Richard Hardy. I started my career at Kiwi Power.

So demand-side response aggregator. And for the last few years, I've been working as the project director at Xlinks.

Xlinks, OK. We spell that, X--

how do you spell Xlinks, so everyone can Google it?

X-L-I-N-K-S.

OK, cool. And what is Xlinks?

So we are a company that's all about harnessing and connecting the power of nature. So we are building 10 and a half gigawatts of renewable energy in Morocco and connecting that directly to the UK transmission network via subsea cables.

OK, so this is the thing that everybody's always talked about in the pub for, like, hundreds of years probably. If we could just get the power from the sun in Africa and transport it to the UK and everybody else, we'll solve everything, right?

So you said 10 and 1/2 gigawatts. Now, bear in mind, for anyone who's watching this, at the moment, we have 1 and 1/2 gigawatts of energy storage in the UK. So this is a lot more than that, right.

And so this kind of project, where does it start? Whose idea is this?

Sure. So it all started with Simon Morrish just over three years ago.

And it's an idea that he's had since childhood. And as you say, I think it's something that a lot of people talk about and think about.

And really, he wanted to look into it in more depth and understand, what are the limiting factors? And will it work? Is the technology there? And does it make sense?

And so we're talking about a project that requires different governments, so different countries involved, crossing a lot of water. So how long is this--

it's an interconnector basically with a bit at each end that does generation and other stuff, which we'll talk about. How long is this stretch of water we're going to put this cable in?

Sure. So the cable route itself is about 3,800 kilometers.

[CHUCKLES]

And then within that interconnector, we're going to have four separate cables. So two independent systems operating alongside each other.

OK. And 3,800 kilometers, these numbers are so big.

I don't even know how--

well, how far--

I know that Morocco is 3,800 kilometers via cable. But how does this compare to other interconnectors? What's a normal interconnector length?

Sure. So the longest interconnector that's operational at the moment is the North Sea Link. And that's about 780 kilometers long.

Operational from the UK? Operational--

From the UK and worldwide.

OK, cool. That's cool. So the UK has got the longest already. And what is that again?

800 and--

780 kilometers.

780 kilometers. And so you're doing 3,800 kilometers.

Right, OK. And so what is involved in the project? So you've been doing it three years. Well, actually, we'll do the process of how you develop a project like this.

So this guy had this idea. Let's produce power in Africa and send it to the UK. And so you need a really long cable. What else? In fact, four cables. Well, a lot more.

You need a lot of cables. So let's do the cables first. And then what do you need at each end? What's the plan?

Sure. So the cable system itself, it's really based around existing technology. So a key point of this project has always been looking at what technology is already available rather than having an optimistic view as to what's coming down the road.

So the cables are actually very similar to what is used in existing projects, although they are longer. And then either side, there are HVDC converter stations. So what that does, it takes an alternating current at one end, transforms it into the direct current. And then the other end, it converts it from that direct current back into alternating current for the grid.

Which is pretty normal for interconnectors. That sort of length, you do DC link anyway.

RICHARD HARDY: Yes.

So that bit of technology, apart from the fact that the scale is massive, that bit of technology is already tried and tested. And then what's the plan? Are you going to have a massive solar array in Africa, in Morocco. Whereabouts in Morocco is that going to be?

RICHARD HARDY: Sure.

Near the seaside or--

I say "seaside." [CHUCKLES]

Near the coast. I guess it is seaside. It's pretty cool, though. What does that look like on the Moroccan side?

Sure. So the site is about 110 kilometers away from the coast.

And it's towards the south of Morocco or the main cities in Morocco. And actually, a key point for the project when we were finding the site is ensuring it wouldn't interrupt with Morocco's own transition. So it's actually located quite far away from the major cities that people might be more aware of.

And how big is this solar farm going to be?

Sure. So it's going to be a combination of solar and wind.

OK.

And together, we have 1,500 kilometers squared secured for that.

[CHUCKLES]

This is incredible. It's absolutely incredible. I know it's normal to you to talk about these numbers. But this is incredible.

And so I assume it's particularly windy there, as well. Have you chosen the site because of the wind, also? And why are you doing solar and wind?

Sure.

