Fuld transskription af Conversation with Encavis: The Value of a Cross-Country, Multi-Technology Portfolio

renewable energy company with more than 25 years of 02:41.942 --> 02:45.677 experience. Since 2025, Encavis is backed 02:46.177 --> 02:49.652 by a KKR-led consortium with BizMan as co-investor as well. 02:50.502 --> 02:54.352 Today, our platform includes more than 300 02:54.852 --> 02:58.539 wind, solar, and battery plants, over 5 gigawatts of 02:58.603 --> 03:01.924 installed nominal capacity, and activities across 13 European 03:02.052 --> 03:05.164 markets. And again, as Encavis 03:05.664 --> 03:09.190 continues to grow, one of the most interesting opportunities is how we 03:09.254 --> 03:12.703 use that operational portfolio more intelligently, not only to 03:13.203 --> 03:16.585 maximize the value of our assets, right, but also to create better solutions 03:16.633 --> 03:20.161 for customers. That's fabulous. I think it's 03:20.661 --> 03:23.847 going to be really, really interesting because you've obviously got, like you say, 03:23.863 --> 03:27.598 Encavis is a wide scope geographically, 03:28.496 --> 03:31.863 but also that large portfolio and the linking of the market and the 03:32.363 --> 03:36.175 customers. And it's a bit like me, even with my history and being involved 03:36.271 --> 03:39.717 with customers and renewables. So with 03:40.217 --> 03:44.061 all of that in mind, here we're working with corporates 03:44.561 --> 03:47.075 and we're seeing that the needs of energy buyers are changing. 03:47.668 --> 03:51.562 With your background and experience, I would really love to hear your 03:51.594 --> 03:54.806 perspective on how those energy customers 03:54.838 --> 03:58.130 are evolving, what their needs are, and how they're changing, and what 03:58.630 --> 04:01.934 it means for a renewable energy producer like Encavis. 04:03.720 --> 04:07.183 No, I agree completely that customer requirements are changing. 04:08.326 --> 04:11.982 I often say that customers do not necessarily wake 04:12.482 --> 04:16.490 up in the morning wanting a PPA, right? What they actually need is electricity 04:16.523 --> 04:19.943 that is competitive, reliable, and I would say 04:20.443 --> 04:24.047 increasingly renewable. A traditional PPA can, of course, 04:24.240 --> 04:28.184 be a very effective instrument sometimes. It can provide long-term 04:28.684 --> 04:32.738 price visibility, support their decarbonization objectives, and connect a customer 04:33.238 --> 04:36.442 with a specific renewable asset. So, PPAs will therefore 04:36.942 --> 04:40.242 continue to play a significant role. However, 04:40.530 --> 04:44.299 customers' needs are becoming more and more diverse and sophisticated 04:44.799 --> 04:49.101 over time. Just to give a few examples, right? Some customers want long-term 04:49.601 --> 04:53.666 price certainty, while others require greater flexibility. Some want a strong 04:53.698 --> 04:57.341 connection with particular renewable assets, others with 04:57.841 --> 05:01.661 a project in the same country where they consume electricity, but

others are 05:02.161 --> 05:06.594 mainly concerned with managing their overall energy cost and exposure to market volatility. 05:08.374 --> 05:11.849 We also see considerable differences in customers' experience 05:12.045 --> 05:16.366 and internal resources. Some large industrial companies have sophisticated 05:16.866 --> 05:20.797 energy procurement teams and well-defined hedging strategies, while other 05:21.297 --> 05:24.875 companies genuinely want to procure renewable electricity but might not 05:25.375 --> 05:29.275 have the resources to evaluate every aspect of, 05:29.628 --> 05:33.321 let's say, profile risk, negative prices balancing, or the 05:33.821 --> 05:36.741 different contractual structures available, right? 05:37.479 --> 05:41.220 I would also mention that there's also a fundamental physical 05:41.332 --> 05:44.655 challenge, right? Customers consume electricity according to their 05:44.784 --> 05:48.556 needs of the business, while renewable assets produce according to 05:49.056 --> 05:52.072 the weather. A solar plant might produce heavily during 05:52.104 --> 05:55.491 the middle of the day, while an industrial customer might consume 05:55.991 --> 05:59.809 electricity throughout the day and night, right? Wind generation often 06:00.309 --> 06:03.902 provides a better fit with industrial consumption profiles, which makes 06:04.402 --> 06:08.022 it a key component when structuring products that more 06:08.087 --> 06:11.452 closely reflect customers' needs. Battery storage, 06:11.549 --> 06:15.432 that is, as you know, right now in 06:15.594 --> 06:19.468 every forum, in every conversation, can add part of flexibility by 06:19.968 --> 06:24.016 shifting, right, part of this renewable production between hours and helping 06:24.289 --> 06:28.138 to reduce a specific mismatch. However, I see 06:28.154 --> 06:31.536 batteries primarily as a flexible optimization tool rather than 06:31.827 --> 06:35.795 as a single solution for shaping. An entire customer load profile. 06:36.773 --> 06:40.572 So the objective is not to make, I would say, one technology 06:40.684 --> 06:44.387 replicate the customer's entire consumption curve. That's almost impossible. But it's 06:45.397 --> 06:49.260 to combine complementary technologies and market capabilities for 06:49.760 --> 06:52.883 the team to achieve an overall better fit, I would say. 06:53.572 --> 06:57.644 So this is why I would say customers are increasingly interested in solutions 06:57.676 --> 07:00.690 that look beyond the output of one individual asset. 