Battery storage, asset management and scaling portfolios

Richard Whitmore (00:02)
If you haven’t taken the time to understand your needs, not just the needs of the asset, but of your business, what is your business strategy over the next 12, 24 months, you’re going to make a wrong investment decision.

Adam Sroka (00:36)
Hello and welcome back to the HyperGrid podcast. I’m delighted today to be joined by Richard Whitmore, who is Director of Asset Management at Adaptogen Capital. Richard, thank you for joining us this morning on a nice sunny day here in Edinburgh. Anyway, you’re down south, I believe. Would you, yeah, do us the pleasure of introducing yourself and Adaptogen for the audience.

Richard Whitmore (00:59)
Yeah, nice to meet you again Adam. Yeah, I’m based in London where unfortunately it’s cloudy and cold today, but nevermind, you can’t have it all. So yeah, I work for Adaption Capital. I’ve been here for about four years. Adaption are a specialist battery storage fund. We’re building out a portfolio of transmission connected batteries in the UK with our operating platform, Varco Energy. We’ve got two projects in operations already, a third one.

is about to go into operations in the We’re building out our fourth one, that’s about 50 % of the way through. And just yesterday, I closed contracts on our fifth project. So that’s very exciting. And we’re also looking at expanding out into Europe. And for me personally, I’ve been in the renewable space for over 20 years. It’s a great area to be working in.

Adam Sroka (01:51)
So Europe, any like any favorites in Europe that you’re looking at?

Richard Whitmore (01:57)
So Benelux, Iberia, Germany’s a growing market as well. I think there are a years behind where the UK is in terms of their development, but rapidly catching up is what we see. So it’s an exciting time to be in the battery storage space still.

Adam Sroka (02:08)
This is it.

No, I think I totally agree and I think like we have the kind of double-edged sword of like GB it’s a bit messy and a bit like but actually

seeing how the other markets emerge and redo some of the stuff that we’ve done differently is quite fun. We did a lot of work in Germany recently and yeah, just different approaches and different sort of market access, like revenue streams and when they come online it’s all, I imagine that must be quite a lot of your day-to-days churning through the thinking of that and weighing up the pros and cons of A versus B.

Richard Whitmore (02:48)
Yeah, absolutely. We’ve also been lucky enough to bring some of the experiences from the UK into those new markets. Also getting NISO to come and speak to their equivalent in the markets that we’re looking at today. So I think it’s great to bring the learning. So maybe avoid some of the pitfalls that the UK has gone through in the recent years in terms of grid challenges, shall we say.

Adam Sroka (02:54)
Mm.

So you mentioned renewables, you’ve had a career at Austud, you’ve worked in offshore wind, you’re now in BESS, I often think that wind’s like the big serious part of renewables and BESS is like this new upcoming, like kind of wild westy, maybe less so these days, but what lessons, like, do you believe you bring from offshore wind and like BESS as an industry could learn that maybe hasn’t yet?

Richard Whitmore (03:37)
Yes, so when I was reflecting on this just the other day, It’s 15 years ago that I started working in offshore wind You know, and today it’s one of the most mature renewable technologies globally. right? But when I started 15 years ago, it wasn’t very different to where the battery storage industry is today. A lot of focus on development, a little bit of execution, not so much operations, right? So there was no real

forethought to how we’re going to operate these assets or maximize it at the time, certainly in the role I was in anyway. So I do see a lot of commonality, but in my time at Orsted, I can work across multiple areas in the business from development and execution operations. And I really saw how it matured. you focus on data in your business. I think as Orsted matured and realized actually they need to understand how these assets operate.

particularly predictive maintenance, you know, that’s key to maximizing sort of returns and maximizing uptime as well as minimizing downtime as well. And so I think there’s a lot of commonality there and the battery storage space is going through that transition, but more rapidly, I think, because the deployment times are quicker. You know, the technology is on the face of it’s simpler to deploy, but it’s quite a different technology in terms of how you use it.

And data is even more valuable, I think, for a battery storage owner operator like ourselves to consider. I think one of the key areas to focus on as well as collaboration with the supply chain, with the key stakeholders, you you really have to build that knowledge across the whole piece. And regulatory, regulatory understanding is a key driver to the decisions that, you know, you have to make in development as well. And these are all

common scenes really in any kind of generation development project, but particularly renewables that’s been evolving over the last 15 years or so.

