Data Centres: An Energy Black Hole

I don't think that any time that we've any of us have been working within the energy industry, that the markets have been as unpredictable as they are right now...

Hello and welcome to our True Insights discussion today, where we explore some of the key energy and sustainability challenges for a specific industry sector. My name's Chris McLane and I have the honour of hosting today's discussion. And the sector that we're going to be focusing on today is really interesting. It is one of the fastest growing industries globally.

It is one of the most energy intensive. It is one of the most dynamic, progressive and in many ways pioneering when it comes to energy strategies, net zero and procurement. It is, of course, data centres. Now, though we manage almost two terawatt hours of data centre volume across Europe. And in data centre language, that is just over 200 megawatts of consuming it load.

We manage the enterprise to the hyper scale and have built up a lot of experience and expertise in this sector. And talking of expertise, I am delighted to be joined today by some of the leading minds that open energy market when it comes to data centres. To my left we have Jonathan Anstey, who heads up the sustainability side of the business.

Welcome, Jonno. Hi, Chris. Very much looking forward to the discussion. Excellent. Across the table from me we have Ruari Cairns who is our director of Risk Management. Morning, Chris. Yeah, looking forward to get into it. Morning, Ruari. And over the table for me, we have Jonny Rich, who is the head of Data Centre partnerships. Morning, Jonathan. Chris, how are you doing?

Very well, thank you. Now, gents, one of the things I find most interesting about this sector is not just the speed of growth, but the manner in which these data centres have to grow to balance out competitive advantage, energy availability, energy cost, and of course, most importantly, sustainability, long term sustainability, because as such a prevalent energy intensive sector, the eyes of the world are really looking at them to lead change in sustainable growth.

So there's a lot to get stuck into today. So let's let's crack on. So the first thing I want to discuss is that competitive advantage, which is the it's the core of what we we try and support our data centres with. Ultimately, why is competitive advantage so important without getting into the bleeding obvious and what feeds it from an energy perspective?

Yeah, I think there's, there's, there's quite a lot to unpack when looking at competitive advantage. I think the first place to start is to probably sort of set the scene and understand that data centres for data centres. Typically energy isn't a direct cost for data centres, unlike many businesses within the UK, where if you're manufacturing something or you're working in a hospitality sector, if energy prices increase, that's a direct impact onto that business's bottom line because they have to pay those energy costs themselves and that's typically not the case with data centres.

So what data centres instead? Most commonly it would be the customers of those data centres who are paying for those energy costs. So it's a pass through cost to their customers. But despite that, so despite the fact that energy isn't a direct cost to those customers, it's still vitally important that they structure it in a proper strategic way.

They take all of to the proper due diligence to ensure they are getting the best possible prices from the most renewable sources because there's a very strong indirect cost to data centres. And that really comes from that question over competitive advantage. You know, we know a lot from the work that we've had with our customers to date is that often when you've bought a significant amount of capacity so you have a data centre that's live and they've committed to a 50 megawatt site, they need to fill that 50 megawatt site with customers.

And customers want to know where's my power coming from, how renewable is my power, Have I got additionality on my power? And not to confuse people with too many terms right now. We'll get into the details of this a little bit later on. But these are questions that customers want to know straight off. They're off the bat. Now, there's a lot of challenges in terms of how they can do that, particularly at the period when they are starting to ramp up.

But this is something which is hugely important to data centres to be able to make sure that they can provide that information to their customers and that their customers are getting the best possible deals from the best possible sources. So we do a lot of work with our customers, not just understanding the needs of the data centres themselves, but also of the customers that are going to fit into those data centres and are going to be buying some of that capacity from the data centres that goes from everything from making sure they've got the right supply contracts in place, assessing what renewable power opportunities they're looking at, right the way to doing some work over assessing where data centres can be built, because that's really one of the first fundamental questions that data centre operators are looking at now is where should I be building my, my, my, my, my site? Because different areas in Europe attract different costs. Absolutely. And not just in not just in Europe. I mean, we're seeing huge growth within the South African market for, for example, you know, significant tax incentives to be building data centres within South Africa.

