Developing battery storage sites with Mark Wilson (CEO @ ILI Group)

Sixty seven things, you have to make sure you've got right. If you've got those right, you're pretty confident you can take this to sale and have a pretty good process.

If there's one piece lesson, it could make the project non viable. I mean, if you can't get a cable from one bit, another bit because of a third party in between and he doesn't want to deal with you, if you can't get round it, you can't get round it, When we were doing when there was sixty seven points of gap analysis that you knew if you covered off every one of those points, you knew you had a completely robust project. Batteries are are around about the same sort of number.

Hello everybody. Welcome back to transmission. In today's episode, guest host, Ed Porter, is joined by Mark Wilson, CEO of ILI Group.

They discuss what the developer is in in beyond just building a storage asset.

If there's a topic that you'd like to hear discussed on transmission, please let us know in the comments. We'd love to hear from you. And don't forget to hit subscribe so you never miss an episode. With that, let's jump in.

Welcome to transmission. And on this week's episode, we have Mark Wilson joining us from ILI. And today, we're going to be covering the world of developing battery storage projects. Mark, welcome to transmission.

Thank you very much. I say thank you very much for having me here today. It's a pleasure.

And, actually, just to get straight into it. So one project that you have developed and transacted on at the end of last year was a project called Red John. Would you be able to give us a little bit more detail around what exactly Red John is?

Yes. So red John is a pump storage hydro project. It's four hundred and fifty megawatts.

And it will now have a duration time of nine and a half hours.

For anyone that doesn't know what pump storage is, it's a very simple technology proven, well proven technology. I think ninety five percent of the world's energy storage is pumped storage hydro. You basically have a reservoir at the bottom of a mountain and you have a reservoir at the top of the mountain. You have tunnels, under the mountain with a cavern, which will have turbines.

And they basically join top reservoir to bottom reservoir.

When there's excess energy on the grid which we see a lot of now certainly in Scotland with on off or wind, rather than switching those turbines off and wasting energy, but also having to pay the developers to do it, so wasting money. You'll use that energy to pump the water from the lower reservoir to the upper reservoir. It'll be stored there. And then when there's no wind or no sun, rather than putting on gas plants, you're able to hit a button. The water goes down the tunnels with gravity at force. Goes to the turbines, creates electricity, and that's gonna be repeated time and time again.

So red John from conception took eight years and we just recently sold it to one of the main top renewable companies globally. Stack craft who are we believe are are probably one of the best companies in the world to take it forward and build it out and be able to operate it efficiently and effectively.

Yeah. No. Fantastic. And in terms of in terms of where Red John is right now, So you've you've sold the project to Stackcraft. What what what do they what do they get for that?

How far along is Red John as a project Right.

So what we've been going or or intelligent land investment has been going for twenty one years. We've been doing different in different sectors and now we're fully focused on energy storage. But what we do as a company which would be seen as our unique selling point is packaging up projects. So for any type of project, but we focus on Greg John, you need you need to get all the land concerns.

You need all the access. You need You need everything. If you're looking at the footprint of that project, you need to be able to manage and control all aspects of that. And there could be hundreds of pieces in that jigsaw.

You then need to get the planning and for a project of that size that goes to the Scottish government to the energy consents. You know, again, the the documents for that are thousands and thousands of pages which will take in every aspect of that project, obviously, ecology, biometric surveys, ground conditions. You name it. It's in there.

You you deal a lot with the local communities. You obviously need to get everybody on-site to make sure they understand what you're doing and see the positives of it that there is gonna be obviously an element of during construction, there's an element of, it's not gonna be super positive for the local people. But over the over that after that term, they can see the benefits. And we're able to, certainly get that message across to everyone. And then you've also got the grid, which is you don't have a grid connection, you don't have a project, as you well know. So we were able to secure a grid connection early, and we've got a grid connection there for twenty twenty seven. Looking at the press and speaking to Stackhouse, certainly looks like that project will be if not the first one of the first pump storage projects operational.

