Ep 9 The Philippines electricity market and solar auctions with Chris Starling

Intro: Hi everyone. It's Ben today. I'm joined by Manuka host. Hi, do you want to introduce yourself? Thank you, Ben

Hi, everyone. I'm you all for Six years I work. Research fellow in clean energy in China. Mainly focusing on. Youssou such as coal face out. renewable Energy policy. Since last year I relocate Singapore.

And that's all. Yeah, that's all. So today we are going to interview Chris starting. Yes. Chris is a partner at Lantau group covering the Philippines, Thailand, and Vietnam. Today, we're going to talk about the Philippines' electricity market and about the recent solar green energy auction.

 Thanks. And on with the show.

Yiou: Hi Chris. Welcome to the show.

Chris: Thanks for having.

Yiou: Can you give an overview of your career and how you came to meet the coverage of the Philippines, Thailand, and vie Vietnam market at the land group

Chris: Sure. As I said, first of all, it's a great pleasure to be invited onto the podcast, today. I graduated back in 2005. When I joined a company called RW E, so one of the big European utilities. And that wasn't long, long after the UK power market sort of opened up. So it was quite an exciting time to be in the energy sector. I worked in teams involved with the commercial optimization of UK power assets, which at the time was sort of mostly gas. Coal and oil. And then a lot of my time at RW e back in the UK was spent trading on the UK and European power markets. So focusing on uk, France, uk, Holland, interconnections, some asset back trading, some proprietary trading.

As well, spent some time in another commodity trading house, known as noble before taking a mba and then following that, really just made the move over to Asia. So moved to Hong Kong in 2016, joined the Lantau Group, which is where I am, today. We're known as kind of tg, I guess, in the sector among our clients.

But essentially we're an economic and strategy consulting house focusing purely on the Asia Pacific energy sector. Essentially, so as you mentioned, my role is predominantly focused on the Philippine, Vietnam, and Thai markets, so quite Southeast Asian. It's not exclusive to those markets, but that's certainly where we see a lot of client interest. You know, we're advising investors, generators, developers, regulatory authorities, governments, mullas. So quite a range of, stakeholders across the value chain. I guess going back to your question, why the Philippines and out of those three markets, the Philippines is where we as tlg are, are very, very active.

And really I think that speaks to the deregulated structure of the market alongside, Singapore. It's is one of the most deregulated markets in the region. And when you compare that to say Thailand and Vietnam and Malaysia and some of the others, those markets have been much slower to evolve from sort of their single buyer models and and so forth. The three markets are very vibrant. There's a lot of commercial interest in them. They've got a very compelling growth story, quite active transactional environment. And as I said, importantly, they're at different stages of market liberalization. So for me, as a consultant, I like to work in a market on the one hand, like the Philippines, where you've got a very commercially active deregulated market dynamic going on. But then on the other hand, you've got Thailand. You've got Vie Vietnam, which is still largely under sort of single buyer, centrally cloned models, you know, have got active private sector participation. But at the same time, the government has a strong hand in how the sector is being developed.

Ben: Oh. It's very interesting market to cover and I'm quite excited actually to date to have you to discuss about the Philippine market as you said. It. It is one of the most interesting in South Asia because of is deed aspects. So we'll first speak about the Philippine interest market, and then we focus on the green energy auction that has been happening this year, and specifically maybe about solar.

 On the Philippine electricity market, could you give us a brief introduction about this market? It would be interesting if you can talk about, the different submarket with lun, vi I, and its current energy mix

Chris: sure, be happy to, So essentially, as I mentioned, the Philippines, very liberalized, private sector oriented, commercially active, you know, and that's again, at odds with some of the more, century plan markets in the region. Just expanding upon that a little bit, you've got a market which has an established spot market known as the weem, the wholesale electricity spot market. The market also has a competitive retail market, and there's been long standing policy support for renewable energy, so, You combine those ingredients with a quite compelling growth story, essentially that's striving a lot of our interest we're seeing among our clients, whether those are investors, developers, end users and so forth.

If we just drill a little bit deeper, as you say, we've got three key regions when we think about the Philippines is Luon, the science and Mindo. It's obviously an archeologic country with various islands and so forth. If you were to just take a top down view on the market, you'd look at it and you'd think, Well, actually there's 60 to 65% coal, in the generation mix.

