Securing debt for battery energy storage with Brandon Faber (Director @ NORD/LB)

Hello, everybody. Quentin here, and welcome to the transmission podcast.

This week is a real treat. We've got Brandon Faber on who joins us from NordLB.

Now NordLB is a commercial bank headquartered in Germany with massive operations in North America, and they are one of the biggest lenders around the world to energy storage projects. Brandon really knows his stuff about projects and getting these financed and off take agreements and and much, much more. And we go into quite some detail this episode about how the whole asset finance world works. I really enjoyed this conversation, and I think you will too. So without further ado, here's Brandon.

Brandon, welcome to the podcast.

Thank you. Thanks for having me on. Super excited and honored to be here today.

Today, we're gonna talk a lot about what you do at the bank and you guys' involvement, in energy storage. Let's get stuck in. So from your point of view, what is the role of institutions or institution investors and banks and private equity in funding energy storage projects?

Yeah. And it's a good question to start with. I I think from a simple answer, you know, institutional investors and banks play as central of a role as they can in in funding storage projects.

NordLB is a bank, and we provide senior debt to to these storage projects.

You know, we're a little bit more suited to provide short term financing in the form of construction loans and tax equity bridge loans.

And then we also provide longer term financing with term loans. And the way we think about, you know, how we size those loans and provide those loans is by looking at the project's cash flow profile.

And as you can appreciate with the battery storage project, a a lot of the economics and and money to be made is is in the merchant market. From our perspective, we we do take a view there. But I think that's actually where the institutional capital and private credit is is best, best to come in. We start to lose a lot of the senior banking, tighter pricing market for for more for more merchant y transactions.

What does that mean? Just for for our listeners. So in our industry, you often hear the term senior debt.

Yeah.

What does senior debt mean?

Yes. Senior debt is is essentially the part of the capital stack that is most risk conservative. So you essentially get paid first. I mean, there are some nuances there with with tax equity in the US market and concept of back leverage. But, essentially, you know, it's it's the most conservative part of the capital stack. You know, you size your debt where you assume conservatively that you can be repaid or refinanced.

But with that, right, there's no there's no upside. So you're really relying on getting your interest coupon and, you know, getting repaid in, you know, five generally, five years is is what we see.

And so is what you guys do the most senior debt? So is it the top of that stack is if we Correct. That way?

Yeah. Correct. So NordLB and and kind of a lot of, you know, our specific industry is really involved in in the top of of of that, of of senior debt. We don't get too much in mezzanine financing. You know, it is a solution that that we we can provide, but but our core bread and butter is is the senior stuff.

And how does mezzanine financing work? I'm gonna keep on jumping in here just to clarify some of these points so we can get deep into them. But what what's this mezzanine financing that you guys clearly don't do?

Yeah. Mezzanine financing is just, kind of a second tranche of debt below senior.

It's it's obviously a little bit more risky because you're second in line or in cases, maybe third or fourth in line to to be repaid. So, you know, if there is a, foreclosure bankruptcy situation, you know, you you again or or could be left hanging depending on on how severe that, you know, that bankruptcy is. So, yeah, we tend to operate in in the senior realm, first priority lean on on the project assets.

Again, there's some caveats because of the tax equity industry and market in the US, but, you know, really, generally, the the most conservative profile in terms of investing in these energy infrastructure projects.

Alright.

And can we set the scene here with some examples? So you guys are really active in power power infrastructure.

Could you give some examples of some projects that you've been involved with where NordLB have lent to that have have have lent money to that project in the last twelve months, say?

Yeah. Of course. I'm gonna actually answer that question by but not being in the twelve months because we we we actually pride ourselves on being being more of a pioneer to this industry. I mean, we financed the the largest battery storage project standalone at the time back in twenty twenty one.

That was a two hundred fifty megawatt project. We then went on to finance the largest solar plus storage project in in the Gemini project. I believe that was in in twenty twenty two. And and, you know, the projects and types of projects that we finance that I'm talking about today is utility scale storage, so really in excess of of one hundred megawatts.