At the moment, South Africa is a very strategically important place for data centres. You know, it connects most of Europe with Asia, Africa and the US. It's a very strategically advantaged, advantageous place to be operating a data centre. But, you know, everyone knows about the grid reliability issues that you face within that country and the fact that currently South Africa gets 80% of its generation from coal.

So when you have large these large sort of hyper scale customers where renewable energy is so important, that has to be balanced out against all of these other factors. So I think the point that we need to make is that there are so many different moving parts. When you look at this, it's not a simple out of the box solution.

Things really need to be looked at a lot more strategically when entering into these discussions. You know, businesses really need to be looking at the sort of five, ten year horizon and making sure that all of these decisions are made within that proper structured framework. And when you look at that longer time horizon, then the opportunity for sustainability comes into play quite significantly, doesn't it?

Because obviously you can do some short term stuff, but there's a much, much more interesting long term investments you can make to, to, to, to supply yourself with renewable power. Yeah, sure. Just picking up on the question specific to competitive advantage, I think I think one of the interesting points that Rory raises there is the decoupling. If you like, of the cost impact, given that that's not always a direct cost to a data centre operator.

So a key area where they can create and or maintain that competitive advantage is through sustainability initiatives. And given that the customers of the data centre operators themselves do typically bear that cost, they are in a greater position to demand that sustainability piece, the environment. And we see that in publicly stated targets across the data centre operators, be they individual corporate levels or as or as an industry as a whole.

So for example, by 2025, 75% of energy consumed by data centres needs to be renewable and or carbon free, increasing to 100% by 2030. That's from the climate change strategy designed to pact which which is if you compare that to the European Union or Europe as a continent, their target is net zero by 2050. So sustainability really is at the core in the centre of building and keeping a competitive advantage in this space in my mind, yeah.

I think it brings back to what Chris was saying at the start. I think that's why data centres are so interesting to us because it puts us in a and I think a very natural fit between, you know, one of the sort of forward thinking, leading innovative industries and OEM and that's why we entered into the market was to take advantage of this changing, evolving, rapidly modernising market.

There's just so many exciting opportunities for the industry. One of the phrases I've heard a lot within the data centre world is puy or power usage effectiveness and correct me if I'm wrong, but that is the majority of of of of impact that can be had on a PUC comes from the cooling of the ability to to cool effectively in a in a data centre is that correct?

Yes sure. So the power demand of the data centre is is driven by cooling the servers and that's where the demand comes from. So in the data centre design, if you like, and some of the considerations around sustainability, a key part of that is having the greatest efficiency of the energy that is used. And then beyond that, layering on top of the renewable energy solutions through power purchase agreements and project wise and microgrid, some of the stuff that we'll get on to later, but primarily is making the energy that is used onsite as efficient as possible, which is through improving that power score.

So if cooling plays such a massive part in in in the in the total efficiency of of of a building, why are we not seeing all data centres in the in the in the Arctic Circle as an example. Johnny it's just been a really good question. I mean location plays such a massive role for these guys as well. You do get quite a few in the Nordic states, obviously the ambient temperatures lower, lower cooling demand, lower pay PUC, it's really easy, but there's always going to be grid capacity issues wherever you are, which is why they can't all be in one location.

Unfortunately, as much as it would make sense, it's just not feasible. Yeah, I'm glad. I'm glad we managed to get through that section without anyone making a joke about the Scottish weather. So just on that before we move on, one of the exciting things I've seen developing with regards to heat and data centres is heat recovery and using some of that excess heat from data centres to feed district heating schemes and effectively providing heat for residential or neighbouring commercial activities, which is a which is a really neat solution.

It's brilliant, brilliant idea that needs to be thought about really at the planning stages of all big developments, which is just kind of where it's falling down a little bit at the moment because trying to get planning permission for a data centre itself is difficult enough, let alone try and get planning permission for a data centre as well as from any commercial buildings or houses.

It's just that added level of complication. But it's definitely where I think the industry wants to go. They want to be able to. So we now look at additionality, not just being in the form of renewable energy, but in the form of how you can a data centre could support a local community. Yes, exactly. That. Exactly. And be seen to be a power for good rather than a drain on on a on a resource.