07:00.802 --> 07:04.794 They want combinations of assets that better reflect their consumption while 07:04.810 --> 07:08.547 still, of course, delivering the cost, risk, and the sustainability 07:08.579 --> 07:10.985 outcomes that the customers might require. 07:12.188 --> 07:15.845 And on the other side, from our side, Russell, for renewable producers, 07:15.942 --> 07:19.808 right, this means becoming more customer-oriented. Instead of 07:20.308 --> 07:23.594 beginning with the product that we have in our desks and we 07:24.094 --> 07:27.315 need to ask the customer and adapt to it, we should begin 07:27.347 --> 07:30.684 by understanding them, what they need, their consumption profile, objectives, 07:30.860 --> 07:33.751 risk appetite, et cetera, et cetera. We can then, 07:34.090 --> 07:37.778 with all the pieces on the table, determine which is the combination 07:38.278 --> 07:42.232 of generation, contracts, market procurement, storage, and risk management that 07:42.732 --> 07:46.479 is more appropriate. So customers should not have 07:46.592 --> 07:50.512 to adapt their business solely to the production profile of pure 07:51.012 --> 07:54.903 renewable assets. Our role is to use the portfolio to build a 07:55.403 --> 07:58.684 solution for them. Jorge, I knew 07:59.184 --> 08:02.316 there was a really good reason I wanted you on, and I think that was 08:02.462 --> 08:06.176 it. I think we think so alike on this, and I completely agree 08:06.241 --> 08:09.710 with you. In the past, I can remember 08:10.210 --> 08:13.975 a time when corporate energy strategy was just what day did I 08:14.475 --> 08:17.341 fix my price on because I want it to be, you know, the lowest possible. 08:18.100 --> 08:21.980 That's, you know, that's evolved so much over time through sort of flexible 08:21.996 --> 08:25.361 purchasing and risk management, and now it's so much more. 08:25.522 --> 08:28.822 It's kind of what am I buying, when am I buying it, what else am 08:28.871 --> 08:32.040 I doing. So, you know, as you say, you've got, yeah, you know, 08:32.120 --> 08:36.115 what are you taking from a utility, but also what might you be self-generating, 08:36.692 --> 08:39.708 or what's coming from a PPA and when and how, 08:39.836 --> 08:43.782 and how is that structured? Even then out into how am 08:43.830 --> 08:47.295 I using it, you know, and the interplay 08:47.795 --> 08:51.770 between what I'm buying and that might be, you know, the generation shapes of 08:52.270 --> 08:55.765 any PPAs you have and any flexibility, any batteries. 08:56.101 --> 08:59.407 How am I optimizing the plant on site to either 08:59.907 --> 09:03.308 not use it or use it at the right time. It's such a big piece 09:03.420 --> 09:06.760 now, and it really has, you know, moving on, 09:06.936 --> 09:10.115 and we see it moving on even further with the use of AI and people. 09:10.163 --> 09:14.240 So they say, well, we're going to actually concentrate on how we're using it and 09:14.321 --> 09:17.050 how we align with it. But I think you're absolutely right, you know, 09:17.451 --> 09:21.127 it's moved away from a sort of very 09:21.159 --> 09:24.707 simple offer, you know, like, well, a bit of an offer 09:24.771 --> 09:28.595 and to a degree simplicity to be much more complex. And much, 09:29.175 --> 09:32.432 much more solution-focused, which I think is why, 09:33.061 --> 09:36.335 you know, what Enkavis is

doing just makes so much sense. 09:38.082 --> 09:41.269 So having talked about that massive kind of increase in, 09:41.447 --> 09:45.007 should we say, complexity and needs and the different strategic 09:45.507 --> 09:48.855 looks and how we're thinking about it very differently when we're buying energy, 09:50.283 --> 09:53.775 obviously you've got a really varied operational energy 09:53.904 --> 09:57.478 portfolio and it's across multiple countries, multiple technologies. You've got battery storage and 09:57.978 --> 10:02.282 everything else. What would you see as the value 10:02.830 --> 10:06.168 of that for both NCARBIS and the energy 10:06.297 --> 10:09.852 customer? Good question, 10:09.868 --> 10:14.461 Russell. So, I think the first obvious advantage is diversification, 10:14.478 --> 10:17.939 right? If you consider an individual renewable asset, 10:18.036 --> 10:21.408 its performance is influenced by the weather conditions, market prices, 10:21.522 --> 10:25.577 grid situation, even regulatory framework in one particular 10:26.077 --> 10:30.048 location. When you operate across several countries and technologies, 10:30.144 --> 10:34.378 you are less dependent on that single production profile, or one weather pattern, 10:34.570 --> 10:37.826 or one regulatory framework, or one market environment. 10:39.141 --> 10:43.054 Solar and wind provide a good, good, good example. They generate 10:43.554 --> 10:47.208 at different times and are affected by different weather conditions. They are not perfectly 10:47.304 --> 10:51.778 complementary, and simply combining solar and wind does not remove intermittency. 