Modo Selects - Financing, building, and operating batteries with Amit Gudka (Founder @ Field)

Long term ambition is to be a global renewable energy infrastructure company. You know, there's a hell of a lot of renewable energy infrastructure that needs to be built over the twenty to thirty years globally. The biggest amount of infrastructure kind of ever. And the speed at which that needs to happen is is is insane, as you say.

And Yeah. There need to be lots of companies and lots of people who understand how to, like, finance new energy infrastructure, build it, and then also operate and monetize it. Develop build, own, operate, optimize as well, get them into the market. So you can do the whole shebang.

There's, you know, it's not necessarily just about price and, you know, improving returns by removing a cost that you're paying someone else to do. I think a lot of it is to do with autonomy. We want to just build as much infrastructure and technology as possible that helps the energy transition helps accelerate it. Hello, everybody.

And welcome back for another installment of our Moto Select series, where we revisit some of our earlier episodes.

This episode is from March twenty two with Amit Goodkur. Founder of Field Energy. You may have seen the news of Field's recent two hundred million pound fundraise in order to help them reach their ambitious goals of becoming a full life cycle, battery storage, developer, owner, and operator. When we spoke to Amit last year, Field were in a much earlier stage of their journey. And so today, we are revisiting that episode where Amit outlines his overarching mission and how he thought at the time Field would go about achieving it. As always, if you're enjoying the podcast, please hit like and subscribe. And if you want to see more content from the Moto team, follow us on LinkedIn.

Hi, buddy. Quentin here for Moto. I'm here. I sat with Amit in, probably the most East London of all East London shared working spaces.

And today, we're gonna be talking about, life at field, Amex experience, And what's what's coming next? So I'm really pleased to have you on. We're absolutely chuffed to be sat here doing this. And thanks for hosting us.

Thanks, Quintin. Yeah. Good to see. It's a lot of greenery behind us and, I guess, if anyone watching, you might notice, just sort of eating over there and come comes there's a dog.

There's a very small trendy dog. So, yeah. So firstly, Amit.

What's going on in energy markets at the moment? You, come from background of, trading, and you've been you've been around for a long time. Just a quick quick take before we get stuck into your experience and field. What on earth's happening in energy markets?

I think there's been two really big But the biggest theme over the last year has been global gas prices. Right? So huge demand from Asia that's taken a lot of the LNG to to Asia, combined with low storage levels at the end of last year. Sort of the perfect storm on the gas front.

But I think what's really interesting is behind that, we've we've actually had this really the the electricity volatility story that's been building for a while. What's your background? Start with the trading experience and then what's got you to field, and then we can talk about field. But start with trading because that's, we haven't had anyone on the show yet talking about it's like to be a trader.

So what what does that involve?

Yeah. So it started out as a gas and power trader focused on European markets and the UK market.

So, yeah, that was the first job at university starting as an analyst. There's lots of screens and call phones and, No. Yeah. I think there's probably more screens than people actually need.

Right. I think sort of screens probably become a bit of a bit of a status symbol probably for traders than that actually require Yeah. I started out as an analyst, and and so the main focus was on supply and demand for gas and electricity across Europe. Main focus on UK markets and UK gas in particular.

Did that for a few years and progressed into actually trading.

So I was doing that at at a bank What you do initially is take customer orders so there'll be a customer, maybe a utility who needs to hedge their hedge their gas Yep. And you provide prices to them, and then over time you sort of progress to to trading more markets. So, really enjoyed, you know, doing that. I think it's I think markets are really, you know, intellectually really interesting and power and gas markets in particular.

I think after a while, just started to Just question what maybe the real, like, value add of just trading itself was. You know, it felt a bit zero sum game.

It's kind of I think, yeah, like I say, it's intellectually interesting, but, you know, question really, the value add after a while. And so got got really thinking about energy sector more widely and that's when I sort of left in twenty fourteen to set up bulb the energy supplier.

Yeah, really, yeah, really exciting sort of few years there. I mean, obviously, it's been in the news, been an unfortunate, unfortunate outcome for for that business over the last year. I left there just over a year ago to Southfield.

