The rise of the flexible grid: How industry, AI and data centres are reshaping demand

(upbeat music) - You're listening to Energy Insiders, a weekly update on clean energy and climate policy with Renew Economies Editor, Jarls Parkinson, leading energy analyst David Leach. Energy Insiders is brought to you by EverGen, providing cutting-edge energy management software for battery optimization, virtual power plants, and distributed energy resources. And Pylon, helping solar installers and retailers design high-resolution solar proposals in minutes. Hi, it's David Leach here, and welcome to an episode of Energy Insiders. Jarls Parkinson is away for a couple of weeks, so he's somewhat gingerly and trusted me with the hot seat. And we have a great interview today with Michael Phelan from Good Beyond, which will be coming up after the break in a while. The points I want to cover today, in terms of news of the week, frankly, there isn't a great deal with the things that struck me. Were first of all, a 1 billion increase in the cost of project energy connect, which is the link between Newlink between South Australia and New South Wales that Transgrid's put in a cost increase application for. Transgrid say that despite the increase in costs, New South Wales consumers will still be better off because it will lead to a result in generation costs. While of course the cost increases entirely regrettable, it's not inconsistent with transmission cost increases that we see around the world. I was only reading about transmission cost increases in Irkott in Texas, as Doug Lewin has pointed out. He's a great expert on Texas. But what Irkott was saying in their presentation about the transmission cost increases is that because the volumes are going up, much like airline travel, in the end the cost per unit comes down. So the key for lower electricity costs in one way, as well as having more renewable energy and more supply competing, is also to increase demand because when you spread more volumes over a given cost base, you'll end up with lower unit costs. So that's one item, the increase in the project energy connect transmission cost, which by the way, that project is due to complete, I guess towards the end of this year, and I expect we'll see some electricity flowing through it this year, which I personally think will be great. The second item of note, which is fairly minor, is that Indernoid is a very large battery complex being built in Brisbane. And the dual ID, the dispatch unit ID, for the second stage of that, actually ended the NIM registration system this week. So I think that project is commissioning at pace, and I also noticed that in Queensland, another large battery of Stanwool's also started commissioning. So every day I've got a monitor on my, a dash on my website, an indicator that shows the NIM-wide battery state of charge and discharge, and it can go up or down to gigawatt or two gigawatt hours in an hour. And it's quite interesting to watch that and we expect the scale of that gauge to increase very steadily as we go over time. So there are the two items of news that I wanted to concentrate on. The other item of news is one that actually didn't happen that we keep drawing attention to. And that is the, we've seen not very many large wind or solar projects actually get to final investment decision. And this is where I want to talk a little bit about policy in the federal government, the current government, federal labor government, it's likely to be an office for, I suppose, another five years. Perhaps longer, but you could reasonably expect five more years now. During that time, and that will take us more or less to 2030. And by that time, we're supposed to have 80% renewable energy. But at the moment, and this the projects are started this year, we've mentioned that many times on this podcast, unless they started rich, finite, final investment decision this year, they won't be ready for 2030. So we have to have start having some news on that. This and that points to what can be done to make the, to speed up things. And what's really missing, I suppose, is a couple of the projects still need some environmental approvals. But what's mostly missing is the revenue assurance for the equity of providers. And that revenue assurance, that guarantee that the builder of the wind farm or the solar farm is going to get paid. Obviously comes from typically from one of the big gentailers. The scale of the projects that we're building now is typically up around a gigawatt, I suppose, to the 200 and 300 megawatt projects that we used to build. And at a gigawatt size, you're talking typically between three and $4 billion of investment. And that's a lot that has to be stummed. And we need big PPAs that can only come from a few people. They could come from a government, but then unlikely to come directly from a government with one exception. All they can come from the big gentailers. And even for the gentailers, they're quite a risk. Origin will certainly get the Delta Yanko wind farm to FID this year. But beyond that, everything is still uncertain. As we've all mentioned on this podcast, one option for doing things is to take Tomago, which the federal government wants to-- Tomago Aluminium is available. The federal government wants it to continue. And the probable way that that will happen is that Tomago will get its electricity from snowy. That's what the newspaper articles are. And snowy will need to get the energy to supply that Tomago from somewhere. And they could possibly write PPAs. They would enable one or two of these wind farms in New South Wales to get to financial clothes and to get built. So