Financing Merchant Batteries When Contracts Run Out - Aquila Clean Energy

I'm your host, Ed Porter. Welcome back to Transmission. 15 years of guaranteed revenue and one bidder took most of it. Italy's first MACSE auction cleared low and concentrated. My guest today is Grace who oversees investments at Aquila Clean Energy. She says it didn't fail. It worked exactly as designed. The real story is what happens next for the portfolios looking at Italy. We start the conversation looking at November's second MACSE round. Then we move around Europe to get into why German lenders are starting to back merchant projects, why investors are underpricing the choice of optimiser, and why timing decides returns in smaller markets like Lithuania and Finland. If you're active in Italy or Germany, check out the latest Modo Energy forecast releases. And beyond batteries, Ko now covers wind, solar, and data centres. Ask how solar capture prices are moving in Italy, how much wind capacity Germany is building, or how power prices differ across Europe's markets. Sign up to Modo Energy for free to get access to Ko, plus trial access to our research articles across multiassets. Link in the description. Let's jump in. Hi, Grace. Welcome to Transmission. >> Thank you, Ed, for having me. >> Our pleasure. And so, as ever, let's get straight into it. So, what is the one thing that people get wrong about MACSE? >> I would say people get wrong that MACSE failed. For me, I don't think it failed. Because it worked as the way it was designed to work, right? you had a real competition and the auction cleared at a market price for which certain developers were willing to accept to provide this long-term you know duration storage and also like the what was surprising most of people in the market including everyone all the independent developers is that the pricing the market price or the clearing market price was very low and also the outcome was concentrated to one player and that one player really kind of you know underbid everyone else and took over the market pretty much. >> But in the end for me MACSE it is still a mechanism that works there still good mechanism because it really offers you this guaranteed revenues that you're able to take to the market to get institutional investors who are interested institutional capital and also attractive terms. >> But let's see how the next one happens. I'm very curious as well to the results of it. >> Yes. So we have the next MACSE with detail coming out in November. Yes. Or running in November. And so let's dig into this bit more. So the MACSE has sort of fundamentally changed the Italian BESS market. How do you assess the investment case for storage in Italy? Beyond MACSE >> I would say first when the results came out it really created this sort of like not negative I guess opinion on what's next for battery projects in Italy and a lot of investors or even developers who went into Italy couple years ago they went there with you know with this concept like there's going to be MACSE so you know that's the best way you can guarantee you know revenues for the next 15 years of course there's also this merchant upside that you can retain the thing is yes it was disappointing but at the end of the day Italy is still one of those countries with the right fundamentals that's still compi compelling for investors to invest in BESS or even beyond that renewables and that's you know you have high penetration renewables you have the grid that still needs there's a grid needs for flexibility and also you have Terna who is also involved right you have a regulator from in other markets where we haven't seen where they're very involved in actually understanding that they need the storage. So now what happens is that you have MACSE which has divided in a sense the country into all the investment case into two >> where you have project with MACSE so easy to finance bankable lenders are very happy with that so it's very clean >> and then you have other projects where you now have to reconsider how do you now build a new case around that so this means building a new revenue the revenue stack from scratch consider considering capacity market probably the upcoming capacity market depending whether in the north or in the south price zones and as well as participating in the next zone in the next MACSE upcoming MACSE and tolling as well tolling also became a bit more popular as well after MACSE but in the end I would say that the investment case still remained the same I would say even with the results we received but the only thing that changed I would say is the finance structure that became harder because lenders especially in Italy are not very interested in looking at fully merchant cases like we've seen in other market like Germany. >> Mhm. Well, maybe just going back a step, right? So we've talked initially about sort of MACSE and like what's something that people get wrong about it and so saying that like the first auction was a bit odd because Enel came in and took lots of the contracts and then going beyond that we're then saying well there's also an opportunity to deploy storage in Italy sort of beyond the MACSE right >> but you're in this market so this is something that you think about sort of on a regular basis I'm trying to sort of read the room a little bit like which way would you want to go if you had sort of like free choice of either sort of winning a MACSE contract or going down like the commercial road sort of outside of MACSE where would you go? It really depends as well because the thing with Italy it's also has these six price zones right so if you think about south of course you have to go with MACSE that's why it's really concentrated and this is where MACSE is it makes sense to to go with MACSE there if not go with private tolling most probably the only issue with tolling is that they also kind of depend on the pricing that you get from MACSE right the clearing market price in a sense does benchmark the price for tolling but then if you look into the north capacity market that's way more that's what would work. So in this I think looking at the portfolio if you have a portfolio in Italy you first of all you have to think where are the project