And, yeah, we're that's what that's what we're doing now. And so, we were talking before the we recorded this. I'm just gonna turn my phone off. It's making that loud noise.

We were talking to talk before before this that you started bulb in the same offices we're in now. Right? And we're you're doing the same thing again with Field, which was called Vermity of Vermont for. Vemity.

Yeah. And and he changed the name recently to field. And so what's field trying to do?

Yeah. So there's the point on Vemity as well. So the the companies that the top company, actually, holding company is still Vimity. My my grandma's, my grandma's name and, you know, is is who who, you know, passed away a couple of years ago.

So that's who the top guy is named after. Field is our field is our brand name and go go to market name. I think well, as as as you just found, pronouncing Vimity wasn't probably the most natural images. Yeah.

No. I think I think it's I think it's actually quite a hard a hard name to to pronounce. So that's why we've, or one of the reasons we've moved to to field. And so, yeah, field, what we're doing, long term ambition is to be a global renewable energy infrastructure company.

And, you know, there's a hell of a lot of renewable energy infrastructure that needs to be built over the twenty to thirty years globally. Mhmm. The biggest amount of infrastructure kind of ever in in the shortest amount of time. So war time in infrastructure.

Right? This, I think it's Michael Leebright. Someone did a thing. It's like three times wartime infrastructure in the next thirty years.

Exactly. And World War two. What the fuck? Yeah. It's it's it's enormous. Right? And the speed at which that needs to happen is is insane, as you say.

And, you know, there need to be lots of companies, and lots of people who understand how to like, finance, new energy infrastructure, you know, build it and then also operate and monetize it. And, you know, I think learning that skill set over the next twenty or thirty years is gonna be really valuable and have a lot of impact. So that's what that's what we're doing. We're starting with you know, utility scale front of the meter, batteries, in in the UK.

But, you know, over time, the longer the longer term ambition is to move into other technologies in other countries. Okay. Cool. So just pick a couple of things there.

So, you mentioned renewable energy infrastructure. So that's beyond just batteries. So other stuff as well. And we're talking about UK, but there'll be something also talking about internationally.

What what was interesting is you also had it optimized. So is field going to be fully integrated. You're gonna be, you know, develop these assets, develop build, own, operate, optimize as well, get them into the market. So you can do the whole shebang a bit like kind centrica circa ten years ago.

We're, you know, is it that kind of obviously, centric with that? I don't wanna say field. And no disrespect to field or centrica here. Right?

There's different coverings.

But is what what is is that what you're going for? Yeah. So really important.

So look, right now, we've got our first and, you know, probably come to you in a bit. We've got our first asset that will be a first battery that will be going live. In a few months, it'd be commissioning in April. And that first project, you know, we have we've acquired the the site from from a developer, and we'll be using a third party optimizer for that.

But in the long run, yeah, we will be doing sort of end to end. Right? So we'll be developing projects from scratch from Greenfield State, you know, finding grid connections and land, and then taking it through to financing construction, And then, yeah, optimizing it is really important. I think, you know, you want to, you know, ultimately if you're building assets that are worth, you know, tens, hundreds of millions of pounds, ultimately.

You want to have control over over those assets. So I think there's an there's, you know, it's not necessarily just about price and, you know, improving returns by removing a cost that you're paying someone else to do. I think a lot of it is to do with autonomy. A control and, and also the ability to expand into different markets or technologies.

So that's why we wanted to be doing that. Okay. Yeah. Makes sense. There's no new to that's I think we did some research recently.

I think it was something like sixty eight percent of all the assets in the UK currently use a third party optimizer. And of the, my numbers, my numbers, I think, are right here. And then, obviously, the thirty two percent, a lot of those refs, they don't really need optimizing. So when you discount by that, it's like actually three quarters to market maybe more using optimizers.

So it's interesting you go down down this route. I guess there's a scale question when you get to a certain scale it does make sense to bring it in house. And if you really can go if you can build technology faster and better, if you operationally as a business, as we believe this modem is the same. Right?

If your USB is, going fast, breaking stuff fast and and then and having a, sort of, entrepreneurial mindset, why not do it all in house? Right? Cause you can believe that way, then you might as well control all of it.