And to put that into scope, I mean, these projects demand, you know, potentially upwards of two, three, four, five hundred million dollars of capital.

And so as far back as twenty twenty one, you were financing, you know, hundred megawatt scale, utility scale battery assets. Mhmm. It wasn't that wasn't that common back then. So how did you get comfortable with with doing that?

And were you financing the whole asset, or was it just the the capacity market element or the, you know, the the guaranteed returns element? Or were you comfortable with the merchant side, so being comfortable with taking the exposure to the power markets and spreads in power markets? How how did you and the team think about that problem? Because, you know, if you as you talked about being the the senior debt provider, the most risk off debt provider, how do you think about the merchant problem?

Yeah. No. It it it's a great question. You know, back in twenty twenty one, you know, like like you said, battery technology is is a very novel, asset class in in energy infrastructure.

And but the writing was on the wall that it it would become pretty pretty important in in the broader landscape of of the grid.

That first project that I referenced was with one of our most core and and trusted clients, and I I I can get into this a little bit later in the podcast. But, you know, starting out with the brand new technology and and, again, financing upwards of of a hundred million dollars, you really need to have a close relationship with that sponsor and developer that that's building it. And they really need to prove that they are sophisticated and broader renewable energy development or have some experience with that.

Again, in the case for the twenty twenty one project, it was one of our our most most trusted clients.

Can you say who it was?

Yeah. Yeah. It was, it was with Recurrent Energy. It was the the Crimson Project in California.

And that project, to answer your second question, was highly contracted. Right? And I think that's the best really the only way to that the bank financing market got really got into this industry is you gotta build from somewhere. And, you know, by having a contracted revenue profile and kind of mitigating and and derisking that aspect of the financing, you can really focus on on the technology at the time and doing due diligence with independent engineers and and getting comfortable from a technical standpoint.

And then from there, you know, we, again, financed projects over the years and and got got more comfortable and started seeing real real data that, to back up these these new transactions where, you know, your risk tolerance does slowly start to increase and, you you know, you do generally get that get that comfort level there.

If I think back across the last, let's say, five years in grid scale energy storage where around the turn of this decade, the the concept of debt financing became a reality for grid scale storage.

What one of the things that was sort of talked about a lot in, twenty twenty one, twenty two was the banks will lend to these projects for the guaranteed the contracted revenues bit, but they won't they won't lend to the merchant bit. But don't worry. As banks become more comfortable with this, they're gonna become more comfortable with merchant. And so it was kinda like this idea, and there there are some projects that have been financed on merchant business cases.

Don't get me wrong. But this idea that the cavalry was coming. Right? This low cost capital was coming into this market.

And then one of the things that's really interesting is how, certainly, in the last twelve, eighteen months, there's been a lot of grid scale batteries that have been, selling longer term contracts for, you know, total agreements or, more, floor based off take agreements.

And my question to you is with your banking hat on, if I was a banker and seeing that happen so I was thinking, right, I need to get comfortable with merchant, but I I can't quite get there. Mhmm.

And now I'm seeing projects starting to get more tolling agreements.

Do I even bother getting comfortable with merchant anymore? Or do I just look for the tolling agreement projects?

Yeah. I think, you know, each bank will have their own mandate and their own their own risk appetite. Don't get me wrong.

I think from a personal view, you are leaving a a lot of, business and and and financing opportunity out there if you just completely neglect that that corner of the market. And frankly, like, you know, going back in in the twenty tens, the banking market ultimately got comfortable with solar and and wind merchant. Right? And and how did we how did we do that?

And the answer there is just really understanding, you know, what are the downside cases in the merchant? How much can you absorb on these negative, merchant cases or, you know, downside or overbilled cases where you can still repay debt? And I think if you create a credible story from that standpoint of, look, even if you hit this floor price, you know, we can still still repay our debt service. And, you know, ultimately, that again, it it'll be bank to bank, but, ultimately, you know, how you craft that story is is ever important.