10:52.532 --> 10:56.270 However, I believe it gives you more options than relying on 10:56.366 --> 10:59.574 only one technology. Battery storage, we mentioned that 11:00.074 --> 11:03.970 before, introduces another source of flexibility. It can shift energy between hours, 11:04.082 --> 11:06.938 help manage specific production and market exposures. Again, 11:07.595 --> 11:11.670 not a universal solution, but it provides an additional tool for optimizing 11:11.702 --> 11:15.841 the portfolio. This is one, but geographical diversification 11:16.338 --> 11:20.893 creates to me another dimension. Weather conditions, 11:20.925 --> 11:24.916 market prices, renewable generation, grid constraints, and customer 11:25.416 --> 11:29.084 demand, I would say, are not identical across Europe or different 11:29.584 --> 11:34.021 countries across the globe. A portfolio across several countries therefore provides 11:34.133 --> 11:37.291 broader market experience and greater resilience. 11:38.061 --> 11:41.411 However, the value of the portfolio does not emerge automatically 11:41.539 --> 11:45.419 simply by the assets existing. The portfolio needs 11:45.435 --> 11:48.993 to be actively understood and managed. You need reliable production 11:49.041 --> 11:51.912 forecasts, market access, portfolio management capacity, probabilities, 11:52.666 --> 11:56.517

pricing modeling, and of course, the ability to actually manage the 11:57.017 --> 12:00.689 resulting exposures. The way I see 12:00.705 --> 12:03.898 it is that you need to understand not only how much electricity the assets are 12:04.398 --> 12:07.813 expected to produce, but when and where that production will occur, 12:07.893 --> 12:10.300 and what is the value that you might have in the market. 12:11.182 --> 12:14.889 The operational nature of the portfolio is also very important. 12:14.969 --> 12:18.435 Sometimes we don't give the value for it, but there's 12:18.499 --> 12:22.780 a minimum difference between discussing a theoretical future pipeline 12:22.972 --> 12:27.525 and managing renewable assets that are already today producing 12:27.573 --> 12:31.725 electricity. For Encabis, for example, the portfolio creates 12:32.225 --> 12:35.732 value in 2 directions, right? One, for the company, it provides a platform 12:36.232 --> 12:39.403 for diversification, active risk management, and optimization. But for 12:39.903 --> 12:43.475 our customers, it gives us a broader set of, I would call, 12:43.828 --> 12:47.338 building blocks, right? And greater flexibility than we would 12:47.838 --> 12:53.135 have if we were offering production from only one individual technology or country. 12:53.200 --> 12:56.069 So as a quick summary, right, the value— the way I see it, the value 12:56.569 --> 12:59.937 is not simply in owning more and more and more assets. The value comes 12:59.970 --> 13:03.662 from understanding how those assets interact 13:03.695 --> 13:07.173 and managing them as one single portfolio. 13:09.162 --> 13:11.952 That makes a lot of sense. And I think, yeah, it does, 13:11.969 --> 13:15.840 Jorge. It makes a lot of sense because I think the, 13:16.018 --> 13:18.873 the 2 things that leap out for me is, is one, at some point down 13:18.905 --> 13:22.691 there in the future, we we're not just going to keep building forever. We're eventually 13:23.191 --> 13:26.489 going to get enough renewable assets that, you know, there's going to be build and 13:26.761 --> 13:30.623 repowering and kind of churn. But, you know, 13:31.232 --> 13:35.110 things are going to be reasonably balanced. And then the way that you use operational 13:35.610 --> 13:39.003 assets will be the most important thing. It won't be just, oh, I stuck another 13:39.019 --> 13:42.464 asset on and I matched it. Exactly. And secondly, 13:42.849 --> 13:46.150 my experience has been that even, you know, looking at the sort 13:46.650 --> 13:50.613 of technology match, Um, even looking at a relatively 13:50.645 --> 13:54.099 baseload consumption customer, even with an oversized wind 13:54.599 --> 13:58.083 farm, might only match sort of 50% of the time on 13:58.131 --> 14:02.099 an hourly basis. And, and yet, if, if you stir in some other technologies, 14:02.195 --> 14:06.050 you know, you, you, you, you get appropriately sized solar, 14:06.372 --> 14:10.291 maybe some battery, you know, even maybe some other technology like a small run 14:10.323 --> 14:13.729 of river if it's available or something like that, you can suddenly kick that into 14:13.761 --> 14:16.171 the 80-85%. Um, which then isn't, 14:16.669 --> 14:20.508 isn't, isn't a huge leap to sort of think, well, actually, what we've 14:21.008 --> 14:24.475 got, like 15% now, that's not, that's not like not matched. 14:24.555 --> 14:27.575 So, um, it is amazing and actually very interesting, 14:27.591 --> 14:30.932 like you say then. Um, and I think what we, what we don't always 14:30.980 --> 14:33.695 immediately think of, but I know we see a bit more here at Schneider, 14:33.711 --> 14:36.634 is that, that kind of, you know, pan-European bit, 14:36.811 --> 14:40.088 like what have I got, where is it, how does it relate to things? 