So it's a very windy site. The capacity factor on the wind will be about 55%, which is actually much better than even a lot of offshore wind farms in the UK. And that wind's really driven by the convection currents, the temperature differential between the Atlantic and the African continent. So it's very reliable, and very reliable on a daily basis. And fortunately for us, it picks up in the evening, just as the solar is coming down.

OK, so you're going to do solar across the day in the African desert. Would you class it as desert in Morocco?

It is a desert, yeah.

So excuse my geography, right? So you're using solar throughout the day. And you've got a curve of production in the day. And the wind will keep going through the day, as well, would it? And then at night, the wind really picks up and takes over.

Yeah, that's exactly right. And alongside the generation, we're also installing five gigawatts and 20 gigawatt hours of battery storage. And--

OK, so that's, like, three times--

no, 20 gigawatt hours. That's like 10 times--

no. Let's try this again. That is, yeah, pretty much 10 times what we have in the UK right now in one place to do--

why do you need to store it at that end? Why don't you do the energy storage at this end?

Sure. So when we look at the cable system, one way of thinking about it is a very expensive grid connection. And we want to maximize the load factor on that. The storage also means that we can offer more firm and flexible power to the UK network.

And the cable systems themselves will have a load factor of approximately 80% to 85%. So actually in the UK, the cables will be rated at 3.6 gigawatts. So from the UK's perspective, it's a 3.6 gigawatt project. But because of all the generation and the the storage sat behind that, it's very reliable. And it is very firm throughout the day and throughout the year.

OK, so for people listening to this podcast, 3.6 gigawatts, let's compare that to a nuclear power station. So what does that look like compared to other power stations out there?

Sure. So Hinkley Point will be 3.2 gigawatts. So--

The new Hinkley Point.

That's correct.

Yeah.

So it will be a bit above that. In terms of the annual output, it corresponds to roughly 8% of the UK's electricity demand.

Wow.

Wow.

And so everything about this project is big and really exciting. But from a UK power perspective, thinking about, how does National Grid manage this? And how do we all pay for our electricity?

For the folks who are listening to this podcast, we're talking about essentially another nuclear power station, a big nuclear power station in size, but it's going to be completely renewable. I'm not suggesting that nuclear isn't. And I'm definitely not going down that rabbit hole in this podcast, right? But it's Hinkley Point C size. And is it going to be baseload?

So it's going to be, we describe it, as firm and flexible.

And we would say "baseload equivalent" because actually it is a substitute for baseload generation.

It offers that level of reliability. It's not quite baseload in the sense that it operates 24 hours every day of the year. But it fulfills that role on the network.

OK.

So let's take a step back again. So someone had this idea. I mean, I don't want to take it away from Simon. I forget his last name. I don't want to take it away from Simon. But everybody's had the idea that this idea makes sense, right? And then someone said, well, why don't we go and do it?

And so Simon put together a team. You're on the team.

And who's in that team now? I mean, how many people are in that team?

Sure. So it's probably worth just mentioning a couple of our board members first.

Yeah, OK.

So our chairman is Dave Lewis.

So he's the ex-CEO of Tesco's.

But he's also been appointed as the UK government's supply chain advisor.

Our vice chair is a gentleman called Paddy Padmanathan. So he is also CEO and president of a company called ACWA power. Now, they operate about $60 billion worth of energy assets across North Africa and the Middle East. And they've built about $6 billion worth of renewable energy assets in Morocco.

Wow, OK.

And then we also have Ian Davis on the board. So Ian Davis, who was the former chairman of Rolls-Royce.

So these people, they've already got experience, from the UK, building stuff in Morocco. That's kind of important, right?

Yeah.

So that's the exec team, if you like. And who else is involved in this project? I guess you've got government involved now at this stage.

Well, I don't know. I don't know. You tell me.

I guess within the team, we have Nigel Williams leading our interconnector portion of the business. So he was actually the project director on North Sea Link, the longest operational interconnector in the world. And that's a team which is expanding at the moment, but bringing in a lot of expertise from previous projects within the HVDC space and the subsea space.

And then within Morocco, we have a fantastic team in place there. And actually, they are involved with all the large-scale renewable energy projects within Morocco. So they understand that landscape very well.

OK, so am I right in thinking that this will not be connected to the Moroccan grid?

That's absolutely correct.

OK, so it's like a satellite bit of the great British grid. Just happens to be in North Africa.