And I think what's exciting for me personally on the merchant battery side of things is these are highly structured transactions. They're not, you know, here's your towing agreement financing, go get approval, you know, done. It's you know, we we layer in target cash sweeps. We layer in certain reserves to handle the the seasonality, the coverage ratio, and and how long you're extending cash flow for and and what your budget requirements and and augmentation requirements are there.

So so it's a very detailed in the weeds type of asset class that that really favors those banks that can get their hands dirty and and can get in the trenches that, you know, those are the ones that are gonna benefit in offering, you know, more creative financing solutions for for some of these top tier sponsors.

Can you talk about that in a bit more detail? That sounds really interesting. So rather than just writing checks and waiting for the the coupon or the interest, is what you're saying that more sophisticated banks are able to layer in managing that managing risk of repayment with with covenants, so with agreements around how much you know, how the business is the the the project business is run.

How does that work, and how do you come up with those?

Yeah. And, I guess, to start with this point, again, it will be completely up to your your bank's mandate and latitude for for the risk curve and and profitability.

Each bank in the industry has, you know, their their hurdles to make. And, you know, in this market, you know, one bank will tell you we can't do any tolling agreements because, you know, that there's they just don't meet those transactions don't meet their their profitability metrics. In order to be you know, tends to operate in the middle of that, we we we, you know, we like to have a diverse portfolio, and and we can we're lucky to able to operate in a little bit of both. On the more merchant side of of that risk appetite, yeah, I mean, again, it goes down to crafting crafting the story. And if you're you know, I mentioned some of the metrics with with target sweeps and and coverage ratios.

But, ultimately, at the end of the day, you know, if you have a highly structured transaction where, you know, you are having a loan repaid and, you know, in a base case in six, seven years, but on a solar project, you need, you know, twenty fives or twenty five or even thirty years of cash flow to to repay your debt.

I mean, you you know, there start to become some actual, tangible positives by by investing in in this new asset class of battery storage. So, again, I I think it's a matter of being open minded, but also as an as a note sponsors of, like, you know, this is still a a nascent technology, and bank liquidity is is generally much more deep, obviously, with with the contracted contracted profile. So it it's finding that sweet spot of getting a good cost of capital and the financial partners that that you wanna have and or, you know, if you're okay with with a limited subset of the banking universe at at a higher cost of capital, then, you know, that that's one way you can operate your business.

So There's probably a few gigawatts of of battery utility scale battery storage that's been financed now through senior debt.

Mhmm. Even even even just Great Britain and the US. And I'd be interested to know if any of those projects have failed to pay back their debts, if you like.

Yeah.

I don't know whether we can get hold of that data somewhere.

I'd actually be surprised. I reckon it's pretty unlikely.

Yeah. So far. Yeah. Yeah. Touch wood. This feels like one of those kind of it's it's Christmas two thousand seven and saying it's the top of the market forever kind of thing.

Yeah. And and I think, you know, there there's definitely some some pause for caution rate. Just because things are working in the past doesn't necessarily mean that that they're proven to to succeed in the future. And especially with utility scale battery storage, I mean, the market changes on a dime so fast. I mean, in, you know, twenty twenty two and twenty twenty three, you know, the market was evidently really hot, and there were headlines of batteries making, you know, millions of dollars in a few days.

But, you know, as of late, that actually hasn't fully fully materialized.

So, you know, it it's again, knowing what those downside scenarios are, NordLB takes a really meticulous approach in in terms of vetting and and and doing doing that diligence and and understanding that, you know, we're comfortable with with the cash flow profile.

But, I mean, to answer your question, I I mean, we've we financed six gigawatts of battery storage to date. Wow.

So yeah. That is incredible.

Yeah. And and that makes up around twenty five transactions. So we, you know, we pride ourselves on that, and I I think we, you know, it only serves us moving forward because we have those operational data points. We can we can tell our clients what we're seeing and what's working and what's not. So, yeah, we're we're fortunate to be in that position.

And so could you share it at all? Is it working?

Yeah. No. I I I mean, so far, you know, again, this is a personal view, but broadly, you know, we're we're very bullish on the on the battery sector.

