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Kind of thing today is Wall Street returns to a T plus one stock trading after a century Only in Bloomberg. When people read that kind of story, and maybe I'll find one other person that cares about this, Larry Tapp, He's head of market Structure a Bloomberg Intelligence. Larry, can you explain to us what is going on here? To explain it? Like I'm five years old, because when I started the business, I think it was T plus seven. That was a gentlemanly timeframe. Now it's T plus one.
What's going on?
Not a problem, Paul? Yeah, you know, starting today, securities traded today will actually settle tomorrow instead of on on Thursday. So what that means is that we buy I buy Apple today, and on tomorrow tomorrow, I get the shares in my account and my broker takes the payment out of my out of my account. Now for most retail
it's not going to be that big an issue. It's much more of an institutional issue where the securities in cash don't reside at the broker, where they reside at a third party custodian, and that becomes a little more complicated.
So how does it become complicated? Like it seems like a pretty straightforward thing, right, So where do the problems lie?
Well, there are there are problems will lie in four or five different areas. The biggest problem is with foreign exchange. So let's just say I am Aberdeen and I'm located in Scotland or wherever, or in London. If they buy Apple, they're going to have to actually send over currency pounds and convert that to dollars and pay for that. The problem is that currency takes two days to settle in standard currency settlement, whereas the securities will settle in one day.
So if they buy Apple today, will have to pay
for the securities tomorrow. But if they send over pounds to pay for that to cover that, the pounds won't actually get converted to dollars till Thursday, which means they won't have the cash there on time, which means they either have to finance that purchase, or they have to move the cash earlier, or they have to instead of using Swift or CLS, which is the currency settlement system, they actually have to call somebody and say, hey, let's do this on an emergency basis and get this taken
care of. And so that's an issue. The second it has to do with securities lending. So if my security is of my apples out on loan, they have to get that back so that I can actually make sure that can get delivered. Now, Apple's probably not a big issue there, but if it's hard to borrow security, it might be much more difficult to find the securities, you know, if I've lent them out to try to collect a feed,
getting them back maybe a little bit more problematic. Other issues which impact actually everybody in the US is the allocation confirmation process. So if I'm FIDELI or if I'm a big asset manager, I'm not buying one hundred or two hundred shares of Apple. I'm probably buying one hundred thousand or a million shares of Apple. Trays these days don't necessarily occur in these big blocks like they used to. They get broken up into algos and they get executed
in hundred share increments. That said, the und share increments don't settle immediately. They have to be badged up. We have to create an average price. There's a lot of manual or at least what used to be manual effort involved in managing that, and the process just needs to
be sped up. And the close out time is generally nine nine PM for that, and so they have between you know, four and nine to get all that operational stuff done and that just takes, you know, takes time sometimes when when it you know, becomes harder to add all this stuff up and average price it out and break them up into the transactions. Because it's probably not
a million shares of Apple for one fidelity account. It could be you know, ten different portfolios that are buying Apple and it has to be broken up into you know, ten little clumps. And there are a couple of other issues, but those are the big ones.
So given all that, why is a SEC doing this is simply because from a technological perspective, they can, well.
The SEC can do a lot of things, but increasingly people are suing the SEC, so there they can't do anything they want. I think the issue here revolves around the Robinhood issue back in January of twenty twenty one, where they got a margin call to come up with three billion dollars to cover all the memestock buying. And so there's an old saying in the back office that
nothing good ever happens between trading and settlement date. So the challenge there is that if for whatever reason, XYZ broker goes bankrupt, you know, you know on one day, the shorter the settlement period is, the more likely that those transactions get paid for and they don't have to be funded by you know, the industry, because right now what happens is all these transactions washed through the DTCC.
The DTCC, the depository trust guarantees settlements. So if God forbid, a broker goes down, you know, the other side of the isn't broken. But to do that they have to take margin from virtually the whole industry. And so if you shorten the settlement cycle, the risk of failure goes down, and so the amount of margin that you have to put up to guarantee those trades goes down, and so it just takes less risk, It takes risk out of the settlement system.
So Larry, with that in mind, how long are we going to know? At what point when we know if T plus one is working or the difficulties are cropping up, when are we going to know that?