In the UK in about thirty years. So there's literally hundreds of pieces to the Jigsaw to bring the whole project together, but we're we've got stack draft, they've now got a point where they can design it to how they want it to be designed and then look to take the financial close, get all the contracts for for the construction people and start building it.

Okay. And in terms of then red John going on and into operation, And so right now, there kind of aren't shovels on-site. No one's moving any any turf. There there is kind of still a few major things to happen. So as you say now need to go and design the site, and then they need to appoint an EPC who would then go and build the project itself, then go through final testing before that would then be allowed to charge and discharge to the grid.

Yes. But as as far as I know there's a lot going on, at the moment and there's as far as drilling's going to commence relatively shortly. So now there's there's a lot going on with the project as we speak. It's it's it's really happening.

Okay. Great. And and and just to kind of understand a little bit about the strategy that I like have here. Right?

So it's taking you way to nine years to build this project. You must be super close to it. You must be it's kind of a project that you've worked with for a very long time. Why do you step away from that project?

Why do you sell it to someone else?

To completely honest, because we know what our abilities are. We, say we've been, doing all the pre development work for projects for the last twenty one years, which a lot of people don't actually like to do because it's high risk and we've become we believe very good at that and and what we believe is getting a site ready to build. And I see it as and we'll be doing it for our next pump storage projects as well. We're not developers at at an operator's for a project of that kind of animal of that size and to us to see the best chance of success is to pass the baton to the experts and let them go and do the next part of the journey and make it happen. So it's it's it's been been realistic of ensuring that that these projects come to fruition.

And so you say that almost like in that lifetime of of from the first instance that project is imagined through to going live, you need a specialist at pretty much every single stage. And so you kind of hold that specialism for the first part and then you pass that on to whoever it may be. In this case, Stackcraft, it kind of brings it through. And and just to kind of one one thing you mentioned there was around the the kind of high risk of these projects. And it would be great for listeners to understand because from the outside, perhaps it sometimes seems like every project that you look at you develop through to completion. So do you have an idea of the number of projects that you have to look at in order to get one through to that kind of ready to build stage? And we'll come back on to ready to build in a second.

Well, I can just say what we did. So when we started when we embarked on looking at energy stories back in two thousand and fifteen, and we we we felt that pump storage was the best technology to go with, but also for long duration storage, and we're hosting a lot of lithium battery for short duration storage which I'm sure we'll come on to. We looked at over a hundred and thirty locations in Scotland for the pump storage, and we whittled those down with the help of ACOM to three projects.

And basically scored them, and we believe they're the best sites in the country. There are other sites you can take forward, and there's a bit of a myth there's not a lot of sites out there. There are, but certainly we feel we've got a really good head start and we've got the three best that we're taking forward. Yeah. It was all it was two years of hunting.

Two years to find three from a hundred and thirty. And I think people will want to know, like, what what do you pick for? Like, what's the are you looking for kind of the tallest mountain, the easiest to develop sites, the best transport links, grid connection, like, what's the what's the secret source of finding those three sites?

You've you've kinda just nailed it ahead of why you just knocked off.

Red. Red's absolutely important. So you don't want to be too far away from a major substation, two seven five or four hundred KV substation. You want to ideally have a lower head pond, a lower lock or an upper head pond or an upper lock if you're lucky enough to find both with a with a one and then the one up in the mountain, well then obviously your your costs are gonna be your CapEx is gonna be a lot less.

For all our projects, we have got a lower head pawn. So for red, John, we'll use it or hit a lower pawn we're using lock net. Our other ones were or bally mean it, which is the next one that's most advanced. It's using lock o.

That'll save significant funds for not having to build an upper reservoir and a lower reservoir. So that's just looking to try and make your CapEx as as efficient as possible. Obviously, you need good access. The you don't wanna go into Triple SIs or anything like that.

You wanna be you've gotta take the the most thing is you're you're looking at the ecology of the area. There's gonna be by but there's gonna be areas that you just do not wanna go into because you're gonna have an impact. We and and that's where we got a common border. We brought in the experts to score each of our sites.