Yeah, in some senses, it looks a bit like offshore wind in that regard, in that it's island generation connected to the GB network. But it doesn't actually sit technically within the UK.

OK, so I've got some questions I've got to ask, right? So I'm sure you've had this a lot. But the first question is the scale.

I know the technology's been used before. And we've got interconnectors.

Are there mega-projects like this happening, big, long interconnectors like this, happening elsewhere in the world? Is this the new world we live in, that we're going to be doing intercontinental transmission lines?

This is absolutely the new world we're going to be living in. So there is actually another very similar project on the other side of the world, Sun Cable looking to connect Northern Territory in Australia to Singapore.

QUENTIN SCRIMSHIRE: It's a great name, Sun Cable.

[CHUCKLES]

It's fairly comparable in terms of what they're doing on the generation side and the HVDC side. But we're also talking to a lot of other organizations who are interested in this space and absolutely see the future being long-distance interconnection.

And how does the--

sorry, I'm going to jump around a bit here because my brain's going crazy. So how does the supply chain work? Because if you build--

I don't know. If the longest cable in the world--

the longest subsea cable anyway. There might be longer cables elsewhere.

But the one that you mentioned before, the 780 kilometers that's connected to the UK, if that's the longest we've done before, who made that cable? And where are you going to find a cable manufacturer to build one this long?

Yeah, so really, in terms of the subsea cable market, historically there's been three major players based in Europe. We're starting to see more companies in Asia really catch up on the technology level and in terms of their offering. But many people still focus on the European market.

Now, with the expansions they have announced, the annual capacity will be about 2,000 kilometers of this type of cable a year. The

Annual capacity of what? Sorry. Of all cable?

Of all of the them combined in--

Of the whole--

the global cable?

Well, in Europe, would be about 2,000 kilometers per year.

All the cable of this type, 2,000 kilometers. And you're going to build almost double that.

Per cable.

Oh, and more cables.

So we need over 15,000 kilometers.

Oh, my days.

RICHARD HARDY: Yeah.

Right. OK, so UK--

sorry. Europe can build 2,000 kilometers of this stuff. And you need 15,000. So back to my original point.

Where does this come from?

We initially engaged with the existing supply chain.

And it became clear that even with the expansions that are happening, that the capacity wasn't there. So actually, we started looking into developing our own cable manufacturing facilities.

Out of that, a separate company is now being set up, XLCC.

And they are developing two factories in the UK.

So the first is in Hunstanton. And the second is Port Talbot.

Oh, cool.

And together, they'll have a capacity of 4,000 kilometers a year. So XLCC are building, really from scratch, double the existing capacity within Europe.

Wow, so that's good news for our economy. I mean, it sounds incredible, building this stuff at home.

I would have never imagined that we would have built this kind of thing in the UK. For some reason, the world we live in now, I would never have thought that that would be in the UK, which is awesome.

Yeah, I mean, to be honest, it makes a ton of sense because the UK is one of the largest markets for these cables. We have a lot of interconnectors already in place. We've got a lot more planned.

And actually, these are the same cables that can be used for offshore wind. As the wind farms are getting further and further away from the coast, they're moving more towards HVDC rather than HVAC. So it just makes a lot of sense.

What's been challenging within the UK is really finding those anchor customers.

The way the market works is typically a cable company would get an order. They'd then go out, develop, and build the factories. But the timings for that don't really work well with renewable energy projects or interconnector projects.

So it's been very difficult to build greenfield factories. And actually, one of the benefits of this project is, because of the scale, it just makes a lot of sense to work with XLCC, get this capacity in place, and be able to materially change the dynamics of the market.

Yeah, and also just, I mean, jobs. I mean, Port Talbot, an area that will be very glad of that kind of manufacturing. I mean, a history of building incredible things in the past. And all right, so we've done the cable. Well, we haven't done the cable. But we're going to come back to the cable in a minute.

But let's do the other bits. So we've got a power conversion station. How big is this thing going to be? We've got to convert the AC power from the generation to DC to put it under the sea, to then convert it back at the other end.

So you've got two ends of this.

And we've got six gigawatts-ish of power conversion to do. That's a lot of heat to get rid of, by the way. But yeah, who's going to build that? And how do you build one of those? I imagine no one's ever built one that big before. But maybe I'm wrong.

Sure. So in terms of the converter stations, they actually look fairly similar to what's already out there in the market. So I guess the two key factors--

there's the voltage. And there's the current.