anyway, we'll be watching for news on that quite closely. But there was, of course, no news this week on that. It hasn't been any news on it. Most other weeks either. Which brings me to the federal government policy, which is the last topic I want to cover in this interview in this intro. And this year at the federal government level, we have a number of policy reviews. At the right now, we have a review going on to the least deduction that's available for electric vehicles. Later in the year, though, there's supposed to be a review of electric vehicle policy. In my opinion, the fringe benefit tax discount, which EVs get, that should be rolled into the broader electric vehicle policy review. I've said several times on this podcast that there are terrific savings. We've had people like Malcolm Turnbull agree savings in terms of imported oil, savings in terms of being more secure in the event of conflict, which hopefully we'll never have. But overall, wonderful benefits to the Australian community of decarbonisation, like vehicle emissions are the next biggest source after electricity. And it's easy to get that moving along. And when we look at the policies that would work, virtually every policy expert you ever talk to says that more charging infrastructure is the best bang for the buck. And you can think about this from a psychology perspective. Why don't people buy an EV? There are two reasons. They're scared. And the main fear they have is charging fear. It's range anxiety. So we can take away that fear. We'll automatically make people more likely to buy EVs. And this doesn't just mean charges on highways and in country towns. It means that all the people that live in units can be absolutely confident when they buy an EV. They'll be able to keep it as charged as they want to whenever they want to. And then on the greed side, we need to reduce the cost of EVs. To some extent, that's happening already as the Chinese cars come into the market. And as the second hand market also grows, there are some great deals probably in second hand EVs, particularly as ones that were on the lease a couple of years ago start to come off. But things like Regio Tax Savings, which is a state government thing, fringe benefit tax reductions, I mean, or just a straight out cash grant. They're the kind of things that like the home battery scheme that can really cause the sector to kick off. So I think that's something that should be done that whole process before the fringe benefit tax review is complete. Because fringe benefit tax really is only one policy. And it's an effective one, but it may not be the most effective one. The second review that's really due this year, happened later in the year, and we'll talk about it again, is a review of the safeguard scheme. That covers like a couple of hundred million tons of carbon emissions by our largest emitters. And most of those emitters are, in fact, oil and gas producers and coal producers together with steel works and cement works and a few other things. That's a complicated review to think about because there aren't going to be many votes in a lot of ways, even though the carbon emissions are a really big part of the total. And it really requires the government to decide how much support or how it tacit support. I don't mean direct support, but tacit support. It can allow for the gas industry in particular. I think anyone who follows politics understands that in West Australia, getting in the way of the gas industry is going to make the West Australian government probably fairly unhappy. So the big deal in that review probably is going to be around Accu's Australian carbon credit. units, about half of those come from land schemes, planting trees and whatever. And as we all know, there's a lot of doubt about the total validity of all those schemes, even though I'm absolutely convinced that some of them are completely genuine and done with the absolute best interests in the line. But in the end of the day, letting these big gas and coal companies buy accuses a way of continuing to produce coal and gas without doing anything else, it's kind of not going to build the future that we need for the future generations. So those are kind of the some of the policy issues. There's a lot more what we're going to do about half of the networks as home batteries grow and how they're charging, but they're kind of more within for the wants to think about. It's this big strategy where the federal government has the opportunity, but it needs to be making the decisions now because five years is not very long to get a lot done. And now I'd like to thank our sponsors Evogen and Pylon and after this break we'll be back with a great interview from the CEO of Grid Beyond, Michael Feele. Good day, Alex Carey here. The Goodwee ASA all in one home storage solution is here and it's a game changer. It's packed with market leading features, full home backup and six level battery protection. With up to 48 kilowatt hours in a single stack, the ASA is a breeze to install with no gateway needed. The Goodwee ASA series is available now and price to cover the 2026 drop in the rebate. Visit Goodwee.com.au for more information. Michael Feele, thank you very much for joining Energy and Siders all the way from Ireland. Yeah, thanks for having me. Good beyond. I'm not a name well known in Australia. Yehdroyd will be more. You do have a presence here, but you set up the company in 2010, I think. What did you see there? What was going on that inspired such a move? Yeah, at that time we realized that flexibility in industrial commercial load and also storage would be very valuable for balancing renewables. Grid