We view it as inevitable to, net zero and decarbonizing the grid.

There is no piece to the puzzle that batteries really don't don't plug in and fit there. They're flexible generation. They're instantaneous dispatch. They've proven that they're reliable. And I think the headlines will honestly continue to prove themselves of, you know, x battery projects, saves, grid outage, and or, you know, you know, x battery projects, keep the lights on and and Kaiso. So, I think more support will will will come over the years, and and, you know, people will realize this is real transformational, asset class.

Let's talk about tolling agreements for a minute because the offtake agreement is so important to you as a bank. Right? Because that is the that's where the cash flows come from one way or another. So if you're, do you you've got your banking hat on and you're looking at a project that has a tolling agreement, what kind of things are you looking for for a robust tolling agreement? What what are the the green flags, and what are the amber or red flags?

Yeah. It's a good question. I think when a client presents us a project with the tolling agreement, the natural reaction is, you know, this is a very conservative financing. You know, you are getting your contracted payments, and there's, you know, there should be little to no questions about it. That being said, tolling agreements definitely come with with their nuances.

Generally, you know, we see tolling agreements in regulated markets. So, you know, that that that's a double edged sword. Right? Because if you're and this is, again, a very downside scenario. But in the case of, you know, whatever market you're operating in, if your utility goes bankrupt, then, you know, you have no access to to monetize battery cash flows. And that's asset.

Yeah. Exactly. A a stranded asset. And, you know, luckily, these utilities are generally investment grade, but but it's a serious risk.

I mean, we we take the approach of can you wheel the power to a liquid market? You know, what are the downside scenarios there, and and what's the likelihood of that? So that's point number one. And then point number two that that I think, the market needs to appreciate is is tolling agreements come with pretty pretty strong performance obligations.

Generally, we see them you know, you have to be hitting one hundred percent of capacity or you have to be at least, you know, x percent available.

So performance expectations on who? On the on the project? On the project. That needs to be available.

Yes. On the project. So, you know, the when the project gets built and is operational I mean, the job really is isn't finished. Right? I mean, you are required to maintain a certain level of performance to that offtaker. And, you know, in the case of these tolling agreements, if you don't meet those thresholds, you know, you could be on the hook for serious penalties or even termination of the contract, which, again, in a senior level position where we're offering the cheapest form of cost of capital, like, we need to know that that risk is is very far off or is extremely mitigated.

So, you know, the way we handle that is, you know and again, also a positive to the the battery industry is you you have these robust long term service agreements that that match that that generally there's some caveats there, but generally match those performance obligations. So you have somewhat of a back to back arrangement where you have a counterparty that's that's guaranteeing on your side of the project, an an o and m counterparty that's guaranteeing that performance, threshold that you're required to hit in the PPA.

But then you you get down the rabbit hole of well, I'll tell you what. Have a go at defining availability.

This is a podcast in itself.

Yeah. Podcast in itself.

Yeah. That that's right. I mean, we we could we could speak to ours on this topic. But, yeah, I mean so I think in conclusion, tolling agreements are you know, they're a great product for locking in contracted revenue, but but they definitely have their obstacles that that that, you know, that you need to to diligence, along the way along with, you know, your council teams.

Well, what other types of mechanisms or options are you seeing outside of the vanilla tolling agreement?

Yeah. I think for the most part in Kaiso, right, we'll we'll see projects just with a resource adequacy, contract. And the way to think about that is a battery is unique in that it can make several different revenue streams. It can make capacity revenue. It can make energy arbitrage revenue, which most people are familiar with, and then ancillary services revenue.

So a tolling agreement generally bundles all those revenue products, and the offtaker sells or the offtaker pays a fixed payment for those essentially.

And then with an RA contract, you essentially just get that portion of the battery's revenue in in a fixed contracted payment. And the rest of it, call it, you know, thirty to forty percent, or depending, thirty to fifty percent will will be operating merchant. So, you know, that that's an offtake arrangement that we're seeing. I think it also depends on what market you're looking at. You know, we recently had financed a battery storage project in Massachusetts, a a first of a kind and one of the largest in the state. Yeah. I I know in Massachusetts, they have a creative incentivization program through the Clean Peak standard where the battery project is able to earn revenue through so called Clean Peak energy certificates.