located I think that's the most critical point at this in the north the south, Sicily, Sardinia and then from there creating a strategy around that to ensure that you are participating in the right I would say revenue strategy for each of those assets. Yeah. >> Okay. And then a kind of a critical part of this. So assuming you haven't got a MACSE contract, what commercial structures and revenue strategies do you see in the market that you could sort of access today? >> Yeah. >> What can you get and how does that affect this concept of bankability which you've talked about? So getting investors to >> join you in supporting the project. >> Yeah. I mean this was a very tricky topic. I mean I think after MACSE like everyone else you're like okay then how what do you do with these projects and most of developers have so many of these gigawatts of projects that they have on their portfolio and this is where we start seeing like you know as the market will you know that's the first thing someone say like the market is going to adapt somehow to some extent and it kind of indicated that MACSE is one of the key ways to secure revenue it's not necessarily the one thing you should rely on as your in as your investment case or your business case And so the first thing we had to look was the tolling you know and I think I can imagine all the officers received so many calls from different developers who were interested we're like okay beyond this because there's no way I can finance a fully merchant case in Italy yet. Hopefully we will see that but not yet. So that means you really need to find ways to secure revenues and this that's the first thing. If you're unable to let's say fully secure revenue a full a full toll then to some extent you have to mix contracted revenues with ancillary services with energy arbitrage that's the next step I would say and hopefully capacity market in the north as well the thing is financing fully merchant financing it is possible it is plausible to do so it's just depends on whether the lenders understand the risk they can price that risk and in Italy right now is still not yet when you have conversation with lenders they're still not yet there and probably it's maybe a couple years before they get there because the question for me I asked even them I'm like okay we even the upcoming MACSE we have almost 7 gigawatts of project that have been authorised after the first MACSE so everyone wants to participate not among those seven gigawatts which are in the north or south but probably a lot will be concentrated in the south and those projects want to secure revenues wants to be financed. So not all project will re will go through MACSE because you know already the second round will is targeting six gigawatt hours and with that you won't be able not all project will be able to win not all project will be able to get the private tolling agreement not all project will be able to get capacity market so what do you do with those project that don't right and that's the question I like to ask the lenders like I think that it is possible that you can create a structure that can you know around these kind of projects so that projects are not left being financed and you open more doors to some of developers unable maybe to build because you cannot build without any sort of backing from a from a lender or from an investor. So yeah, so that's why I would say that really it's going to be where this we need a combination having lenders being on one on one side to hear the developers you know making sure that if they are comfortable with that then creating an asset that is that has the right fundamentals an asset that is that's all the strong fundamentals you can negotiate good contracts and have the right optimiser as well that's usually the question when it comes to fully merchant right how do you do that So I do think they we need to find the solution or the market needs to adapt in a certain way that all projects are able to be included somehow to be financed or to be built to some extent. Yeah. >> Well, maybe that's true. So let's just have a quick recap, right? So option one, MACSE contract much sort of like long-term, very bankable, very easy to get debt in against those projects. Then option two, you have a sort of a full toll, right? Where you pass your market risk over to another counterparty, usually a trader, and they'll take on a lot of that risk and they give you sort of certainty over that toll period. Again, very easy to bring debt in against that because >> you're essentially assessing the quality of the toll. >> Then you've got this third bucket which gets a bit more risky, right? So there's no there's no toll in place and you're sort of going through this merchant merchant basis and you've got merchant approach, sorry, and you've got the capacity market that goes alongside it. But in that case, so when you're talking about debt coming into that project, bit of a sliding scale here. So you probably won't be able to get as much debt into that project. >> So you spend a lot of time thinking about financing those structures, >> I imagine you're then also trying to think about just like a Yes, you can do the merchant side and you can bring debt into it, >> but you probably have to have more equity from your side to be able to get that project off the ground. >> Yes, exactly. I mean, the structure will be different. Won't be the traditional project financing where you have a long-term tenor. But now you have to consider this merchant risk has to be priced very explicitly in that. most probably you find you will get something around 3 to seven years of a short tenor. So meaning that you know instead of this 15 years or 20 years now you have something that is around three to seven years because the lender only able to kind of understand the risk on this short-term I would say horizon rather than the longer time longer time. Yeah. And of course the gearing ratio is definitely different. It's not the usual you will get but it is it is a state I mean something to support you know those projects that are fully merchant >> and there is this kind of fourth bucket which we have to talk about obviously developers don't like to see it but like some