Yeah, but I think there's an opportunity to do that given I think we're under no illusions around the table and beyond the table that data centres are going to increase and that their load will increase. Given where we're going with data tech, I so if we can, if we can do the things now that allow us to better build and design from scratch from a blank canvas, these facilities then then it could be a great thing for the future that the can transcend into other sectors.

So with so many data centres coming online, one of the most challenging phases of bringing a new data centre onto the grid is the is the ramp up process. And being able to forecast that you may well as a data centre have sold the space to a large hyper scale customer, which is fantastic. But you at that time sacrifice the understanding or the forecast ability of of of of how much energy that customer what demand that customer is going to put on the data, put on the data centre at any one point.

So how do we how do we overcome that lack of ability to forecast and how does it how does it affect sustainability strategies? How does it affect energy buying? Yeah, how do how do we how do we overcome that? Yeah. So, so I think with the ramp up, probably the first thing that we need to cover is, is what are the problems that that causes and why is it a problem?

So the big challenge that happens with the ramp up is as you've covered, you've got a large hyper scale customer has moved into a large data centre. Now we've seen ourselves it can take as long as two, sometimes three years for that customer to move into that data centre and then start using all of that available capacity. I mean, often they never even end up getting close to the available capacity in total.

So there's quite a long period of time where volumes are very uncertain. And typically during that ramp up process, as well as the general uncertainty over the volumes, there's often a lot of testing which takes place. So the data centres will be sort of running everything at maximum capacity to test the ability to to take that strain onto the market.

So you can be seeing anywhere from, you know, a day to consuming one or two megawatts, one day to consuming 20 or 30 megawatts the next day. Now that's, of course, is huge difficulties from what's called a balancing perspective, because I think businesses, when they're looking at buying energy, they often consider what's happening from the customer to the supplier, but don't really consider that what's happening from the supplier to the grid.

Because what you have to remember is that during that process, when you're committing to buy power from a supplier, the supplier also has to commit to taking that power from the grid. And so when you've got those huge volumetric uncertainties that you have during that ramp up process, it really limits the type of product offering it. First of all, that the supplier will be able to offer to those customers looking at a fixed price contract, for example, you know, when you take a fixed price contract from a supplier, you're making a commitment to buy a certain amount of volume between a start date, fixed date and a fixed end date.

And the price that's negotiated will appear for the whole duration of that fixed price contract. And that can't really be done during that ramp up period because you don't know how much volume you're going to be committing to. So if a supplier was pricing up that fixed price contract, they would make sure that they're covering off all of that volumetric uncertainty by increasing the margin on the contract, those fixed prices become very, very expensive.

And even putting in place what would be called the volumetric as a volume tolerance contract are really difficult during that ramp up perspective because even getting a customer to commit to, you know, sort of their volumes within a ten or 20% tolerance is almost impossible. And we've seen that during the ramp ups that we've been through through recently.

And so I've sort of maybe created a bit of a bit of a description of how difficult that issue is. It's not to say that things can't be done within there. There are solutions to it, but it's just the point I think we need to make is that it's really important to understand all of the various different contract offerings, the risks and rewards and benefits of of of each individual approach and making sure that you are putting in place the right type of contract for your for your data, for your data centre.

And so typically what we've seen is contracts such as cash out contracts where, you know, you've got the option to be able to take a lot of spot price exposure where you're taking the sort of near term market prices as opposed to longer term hedges are often or are often a much better fit for those customers that are on the ramp up.

But as well as the issue over putting in place a supply contract, another big issue that we've seen with the ramp up is the issue over buying renewable power. So when you're buying renewable and you can speak a little bit more to this, to this Jonno, but there's a number of different ways in which you can buy renewable power.

You can buy, you know, regular renewable rec certificates to be able to cover it off. You can have some on site generation which typically isn't a particularly good fit for the data centres themselves. Or you can have private wire or corporate PPA agreements with a sort of third party corporate PPA provider. And all of those have challenges during that ramp up period because of that volumetric uncertainty.

I feel like you've just stolen this won't be the last time.

Yeah. Got on it. Yeah. Right. A little bit on that because it is difficult to combine a sustainability strategy with a ramp up phase. Right. Certainly not the first time. Thanks for that. I think I think by the very nature of the volumetric uncertainty and volume volatility that we just articulated, that doesn't particularly lend itself well to sustainability or renewables by their very nature of renewables.