Well, it depends on who we is, the brokers and the custodians and the folks involved that the transactions will know pretty quickly, you know. The problem is that data to the rest of the public probably won't be known for a while. And where we expect to see problems occur would be in the fail numbers. So if if, if, if I have to, if I'm a European, if I go back up, I'm Aberdeen, and I have to pay for Apple and the US and my payment doesn't come
in two things Leiter happen. One is that I'll have to borrow cash from my bank, in which case we may never know about it because it's it'll just be wind up being a loan from X y Z bank to Aberdeen. Or two, the securities will fail and then the fail numbers come out on a delayed basis, so we won't know what the fails wind up going up for a couple of weeks. And so that's where and so and the third issue is that if all hell breaks loose and we have a real problem, that'll be
known in the back offices before anything. And the question is, you know what kind of transparency will we get out of it. Maybe we'll know some stuff from the Federal Reserve if things go drastically awry, or the d DCC, your CEFMA. But they're going to have to They're gonna have to publish that information. It's not like something that we could see on a screen on the Bloomberg screen, right, A lot of that stuff is fairly private data.
All right, Larry, We're gonna to leave it there. Great stuff. Larry tab head of market Structure Bloomberg Intelligence. He is on top of He is the leading voice in the marketplace a back all these markets actually work. This is Bloomberg.
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This is how it was described to buy. Our next guest to me the first time I met him. The biggest company you never heard of?
For me?
Love that My man was I this is a fifty billion this is Arthur J. Gallagher and Company. It's an insurance company. I don't anything about insurance, and maybe that has some something to do with it. But it's fifty four billion dollars in market cap. I mean, it's up ten percent this year of the stock, up twenty three percent over the trailing twelve months. It just up into the right every year. Why haven't I paid it more attention to this one? But thank you.
It's like a family business.
I know.
Great grandfather Pac Allagher joins this year, great grandson of the founder. He's the chief executive officer of Gallagher Insurance. Pat talk to us about your company. You're based on Chicago. Talk to us about a typical customer of yours and a typical piece of business you do for your customers. What are you guys really focusing on these days?
Well, first of all, pall we're not an insurance company, so we don't take risks. We're insurance programs.
So much rights.
And it was my grandfather start of the company, not my great grandfather. But anyway, every single day we get up and we talk to customers about what the things are that they are facing them that could cause real disaster in their business. So this can be a business as large as any of the largest companies in America with professional risk management staff, all the way down to the smallest of companies that you know in neighborhood, and each of these businesses faces all kinds of complex risk
that's becoming more complex as we sit here. We never ever thought of cyber ten years ago. Cyber is a huge risk. Everybody's concerned about it. I tell our production for us, if you're talking to the largest company in America, or you're talking to someone who owns nothing more than a sundry shop, they've got to be concerned about this. And now you add AI to that, and so you
see the world everywhere. On top of that, of course, you've got climate change and weather related issues that are happening across the world, which is one of the reasons why you see such a difficult time, for instance, getting homeowners insurance in places like southern southern Florida. The point is that every single company, every single organization out there, faces these risks. What do they do with them. Insurance
plays one role. The other part of a broker's role is to say, there's some things that aren't ensurable, Now, how do we deal with that? What are the things we do to help you control that. So we look at a full spectrum of risk for a client and say, these are the things that we can do to help you deal with that as you go forward, and that is incredibly valuable. We have a survey that we're just
finalizing the details on now. We talked to about one thousand business owners across America and it's interesting to me because it really is a finger on the pulse. They're very concerned about weather related issues. Oh yeah, weather has all of a sudden gone from something that's important on the coasts to something that's important everywhere. I mean, I grew up in the Midwest. We never had tornadoes in
the fall. Now that's normal. So just unfortunately a week ago in Iowa there was a terrible school So people are worried about that. They're worried about tech.
So how many how many? So what kind of customers come to you and you say and they're like I can't get coverage on this, or like I need coverage on this, but I can't get it, or how has that conversation evolved just in the last five years.
Oh, it's huge, So let's let's first of all, a big part of what we do is help people take their own risk. So that can take the form of a large client creating a self insured platform where we ensure excess of large deductibles. It can also go on all the way to the middle market where groups band together to form captive insurance companies. So the first the first line of defense, of course, is to look at all this and say what's insurable. Okay, you've got plants
in Iowa, You've got plants in Naples, Florida. How's that going to shake out? What's that going to look like. Secondly, you've got workers. You have to ensure the worker's compensation. Those types of things you check off the list first. Then you come back and say, these things either shouldn't be or can't be insured. And there, Alexis really is really the point of differentiation, because that's where we bring an expert in to your point. If you ask anybody
out in the marketplace, not everything's insurable. Who's going to help me? If you happen to be a builder. That's a different answer than if you happen to be a school, school district or university. So you have to have people that talk that language, and that is really what differentiates us. It's not just about quoting insurance.