projects won't get built right that's like >> there is there is the reality that like not everything gets to market right so it'll be interesting to see kind of how people react to that next round of MACSE and obviously keep watching that space for news later on this year >> yeah actually just to add on that I think what I'm actually looking forward to see especially with this MACSE with this the second MACSE is that you know Terna I think has heard a lot of feedback from the market where everyone was you know not happy with the fact you had one player who you know kind of dominated the market so they have included this anti-concentration rules you know to kind of prevent that if you have one bidder in one region then the minimum guarantee price or volume will be dropped to zero so in reality let's see how that works I mean this is what they have announced but maybe this gives more chance to independent developers to bid. But what does it mean in terms of the clearing market price? That's a very good question. It's a it's like the question everyone wants to know because >> is it are we following the same the same results we got from the first MACSE. Is it because now we have more projects, everyone is really hungry to kind of be able to secure revenues. Are they going to be more aggressive? Has the first MACSE set up set really the price now going forward or will this allow actually the price to go up because maybe the now you don't have you cannot just dominate the region so you have more players people will be a bit maybe bidding higher that's interesting to see how it will turn out but yeah I'm very curious yeah >> and we've also seen like more since the first MACSE like we have also had changing sort of capex numbers for batteries right so we'll see people configure their sites slightly differently. People will also use different providers for this sort of the batteries that they're procuring for example and so like I think we will see some different strategies coming through. So excited to kind of >> excited to see what happens in that next round. Maybe let's so obviously you're looking at MACSE, you're looking at Italy but you're also looking at Germany. So how is the how is sort of the investment playing out differently in Germany? Let's start with that actually >> in Germany is quite interesting in terms of bankability I would say I mean 3 years ago or so if you go to speak to German lenders about you know the potential to finance a fully merchant case I think the conversation really ended quickly or they didn't really understand how the technology worked you know or how you know how the batteries operate so and there was no secured revenue so usually conversation don't tend to last long I would say now it's bit different of course there's been already one transaction a fully merchant not a German lender but a Dutch lender in Germany and this kind of sets the tone like there is it sets precedent probably there's there's opportunity for project fully merchant to be financed but I think what lenders are seeing is that now more pro when more project come online you can you're starting to get more operating track record getting comfortable how project work, how the revenue capture rates are working just to and then in the sense you're they're no longer probably underwriting a model maybe more against comparable values because you have more data in the market. Of course, this is still early and maybe and maybe in the next few years this could change. But not all lenders are also comfortable with full >> sort of like very specific features that come into that, right? So, if I'm a lender and you're asking me to go into a merchant bank, then I think I would think about ways to allow people to pay down that debt more quickly. So, maybe cash sweeps might be something that I might look at to give me more options. So yes, I recognise that the revenue might be more volatile, but as long as I've got ways to get my sort of debt repaid, then I can get comfortable with it. >> Exactly. So really, as you said, really exactly that the structure really is adapted to the fact you don't have you have only fully merchant and so cash will be one of that to be repaid faster and also having this really short tenor that we talked about earlier, you know, and the merchant risk being priced in very explicitly into that. >> Okay. >> But yeah. Yeah. And sort of beyond that are you seeing any other sort of caveats or conditions coming into that's allowing lenders to get more comfortable with it >> I would say that's the thing like because I think a lot of focus tend to be on the revenue in its own but actually is the asset has enough strong fundamentals that you actually is the word is asset worth it is it bankable and what I mean is that there's so much right I mean it could list a lot of topics on this one you need to have a diversified revenue stack. That's one. And second is picking the right optimiser. And this is something that the lender is comfortable with. And ideally has to have someone with a oper with a track record. Not necessarily a bigger player because that's usually what people would tend to go for. You can also have smaller we've seen smaller players who are quite really good as long as they have a strong bank financing backing but really have good credible I would say dispatching strategies understand very well the market and can easily translate or interpret all the regulatory changes that happening to kind of stress test your project. So there goes a lot of stress testing of the revenues as well because as well you know it's fully merchant so that means more project coming online there is saturation especially on the FCR level so they have to run a lot of models to understand what kind of downside are we talking about >> so we and also beyond that what kind of contracts you've negotiated whether you've negotiated the what kind of supplier the quality of the supplier is it tier one >> and also the performance the long-term I guess performance of the project in terms of like what kind of availability guarantees have you secured warranties and yeah like it's quite a package I would say >> and we and we definitely see that so you kind of split that at a high level