That's quite similar to some of the other markets in the region. But what I think is quite noteworthy and interesting is that. When you look at the regions within the Philippines in more detail, you tend to find dynamics whereby the supply mix reflects the indigenous resource potential in the market.

So you take Luon, which is by far the largest region in terms of demand and supply. In Luon you've got a lot of hydro. You've got domestic gas in the form of the Mepi offshore gas field. You've got sun, geothermal. You look at versa size, you've got a lot of geothermal, not a lot of hydro, no gas. And you look at the third most southern region of Mindel, you've got a lot of hydro, which is still actually nationalized and owned and operated by the government and a limited amount of geothermal.

And so, Coal is very much the prevailing story. I guess if you were to just take the bird's eye view on supply dynamics in the market and that, that's consistent with what you'd expect in many ways, because coal has been driving, you know, affordable, reliable base load capacity growth over the past decade or so.

But actually there's a lot of regional distinction in the supply mix, which I think makes, was one of the factors at least that makes the Philippines particularly interesting to.

Yiou: Thank you Chris, and that's very interesting. What are the main actors operating in this, electricity market regarding the regulation generation, transformation distribution site.

Chris: Sure, so essentially consistent with the fact that the market is, largely deregulated. You have a sector that is what we like to refer to as unbundled, so that means various points in the. Value chain, whether that's generation, transmission, distribution and then more further downstream, you've got a number of actors playing a role, both in terms of government and, and private sector.

So essentially at an overall level, there's a lack of government control and centralized planning that we've already talked about. Not withstanding. The Department of Energy or the doe we refer to them, is sort of the Apex policy body that drives policy development in the market overall , and is supported by other agencies such as the National Electrification Administration, which deals more with the sort of more rural areas of the Philippine.

There's an independent regulator in the form of the Energy Regulatory Commission, the erc. In terms of the generation space, you've got a large number of IPPs that are active, um, and a relatively small amount of capacity that that sits with the government, as I mentioned, that is still yet to be privatized.

But generally speaking, the government has been. Fulfilling its duties, in terms of getting everything privatized, in terms of some of those last remaining hydro and oil, assets. There's a market in the form of the wholesale spot market that I mentioned, the Weem that's operated by an independent market operator these days., and then on the transmission and distribution side, you've got National Grid Corporation that, , operates and maintains and invests in the grid under a 50 year concession. And then on the more downstream side of the market, you've got a large number of. Private investor owned utilities and electric corporatives that operate, , distribution businesses essentially in different distinct franchise areas.

So you've got a myriad of, utilities and corporatives that are active in distribution and retailing of power. And on top of that, you've also got a competitive retail market, where you've got active retailers that are. So quite a lot of moving parts, if I'm honest, to sort of break down onto a podcast.

Ben: Yeah, that gives a really good overview and , when I was looking into it, I was like they are really a lot of actor in this market. So recently there's been a new president with President Marcos Jr coming, and succeeding to what Do You Go Duterte, in May of this year. So the new president has announced, that's renewable energy will be really at the top of the country's climate agenda. Just, explain how, this announcement has materialized in term of policy and governmental actions.

Chris: Yeah, well it, I mean, in many respects, as far as I see it and sat here today, it's kind of business as usual. I mean, it's very much true that the Marcos administration. Bbm, as I think he's referred to, is sort of pushing forward with the progressive renewables energy policy agenda. But that's really been the case since the Renewable Energy Act, was put into place back in 2008.

So, Sort of business as usual from a renewable policy, government point of view. And even just since the assuming office, the Marco Cost administration has done a number of things. They've reaffirmed the moratorium on new coal projects. , so really the Philippines is saying no to coal going forward. And that that announcement under the Duterte administration, I think came out back in the tail end of 20. The new administration has also signaled they're gonna be further green auctions to be held following the first inaugural green auction that was held back in June of this year.

And at the same time, they put in place higher renewable portfolio standards, rps, from next year to kind of enforce a higher level and standard of renewable energy sourcing among off takers. And then on top of that, they've most recently eased or said they will ease restrictions around foreign ownership to allow foreign investment to sort of go up to a hundred percent from its previous 40% cap in terms of renewable energy generating assets.

So the progressive policy agenda for renewables is sort of continuing and certainly since the mark awesome administration has come in. They certainly look to reinforce in terms of some of the initial steps they've taken

Ben: Yeah, so it seems is more of a continuity from the existing policies that was already in place, so, Okay. No, that's, that's interesting. To speak about the weather markets and especially in lu, basically the biggest market representing 70% of the generation in the country. It would be quite interesting if you can just focus on the short term and indicate what are the factors that has impacted the ways market prices in 2020.