Adam Sroka (05:39)
You mentioned the uptime availability, speak to so many optimizers and developers and the work we do, would you agree that due to the asymmetry in some of the markets and salary services and the lumpiness of revenue that actually like that’s a bigger concern within Bez than it is in Wind?

Richard Whitmore (06:00)
Yeah, think a concern perhaps is not the right word. It’s more of a challenge to understand how you best get your return on investment.

Offshore wind, solar, they’re passive generators, really. right? You build them, the sun shines, the wind blows, you get your energy, and often you have a PPA, a power purchase agreement. Whereas batteries are trading machines and you have to understand how you’re going to maximise your revenue. Historically, that’s been fully merchant, but it’s also transitioned from sort of frequency products to support the grid more through

Adam Sroka (06:25)
Hmm.

Richard Whitmore (06:38)
classically use the battery system itself to generate those revenues. But you see now that the inverters, the PCS are coming into play. We need to understand how we then look at delivering system services like inertia, even black start to the grid. Although the grid does need to understand the value that storage brings to that space. I’m not sure they’re quite there yet, although moving in that direction. So it is a much more complex

machine than offshore wind, solar, onshore wind for sure.

Adam Sroka (07:10)
When I’ve looked at the Black Star and some of the regional equivalents of some of that stuff, it does feel like a really interesting space that isn’t too well modeled, too well understood today, but is very quickly rocketing up people’s priority list.

Richard Whitmore (07:27)
Yeah, but I think that’s right, especially as you’re transitioning from stable generators like whole nuclear gas, right, to intermittent renewables. And so you need to understand how you’re going to integrate that into the system. And there’s maybe a higher risk of some challenges on the transmission network. And batteries play a key role in that. They are that base load they can provide.

Adam Sroka (07:34)
you

.

Richard Whitmore (07:52)
real support, real inertia to the system to help bring it back from a trip state to a black start. It’s going to come eventually, I think, with a combination of offshore wind, onshore wind, and batteries to deliver that service. But the mindset is not quite there yet, I think, from the system operator.

Adam Sroka (08:05)
you

Yeah, I think like, where do you, how do you price it? What’s the monetary value of like, not having it? I don’t know. I just think it’s a really tricky one.

Richard Whitmore (08:24)
Well, if you think about how disaggregated battery storage, if that’s the right way to phrase it, is across the country, there’s a real opportunity to pull that into a portfolio for the system operator to supply the services they need. And therefore, the cost to the consumer should be lower overall, but still allowing some kind of income for the storage developers and owner operators to maximize their value.

Adam Sroka (08:33)
Mm.

I want to touch on long-term performance because obviously in wind that becomes quite like you have very long horizons and you’re thinking like long distance. Are there any learnings from like operational data and how critical that is in long-term performance that we can bring into BESS or that you’re seeing in BESS

Richard Whitmore (09:12)
I think that’s an interesting question. One of the roles I had in Offshore Wind was I worked with a team that was responsible for collecting all the operational data from the assets, not just in the back office, sending people out in boats with cameras, with tools to measure ⁓ issues, cracks in the blades or the foundation state. And part of my role was to then feed that back into

the overall planning for subsequent years and ongoing maintenance. So you could have a better predictive maintenance strategy. And that ultimately leads to more uptime. And I do see something similar with battery storage, but it’s not as complex, right? There’s no moving parts. It’s not such an issue from an integrity point of view. ⁓ But you still want to know

when is best to maintain your asset? When is it best to take it offline? The winter months are best for trading potentially, so maybe you want to avoid that. So you want to have that foresight to say, let’s do it in the spring of next year rather than wait for it to fail if you’re detecting on your component level some challenges with the data.

Adam Sroka (10:30)
It’s so funny because like you go back to CCGTs or like massive sort of generator assets and actually like outage planning and like operations and the forecasting is like becomes the be all end all of a lot of the business rhythm like because actually every little tweak or thing that happens affects an outage window you have to notify people whereas I think a lot of

Richard Whitmore (10:41)
you

Adam Sroka (10:56)
There’s a lot of best developers at least in from what I’ve seen that don’t come from that big heavy plant background that I say developers, mean, owner operators really, but that. And it’s like, you don’t have that. Okay. You don’t need the big outage planning, but it is important. And factoring in the, this thing will need maintained and fixed and tweaked and sort of planning for that. But I don’t know the answer because the maintenance.

actual time to do any maintenance window is so much shorter than a power station and wind turbine.