So we were we were doing as little impact as possible.

Yeah.

Could I could I ask about triple s I? What's what's a triple s I?

So a triple s I would be like a nature reserve or or it's like an area that just you just don't build on. You just don't really touch. There would be to them trying to get the Pete district in in England would be a Triple SI, things like that. Okay. Places like that.

And in terms of IELI, it seems that most of your investment is focused in in Scotland, what's the reasoning behind being being mostly based in Scotland.

Well, it it's it's not we've it's because I we're we live here. I can probably tell I'm originally from Ireland. I grew up on a farm, and and my dad bought a farm in Scotland. So that's how I come to be here.

But we, when we started off twenty one years ago, we started off looking for strategic sites for residential, and then we moved into onshore wind when the feeding tar came out. When we were doing the wind, we signed up over six hundred farmers in the country. So we've now with the energy stores we have about eight hundred farmers on our books. So what we've found is a as a a bit of an advantage and and staying in our local area. Our local country is everybody knows us and we've got a very good reputation. So if the land owner doesn't know us his neighbors likely to know us or his neighbors likely to know us. So that goes a really long way for us to be able to get these projects through quickly and effectively.

We could we could move into other countries, and we have got a modem.

Okay. Interesting. Interesting. And and from a from an energy perspective for for for modem, we definitely see Scotland is being a really interesting location largely because you have lots of offshore wind connecting in Scotland that struggles to essentially be able to shift energy from Scotland to England because there are only certain sizes of cable.

And so you do get these times where they've got too much generation in Scotland, and so there's a there's a good business case for battery want to charge from that excess generation. So for a pump storage project, in particularly anything longer duration, there's a there's a kind of a really clear reason that that Scotland is a good location. Let's move on to batteries. If we could just take a second to to talk through, like, what exactly makes a site ready to build.

So if you're looking at, say, just a standard fifty megawatt battery site. We would I mean it sounds easier when we say it but say we've it's because I've been doing it for so long but we would go out sign up the land owner next to a substation that we know has got capacity. We we know which substations in the country have capacity because of our our experience with onshore wind. We'll get all the land right signed up if that cable isn't next to the substation that has to go three other landowners will get third party rights to go lay the cable underground to get from a to b.

We'll be doing the planning and parallel to that and we'll also have done the grid application in parallel to that as well. We started putting grid applications in in two thousand sixteen, two thousand seventeen. So we've been very lucky to because we could we we we could see this coming, that we have early connection days for most of our sites. We move already sold eight fifty megawatt sites into the market and they were also twenty three, twenty four twenty five connection dates.

We've got, I think, two point one gigawatts of sites at the moment. All fifties hundreds are two hundreds and most of them would be end of twenty five, twenty six, twenty seven, maybe one or two twenty eight. So These are the sort of sites that the market needs to get us to our target. Although things are changing the the grid the old grid systems changing as we speak So hopefully that allows more to come on.

Yeah. And maybe maybe more on that in a second. But just when you then take a battery site and you then sell that on to the the next owner, and that could be someone like a stack craft. People in the market talk about a developer premium.

So would it be possible just to kind of talk through what is a premium and perhaps why is it bigger for some sites and smaller for others? So packaging up the sites and getting them ready to build as as it sounds easy but it it's not as easy as it sounds. There's a I know talking to a lot of developers, there's a lot of sites out there. That when they go through and do their due diligence, there's missing pieces.

A a nice way I like to describe what we do is when we give you a site, when we sell you a site, we go to legals. You'll bring in your legal team. We'll bring in our legal team. We know you're gonna we're gonna close that deal because of When we did the wind, we did we signed up six hundred land owners and we got a hundred and forty sites in the planning and we got ninety six consents.

And most of my team have been with me for fifteen years. So you imagine doing the same thing day in, day out for fifteen years. It's like playing a piano or a violin or whatever. You're gonna be bloody good at it after that period of time.

