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- [00:00]
A
I'm your host, Ed Porter. Welcome back to Transmission. Three years ago, a solar project in Spain sold for €200,000amegawatt. Today, the best price you can get is €50,000. Batteries went the other way, from basically nothing to 100,000amegawatt and climbing. Same country, same investors, opposite directions. What flipped the market was solar cannibalization. Too much sun, not enough storage and capture. Prices falling through the floor. Now there's a 30 gigawatt battery pipeline in Spain. Carmen Izquiero is founder of Inteza, the marketplace where many of those deals show up. This episode is about what the prices are actually telling us. And if you want to find out more about Spanish power markets, Ko Moto Energy's AI analysts can guide your questions on asset specific forecasts. Now back to the episode. Let's jump in. Hello, Carmen, welcome to Transmission.
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B
Hello, Ed. Thank you very much for hosting me today.
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A
Oh, our pleasure. We're delighted you're here and as always, let's jump straight in. So you see more Spanish renewable deals than almost anyone else. What is the one thing that people get wrong and about deals in Spain's energy market?
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B
Yeah, I would say that the wrong perception is that Spain is frozen. Many people tend to think that now deals are not happening, and that's not true. We have batteries where we see dozens of deals every month, I would say. And we also have solar where deals are still happening. Of course, investors are much more selective and prices are different compared to some years ago, but they're happening.
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A
Okay. And when you say prices are different, obviously, like the solar build out in Spain has been really rapid. So you've got 40ish gigawatts today. And by the time you add on some domestic, maybe that's more like 50 gigawatts. So it feels like a huge amount of solar has been built. When you say prices are different for solar, do you mean that they have come down in terms of like the cost of acquiring those projects?
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B
Exactly. I mean, two or three years ago we were seeing ready to build prices for solar pv of around 2002. I mean, €200,000 per megawatt. Right. Now, the best price you can get for a standalone solar PV project, it's 50. Okay, 50 hundred thousand, of course. So yeah, the market has changed a lot.
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A
Yeah. So a huge change. And then on the battery side, has that kind of gone the other way? Because these, these things, they seem to like move together.
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B
It's exactly the opposite. Okay. In Spain, in Spain, I mean, two or three years Ago we didn't have any batteries. I mean barely anybody was developing batteries. But right now we've seen the need of this kind of asset in the market right now. I mean we are seeing prices of around €100,000 per megawatt, something around that for the most advanced projects. So it's quite different and the trend is going upwards.
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A
Yeah. And that's what we'd expect to see. Right. So as you build way more solar, this kind of gives you that oversupply in the middle of the day and, and you're starting to see sort of zero pound pricing or even negative pricing coming through in Spain. Bad news for solar, great news for batteries. And so that means that you're starting to see that coming through in the, in the sort of deal, the deal prices that you're seeing now. People will be wondering, well, how come you've got this kind of access to and how come you have this insight into the prices that these projects are transacting at. So would you like to do a little intro in terms of, in teaser in terms of what you do, but also how it, how it was conceived as a, as a company?
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B
Yeah. TSL is a renewable energy products marketplace. So what we do is we digitalize M and A transactions. So through a one stop shop platform we put in contact all the developers, all the products that are being transacted in the market. Not only in Spain, in different regions in Europe with thousands of investors such as utilities, ipps. So we believe that through technology we could bring efficiency to this market and that's what we are doing. Yeah.
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A
Okay. And maybe just give me, give us an insight sort of behind the scenes. So like on a, on a month to month basis, like how many deals are you seeing coming through right now?
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B
We have around 200 products on the platform. I would say 70 or 80 are, are in Spain. The others are in Poland, in Italy, in Germany, UK and per month around 20, I would say maybe something like that. Okay, 20 to 30. I mean I also see deals that are not closing through the platform.
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A
Yeah, there's a lot, so there's a lot happening right in Spain. And we've just been talking about how Spain has so much more solar installed than other parts of Europe, but barely any batteries. Do you think that that feels like a market that's on the edge of all of a sudden ramping up the battery installation quite quickly?