In my view, if we think about power purchase agreement that the planning, the connections, the construction of the negotiation, etc., well it's common for that to be done three, four, sometimes even five years ahead of the cod. So the renewable parlance, they have the commercial operation. They of a renewable asset. So where they can maybe be of assistance is to take some of the strain, if you like, away from the baseload to three years into the future and just leave the balance of the demand.

And that volatility for the for the risk specialists to put that ball back in your court. But yeah, just by that, just by their nature of time taken for us to come on load renewables will struggle to solve the puzzle presented by data centre ramp up but they can certainly play their part further down the line. I think that's I mean, I think we've done a very good job there of presenting exactly how complex that ramp up period is for data centres and why we don't always have renewable technology thought about right at the beginning of a data centres lifespan because it just cannot help with that massive variation in power light.

What Jenny says, it's a great, great option to be thinking about for further down the line, but the ramp up period is just so difficult for people to to compute exactly how much load they need at any given time. I guess as well. Again, it comes back to geography in the siting of a data centre. I'm just imagining a scenario where a new data centre that would have that would experience that ramp up if it's built close to an existing generation asset.

So be that wind solar farm there may well be opportunity for a private PPA, which is which is effectively a private connection to the asset that takes it off grid. And it would it would almost certainly be advantageous to the the generator or the seller of that power to sell as much as possible of that power to the data centre operator rather than export to grid and probably get to a typical price.

So there could be some economic drivers or motivators that that would that would allow existing assets that are in close proximity to the data centre to help with that ramp up period. Yeah, Yeah. I think I think an important thing to consider here is that there's two things that need to be done at the same time. You need to be looking both at that longer term strategy that we've been speaking about.

So having in place a five, ten, 15 year strategic plan for how you're going to eventually ramp up and bring in all of these interesting and more complex type of type of contracts. But you also, during that ramp up period, have to have a short term strategy. And the tools that you use during that short term strategy are often very different from the tools that you use during that long term strategy.

I think we've covered that putting in place those longer term corporate BPAs are not a good fit during that ramp up period. But then there are solutions for that. During that short time period, that is when you can start to look at, you know, Rex records. So certificates which are certificates that would cover that to show that you're the power that's been provided to the site has at some stage come from a renewable source and there's a lot of complex questions over additionality and how green are those certificates is not the ideal end goal where you want to be able to end up.

But it is a good short term measure to be able to sort of green up the power that you are having to the site during that difficult ramp up period. I guess also subject to market forces and prices, those certificates to use an umbrella term, a widely available at any time. So that's that's that's a solution that can be can be used.

Yeah absolutely. We we're seeing a lot of demand across the industry for regrowth for Rex guarantees of origin in the data centre world. There is a quite a bit of demand but obviously there is a repetitional issue occasionally well with more with carbon offsetting than Rex and Regus, but carbon offsetting is one of the things that has been done within the industry to try and alleviate some of that pressure.

Yeah, yeah. To try and alleviate some of the pressure when they are going through the ramp up period. Yep. Okay. So we've located the site, we've gone through the ramp up phase, we now get to a point where we're at a stable load and we've got hopefully a full data centre, a lot of happy customers.

What's, what's the next step in terms of driving that competitive advantage from the point of view of sustainability? What's what what should a data centre be looking at Once they got that guarantee of load and demand to really push themselves ahead of the pack? Well, in my mind and you wouldn't you would expect me to say this, but it would be, it would be the early sourcing of long term power purchase agreements.

And the reason I say that is we've touched in this discussion already on how we foresee as an industry at growing power demand across data centres, increasing, increasing regionally. We've we've spent a lot of time and energy market sourcing, KPIs, corporate power purchase agreements for data centre customers and a trend that we have seen just become more and more apparent is that the scarcity of some of these longer term large corporate parties that are available typically that be linked to solar and wind assets.