And so what's the vision for field? What what's the world you're trying to build with field? What does that look like? So I think as you mentioned, we've got, you know, targets that we wanna build out, you know, you know, three hundred megawatts next year. We wanna build out a gigawatt, the year afterwards. And, you know, that's that's sort of on track at the moment.

But I think rather than just sort of numbers and gigawatts and etcetera and, you know, capital deployed. I think they're really brag a watts. I was like, yeah. I think I think the really important thing is we want to just build as much infrastructure and technology as possible that helps the energy transition, helps accelerate it, helps, you know, all these countries that have made zero commitments to achieve them. And so that, you know, that's the real that's the overall aim. So, yeah, we're saying x many megawatts over the next few years, but you know, ultimately, and also, you know, battery storage you might look at in a few years, right, and say this isn't actually the this isn't the technology that makes sense anymore. Maybe want to look at other stuff, and something else that actually generally co like, contributes to decarbonizing.

And so Yeah. I think that, you know, that's the that's the overall the overall aim. I think putting it into numbers and capital deployed in the longer run, I think, is, yeah, it's it's hard to say right now. It's hard.

And also, I like it because you basically you're saying we're gonna build as much as possible. And I guess in the next decade, you're not gonna overbuild. Right? As much as possible is as much as we need to build.

In fact, we need more is more than as much as possible. Yeah. So why not? Why why restrict yourself with numbers?

Yeah.

So feel. I wanna talk about speed for a second because we know lots of people at field work here, you know, you guys are hiring. We speak to people that you speak, you know, look, look, you know, who have come across field. And one word always just resonates, which is speed.

Right? Field is going fast. Field is hiring fast. Field is raising fast. Field is building fast.

What what the speed means to you at field? And what what's the silly question almost? But what what's the advantage? And why do you believe so much in it? So the case the case is very clear for, like, battery storage in in in our opinion for battery storage right now.

And so, you know, and it's something that can help decarbonize. I can and it can help and it enables, you know, a faster build out of renewable energy, and it stops renewable energy being blamed for for, you know, for market volatility when actually, you know, that there's bloody wind farms co cooling up. Yeah. Yeah.

Sort of, you know, gas prices have driven the gas price. It's like gas gas has driven the gas price of it. So, you know, I think is really important to scale up renewables and but really important scale up storage alongside us as quickly as possible. So that's, like, that's why we need to go fast.

Mhmm. But then, you know, as a business, what's the benefit? It yeah. Look, we're we're hiring a we're hiring a really great team, but I'm so impressive of people that have been hiring, and people are really interested in contributing to the energy transition and making it happen fast.

And so as a business, if you are moving fast, you know, you you can attract better talent as well. Yeah. Yeah. And then and then I think the, you know, the are the really important reason for for for moving fast is, yeah, there's a lot of other people who are who are also doing this.

And, you know, you want to be getting into the best best locations.

In battery storage location is gonna become increasingly important, and so moving quickly and being in those places. And also, you know, supply chains, bottlenecks, prices have gone up recently in for the first time. And so, you know, we want to be we wanna be ahead of that. Right?

We wanna be moving quickly and making sure that we're actually you know, we're we're actually able to deliver on the plan that we spent a lot of time putting together. Yeah. Yeah. Okay.

Cool. And so what's holding you back? I mean, you've mentioned a few things. The bottle nets to operationally as a business.

You can hire the best best talent. You can stretch, you know, optimize the business to run really fast to make decisions quickly and perhaps without all the information to do the you know, operational stuff that startups do. But then the whole energy world around us is quite slow. And so, what's holding you up right now?

One of the things outside of your control that you can't control, which are frustratingly frustratingly slow, and it's holding up the whole thing. The whole of the company. But you know what I mean? The whole of the energy transition is a as a thing.

And how are you managing that? Yeah. Yeah. And we talked about speed and moving fast think it's really important to also just be really mindful of the fact that we're not just building an app to, you know, we're not we're not building a through delivery apple.

I I don't have Tinder for batteries. Exactly. So we're not doing that. It's it's it's like meaningful infrastructure that has an important role to play, but also needs be robust and reliable and safe.

Yep. So, you know, there's certain things that ultimately you can't cut corners on. Right? Yep.