- [04:59]
B
Yeah, definitely. I mean the reason why we have so many solar in Spain is because two, four years ago, I mean with the Ukraine war in 2022 prices. I mean, electricity prices were super high. Spain, of course, is a very sunny place. And solar PV was capturing exceptionally high prices. So it was super interesting to develop these kind of assets. And the need of batteries wasn't there. Everybody started developing solar PV. And through the years 2023, 2024, when cannibalization of solar PV started, capture prices were going down. Developers realized that they needed batteries and then they started developing batteries. What happens? A development takes three to five years, more or less, in Spain. So all these assets that started being developed in 2023, they are reaching, ready to be now, this year, next year. So we expect to have like a very big amount of batteries coming to operation in the coming two years. In fact, the actual pipeline of batteries in Spain is around 30 gigabyte. What?
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A
It's incredible, right? So just to think about where some of this stuff is coming from. And you mentioned sort of the Crimean War, right, so drove huge increases in gas prices. Off the back of those huge gas prices, you see people go, actually, you know what, let's bring more solar through, let's bring more wind online, let's get away from gas. That takes time to come through. As those projects start to deliver in 2023, 2024, all of a sudden you're seeing power prices come down because you've got a lot of solar then on the system and. And then people go, aha, right. Battery prices are coming down. We see the spreads emerging in the market. We need to build battery projects. And then you. Wait, I think you said through three to eight years. Did you say for.
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B
No, no, three to five. I mean, there's some assets that take eight years or even more, but three to six is like, okay, okay, so
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A
then we're going from say, 2026, 2027 out to 2030. And it's just fascinating to me to link all of that back to the Crimean War. And at some point, you know, Russia's decision, Russia, a gas major at some, at some point, has triggered this process of delinking gas from European power markets. I just. It's so fascinating to sort of see that come through. Maybe a huge strategic pivot has been happening, but these things happen so slowly. One thing I would say about Spain is when we hear about it, it sometimes feels like it has been quite slow to move. So you mentioned 30 gigawatts of batteries in the pipeline. We see around, I think, three and a half gigawatts of batteries deployed and operating in Spain by 2030. What do you think about that number? Is that A number that you think is conservative or do you think for a new sector building batteries for the first time, do you think that actually it will, we'll find some speed bumps in the road?
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B
I would say it's a bit conservative. I mean, of course not all this pipeline of projects being developed is going to reach ready to build. Many of them will have negative permits at some point. That also happens with solar, with wind, with other technologies. But 10% of them is very conservative, I think.
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A
Okay, so let's just think through what makes a project happen. Right, so as you say, you need permits, you need, and those permits can be sort of electrical connection permits. You also need planning as well. You need the cash to exist. And then you also need like the electrically qualified people, you know, you need the people who will go on the ground and make sure all of this is connected. If you had to guess in kind of in that supply chain, like where do you think the weak link is?
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B
Well, that's a difficult one. I mean on the development side I think we are covered because we have dozens, hundreds of developers in Spain and they are used to solar PV and batteries. Is not so different in Spain regarding permitting, regarding construction financing. Maybe here it's going to be a bit more difficult because banks are not financing batteries yet in Spain. I mean we will see what happens in the future. But for the moment we're not seeing banks financing anything because there's no, there's anything to finance. I mean there's no ready to build projects and maybe the, the, the labor force to, to build these projects could be a bottleneck. I think it's already, it has been solar PV and probably in batteries going to be the same.
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A
Yeah, I definitely feel like the financial side is warming up. Like we're definitely seeing the, the start of that and so I guess it might be in the sort of technical engineering side that might be the slowest part to ramp. But yeah, as we start to see those projects coming through, there may be also some skilled labour that shifts from the solar side over to the battery side. Do you think that will happen?
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B
Probably yes. I mean definitely yes. I mean we've seen that most of the capital is going to batteries right now. I mean banks are not financing lots of solar, they are not financing merchant structures. And I think they're a bit wait and see what happens with batteries, but probably in the coming years we will see most of the capital flow into batteries.
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A
Okay.
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B
Batteries or co located assets with batteries.