But there is certainly my view that the demand for those solutions and products is far greater than the supply of them, and it's not a supply that can readily and immediately be turned up to meet that demand. So in my view, there's going to be an upward price pressure on corporate PPAs, something that we've seen already. So just linking back to the competitive Advantage piece, I think if those if those contracts can be saw and agreed earlier, I think there will be a price advantage there for those for those off takers, for the early adopters, if you will.

And we'll see we'll see the availability of these these big power purchase agreements. I mean, some of the some of these data data centres, one site may be, you know, 50 megawatts, 100 megawatts. Yeah. How much you know, how much the how much availability is there, how much supply of of large corporate PPAs and what technology would you look at as it were assume not solar at that level but you know, yeah, in terms of technology, it's a mix when you're when you're buying power at that scale.

I mean, the most prevalent corporate PPA is certainly in Europe a solar and wind assets, some hydro and a bit better front too. So and the solar and wind, yes. So there is availability of projects for sure. But the key the key separation point is, is when those assets come online it's it's common now where we are Q4 2023 to not see some of these larger projects that are going to be suited to a data centre by which I'm talking 100 gig plus per annum generation solar and wind across Europe, not coming online until 2028.

And it's conceivable that within that five year period that there might be delays. So realistically, in terms of risk and strategising, we might be looking at a 5 to 6 year lag until these assets come on. There is plenty of existing assets available that are out there that are coming off subsidy, that are available through some of the mainstream suppliers.

But they are considered secondary in terms of importance because they don't crucially, they don't carry that additionality aspect. So the off taker is unable to claim that their contractual commitment or that their contract, if you like, has directly led to the building of new renewable energy assets. And that's that's that's key in this in this space. So the answer is mixed, if you like.

There is there is availability of renewable power. But in terms of what what we see data centre operators wanting those long term new assets, they are absolutely the, I would say, in short supply. And I don't see that improving anytime soon. And that's a real worry for people. I mean, even over in Ireland, they're predicting that by 2028 that the overall grid capacity, 30% of that will be used by data centres in 2020.

And if you can't bring on renewables in a fast way, then something is going to have to provide that power. The data centres aren't going to stop growing. As you mentioned earlier, you know, there's just so much going on at the moment and that's driving that growth. If the renewables can't keep up, power has to come from somewhere.

Yeah, yeah. It's my view that we'll just see that translated to an increase in price for renewable power as that renewable label carries greater importance, the price of it will increase. As you know, for those that are willing to meet that price tag. And again, it all feeds through into that balance of risk as well, doesn't it? So you've got I mean, it's great that we can we can source and we can we can identify and source these these these fantastic projects, these CPUs, but they carry a price tag and a ten and 15 year price tag, sometimes linked to RPI, sometimes not.

It's sometimes fixed. And they've got to be fed into the whole risk profile of the data centre because ultimately that will determine the end price of the customers have to pay. So Reuters Tell us a bit more about how we how we bring in the CPUs to feed your risk model and the sort of output pricing. Yeah. So I think that's sort of coming back to what I was saying, that there's so many moving parts with all of this.

It is such a complex situation because on the one hand you've got this absolute requirement to be able to bring on significant amounts of renewable power on to sites where we've seen that there's limited that often limited availability of that renewable power. But even for businesses that have been successful in doing so, the question then is, is that the right thing to do financially, economically, is have putting in place that renewable asset actually going to provide value for you as a as a customer?

And that really at the moment I suppose, is the $64,000 question. And I wish I was able to answer whether, you know, a ten or 15 year PPA was going to provide long term value. But the truth is it's impossible to be able to do so. I mean, just sitting around the table now, I mean, we must be knocking on the door of 60 years of experience between us.

In terms of experience within the energy industry, I don't think that any time that we've any of us have been working within the energy industry, that the markets have been as unpredictable as they are right now. You know, trying to forecast where energy prices will be in one or two years time is trying to get inside the mind of Putin understanding what's going to happen within the within the Middle East and what's going to happen with the ongoing French nuclear crisis that we're seeing affecting, affecting European power.

There are so many complexities right now with the markets that are trying to provide an accurate or detailed forecast for one or two years in the future is nigh on impossible. I'm trying to get that ten or 1520 year picture is it's just almost, almost impossible to be able to do so. Businesses really now need to be in the absence of being able to have a predictable or reliable forecast to do.