Chris: Sure, but the wisdom is essentially an energy only. Spot market now dealing in five minute trading intervals moved from the hourly trading intervals, has been like that since June of last year. The wisdom currently extends across luon and Versaci. It was implemented, I think, in Luon as far back as 2006 and the back end of 2010, early 2011 in the case of Versa size. Essentially it's, an energy only spot market with locational marginal pricing. Five minute trading intervals well established has been in place for around about 15 years. In the case of Luon is certainly what everyone looks at in terms of pricing expectation and pricing dynamics.

Supply demand, tightness, When. Observing the Philippine market. And I think what's been interesting about 2022, and obviously it's been an exceptional year so far in many respects, the pricing drivers have really been twofold. So on the one hand, you've seen supply side tightness feeding through into the market, there have been delays to one of the large thermal projects, G N P D in particular.

And then at the same time, demand has really recovered and surpassed pre covid levels. So we're back to that sort of annualized four, 5% demand growth that We, are used to seeing in the Philippines. And so certainly in terms of market fundamentals, things are tightening up and have tightened up this year.

But at the same time, the commodity price dynamic globally has been really interesting because we. have been in a world where we've been seeing coal prices, 350, $400 per metric ton. In a market where things are dominated by coal in particular, that rise in fuel cost has had a huge impact on Wes prices. And it's essentially meant that the marginal cost of generation for coal players has been reaching upwards of sort of seven, eight pesos per kilowatt hour. To put that into context, we've been used to dealing. With Wessin prices in a range of say, two and a half to four and a half pesos per kilowatt hour over the past five years before that time. So we've seen a real up trend into a sort of higher priced environment. As regards wessin prices that have been driven, I would say more driven by the commodity price dynamic. There's a supply side tightness. But the commodity price dynamic has really added another layer to that and has seen prices surge.

Ben: 2022 has been a historical year for all the energy markets across the world. Specifically on the weather market in Luong when we look at the merit order there is something that I found quite interesting, which was that there is a take a pay gas contract in Melan PAs, which means that, these distorts, the merit order in the luon markets, and this place is called, could you talk about that and explain the merit order in the Luon markets.

Chris: Sure. So it's, it's definitely true that there's, some intricacies with the merit order and luon that, that we observe. When you look at Meire, which is a gas field, that was commercialized in back in 2001, 2002, that's historically underpinned around three gigawatts. Of Gasified capacity in the market.

And you know, to put that into context, Luon has a peak demand of around about 12 gigawatts. So a significant amount of gas has been,, playing a role in the luon generation mix. And that gas, when it was commercialized, the gas supplied purchase agreements had take or play clauses with quite. Annual contract quantities, essentially.

So what that meant was over the past 20 years, we've essentially had base load gas in the Philippines. And that gas has been dispatching as base load largely, or in a large degree because of that take or pay pricing dynamic within those gas supply contracts. What that means is The gas fire generators that are first gen and San Miguel, essentially they're bidding into the market at zero price to ensure they get dispatch and ensure they generate power and use that gas rather than just paying for it and not using it.

So certainly gas, in the form of balli gas has been playing quite an important role in the merit order in Luon, and by virtue of being priced at, at zero, that gas has displaced, and distorted the economics and displaced coal. Put coal is more marginal at times, historically, as well. But the merit order overall obviously features quite ama, quite a large amount of renewables and increasing amount of solar. Zero cost, non dispatchable renewable energy features, geothermal, hydro, and then a large amount of coal. And then when you look at what's setting prices, which is. At the margin, essentially you do see quite a steepening of the merit order essentially, so that quite often the grid is requiring, open cycle gas turbines or, other diesel or oil based plants to balance essentially. And so, It's not the case as much, or it hasn't been as much the case in the last few years that coal has been at the margin or, and Mepi gas has been at the margin. But actually it's tended to be in those tight periods that you see sort of storage hydro or oil or diesel setting the mar marginal price over those peak periods.

Ben: I think we cover quite some ground on the Philippine twist market. Maybe we. Just focus now on the green auctions and especially about the solar auction that has happened. So the, doe had a inaugural green auction in June, of this year with about two gigawatts of capacity awarded and all the developer basically were waiting for this auction for I believe a couple of years already. What are the key takeaway from this auction?