And the voltage we're using is the same as is used in a number of other projects. The current is comparable, maybe slightly higher. But because of the way the converter stations work, actually they look very similar to what's already been built in the past.

Yeah.

In terms of the size of them, each converter station complex will be approximately 250 by 250 meters. And really, there are kind of three main suppliers in that market who have been behind the majority of the converter stations around the world.

I guess for context, it's the same thing that you have connected for grid-scale storage. I mean, we're talking a different scale here. But the battery assets being built by--

I watch this podcast, so our listeners--

are the same sort of thing, right? You've got a converter station. And it's bidirectional.

Yeah.

Oh, so that's another question. Is this interconnector going to be bidirectional? Can we send power back to that battery if we need to?

So technically, it's absolutely capable of that.

At the moment, we do not envisage the project working in that way.

And the reason for that is we already have such a high capacity factor on the cable system, there's really very little opportunity to then operate it in the other direction. So actually--

When you say "capacity factor," you mean it's basically going to be one way to the UK. The UK is going to need it all the time. I say "the UK"--

GB.

That's pretty much it. And actually, our grid connection is only for export onto National Grid's transmission network.

We want to keep it very simple. And we want to keep the offering to the UK very simple.

OK, it makes sense. All right, so that's the power conversion station, which, already, my head is thinking about how big that thing is going to be. And then on the UK side, where is it going to come in? You might have said this already. But just where on the map is it coming in?

Sure. So we've got two 1.8-gigawatt grid connections in [INAUDIBLE]. So that's the north coast of Devon.

OK.

And where does the--

we're jumping around. But I can't help it.

The cable under the sea, where does that go? Does it go around the continental shelf?

I assume you're going to stay in shallow-ish waters? Is there any deep bits you have to go through? How does that work?

Yeah, so we're going to be keeping the subsea cable route in relatively shallow waters. So the maximum depth is about 700 meters.

So again, it's comparable with other projects. Actually, these types of cables have been installed to over 1,500 meters.

But we really want to keep it as simple as possible. So it follows the continental shelf and follows really the coastline of Europe.

But in that case, you've got to follow the--

and I'm not an expert on this politics. But if you're going to follow the edge of Europe, then does that mean you have to get permission from whoever's land you're on? So I guess Spain, Portugal, France. This is my geographical knowledge really coming out here.

Do you have to go to the governments of those countries and say, hey, can I put a cable in your continental shelf, please?

Yes, we do. So--

[CHUCKLES]

--for the UK and Morocco, it looks pretty standard. It almost looks like any other interconnector. For the other countries, we have a bit more flexibility in terms of would we go inside of territorial waters or not.

So our preference would be to go inside the territorial waters. It makes the routing slightly easier. But as part of the subsea surveys we're going to be conducting this year, we're also investigating alternative routes.

But yes, there's absolutely a permitting process there. If you're outside of the territorial waters, then it's really quite a light touch compared to going inside the territorial waters.

I'm thinking about this now in a different way. So I guess in the world of oil and gas, doing this stuff is completely normal, right?

RICHARD HARDY: Absolutely.

You put a pipeline in across continents.

You create pressure. So you pump it a bit like the inverter stations. And you have to sign contracts with all of the countries you go through. And then you have to look after it.

And then, hopefully, it makes sense financially, which it tends to. So I guess this is just like that. But in the new world, we're not moving oil and gas. We're moving electricity.

Yeah, it is very similar to that. And a lot of the expertise that now exists within this industry originated in the oil and gas market.

OK, OK. And so a few more questions. What about if we're talking nuclear power station size generation in the UK and it's going to come out--

so you've got two entry points to the grid, two connections to the grid, my question was going to be, is that a big risk to the UK grid?

Because if the interconnector trips, and interconnectors have tripped before, right, that means we lose, like, three gigawatts in one go. And is that really bad? And my gut feeling is it probably is really bad. But I imagine you probably already had this conversation, and you've got an answer.

Sure. So I guess the first thing to bear in mind is they are two separate, independent systems.

So when we look at one of the systems tripping, that won't impact the other one. So really it's two 1.8-gigawatt blocks.

1.8 gigawatts is still--

Yeah, this is big.

--a large loss of infeed.

But when Hinkley Point's online, that is how National Grid's going to be sizing their services in any case.

