Ep57 Asia's energy transition: hybrids rise, gas adapts, and markets reform, ft Mike Thomas, The Lantau Group

In Episode 57, leading Asia energy economist Mike Thomas of The Lantau Group shared insights on 2024 trends and the 2025 outlook. He highlighted improved investment fundamentals, growing demand for renewables, and significant market reforms in Malaysia and the Philippines. Looking ahead, Mike expects continued renewable growth despite geopolitical uncertainties, more solar-hybrid projects, and evolving challenges in gas flexibility. Mike also thinks that while nuclear power's future remains uncertain in Southeast Asia, small modular reactors show long-term promise.

REFERENCES: TLG Insights

ABOUT MIKE: Mike Thomas is the Managing Director and a founding partner at The Lantau Group with over 30 years of consulting experience, focussing on the energy sector.  He advises a wide range of energy sector stakeholders on strategic, regulatory, and competition matters; sustainability; market design and development; and commercial transactions.  Prior to co-founding in 2010, he headed the Asia Pacific Energy & Environment practice of a global consulting firm.  Mike has an MPP from Harvard Kennedy School, United States and a BA in Economics from Carleton College, United States. More specifically, within the Asia Pacific region, he has led many significant engagements involving the robust application of economics and analytics to a wide variety of business, policy, and regulatory challenges affecting the electricity and gas sectors.  He works extensively with multinationals on sustainability strategies, focussing on the best options in different markets, and on the regulatory and policy changes needed to support increasing renewable energy contracting options.  He has testified or advised as an industry economic expert in commercial contract disputes before courts or arbitral panels in Malaysia, Singapore, Hong Kong, New Zealand, and Australia, and on disputed regulatory matters before regulatory authorities in New Zealand, Australia, and the Philippines.  His experience in commercial matters includes market forecasts and revenue simulations for numerous renewable energy and conventional energy projects and market assessments in South Asia, North Asia, ASEAN, and Australia/New Zealand.

FEEDBACK: Email Host | HOST, PRODUCTION, ARTWORK: Joseph Jacobelli | MUSIC: Ep0-29 The Open Goldberg Variations, Kimiko Ishizaka Ep30-50 Orchestra Gli Armonici – Tomaso Albinoni, Op.07, Concerto 04 per archi in Sol - III. Allegro. | Ep51 – Brandenburg Concerto No. 4 in G, Movement I (Allegro), BWV 1049 Kevin MacLeod. Licensed under Creative Commons: By Attribution 4.0 License

Transcript

Ep57 Asia's energy transition: hybrids rise, gas adapts, and markets reform, ft Mike Thomas, The Lantau Group

PLEASE NOTE THAT THE AUTOMATICALLY GENERATED TRANSCRIPT MAY CONTAIN ERRORS. FOR ACCURACY, RELY ON THE ORIGINAL RECORDING.

Mike Thomas: [00:00:00] Thanks, Joseph. It's good to be here. And it's also a really interesting time. 2024 was kind of a momentous here in some respects for, for what we saw in Asia. I didn't really sense a particular. Thing or. Or moment what it seemed to be to us at The Lantau Group was really accumulating improved fundamentals and greater pressure from end users and nudges in several of our core markets.

In a general direction of reform which was unusual considering how slow some of the markets have been in the past decade to, to adopt sort of more openness. For example Malaysia under its, under its government has developed a whole range of more energy friendly, energy focused, energy transition oriented, energy [00:01:00] sector reforms probably more reforms in the energy sector in Malaysia than any other sector. And the beginnings of putting that country on the map, for some of our clients who previously weren't looking at it at all, Malaysia hadn't really had the reputation of being that open for business.

They'd had large scale solar tenders, but it was all during COVID and so it was a little bit up and down, but now more recent developments around AI and data centres. And whether they locate in Singapore or Johor or, or other kinds of developments have really put a lot of proactive users in advocating opportunities for, for them.