Beyond was set up at that time to start that work. The Irish market, UK market, were opening up and starting to realize that if they wanted to go to the levels of renewables that were now seeing again in Australia, that you needed to have flexible load. The demand side needs to be flexible and there were enabling markets to cause that to happen. So Grid Beyond was set up to take advantage of that. And basically what is like a software management firm to us more about the products that you offer? Yeah, so I suppose at two levels, we optimize at a site level batteries and generators and industrial loads and various things. So we find flexibility in those and put them into the markets when they're short. So for the battery, we could be charging at times when there's excess generation like in the midday and in Australia and giving it back in the evening when there's a peak and there's a shortage of energy because the sun is going down. So it's really set up on that premise that we move things around. We move industrial loads, we move generations around. We move batteries around to balance the grid around renewables. Yeah, tell us a little bit about the situation is in Ireland then. We don't hear much from Ireland. You put a lot of wind energy. You obviously have batteries there now. What's going to happen? Yeah, so Ireland was originally probably one of the early adopters of in particular wind. So they got to very high levels of wind back even 10 years ago, hitting about 70%, which is quite high by most standards. And I've continued since to add more wind and solar and various renewables to the grid. That causes lots of problems. So that causes issues with frequency but also voltage. So they would definitely have been leading lights in terms of what would be required on a grid where inertia was falling and what would be needed from a frequency response point of view. What would be needed from a voltage point of view and probably lead the world in a particular area. In terms of other areas, the acceleration probably hasn't been as fast as places like Australia as is now happening in Australia. Or you're seeing very large amounts of renewables, very large amounts of batteries and various systems going in which are a lot higher than certainly the need for inertia voltage frequency. It's more about arbitrage, I guess in that market. Yeah. And with Ireland then, some of those issues that you talked about as frequency and voltage and things like that. Have they been addressed now more or less with the role out of the system that you operate and the first big batteries? When are the first batteries going? We were think that we were the first. No, no, no. Ireland put a battery in, I think just before the Adelaide battery, it was the first where the very fast frequency and then they got to synthetic inertia as a concept, I think, first. Yeah, Michael, you worked on that, I think, didn't you? Yeah, that's correct. So Ireland have been putting in batteries, say, for the last 19 years. So the early batteries, both Ireland and UK were put in around 2016, 2017 in volume. So we would have been involved in putting in significant numbers of batteries into both markets since that time. So if we move on a little bit, I mean, really, you're working more on the demand side than the supply side, is that fair? We do a bit of both. So we probably, we also have quite large batteries. So we optimize, say, 200 megawatt batteries in places like California, say, 50 megawatt batteries and the likes in the UK and Ireland. So we also have large batteries. We'd be right across the UK, our US as well. So we have batteries in California in case so we batteries in Eric Koch, we've batteries in PJM. So we've even got batteries and lots of them in Japan. So we get to see the world really of, you know, where renewables are going in, where there's a lot of batteries going in in particular and a lot of DSR. So we tend to follow the best markets for batteries in DSR and try to be there. And most of the time we are. And you want to own the batteries or just dispatch them. And we mainly dispatch them. We have some batteries that we have joined ownership of true and SPV mainly in UK and Ireland. But in other markets we work with financiers, say, and Australia, we would work with financiers who will finance, say, behind the meter, if I make a lot of batteries, various types of systems and where the battery signs the optimizer, maybe the MSGADL for those, but not necessarily the owner. So that's right, because I think if I'm right about your business and I only look at the website, your capital is what 20, 30 million pounds or something like that. And not even sure if that's Irish pounds, I'm not even sure if I've got the right currency. And I mean, your services firm is rather than a capital provider. Yeah, we're more of an AI kind of optimization type company than necessarily anything to do with heavy capital. So our main offerings really are around forecasting and optimization of distribution assets. And they can be, as you know, they can be batteries, they can be generators, they can be industrial loads, but they can also be just managing the imbalance on solar and wind. So it's interesting because every market is very different. I used to go to these utility conferences and I once asked next year in Boston, you know, with I think you've going somewhere else and I said we don't even know what the rules are going to be in elsewhere in the United States, Littleone anywhere else. But I mean, if you wanted to come into where you're in our market in Japan and as you say, Kaiso, which is California and Erkotz and Europe, I mean, they've