It's really important that those data centres scenario plan for what happens in various different situations. So if you've got a long term PPA contract sleeved into your into your contract and affecting a large volume of it, what's the impact to your business if prices do move against you? So if you lock that in a price of, let's say 70 or £80 a megawatt hour, what's the impact to the business and to your customers if market prices then fall down to £50 per megawatt hour or £40 per megawatt hour, businesses really need to be starting to ask these questions and almost being prepared for the worst.

So you need to scenario plan in these situations and say, you know, if that if the market prices do move against us in that way, is our strategy still still so still viable? And that's what we've been doing a lot of work with our with our customers in terms of making sure that all of this stuff is structured and much more of a of a of a sort of, you know, properly structured process which which which which which balances all of those risks.

Your upside risk and your downside. Do you think we're going to get to a point where data centres need to get the buy in of their customer base to to share that risk with them so that the data centre can't be held wholly accountable for, you know, of ultimately trying to achieve net zero or, you know, bring in these renewable projects, but increasing their risk as they do say Yes.

So they will need, especially in the hyper scale world, they might need to get the end of the of the customers long term buy into to guarantee that they're not going to lose that competitive advantage for doing the right thing. And that's that's ultimately what it is, isn't it? Yeah, absolutely. And I mean, I think we already are seeing that rather than that's going to be something that's going there we're going to see in the future.

And we know with working with the with our data centre customers at the moment, there's a lot of direct communication with those customers because when customers come in, again, they've got these can meet competing demands over what's the price and what's the renewable power. And it's no longer such a straightforward question over or over, you know, what is your price going to be or what sort of power are you going to be coming in there?

There's when you've got so much volatility within the markets right now, customers do need to be bearing some of the the brunt of that risk. If you want to go down that route where you want to be able to provide additionality and you want to bring in some real good quality renewable power, you need to accept the risk that by doing so, you need to be committing to a longer term contract at a fixed price potentially.

I mean, I know there are other options where people can be sleeved in in the sort of spot market, but as a general rule, a longer term PPA PPA contract comes with significant amounts of market risk. And I think that absolutely we're moving in a direction where customers will have to start bearing some of that risk. We talk about it negatively, but there's obviously a huge positive impact or potential or impact though if we see the you know, if we if we win the clocks back a year or so ago when we were in the midst of the energy crisis, having 70% of your energy covered by PPA, £85 megawatt hour would be would be

fantastic. So yeah, but yeah, I mean absolutely. So I think on, on on that that's you know what we've spent so much time with our customers in terms of understanding that, you know, what are the wider objectives of the business. And it isn't just upside risk or downside risk that has to be managed at any one time. You need to be managing both of them.

You need to have a strategy that works, that will work if market prices are rising and it will work if market prices are falling. And there are ways to be able to do that, there are ways to be able to structure your contracts in a strategic way that allows you to be able to to have a strategy that will work regardless of what direction the market is moving in.

I think just going back to what you're saying about the customers needing to take on board some of the risk, it's really I think you're right. But it's a really difficult thing when people want a computer processing power has been so prolific. If you just want to store photos somewhere, you don't think, that's going to add power load to a server somewhere.

You can just upload your photos from your home. And even corporate clients, they are so used to already having just storage at their disposal whenever they want it, almost being able to switch it on and off on a whim. It's really going to have to change the way that consumers think about data and maybe a bit of an educational piece about the impact that the upscaling downscaling that their data usage has.

The industry just hasn't been positioned in that way to people. It's all been about convenience. It's all been about being able to take it or leave it when it whenever you want it, and to have that security of those longer term prices look versus you need that longer term planning. And that's just not necessary back in the market at the moment.

But it is something I think that's going to need to come. So you're saying there's a there's a role, educational role for a data centre? Yeah, definitely. Definitely. I think, yeah. Trying to get into, I should say, trying to get the clients onside and explaining why they need to come on site from a sustainability angle is definitely something that needs to happen for sure.