And your project can contract with different sorts of entities that that contracts this cash flow, and the cash flow can be quite significant. So Massachusetts, for example, has found a way to to bring bankability to their market in a way because otherwise, if you don't, you know, if you don't have a way to contract, cash flows, you're gonna really challenge to find widespread deployment. I mean, it's really hard to finance a use case, on a fully merchant profile.

So And at what stage do you get involved?

Would you is the asset already built and past commissioning and online and then you guys finance comes in, or would you consider financing a project through the build phase?

Yes. So so we generally come in at what's called around notice to proceed, EPC term. It's essentially when the project is largely derisked of of development like risk. So so we're not, you know, we're not in the business of of taking those risks, whether that be, you know, like permits or interconnection, something along those lines. So pretty much, you know, we come in when the project is ready to start construction and, you know, delivery of the equipment is on the way and and the project is is essentially ready to be built ground up.

With battery storage, you know, we view this as a positive because because, actually, you know, what we've seen is the construction of battery storage be be rather simple relative to other infrastructure classes.

I mean, you're, in some cases, operating on a few acres plot of land and and putting containers down on a on a construction site versus, you know, wind or solar where you could be excavating mountains and and hills to for for your energy or, excuse me, for your, engineering design.

So so, yeah, we we finance through construction and then generally a period of of five years after construction is done or after COD is hit.

Okay. So you've got people on the ground, owners, engineers going and checking things and, making sure there's quality.

Yeah. We don't specifically bank, but we we do have reporting, covenants where, you know, we can request that a engineer go go on behalf of the lenders and and and, and report. And then, yeah, we we generally get monthly reporting requirements from the the EPC and sponsor of of milestones being met and and progress of the project.

Fascinated by the fact that you've got six gigawatts of battery storage already financed. That is a remarkable number.

How how far will you go? What's an appropriate amount of exposure for Nordell b? Do you want ten gigawatts, twenty gigawatts, thirty gigawatts?

Yeah. I mean, we'll see what what the future holds there. I I I think from an asset class point of view, you know, again, from from NordLB's perspective, you know, we're we're we heavily finance in in solar really solar solar energy being our our primary asset class. And if you look at battery storage, I mean, it just serves as such a natural complement to to solar and and what solar trying to achieve with being an an as the most economic efficient energy resource during the daytime, but that inevitably, you know, offloads, in the evening time to where battery storage can complement that. And from, you know, from our perspective, you can't have one really without the other. So, you know, we really see battery growth being being enormous and and Nordell B being being a big part of that.

And so you've got the era of a lot of the energy storage folks in the industry now. What are you looking for? What does a good project look like to you? What's the what does the perfect project look like? And then what are some things you'd accept given the right conditions?

Yeah. And and I think this question, we we obviously could spend hours discussing of of all of the things that we get into. But but I think you really need to break it down in in into the major points starting with with the technology and kinda what we discussed at the beginning of the call. I mean, you really need to understand that the that the technology is is proven in some regard. Are there bankability studies done? Has it been deployed on on a utility scale?

And then then moving on from there, yeah, you you really need to to look and understand your your revenue profile and and what type of return you're you're getting from from the storage project. So, you know, if you're okay with more mild returns, but, you know, you really wanna minimize your equity spent as your business strategy, then then, yeah, tolling agreements and and kind of that path to bankability will will suit you well because, you know, you're you're really gonna get the most bank liquidity with those projects and most interest.

And if I was a sponsor, frankly, I I would really start there and and build up your portfolio.

If, you know, if you're on my side of the table, right, and you hear a developer come to you and says, you know, we wanna build a fully merchant project. You know, we've never done this before.

You know, as you can appreciate, the conversation will will end pretty pretty quickly. So I think it's, you know, building up that relationship with with stable core clients and bankable battery projects and then and then building building off of that.