Richard Whitmore (11:30)
Yeah, absolutely. But you are going to get component failures, right? And at the moment, I don’t feel we, the industry has visibility or enough visibility of that level of data to start making that kind of

upfront decision making, you know, that’s required. know, it’s quite boring, really, it’s not as exciting as developing and building and operating the asset. But you do need an annual sort of cycle of a process to say, okay, what’s our plans for next year, for the next two years, five years. It is less than offshore wind, but it does need to come, the industry does need to get there, I think, in terms of what and how they’re going to manage these assets for the long term.

You know, today batteries are what 10 to 15 year asset life, but are they really because the balance of plan that you’re investing in is a 25 to 30 year asset investment. there’s likely to be augmentation, know, replanting is the term used in offshore wind rights. So, you know, that has to factor into your planning ultimately. And there will be a residual value in these batteries in 10 to 15 years. We just don’t know it yet.

Adam Sroka (12:19)
Hmm.

And we’re already seeing old assets, like five years old, having their duration doubled or increased to get into some of the more long-term storage markets and things like that, smaller assets. But we’re seeing that happen now. It’s just going to keep happening as these become more attractive. New services come online, like so on and so forth.

Richard Whitmore (13:01)
Yeah.

Yeah, I agree. I offshore wind and the battery storage industry, kind of OEM led in terms of what’s available in terms of technology. But it’s really transitioning now to sort of owner led decision making on duration in particular, you know, and really having visibility on the services that you want to be able to deliver for your asset. Because the OEMs are global, right? You need to focus on the local market and have that knowledge.

Adam Sroka (13:09)
Yeah

Mm-hmm.

Richard Whitmore (13:32)
So I really see the industry is transitioning away from that OEM led in the battery space, OEM led decisions on what products you’re going to buy to know I’m the customer, I would like this product to deliver this service and have this duration for this long. that’s why it’s also exciting. It’s evolving all the time.

Adam Sroka (13:47)
Mm.

Yeah, definitely. it’s like really, I’m already feeling people start to think about actually like the spares supply chain, which is a funny concept in batteries, but like, transformers are not quick to build and easy or cheap exactly. You don’t want one of them sat in a shed like for your, your site. So where’s that coming from? What’s the lead time on?

effective replacement parts and things like that. I’ve heard people have those conversations, so I feel like it’s a maturing space, but not one that’s deeply understood yet.

Richard Whitmore (14:25)
We’re having those exact conversations. Transformers lead times of 24, 36 months now. Even the components that support the transformers for the high voltage connection are 12 to 24 months. So we’re having those strategic spares discussions internally and with our supply chain today.

Adam Sroka (14:44)
The

strategic is a great sort of synonym for very expensive. It’s just so expensive. Yeah, yeah, like having one costs a lot like losing time costs a lot. It’s so funny. What do you think like then across portfolio in in BES in particular, like what data tooling gaps are there? I have to ask, What is like, what are the gaps and the things that you think are really underserved by the tools in this space?

Richard Whitmore (14:49)
Well, in terms of lost time and cost, yeah.

Yeah, yeah, yeah, for sure.

You know, that’s a really interesting question. It’s something that we’re discussing internally in the team, even today. I have a view that we all too often jump to the tools without actually understanding what question those tools are going to answer for us. So you really need to take, I think, a step back and have a broader look at your requirements before you then invest in those tools. I I am pinged.

Adam Sroka (15:21)
Hmm.

Richard Whitmore (15:39)
Almost a couple of times a day from a new company on LinkedIn that’s setting up, let’s say they can deliver me the ultimate asset management tool that’s going to solve all my problems. But can they? Is it really what we want? Is it, is it what we need? A part of the challenge is, the data silos that you have today. You know, You’ve got your OEM over here for the battery. The PCS has their own kind of data source, which is becoming even more important. You know, we also need to understand data from our

Adam Sroka (15:55)
Yeah.

