You're listening to a share these podcast, any kind of broader trends that you see out there that are informing your portfolio.
We think a lot about growth of data. We think a lot about decarbonization. The next extension of decarbonization really has been thinking more about a circular economy and what opportunities come from that, which again is not just an esg idea, it's actually also just an economic rationalist idea. Why I use things once and put them in the trash. So I give an example of a really interesting business we've invested in for one of our funds. It's called
viscount Reuse. So when you go to the supermarket, we love investing in all the things that you hopefully you don't need to have heard of Morrison, You don't even need to even realize you use the products you're invested in. But when someone mentioned you go, oh that thing, I use that every day. I never even thought about the decision.
So when you go to the supermarket, fruits sometimes comes in those cardboard crates which get scrunched down, and then when you're moving house you go to the supermarket and pick them up from the back. Increasingly around the world supermarkets are trying to get away from that and use reusable plastic crates. And what's the best way for a supermarket to do that. It's to have one pool provider so that all of their suppliers are using the same
kind of crates. They come into the supermarket, then they get broken down, sent back to you to clean, and then you send them out to their suppliers, and so you end up with this very infrastructure like business. You know, something which is going to keep being used in the next ten years. You're locked in as the sole supplier to one of a duopoly or oligopoly the supermarket providers,
and you can add on some other customers. So that's a business we've invested in that ultimately its growth will come from the world wanting to be more circular, and the supermarkets want to be more circular, partly for ESGM, partly because it increases their margins. Up with this really downside protected infrastructural like business, but something you never thought of as infratructure.
It's a place comes in where there's real value in standardization exactly. It's otherwise where do you send them back to exactly?
And then think of all the ways you can start improving that, like make those traceable, allow the supermarket to know what temperature that product's been at all the time, so they know that has this milk been tainted because at some point in the supply chain there's a failure, they can work out where it was. So the whole lot of ways you can use technology to keep making this dumb things smarter and add value to the customer.
Well infrastructure everywhere. So we've talked a little bit about renewables and especially New Zealand's history with renewable but how do you see that transition going throughout infrastructure investment throughout Australia and New Zealand.
I'll admit something to my shame, having grown up in New Zealand they moved to Australia, and having been on the board of Tilt Renewables when we created it all the way through to when we sold it, I didn't think much new renewable energy development was going to happen in New Zealand. Kind of thought, oh, well, we're kind of done. Know we're at ninety percent. And what I hadn't factored in was the rest of the electrification of
the economy. So how do you go from Fonterra burning coal to turn milk into milk powder to using renewable electricity, cars running on renewabal electricity. See realized there's actually all of this demands. Even when you're at nine percent renewables, Probably in New Zealand will still double its renewable energy capacity over the next few decades. Australia has gone very slowly and is now starting to make progress at getting towards sixty seventy renewables, and that won't actually be driven
by policy. That'll be driven by old coal plants breaking right, so that reaching end of life. So that's kind of inevitable. So there's a lot of opportunity in Australia. Probably the biggest constraints in the moment in Australia is just the scale of the transition required means you're rewiring the whole country. So in one of our other portfolios, Utilities Trusts of Australia, we are a shareholder in Transcrid the poles and wires of New South Wales and Electronet the poles and whis
of South Australia. Those businesses are literally investing billions of dollars to rewire from a system that was based around generating in a few small coal a few big coal power plants, to one where actually there's renewable energy all over the state and you need to connect up your states to manage intermittency, so all of that stuff has to get worked through. So that'll mean there's short term difficulties friction points in Australia, but long run will look
really interesting. And then you look globally, whatever happens out of the big beautiful bill that's going through at the moment. One where another US is going to build a enormous amount of renewable energy just because it needs the power in it is brood economics. The lowest cost form of power is solar or solar plus batteries in the US.
Europe's got an energy independence issue, so it's not just about renewables there, it's actually how do we reduce our dependence on Russian gas, so you need to all have your own renewables. And then Asia you've got growth of demand for energy as well as you know, as people get wealth there in the economies industrialize along with decarbonization pledges, so you think all around the world you see different
reasons for people to be doing a lot more. The really unidealistic way to think about renewable energy, Like you can think about it as an idealist, and I do, but the unidealistic way to think about it just as an investor is actually it's an option strategy. So you know that you can have complete confidence in the trajectory of the world. Over the next two three decades, a
lot more renewables will be built. It's really hard to be certain in the next twelve months which specific solar farm or wind farm will get built because there's a change in energy prices or a change in regulation. You can have renewable energy development options in as many places as possible, with great teams working on them, and then optimize at each point which one you should be putting
your two three hundred million dollars into. Actually taking from being a plan to being reality, you'll find that you're constantly surprised on the upside, rather than kind of having like a single pinpoint bet on one company or one project of that.
Do you think that we can be leaders in the field of how that develops.
I think we already are. Like if you think about New Zealand, had this ADVANTAGEHI built from its disadvantage artists from not having a lot of coal and gas. It got really good at wind generation. And then for Morrison, we took that idea that we've been working on the nineties in New Zealand and started getting options in Australia in the late nineties that we created Tilt Renewables, which we which an infertal investment that we sold twenty one
twenty two. Out of that experience, we set up Long Road Energy for intilling the New Zealand super Fund in the US. That's been a phenomenal investment now worth several billion dollars. Took that to the Europe, took it to Asia. So yeah, and that's just really kind of slowly over decades, reinvesting in the fact that you've got to hit start on the world and something they need more of.
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