So This is really, I think, really important to note that. And I think that point you said about moving fast and break break things, you know, that's also not something that we can't with, you know, with with a with a expensive expensive piece of kit that has, you know, safety protocols that you need to follow. That's not something you can find, you you can do. So, like, there's an inherent kind of there's an inherent speed at which things need to go, and there's an inherent sort of lumpiness to infrastructure business that you just sort of need to you need to respect.

I think the the things around, like, operational, you know, within the business. And I think, you know, you start to sit. Right? You have multiple multiple sites.

Most, you know, in your ideal world when you put your business plan together at the beginning, you think, right? We're gonna have every single standardized site in the is gonna look the same. The site's gonna look the same. And then, obviously, that's not how the world works.

Right? Every site is different. It's each distributor's different. Yeah. And and you have different things that you need to to manage.

So I hope you got a company pair of wellies if you're going out to all these sites in the middle of winter. Yeah. I think I went on the first with Chris. He's our technical director.

He went up to Scotland say to our site in near Lochnes. And, yeah, it definitely was yeah. The the sort of, yeah, city boy unprepared for for that. So, yeah, I'm definitely, yeah, improving improving the kit that I've got.

But, yeah, the I think the, like, moving quickly on moving quickly on those sites, is something that we want to do, but you have to respect the the, you know, what you have to do with health and safety. But operationally, you know, you want to standardize as much as possible.

So, you know, you know, that's really important. Framework agreements, for your with your main counterparties, not having lots of different different sites. I think those things are super important. Contracts get really complicated.

You know, there's big contracts that you need to you need to deal with. And and again, having a really good, like, organizational structure where you can manage those big contracts like, and make decisions on them quickly and and effectively as a team. I think that those things are what you could you can do as a business, and they can actually hold moments. Yeah. Yeah. As the alpha, if you like.

So the idea is on how we can change the rules, the rules of this game that we're in to make things go faster for example, grid connections, I learned it's been a while since I've been involved in grid connections. Right? But, it used to be, I think, sixty days. We had to wait for a grid connection of forty five days. It's just, once you put an application in, like a g, ninety nine or whatever it was before.

And you have to wait ages to get it back from the DNA. So these kind of things that take a while. Now what what could we that's just one idea. What else can we do to to to to reduce barriers and and get this stuff done faster or frustrating you?

I mean, the the DNO yeah. The the time it takes to get a grid connection off of that. We've not, like I said, we've not actually done these first sites, we haven't actually done the connection applications ourselves. So it's like, ready to go sites made ready. Exactly. Right. But it's something that we're moving into.

The connection side, I think it's really interesting. Right? So everyone will complain about the speed of distributors here or or national grid or whatever to to respond.

But, you know, we've started looking at international. Right? We started looking at Europe. And the grid application process process is there.

Just not standardized. It's not like it's there's not a standardized way of going about it with, you know, the way that DNOs are run here. There's quite a lot of rules around how they have to respond, when they have to respond, what the response needs to look like, and what they commit to. And that's definitely not the case in in Europe.

So you know, we're kind of and that's the reason why the UK is much more mature as a as a as a storage market, right, as a merchant as a merch and storage market because there's rules of the game. There's rules of the game that are set up that enable, you know, new players to come into it. And so I think in that sense, the UK is actually in quite in in a relatively in in a relatively good place. I think there's in I think it's gonna be interesting as we move from like, the move from distribution connected storage more to transmission connections, it'll be interesting to see, you know, because I think the distribution connection like storage model is is actually is running relatively effectively.

Mhmm. Thank you. And, you know, you can see it scaling up quite fast. It'd be interesting to see how as you get to these much bigger projects, which again, I think when you're having four hundred megawatt batteries that go up, you know, this is power station size.

Right? And, you know, arguably you can't go as fast as you as you can with a twenty to fifty megawatt distribution connected battery. So I think that would be an interesting step change Yeah. We had, Bridget from Austin on a couple of weeks ago, and she was talking about co locating's, storage on wind sites, but like I don't know.

I think it was Docker Bank or one of these offshore wind sites. They're looking at, like, two the sizes they're talking about, it's like two gigawatts, eight gigawatt hour battery.