Richard Whitmore (16:08)
high voltage equipment, right, to make sure that it’s performing as it should. And Even within the battery degradation, warranty, know, state of health, state of charge. But then that all has to link into the market data, the route to market provider performance, right. So it’s very disaggregated and we need to figure out as an industry and a business what’s valuable in all of that data, right. If you want to…

every element of data from your battery, you’ll need a data center of your own. right? So you need to work out what’s important. And That takes time and you should take that time. You shouldn’t wait until you’ve got operational assets to do that. You you should be doing that early on in your asset development cycle. But you need to take the time to think what is important for us. And then you go out to market say, what can the market do?

to deliver the solutions that we need as a business.

Adam Sroka (17:04)
you’re, totally right. I did, I would say this, but I believe that actually there is no product for this market that will work. There’s none, there’s none yet to do and there’s none that will. And not because the people that are pinging you aren’t some of the incredible engineers with great tech. are.

And there’s incredible point solutions out there, but products only work when the customers have a lot of overlap. And actually like every developer is pretty different. They’ve got different risk appetites, different markets, different portfolios. They want to go different places. They want different stuff. of our, like some of our customers want to sell their services to other asset managers. Some just want to hand the keys over like in that environment. And there’s not, there’s not 10,000 developers, right? It’s like.

Richard Whitmore (17:38)
Okay.

Adam Sroka (17:53)
few hundred worldwide of people doing this stuff. So products are funny space. And I believe you either sell for trying to web together point solutions yourself or the approach we’re now taking is we can help bridge that gap and sort of take like those points and solutions and build them into the whole thing that you need that’s specific for you until we see consolidation in the market, like kind of the revenue streams mature and settle down and things like that. think

Richard Whitmore (17:55)
you

Thank

Adam Sroka (18:23)
10 years from now that I might have a different answer. But for where we are today, I think the data landscape, the tooling landscape is still very wild west and everything’s emergent and new and IP leakage and all that stuff’s good.

Richard Whitmore (18:37)
Yeah, I totally agree. And that’s why it’s important that the customer, the client, the owner needs to understand what it is they want. What is it? What is it they don’t know they don’t know? because, you also need something that is going to be adaptable to your future needs. But you need to start in the right place.

Adam Sroka (18:49)
Yeah.

Yeah, and go on that journey with your tech suppliers and things like that. If anyone’s stuck in the audience, you know that come,

what about external challenges and like the big macro stuff? I’m thinking balancing mechanism, behaviors, dispatch issues, like the way interactions work. How do like system level problems trickle down into affecting your day-to-day operations?

Richard Whitmore (19:22)
It comes back to the, I think the data silo, right? You’ve got all of this information coming at you as an owner operator that you need to make sense of in real time, quite often, or you’re going to get tripped up or you’re going to get fined for missing a cell in the balancing mechanism or some other charge on the network.

Adam Sroka (19:25)
Mm-hmm.

Richard Whitmore (19:45)
You really, I think it feeds into the strategy piece. You really need to have a clear strategy as a business and how are going to manage all of this disparate information and different sources? And part of that is who’s going to do that for you? Are you going to say route to market provider, right? You need to manage all of these issues for me, or are you going to take a more proactive role and develop your own capability that you then have to feed through, that adds layers of complexity?

and time. So I think it becomes quite a challenge. And the market’s evolving all the time, right? NISO, which is fantastic, right? It’s bringing new products to market constantly. And so we as an operator have to adjust our thinking in that regard as well. And it does also feed back into the design. One of our earlier discussion points about the design of the asset, right, on day one.

Adam Sroka (20:40)
Mm-hmm.

Richard Whitmore (20:42)
The reason people are going from half hour to one hour to one and a half hour augmentations is because the half hour system is for frequency products, right? And only a one trick pony. Now we need to build assets that can deliver across multiple different revenue streams and predict the future.

Adam Sroka (20:53)
Mm.

I think a lot of organizations struggle to really outline what it is they really want from the tools, from data, from AI. We have peak hype cycle, And the marketing of some of biggest companies in the world have done a great job of convincing everyone AI is magic and it’s going to replace everything. And don’t worry about it. The techs are a big silver bullet, but the lived experience is totally I could name a number of tools that where…

adverts on LinkedIn definitely paint a very very lovely story of what doesn’t happen when you try and use it in the wild. What do you think the biggest pitfalls are in in kind of people jumping to solution-led thinking?

Richard Whitmore (21:39)
You’re going to make the wrong investment. mean, fundamentally, If you haven’t taken the time to understand your needs, not just the needs of the asset, but of your business, what is your business strategy over the next 12, 24 months, you’re going to make a wrong investment decision. going to have to replace that tool at some point in the future.