all got very different rules. I mean, how does one piece of software adapt to all those different rule systems? Yeah, we probably look at the other way around that they're all fairly similar. So they all have a kind of a day ahead market. They all have maybe a real-time market Australia's a real-time market. They all have ancillary services designed to do roughly the same things. So they're normally generally trying to load up or load down on very fast things like frequency, on slower things like reserves. A lot of it is around obviously setting up the market using other day ahead of a real-time market and then making corrections using reserves and final corrections on frequency and voltage. So we kind of view the other way around that they're all fairly similar and the details of the rules are probably different but the fundamental structures are pretty much always the same. And I guess the battery integrators, the influences and the testlers, they all have their like auto-bidder services, which as you say, are optimized for particular markets like in Australia in our market. I mean, there's a lot of ancillary services revenue streams which I'm quite sure are different to the ones in other markets. So I mean, how do you find competing with the offerings from the battery integrators? Yeah, we probably don't compete that much with those two because if they're providing their turnkey solution, then they will do that. But what we have seen with Australian customers is that they might have a say a solution from one of the aforementioned and they might want to optimize across the sites. So there might be, I don't know, water company or there might be an industrial site or something of that type and they need to optimize the battery but also with the solar, which I guess they get across, but then also with the industrial load or the water treatment or wastewater treatment and then that might be challenging. So we obviously with our heritage, you're fairly familiar with industrial loads, commercial loads and various things so we can optimize across the spectrum if you're like for the site, and then put the flexibility that remains into the central market, through the VPP. Then you're competing with the demand response people in a sense aren't you? I guess these things are quite complicated aren't they? I mean like that every business is quite different. It's power consumption and it's the value of the lost revenue of demand response differs. It's quite an individual piece of work for every client, isn't it all not? Yeah, unless you're across, like we're across all the markets, so we work with every industrial that there is and that has flexibility and most commercials that have flexibility. So we're very familiar with the flexibility they have. If they have generation, we've done that many, many times optimize them, see HPs and the likes. And then batteries were fairly comfortable with those as well and solar. So we can generally optimize the whole lot together and what you find is they're similar. You know, an industrial plant, you know, that's making cement in Australia makes it pretty much the same way as they make it in the UK or Ireland or America or anywhere else. When they decide to put in solar and batteries and various things, they face exactly well very very similar challenges that you would see in the other markets. Obviously the market varies but the assets don't as well would be the way of thinking about it. So you're facing a different market, maybe with different, somewhat different price situations, but the rest of it is pretty much the same because the assets are pretty much the same. They're in a different ambient, but generally they're the same. So how is it flexible? Can some of these industrials be? And so how are they coming to, you know, sort of getting to this moment? Because before, I guess they just thought that they just do their thing and just carry on. Now they've got all these different options on type generation batteries, you know, picking their time of day to use more power or less. What can you sort of tell us about the levels of flexibility and the willingness of the industrials to take it up? I mean, you know, just I'm commenting only from Australia's perspective and I'm about cement, you know, it's really all about the heat. I used to cover cement industries, it's cool. It's all about the heat to make the cement not about the electricity consumption so much. And in Australia, at least an awful lot of it's about process heat and electrification as opposed, Michael, I think mentioned combined heat and power, CHP a little bit, but you know, that's the challenge in Australia, but anyway, I didn't mean to interrupt. Yeah, well, that's the thing. Industries are identifying, so anywhere we're trying to. Yeah, so just to take some into account, cement is an example, so 100% correct. The killing and the heating is an issue and obviously the electrification of that is important, but cement plants already have a lot of flexibility, so they're typically the raw mill, for example, and the cement mill are typically a few megawatts, say, up to five megawatts apiece. So you could have 10 megawatts of flexibility in a cement plant that could be put into WDRM wholesale F-CAS. So it's it's not nothing and then you can put a battery against the fixed load, so you can have a solar and a battery against the fixed load and that's typically how they go about electrifying in the very short term, and then they're looking at how can they provide them, you know, the killing process and that in a better way that uses less electricity. So that's typically how they would go about the