There are also some levers that you can pull within the converter station technology. So depending on what the fault is, actually if there's a trip, very quickly back online.

OK, and then coming back to the project. So I think many people won't have done this already because they'll think, ah, it's too hard, it'll never happen, B, you'll never get the governments on board, or, C, it's just going to take too long, right?

But now in the talk with--

I know I keep on comparing this to nuclear. And I don't know whether that's a good or bad thing. But I'm going to carry on doing it because that's the size we're in. And so nuclear power stations take forever to build.

So how long does this thing take? And is it more or less time? Or is it the same kind of time?

I guess for this project, there's quite a lot of work that needs to be done up front. And this looks like something slightly different to existing projects, and particularly on the cable side, where these factories need to be built.

You then need to produce test cable. You need to test it for a year. There's a process to get it up and running.

Actually, once we have that in place, we can really add a 1.8 gigawatt system every two years.

The initial project is going to take slightly longer. Our first grid connection is for 2027. Our second is for 2029. But following that, roughly every two years, we could add the same amount of capacity.

Wow, so this is the beginning, right? We could do more than this afterwards.

This is absolutely the beginning. So you know, this is one project that we are absolutely focused on at the moment.

But we do see this as the beginning of a new industry, another tool in the toolkit, if you like. And Morocco and UK works fantastically because--

Yeah, there's a long-standing relationship there anyway, isn't it?

Exactly.

Who owns it? Who's going to own it? So what do the Moroccans have to say about this, right? Because we're taking their energy, and we're going to use it when it's cold up north. So what do they have to say about it?

The Moroccan government absolutely has a strategy in place to become a net exporter of renewable energy. And they have specific regulations in place to enable that. So we actually have authorization under a very specific law, 13-09, which allows us to generate and export power.

Now, I think the really key thing about this project is we're very careful in our land selection. So we are not producing energy and exporting it to the UK at the expense of Morocco's own transition.

QUENTIN SCRIMSHIRE: Yeah, yeah.

And also, there is a big piece there around the local content and really manufacturing as much as possible within Morocco, which will further the transition there. So Morocco is incredibly forward-thinking in regards of renewable energy. And they see this, again, as sort of the beginning of something bigger.

OK.

I want to come back to the process now. So where does the money come from?

I know how to build a 50-megawatt battery, right? You come up with a site. You get a grid connection. You get a planning commission.

You go out to some investors. You do a project finance document. And then you raise some money, you build it, and you make money. And you get your IRR that you want. And everybody's happy. So how do you do that for a project of this size?

Yeah, so I suppose the first thing is that there are two very distinct phases here. There's the development phase and then the construction phase. And very different amounts of capital required for each.

So in terms of the development phase, we have a fantastic broad base of investors involved. And everyone who is an investor in Xlinks has actively contributed to furthering the project. And we have available already all the capital we need to take this through to financial close.

In terms of actually building a project of this scale, really it's all about developing the project in the right way. But there is a huge amount of money out there desperate for projects to invest in. So it's really perhaps the standard go-to people for something of this size, so pension funds, maybe sovereign wealth funds, possibly some of the large players in the energy market already.

How big is it, numbers wise? And I'm not going to hold you to this. And of course, everything you say on here--

but let's do a nuclear power station and compare it to that again. So Hinkley Point C is, I don't know, $25 billion or something like that now, maybe more. I don't know. Probably will be higher.

If those numbers are wrong, please, nobody sue me. I just know that the number is a lot. It's above 20, I think. Oh, and Hinkley Point C, by the way, they, of course, have got a contract with the government, where they have a contract for difference, right?

So I want to talk about that mechanism in a minute and whatever you're looking for. So let's say $20 billion for a nuclear power station like Hinkley Point C. What does yours cost?

So our capex is about $16 billion. But then we have relatively low operating costs compared to some other projects.

OK, and no nuclear waste at the end of it to deal with it, of course.

Exactly.

Well, actually one thing--

we are really jumping around. But we haven't talked about the carbon reduction, right? If we can pull this off, if you can pull this off, if our governments can pull this off, we are talking about really 8% of the UK's electricity demand supplied by proper green solar and wind energy.

This will be, like, fundamental change in our carbon usage as a country.

We should have started with that because that's badass, right?

What does that look like? I'm sure you've run the numbers.