So the team we have is phenomenal. They know what they're doing standing their heads, but to package those sites up and to know that they're gonna complete the the plan or the developers that we'd have dealt with who we speak to all the time. I I know we do repeat business with us because it's a premium product there's not gonna be holes, there's not gonna be pieces missing, and that's the most important thing is is when you get that jigsaw box from us, with the lovely picture of the battery site on it, you know when you open up every single piece will be in that jigsaw. And that Well, our that's what we are.

That's what we that's our USB.

Great. And that and that then that developer premium. Right? So you're saying almost implied within this is that some of those sites out there, and there are a lot of sites out in in kind of the GB market at the moment. You're saying that some of those might be missing one of those parts that might be missing where it might have a a really long connection to a substation, or it might not have one of the kind of required pieces. And then and that would mean that the developer premium is significantly less for those projects?

I I can't say for sure because I say, like, I can only listen to third parties, but that's up that's certainly a possibility. If there's one piece missing, it could make the project non viable. I mean, if you can't get a cable from one bit and other bit because of a third party in between and he doesn't wanna deal with you, then if it's a thirty three k v project, then if you can't get around it, you can't get around it. There's there's no potentially no project. And there's lots of elements like that with within other aspects of the of of the project. So it's when we were doing when there was sixty seven points of gap analysis that you knew if you covered off every one of those points you knew you had a completely robust project. Batteries are are around about the same sort of number.

Mhmm. So you gotta see sort of sixty seven things. You have to make sure you've got right. If you've got those right, you're pretty confident. You can take this to sale and have a pretty good process.

And and and maybe just talking then a little bit about how this is how this has changed. So you've obviously been in the market since twenty twenty fifteen and ILife twenty one years, developer premiums have been up and down maybe you could kind of give a bit of a a story in terms of how that's changed over over the years.

Yeah. So we had sites ready but full fully ready to develop in two thousand and eighteen. The COVID hit and we had offers and then those offers understandably disappeared.

The market we've seen the market come back in two thousand, really start in two thousand and twenty. That took a long time for funds and developers to get comfortable with the revenue streams. And then it really sort of In two thousand twenty one, people just got comfortable. It just really sorta gained traction as I'm sure you know.

And prices went up started off at around about twenty thousand a megawatt and jumped to At one point well in excess of a hundred and thirty thousand a megawatt. So huge growth and we're interested to see now where the market's gonna be at. We're still see listening to all a lot of the developers we know and the guys that are in for the long term, it's the the story's not changed. Ever I mean, revenues have been uncharacteristically low this last year, but most people see that as a as an anomaly.

It's not gonna be that's not gonna be a normal occurrence. It's gonna go back to what it should.

Not what it should. The way we expect is it's just common sense. The more renewables that you bring on to the system, the more gas we get off as soon as possible, the more volatility there's gonna be on the system and and the more that batteries and other forms of storage are gonna be required and you'll obviously get paid for that. So if you got a long term view, which is the only way to look at this, cause we're all trying to get to net zero. It's it's it's it's busy.

Mhmm. Agreed. Agreed. And I think we've certainly been saying that exact picture for for for a long time, you know, this this particular year that we're in right now, if we took if we take a forward looking view, solar will grow from here, wind will grow from here, and we currently have a lot of legacy gas that's online.

Those three things will all change in directions that will support storage, both short term and long term. So we definitely see that same positive picture. If if we were to turn this into into kind of a bit more sort of reality of the the here and now. I know right now you're working on a battery project called dice, I think, and that's a fifty meg project that you're currently taking that to market.

What what does the what does the process look like from there? And one thing that's kind of, I think, really interesting for me is what many people are gonna kinda knock on your door and say, oh, you know what? I want to be part of owning that project.

Yeah. Okay. Well, we've only had it out since Monday. So at the moment, we have all notes of interest have to be in by the thirty first of January.