14:40.184 --> 14:43.524 Because You've got a mix now, a more complicated 14:43.572 --> 14:47.345 potential mix of locality depending on what GHG and SBTi 14:47.845 --> 14:51.792 are saying, but actually different demands, different things. Is Polish 14:52.065 --> 14:55.533 wind a really good fit for some Spanish solar, and where 14:56.033 --> 14:59.273 does it best fit into that? Or actually, might some Italian, 14:59.948 --> 15:03.480 you know, might some Italian solar fit well with some German wind? 15:03.624 --> 15:06.899 It is, it's all a question of working 15:06.915 --> 15:10.207 out where is that. That's really You know, 15:10.287 --> 15:12.989 I say it's, it's really where I think the next level of is, particularly with 15:13.022 --> 15:14.839 the operational stuff. Um, 15:16.110 --> 15:18.878 so I think as many, 15:19.539 --> 15:22.906 um, as many developers, 15:23.019 --> 15:26.547 as many, um, you know, 15:28.877 --> 15:32.316 IPPs will look at these things. Having a renewable asset, 15:32.413 --> 15:36.199 well, that's just one thing, but kind of maximizing the value through its operating 15:36.232 --> 15:39.295 life is another. Um, Do you think 15:39.795 --> 15:43.306 that relates to the value maximization? A, 15:43.516 --> 15:47.009 does it relate to solutions that better match how customers consume, 15:47.042 --> 15:49.879 which is kind of what you said in that one? And what do you think 15:50.120 --> 15:53.743 are the capabilities that a renewable producer 15:54.403 --> 15:56.769 really needs to have to achieve that? 15:58.750 --> 16:02.519 Yeah, I would say that 16:02.729 --> 16:06.023 everything begins with operational excellence. 16:07.338 --> 16:10.836 The assets must be available, efficient, and performing as expected, 16:11.012 --> 16:14.734 right? Commercial capabilities cannot compensate for 16:14.943 --> 16:18.360 poor technical performance. So obviously asset 16:18.408 --> 16:22.226 management, maintenance, engineering, and operational data remain the essential foundation 16:22.258 --> 16:25.788 to me. But having strong assets 16:26.288 --> 16:30.248 is only, I would say, the starting point to maximize their

value, 16:31.146 --> 16:35.224 A renewable producer, a PPP, as you said, needs several additional capabilities 16:35.256 --> 16:38.483 that work together through the commercial value chain. 16:39.286 --> 16:42.609 So there are a few ones. I'm going to mention 16:42.641 --> 16:46.173 just the ones that come to my mind. But I would say the 16:46.318 --> 16:50.235 first one is, I would say, origination, right? Origination is much 16:50.251 --> 16:53.767 more, in my view, than selling a predefined product. It is 16:53.799 --> 16:57.058 about understanding the market, identifying the right customers, 16:57.315 --> 17:02.049 and establishing the right relationships at the right moment. This is particularly 17:02.549 --> 17:05.960 important because not every customer is the right match for every renewable 17:06.136 --> 17:09.903 producer portfolio. The origination team needs to understand the customer's 17:10.403 --> 17:13.622 consumption objectives, decision-making process, and appetite for risk, among others, 17:13.687 --> 17:17.181 right? While at the same time understanding what 17:17.213 --> 17:19.746 the producer can continually deliver. 17:20.115 --> 17:23.914 So we can deliver the same for every customer. So in many cases, 17:24.042 --> 17:27.376 origination is what ensures that the right customer 17:27.876 --> 17:31.496 is connected with the right renewable portfolio at the right time, which is more complex 17:31.996 --> 17:35.422 than, than just mentioning it, but this is the core to me, 17:35.486 --> 17:39.738 right? However, I would say coordination can only make credible 17:39.770 --> 17:43.317 commitments when it is supported by strong capabilities behind it. 17:44.125 --> 17:47.660 And that leads me to the second pillar, I would say, 17:47.741 --> 17:49.290 that is portfolio management. 17:50.824 --> 17:54.591 Instead of assessing each asset or contract in isolation, 17:54.704 --> 17:58.277 portfolio management provides a consolidated view of expected generation, 17:58.342 --> 18:01.214 contract volumes, hedge positions, remaining market exposure, 18:02.256 --> 18:06.376 it helps as well to understand where the portfolio is naturally long 18:06.600 --> 18:10.367 or short, how concentrated it is by country, by technology, or production profile, 18:11.009 --> 18:14.631 and which new customer contract could best complement the positions 18:14.696 --> 18:18.751 we already have. So once a potential opportunity has 18:18.783 --> 18:22.759 been identified and assessed against the portfolio, the next capability to me is 18:23.753 --> 18:27.584 one that is getting more and more critical over time, is modeling pricing and 18:27.664 --> 18:31.033 structuring. We discussed earlier, 18:31.274 --> 18:34.468 Russell, but customers increasingly want solutions 18:34.484 --> 18:38.031 that better reflect how they actually consume electricity, right? To make the 18:38.531 --> 18:42.444 final proposition simple and understandable for the customer, the producer 18:42.944 --> 18:46.746 needs to analyze the underlying complexity in considerable detail. 18:47.805 --> 18:51.159 This means assessing expected generation, consumption profiles, 18:51.272 --> 18:53.968 volume, shape, risk balancing, exposure, you name it. 18:54.450 --> 18:58.130 Negative prices, credit requirements, interaction between the proposed 18:58.630 --> 19:02.030 contract and the contracts in the existing portfolio, et cetera, et cetera. 19:02.530 --> 19:06.430 This becomes even more and more sophisticated when flexible assets 19:06.930 --> 19:10.910 such as battery storage assets are included. So, these batteries introduce valuable 19:11.410 --> 19:14.870 optionality, but that optionality needs to be 19:15.370 --> 19:18.890 properly understood and valued. Its contribution depends a lot on when it 19:19.390 --> 19:22.850 charges, discharges, the operating constraints of the asset, the market opportunities available, 19:23.350 --> 19:24.550 and how its flexibility interacts with the rest of the portfolio. 