right so one on one side you're talking about like the technical side which is are the batteries that are going on site are they provided by a reputable provider is there a good warranty that goes with it is the service agreement sensible is there a track record of delivering these projects in Germany, have they been able to service those projects? Dot. There's a whole host of sort of good questions that you can do there. And I think we are getting to the point as you say like where there's a track record, it's really easy to show that some of those providers are really competent and as you say, there should be little concern around supporting those projects. >> I think on the saturation side is really interesting. So you mentioned sort of FCR, so sort of very quick response. You've also got other response markets and then you've also got saturation of some of the more niche note but some of the more sort of fundamental parts of it. So things like the day ahead spread or the intraday spread and as you add more and more batteries that spread sort of squeezes and then you're and then you're kind of left with relatively less revenue. >> That's something we think a lot about. Not a not a huge surprise and I don't know if people want to sort of dig into that in a bit more detail, take a take a look on Modo's Terminal. You'll definitely be able to find some stuff that we've been looking at. But from that saturation point of view, how do you think about it? So are you seeing let's say a benchmark today would say that a battery in Germany, let's say a 2 hour battery is making 200,000 euros per megawatt per year. That's I think roughly a right number. Where do you kind of see that coming down to in the saturation like I think our figures for like a 2-hour system would put you around about 100k per megawatt per year. >> Yeah. >> Depending on sort of specifics. >> Exactly. And also it depends on different providers in the market as well. >> Those who really show that it goes really deep really fast and then those who show a bit of like some sort of a stable way but doesn't go very deep. Yes. >> So it's also a matter of like looking at different providers what they offer and what they how they come up with their methodology and they think on saturation topic and yeah I would say right about what you guys also estimate I think I've seen something similar to that as well. Yeah. >> Yeah. Okay. So you're sort of juggling those views in the market. >> Yes. Yeah. So when you're looking at batteries performance contract as an investor in the space like what do investors sort of consistently underprice on those contracts? >> I would say I mean I like I feel like I like to emphasise a lot that they tend to underprice the optimiser risk. I think I like to emphasise a lot optimiser because for me if you have an asset of course other topics availability guarantees warranties all very critical right they're very important. It's just like if your if a project is exposed to fully merchant or even to some extent some sort of exposure to merchant your revenues are dependent on an optimiser. >> So you need to make sure you've selected the right optimiser who one has the same incentive. The incentive is aligned between the asset owner and the optimiser. Meaning that they're not incentivised to just, you know, create more short-term value or revenues at the expense of that means, you know, aggressively degrading the asset and at the expense of the long-term health of of the battery. And of course the optimiser as I mentioned earlier it's who really has understands the market with and you know especially when we talk about the upcoming grid dynamic fees which upcoming 2030, 2033 I think >> which are these like changes in location variable the fees that could change based on the location or every 15 minutes at a local grid. So in that case your optimiser will be very critical because they not only will need to look into just the power market prices how the energy arbitrage is working all that they will have to understand all the price signals at the local grid to make sure that they are able to either read very quickly and respond and allow the asset to quickly maybe dispatch being able to charge when the local grid has surpluses or discharge when it's in need >> and that could potentially create some sort of revenue. I know the dynamic grid fees is a very big topic and we still don't know how they're going to work but to some extent then this optimiser become very critical. So the risk of underpricing this making sure you have picked the right one is very critical I would say. I totally agree. And like sometimes we see tenders coming through and they say, "Oh, this optimiser has given me 5% profit share. This one's doing 3% profit share." And I sort of from my side, I kind of think, "Oh, just just be careful." Like don't just pick the lowest number, right? Because it's 3% of what? Right. Exactly. And you might be better off paying 5% for a better number than 3% of a significantly worse number. Right. If it's 3%, you've got the 97% of the other part. So you really want to make sure that sort of 100% is a big portion. I want to ask on the dynamic grid fees because that's a sort of fascinating topic. >> Obviously that doesn't exist yet. >> Yes. >> So when you say I want to look for track record on this like how are you doing that? How are you getting confidence that an optimiser really knows what they're doing? >> I think at this stage is not yet. You know we just having conversation with them just to understand what they what's their thought what they're thinking and that's where really having an optimiser always thinking ahead and trying to understand the market where it's heading becomes critical it's going to be a very interesting way because it's really might be able to reward an asset if they're able to dispatch in a grid friendly way as that's what they're looking for right >> I think it's still very in the works and still don't know exactly how this would work but I would say it does create an interesting topic on how do you make your project your assets still to some extent might make some additional revenues and also being able to understand like on a local grid at what point