Yeah. So to conclude there's a, there's a lot for data centre operators to be thinking about, as I'm sure they're very aware of from the ramp up to the to the to the general operation and feeding in these aggressive sustainability strategies, which fits very nicely with, with the platform that we, we we've built, which is true. So maybe worth just touching on how true can support a data centre and looking at the sustainability strategies and how they how they might work during either ramp up or during a period of flat, flat demand and how it can really benefit a data centre in in making the difficult decisions that they're going to have to be faced with in the

in the near-term future. For me, I think the key there is it will allow true will allow a data centre to see and plan from a cost and carbon perspective how best to deploy their capital into sustainability strategies. So that typically I would say this across various industries, but but increasingly so within data centres given the demand true will give them an ability to scenario plan effectively.

What would the impact be of x installation versus why installation and best map out in what order to deploy certain technologies that would allow the savings effectively to be reinvested into the subsequent subsequent step in in that journey towards net zero. So it would in essence, it will give some surety and verification to what would otherwise potentially be quite disparate.

The net net zero piece, it would bring all of those potential projects and also existing projects together and formulate that into a plan. Yeah, I think that's the key point is if we were having this conversation ten years ago, you'd have and you're dealing with a business who was looking at procurement, sustainability, net zero and any sort of on site assets which they were looking to have, they would have typically been dealt with by very different areas of the business that you'd have procurement sat over in one area of the business and system and sustainability net zero emissions sat in a completely different area of the business.

I think what we're trying to to to steer our customers to more and as a change that we're seeing right the way across the market is that they can't be thought of as independent of one another anymore. They should be two parts of a whole rather than two individual aspects of the of the strategy. So it's really important now that businesses do bring everything together into one place.

If you're looking at your sustainability net zero ambitions, there's now so many opportunities there to be able to to do that in a really financially beneficial, beneficial way. And it needs to be tied in with what you're doing on the procurement. There's so many there's a lot of things that we didn't get the opportunity to talk about today.

But you know, with National Grid incentives for businesses to have on site assets, for example, where that can be used to be able to provide additional revenue flows for businesses. So I think it's just really important now to be able to have that one place where you can bring all of these quite complex things together and in a nice, easy and simplified manner.

I think the simplification is the real benefit, the procurement for data centre is not an easy task as I think you've laid out pretty well. It's just being able to have that scenario planning that Joe and I spoke about and the procurement visually all in one place, and to see any point in a data centres lifecycle exactly what's happening with that procurement is just going to be so beneficial for, for the guys working on it.

I think also as well, if and when a particular project is decided on or even before that point true, would allow you to analyse the various ways of financing or funding that solution. So whether it be through capital expenditure, long term leasing arrangements, where title passes at the end or or be it through third party investor funding, through power purchase agreement, looking at how those three options interplay against one another, which benefits a borrower, which point in time is something quite unique that I've not seen elsewhere.

And certainly the feedback we've had from customers has been along those lines and the the unique way that the procurement plays into all of that. So you can see clearly what's going on at any point is just absolutely critical for them to be able to see the payback on this. So one of the things I understand is at the forefront of data centre operators at the moment is the energy efficiency directive that is coming in soon.

Johnny, can you tell us a bit more about this and what impact it's going to have on data centres? Yes. So the European Union has been debating this for quite a while now. There's going to be some real stringent reporting and the data centres have to adhere to all about they're well, not actually all about their energy usage. It's also about wastewater usage.

And are they utilising any waste heat, as we spoke about earlier. But it's really tied in to try and reduce the energy usage by 11.7% and contribute to a 55% cut in carbon emissions by 2030. They've got some real stringent targets coming in and it's going to play a real big role for data centres in Europe. I think everyone over one megawatts usage has to report on this and it's all the standard things like I spoke about earlier, like the PUC and cooling as well as the holistic look as well, which is big.

And that's only going to add to the demand for renewable assets. And I don't represent PPA type contracts given those regulatory pressures that they face. Okay. Thank you very much, gentlemen. I think that's been I think I think we've covered a heck of a lot, though. We've covered a lot and hopefully that has been informative, educational, maybe in some areas.

But yeah, it's been a it's been a is a complex industry and it's one, as I said before, right at the beginning, it's his pioneering in so many ways because there's a lot of pressure on the industry externally to, to, to lead. So yeah it's I think we've we've covered a lot and hopefully that's been been really useful.