electrification, but they're very active participants in all markets like weeps and cement plants all over the world in grid services markets and wholesale markets in terms of intelligence, but we have been doing for them is they typically have to make to a production plan, so they have a plan of what they want to do, but generally that plan doesn't take energy into account. So what we've been doing is coming up with an optimization system that forecasts a seven days of energy price in Australia and then we're looking at the production plan in other words what they need to make and silo levels and various things for them and then we're coming over the a seven day plan of how they might operate, mindful of when we believe the high prices are going to be in the Australian market. So in that way they're optimizing their production against energy price and avoiding very high prices that they might be on index towards, and especially with the raw milk and cement milk. And what are the sort of industries that have been working with in Australia or overseas? So in Australia people like the metals industry, so they are making steel and various things are foreign, as well as putting those into FCAS. Also mills of various types in the market talking to some of the water companies, coal stores. Any any large industrial really would flexibility the gas companies, the gas to liquid people, we typically put those into market as well. A more overseas pretty much the same, like it's the heavy industrials. So you're putting everybody from chlorine makers to even you know you come down the market, you come down from multi-site so in UK and Ireland we have supermarkets in the market, we have distribution centers in the market, we're even in the UK these days looking at even social housing and things like that where they might put in batteries with solar and things and putting those into the market. Talk to me a little bit about supermarkets because you know what their power consumption is really for cold storage and light mainly isn't it? And you can't really turn the, I mean you might be able to turn the freezer down in England or even Ireland but you're not going to be turning the freezer down in that in that light in the summer. I'm pretty sure. You can set point control it like I mean they haven't inertia so the products, like if you drive a product from say -18 to -25 it has a fair bit of extra cooling in it and that would have a certain hold across the peak so the price of is 19,000 dollars and the grid is about to fall over in Australia. They're probably one of the things that could actually turn down for a period of time, have a carry especially if the doors are closed and sit there happily for an hour or two and hold their temperature as they heat from -25 to -18 for example. Yes that's interesting. I've been talking about demand response on and off here on this podcast and you know for like 10 years and I looked around the world and I can really find where demand response makes much difference to the overall system in aggregate but it certainly can make a difference to individual producers and consumers, can't it? But I mean it also comes at a cost you know like turning things up and down increases wear and tear and sometimes this missed revenue I mean cement kilns, water operat - I mean kilns water operated at a very constant temperature I guess the ball meals and stuff can operate on and off you can turn them on more easily. You know that's correct the things are going on enough anyway like we're more synchronizing them to grid prices so as you say this cement mill or the raw mill won't be running 24/7 unless there's 24/7 demand so they have to go off sometime and they might as well be off on the prices high and the grid is under severe pressure and that's really what we're doing we're kind of in that instance. I'm synchronizing the plan with and to make sure that this the mills are not running if they don't need to run when the prices are very high. So Michael just tell me how has your business going? What's what's riven you up on last year? Yes so you know what kind of saying the DSR maybe you know it doesn't make that much difference but in reality it does like we would have gigawatts of power like that's fairly significant by any standards that we put into markets so even from a revenue point of view like we're probably from a euro point of view would be head non-torch 100 million of revenue so it's a decent amount of of DSR and batteries being put into markets and obviously them keeping the grids in balance so the likes of national grid in the UK the air grid people in Ireland some of the American utilities would rely heavily on these types of systems and if you take the US as an example they're very interested in this area because it's one of the quicker ways of finding flexibility that could be used to build data centers so we can just not a renewable energy thing so so that's why they're interested in the USA sorry that's a silly comment but I mean I thought I mean data centers are a hot topic but training loads are not particularly interruptable are they and certainly like the query loads are not interruptable either either so how do you fit a data center into into that kind of system? Yeah no you're right it would be somewhat different so sometimes well mainly what data centers are doing today is they're using the generators they already have are putting in batteries so we different batteries into data centers that can participate in grid services and the data center can happily go along doing what it does in terms of providing the data processing to people so that's roughly where data