And then the government has been racing to develop programs, not always perfectly, but, I mean, you know, we've got things coming out of out of the woodwork in a sense of. Where they weren't there before. The Philippines. Similarly, I could just become more [00:02:00] fundamentals oriented. So while there's been a lot of gas developments and very importantly, so, there weren't really major policy shifts in the Philippines, just sort of the continuous recognition that it's been a great place to do business as an energy business, energy company, whether you're international or local and, over the past decade, many firms have accumulated sites and opportunities that have been waiting for the right moment.

And I would say the Actis investment in Terra Solar is one of those that sort of demonstrated that catalysing point is a very significant project. I, I don't think anybody with all respect to all of Asia, you know, the idea that the Philippines would come forward with a, One of the largest projects, solar hybrid projects in the world.

Was probably not on anybody's bingo card. So, so I [00:03:00] think that is, you know, I, I, I felt that pretty outstanding really. And then you know, I think there have been the beginnings of offshore wind in the, in Asia. There had been some in previous years around Taiwan and interest in Japan, but a little bit more activity across the region and a lot more investigation by governments.

But not always finding that it was the least cost, but or, or the easiest. And of course, in the rest of the world, there's been some, some, some rollback of, of opportunity say in the U S east coast, which highlights some of the difficulties of, of, of bringing offshore wind to market. But the idea that you, you have this engine of renewable energy development, it's kind of like the old saying, prime the pump A number of things just have to happen, and a lot of it started happening in 2023 and 2024 that, that lay the groundwork and plant the seeds, if I'm going to throw all the metaphors in [00:04:00] for what should be a very interesting 2025 and I think that's generally true across the, the, the, the region Our work has been Pan, Pan Asia and we see We see those developments and those, those changes.

So 2024 wasn't a single event kind of Kind of thing you know, U. S. election was late in the year, all of the anticipation of that, but that's something we can talk about separately. But the, I think the, the main thrust for us in 2024 was renewables just keep getting stronger. The gas story kept getting more complicated and the solar hybrid story started to make a dramatic appearance.

And it's you know, that's, that's, that's a, that's a path that's it's going to continue. 

Joseph J: Right. So, so you, you were saying that you know, you, you, you would summarize it as saying improved investment fundamentals in general in 2024. You mentioned pressure from end users and [00:05:00] more examples of shift towards more open markets in terms of power reforms with regards to the second one, pressure from end users.

Do you mind clarifying that a little bit for us? 

Mike Thomas: Yeah, it's, it's, it's really interesting issue. This whole end user. What does it mean for the energy transition? We, we ended 2023 with a project for sort of a decarbonization roadmap that we did for 1 of our clients that began to explore all the different ways in which A country could, could decarbonize and we, we characterize it in 3 waves.

The 1st wave was the easy stuff, the low hanging fruit, right? And then, then, then as the integration of renewables became more Greater more complications started to arise. That's where the batteries, ancillary services and other aspects. And then finally, if you really will go all the way to decarbonization, you were going to start running out of [00:06:00] in country solar or wind, possibly in some, many markets, and you were going to start either importing green molecules, or you were going to move to a different You were type of green electron like some, some, some longer term new technology.

Now the end user side is really interested in this first wave. Get the solar, get a battery, maybe Whether they go to 24 7, take advantage 24 7 green power is up. Some do some don't. Many are driving for as many green electrons as they can using whatever system policy regulatory technological sort of arrangement that they can put together that is least cost for them. So they've been really agitating what I call this 1st wave, how to grab this much of the green the cheapest fastest developable green energy. And it's been motivated in Asia because [00:07:00] they have had success doing this in US and in Europe often with policy tax incentives as well as other aspects that have allowed them to do that. And they're trying to replicate this. So a good bit of the on the ground activity in Asia is working with governments, regulators, utilities to identify where things can be made more like what they're seeing in the rest of the world or where they can get first dibs on.

A good green opportunity or where the system has enough capacity to absorb, say, more green electrons without creating a wave to what I call a Wave Two problem, which is when the integration of renewable energy at the system level starts to making people realize that there are some additional costs that have to be incurred and there'll be some additional investments that will be needed.