I think the industry is also move moving away. talked about this OEM led piece before, and I think that also links to data in a large extent where we just accepted it in five years ago from the OEM. Here’s the data we’re going to get. Right. And now we, as the client saying, well, no, actually we, it’s my data. want, I want it all to your point earlier around one of your clients asking for everything. You know, we want access to it, but don’t quite know what.

we’re going to do with it all yet. And so that all feeds into that, that big picture as well, right? The whole value chain thinking.

Adam Sroka (22:43)
Yeah, I totally agree. it’s like, it’s reminiscent of like 10 years ago in just data science and in general, where everyone was like, I don’t know what it is, but I need it. Just keep everything. It’s like, I don’t know art, but I know what I like, kind of thing. And like store the lot. And then it turned out that that was costly and not that useful. And we kind of matured that space because time went on and people tried things and like the industry knowledge grew. And I think

Bez is there in that, okay, there’s so much data and yeah, everyone’s been telling me for a decade, is valuable. Why? I’m not really sure because the cutting edge is still developing and new forecasts and predictions and now all this AI is a thing. And I think it’s a difficult space to navigate if you’re not a data professional because…

Richard Whitmore (23:18)
Yeah.

Adam Sroka (23:36)
there’s an argument can be made anyway, right? Any which way. And what if there is like 10 % locked away in your data that you just don’t know about because you’ve not, you’ve not done the right POC. You’ve not done the right thing. It’s a really, it’s not like a one size fits all, but I think, yeah, like find people that have been on the path and see if there are small wins that you can prove stuff out and be very controversial for energy, but try and.

take some small risks and see if we can experiment a bit and innovate into what we’re doing going forward. One thing I think it’d be good to ask is if there was newer developers that are just appearing, they’ve got their first site and they’re about to go, go, go, what advice would you give them? What kind of foundations, everything from data, tools, asset management, contracts, what advice would you give them to be successful for their first site?

Richard Whitmore (24:22)
you

You know, when I started out in my career a long time ago now, we won’t say exactly how long, how you were going to operate an asset was always considered in the last week of a project. That was just the reality of the situation. And so over my career, I’ve become a strong advocate of

Adam Sroka (24:39)
you

Richard Whitmore (24:49)
building your asset management operational capability. If you’re a new developer before your asset is operational, you know, well in advance. And part of that is the tools you need, but you also need to understand. You know, what is the, what is the data you’re going to get? How are you going to use it? Who is going to, you know, interpret that for you so that you, as the board of that new startup company can make the right sort of strategic.

decisions in time. And you’re going to procure these assets, right? So you also want to understand, how is the API interaction going to work with your suppliers and your route to market provider? What is the impact on warranties and degradation going to be that you want to consider as part of that as well? But you need to bring in the people, you know, it’s all well and good talking about tools and data, but who’s going to, who’s going to run that for you?

Adam Sroka (25:46)
Hmm.

Richard Whitmore (25:47)
And there’s real value in bringing in people with the right experience at the right time during the execution of your project to start ramping up your operational and asset management capability. You know, not just asset managers, data scientists before your assets are operational, right? So they can start putting in place all of your internal tools and processes. These are all key. But also take the time to sit down and think.

What is it we want to do after 12 months of operating? Where do we want to be? what kind of company do we want to be? You can be company A that just simply happy for someone else to do it all for you completely, or more like adaption of our code. We’re very interested in the data, right? We want to understand that so that we can make real time decisions on how to not only maximize the return on asset A,

Adam Sroka (26:25)
Mm.

Richard Whitmore (26:40)
but how to improve the development opportunities for asset B. And so don’t ignore the elephant in the room, which is data. You need to get on top of it straight away, would be my strong advice.

Adam Sroka (26:48)
Mm.

⁓

I love it. Didn’t even have to pay you to say that’s great, great advice. That just totally suits. But I think it’s good because it shows like, think people are realising that there’s…

ultimately like big efficiencies and wins that trapped away in kind of the non hardware side of this and the non system side of this. Yeah, it’s interesting to hear from you that actually thinking that way forward has obviously brought you benefits, right? And you feel that that has allowed you to do better than you would have otherwise.

Richard Whitmore (27:21)
Yes.

