This is Dana Perkins and you're listening to Switched on the podcast where we feature different B and F analysts each week and they share their research on the energy transition. Now, if you're a regular listener, you'll have noticed that we've featured a co host on a few episodes of the last couple of months, and today he is the host
of the show. I've worked with Tom Rowlands Reese for nearly the entire fifteen years I have been at BNF, and not only does he match my exuberance for the intricacies of the energy transition, but he is also a self proclaimed energy nerd. I've also always found him to be a great storyteller, and today's show was no exception. On the topic of what is a power market? Tom and his guests have managed to explain this question by relying on tandem bicycles as their metaphor of all things.
Tom is the perfect host for a show on power markets because he actually leads our power research teams globally. He's joined today by Helen Coe, who manages our US power team, and Ian Berryman, who is our head of
Energy Systems Modeling at BNF. I think this show might be their love Letter to Power Markets, where at the beginning they share why power markets are an incredible innovation on power systems, before they then get into just how these markets work and the things one needs to consider if they want to know what a power market actually
is and to be conversant with the terminology. If you're a BNF client, we have a wealth of information on power markets around the world and this can be found at BNF go on the Bloomberg terminal or at BNF dot com by going then to the dropdown menu titled Sectors and then selecting power markets, and I would recommend starting with some research notes such as US merit Order Primer, a supply side power Study. We also have an accompanying
live sheet that goes with this. We have a European Power Markets Monitor live sheet and a European Power Monthly, a US Power Weekly and the twenty twenty four CAISO Market Outlook Dynamics in transition. So here we go Tom on his maiden voyage as solo host, joined by Helen and Ian, where they share why everyone should be as enthralled by power markets as they are.
Helen co Welcome to the show, Thank you, and Ian Berryman welcome to the show. Thank you. I am really excited to talk to two fellow nerds on this topic. We've got the head of Energy Systems Modeling here and the head of US Power to talk about power markets, to explain how they work, why we think they're cool. So let's start with that last question, Helen, what's your view on why power markets are so cool?
I mean, I think power markets are cool because it's often like the interplay between supply and demand and economics. When I think about why I wanted to cover power markets and understand US power markets in particular, I think to the fact that I really like strategy games. I like chess, and I like Majong, and I think power markets is a little bit like the ultimate strategy game. I think, like, you have power plant owners and their goal is to maximize profits by trying to figure out
when to generate, when to hit demand. You have system operators and they're trying to figure out how to win the game by trying to figure out how to balance the power market in real time five minutes, fifteen minutes, depending on that market. And so it's this big strategy game that everyone's playing all together. The other thing is that it's regional, so every game is very much unique
to that specific area. It's often shaped by the physical infrastructure of that region, the geography, or the local politics. The way I think about this is like asking maybe you or Ian to draw a cat. Right, everyone knows what a cat looks like. You have an idea of what the cat is. But when I ask you to draw a cat, it's going to look very very different. Depending on just the ears or the whiskers, you're going to have a different cat. And it's the same between
URKOT or KAISO or PJM. Various power markets are regionally very different. You have like urcot's price oidders or kaiso's resource adequacy rules, all really really unique, and as an analyst, it's really interesting to basically figure out large trends across multiple power markets and figure out what that strategy is from a fundamental perspective, but then also get to deep dive into kind of the intricacies of each region.
You've touched on so many things that we're going to explore in a little bit more detail for those listeners who are not familiar with US power markets. By the way, Urkot is the power market that covers most of Texas, KAISO is most of California, and PGM is multiple states in the US Mid Atlantic Ian you've heard Heirlin's perspective, Why do you think power markets are so cool?
Yeah?
Thanks so so I think power markets are really cool because I think they are an amazing, even shining example of real world free markets. And yeah, when I started working at BNF and I got exposed to power markets, my experience was really like, Wow, these things they just really work and they're sort of just beautiful in their simplicity. And I think that's for me, that's what it is. An electron is an electro on. Electricity is electricity. It doesn't really matter where you get it from. It's all
the same. And it's sort of like that where theoretical the sort of beauty of capitalism can actually be applied in the real world and really work and deliver, for the most part, incredibly reliable power that very infrequently we do without. And it's often very cheap considering the amount of value that it brings to our lives.
I mean, I think that is a really true statement that I would agree with that power is very cheap compared to the value that it brings to our lives and maybe we can probe that a little bit more later, and I am sure we are also going to join this podcast talk about some of the shortcomings of power markets.
After further learning, I realized that also the power system is not always as amazing as I make it out to be.
But for the most part, it's pretty good. No, But I think it's a fair point that before we talk about where the glass might be a little bit empty, there is a lot of water in the glass. Power markets are by and large, they serve an important purpose and actually kind of leads to my next question because we're not here talking about power systems but talking about power markets specifically, which is a component of the power system,
and not all power systems have a power market. So just to put power markets in context, can we talk a little bit about what the alternatives to having a power market are before we go into the details of how the power market works. What are the other options?