Yeah, so probably the most interesting statistic there is if we'd been operational since September last year, we would have reduced the output of gas power stations in the UK by about 25%.

Wow.

So it's interesting. I guess it depends on what lens you look at it through. You can either look at it through the lens of we will absolutely hit our climate change targets. And then it's a matter of, how much will it cost? Or you can look at it as, what would the carbon reduction be?

I suppose, maybe optimistically, we focus on the first. And we really look at how this impacts the cost of the transition rather than what the carbon impact would be if it isn't that.

So if I was in Moroccan government, I would be thinking, OK, I need to get this into the rest of Europe, right? I want to get this into all over Europe the same way that Russian gas flows in.

And I imagine they probably are. They're probably thinking, OK, we've got a huge opportunity here. That's pretty cool.

Can I just come back to process?

Well, I say "process." How does the project make money? So you're taking on external investment that's going to help for things like--

I know you mentioned earlier you're doing a sea survey or whatever it is. I assume that means you've got to hire boats and go and look at the seabed, right?

RICHARD HARDY: Yeah.

And these numbers are probably quite big. You're probably talking millions to do that. So all of this is money that you've got to spend, that private investors are paying for.

How do they make money when this project is live? What does that look like?

Sure. So I guess there are a few different ways of looking at this, as well, actually.

So at the moment, we are pursuing conversations along the lines of a contract for difference. So that would ultimately mean that we are selling our power directly into the wholesale market.

And in almost any eventuality, we would be selling into the wholesale market. But with a project of this scale and with a capex of $16 billion, it's very important to have that revenue security in place.

And there are other potential routes other than a contract for difference. But we believe that the project is most suited to that.

And we'd be looking at a price of 48 pounds per megawatt hour for that, which, to put it into context, Hinkley Point C was 92.50 pounds.

Wow.

And--

Because you could do a cap and floor, as well, like other interconnectors. But I'm sure you've looked at that. And that doesn't--

Yes, it's a bit challenging for this project. So what would normally happen with a cap and floor regime, is Ofgem would look at prices in one market, and they'd compare that to the UK. And they would work out what the arbitrage opportunity is. Because we're building the generation in Morocco, it's slightly challenging to do it that way.

And you could get a capacity market contract on both sides of the interconnector if you're in Europe. But anyway, OK, cool.

And so where are you in the process? So you say the first connection is 2027, which is five years away, right? We got to get moving on this thing. What needs to happen between now and cutting the ribbon and testing and getting this thing on?

Sure. So I suppose we start off in Morocco. We have that site secured. We have fantastic support from the Moroccan government. We have the authorization we need. And the site studies are underway at the moment, so the environmental social impact assessment, geotechnical, topographic.

And actually, this week, we have been putting up, or we've started putting up, 15 wind masts and five meteorological stations for the measurement campaign. So that will give us the granular, detailed, accurate data to hone in all

The modeling, which has been done based on satellite data to date.

In terms of the cables, we are doing the subsea surveys this year. So that will give us geophysical, geotechnical information. We can then look at how deep we need to bury the cable along the route to protect it. We can go, and we can submit formal applications for the permits.

QUENTIN SCRIMSHIRE: Oh, wow. You're burying the cables. So it's not just on the seabed. OK, wow--

Yep, so--

--because wind farms just put it on the seabed, right? Or you can put those concrete cover things down on top of it.

Yeah.

You're doing a proper burial.

So we will be burying the cable.

And that's all about making sure it's protected. We want to install this cable. And then we want to forget about it.

Well, what's the lifespan of this project? What's the design life of this thing?

Sure, so the design life for the cables is 40 years.

For converter stations, you need to change out the valve holes after about 25 years.

And then for the generation, that's something which is progressively getting longer and longer.

But really, 30 years is seen as fairly standard now for a project of this size. And actually, we're having conversations about how that could be extended or what the repairing process would look like for that.

On the batteries, we're probably looking at a much shorter period. And although we'll be augmenting the site every year to account for the degradation, after 20 years, we're assuming full repowering across the board.

We are operating the batteries in a fairly friendly way, though. We're not aggressively charging at full power, discharging at full power, deep cycles every day. So we're looking to maintain the battery life as best we can.

And is it lithium ion batteries you're looking at, I assume? Are you also looking at flow and other technologies? Or even pump storage, I guess, you could do. Although, maybe it would all evaporate. I don't know.