19:27.737 --> 19:30.733 So, although the customer proposition should be clear, 19:31.364 --> 19:34.959 to me, the analysis behind it cannot be at any point simplistic. 19:35.962 --> 19:39.355 And then we have the deal, right? We have the origination, the portfolio management knows 19:39.855 --> 19:43.342 exactly what it is, and the modeling pricing team just 19:43.842 --> 19:46.462 analyzing everything in detail. But once the solution is there, 19:48.291 --> 19:51.577 which is great, it's been structured, we know what we 19:51.593 --> 19:55.445 want, but now we approach to physical delivery. And to me, 19:55.509 --> 19:59.347 short-term trading— and there are several names for it— but short-term trading 19:59.379 --> 20:02.863 becomes critical. Forecast production will 20:03.698 --> 20:06.957 differ from actual production by definition. Market conditions will 20:07.005 --> 20:10.586 change continuously, right? Portfolio therefore 20:11.086 --> 20:14.760 needs to be managed through the day ahead, intraday, balancing responsibilities, 20:14.856 --> 20:18.662 physical power logistics must also be handled professionally. 20:19.288 --> 20:22.918 But short-term trading is not only about just correcting forecasts. 20:23.609 --> 20:27.256 As the portfolios grow and become more diverse, to me, it becomes 20:27.384 --> 20:30.463 increasingly important to capture the value embedded in our 20:30.963 --> 20:32.129 assets as market conditions evolve. 20:34.080 --> 20:37.913 Renewable producers have traditionally outsourced significant 20:37.994 --> 20:41.067 parts of the physical dispatch and short-term management of their assets. 20:41.714 --> 20:45.669 And I want to be clear, outsourcing can be great 20:46.169 --> 20:49.905 and can provide market access and operational efficiency, particularly while 20:50.405 --> 20:54.587 internal capacities are being developed. I mean, we all have done that, right? And that 20:55.087 --> 20:59.837 makes

full sense. But however, if the producer outsources the full decision-making 20:59.901 --> 21:03.754 process, it will also transfer part of the portfolio 21:04.254 --> 21:08.089 inside flexibility and optimization potential to a third party. So it's 21:08.589 --> 21:13.130 not something for the renewable producer, it's also something that we could get for 21:13.630 --> 21:17.770 the client. So this is why to me strong internal short-term trading 21:17.802 --> 21:21.480 dispatching capabilities are strategically important. They keep the 21:21.980 --> 21:25.210 producer closer to the assets and provide much clearer understanding. 21:25.780 --> 21:29.580 Just an example, and I'm giving you a very long answer, 21:30.080 --> 21:34.020 right? But Encavis already has significant operational 21:34.520 --> 21:38.040 experience in this case in Germany, where ES, Encavis Energy Solutions, 21:38.540 --> 21:41.960 has progressively expanded its activity to a portfolio of, 21:42.460 --> 21:46.500 I would say, more than 50 assets, more than 500 megawatts in 2026. 21:47.000 --> 21:49.080 And we aim to increase that figure to 1 gigawatt by the end of the 21:49.580 --> 21:53.050 year in Germany. So we do have those capabilities, but on top 21:53.550 --> 21:57.330 of that, we are now building these capabilities and developing the 21:57.830 --> 22:01.490 infrastructure required to extend the model that we have right now in Germany progressively 22:01.990 --> 22:05.710 into additional markets. I could mention 22:06.210 --> 22:10.070 Spain, for example, or Italy. And finally, 22:10.570 --> 22:13.510 the last lever, and I just put it with this because we talk about, 22:13.810 --> 22:17.310 let's say, technical teams, and this has been in the market, let's say, 22:17.810 --> 22:21.277 forever. The market has evolved, but this has been forever. But now the last one 22:21.309 --> 22:25.290 that to me is even more relevant is 22:26.670 --> 22:29.993 reliable data, robust systems, strong commercial operations, 22:30.041 --> 22:33.605 you name it before, Russell, AI, etc. This becomes 22:33.669 --> 22:37.249 increasingly important as the portfolio grows across markets, technologies, 22:37.345 --> 22:40.860 countries. And this rapid development of AI and automation, 22:40.973 --> 22:44.793 the quality and accessibility of the underlying data will 22:44.825 --> 22:48.692 increasingly determine how effectively we can analyze 22:48.836 --> 22:51.482 positions, automate process, and at the end of the day, 22:52.108 --> 22:55.251 getting more value of our assets and transfer part of that value to 22:55.751 --> 22:59.020 the clients as well. So maximizing value 22:59.520 --> 23:03.141 in general does not mean taking more risk. It means understanding 23:03.189 --> 23:06.397 the portfolio in more detail, making better informed decisions, 23:06.461 --> 23:09.460 and managing risk more intelligently. 23:10.005 --> 23:13.933 So a very long answer, Russell, but there was a lot of 23:14.433 --> 23:17.620 different pieces to tackle here. It was, and it's a great answer. 