And at the moment, we have nine. Normally, at this stage, we probably would have more. We would be because we would put out our database of of all the people that have contact us in the last four or five years and it would be about fifty companies roughly. I would anticipate by the way this flow where things are flowing out and anticipate about fifteen notes of interest by by the thirty first and then we'll look for nonbinding offers by the sixteenth of February.

Last year we were getting up to twelve nonbinding offers, which I've I've been in the other markets like the housing market and the onshore wind market and and I've never seen anything like that. I do think that that will level off a little bit because the will be companies that have tried to jump in maybe too quickly and haven't been properly funded and maybe just thought there was a quick buck to make and I don't think believe in any such things that everything takes time. And but the guys are in long term, we'll expect offers from all those guys. So I'd be surprised if we don't get at least five or six.

Okay. And then of those those five or six or maybe, actually, let's go go back in time to a time when you had more people of kind of various quality bidding in for those services, would you always, like, would you say our absolutely will accept the highest price, or would you kind of look for people who are really confident can take that project through to completion?

Absolutely the latter. We're looking at a ability to, bring the project to fruition. We've had scenarios where a and and it was mainly in the past with when we learned that lesson as price is one element of it, but it's it's more the element of can can the delivery of the experience in in dealing in the sector. So having previous projects on the ground is is a big plus and just the ability to make it happen. Price certainly does come into it, but it's not the number one point.

Yeah. Exactly. So I I wanted to run through I wanted to run through three three more things before getting on to final questions. So the connection queue, this is something that people in the energy we've heard a lot, and there's been a a huge amount of discussion around connection reform.

What's what's the impact of the connection reform going on in in the UK on Iowa?

Well, we've been, let's say, we've been very fortunate. We got in early, so most of our sites have pretty early connection dates that are attractive to developers and funders. We have some sites that we are talking to SSE in Scottish Bar. There are main DNOs.

To bring in earlier connection dates, which would be a bonus. We see it as a very good thing. I mean, there's a lot of sites out there that are potentially holding back really good projects and I'm not talking about us. I'm talking about other people in the market and those projects should be going ahead.

We're we don't feel as if we're competing with anyone. We're we're doing what we're doing. We're delivering hopefully at least four and a half gig of of energy storage and and different technologies, and we're looking at other technologies now and taking those forward. And everybody's gotta play their back to get there.

So, the the whole system that the rules been changed is a very positive thing we see.

Okay. And just to put some numbers, so you mentioned there that some projects have been brought forward.

That could be a year, could be five years. I think we've heard a number of, like, mid twenty thirties potentially coming into being late twenties projects. Is that something that you've seen when you've been offered these sort of advanced or earlier connection dates?

That that makes sense. We have I mean, if you're looking at just the logistic of a project. I mean, if you have a few of those sort sort of dates bringing them into late twenty twenty eight twenty seven twenty nine, that that makes sense, but I don't see it's like if somebody's got a twenty thirty that it's gonna get brought down to twenty twenty six or something like that because I mean, even to order to order equipment, some of the transformers and the lights takes a couple of years to get those into your zone, two years just for the equipment. And then HDNO was absolutely full on at the moment.

So they've got a schedule that they that they can only work to or so many they've only got so many spaces within it. So it's it's looking at what's realistic as well. So I think sites will get bought forward and more more importantly a lot of the zombie sites will be get taken out. But I say it's a good thing.

It'll be interesting to see how it all unfolds.

I have to I have to ask what's a what's a zombie project?

So a zombie project as well I just call it a dead site is never gonna happen. And maybe speculators have come in and and, maybe got a grid connection, but they're struggling to get the the land rights. They're never gonna get the land rights or it's had been refused planning. They're still trying to get planned.

It's gone to the government. It's still being refused, but they still don't wanna give it up. It's like at certain times with a lot of it. We drop a lot of sites because we'll at a certain point, we say, we're just not doing the land doing any favors.

We're not doing anyone any favors. Give it up.

Stop kicking a dead horse and that's essentially what we see as a zombie site. There'll be certain criteria like planning grade or not grid planning and, land rights that you'll need to have a tier two, I would imagine.