Such as in transmission or ancillary services support [00:08:00] or additional batteries or firming capacity and all that. So what I'm really seeing in the first wave for the end users is how to get momentum in Asia as fast as possible, faster than maybe the governments are aware, faster than the system has been moving.

And that's where you start seeing policies like Malaysia's Corporate Renewable Energy Support Scheme, CRES, or, or others. They're not fully, they're not fully thought through, but they're obviously very responsive, though, to, to end user looking for more control over their contracting of, of, of green energy.

So they're, they're almost like a series of bolt Ons or odd lots for tapping the existing system. They're not fundamental change they're options that have been added. And, and we see, you know, we see a little bit of that in Malaysia. We see, we've seen a little bit of that in, in [00:09:00] in Philippines, which is a more advanced market.

We see that in, in, in every, every market, but very slowly, but that's this first wave. And I think it's more like, you know, people knocking on the door, how do I get in and. And do something here where I that is like what I'm able to do elsewhere without really thinking through any of the consequences without thinking through any of the other longer term system reforms, just get the ball rolling.

So that's what I mean by the end users being sort of a catalysing force for, for, for initiating change. But I, I will say this, Joseph, I think that that Wave Two, if, if, if, if, if. If you let the end users, get whatever they want, the Asian markets are not sophisticated enough to handle that. So it'll be a balancing act, how far you can go, how much, how much freedom that you can give to the end users before you start running [00:10:00] into, you know, true honest to goodness, old fashioned system integration challenges.

And I think that's what 2025 starts to look like. We're starting to see sort of. Folks anticipating. Well, what happens if we accelerate? What else? What else do we what else do we need to do? 

Joseph J: One last thing about 2024. And this is purely my Kind of non-empirical non-scientific Feeling about it that they seem in a lot of Asian jurisdictions more conversations between the private sector and the public sector where traditionally Asia is very, very being public sector driven as in, you know, we have the government, we decide, we determine where now there's a little bit more conversation.

Between, you know, what does the private sector actually want and private sector actually need is that just my kind of like, wishful thinking? Or did you also witness that? [00:11:00] 

Mike Thomas: No, that's exactly, exactly what I'm talking about. That's, that's, that's, that's. Whether that's end users or whether that's investor community, whether it's the, the, the funds based, or platform-based renewables developers say, we can come, we can do this.

We can do this really fast. We can do this really. Well, we just need access. You know, we have the capital. We have the technology. We put the supply chain together. We've got teams. We want to be on the ground. We see the inherent value and having a position in multiple markets throughout the region. And.

You know, yours is where we want to be right now. And who do I need to talk to? What do we need to do? How do we need to educate? What do we need to change to make that possible whether that's reforms on land acquisition, approvals, transmission sightings, whether that's setting new targets or setting new auctions or policies or opening the bilateral market because a lot of times people want to negotiate something more uniquely. [00:12:00] Exactly. That conversation is new.

And it really started to grow in I think, beginning in 2023, but throughout 2024, and the momentum is very strong, I think, for 2025,

Joseph J: and I promise this is my last question about 2024. Before we talk about the future, if you are sitting now, while we're sitting now at the end of 2024, looking back, is there anything that kind of has Happily or negatively surprised you any events, any trends that you saw in 2024?

Mike Thomas: Thanks, Joseph. Good question. There's a couple of things both on the positive and the negative. On the positive markets like, like, Like China have continued to do reform oriented activities and for, for us at TLG, there was a period of time, perhaps during COVID and perhaps during the I mean, there's always been a little bit of geopolitical stuff going on these days, but it seems like China's [00:13:00] Opening up on the green side has been a positive and we're seeing things happen again.

The negative was coal came back into the conversation Now What is doing there and where it's going and to what extent it is the answer to a problem That exists or an answer to a problem that people anticipate or an answer to a problem It doesn't exist but people worry about it is the whole security of supply and I think the thing that That has motivated that has been demand growth uncertainty So demand growth forecasting It's always been a dark art and then it is a darker art, you know, super dark.