23:17.765 --> 23:21.948 I've been sitting listening, trying to pick out some bits, and I think the 23:22.448 --> 23:26.405 bits that I picked out in terms of the technology, 23:26.517 --> 23:30.044 I think you're right. It's the technology, the data, 23:30.124 --> 23:34.099 the speed of response, having the right things. From my own background previously 23:34.131 --> 23:37.385 in a supplier utility and seeing that, 23:38.043 --> 23:42.034 you can have very knowledgeable traders, you can have access to everything, but actually 23:42.451 --> 23:46.638 that bottleneck is having the data at your fingertips. And having the right analysis, 23:47.023 --> 23:50.507 figuring out what's going on right now and what 23:51.007 --> 23:53.478 does it mean, what I need to do with that. And I do think the 23:53.978 --> 23:56.754 technology in that area is coming along, and I think we'll see a lot. 23:57.139 --> 24:00.382 Um, and I think, you know, that as you say, the way 24:00.430 --> 24:04.300 that you optimize, I, I think, you know, it's almost like NCAVIS really is putting 24:04.800 --> 24:08.571 the next-gen bit into next-gen IPP. And it's like, how are you 24:08.716 --> 24:12.694 evolving? You know, how In, in the old days, 24:12.710 --> 24:15.851 you know, oh well, build it, run it, see what happens. It's not like that 24:16.351 --> 24:19.442 at all. It's so much more proactive. And then I think, you know, 24:19.778 --> 24:22.199 coming right back to what you said at the beginning, there's a whole balancing act, 24:22.247 --> 24:25.837 isn't there, with understanding the customer and then trying to balance 24:25.965 --> 24:29.444 in, in that origination process. Well, we understand 24:29.476 --> 24:33.178 them really, really well, hopefully, and what they want. Can we deliver 24:33.226 --> 24:36.945 it? Do we have the flexibility or the capability in our portfolio? 24:37.009 --> 24:40.825 And by building that back part, that next-gen and 24:41.241 --> 24:44.448 IPP part, you've got a better chance of doing it. So I think that's, 24:44.544 --> 24:48.809 that's, that's a really interesting, um, kind of evolution. 24:48.874 --> 24:52.802 And it, you know, um, the whole thing is becoming— I 24:53.302 --> 24:55.624 don't want to say more decentralized, that's not what I mean. I think it's becoming 24:56.124 --> 24:59.424 more diverse. That's the word I'm looking for. You know, the energy 24:59.440 --> 25:03.513 sphere is more diverse, it's more technical, it's more complex, but people are rising 25:03.609 --> 25:05.934 to that and getting the benefits of it. 25:06.415 --> 25:10.005 Um, So, that's really good. So, to move along 25:10.037 --> 25:13.591 a bit, I think, to me, it feels like, 25:13.655 --> 25:16.853 for a while, we've been in a place where, you know, in EU, 25:16.902 --> 25:20.314 the scale has been key on PPAs. But I think with— 25:21.754 --> 25:26.284 well,

who knows exactly what GHG Protocol will come out with, and SBTi 25:26.784 --> 25:30.358 changes coming through, I feel, and I'm hearing more and more, 25:30.374 --> 25:33.752 that locality is becoming more important. So, 25:33.768 --> 25:37.294 looking ahead, Do you feel— what 25:37.585 --> 25:40.786 will be your kind of view and experience telling you 25:40.900 --> 25:44.440 that what's the right balance between the big European scale and 25:44.940 --> 25:48.266 the local market expertise for an energy producer? 25:49.057 --> 25:52.189 Yeah, I think success in general, 25:52.447 --> 25:56.454 I think successful renewable producers increasingly need both 25:56.842 --> 26:00.979 multi-country scale and strong local expertise. 26:01.746 --> 26:04.967 I do not see them as alternatives, right? So it's not black or white. 26:05.111 --> 26:08.349 I see them being one with the other. 26:08.413 --> 26:12.628 I see them complementary. So operating across multiple 26:12.644 --> 26:16.747 countries creates several important disadvantages. We already discussed 26:16.811 --> 26:20.032 about that, right? Scale is also relevant 26:20.532 --> 26:24.007 when working with large customers operating globally or across several countries. 26:24.359 --> 26:28.222 These companies might value having one strategic partner capable 26:28.302 --> 26:32.503 of understanding their wider energy requirements and then supporting 26:32.695 --> 26:35.072 a consistent, let's say, overall strategy. 26:36.550 --> 26:40.404 This is great, but at the same time, we must not forget electricity 26:40.904 --> 26:45.431 markets remain deeply local. So each 26:45.448 --> 26:49.174 country has its own regulation, market design, grid conditions, 26:49.238 --> 26:52.177 balancing arrangement, and contractual practices. 26:53.253 --> 26:56.770 The dynamics affecting a solar portfolio in Spain are not the same as 26:57.270 --> 27:00.689 those affecting wind assets in Germany or a customer supply solution in Italy. 27:01.845 --> 27:05.568 Customer relationships are also local. Understanding how 27:05.681 --> 27:08.794 a customer operates, how it procures electricity, 27:09.693 --> 27:13.336 what risks it is willing to accept requires proximity and market knowledge. 27:13.802 --> 27:17.172 Language and cultural understanding also matter. 27:17.654 --> 27:19.869 We underestimate that, but they also matter a lot, 27:20.446 --> 27:25.133 particularly when discussing complex and financially significant 27:25.633 --> 27:29.482 energy contracts. So therefore, I do not believe that global scale should 27:29.530 --> 27:33.126 mean centralizing everything or offering exactly the same product everywhere. 27:33.929 --> 27:37.926 The model, I believe, is a combination. It combines strong 27:38.119 --> 27:41.217 central capabilities with empowered local teams. 27:42.036 --> 27:45.183 So certain capabilities benefit significantly from scale, 27:45.343 --> 27:49.084 right? We named it before, portfolio management, data systems, 27:49.260 --> 27:52.423 that's obvious, right? That you can clearly benefit of that. 27:52.551 --> 27:55.954 But at the same time, local teams are essential. 