Adam Sroka (27:21)
Okay,

so my fictional new battery best developers followed your advice and set up and they’re going with their first asset. What are the biggest barriers? And it’s a funny question, I think this I’ve got it written down here. What are the biggest barriers to going from successful to scalable? Like

Asset 234 being a big success as well as just the first.

Richard Whitmore (27:43)
Yeah, it’s.

Where to start on that one? mean, you you want to start at the foundational levels and your development strategy or are you going to be a business that buys ready to assets? know, there is a decision to make even at that early stage in the development cycle of a BEZ project. But once you’ve made that decision, really, what’s the scale of the assets you’re interested in? You know, is it 10 megawatt, 50 megawatt?

Adam Sroka (27:54)
you

Richard Whitmore (28:12)
These play a part because the cost to maintain a 10 megawatt asset in terms of your time is not that different to maintaining a 100 megawatt asset or even a 500 megawatt asset ultimately.

And then you need to consider, you your supply chain issues and challenges, right? You need to have foresight on what’s happening there. What we’ve seen over the last 12, 24 months is that Bez is becoming pretty standardized, right? It’s 20 foot shipping containers. There are some outliers there with Fluence and their SmartStack and some other. Yeah, exactly. But that’s becoming pretty standardized, but what…

Adam Sroka (28:46)
staying on top of each other.

Richard Whitmore (28:52)
What’s happening is that the balance of plan, the high voltage equipment and the PCS is becoming more and more important, you know, almost equally important to the battery system themselves. So you really need to have a grasp on you’re procuring project A today, but you know, B and C tomorrow, what’s going to happen to that supply chain? What’s the feedback loop for your learnings from project A to ensure that project

BNC are better, more efficient, deployed more effectively. Going back to the half hour versus one hour, two hour solution, what is your strategy in terms of duration? Two hour, four hour, six hour. Are you going to develop the assets to accommodate that in the future? And going back to my earlier point of making sure you’ve got the capability in-house, even for project one.

to understand your needs and your requirements and to deploy that on the ground as well. I think they’re probably the fundamentals, I’d say, to making sure that in terms of building out your projects, you’re successful, supply chain, internal capabilities, your strategy in terms of asset design and deployment. And then once you’ve got all that, you need to sit down and go,

Okay, and in five years we’re going to have a gigawatt hour of battery storage assets. What does that mean? How are we going to manage that? What’s the market going to be looking like? What’s the regulatory space going to be saying about battery storage? Do we want to expand outside of our core market? What’s the next technology coming along? Is it going to be sodium? Is it going to be solid-state?

I mean, you can keep going, right?

Adam Sroka (30:42)
Yeah, it’s interesting to hear. I said a similar thing to the earlier part of your answer on the stage at ESS where we were talking about optimization and I was being a bit obtuse, like optimization and silvery markets, what’s the future? And answer that question. That’s very much about make the asset do the work today. But I said, well, what are you optimizing? Because actually there’s all this peripheral stuff that you’ve mentioned that like

Like any day’s performance is going to be dwarfed by savings in capex and operational costs over the portfolio. Like if you can get a couple of percent more efficient on building the portfolio, like who cares? Everyone, everyone cares, right? But who cares on any one day? And that meta-learning, that like, is it actually, is this market ever good for us? Because if it’s not, why are we physical assets that, why are we not building more specialist assets that ignore?

that duff market, we don’t like it for whatever risk appetite reason or whatever we’ve got. I think, yeah, being an optimization nerd, I always think like, yeah, you can just keep zooming out and we just need a model of the entire universe and all the markets and everything everyone’s going to do and then we’ll make good decisions. it’s, yeah, it’s fine. No, it’s, but how do you, how do you zoom out beyond, and I think people don’t believe in that O &M.

Richard Whitmore (31:45)
Yeah.

Sounds easy.

Adam Sroka (32:09)
by asset management and the longer term. But actually it’s like, that’s where all the value lives. It’s like that the secrets to doing really well longer term live in that day to day life of the asset manager.

Richard Whitmore (32:22)
be honest, the simple answer, I think, to your point is cash, right? Revenue. If you haven’t designed your first assets in the most optimal way, you’re not going to have the revenue and cash to continue to develop and evolve your business. No matter how much you want to optimize your, let’s be silly for a moment, quarter of an hour asset that you built in a world that wants four hour assets, you’re never going to earn the revenue to allow you to continue.