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A
Yes. Okay. And then obviously with your platform you're seeing the People who are buying and selling these projects. So could you talk a little bit about who are the sort of typical buyers and sellers of projects?
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B
Yes, well it depends on the type of asset of course but for we have Right now around 3,000 companies register on the platform. So I would say for batteries, almost everybody's looking for batteries in Spain like the global IPP, I mean large IPPs, global IPPs, infra funds, there's independent power producers. Independent power producers, sorry, yeah. Infrastructure funds, family offices, all sort of European utilities. We're also seeing some local players from Nordic countries or other countries where they are more used to batteries. For example, the UK coming to Spain, that's for batteries. But for solar PV what we are seeing and the shift has been clear, we're seeing long term investors that see the value of solar PV in the long term because right now the capture price you're going to get with your solar PV is not the best one. And they are also thinking of strategies of co locating these assets with, with the battery and seeing in the long term like stable revenues.
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A
And as you said you're seeing the price for those transacted battery projects that has been increasing, increasing. So there's early movers that have got into battery projects in sp. They are being rewarded.
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B
Yes, definitely. Those early movers that on the peak of solar thought that this was going to come and they started developing batteries. Now they are, they're seeing a good compensation. I mean products reaching, ready to build. Right now they are, they're like treated like, like gold in Spain.
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A
I love it. And maybe this, maybe this just, it doesn't happen at all. But I would love the concept of like this kind of family office. So this incredibly wealthy family like find out that they've bought a battery in Spain and they go and see it. I'd love to, I'd love to see a very wealthy family sort of pull up and take a look at the Bashe project and go oh you know what, that, that's not as interesting as I thought it was going to be.
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B
I mean for family offices I would say maybe they are looking more for solar co located with, with batteries.
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A
Okay.
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B
Because it's like a easier asset. But family offices were saying entering into the battery market is because they have experience in, in solar or other kind of renewable energy technologies. Or energy technologies. Yeah, it's not an easy asset to, to have as an investment. You know, it's not like investing on the S and P. You need to manage this asset and it's not easy.
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A
Yeah, exactly. So not anyone can get into this space. And as you kind of rightly say, it'll often be the people who've got that solar exposure, solar understanding, who will kind of shift across. Well, let's take a moment to then compare say Spain to Italy. Another market where you're very active. It feels like with the blackout that happened in Spain of April of last year, that's April 2025, depending on when you're listening to this, there's sort of a bit of a watershed moment where Spain starts to move very quickly towards batteries. How would you see Spain comparing to Italy?
- [13:16]
B
Yes, as I said, Spain now is, it's booming. I mean, appetite is increasing, the prices are increasing. There's a lot of interest for these kind of assets. Everybody's expecting the capacity market to come to Spain. I mean, to happen in Spain and in Italy it was similar. I mean, batteries were interesting asset class. However, then Maxe happened and that changed everything. Maxe, I mean, all the capacity awarded, most of the capacity awarded was awarded to Enel, which is like a super big player and it's not competitive with small players. Also, the price awarded was kind of slow compared to what was expected. And that, that point, that become like a change in the market. So investor appetite slowed down, prices were decreasing. And I would say right now, Italy for batteries, it's in a moment of wait and see. Developers, investors are waiting. What's going to happen in the future? What's happening with the second max auction? What's going to happen with the capacity market? And they are hoping that this is gonna change and I hope so.
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A
Yeah. Okay, so we're seeing. So this is the. Let's just a quick recap on the maxer is the sort of the centralized procurement process for batteries in Italy where so you're almost seeing if you had one battery investor and they had a choice between going to sort of Italy or Spain, you would say right now they're going towards Spain.
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B
Yeah.
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A
Okay. And what's, I think is really interesting. So the two countries are very different, obviously for lots of reasons. But from a, from a solar perspective, in Spain you're seeing incredibly low capture rates for, for solar projects and you're seeing people trying to shift out of solar very quickly. If you look at solar in Italy, similar latitude should be seeing quite sort of severe solar cannibalization. But when we've been tracking sort of solar capture rates, it's actually not as bad and in part because it's been very slow to deliver as much solar as has come through in Spain. So do you see sort of still continued enthusiasm for say solar in Italy? What's your take?