And and then with these projects, so I can imagine that we you might have a project that five years ago looked like a fifty megawatt project. But actually, as you get closer and closer to the delivery, you think, actually, the the fundamental technology is changing. Maybe the wind, maybe onshore wind comes back, and there's a really good opportunity to kind of co locate that wind perhaps with with with storage, perhaps more likely solar with storage. That's much more what we're seeing. But just in this sort of theoretical example, wind and storage, If you wanted to change the tech that you have on your site, do you have to kind of reapply and go to the back of the queue, or can you can you kind of make adjustments as you as you're kind of working your way through connection.

Again, rules are changing, and it might be different with each individual D and O, but my understanding is we had a project that we looked to, excuse me, change the technology recently and keep the grid connection and we were told that we weren't allowed to do that. So we just accepted that. So, obviously, we did it. We did we did we did our due diligence with our lawyers, but the reality is is If that is the case, then that's how the that's how the new rules are set. And let's all play the game. That's how I see it.

Yeah. That is I think as long as it's consistent and fair, it makes sense. But as technology changes, as technology changes very quickly, you know, we might be missing opportunities to get more stuff on the grid sooner and kind of make make more of the grid connections that we've got. So it feels like there might be a future change there.

Okay. Brilliant. And then moving on to the kind of the the the wider market here. So by twenty fifty, we need this kind of number of three hundred, three hundred gigawatts of of capacity live in the GPU system, and the connection queue at the moment, the size of it is is kind of talked about in various places, National Grid would talk about five hundred gigawatts.

So the number there that it kind of that pops out is the two hundred gigawatts of sites that that kind of don't get built. So when you look at that number of two hundred gigawatts, do you think, oh, there's there's probably there there probably are two hundred gigawatts of sites that aren't really meeting the right levels that we should be building, or do you think that there'll be some good sites that will kind of not be built in order of of the queue, do you think we'll lose some good sites that that perhaps if they had earlier connections they would have been built?

Very likely. Yeah. I think there'll be an element of funding that for some companies that there's a lot of security payments that you have to make for grids to hold on to your grid and that can run into several million pounds. Depending on the size of the project. And that is a is maybe not an initial barrier to empty, but it then becomes a barrier to keep continuing. So I could see that being an issue for some people that are genuinely trying to to have a good project.

That's something that they need to go in quickly try and resolve to make sure those projects stay successful.

I do believe there's a lot of bad projects out there that are not gonna happen either because people are just speculating and they don't have the funding or they're just they don't know what they're do. The the projects have been picked are in the wrong locations. Like a wind farm can be in so many great locations that makes sense but can be in some terrible locations that you just wouldn't even consider. Same for any solar, same for anything.

I I would say out of that there'll be a very high percentage of projects that will potentially be thrown out but that opens the door for then hopefully a rush of all the good projects wind solar energy storage to really sort of get traction and get built as quickly as possible. So I think it just gets rid of the the week from the shaft. It just make brings realism to the whole thing. And and I found in the last twenty years.

Kind of how the world works.

Yeah. Yeah. Firm firm agreement from this side. In terms of in terms of then, last question on on grid, if you have if you're gonna have a magic wand or you're able to kind of steer grids next next next change, we're trying to hit a a net zero grid by twenty thirty five or twenty thirty depending on, politics. But but if you had that magic bond, then you could you could kind of ask Grid to do one thing next. And what what what change would you make?

So I think they're doing it. Do not think if we can if we can get all the the really the sites that are never gonna go ahead off the system and and it's like any queue. Get rid of get open it up for for for all the good sites that can very quickly be funded be built and go ahead, you're gonna see a huge amount of sites starting to be constructed and go operational and a lot of good sites that are funded and in good locations coming on and getting earlier connection dates. I'm actually really happy to see what's happening is happening You could maybe say it would be great to see that a few years ago but it's it's happening now. So I think it's really positive.