Dude, that's like, they're like four times the whole, but more than that, five times the whole, you you can market. So, things are gonna get much, much bigger, very, very fast. Not necessarily grid connected for just the standalone model, but colo case as well. All numbers are going up.

Yeah. I wanna talk to you about investor sentiment. You've been out in the market, and you started field and you've you're building assets. And then, I'm assuming that sports, you've had to bring on some external capital to do that.

Right? Yeah. I think that's a pretty safe assumption. So you've been speaking to investors and probably getting a lot of attention.

What does investor appetite look and feel like now?

And I asked that because, for the the merchant case of storage is fairly well established now, it's taken a few years to kind of get everyone's head around it. And the the market's changing so fast, and it feels like investors, as soon as they understand one model, it all changes. So how are you dealing with the ambiguity of that and how are you communicating that to investors? Is it becoming easier?

People become more comfortable with it? I'm putting words in your mouth now. I I don't know. What what's it what's it like on the roadshow, without it?

Yeah. I think it's it's comp so I started looking at, you know, in detail on batteries probably like, two two and a half years ago. And I think the whole, you know, everything's moved on in terms of, like, lender appetite and also equity investor appetite. And so you know, the previously for on on the lending side, you definitely needed floor price.

From an end from your optimizer contract from someone with, really big balance sheet. And, the floor price and also the the amount that you paid in commission above the floor price was was really high. Mhmm. And that's completely so I guess on the optimizer side, it's become more competitive. And so you can get floor price contracts paying lower commissions now.

And then also lenders don't necessarily just require a floor price Right? They've they've got sufficiently comfortable and understand the market enough that they understand what a kind of base level real downside case Yeah. Like, level of revenue that they can expect from batteries and have gotten more comfortable with that. So that's comp I think that's like a that's a big shift.

And you know, that really opens up the low cost of capital, you know, money into into storage. So that that's that's been quite a big change. And I think there's something that it's becoming quite, almost quite standardized, there. So I think that's really exciting development. I think on the equity side, huge interest in energy transition, like ESG, and you know, the the the sustainability. There's, you know, all every fund out there has has, you know, has some angle on that.

I think then when you actually get into the detail though of battery storage, and it's funny we're we're in the battery storage space, you think, god, it's moved on so far. It's so mature. We're we're we're going too slow. We're behind.

Like, you know, you have all of those things, then actually, when you go out further, you realize how sort of new an asset class it is. So it's finding within all of those, you know, thousands of different, you know, firms that they're out there and funds that can invest. It's finding the ones where you're sort of pushing on an open door. Right?

So not not many are fully educated about the battery business case, but there are quite a few out there that are willing to that that have started thinking about and they're interested in. Also, thinking about previously it's just been let's just invest in software. Mhmm. And I think that, you know, software alone isn't going to, like, solve the energy transition.

Right? It's like there's a lot of hardware involved as well. There's a lot of infrastructure. So I think that's the sort of mindset shift that I I'm seeing a bit more of or or at least we're starting to speak to the people in that in that space who are who are interested in doing it.

And what about the merchant case? Investors comfortable with the kind of with the the the whole thing around mergers. So much deeper markets, they should be happier, you'd think because the whole the the the fear of frequencies wants to be coming full, if you like, kind of diminishes when you can make money on spreads.

But are they comfortable with the, I'm not gonna say unpredictability of that because, if you believe in, renewable penetration and volatility long term, then it's it's gonna be there. But Are they comfortable with the idea of merchant now in a way that has has that changed in the last couple of years? Or has it been has been fine?

Yeah. I I yeah. That's changed definitely. Right? So merchant is, you know, the I think there's clearly, like, a base level of revenues that people understand that that they can expect from from a batch.

There's a base level of spread And, obviously, it's well below the level of spreads that we're seeing today, or we've seen over the last six months. I think there's definitely people who got comfortable with the fact that, yeah, it's not, you're not just putting You know, these are deep markets. The wholesale market is a deep market, and there's a certain level of spread that can be supported by by this asset. So, yeah, the the the the sort of appetite to invest there for in merchant, in merchant projects is is really increased.

Awesome.