And you're a global business. Talk to us about the business here in the US versus maybe some of the other bigger markets outside the US.
So we are global business. We like to say that any account of any size, located anywhere in the world, we can do and we can be helpful too. If you look at the United States, though, we have a very interesting business here in that it's incredibly fragmented right now. We have thirty thousand competitors. Those aren't people, those are firms. So in your local community, you know, you drive by main Street and you'll see Jones Insurance that's a competitor
of ours. So it goes from those thirty thousand in business insurance, the top one hundred went all the way down to thirty five million, thirty six million in revenue. We did about ten billion last year and the other twenty nine nine hundred are smaller than that. So it's just incredibly fragmented business with professionals of all sizes and sorts around the country. That we have a very strong platform of acquisitions and we bring those people in, we don't want them to leave us. We feel that one
plus one can equal five. Paul, you're in your community, you know your people. You're very good at insurance. But when we bring our capabilities in, when we bring our data and analytics. Now that big account in town, that large contractor the large university that you knew you had to stay away from, let's go get it together. And if that energizes you, you'll be a great fit for our acquisition team.
You're going to sell insurance, No, but it's people I know that so insurance do fair very well. And you spend a lot of time on the golf course too, which I don't figure out that business.
Oh ok, yeah, we are recruiting Paul.
By the way, I think exactly what is a typical acquisition for you guys. Is there a typical size you like or is there a typical revenue.
Number you like? Well, we're not afraid to do large deals, and in the last ten years we've done a number that have reached that billion mark and we're very proud of that. But really if you go back to my comment about size of the availability in the United States, and this is mirrored globally. Most of the people who are out there that are private are smaller. And by that I mean our average acquisition size is probably somewhere
around ten million in revenue. Okay, it's probably owned by two or three entrepreneurs, may have started at their dining room table, or their parents may have started it. They've grown the business to a great size for them in their local community. To your point, Paul, they make a very good living, and yet at the same time, if they want to stay in touch with what's happening in the future, AI, cyber data analytics, et cetera, they need
a partner. And that's what we bring. And again back to the point that we don't synergize out costs and say come in here, get rid of everybody. We just want your book of business. We want to take that platform and really expand it.
That thirty seconds left, Pat, just how's your year been so far?
Years?
Looking great? Thank you very much. The last five years have been terrific, and we look at the future and we're just getting started.
All right, sounds good to me. The insurance business is a good business. They all tell me that, but I just don't understand it.
To be honest, I buy a lot of it. Yeah, I was gonna say, we buy a lot of it. This is very true.
Yeah, I thought a lot of Pat Gallagher. He's the chief executive officer of Gallagher Insurance. Joining Slive here on a Bloomberg Interactive Brokers studio. Again, this is a large insurance brokerage firm, so I have to make sure I get that correct. Matt Palosol always on top of me about that. But I'm just looking at the revenue. Ten billion dollars of revenue, so it's just really extraordinary.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on fo card playing Android outo with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
All right, let's check in with guy. He's pretty good on tech Space, He's okay, he's not bad. On Rock run our senior technology anelsts for Bloomberg Intelligence. On Rock, I was kind of paraphrasing what I think you're gonna say about this report that you know their iPhone shipments are up at gajillion percent here in the latest period. But talk to us about this data coming out of China.
How reliable is it and how predictive is it? And if it's up fifty percent in the latest period, why isn't Apple stock up a lot more today?
Yes, that's a very good question, Paul, And again I have nothing against the people who collect this data and figure it out, but this is the way I looked at it. In jan and Feb this data was down I think minus thirty five minus forty percent or so, and then when Apple reported their quarter, they said, you know what, mainland China, our iPhone revenue grew. So there
is not that direct correlation between the two numbers. And it could be because there are times when Apple you know, sells phone, but it's stuck in the inventory channel in between. Then they put out a sale and then gets cleared up. So it's a question of timing not so much. But the big thing for us is that there is there was a downdraft of negative news coming out of China. It's turned positive two months in a row, so that's a good news. Seems more like a cyclical issue to me.