Yeah. I think I think a lot of industry would actually share that view. So, yeah, that's a really good sign. And and one thing that's come out very recently in terms of other developments, so we've seen the released for consultation around long duration energy storage. And that's looking for non lithium technologies to come and provide longer duration storage. You're perhaps in somewhat of a unique position in that you're both on the pumped hydro side, but also on the lithium side of this piece. So have you had a chance to kind of look through the consultation And what's your what's your take on it?

Yeah. So we've been our sales and a lot of major big companies have been lobbying for this mechanism for six or seven years now at Westminster and it's great to finally see it come to fruition. The reason it has to happen for long duration storage like certain like pump storage and compressed air and technologies like that is especially for pump storage is because the construction time is five, six years. These are massive CapEx.

Red Johns six, seven hundred million and CapEx to build it out. And as I say, the term will go out five years is to build is if you don't have that floor. You're not gonna be able to get the debt in to be able to build these projects. So the difference with batteries is We've been in the market. They can stand in their own two feet. They they don't need it. It they're they're they're making money and see the thing is, and this is the This is the thing I do which I'm sure most of the battery guys will get, but they don't want the cabin floor.

It's as simple as that. And any of them say they do, they need to dig deeper because the cap and floor is exactly what it says is it's a floor price and a cap The cap will probably be somewhere. It'll be a single digit IRRs.

Now what I bought the battery market over the last three or four years is the IRRs have been phenomenal and you work on volatility.

If I was in the battery market and I chose to go you would just wouldn't choose to account on floor because you you wouldn't it would become boring and you wouldn't make the sort of money that you should be making. With that type of technology.

Pump storage is a completely different animal that can last for a hundred and twenty five years, and the type of companies that take these forward are quite happy with a lower rate of return. So it's it's it's a moot point as far as I can see. The only reason I could say and I would very blunt is, that maybe some battery guys that'll push for it is because they do it's obviously competes in the marketplace with them and but see to be on see if you're really being blunt as you can be is I think that's really wrong because we're all supposed to be trying to get to net zero and this okay. You make money. Business is business, but the ultimate goal is to net to get to net zero. Ever they can play in the get play a part in this and to push another technology out, I think, is just fundamentally wrong?

Yeah. Yeah. I think I think that would be actually a view held by by lots of lots of battery battery heads, they would say, a hundred percent, we don't wanna be pushing any technology out. I think there is, I think where a lot of the industry would would fall on would they would say something along the lines of, let the market procure what they need.

So if the market needs, say, six hour duration, we might not necessarily need we we might be able to need that. We might be able to meet that at lowest cost through a lithium project, but if the market needs, say, fifty hours, then it's probably quite unlikely that lithium's gonna be the best tech for that. And so I think the the kind of people who've who have pushed back on this it's mostly been around a kind of arbitrary exclusion, then they would say, well, actually, just just just procure what you need grid, you identify the duration that you're after, and then you let the market compete, and then the market will come up with a with a with a good solution.

And I don't think anyone is out there talking about a hundred hour, two hundred hour lithium system. That would just be well away from what is profitable.

Yeah. No. I'd say, just analysis I've looked at over the last number years. Jacob's brought out some good reports on it.

And if you look at the just the cost per megawatt, and and obviously the prices are changing batteries have come down significantly over the years. I just to me, it's two different things. Long duration, The so the the same as it was for interconnectors. It's the same type of mechanism.

Interconnectors weren't built until we got cap and floor. And it was for interconnectors.

So you could see you could kinda say, well, what about other technologies at that point? It's been brought out for a reason because we need long duration storage and let's get as much short duration storage out there as we can. Let's all fill that space. Absolutely.

I'm all for that. But bring in the other technologies, the other long duration. There's there's obviously gonna be a place for green hydrogen as well. And all these people, all these different technologies work together to get a tech technollet to net zero.

It's not rocket science.

To me, it's it's it's it's easy.

It's not difficult.

Yep. I I hundred percent agree with doing as much as we can as fast as we can.