Let's talk about one of your assets at the moment. So you mentioned earlier you're building an asset right now. Is it a one in Scotland? If you could talk through what you're building and, how that works and how you found building your first asset and what you've learned, that'd be awesome. Yes. The fur the the first one's actually in Oldham, so near Manchester. So, that's That's a twenty megawatt one hour duration project.

It's on an industrial site.

It's actually So we're kind of steep learning curve. Right? So you sort of first thing when you go into it, you speak to a number of developers, we found this site had a really sort of attractive grid connection and, you know, date and also and also cost. And we saw we move forward with that then obviously, you know, we start un unpeeling.

Yeah. You know, what's actually going on with the land.

With the with with the planning permission, the one that we've got actually initially is in a is is actually in a in a energy barn or a warehouse. K. That has its own, like, challenges as well. So, you know, we've learned kind of everything along the way of of doing that. And I think, yeah, it's been a really important learning learning curve for us to be on. It's again, I think the really important thing for us has been let's move quickly on this. Obviously, in as low, you know, in a low risk manner, but let's you know, for that first project, I think we could have spent a lot longer going around every single site that was that was available.

And and, you know, we ultimately ended up with a much shorter list and we just went for something that we could work on soon because, yeah, developing the actual understanding of how batteries work, how construction works, how planning permission works was so important. And it's, you know, it's a even for members in the team who have worked in batteries, but, you know, in potentially it optimizes, or developers actually doing a full project from end to end is is is new. It's a really good experience. So we've learned a lot from that. It's all on track commissioning. So I say I say right now publicly.

But like Someone's gonna walk past and put a note on the window. Yeah. Yeah. Exactly.

It's gonna get on top. But, yeah, all on track for sort of commissioning commissioning in q two of this year. So we we're really excited with the progress on that. So we have first first field battery on the Lamoda leader board as well soon.

Very excited about that. Yeah. Well, yeah, until, you know, and then and then we got to see the performance. But yeah.

Yeah.

So, yeah, it's all very public now.

Performs, which is which is what you guys do so well.

So yeah, I think that that's really, you know, really exciting with the progress that we made there. The behind that, we've got two more projects, that were were publicly announced that we've acquired. So there's one Gerard Cross, so towards the London. Oh, I used to live in Beckonsfield, so it would have might would have been in my backyard and I would have voted for it.

Yeah. Yeah. So and, yeah, Beckonsfield they've got a nice model village there. Oh, yeah. I love you for one of it, but yeah.

Yeah. So, so yeah, we're that that's the next one. And again, that will probably be a one hour duration. Cool battery.

With connection, and energization due in q one twenty three. And then we've got the that are sort of largest one so far is the fifty megawatt and likely to be two hour duration. Yep. It's a fifty megawatt one hundred megawatt hour project.

Up in, in the north of Scotland. Well, big projects. Yeah. So that's that's, that's, and and, you know, again, that location it suits itself better, right, for for for for longer duration.

It's, you know, that it's an area of constraints. A lot of the wind farms there. And the subs the substation that goes into a lot of the wind farms get constrained. So, you know, I think there's that that could be quite an attractive place to do a longer duration a longer duration I Awesome.

And you you, you mentioned that they're not shopping around too much for, so obviously, you you found some sites you're comfortable with and they meet your risk profile. But, so we did some analysis that pretty much it's like the Bitcoin story. Right? Anyone who bought bought Bitcoin didn't sell up until a certain point was always in the money.

Right? And it's the same with batteries. If you go back to twenty sixteen when the first asset started being built. Pretty much all of them have outperformed what we estimate the business case was, apart from a brief blipware FFR hit bug five pound in twenty seventeen and twenty eighteen for a bit, and everyone was like, oh, the market's over.

It's saturated. And it, like, six months later, it switched on again And the the people who are winning this market, who people have got operational assets, not just talking about operational assets. So, yeah, I mean, I can completely understand why it went down that route. So three assets, one's gonna be built soon, two more coming, soon as well.

And then, are you looking beyond the UK for the next ones, or you're gonna stay in stay here. Yes. We've got a couple more that are, like, basically planning decisions, due this week, and then we would we would require those and take those into construction as well. Cool.