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B
Yeah, I think for what you said was completely right. I mean for Italy we haven't seen this decrease in capture rates. I mean price capture are quite interesting. There's mechanism to retribute solar that are also interesting. The deployment of batteries has been at the same time as solar. So it had, it has been quite balanced. Of course in the future the more solar you deploy, maybe capture rates are going to be, I mean are going to decrease. This is a market. We also have demand that is expected to increase. There's data centers in Italy, there's also data centers in Spain. We don't know what's going to happen in the short and midterm with data centers but could be a good opportunity to increase the demand of both countries. So I think we have to balance this is to the deployment of solar with the deployment of data centers and the increase of demand.
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A
Okay, well let's, let's come back to Spain, right. So people will be familiar sort of with the phrase low prices, cure low prices. And what we're seeing in Spain is low prices and so is that, you know, you're talking to people in the market all the time. You starting to see interest for data centers coming through in Spain?
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B
Yes, definitely we've seen interest for data centers everywhere in Europe. Of course Spain is super attractive. It's a super attractive market because of the prices. But yeah, definitely. Right now many developers are starting to develop data centers looking for players to invest with them because these assets are also very, very different. Much more different than batteries and very, very difficult to develop and to build. So it's a very different, different asset class again. But we see a lot of appetite for, for it in Spain. And this is to develop it.
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A
Yeah, yeah, for sure. And this is maybe going away from your sort of standard day to day. But do, do you see those data centers coming through as sort of just standard demand on the system? So they're kind of connecting to and seeing the wholesale price. Or do you see people thinking hey look, I've got you know, a gigawatt of solar, solar plant here. I could co locate these two together. So data centers and PV all in one location. Are you starting to see that sort of behind the meter play?
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B
Yeah, exactly, we see both, but behind the meter it makes a lot of sense. I mean of course you need to have a baseload for, for the data center. You cannot have data center during the day and not during the Night. So you cannot connect it only to, to a solar plant. But, but yeah, it makes sense. It's a, it's a good way to have some more investment to get more profits from your solar plant right now or wind plant. We're seeing that.
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A
Okay. It makes sense and it's a trend we're seeing everywhere. So it's not a huge surprise to see it coming through in Spain. You mentioned something earlier about financiers not yet sort of backing projects in Spain, in part because, and I should be clear, battery projects in Spain, in part because those battery projects haven't yet come through and gone live. What, in your view is the, the point at which battery projects become bankable in Spain?
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B
Well, as you said, not many batteries are being financed because there's no reliable batteries. But if you look to the banks and what they are looking to finance, when they look to solar or to wind, they look to stable revenue. So probably for batteries, they're going to look to the same thing. They're going to look to stable revenue. So probably with tolling agreements, you can have that. With the capacity market, you can also have that. Also the fundamentals you need to have the product proper and real ready to build. You shouldn't be missing any licenses or anything and expect to be very similar to that kind of financing also. In fact, Spanish banks, I know they have finance batteries outside Spain, so they're used to it and they know how to do it. Just a matter of time to have them financing also batteries here in Spain. There in Spain.
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A
There in Spain, yes. Yeah, Maybe sunny outside, but this is definitely central London. And so you mentioned the capacity market. I think twice. It's kind of been coming for some time. What's the view on the ground in terms of that capacity market? Is there sort of a lot of confidence that it will go live?
- [19:48]
B
I think everybody thinks it's going to come live. I've heard so many dates. Some people were thinking it was going to happen last year, it didn't. Some other people think it's going to happen this summer. I have no insider information. I'm going to be very honest with that. But I think it has to happen because we need it. And it's just one more revenue stream and it's a way to bring stability to the market. It will happen. It's a matter of time.