Than a structural problem people giving away Apple phones not buying it, So that's not the case. So that's a good news. So I think, you know, from an overall point of sentiment point of view, I think this is good news for Apple that China, which in our view is the most important market for them over the next three to five years, and we are not going to see you know, let's say eurobar declining share. I think it's it's going to be okay over the next few years,
even if it goes ups and down. So that's really the big takeaway for us. DAR.
So can I call this a nothing burger? No, that's not true because I say that because you didn't hear it. But Paul was guessing you would call this data a nothing burger. But you're being too polite about it.
I think done a wrong So sentiment vice think about it. The only thing that we've been hearing for almost a year now that people don't want to buy iPhones in China, it's because of the government and nationalism and so many all things. And I think this one tells us that's not the case. People are strapped for cash and if they get a good deal on a phone, they'll buy it. So what do I expect. I expect Apple to go out and do more promotional activities over the next few
months to try and sell more products into the market. Now, not every market is different. Apple's not known to give a lot of discounts globally, but if that's what they have to do in China, that's what.
They have to do, all right, fair enough.
But let's go to the discounts though for a second. So even if we don't say, take this data as gold, but just directionally, Apple and discounts tend not to go together, at least in my mind. What do you make of that?
Yeah, I think this is a new thing for Apple, and again they're probably grinding their teeth and not liking it. But you know what, they have the rest of the world to make up for it. In the US, for example, people are liking to buy the higher end model, the pro model. That helps margins, that helps the adage selling price.
So if they have to give a little bit up to gain market share in China, I think they should do it because you don't want to be branded as somebody a second player in China out there, which is you know, in our view, the most important market for growth for Apple. Otherwise what's going to happen is you're not going to see any growth in China. For that matter, their top line growth is not going to grow, and that's not good for the stock. Also, and ra' talk to.
Us about India. What is it as a percentage of Apple's business today and what do you think it can be five, six, seven years from now.
Yeah, so in our view, apples very small, less than five percent. In fact, when you we have done a lot of work on the number of shipments in India, Apple's market share is you know, less than five percent. But here's the kicker. Ninety five percent of the phones don't even qualify for to be in the Apples you could say ecosystem, which means they're under three hundred dollars. As the Indian economy grows, as the middle class becomes more affluent, I think Apple's going to be a winner
over here. But think about it this way. When we look at the US with per capita income of let's say sixty five seventy thousand dollars, somewhere in that realm, China is around twelve and a half thousand dollars. India is about two thousand, twenty five hundred dollars. So when you look at these three ecosystems, I think I think when we look at that growth driver from five years onwards, that's where you know, India comes in and there's a
massive market there for Apple. But that's not going to happen next year or the.
Year after, right, that's sort of a structural change, et cetera in the market. I don't round what else are you working on right now?
I think the biggest thing right now is what happens at WWDC and whether that's going to be enough to sustain this. You know, I would say optimism that we have seen in Apple for the first time, I would say in the last eighteen months, because we all knew China was a problem. We saw that in the numbers, sales numbers and not very strong. But AI has that outside potential to go out and spur the next sale
off phones. Why because there is a massive amount over forty three percent of the phones our iPhone twelve and below, which is old phones with lower you know, you could say RAM, memory and other things. Now for if they go out and say I have really cool features coming into the phone, you got to go find a way to upgrade it. Now, if some he has a fourteen or a fifteen, they're most likely not going to upgrade it.
But if you have something and I can iPhone ten, iPhone eleven, there may be a reason enough for you to upgrade it. So that really brings a new fresh you could say life and Apple, and that's really important. On June tenth, when they get this developer conference.
All right, I'm sitting on an Apple iPhone eleven. When do I upgrade?
You should update it in the winter when the sixteen comes out or whatever the name they give that phone, because it should have a faster processor, it should have a lot more memory. They'll just make things easier for you. You can watch your golf shows in a little bit easier way.
Very good.
Now, Tim Cook's sixty three, I'm gonna s whitch gears on you? Is there any push for this guy to put out a succession plan of note or things just going so well at Apple that nobody's pushing for that.
See, Tim's done well. The Apple's done very well under Tim. I have no way of predicting what he's going to leave, but I really I mean, in my view, if you were to somehow ring fence the China business. Apple alone is a company that I think, you know, can do can do good by itself. It doesn't really need a massive charismatic leader in order to you know, come up with that. This is a company with a global brand, the products people love, people trust the products, and the
install base is very loyal. I mean, we think somewhere in the mid nineties people can keep the phones. They don't go out and change into a new ecosystem. I think this is a phenomenal business. But you know, you do need certain innovation, but not to the level you need in other technology companies now.