So if you're a a developer or an owner with a platform, really, the way to do this is get a couple of projects in the ground with holding agreements that everything's derisked, prove you can build stuff to quality, and that you always pay your debts, and then venture into the merchant world.

Yeah. And and, you know, this is a very opinionated, you know, viewpoint, and there's definitely developers out there that are that are better better suited or better kinda suited to to take part in this conversation as well. But, yeah, in short, I I think that's right. I I think there's just a general level of risk appetite that the senior bank market can can accept.

And and, look, you can go build that fully merchant project, but, you know, that's gonna come at higher cost of capital. So it's, again, what what business strategy does your platform wanna have and, you know, you know, how how does kind of the senior bank finance market fit fit into that. And it doesn't it doesn't always fit into, you know, to tell you sponsor strategies.

So And and now I'm gonna ask you a very naughty question.

And if you could do your best to answer it, please forgive me. But how cheap is the money? Right?

You say it's a cheaper form of money Mhmm.

Getting senior debt in. How does the cost of capital for what Nordell b does compare to other capital in the stack?

Yeah. Yeah. I I I many think there's other forums on this out there. But, yeah, I mean, with highly contracted deals, like so called clean deals, you know, you can get pricing really as as low as under two percent over SOFR. And, you know, that that can kinda quickly jump up depending on the level of merchant and other other risk factors.

But but, yeah, I mean, a fully merchant project can have have a three handle on it or even a even, you know, four percent margin over SOFR. So so it quickly quickly escalates.

And, you know, each each basis point of of cost of capital is is essential, right, to these to these sponsors. So so just finding where, you know, where best, you know, the project is and, you know, where it can optim optimally, hit the return is definitely the focal point.

And thanks for answering that question. You could have said, well, that's that's private, and, I appreciate that. Yeah. So so now for our last two questions.

The first one is this is your chance to plug anything. If you if you wanna say something to the energy storage community, this is this is your go. And the next one is your contrarian view. But first, the floor is yours.

Yeah. I I think, as the plugs in the industry, I mean, again, we're we're fortunate at at Nord to be able to to seen so much and and to be able to finance so much of the battery storage, projects that we've seen come across our desk. I I think, you know, the message should be that, again, moving forward, that sponsors have an have an open mind to the asset class. I I I think too much of the industry thinks that this is already proven and and already easily bankable. And and, frankly, it's not. There's a lot of nuances, a lot of details. I mean, we we only scratch the surface here today where it it it is a challenging asset class.

But I think, you know, again, being at the forefront of of these projects and and and innovating and all these different commercial optics and arrangements, you know, suits Nordell b well. And we're, you know, we're excited and and lucky to offer kind of these these flexible financing solutions for, you know, for these new new sponsors and developers.

And finally, what's your contrarian view? So what's the thing that you believe that a lot of people don't?

Yeah. I think this is this is a great question. And I think, personally, the for me, the inflation reduction act is not as good to the industry as as people might think.

Oh, here we go. Here we go.

Yeah. Yeah. And what I mean by that and there's, you know, a few different angles to this. But I think from what we're seeing specifically with these tax credit adders, you know, we're seeing these projects become really frothy where sponsors on a normal case basis by looking at the cash flows don't need to contribute any equity into the project or even even it's showing negative equity is is needed.

And I think from from a political point of view, that that's that really wasn't the the goal of IRA. Right? The goal is to to accelerate, energy deployment and and and focus, energy investment to to decarbonize the grid. But when you juice it up so much, you know, there are projects out there that I'm sure that are being built that shouldn't be built, on on normal cases.

And I think at the end of the day, what will be what will be most important for the industry is getting bipartisan support to really supercharge this the sector. And, you know, by by saying that the renewable energy is propped up on tax credits, I mean, it is a fair statement right now. But but I think, you know, the market is maturing. These technologies are are getting, cheaper and more efficient.