centers are today and going forward they might look at our starting to think about at least the the chillers the mother that could be some flexibility in those and then is there any kind of determining what is the flexible load like what load is discretionary and can actually be delayed or could be moved around to another data center if a particular area is under pressure but that's early work and progress I would describe describe it as whether starting to figure out is that possible? I was really about one day the data center in the USA I think that might be Microsoft but I'm not sure it was like 500 megawatts of load of which 200 megawatts was cooling rejection you know it's I know and they've got all these big banks of gas generators inside they're sitting around for the reserve power it's quite an interesting topic to me. Yeah they could be forced into the market. So in places like Texas and possibly PGM and that they are considering that, and maybe Ireland, that if they grid isn't an emergency situation, these people have backup power, that maybe the backup power would be used, one to keep the data center going, but also to keep the grid going in those instances. So I think you're going to see more activity from data centers going forward. - And I don't know if you have a view on it, but data centers, particularly in training mode, can also suddenly stop consuming power very suddenly, when the sum issue that causes the training to be interrupted and all of a sudden, you get a very big load reduction, which can cause just as much frequency control as supply dropping off. - Yeah, you can use a battery, as you probably know, as a damper against that, so we can kind of compensate for those pulsing, or if you're like fast changing of loads in the data center. And I think that will be the solution for that, or at least one of the solutions that people consider for that going forward. - Where in the world does some demand response and demand management, this will happen very well in terms of, just not just technologies, but also market signals and market encouragement. We get the sense in Australia that it is an undeveloped market, that the opportunities there, there's been some mechanisms which have existed, but they haven't been fully exploited. - Yeah, probably the best market we operate in is the UK. So the UK is a fairly mature market that we've been doing, I suppose, demand response of various types there, nearly since 2010, 2012. The market has moved gradually as a steady pace all the time, so they saw the value of demand response and batteries start bringing demand response around that time, start up in batteries in around 2017, designed all their frequency response and then salaries, I suppose primarily around batteries, and to some extent around demand response. We're happy to get it all into that, get those things into the market, then more recently they've allowed aggregators then put load into the central market, say the wholesale market on the P415 to allow that flexibility show up in the wholesale markets, and probably where they're at at the moment, is they're looking at the D&O services. So if there's a constraint on the D&O network, having a marketplace there that aggregators like us compete into, and if we have a solution, then we would solve the problem and I don't know how to build a new distribution line. So I think they've constantly been innovating, constantly using demand response batteries and various systems, flexible systems like that in a good way to try and optimize the grid. - How much demand response or power can you offer from your aggregation services in the UK? - Oh, we would be again in the well over a gigabot of power in the UK being offered, through really the combination of batteries to load through generation of every type, as it was, into the market, and also some front of the meter battery systems, sometimes generation systems as well. - So if a one gigabot generator, gas generator, I guess, or a link to the Europe drop transmission, link dropped out, you could turn around and offer a gigabot immediately. - Yeah, we can compensate for that, but that's what it was set up for in the first place, was to compensate for the likes of the loss of an interconnector line or a fairly significant failure on the grid. So there's a few of us who do it, but yeah, that was the original theory. It has moved on from there, as you know, in the modern in Australia, where people are moving on from those ancillaries and frequency to more arbitrage and general balance of the grid. - Trading, thanks. I have a charge as a perfect profit. I'm very fussy about that word as a financial person. (laughing) - It just, it has moved on, but I'm just interested in this one gigabot. You can control all of that instantly from what your piece of software, you could just issue a button and one gigabot would suddenly turn up within what time frame? - It depends on the asset. So some of that will be in frequency services. Some of it will be in reserve services. Some of it will go into wholesale services. So it really depends on the asset as to what speed we can ramp and what we can do. But it would all show up in minutes. Some of it would show up in fractions of a second to a second. - But it's not so coordinated that it could all come just like a battery. I mean, one gigabot battery can do it in like, I don't know, five milliseconds or something. - It would be similar. So the thing is it's made up of different things. A chunk of it is batteries. A chunk of it then is generation. A chunk of it is industrial and commercial load. So they're all going to have different characteristics. But