27:56.179 --> 28:00.574 Origination, customer relationships, regulation, understanding the practical 28:01.074 --> 28:04.295 realities of each market are key. Short-term market that we 28:04.795 --> 28:08.673 discussed, the short-term market execution, balancing, etc., requires deep 28:09.010 --> 28:12.121 knowledge of the country and its power market agreements. 28:12.217 --> 28:16.002 This is in general are super detailed and complex things that you need to treat 28:16.502 --> 28:20.525 it locally. So again, an example for Encavis, 28:21.038 --> 28:24.665 our presence across multiple European markets give us an 28:25.165 --> 28:28.954 excellent foundation, obviously. We have operational assets, people, and expertise 28:29.692 --> 28:33.049 in different countries. The opportunity is to connect those 28:33.161 --> 28:37.225 components more closely so the knowledge, capabilities, and portfolio 28:37.241 --> 28:40.308 advantages of the wider group can support 28:40.808 --> 28:43.858 effective local execution. As an example, right, 28:44.243 --> 28:46.604 our recent expansion in Spain is a good one. 28:47.520 --> 28:50.812 Only a few months ago, we opened our new office in Madrid and reinforced our 28:50.893 --> 28:54.805 local team. This was not simply about opening another location. 28:55.094 --> 28:58.733 It was about being closer to the customers, understanding the local 28:58.765 --> 29:02.468 market in greater depth, and building the origination, 29:02.532 --> 29:07.261 trading, commercial capabilities required to grow successfully in any 29:07.761 --> 29:10.980 country, in this case in Spain, right? But that local presence is great, 29:11.348 --> 29:14.907 but of course, super supported by the broader Encavis platform. 29:15.596 --> 29:19.107 Spanish team can draw on the group's traditional portfolio, 29:19.123 --> 29:22.602 portfolio management expertise, systems, experience, et cetera, et cetera. 29:23.115 --> 29:27.321 But then, You know, I would say I've been speaking from a company 29:27.821 --> 29:31.287 perspective, from an Encavis perspective, but from a customer perspective, 29:31.640 --> 29:34.739 this combination is particularly relevant for companies 29:34.915 --> 29:38.319 operating globally or across several countries. They may want 29:38.384 --> 29:42.157 a consistent strategic partner and a coordinated energy strategy, 29:42.558 --> 29:46.380 but the solution still needs to work locally in every 29:46.412 --> 29:50.610 single market. So Just 29:51.110 --> 29:54.370 changing a little bit the topic, right? From the potential changes that you mentioned, 29:54.610 --> 29:57.950 honestly, Russell, I would be careful not to 29:58.450 --> 30:02.130 predict the final outcome of these frameworks. They move, you know, 30:02.630 --> 30:05.349 they move so

many times that I might be even a little bit lost now, 30:05.849 --> 30:09.450 right? But I think— I'm not putting money on anything, to be honest with 30:09.950 --> 30:13.790 you. I'll just leave it there. Exactly. Me neither. 30:14.290 --> 30:17.003 But the broader direction is clear. Is clear. 30:18.047 --> 30:21.786 Customers are not looking for renewable electricity 30:21.818 --> 30:24.996 only. They increasingly want a clear connection 30:25.012 --> 30:28.238 between their consumption and the renewable sources supporting it. 30:29.121 --> 30:32.571 Whether that ultimately translates into stricter requirements 30:33.071 --> 30:37.226 around location matching, time matching, or other forms of carbon 30:37.726 --> 30:40.516 accounting, the underlying objective is similar, I would say, right? 30:40.757 --> 30:44.446 Maybe I'm oversimplifying, but establishing a closer and more credible 30:44.946 --> 30:48.823 link between the physical electricity consumption and the renewable generation. 30:49.898 --> 30:52.992 And in that context, local market expertise 30:53.025 --> 30:56.247 becomes even more and more important. 30:56.536 --> 31:00.048 So, yeah, just recap, right? The right model is neither 31:00.657 --> 31:04.265 centralized or completely decentralized. This multi-country 31:04.765 --> 31:08.241 scale gives you the platform, diversification capabilities that we discussed 31:08.257 --> 31:11.363 before, but local expertise. Ensure that those, 31:12.366 --> 31:15.976 I would say, capabilities are translated into solutions that genuinely 31:16.720 --> 31:18.695 work in each market, I would say. 31:21.047 --> 31:23.882 Yeah, I think that makes sense. And I think, you know, 31:24.768 --> 31:28.247 the link between having that deep 31:28.311 --> 31:32.433 local expertise, but the global scale, the global scale doesn't 31:32.933 --> 31:36.320 work without local expertise. It's just in my view. And I think, you know, 31:36.417 --> 31:40.810 I done some other podcasts where we've talked about the link between sustainability 31:40.826 --> 31:44.371 and success. And one of the things, and to be fair, we've not discussed 31:44.871 --> 31:48.701 in that, but we've seen is that, that there very much is that, 31:49.407 --> 31:53.032 you know, that link in, in many cases between the 31:53.532 --> 31:57.105 scale and, and multiple technology— multiple, 31:57.121 --> 32:00.105 sorry, geographies. Not even just a massive scale, 32:00.169 --> 32:03.457 you know, sometimes just 2 geographies, but that link between the 32:03.521 --> 32:06.896 deep understanding of those 2 places, for example, 32:07.363 --> 32:10.967 or saying, as you said, you know, I'm a multinational corporation, 32:11.546 --> 32:15.182 which is fine, I've got my centralized strategy, but we've got all the local teams 32:15.682 --> 32:18.539 working on it and we've got a link. So I can definitely see that. 32:18.894 --> 32:21.945 And as you said, and there's no way I think anyone listening is