But I wonder if you just need a really good China ambassador within that company.
Yeah, I mean Tim's has been. Tim has been an amazing China ambassador. If you go back, even the days when we had China Tarraff wars, Apple really you know, skated unhurt from there. Now. The only issue we have been having in the last two three years is supply chain problems in China because of COVID. Then after that the consumers slow down and then a little bit negative you know, you could say fights between the US and
China and that has had an impact on Apple. But you know, in our view, if there is there is the way to ring fact that I would say risk. You know, Apple, Apple is a good company to look.
At all right, Honro, thanks so much for joining us on a rock run a senior technology anaels Bloomberg Intelligence. Just looking at the FA function for Apple revenue, the forecast for their September twenty fourth or fiscal twenty four year three hundred and eighty seven billion dollars of revenue, net income, one hundred and one billion dollars in free cash flow of one hundred and four billion dollars.
Look a lot of money.
That's like they make a lot of money.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, card Play and rout Auto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.
We also take a view of Bloomberg ne EF. It's Bloomberg New Energy Finance. They're a research center within Bloomberg that covers commodities, power, transport, industry, buildings, AG sectors, technology, sustainable issues, all to help businesses and companies kind of learn how they can transition as we move to net zero at some point. And today we're going to take a look at offshore wind here in the US. It's been a real nightmare, particularly here on the East Coast.
In some ways it makes sense, big ocean, lots of wind. Stick a turbine in there, boom you have renewable power. The issue, though, is many of the issue has been in pricing. The contracts that were signed didn't account for the massive amount of inflation that we've seen in the last couple of years, and a lot of projects have then been canceled. So the question really is what happens now, particularly as inflation comes down. Oliver metcalf is head of Wind research at BNF and he joins US now in
the Interactive Brokers studio. Ali, thanks for joining me, appreciate thanks for having me on. So I just sort of set up with the problem was where are we now with that?
Well, it's been a difficult last twelve months for the US off your wind industry. We saw around nine gigawatts of off take contracts, so contracts for the generation of these projects get canceled. That's around a third of the contracts that were signed in total for the US off your Wind pipeline. You mentioned there it was because the high inflation, high interest rates have really hit the technology
as well. So it's a really capitally intensive technology and so a higher cost of financing hits off your Wind especially hard compared with other technologies. We're beginning to see a bit of a turning of the fortunes. So we're seeing the first couple of commercial scale off your wind projects start to come online in the US. One has already come online off the coast of New York, and one that will feed Parento Massachusetts is under construction at
the moment. So some good stories beginning. And we're also seeing states willing to adjust this obvioslete mechanisms to account for some of the pain that projects have been feeling recently. So offer developers more protection in the contracts they off take, contracts they're offering, and just simply higher prices that these these developers need to make their return.
So talk to us about just wind research. How is wind I'm sorry, wind power? How is that from an efficiency perspective versus solar and versus other stuff that's out there. How competitors is wind.
So you get kind of higher productivity from a wind turbine compared with a solar panel and that and that's even more productive offshore, and so offshore wind you have more consistent, more consistent wind speeds, stronger winds as well. So that means kind of if you imagine a wind turbine operating one hundred percent of the time, that's kind of the theoretical maximum. You can get between forty to sixty percent of that generation typically on a wind project.
Now that sixty percent isn't too far off the kind of percentage we could see from a kind of conventional generator, a gas or a cold plant.
Oh really, what about like nuclear? It's a nuclear a lot better than that.
Nuclear is much harder to ramp up and down, and so they tend to operate completely as base loads. So you get really high what we call capacity factors for nuclear. So it's operating almost all the time if it's if it's part of the mix.
So you mentioned so part of the issue is the off take contract. So basically, if I'm a developer, you know, Paul goes and says, okay, I'm gonna buy this win from you for this amount of time. He's going to pay me this, which gives me clarity on the how I can go and invest that money. But my costs go up and I'm kind of left naked at that point. How is that being resolved? You mentioned subsidies, but like
what else? Because that gap is very unpredictable. And I remember talking to Siemens North America ahead about that and they're like, we took on all the commodity risk and they're trying to change that now because they're not commodity traders.
But like, how do you do that?
Well?