roughly as blocks, you can define what performance they have or ramp rates they have and what they can do. So that's what we do. That's why we call it probably. Well, one name for this is Virtua Powerplant. It's a power plant with ramping up and ramping down rates. And that depends on the assets you're talking about. Obviously our batteries are the same as everybody else's. They can do perform just as fast as anybody else's. But the generators are similar to other generators. If the gas turbine types, they're going to have the same performance as any other gas turbine type. Given the fall in battery prices, it seems to me that the economics just favor doing a simple battery rather than having all this demand response. Sorry Charles, I'm taking up too much time here. - The demand response still has lower marginal cost in that the investment has already been made. Whereas the batteries have a cost and we know from something batteries and things like that that you do want to get a return. And when the markets go towards marginal cost, generally DSR is more attractive than batteries. - Well, where's Australia falling short? What are the opportunities to grow this opportunity in Australia? What would you like to see? - I think Australia's kind of still at the very large battery stage and even incredibly large battery stage. And your question is that the right answer for the type of grid that Australia has. Like will there not be problems in the distribution network in a while? Like you're seeing in the UK at the moment and should that be getting more attention? Because if you put in massive batteries, you know, at particular points, our failure or particular points in the system, then it's constrained start coming up into the distribution network with the business case B for batteries, you know, should that get a bit more talk? - Hmm, too, maybe. - So there's more about that? - What's happening in the UK that you feel that Australia could also experience? - So in both UK and Ireland, they're probably moving on from the central system and managing the central system which they've been doing for years to the distribution network. So maybe what's the needs of the distribution networks are based on low growth and starting then to consider what is the right answer for flexibility in those areas and if so, how much do you need? And can you set up marketplaces or some method to actually call out where flexibility is needed in the distribution network? - It's interesting. I mean, we've sort of in Australia was learning a lot about your sort of visibility and capability on the distribution network, you know, companies with digital twin models and things like that, sort of, you know, identifying sort of areas which can be exploited to which, you know, either too had not been recognized. - Charles, the cynical viewpoint is that the distribution network spent years arguing that all the expassal that was going to cause problems for them been exported and they needed more revenue to protect against that and now they're turning around and saying too much power is coming into the networks and they need more money to protect against that. Whatever it is, the distribution network needs more revenue. Sorry. - You know, that's just them just on gaming the system and I think the market point is they're basically probably up to now or maybe this is not the case but up to now they haven't quite realized what the opportunities are. What they can do. - Yeah, it does look like it's at a slightly earlier stage. So if I look at UK, there's a marketplace there. So we can see right across all their distribution network operators, what flexibility they're required to keep the lights on in that distribution system over the next few years and if we can provide that true flexibility in storage and various other things and we'll do that first. If we can't, they'll build a distribution line then over the next few years. Ireland is kind of on the same way. So ESP and others have kind of studied the distribution network and again, looking to put batteries and probably batteries are some kind of flexible system into the worst constrained areas on the distribution network. So it's easy. - So you're talking about what we call community batteries or neighborhood batteries are small batteries of a five to 10 megawatt type situation having more of those. Is that what you're sort of getting to or are you just thinking? - Yeah, kind of in a planned way though. So they're kind of figuring out what's going to constrain. When it's going to constrain, I'm high with a need a battery in that particular area. So it's fairly well planned. It's fairly well thought out. And then they're solving their bigger problems first. Like the UK probably has a projection that maybe in five years if electrification continues, you could have 25% constraint on the distribution network. So you're going to have to do something about that. Like eventually becomes very difficult to keep up. The further it would be electrifies. So then it's how do you solve that in a more individual way, maybe using flexibility and batteries and various things? - Because in Australia, we don't, it's different. For the most part, we can become self-sufficient. It's become easier and easier. The throughput through the grid in both directions is probably becoming less and less. As cause so much of the residential network has 40% as behind the meter rooftop solar. And as they all put batteries on and the batteries are so cheap now, I think you can get what 20 kilowatt hours for $7,000 in Australian dollars less. Then you hardly need to grid at all, except in the middle of the window. And so