It is the night sky in a remote location dark very Hard to do because now you take econometrics, which is looking backwards and going forwards and that never [00:14:00] captured captures things that weren't in the past. So it's great. You can be very sophisticated, but you can only be as smart as you can extract, information that has already occurred and extrapolate from that in a sensible way. So now you have digitization AI and where the data centres are going to go. So I think on the dark side of this is how much demand growth. Is there really? On the demand side, how many data centres are being proposed in different places, but it's really the same data centre.

We just don't know where we're going to put it yet. So we're going to have 5 conversations. It's in Singapore. No, it's not. It's in Johor. No, it's in Indonesia. It all depends on the grid. You know, it's so, so some of this is, is really complicating. The risk profile of a lot of projects, and I think that is why I put it in the dark side.

I think that's even harder than the coal part. And, you know, the, the call it because people want to keep up, but you can't build a coal plant [00:15:00] very fast. The data centres can be built super-fast. So you have it already. You've got a difficult balancing act between those who say the only way to keep the system going is to build more base load capacity and others.

Sorry. Saying the only way you can do anything that keeps up with demand is, is to do faster to market faster to market technologies, which, which, which or you need a new, new way of, of doing that. So, to me maybe not the most artful answer to this, but to me, those two things will coal come back and why and who will do it, and will they really make money at it?

Or is it just the first 5 or 6 years? And then all of a sudden, who knows what a back-end risk story? And then how do we parse the demand growth? And what is the appropriate policy settings for a country trying to plan an electricity system? The old-fashioned way with demand coming in 50 to 100 megawatt hyperscale blocks, but [00:16:00] may or may not happen, you know the old saying, if you build it, they will come.

It's not necessarily true. Sometimes you build it, and you pay for it. No, 

Joseph J: I absolutely agree. If you were to ask me that question, what surprised me? 2024 and this is going to be the segue for 2035 is number one that nuclear came back to the conversation something which was in the Kind of woodwork in the in the in the hidden woodlands For a while and the second thing is actually some countries very seriously talking about the phasing out or phasing down of coal fired power plants, which For many years has appeared as just wishful thinking but now it seems it's a little bit more concrete, although we haven't found the magic wand to resolve that but unless somebody takes a takes a Takes a hit.

Yeah 

Mike Thomas: I [00:17:00] didn't mention nuclear. I never really thought it Quite left the conversation because in a lot of conversations in in the parts of Asia where we work that nuclear was really never serious, I mean Whether it can come back in the Philippines is a really interesting question Whether I can get started in a country like Malaysia's but which has looked at this three or four times in my lifetime Is a good question whether any of these markets should be first mover markets Is real, real significant doubt on my mind, but China certainly resumed its nuclear and in many ways leap leapt over a lot and we watched that very carefully.

So, you know, I think that's always been kind of a Wave Three solution for me. And the question was, who was going to do all the pilots who is going to do the work that brought the cost curve down? And whether that was an ASEAN country, or whether that was a larger [00:18:00] Asian market, or whether that was, was, was, was, was, was China so that's the only reason I didn't mention it is because I feel like it's been cooking along all the, all the way.

And all of a sudden, we're back in the conversation, which is wonderful. As I think it's, it's quite an important part of the wave 3 solution, but we're still a way though. The reason I, I mentioned coal was you know, perhaps the most significant words spoken post COP where Indonesia's, promise to roll out of coal, which was something I, I wasn't really expecting. You know, many of my favourite countries in Asia don't make any commitments whatsoever towards, like the Philippines, they haven't really ever said that they were going to go to zero, but they make good progress anyway. I don't think the commitments matter that much.

It's much more a ground game of inches and yards and not inches. Big, big, big bold promises, but it's great to see that. And, and it does change the tone and maybe help people understand that this is still the direction of things. But I, [00:19:00] I still don't know how you get a coal plant financed, you know, without a government coming in or offering a very large subsidy or, or some kind of emergency tender.