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A
Okay, and let's talk about that revenue side. Right. So when people come to the market, often in these markets that are starting to grow, and I think we saw this a little bit in Germany, Actually people kind of came in and said, ah, my revenue assumption is way up here. It's really high number and there's often a sort of a split between sort of the expect their expectation of where revenues might be and then what sort of banks are willing to finance. So are you seeing that, are you seeing there is that sort of spread of revenue expectations or do you see sort of buyers have got a reasonably good handle on the reality of what the market might deliver in terms of revenues?
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B
I would say it depends on who's the, who's the buyer, the investor or the owner of the battery. Of course we have international players that are already owning batteries. In other countries, I think they already know how to manage this kind of assets. But in Spain, for those who don't have experience with batteries, we see there's a lot of expectations on arbitrage, which of course is super interesting. But the problem of arbitrage is that it's going to be cannibalized soon. I mean the more batteries entering the market, the spread is going to be smaller. But I would say it, it depends on, on who's the player. But you have other.
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A
Yeah, these players who are coming to the market, they've seen it before in different markets. They understand sort of how that market is going to mature.
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B
Exactly. They know about ancillary services, they know about tolling agreements. They know of course aritrage. They know about capacity markets in, in probably other countries.
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A
Yeah, and I was going to say so, so we've talked very much about Spain and Italy. You also cover a few other markets as well. So maybe it'd be worth just covering those for a few, A few, a few moments.
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B
Yeah, I mean we in Spain, you already know what we're doing. Italy is a very interesting market for all kind of assets we have right now. We're also very active in Poland where it's a market that we see it's growing very, very fast. Lots of developments, lots of carbon, so lots of more renewables we need to develop there.
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A
And actually a really interesting. Sorry to interrupt and we'll come back to your regions that you're covering, but in Poland, like a really good spread as well, like between the peak price and the sort of minimum price that you see.
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B
Yes.
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A
So it's not just often people think about Poland as being a capacity market only story, or it was a few years ago, just capacity market only story. Actually the fundamentals are pretty good.
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B
Exactly. Yeah. Yeah. Maybe for solar in Poland we are not very. I mean most of the developers, they are already knowing that they have to co locate their assets with other, with batteries, probably to capture better prices. But, but you will see that's a very promising market for the next five, six years at least.
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A
And you mentioned just as we were chatting to start off with that, you might be looking at places like Romania as well. Is it. Do you see sort of Vintaza moving to like lots of markets quite quickly? That's what it feels like. One of the strengths of a, of a platform approach.
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B
Yes, definitely. We are right now opening the uk, we are opening Germany. We are seeing a lot of appetite for these two countries we are about to open. And Romania, where we see also a lot of investor appetite and a lot of developments. Yeah, they're happening and we expect to open in the whole Europe in the coming two years.
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A
Yeah, it's a, it's a fascinating time. We've seen sort of battery space for a long time and in some sort of core markets it's, it's grown, it's grown a little bit slower in others and now it feels like the tipping point has been hit and it's just happening in so many markets all at the same time. Yes, great to see. Come on. One final question. What is a contrarian view you hold about energy markets in Europe?
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B
Well, yeah, my view is that good, good M and E processes should be available to everybody in the energy market. The contrarian view is no, I mean, deals are done like in the traditional way. They are opaque, they are bilateral. There's not a lot of transparency, they are slow, they are full of intermediaries. And that's why we built Antiser, to bring the transparency to this industry and to bring deals to reality. I mean, to bring products to reality as soon as possible.
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A
But that pace, right, does that come with a downside? So obviously moving faster is good, but surely the legacy providers would say, hey, look, all of this stuff takes time. We have to do all these checks. You have to make sure you're buying the right thing.
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B
It's a combination of both. We work with the legacy ones, but they have to adapt to the, to the new technologies. I mean to, to the new era, to the efficiency that technology brings. The transparency we bring. Yeah, it's a combination.
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A
Oh, it's fascinating. We're an AI company, we think about terminals and platforms all the time. So like I'm, I'm trying to wear my hat to, to challenge you on it, but I have to say I agree with you. So, Carmen, thank you very much for coming on transmission. You've been a wonderful guest. So much is happening right now. Go and check out and teaser loads of projects happening today.
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B
Thank you very much, Ed.