[LAUGHTER]

So yeah, really going back to the principle of trying to ensure all the technology we're looking at already exists. All our modeling is based on lithium ion storage. And that's because it's really bankable. It exists today. And people sort of understand it, or at least they're very aware of it.

Yeah, yeah.

There may well be great opportunities to optimize the storage solution down the line. But actually, lithium ion looks to be a great choice for a project of this nature.

If I understand this correctly, and I'm just kind of taking your hints here, it feels like what the project's doing is saying, you know what? We're already doing a really long international project. Let's just stick to what we know on technology.

Let's de-risk the technology side and try and make a really long cable and really big stuff but with the technology that already works rather than reinventing the wheel at each stage because you know what? We've got enough on our plate as it is.

That's absolutely it. And with the cables, they [CHUCKLES]

are a lot longer. But because it's DC, it's actually somewhat straightforward. If you have a longer cable, you do have higher losses. But other than that, the impact isn't particularly significant.

I'm just thinking about it from National Grid's perspective. From a system operator's perspective, if it really is a flexible asset which you can turn on and off, I guess you need some--

there's all sorts of comms and telemetry and things. But we can handle that.

If they've got three gigawatts at their disposal that they can turn up and turn down like you can--

a nuclear power station, you can't turn up and turn down flexibly like you can something that's connected to an inverter, right? What an incredible resource for the system operator. What do they have to say about it?

I mean, I guess as a mere mortal, I can't help but listen to all of this and the numbers that you've become used to. And you say these really big numbers. And it seems normal to you.

But to me and everybody listening, it's probably like, wow, this is big, right?

And I can't help but get excited by this idea.

But what does National Grid have to say about it? I assume you're dealing with them. Are they OK with this? Is this good for them, I assume?

Sure, so yeah. We absolutely have been dealing with National Grid.

We have our grid connections in place. I think, look, it's pretty clear that the cornerstone of the UK's energy transition is going to be wind now, and particularly offshore wind. And it's very, very difficult for anyone to think anything else. And that's because wind is a fantastic resource in the UK. And we should be installing a lot of it.

That said, I think everyone also recognizes there are periods where the generation dips. And if it's for a few hours or a day, actually storage in the UK can just take care of that pretty easily.

The challenge is when that is for longer periods. And I think from National Grid's perspective, what this does is it provides a bit more confidence about firm generation being on the network when it's needed.

This is the year of long-duration storage, right? Because everybody's talking about it. The government's very biased. Everybody's talking about, how can we stimulate long-duration storage because, whichever way you model it, my days, we've got a problem ahead of our hands, seasonal storage or long duration, however you want to talk about it.

This could kind of displace some of that, which is exciting. I guess the issue is it comes in 2027, 2029 if it's on time, which is a long way off. But I guess anything of this size is going to be a long way off, unless it's distribution connected and lots of small assets.

OK, I just want to finish up now. As somebody who's interested in the energy transition, and we call it the Future Energy System, which this is, of course, part of it, how do we get involved? How do we find out more about this? How do we learn more?

Is there somewhere online we can--

the resources? How do we, as the general public, learn more about this thing?

Sure, so, look, [CHUCKLES]

we have a website.

We're on LinkedIn. We're on other social media platforms.

Really, we're going to be trying to release more and more information about the project as we progress.

I think there's a lot of exciting things going on. And we're going to be talking more and more about that.

OK, so get you on LinkedIn. Go to your website.

And when more information comes out, we at Modo would love to be part of it. And I just want to say, Richard, this has been an incredible conversation.

Again, these numbers are eye-wateringly large--

well, actually eye-wateringly exciting from carbon reduction. And it's almost common sense. It's almost common sense.

It's a no-brainer.

Like, this is the funny thing.

It's so big that you think about it and go, oh, it'll never happen. And then the more you talk about it, you think, actually, we should have done this years ago. Of course, technology and cost reduction curves. But anyway, I'm going on.

I just want to say, thank you so much for coming on and explaining what this is. We'll put a link in the comments so folks can go to your website and learn more.

And please do keep us updated, right? We want to be involved. And we want to learn. And we want to make this thing happen. It's awesome.

Well, thanks for having me on. It's been great talking with you.

All right, thanks. Cheers.

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