you need to discharge or charge >> and very fast too right you know this 15 minutes changes in the fees I think that seems very interesting but not very I'm not very familiar yet to how this works >> and maybe taking a step back for comment on like Germany in general like what a great thing that the grid is going to give signals around where there's congestion to try and get batteries to work in a way to help congestion or over supply in certain areas. Like this is the type of grid we need where you give signals to flexible assets and you get them to do the things that your grid needs. Yeah, I think some grids are sort of still like stuck in the stone age where they're giving the wrong signal to assets in the wrong place and you're kind of thinking like you're just making life much harder for yourself and you're having to build way more grid than you need to like just get to the point where you're recognising that there's a constraint in the network and where there's lots of say wind generation. Okay, give the signal to those assets to charge and then where there's >> not enough generation or lots of demand then give them the signal to discharge. I'm very excited about what that could do for grids, but we shouldn't talk about that too much. Okay. So, we've done, let's do a quick recap. We've done Italy, the sort of bulk procurement of MACSE with a few options. We've then moved to Germany and we're talking about how do people get those projects across the line. Maybe let's go a little bit broader then and let's say you're active across 11 European markets. I think >> more than 11. >> More than 11. Okay. It might be 12. Okay. Good. I mean, look, our research is rock solid here. I'll have no questions asked of it. 11 or 12 European markets that spread is quite wide. Is that is that because there's sort of less conviction and so you're acknowledging that there's a there's a sort of a good risk play which is to spread out your bets or is it sort of something where you say look we believe in every single one of these but you kind of can't put all of your eggs in one basket because who knows what that system operator or regulator might do. They might do something completely wacky and we can't have that exposure. Exactly that and I it's really a little bit of both. Yeah. Because on the conviction you're trying to you understand the change in upcoming change in the structure in the grid structure maybe due to the fact there might be some need in balancing services and there might be a high penetration of renewables. So we're able to see like okay even though this is not yet priced in the market yet but this might be the right timing to go into such market whether it's a smaller market or a bigger market to in a sense taking being able to benefit from the upside when that actually comes into place. So you're already seeing that you're already seeing something that maybe the market is not seeing not everyone but being able to be going into a market really and that really conviction really also depends on those on the right timing as well right if you really in the right timing you could do really well >> it's a really it's a really important point right anyone listening on investing like this episode I think will attract people who want to invest in battery storage right so timing is so critical if you are heading towards a market where the services aren't saturated yet and it's giving you 200 euros per megawatt per year and then you're having to pay a big fee to get access to the grid and buy one of those sites that might connect in say two years time like there's a real risk that you could buy something very expensive >> and then when it goes live like the market's kind of fallen away a little bit but if you can be either side of that so if you can be really early and catch the 200,000 or if you could be late and buy the asset for less then like there are some timing is critical >> it's really critical And that's really what puts us in some of the markets where could be smaller markets that you don't see a lot of investors. >> And at the same time as you say diversification becomes critical because you know you could have one bad year or one market had you know changes some regulatory that kind of affects your portfolio so at least the other market can carry on the rest of the of the portfolio. Okay. So yeah, so I would say both and yeah, >> maybe let's make that a bit more specific for people because we've talked about big markets, Italy, Germany. And we've implied a few others. But let's now go to some real specifics. So Finland and Lithuania are two markets that you're active in. I don't hear Finland Lithuania all the time. So what is what is it about those markets that brings you to them? >> I mean, these are smaller markets of course. And most people I think investors will underlook overlook them because probably less liquid and it's very small but if you look at Lithuania I think this also comes with the conviction we talked about earlier right the there was already all the investors that went in earlier they saw this synchronisation happening with the Baltic with the continental Europe so the Baltic states were now going to be responsible to balance their power, their grid and that meant the grid operators were making were in need of some grid reserve capacity. >> So that created a lot of opportunity for batteries to come in. Yes, it's not contracted revenues but there is a need for this grid this reserve capacity. So and that created a lot of interest in some of the investments that went in and that kind of thing played out well. When you look into some of the numbers I think some people said they've really done very well in terms of returns. Those even went in quite early and already start operating. >> And then comes to Finland also smaller market I would say not very big it one bidding zone I think one single bidding zone compared to the Nording Nordic countries and high penetration of wind. So that's created also some sort of opportunities when it comes to batteries. But the thing with this smaller market is that it's also exactly timing. You need to come in earlier because it gets saturated very fast because as soon as people realise that there was