going to 32:21.961 --> 32:26.004 bet anything on what exactly is going to come out of GHG. So I 32:26.069 --> 32:27.950 think that's very fair. 32:30.047 --> 32:33.507 Before we wrap up, I really appreciate, you know, you joining 32:33.523 --> 32:36.643 me, but have you got any last thoughts before we close, please, 32:37.161 --> 32:37.419 Jorge? 32:40.475 --> 32:44.499 Perhaps just one that I hear over time, so maybe 32:45.303 --> 32:49.050 it's worth highlighting. So from a customer 32:49.550 --> 32:53.321 perspective, Russell, renewable electricity can sometimes appear relatively 32:53.434 --> 32:57.302 standard, right? An electron is an electron, but the company standing behind 32:57.304 --> 33:00.417 the contract, managing the assets and supporting the customer 33:00.483 --> 33:03.976 is not always the same. We named it before, 33:04.040 --> 33:07.317 energy agreements can be significant and long-term commitments. 33:07.734 --> 33:09.806 Customers should look, in my opinion, 33:10.706 --> 33:14.143 beyond the headline price and consider the strength of the 33:14.643 --> 33:18.223 partner they are choosing. That means looking for a company 33:18.320 --> 33:21.837 with strong operational assets, well-diversified portfolio, 33:21.934 --> 33:25.564 different technologies, what we have been discussing during the, the whole 33:26.064 --> 33:30.046 conversation, right? So it's important that they understand who 33:30.222 --> 33:33.992 stands behind that company. Strong and committed shareholders can 33:34.492 --> 33:37.569 provide additional stability and support investment and long-term growth, 33:37.938 --> 33:41.275 not just for the company, but also for the client that is getting into a 33:41.355 --> 33:45.623 long-term contract or a relationship with the 33:46.123 --> 33:49.714 producer, right? Customers should look at that. So what I would 33:50.214 --> 33:54.607 say is, yeah, in general, right, for customers to not look only at 33:55.107 --> 33:58.697 one of the points, it could be volume, electricity product, whatever, look carefully 33:59.259 --> 34:02.402 at the partner behind it. The right partner should have the assets, 34:02.450 --> 34:06.217 capabilities, diversification, a strong backing, and local 34:06.717 --> 34:09.808 expertise to support your businesses as 34:10.337 --> 34:13.736 your needs need the energy market continue to evolve, right? This is 34:13.752 --> 34:17.262 going to evolve. So having a partner next to you in general, in the long 34:17.294 --> 34:21.623 run, I think it's super, super relevant. So I mean, I could be talking 34:21.687 --> 34:25.390 with you for hours, Russell. Very interesting topic. And it's been a real, real, 34:25.454 --> 34:29.124 real pleasure. I, I've really enjoyed it. It's been really 34:29.237 --> 34:31.882 interesting, and I would agree. And the word I pulled out of what you said 34:32.382 --> 34:35.489 in that last answer, um, Jorge, was, was partner. And I think that's been really 34:35.989 --> 34:39.898 important, and that's been my experience in long-term contracts, because you don't 34:40.398 --> 34:43.874 know what's gonna happen. Okay. Um, and, you know, good or 34:43.890 --> 34:47.401 bad. And to be fair, nothing might happen and it's fine, but it's one 34:47.901 --> 34:51.617 of those things where whenever there is, you know, 34:51.681 --> 34:54.278 a barrier, a bump in the road, whatever you want to call it, um, 34:54.471 --> 34:58.566 working with a partner who's, you know, got got capability 34:59.066 --> 35:02.686 and flexibility, and let's be honest, we're people, is good to work 35:03.186 --> 35:07.347 with, is really worth, is really worth something because actually it's 35:07.411 --> 35:10.914 not just the fact that the deal works today, it's the fact that it works 35:11.203 --> 35:14.745 and works and continues to work for years to come. So I think, you know, 35:14.906 --> 35:18.087 that, that, that's, that's really important. I think so. Um, 35:19.750 --> 35:23.535 we could talk, uh, again, you know, for hours. I'm, I am 35:24.035 --> 35:26.375 hopeful that you will agree to come and do this again sometime with me. 35:27.022 --> 35:30.780 But for now, I just want to say thank you so much for joining me. 35:30.876 --> 35:33.783 It's been a great conversation. Thank you, Russell. 35:33.847 --> 35:37.171 Great conversation and I'm looking forward for the next one 35:37.204 --> 35:40.110 if you need. Thanks a lot, Russell. Oh, definitely. 35:40.335 --> 35:43.948 And if anyone's listening, if anything that we've raised today 35:44.045 --> 35:47.658 is of interest, you are welcome to reach out to Jorge 35:48.158 --> 35:51.641 directly through LinkedIn. You know, you can Google Enkavis 35:51.753 --> 35:54.772 and find him through there. You can reach out to us here at Zygo and, 35:55.286 --> 35:58.068 or me directly, and I can also put you in touch if that matters. 35:58.181 --> 36:01.755 So if there's anything of interest, um, feel free to get in touch. Um, 36:01.884 --> 36:04.396 Jorge, thank you very much again. Thank you very much,