So it's, it's quite a complicated little 

Joseph J: It is. And I guess that's a, that's definitely a conversation for another day. It's more not today, but looking now at You know, I call it 2025 outlook, but it's really more, you know, the next 25 years till 2050 and even maybe beyond. What are the kind of key things that you see happening in 2025 or beyond 2025?

I guess the elephant in the room is, you know, the new administration in the US from the 20th of January. We have absolutely no idea what they will do and once they to do it. We don't know if there's going to be any U turns. So let's not try to predict it. I guess if we could predict it, we would be very, very wealthy and very, very hard.

But [00:20:00] but in terms, I mean, we do know that that's going to create some form of. Investment uncertainty, which, you know, people that are investing long duration assets do not like it may also create some kind of disruptions on the supply chain front as well. So apart from this big elephant in the room, and you may have some specific comment on it.

What are the, you know, what are the kind of 2025 and beyond? Kind of, I don't want to call it predictions, but let's call them predictions anyway. 

Mike Thomas: Well, we'll stick out, our finger in the air here and see. So one thing that we've observed and that we are always advising our, our clients, particularly those in the public policy sector setting targets.

Is that [00:21:00] the way economics works is almost never move continuous path. Because like the economics of an investment it's not. It's not that one single factor is improving. Every single factor is always going in sometimes, right? One aspect, like technology costs might be falling, but you're competing against a fuel cost that's also falling.

So which one's falling faster? Economics is, is relative, not, not, not absolute. So what you can have been a situation where you have two or three things that. Don't seem to have changed very much, but they all changed in the same direction, and that creates in, in, in, in our experience, anyway, sort of a ratchet effect where, you know, there might be a plateau and be quiet time.

And maybe people say because of uncertainty but uncertainty is just another way of saying I’ve got four or five [00:22:00] factors and three of them are going one way and two of them are going another or none of them have moved yet, and I was expecting them to it's some combination of that And but during that that plateau when that uncertainty is happening.

What are people doing? And I don't think they've ever stopped. They're still out there building their, their, their land and site portfolios. They're, they're still getting there, prioritizing their connection points. They're still working with the governments and all that.

So my projection is that just like it's always been, you know, we're going to see a period where people are digesting the geopolitical uncertainty the tariff, Trump tariff type uncertainty. They may hold their fire for a little while. But underneath the almost inexorable economics of renewable energy that has just continued to [00:23:00] improve over, over time, quite dramatically at times and steps against what I would say is the, you know, what is the renewable energy competing with? It's competing with, with, with gas. Which is demonstrated its volatility uncertainty and so maybe it will be low, but then it could be high again and people have to make, like you say 20-25-year investments.

So, the fact that I might have 2 or 3 good years doesn't necessarily mean that I have enough. So, so I look at this and I think of it as a ratchet and I, I think that. What happens then is, will 2025 be a plateau year or will it be an acceleration year? Will it be a year of preparation and readiness and 2026 will be a year of a pop or an explosion, or will, will some of this uncertainty resolve a little bit faster And I'm kind of in the camp that it will go faster, despite all the uncertainty that the renewable energy will accelerate [00:24:00] with or without the U. S. If the U. S. closes off to China, where is this stuff that China makes goes find another home in Asia? Maybe that's a good thing for Asia in terms of cost. Most of China's exports and energy will be renewable energy in related If that comes in at a lower cost and it's more insulated against lower natural gas prices, you know, for example, so again, you that that that point that it's all about the relativities of things so I'm I guess I'm hedging a little bit there, Joseph, because, you know, it doesn't really require a, a, a, a, a huge pop all of our renewable energy clients are going to continue to be very bullish on renewable energy opportunities. They will be frustrated by grid connection timings, just like they are all around the world. Welcome to the club policymakers will. We'll set targets that don't necessarily have the full system support the [00:25:00] planners will scratch their head and wonder how on the world are going to do that or, you know, without, without traditional technologies, then solar hybrid will come in and, and, and, and compete against, mid merit gas, maybe it's worth saying 1 more thing about that.