Yeah, that is that unpredictability that hit developers especially hard. So in the previous contracts, there's ones I was talking about the got canceled. There was very little adjustment in the contract price to account for moving commodity prices to account for inflation. So that's the kind of thing that states are building into these contracts now to kind of better share the risk between a state which is buying
the power and the developer that's building the project. So we're seeing kind of these prices getting index to CPI for example, to certain kind of producer price indexes and to certain commodity prices to make sometimes a one time adjustment from when you agree to that price to when you're actually securing finance, and sometimes you see that adjustments accounting for inflation right throughout the life.
Of the project. That's interesting.
That's the kind of structure we see in lots of other countries that have managed to build large scale off your wind projects globally, and so yeah, from the off your wind industry's perspective, it's good to see that happening in the US as well.
Talk to us about you mentioned the project off the coast of New York. Talk to us about the economics. How much does it cost to build that thing? Hoop hate for it, and just the economics.
So that is a project called South Fork. It was the kind of the first commercial scale offshore wind project in the US that was significantly more expensive than a project we expect to see getting installed today. That's partly because it was it was almost like a proof of concept. So up until then, there are only seven operational offshore wind turbines off the coast of the US so far.
So this is the first kind of larger scale project for one of the newer projects you're probably looking between two point eight to three billion dollars for a one gigawap project, which is a really big off your wind firm, almost ten times the size of that early kind of commercial scale project that just came off the coast of New York. So these are a really sizeable infrastructure investments.
Yeah, what part is the hardest? Because it seems to me that you know, moving the energy from offshore to the grid on land, like you kind of like build a transmission line for that, Like that seems really hard and dangerous. And then I also hear of the transmission plug shortages, so basically the thing you need to actually plug that wind into the grid, there's a shortage of that, and then you've got to build it. And there's all the raw material costs that come at actually building the turbine.
Where's the biggest price increases?
Well, I mean we saw a lot of price increases across the board over the last couple of years. Actually, when you look at a lot of commodity prices that are important for manufacturing of wind turbines, cables, that kind of thing, a lot of those raw material costs have come down. What we've seen is turbine prices have remained
stubbornly high. Wind turbine makers were hit just as hard by rising costs, rising inflation, and many of them were having to deliver on contracts said signed at cheaper rates in this higher priced environment. So that means many of the kind of major wind turbine makers have suffered a lot over the last couple of years, and so they're maintaining higher prices to kind of have a bit of a buffer on their margin, trying to regain kind of
stronger margins. But that means that developers are left paying higher prices for the turbines despite the fact that some of these input costs have started coming down.
Who makes these big tribune things in the ocean, So.
That's companies like Vestas Seamen's Energy. Ge is a big US player and so those I recently spun out. I mean so also it is one of the one of the companies that builds builds the project, so one of the biggest project developers globally. But there'll be the guys putting in the orders with your likes of Vestas Gemen.
I mean, how do you build these things? I mean, how do you install them?
Difficulty difficult. It's tough.
Build them on land, ship them out there, then just plug them in the sand. I mean, how does this work?
So most of what's getting built at the moment is bottom fixed off your wind. So you go out there, you build a foundation that's fixed to the seabed, and then you come out and you build the turbine on top of that. So you build up the tower and then component by component kind of build the big fan.
You can see at the top, I know.
And then also how do you then that question is like if something happens and it gets broken, like how do you fix it? Like what's it like when you go off shore? I mean, what happens when one of these things dies? Just like what's the shelf life of a turbine? And how do you recycle it?
I don't, we haven't.
We don't know that yet.
Yeah, well, well going to your question on what happens when it goes wrong or how you construct it. You need really specialized vessels to build these things. So they call them jack up vessels. So their vessels that kind of have legs that they they extend down into the seabed. Jacks up the vessels, So it's sitting kind of above the water, so you've got a solid platform by which to install the components, or if something goes wrong, to send it out there, take off one of the components
and replace it with a fixed one. But these are really specialized vessels. They cost a lot of money to build. Our estimates around three hundred to five hundred million dollars, and there's a shortage of these things globally at the moment to kind of specialized vessels to install the foundations and then and then the turbines. So if you're a developer, you're struggling to find those slots where you can secure vessels.
And if something goes wrong on a recently installed project with one of these big, big new turbines, then you might struggle to get a vessel to come in and do that, do that replacement work.
Oh cool, Yeah, I mean those engineer people, I don't understand them. They're different.
I mean, it's amazing. Yeah, that's amazing, and we think it's all such an easy fix and it's most definitely not. Ali. Thanks a lot, Ali, Markalf he's joining us head of win research over at you know those super interesting Thank you so much.
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