And we're at the stage right now where, you know, I think vast renewable energy deployment can be achieved without these heavy subsidies. And do I think that these should be phased out right away? Absolutely not. But but I think we we do need to start having the industry stand on two feet, and, you know, battery storage will be will be there leading the way, hopefully.

Could you could you just talk for a second about those adders that you mentioned?

So and this is fascinating that with those adders, you can have projects that, end up with zero or negative equity requirement.

How how do you actually get there in practice? What does the Excel spreadsheet look like that gets you there?

Yeah. So so on a standard case rate, these projects would qualify for thirty percent, tax credits. So, really, thirty percent of your cost of the project or or, really, the value of the project is what the industry bases it on, can be covered by by tax credits. And and tax equity in the market fills fills that gap of of the project.

With the adders that was introduced with IRA, you you know, you have energy community adder, which adds ten percent to that, and domestic content adder, which adds an which could add another ten percent on top of that. So we have seen projects come across our desk with fifty percent ITC assumptions.

And if you take a sec step back for a second, Ray, I mean, these tax credits again are are being really fully funded off of the the IR. So going back to my main point, you know, in those scenarios, if you look at the cash flow of the of the project, you know, under standard circumstances, we'd be fine lend lending to these parameters, but the equity the outcome of the equity needed in the deal would, in some cases, be negative. And I think that's a little bit backwards to what, again, what the IRA wanted to to achieve is this inefficient use of of of tax credits for for acceleration of renewable energy deployment.

So we've just seen a little bit of froth in the market, from that perspective.

Yeah. And it's, in the current political environment, it's a very difficult one to for, it's a difficult very difficult one to swallow, really, and there may be some medium and long term issues with that. Mhmm. Especially now the focus on government efficiency and and and all of that. It's a tricky story to sell to the the taxpayer, I suppose. Did you know the IRA was actually a very targeted instrument, but also in other ways quite blunt.

And, yeah, don't even know what else to say about it apart from we're delving into this will get this is gonna make people angry on some way or the other.

I know.

Yeah. How do you talk about the IRA on this podcast without taking like, by whilst being balanced and not widening people up one side or the other, it becomes such a politically charged thing.

Yeah. And and and, look, I I I'm not saying the IRA was was was it was a bad thing for the industry. It definitely was not. But I I think as with anything kind of political involved or charged in in the industry, there there are double edged, swords, and there are other sides of the coin.

And at the end of the day, I think what I said earlier is most important is is the bipartisan support because, you know, with the new administration, there is a, a resurgence of, you know, gas and oil being the staple energy source. And and I think that's ultimately the the worst the worst scenario, is is if we go go backwards here. You know, this is just from from personal view and personal insight. I think the battery storage and renewable energy sector will will have remarkable growth, to come over the next few years, regardless of what happens in the White House.

And, yeah, it it'll become inevitable. There's such a need for energy infrastructure given the power demand with AI and, again, the electrification of of industries that the the writing's on the wall for for just massive growth for renewables and and battery storage.

Yeah. It would just be a bit more convenient if there wasn't a scapegoat in the IRA and some of these frothier projects. But, yeah, well, as a fact, that was a that was a great contrarian view. I mean, it's it's it's quite rare that someone in our space really challenges the IRA.

So Yeah.

I mean, I Thanks for bringing that up.

Try to be pragmatic, but, also, yeah, this is definitely a a personal view, and I'm sure there's people out there that that would disagree and and whatnot. But, you know, just just trying to share some share some personal insight.

And with that, that's the end of the podcast. So thanks for taking the time out of your day, actually your holiday, to come and join us on the podcast. It was a fascinating discussion. I I can't believe that that you've got six gigawatts of utility scale scale storage financed. It's pretty awesome. So kudos and congratulations to you and the team.

Thank you so much, and, thanks for giving us the opportunity, to hop on today. Super honored and looking forward to all of Modo's, future future insights on the sector.

So Thank you.

And if you're listening to this, please don't forget to hit like, subscribe, and hit all the good buttons. They really mean the world to us, and they mean that we can get to a bigger audience and share more of this stuff wider.

See you next time.