Well, one more one more kind of rebuttal on it just before we move on to kind of the final part. And that is on kind of some some of the precedent that we've seen. Right? So when when we had the electricity market reform, the twelve, twenty thirteen, we had CFTs that came in for renewable generation.

And that was great. We needed that. They've been a huge success story. And we also, at the same time, there was a kind of concept of missing money, which is that if you subsidize one portion of the market with contracts for difference, which is good for renewables, then the other part of the market, which was kind of gas fired generation that provides capacity, that was that then felt that it was missing out on revenues.

And so kind of concept of missing money that was talked about a lot. And so they brought out both the contracts for different renewables. And at the same time, they brought out the capacity market. And It feels like this might be a similar thing in that if you want to fund long duration storage and exclude kind of short duration storage from it, then you might end up with that same missing money thing.

And perhaps one of the solutions might be if you're gonna fund longer duration storage, then you also might want to fund the short duration storage. Because otherwise you'll get this kind of missing money thing going on. Is that is that something you'd buy into?

I mean, I can hear your logic with the the the the big thing as I say as I said before is when you dig into no I just cannot see how any battery operator would even want to consider.

Cabin floor. It's just not the mechanism for that technology. It just you're you're you're minimizing your opportunity to your investors or your fund, which is it just wouldn't go to considering down that road. So it's it's just See, that's just my opinion.

Yeah. Yeah. Perfect. Thanks, Mark. I I actually I have a whole that has brought a new kind of angle to it. And I think you're absolutely right that if if your cap and floor doesn't give you extra money, then then there's no kind of there is no missing money to it. And so it's just a different way of of of financing those projects.

Brilliant. That takes us to that takes us to the final two questions. And so the the the two questions are is there anything you'd like to plug and watch your contrarian view? And so if you go with the first one, so is there anything that you'd like to plug on the podcast today?

Not really. So we we are very excited for the years ahead for the energy storage market. We have a strong portfolio We're here to facilitate the market. We'd we have we believe a very premium product that anyone that takes it forward will get it built and it'll be it'll be operational.

So yeah, same, I would hope if anyone doesn't know us give us a shout and we'll see if we can help you out.

There we go. Very good. And your contrarian view, something that you believe that the market doesn't.

Right.

Well, I have this my simple mind has this belief that because of the amount of resources that the UK has, the amount of offshore wind, the amount of solar down south, but certainly the amount of offshore around the whole country a wind is that we could become a global powerhouse. I see is that we could get so much more storage onto the system than we have set. I think we're set sixty gig. Look double it or triple it and get our infrastructure sorted as quickly as possible.

I e the grid so that we can get the energy brought from up north down south effectively, but also be able to store huge amounts of energy and then use these interconnectors that we have going from the UK to Europe and become an exporter but also be full of the country has got full energy security. We don't rely on anyone. But we are able to then export huge amount of electricity into Europe. That to me is, I mean, great Britain great Britain maybe hasn't been that great.

Some people might say for for a while, but that would certainly make us a very it would certainly bring back the great again, and I think it's very, very achievable. And and would show the rest of the world how we could be we could easily become the number one country and you paper and pay the number one country for getting to net zero. I totally believe that we just need to put the food to the floor. The the government is is is is is the government at the moment, but certainly the ASO and National Grid are annulled.

And those are making changes to make it happen. So the we just need to get her put the foot down and do it.

Instead of so instead of the challenge of net zero, you're seeing the opportunity of net zero, and think we could be the first ones there.

And and much much more. UK should should be able to hit net net too very easily with all the resources that we have absolutely and then do a lot more than that to facilitate other people.

Brilliant. Mark, thank you very much for coming on the podcast today. I love talking through just understanding exactly how someone gets a site from through to through to close, as well as all the pitfalls along the way, what all the terms mean, what a typical transaction looks like, as well as kind of views into the future, and some hope for the energy markets in the UK as well in terms of where we might sit within Europe, etcetera, etcetera. Become freestanding and do some huge exports to Europe. It's been a pleasure having you on. Thanks very much.