Adam Sroka (32:28)
Hmm.

Richard Whitmore (32:52)
develop and not only that you’re going to struggle to get financing from from the market right so that’s really the key I would say.

Adam Sroka (33:02)
Operators often underestimate how different like storage assets are to some of the passive ones like you’ve mentioned the passive generators like.

If you could have one wish, would it be around making the market and investors get? What lesson would you wish for them to learn?

Richard Whitmore (33:20)
These are, you know, they are trading machines, as I mentioned before, that’s the key difference here. Offshore wind, it’s very glamorous, right? Offshore wind, you know, it’s, yeah, it costs a lot of money to build, it’s very complex in terms of construction. But in terms of operation, putting aside, you know, the harsh environment of

of the North Sea for a second. It’s quite simple. right? You plug it in, the wind blows, you get some energy out of it at the end. It’s almost the opposite for batteries, right? From a construction point of view, they are relatively straightforward, Some slab foundations, put your shipping container sized battery on top with your PCS connected. But the thinking and the challenge is more how you are going to operate it going forward.

Adam Sroka (33:51)
watch it.

Mm-hmm. ⁓

Richard Whitmore (34:12)
So, you know, the balance of capabilities I would envisage between an offshore owner operator and a BESS would be quite different, I think, in terms of quite technical for offshore wind with some trading capability. BESS is a lot of commercial trading, regulatory understanding with a little bit of engineering on the side. I’m an engineer, so I’d say not enough engineering, but you know.

Adam Sroka (34:39)
there.

Richard Whitmore (34:40)
people look at batteries, that’s simple, you can build that in no time. Yes, but in many ways it’s more complex than the passive generators of offshore wind, onshore wind, solar.

Adam Sroka (34:51)
you’ve completed the easy part of this project. Well done. Okay, so go forward. What are you most excited about in the space, especially BESS What do you think in the next few years is getting you excited?

Richard Whitmore (34:58)
Thanks.

When I was thinking on this upcoming yesterday, I realized I’ve worked in the battery space now since 2018, which is quite a long time, I suppose, for people these days. And back then, you know, I built the half hour asset and the technology has just evolved so rapidly, To meet the growing needs of the market as renewable penetration has increased.

Adam Sroka (35:24)
Hmm.

Richard Whitmore (35:31)
and we’re about to deploy a 6.25 megawatt hour container on our next project. And our current project now is five megawatt hours. That in itself is exciting. That rapid rate of development is exciting. And we have to keep up because you also have to understand how to balance that with the PCS development. And that’s not necessarily meeting the same pace as the bez.

But then new technologies, right? So, GMI and Solid State, we talked about this earlier, that’s going to come into the fore at some point. I personally don’t think for at least five, 10 years, because the cost level of lithium ion is so competitive now that it’s very difficult for any other technology to sort of break through. But also…

We are maturing as an industry, right? And at some point we’re going to have business as usual and it might not sound exciting, but actually reaching that milestone is quite an achievement, right? Where you understand day to day, you’ve got your gigawatt hour portfolio operating, you’ve got your next pipeline of projects coming through. That for me is quite an exciting space to be in. And then you’re already thinking about augmentation, replanting, you know, it’s…

Adam Sroka (36:28)
Hmm.

you

Richard Whitmore (36:47)
it’s going to be an exciting space for certainly for the rest of my career, I

Adam Sroka (36:53)
Yeah I like that, yeah it’s interesting. What point do you think, or did it or is it, did wind hit, Offshore wind, did it ever hit business as usual? Or I just think because the scale keeps going up, assets keep changing in offshore, is it business as usual?

Richard Whitmore (37:07)
I would say to an extent yes, because the turbines are getting bigger but the industry knows how to build them.

Adam Sroka (37:13)
Yeah.

Richard Whitmore (37:13)
What’s happening in offshore wind though is that the turbines, the manufacturers have said, well, let’s make bigger and bigger turbines. And the developers have just gone, well, hang on. We can’t even get them from point A to point B anymore. that You kind of reach a peak. And actually There is a parallel in battery storage that I’ve seen recently where companies, know, CATL have come out with a nine megawatt hour solution, but it weighs like 60 tons.

Adam Sroka (37:25)
Yeah.

You can’t get up a truck.

Richard Whitmore (37:42)
So the challenge is going to be delivering that. So this is a fine balance between technology evolving and delivering. ⁓

Adam Sroka (37:45)
Isn’t it?