Chris: Great question and very relevant, just given the recency of that auction? concluding in June. So I think the number one point, if I, if I'm discussing this with clients or other people in the industry is that the auction was successful. We've had, renewable energy capacity awarded that's just shy of the two gigawatts targeted. I think 1,967 megawatts of capacity will be commercialized because of this green energy. So That's the number one point. The second point is really that solar dominated, that wasn't so much of a surprise because there were technology specific quotas. And those quotas were broken down further into regional quotas but solar certainly dominated. It was just shy. 1,500 megawatts. Wind came in at about 3 74 megawatts with the remainder of the two gigawatts coming from biomass or small hydro. Very successful in that regard and all being well, that capacity should start coming online, sometime before the end of 2025, I think is the cod cutoff for those projects. I think the other thing that's interesting When we look at the green energy auction, is that the dynamics were not quite as competitive as you might think. So we're used to having auctions in the region, whether that's the sort of LSS program in Malaysia or something else. We're used to them being quite competitive and whilst we have seen quite attractive tariffs, being set in the green auctions in the Philippines, I don't think things were quite as competitive.

As you might expect. And the reason I say that is that quite a number of the registered bidders that sort of put their names down to participate in the green auction, chose not to compete when it came down to submitting their bids on that day. And from what we can tell, they were generally put off by the particularly low reserve price.

For example, for solar, we had a situation where the reserve price for solar was around about 3.68 pesos per kilowatt. And so you had quite a lot of bunching of bids around that mark. And I think in some respects, the auction timing was unfortunate because what it happened was it coincided with a period of, of a weakening, peso, surging fuel prices, which.

We're starting to manifest in the wem, so we're starting to see higher WEM prices. And at the same time, financing costs have been trickling up as central banks have been tightening. We've had OEM costs starting to rise and factor in as well. And so I think given that timing of the auction in June, a number of the players in the market just looked at things and thought, Well, actually, The green auctions are not the be all and end all right.

There are other offtake channels available in the market. You can develop projects on a merchant basis and sell into the wisdom. You can compete for long term bilateral contracts in the retail market, in the regulated part of the market. And of course there'll be future auctions, which may be feature a higher, or more accommodating reserve price.

And so it's, it's kind of a double edged sword. It's certainly great that the first auction has happened without issue seemingly. But I think in many respects there will be some lessons learned, when the ERC takes another look at things and how it structures the auctions going. Whether that's quotas for specific technologies, whether that's the reserve price computations or, or some other aspect of the design.

Ben: That's really interesting cause as you said, there are, in the Philippines quite a few options for a developer for of take. Could you just, present a different of tech structure that are available and comment on currently what are the level of bankability of each of the structure.

Chris: Sure. So we've, we've talked a little bit about the market structure. essentially. The Philippines, end users are sort of bunched into what's called the regulated market, sort of captive customers, and then the retail electricity market, which is competitive and voluntary, whereby if you are an end user, With upwards of 500 kilowatts of demand, you can voluntarily you know, sign up with a retailer essentially for supply and historically it's been the regulated market that's driven the bulk of new capacity coming online. So people developing, generating projects, whether that's coal, gas, renewables, have been seeking out those longer term bilateral contracts with off takers such ASCO or other distribution utilities and electric corporatives for sort of 15 to 20 year whereby investors and developers are able to recover their investment and have a, a long term bankable contract in place. Now, that's historically been subject to regulatory approval. We have a situation now where we have what's called a CS P involved, which is a competitive selection process whereby to compete for that off. I as a generator need to participate in a competitive selection process and essentially win that offtake and be priced, you know, the most competitive offer compared to competing players, which may or may not be the same technology.

So the regulated market has driven the bulk of. Capacity additions over the last 10 to 20 years, and as the retail market has grown in the past, six or seven years, we've seen, an increasing appetite more recently towards the retail market underpinning new capacity. And so as the retail market has grown to what is now roughly a 30% share of overall demand in the market, it's no longer the case that retailers can just, sign contracts with old coal plants or whatever it might be.

They need to seek out contracts with Greenfield, capacity, because more capacity is fundamentally needed. The market is growing at four to 5% per year. All else equal you. Five or 600 megawatts of base load equivalent supply coming online just for the Philippines market to stand still. And so whether it's the regulated market or retail market, you have strong underlying demand growth driving requirements for new supply. So we have the regulated and retail markets. And within the retail market, it's worth noting that you can grab a retail license and participate as a retailer. So almost as a gen tailor, as we like to refer to them. If you are a generator with a retail license, you're a gen tailor. Or you can be a generator, an investor selling to a retailer and let them take care of the retailing to end users and the corporate PPA side of things.