I think in the network problem for residential in Australia is actually getting, is stranding in a sense. The grid gets is needed less and less. - Yeah, except for the times as you say when the sun isn't quite there. like when it's going to be. cold and Melbourne or whatever and the sun isn't doing it's doing about as much as it does in Ireland and the winter. So the grid is there probably for one for those times. The second thing is I think in some of the markets you're kind of seeing the constraints are probably caused by bigger things. So it's a housing development. It's a new factory. It's a data center or something like that is causing a constraint in an area. And then it's a question of how do you solve that constraint or otherwise a lot of electrification is going on. There's a lot of EVs going on in this charging system going in maybe fast charging system. There's electrification of heat going in in Europe normally in UK or Ireland. Those things are causing problems. Had to address them then. So it says a bit more about EVs and yeah, just to sort of finish off. Because I mean, I'm supposed to share VVs in Ireland. I think it's a lot higher than in Israel. You must be in the high teens or even 20% in Australia was too struggling around the 8s and 9s and 10s. Yeah, it is higher in either Ireland or UK. They've, yeah, you're seeing a reasonable level of EV adoption. You're also seeing some of the public sector electrifying so the bus system in the UK is fairly well electrified. So most of them have done a reasonable amount of electrification. We work with them. We've kind of worked probably with most of the UK bus companies looking at flexibility they have seen what can be done with it in energy markets and also optimizing them from a tariff point of view. So that has gone forward. I mean, they do cause constraints sometimes on the network in the evenings and various things when the buses come back and all want to be charged. You can put batteries into those systems obviously to optimize those. You can do the same with fast charging points and putting batteries again in there to manage the grid capacity or the grid constraint that might exist in that area so they can charge more vehicles. So there is a fair bit of innovation in that area and it has been moving at a reasonable rate. I'm like, we are earning a time but I mean, I'm interested in because you don't have like in the UK the same sort of mid-day duck curve that we have or that California has or you know, you don't have this opportunity to charge the batteries in the middle of the day that you'd be using what gas or imported power or offshore wind. I mean, how does that whiz the power coming from? Yeah, you're right. It varies by the country. So if you're here in Ireland, it probably is the wind. So you're watching for cheap negative-friced wind at night and things like that and loading up on that. If you're in Australia or you're in California, you're looking at duck curve and obviously the AI systems doing all of this so they're just trying to find the lowest, the bottom top and bottom kind of prices, TB2s and TB4s and various things and trying to charge on obviously the bottom and release on the top and then you look at the marginal cost of a battery to make sure what you're doing actually makes sense. So yeah, I mean, it's heavily automated but you're correct. You're following different patterns than different markets. In the UK, you're probably charging your battery from gas or offshore wind down to, I don't really know what. Most likely wind, I'd say, there's still quite a bit of wind on that grid. So the low prices would typically be driven by lots of wind on the grid and in the summer, decent amount of solar as well. Never would have fought. They just had an auction actually with five gigawatts of solar this week actually. It's interesting. You know, it makes reasonable sense and maybe it's getting warmer in this part of the world or something but it's solar since we're making more sense all the time even in this part of the world. Stranger have to think. Michael, thank you very much for looking. That's actually quite a really interesting, quick journey around the world and also the opportunities in Australia. I think it's sort of something that we don't think enough of is a domain response and thinking about the demands out of the equation. So thanks very much for your insights. I just want to ask one final question. How is your business growing in Australia? Is it growing well? I mean, you say you're going to be out here next year or presumably not to visit someone. Yeah, we have a certain amount of demand response activity in the market already. We are seeing some of the customers are starting to go on a, I suppose it's a cost, kind of cost risk management type approach with a bit of past zero carbon and are starting to put in batteries. So we have a few of those coming along behind the meter. We have some batteries as well. Five megawatt batteries that we're trading and optimizing. So we're starting to see growth in the market in Australia. Some of our partners as well are pretty strong in Australia. So we see it as a good market for us. Good stuff. Okay, Michael Philly. Thank you very much. Once again for drilling energy inside us. Okay, guys, it's been interesting. Energy inside us was brought to you by Evergen, the market leading renewable energy software business that optimizes residential and commercial solar and battery systems. Evergen enables large numbers of systems to operate as a single fleet, so network operators can use them as a virtual power plant. 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