So so yeah. And and, you know, with the target of three hundred, three hundred megawatts by the end of twenty twenty three, which right now is is is still on. Yeah. Yeah.

So, So yeah. And then and and I think that's the thing, like, we, you know, we moved quickly initially on that first site, and we're becoming but things are becoming more locational specific And I think, again, like I mentioned, for something that's situated in somewhere like Scotland, I think longer duration makes more sense. And yeah, I think that's gonna be interesting how that unfolds. Probably going back to your point around what are things that could almost help you know, help move things along or blockers.

There's, you know, there's still quite a lot of uncertainty over, you know, embedded export tariffs, etcetera. And I think that stuff, obviously, you know, changes your outlook on places like Scotland. Right? Yeah.

It sort of changes the business case, especially when it's in the first couple of years of business case because it matters so much. Yeah. It's funny. The the Scottish thing.

So for me, the biggest issue is, so if you figure if you think it through, bit wind gets bit down in Scotland in the BM and there's thermal constraints. And so it makes sense that you should be able to capture loads of value by building your asset in Scotland. The problem is the market doesn't really let you do that too much yet because you're limited by the transmission constraint license condition and and and other stuff. And, really, what what for the for the good of the system, we should be encouraging people to build shedloads of storage in Scotland.

The market does the way it's designed doesn't really you don't you don't get the you don't get the reward that you should get for doing that. Since it's such a long way in cold to go around in your wellies. But other than that, you don't get to reward the the the the the it provides the system, which is, a real shame.

One other thing you mentioned earlier, I just wanna pick up on before we finish up. So you talked about CapEx and, prices, prices going up. What, donany details because it's all commercially sensitive. But what are you seeing out there in the market?

And is it a worry?

I mean, it's it's was probably gonna happen at some point. Mhmm. Right? So, you know, battery cost have been in downward trend for for forever.

And know, now the raw material prices are catching up with that, with that increased demand. So, but, you know, four hundred percent increase in lithium prices last year, ultimately, it's gonna find its way to in into battery costs. I think, you know, lithium prices are up again, lithium carbonate prices are up again significantly again this year. So it's very likely that battery prices will go up again this year.

And, you know, that feeds ultimately into your CapEx for your like, total system cost five, ten percent. And that's that's that's that's material, you know, in your this material for your for your business case. So I think that changes no. It doesn't change whether you actually build batteries or not, but it changes the way you find them.

Right? It changes demand that you can borrow against it. It changes the return profile. So I think, yeah, it's gonna be the feed through of that.

And, obviously, we've seen such light excitement in the space. And, you know, obviously, we're well, we're part of that. Right? We're in there and we're the building, we're trying to go fast.

It would be what's the knock on effect on that into into into batches. You know, everyone's always thought, oh, what's gonna happen when dynamic containment revenues go down? And what happens when volatility reduces? But I think no one was really thinking what's gonna happen when battery prices go up.

The expectation was that that would just the battery price will continue going down forever. And because the solar and the wind curve has done that. Exact And so and so I think that's, like, it's gonna be interesting. Does that the the speed at least of announcements that we've seen this year?

Is that gonna is that gonna change that?

And and it remains to be seen. And it does impact your return profile and how much you can borrow. So ultimately, you know, it must slow things down a little bit. Yeah. Definitely. And, I mean, your commodities traders, you'll understand it's a lot better than me. But for me, if a supply and demand of lithium prices, for example, or this commodities are general, but particularly lithium, anything that's required for a battery.

So price shoots up, what's gonna bring price down again, either demand is gonna be suppressed, or a supply side is gonna get over supplied. And of course, there there's new minds setting up and people are digging for lithium in places that they never thought of. But it's still slower than expected. And then on the demand side, where is demand gonna slow down?

Right? Where on earth are people gonna stop buying lithium ion battery batteries for cars or, for electronics or for station's storage. I just don't see it. Right?

The demand side is only going one way. So, unless they overbuild capacity on the mining side, which doesn't appear to be happening, you can still be bullish on lithium now, which is nuts. Right? If you look at the chart, it doesn't make any sense, but, it does.

Yeah. Totally. And, I mean, ex but as as you mentioned as well, it's not just lithium. Right?