On top of that, you have the weem market, essentially whereby you can develop a project on a merchant basis and capture that volatility in the market. You've got, you're obviously exposed to marginal pricing, five minute trading intervals. There's also locational dynamics at play because the market is structured around supply and demand nodes, which essentially means that the price in metro Manila.

Might not be the same as a price in Sabu, for example, because of transmission losses, because of grip constraints and so forth. But the WEM certainly is becoming much more attractive and bankable in the eyes of, developers. And finances indeed. Just because of how long established it's been, the fact that pricing outcomes are becoming, more established.

And actually when you look at the Wes pricing dynamics, you have a situation where volatility in the market, which has been quite pronounced, is actually skewed to the upside. So It's more often than. More often than not, rather that we see WEM prices spike higher rather than crater or or turn negative.

And one of the reasons for that is because there's just quite a lot of coal and thermal plant in the market. And so it takes a lot for the prices in the WEM to fall below the marginal cost of generation, of coal, for example. And in a world now where fuel prices have been rocketing higher. We're seeing, we prices out turn at seven or eight pesos, for example, at a monthly average level.

Whereas as I said earlier, a few years ago, seven or eight pesos would've been sort of the price you might observe during a few peak hours on a typical day. And so the whole pricing dynamic has shifted higher, and I think. That's obviously getting a lot of attention from renewables, investors, that can maybe build solar projects quite quickly and look to capture some of that upside in the weem market essentially.

So we've talked about the regulated market, the retail market, the weem. We've got the green auctions as well, which are now complementary to that. And I guess just to mention that, if. A dispatchable generator on the thermal side, you can also compete for ancillary services contracts. And so there's a plethora of options. There's a lot of versatility in the Philippine market. There are various offtake channels you can pursue, and they're not mutually exclusive. So we see a lot of developers in the markets. Trying to secure a sort of threshold amount of contract cover to get their projects to be bankable, to get that financing in place, which is also important, but then actually wanting to keep some capacity, reserved, if you will, for sort of weso, , to capture some of that volatility in the market.

But it's, it's only now in the last year or so that we've seen some of the, the. Have a bit more appetite for Weso exposure in terms of how they're financing projects essentially.

Ben: I was having discussion with developers. A lot of them are actually considering now, a direct exposure to where, and, I think for the banks might be still a bankability issue, but, , with the price as high the economics seems to be quite interesting now. So how do you see developers strategizing around, taking WESM risk? What are their key, focus and what do you think they should be paying attention.

to

Chris: I think that's an excellent question and very pertinent. you know, we would expect, or if I was a developer investor, I would obviously want to have a sophisticated view on, WESM prices. And we've talked a lot about WESM price dynamics and drivers that we've seeing this year and that we've seen previously.

But of course, you know, the energy transition is, is upon us. , there's a lot of transformation in supply in the supply mix in the Philippines as there is elsewhere, in the region and further beyond. And so what that means, is Things are rarely standing still, and it, it really does pay to look ahead and forecast and take a view as to kind of where WESM prices are likely to head in the longer term.

Taking into account that evolution of the supply mix and expectations around, you know, fuel prices and technology costs, demand, growth, and or manner of assumptions that you might want to consider. And so, Developing projects in that sense. You know, it is quite important to sort of take a robust view on Wes and prices and where things are heading, if you're certainly considering that as an offtake channel. I think what is important to bear in mind alongside the. Where in price trajectory and where those are heading, potentially over the longer term, over the course of your, your project lifetime is to understand the competitive dynamics in the market more broadly.

The Philippines sort of boast the number of large local conglomerates.,, Boy Tees, AC Energy, the Lopez Group through First Gen, Sam, Miguel, and several others. And so depending on where a particular developer and investor might be in terms of their project development and pre-development, it would make sense to really understand the competitive dynamics in the market, to understand the pipelines of the local players, where the offtake opportunities are likely to arise because of course, there are so many off takers in the market, whether those are electric cooperatives, retailers, distribution, utilities, and so forth that.