I mean, the Terra Solar project, it's just 1 of many global emerging solar hybrid projects. But in Asia, where if for gas is imported as in many markets, and is therefore the more expensive side of the gas pricing curve. If there's, if there's land and a reasonable solar resource. You know, I think what Terra Solar shows is that it's a, it's a, it's a competitive against imported LNG.

And that's a project that goes you know, sort of semi baseload type power from 7 am to 9 PM. You know, that's a pretty significant [00:26:00] chunk of time, and many Asian markets do have land and solar enough to make that work. And even if their solar is not quite as good a 10 percent change in the price of solar panels or a small improvement starts to offset some of that.

So I, I look at, I look at those hyperscale projects, and I, I. I get really excited. I think that's that we start seeing more of that emerge in in 2025 and gas will have to start finding its, its role for mid merit and backup, but. Maybe not quite as much as, as what expected anyway, it's just a, it's just a curious, curious thought.

It's how, how will the hyperscale solar hybrid. Battery projects, how, how. How many more of them will we see in Asia is really my, my, my biggest, my biggest question and I, I think the [00:27:00] economics are quite attractive, and I think it would be kind of a shame if we got to the end of 2025 without saying, you know you know, four or five others.

Joseph J: Right. I mean, the key to that is really the energy storage part of it. And if you look at, you know, all the experts, I don't think there's anybody out there who disagrees that the price of energy storage on a per kilowatt hour basis is going to either fall or dive over the next, you know, two to five years.

I think there's a consensus on that. And the other thing also is that there are new tech newer technologies coming through which are going to resolve some of the critical metals. Yeah, situations as well. And those are developing pretty fast. And there's a small experimental project called China, which, which, which kind of serves as the at the hotbed of, of, of [00:28:00] experimentation there.

So, so that says, I mean, that, you know, my, my, my feeling on, on, on energy storage is quite strong. Plus, on the other hand, I'm not even talking about things like vehicle to grid you know, with the EV kind of popping throughout popping up everywhere. But in terms of going back in terms of nuclear, do you feel that although we've been talking about you, I mean, like we talked about before, I mean, Asia has been talking about nuclear forever.

You've got several countries in Asia that have. Nuclear power agencies or research institutes. Some of them even have small micro test pilots in universities or whatever it is. Do you think the time is ripe for a little bit of a pop on that or you would still be a little bit cautious on it, especially for Southeast Asia?

Mike Thomas: The [00:29:00] time is not wrong. It's not exactly how I would recommend just any country spending its resources right now mostly because we took a, quite a detailed look at setting up a nuclear program in in one ASEAN country. I'll just leave the name out for now. It doesn't really matter. About the.

20 years ago maybe 15. And you know, it was it went down some, some ways, but you really wanted the, not the first of a kind or the, you wanted to get to the nth of a kind. You had so much cost to amortize over in terms of the setup and the safety and the, and the team and all of that. And, and the U. S. experience with, in Georgia with Vogtle was, was, was sort of that. It was, it turned out to be much, much, much more difficult and expensive to assemble the whole, You know, logistic supply chain to build the [00:30:00] station plus, you know, the learning for the first one and so many times and then they stopped and then the whole supply chain got disbanded and then pretty much back to start up again if they were ever to do another one.

If you're not prepared for, for that. I'm not saying everybody's going to have the US experience. I would certainly not expect that. But the first one is going to be more expensive. I mean, if it's not the most expensive one that you build, then you're doing something wrong, because you've got to, you've got to establish so many things that don't normally exist, and people don't fully appreciate what's involved in building that, that net, that network of, of, of support.

So, that first one's got to be more expensive, and it better be followed by, You know the second the third and the fourth and the fifth one This is where China just excels as it put things on a long pause for a while it re Adjusted its technology focus And now it's [00:31:00] it's unleashing them at a at a more rapid rate and capturing again Once again the scale and everybody looks at it and says oh, it must be so cheap But I don't think people look inside quite enough.