It's It's it's copper, it's graphite. You know, those costs have been for, I mean, it's it's it's shipping as well. Right? So the, you know, we saw a five fold shipping on our first project, which was, you know, we we locked in prices at a very attractive, attractive level.

But, you know, the shipping side moved considerably during that contract period, and shipping is so volatile. Right? So there's there's all there's all shouldn't be. Right?

Yeah. Yeah. For like decades, it hasn't been. Yeah. Exactly. So it was a private there was a five x increase in shipping costs.

And when you're shipping lots of containers of of of batteries from from from China, that's a significant increase in costs. So, you know, all of those things, all all those things are moving around a lot. It's not it's not just lithium. And so, just to to to finish up, wanna talk about the future of your system and what your vision is for it.

And we talked, we talked to a little bit before about, technology in the future of your system, operational improvements, What do you think it looks like? Decentralization we've also talked about? What what do you think it looks like? And, yeah, what was what's the dream?

I think decentralization is is something that, yeah, we just see that happening. So I think that's where we get to. And I think you get to this you know, the future energy the future energy utopia away, the home is an energy hub. And, you know, you have your solar and your your battery and your EV, and I think that stuff will all we will sort of get there.

But, you know, I think the progress of that takes quite a long time. Taken so long to roll out smart meters in in this country, like, you know, we're we're we're years behind where where that should be. So I think that and also the shifting, like, consumer sentiment. Why was that, by the way?

We always talk about, we always talk about, like, front of meter batteries. We never really talk about supply size. So Why why are why do we not hold? Why why why is it so slow for me to roll out?

Put you on the spot here. So I know you're gonna note. I think I think it was because it was it was Like in other countries where they rolled them out really quickly, it was done by the distributor. It was done by -- Yeah.

-- the grid. And then they just go street by street and install smart meters as opposed to, as opposed to here where it was a supplier led rollout. And I think then there were lots of suppliers as as we know, and and I think that just complicated the the rollout of it. So I think that's the the supplier length probably made sense when there were only a few very large suppliers, but I think that's that's all got muddied in that But It's alright.

I took it completely off into the old amit. Sorry. New amit. So if you train your system, decentralization, everyone's gonna have this little self, self what do self self fulfilling?

That's not the right word. They everyone of them make their own energy themselves. Yeah. Self autonomous love.

Yeah. Self sufficient. Yeah. Sounds like a good utopia. Yeah. And I think I think we do we we do sort of ahead in ahead in that direction.

I Well, I actually there's two ways of that. So I think my view's been just shifting consumer sentiment. In order for that to become a reality. And it's quite complicated and it can be expensive. It will actually take a while.

And you know, in the short run, there are things such as, like, front of the meter utility scale battery that can that can achieve a lot of, achieve a lot of that that, you know, that that that transition that needs to be made.

On the flip side, I think the energy price shock that we've seen over the last year has been so significant and and it's been, you know, so so extreme that actually maybe it will push some of that stuff forwards of, like, faster than it was going. So I think you're seeing quite interesting, like, pilots that are happening. You know, there's there's one between National Grid and Octopus I think now, which is, like, which is a sort of, you know, demand reduction at a a customer level at a domestic level. I think that stuff's starting to happen quite quite, like, quite fast. Mhmm. You're seeing other other things like the capacity market price that or yesterday for the t minus one, you know, seventy five pounds for anyone who's watching it, yes.

And and I think those those were they're like a extreme, like, they're faster or extreme reactions to what, to the extreme price events over the last year. So you could actually see things actually accelerate almost quicker as results. And maybe what we've seen over the last year ends up being like a blessing in disguise for kick up the backside. Yeah.

For, like, improving flexibility and, you know, and and speeding up decentralization. So that, you know, that's the hope. Awesome. So I think we've an out of time.

I just wanna say thank you for coming on, and, thanks for hosting us in this utopia, east London, coolest place I've ever been, I think. Thanks for hosting us. Thanks for coming on. And, yeah, if anyone's got any questions, if you're watching this, comment, let us know what you think.

Ask some questions and we can try and get back to you and make sure you hit the subscribe button. That's it. Thanks very much. Thank you so much.

Thanks, Quintin. Cheers.