Yeah, and I saw a thing about, I think it wasn’t that one, it was slightly lighter than that, but it was actually like you cause headaches with the foundations and even the land starts to get problematic around where you can put it because they’re just so heavy, which I think is hilarious. It’s like, this immovable thing is too heavy, we can’t use it.

Richard Whitmore (38:10)
Well, sadly, the infrastructure in the UK, not sadly, you it’s lasted a very long time, but it was designed for an 80 ton load 60 years ago and it’s now only capable of 40. And this is a problem also for delivering transformers to site. know, it’s a challenge, national grid, however, is the chance that developers have building projects in Scotland where you know, 500 megawatt projects up there where you need to deliver a 400 kV transformer that weighs 200 tons.

Adam Sroka (38:18)
Yeah.

Mm-hmm.

Richard Whitmore (38:39)
You know, it’s going to be interesting.

Adam Sroka (38:39)
Great.

Yeah. Yeah. Shit in morning. I don’t know. It’s good fun. And then the other thing I think that I suppose it will change now with the Q reforms and stuff, but like.

Richard Whitmore (38:42)
Yeah.

Adam Sroka (38:50)
hearing of like sites getting quoted 12 year connection time and stuff like that and I’m just thinking actually like you’re right in 12 years you’re right in the middle of the replanting piece right because the 15 year asset lifetime’s up for some of the earlier ones and they’ve got a good connection and they’re not giving it up are they and like so actually you’re in a funny spot are people

Richard Whitmore (39:06)
Yeah.

Adam Sroka (39:12)
flipping or selling their old sites? Are they going again? And it’s, someone was talking to me and I was like, there’s not any, there’s not many humans that have done cradle to grave of two offshore wind sites. Like, I can’t say there were none, but I don’t think there were many. But yeah, we like the times, the cycles will be quicker with BESS, but we’re still in the first life cycle of all this stuff. Like, I no one’s got to the end yet.

Richard Whitmore (39:24)
Yeah.

Adam Sroka (39:37)
It’s harrowing, it’s seaming about some of their bike. They don’t even know how do we unpick these things from the North Sea and what do we do and do we unscrew them and all that. What the, what headaches are we creating for sort of 10, 12 years from now?

Richard Whitmore (39:38)
Absolutely.

Yeah. I mean, that is a problem for another day as well, right? But it is going to come. Technology is going to evolve that you’ve a site maybe with 20 containers today that will only require five in 10, 15 years time, right? So your replanting cost will be lower. will be lower.

Adam Sroka (40:07)
into little data centers, For Big Jeff.

Richard Whitmore (40:10)
Well,

that’s always an option, I suppose.

Adam Sroka (40:13)
well, okay. Before we go, any like hot takes or controversial opinions? Any heard it here first?

Richard Whitmore (40:19)
Well, you mentioned connections reform, I think that’s probably a discussion for another time.

Adam Sroka (40:22)
that in the download section of the Members Only area.

Richard Whitmore (40:26)
Yeah, I’ll reserve my comments on that for a drink in the pub.

Adam Sroka (40:32)
Amazing. Well, look, before we let anyone go, I always like to ask if people would like to find more about you, adaptogen, barcode, or you’d like to plug anything at all, where should we point them?

Richard Whitmore (40:43)
Well, actually, we’ve just we’re just about to launch or have launched yesterday our new website for adaption and VARCO. So we’ll be publishing that on LinkedIn soon. You know, we’re very open to sharing and discussing new topics, new data points. And we’re publishing on social media, LinkedIn all the time. So, you know, reach out to us on there and we’ll respond where we can reach out to me as well on LinkedIn. That’s my primary.

social, my only social media platform. You know, that’s probably the best, the best option I would say for reaching us.

Adam Sroka (41:17)
to look. Thank you so much for joining us today, like amazing insights and I wish you all the best with a new website.

Richard Whitmore (41:23)
thank you, Adam. It was an enjoyable conversation. Thank you.

Adam Sroka (41:26)
Cheers.

Adam Sroka (41:29)
Thank you once again for listening to the Hypercube Energy podcast. As always, if you have any feedback or comments or you want to get involved, please get in touch. And if you want to find out more about what’s happening in data and AI across the energy sector, please join the Beyond Energy community and I look forward to speaking to you soon.