So when I look at an ASEAN country for sure I don't see that I see the first and maybe the second, but I don't see the, the, the, the run of run to end. So unless you're really, really wanting to be at the, the avantgarde contributing to the world's knowledge base of pilot programs and wanting to do it on a managed scale test or something, you really have to go in knowing that that's what you're going to do.

And, and maybe, maybe Malaysia's best place for that at the moment, because. Because it is, it has looked at this before, but I, I'm, I'm more sceptical about other markets, not, not quite being big enough. It's just, that's the only part. The conversation, I welcome the conversation, really important conversation.

Whether 2025 is the year [00:32:00] that we keep talking or start doing, I, I think I think it's still talking. So I don't, I don't have that one on my bingo card for 2025. Maybe some announcements, maybe some, some, some teams, maybe some, some focus efforts, some study tours, but I don't see anything close to commitments yet.

And partly it's because of what you also said, Joseph, is that the falling cost of storage makes it less and less necessary to move to nuclear super-fast. You know, you can offset a lot of the detriments of solar with cheaper storage. And with the exception of the more equatorial Asian countries, which have a harder time.

You know full year high load utilization, so you've got to figure out what to do, but more seasonal systems like the Philippines You know you put a [00:33:00] nuclear unit in and what do you do in? The third and the fourth quarter when it's cooler and demand is really low You know, how do you how do you actually make money from a nuclear unit during those periods so that's There's no heating load, you know, to pull, pull thing, pull things up.

So yeah, it's a bit of a head scratcher for me as to how, how far to go with that. But that's you know, for, for Asia, but certainly China is, and then if China exports that eventually is able to do so more effectively than, than I, I think all bets are off. But to me, that's still five years from now.

Joseph J: To, to put one of the, in your head, one of the answers could be you know, S. M. R. Small Modular Reactors. Yeah, you know of the 10-megawatt, 30-megawatt, 100-megawatt size. And then I think the parameters are a little bit different, 

Mike Thomas: completely, completely agree with that. And I, I guess I [00:34:00] guess that then, then you can see the scale.

You can see the repetition. So, you know, if, if I'm going to be wrong, let me be wrong there because I think that's really, you know, the most, the most promising solution for many of the countries. The other is, you know, people don't always appreciate their, the amount of solar and, and land-based wind that's available in Asia is not enough to keep up with demand.

So, you know, there, no matter what one thinks about. You know, traditional renewable energy, it is limited, and electrification will, will, will, will push demand up fast enough that we'll start running out of the best and good enough sites you know, before the 2030s are over. And so at that point really, we're on our own in terms of what's next. So I think looking, looking beyond 2030s, you know, to 2040s, that's my wave three thing. You know, somebody's got to be doing something with [00:35:00] SMRs by 

Joseph J: then. 

Then. Well, one, one final question about 2025. So, you know, with The Lantau Group, you guys got clients all over.

All over Asia or you work all over Asia your clients are from all over the world but in terms of just getting a sense When you talk to them about how they feel, and this is not empirical, but just purely subjective. How do you feel about 2025 and beyond? Do you see the same level of interest as this time of last year?

More interest or less interest? 

Mike Thomas: It's interesting. We're seeing more interest going into 2025, with the back half of 2024 was stronger than the front half of 2024 for us. We're, we're still growing, so some of that is maybe just our, our natural riding, our, our sort of our, our natural level as we grow. [00:36:00] Of course, we're going to do more, so, it's a little bit circular, but can't really say that the world is getting to do more we're just doing a larger share of it. I think there's a little bit of that. But my sense is that you know, the Philippines is a good barometer for us. We've, we've worked there for 20 years since the market started and it is just as busy and active, maybe more. So we're saying maybe, maybe more gas to power questions in in, in different markets, I, I, I'm.