an opportunity, everyone comes in and that gets to that saturation we're talking about earlier. >> That's what I was going to ask you, right? So, let's say somebody gives me 500 million euros. And obviously what I would do with that money is I would invest in some batteries or something else. You never know. Like am I too late to Lithuania? Am I too late to Finland? Or are those markets do you see them like still having good fundamentals? >> I wouldn't take the 500 million all of that because it's a smaller market probably a little bit. There is still projects especially I would say in Lithuania that they're looking for I think they're looking for investors that were already matured enough that can still benefit from this grid reserve capacity from the TSOs. But I think beyond Lithuania I think you go into other markets I would say. I think Poland would be will be an interesting market I would say. Some very interesting fundamentals in Poland. some very high sort of peak prices, but also a lot of solar coming through giving you that kind of the nice spread between the two. So yeah, another kind of another fascinating market. Nobody's giving me 500 million euros yet. So like like just yeah, we don't we don't need to invest today. >> Okay. And then as these markets mature, right? So >> I think we'll see sort of a standardisation across the markets. we'll see people building out more sort of four- or six-hour batteries and there'll be a good size of batteries everywhere. So imagine that world in like five or 10 years where we're no longer kind of installing the first batteries but we're installing the sort of the fifth gigawatt or the sixth gigawatt in that world like what is the thing that stands out as making like the best performing assets in the market? I would say the best performing asset at that time will be the ones with a really sophisticated optimisation strategy. And I think with now AI as everyone likes to bring this topic in a lot of things I would say it will play a big very big role because then it will help to kind of really process fast some of the either the price forecast you're getting the signals we're talking about the local grid signals we talked about that you're able to participate in those type of you know being able to dispatch in a in a friendly way for you know that could you know reward you for that so really having that optimisation the best your I mean sophisticated credible optimisation methodology or strategy would will be the one that would set you out from the rest of the of the BESS owners. Yeah, I would say >> interesting and like I'm also fascinated like yes on the location side but also on the sort of other services as well that you can start to provide. So, could you do like voltage? Could you do things like fault currents, inertia type services? I think that's also quite exciting, right? We've it feels like we've started scratching the surface of this. And I don't think if you went into a bank tomorrow and said, "Here's an inertia contract." I think they might they might look at you a bit quizzically, but I don't think that's going to be the case for long. I think we will start to see those coming into contracts. >> Yeah. But the only thing with this kind of when it comes to things like inertia, of course, they're always conditions as well. You know, you need to have a this grid forming inverter. So for project they have already matured where you've already made some of the decisions on your technology then in a sense you can't really go back to that. So you can't miss out on this on this type of opportunity. If you have a larger portfolio of course some of the project could participate but I do feel like these kind of mechanism that are being introduced some they really come with conditions that can make your project not be able to participate as well. So that's another topic. >> You have to plan from them from the start right. So yeah, really important that the grids give a kind of clear signal that they're coming. Okay, well let's wrap up then. So what is a contrarian view you hold about energy or you can be more specific if you'd like to talk about investing in European batteries? >> Yeah, I tend to go back a lot on contracted revenues. I would say mispricing risk on contracted revenues and merchant revenues. What I mean is that contracted revenues always seemed or perceived as very safe revenues you know you very clean you can attract institutional capital you know get the attractive project financing terms >> maybe something like a toll >> exactly like a toll exactly and then merchant of course has all this uncertainty on the revenues but I think with contracted revenues let's say for example in MACSE it's one thing to get you know you win you have all these contracted revenues but there are also conditions you need to meet as well along the way during the 15 years. So how you going to operate they have very strict you know conditions on your degradation on how you the availability. So and also the same for tolling as well like you have to meet all these conditions and so that means as an asset owner you really need to be actively making sure you're operating your asset to meet all these conditions so you don't get penalised. So to some extent it looks good but actually requires more work to make sure that you are taking care of your asset that you're meeting all your conditions while for merchant yes the p it's very uncertain and everything but if it's done in the right way with the right expertise I think the project could really outperform but really depends on the on the on the expertise you've included or the kind of again the optimiser or whoever to run the project and Of course, this goes beyond, of course, the asset on its own, you know, whether you have all the right fundamentals and everything. Yeah. >> Well, Grace, thank you very much for coming in into our into our sort of guest studio here in Berlin. And sort of giving us the run through of investing in these batteries from MACSE to Germany to Lithuania to Finland. I think we snuck some Poland in there halfway through like five of the 11 or 12. So, we'll have to do the rest next time you come on. >> Yeah. Thank you so much for having me. Thank you.