Each one of those will have its own contract supply mix. It will have its own level of compliance with renewable portfolio standards. It will have its own demand characteristics and, and its demand growth, expectations, and so forth. And so understanding the, the downstream side of the market as well is quite important. In addition to what I mentioned around the competitive dynamics around who you may be competing against in terms of trying to win bilateral contracts. Essentially because there are a lot of dominant players in the market, it is quite a structurally cons, structurally, cons. It is quite a structurally concentrated market, rather, essentially.

And I think on top of that, it pays in my mind to really consider all options for offtake and weigh those up in terms of pricing dynamics, attractiveness, the degree of regulatory risk and so forth. As well because each of those, offtake channels that we've talked about quite a bit so far on this podcast have different, characteristics that ultimately will, will feed through into the bankability, and attractiveness as a revenue stream.

Location is also an important part of the equation. As I said, we've got a, an archeologic geography in the Philippines. You've got Luzon Versaci. Mindel Versaci itself has five separate interconnected subgrids. Including the main one of Sabu. And so project location is important just because of how the market is structured. we've talked about nodal prices and, and locational pricing in the weem. That actually becomes relevant as well in the contract market because essentially you can be exposed to a degree of basis risk if you are located in a particular part of the Philippines where you are generating and injecting into the grid, but your offtaker.

It's somewhere else you can be potentially quite exposed to differentials in prices in the wem and that can often sit with you, as a risk in terms of your contracts and how those are structured with off takers. So quite a number of, things to bear in mind in that regard.

Ben: So Chris, if you were to advise a developer looking to develop grid gas solar project today in the Philippine, what would be your top.

Chris: Sure. Well, I think in many respects, looking to develop a solar project is, is no different in some of, in terms of some of the key takeaways as if you were looking to develop a, a wind project or a different type of technology. But I think there are a number of factors you'd want to consider. Certainly on this podcast, we've talked a lot about pricing dynamics in the market, where they've been playing out this year, how they perform historically as some of the drivers, but generally speaking, when we are advising clients in terms of helping them inform their investment decisions, taking a robust forecast view on the direction of we price is very important because as we know, the past is not necessarily a, a guide to the future, and that's particularly true when we think. The energy sector and how that's evolving and the energy transition. We are really on the cusp of quite a sea change in terms of the supply mix in the Philippines. We're seeing a lot more solar coming in, a lot more wind activity in the battery storage space. We've got a moratorium on, on coal, for example.

We've got new LNG coming online, in the next year or so. And so. Boiling all of that down essentially is quite important in terms of where that's going to take wen prices and what that means in terms of the revenue streams and the attractiveness of your project fundamentally. I think on top of that, understanding the competitive dynamics in the market is quite interesting.

In the Philippines, you've got a number of large local conglomerates in the market. You've got the als, the San Miguels, the Lopez groups, the Boyee of this world and so forth. and they're obviously coming from a very much a position of strength in the market in terms of their dominance and and ownership of generation.

They've got active retail business. some of them have got interest in distribution and retail and so forth. And so understanding who you are competing against is quite important, particularly just given the competitive nature of procurement and bilateral contracting in the regulated and retail market. On top. of that, It's worth pointing out that some of the locational dynamics coming into play in the market as well. So the Philippines, as we mentioned, is archeologic. You've got Luon, Versaci, Minal. Within Versaci, you've actually got five separate physically interconnected subgrids, including Sabu.

And so understanding the location or dynamics in the market is important because it can be the case, for example, that a, a project in the north of Luon can be earning quite a different price, for example, to a project located in Sabu. You've obviously got transmission losses, you've potentially got grid constraints having an effect as well.

And so due diligence in that respect on project location is particularly important. But I. one of the most interesting final points I'd mention is that the market, as we've been discussing is full of optionality. So you've got a number of revenue streams and offtake channels for projects, that you can consider.

Traditionally that's been bilateral PPAs in the regulated side of the market. Increasingly, we're seeing bilateral contracting, , in retail underpinning greenfield projects, including for solar. But on top of that, you've got the wes for merchant exposure in the spot market and you've got the green energy auctions.

And so. Really weighing up the pros and cons, the pricing dynamics, the regulatory risk, the addressable market size to each of those is quite important. You know, when you're coming into this market and looking to commercialize a project, because of course they're not mutually exclusive. And that's obviously something important to bear in mind.

Thank you so much for coming on the show. That was fantastic, This.

Chris: Thank you very much indeed for having me. It's been a real pleasure.