I'm guessing we'll see more gas to power tricky gas to power questions, tricky commercial merchant exposure gas to power questions than we saw in 2024. 2024 was mostly renewable energy and larger business strategy questions, and I'm seeing more gas related advisory opportunities for us because You know, people are realizing it competes with renewable energy and the batteries are there and the [00:37:00] molecule management is much more difficult, but I think the volume of activity is, is it's probably increasing because most markets are seeing demand growth. increases Yeah, that's really driving a lot of it. 

Joseph J: That's great Mike any kind of concluding remarks or any kind of like summarizing thoughts That you have or any, you know forward looking statements are welcome as well. 

Mike Thomas: Yeah, three things come to mind joseph one is I think the age of the solar hybrid More customized solar battery load shaping opportunity at a larger scale is, is upon us.

We're seeing that in the Philippines, and we'll see that increasingly throughout Asia. So that's, that's a milestone. It's not just intermittency anymore, it's packaging. And I think that we're getting there. I think second, the [00:38:00] complexity around, integrating gas into the system has increased because it competes with renewables, and so the traditional role that gas has played in Asian markets, if it's domestic gas, often it's been baseload, and that makes less sense.

It now moved towards more flexibility, but flexibility is a tricky part. If you're dependent on the LNG, supply chain. So, if you've got a domestic gas resource and a large pipeline network, you've got line pack, you've got some, some the mobility to, to Use more use less, but the LNG means more trading more trading orientation.

So I think for 2025, the solution to gas will be to try to figure out how to do flexibility in either trading across markets of electricity so that you can continue to use gas or getting more adept at trading your gas. So that you can divert your cargos when you really don't need one, when [00:39:00] it turns out to be cooler than expected or demand didn't grow or something.

And then, and then I think the third, the third part is the tricky part, is the government regulators and markets themselves have to raise their game. The, the markets that win in the energy transition are the ones that provide options. Options for investors provide safety. You can say, oh, merchant markets are risky.

Yes, they're risky if that's all you've got. But if you don't have one at all, if there's no merchant market at all, then investing in that market is risky because you can't do it at all unless you have a contract with a merchant market you can invest with a partial contract or with us and you can do more flexible things.

So the more the Asian market Reforms continue like what we've seen start to happen in in Malaysia and have been announced further in Vietnam and, [00:40:00] and, and in others where there's more paths to market. We're really, really excited to see that because I think that without those additional opening up options, the energy transition does not progress.

Fast enough in Asia. So those are our three things. The hyperscale solar battery you know, enter centre stage gas flexibility, more than gas molecules becomes the, the, the mantra and the markets have to open up to provide the investors with green energy. Alternatives so that they can manage their risk and their portfolios.

If I see a little progress in all 3 of those areas in 2025, then then that that'll be a great, great Santa Claus kind of moment. 

Joseph J: I will write this down and then when we do this again at the end of next year in 2020, 2025, we'll see where we're at. I, apart from the global geopolitical [00:41:00] complexities, increasing complexities I, you know, my, my experience, especially during my recent trip, In, in Asia it is, it's very, very, very bullish.

It's not going to be linear. There's going to be quite a few bumps, but one, I think we can be bullish. 

Mike Thomas: Yeah, I do too. We're, we're super excited about it. Joseph is really a great place to be and look forward to seeing you here. 

Joseph J: That's great. Well, Mike, thank you so much for your time. I really, really appreciate it.

It's always a wonderful conversation. 

Mike Thomas: Joseph, it's great fun. Great way to wrap up the year. Who knows how much of this is true, but everybody can take it with a grain of, a grain of salt. If the energy transition rolls on, it's going to do whatever it does anyway, and we're just going to be along for the ride, help people where we can.

It's good stuff. 

Joseph J: And, and we will enjoy the ride indeed. 

Mike Thomas: Exactly. Exactly. All right. Thank you 

Joseph J: again, Mike. Thank you so much. 

Mike Thomas: Take care, Joseph. Bye bye. 

Joseph J: [00:42:00] Thank you.