You're right, Tom, not everywhere has wholesale power markets in general. I mean even in the US, you have various different types of power systems. In the southeast or the Southwest, you have a lot of vertically integrated utilities, and those are single entities that own both generation, transmission and distribution.
You're referring to the southeast and southwest of the US, right, yes, okay.
Yes, correct, And I mean the price of generation is then based on the capital cost of building those power plants and plus a rate of return, which is rate based, and it's typically the dominant model that we see across various other power markets, like across Asia and China or Korea. They're kind of it's been our version of like vertically integrated utilities is just state owned utilities, and that's just when the government owns and operates the entire electricity supply
chain of generation, transmission, and distribution. Some examples of that are like New York Power Authority or Tennessee Value Authority in the US.
I mean going back, if we go way way back, you know, because I think a lot of our thinking is that the natural state for power systems you have either state owned or regulated monopolies, and then eventually they decide to introduce the liberalized power market. And you see, that's what's happening in various parts of the world like South East Asia. But if you go back before then
power was a completely unregulated market. You know, you had people like Thomas Edison just building generators, building their own wires going everywhere. Then their competitors would be building their own generators and their own wires getting everywhere. So how did we move from that to the sort of the regulated picture, which then then maybe tease up then going into the liberalized pictures. Seems like there's been a bit of a journey in how we've structured the business of delivering power.
I mean, some particular examples would be cases where you have the sort of centralized dispatch model, which can often fly in the face of better economic outcomes. So an example of that where it would be where a state of utility is signed a contract with a coal plant
to provide a certain amount of power. Meanwhile, you've got end consumers who want to put solar panels on their roof and reduce their daytime consumption, and if you don't have everything in place to allow that, you might get stuck with a system where you're sort of forced to burn this coal and you don't have those price signals in the market which would get you a cheaper system overall.
So we describe power markets as being this very pure form of free market capitalism, but it exists as a unit within a sort of a regulated box, and there are parts of the system outside of that market for supply and demand that are heavily regulated.
I think, just to add on Tom, when you threw the question around the history of power markets, like I often think utilities are like these naturally regulated monopolies. When I studied power markets, very much like I assumed that when we think about utilities, they were natural monopolies that roughly around, Like, at least in the US in nineteen ninety two, we started liberalizing markets right so with the Energy Policy Act, and it basically enabled independent power producers
to basically produce generation. And that really came at the same time as you had all this grid enhancements in advanced metering and also new policy announcements like for quarter A eight which allowed for independent system operators, which happened roughly in nineteen ninety six. I think, like the point I'm trying to make is that at least in the US, we went from kind of very decentralized markets to centralized markets, and we're kind of returning into decentralized markets again. When
we think about power markets in general. What's interesting to me is the fact that their constructs that we pretend are like really solid, but they actually ebb and flow and change over time quite a bit.
I think that's a really great point. And actually I wish I could remember the dates. It's a similar story in Europe, and I know that there was a European Union piece of legislation which the date of which and name of which I don't remember, which create did the equivalent thing in Europe, except maybe much more consistently than in the US, because all EU companies have something resembling
a liberalized power market. But aside from that, I think you make a really important point, and because we're going to talk a little bit about power markets and the energy transition in a moment, and I think it's really important to understand because a lot of there are maybe a lot of challenges that need to be resolved, adaptations that need to be made. These power markets, in their
current form, they're not an inherent truth. They are a construct, a relatively recent construct of something that has been continually evolving, and so there is no reason why they can't continue to evolve. So to t that up, why do power markets matter? For the energy transition, very very high level. They matter because they determine who gets paid what, and
so you can there's no fixed design. There's a lot of standardization around the world, but there's no central global government that tells you how to design a power system. And that choice there of who gets enumerated what for providing which service dictates who are the winners and the losers in those markets, and we try to do that in a fair way.
They matter for the energy transition because things like wind and solar very famously don't have a fuel cost, and so if you get enough of them on the system, you can get power prices falling, going towards zero or
sometimes even going negative. And that becomes a challenge because if you want more of these things on the system, if you know that they lower overall costs in the system, but they're not getting paid, then the power market is really crucial to determining how we eve enumerate those assets.
It's a really great point, and Ian just to follow. We said Ian is the head of energy systems modeling. For a lot of listeners, that might not mean anything in particular, but Ian is the brains behind a lot of our neo reports, and in particular the Nephan model that models what gets built in the power system. And I note that you know your model is based on what is the least cost system to keep the lights on?
And it's really interesting because that doesn't produce necessarily the same outcomes as a model that was built around what would you build based on remuneration in the market. So there's a discrepancy there between the value it measured one way and the value measured the other way exactly. So we've kind of talked around the topic a little bit. We've talked about power markets in abstract terms, and I know that Helen and Ian you are both chomping at
the bit here to explain how power markets work. I'm going to start with Ian because Ian has this analogy that he's been absolutely dying to share with us. So, Ian, how do power markets work?
So at its core, a power market is generation, transmission, and distribution. We're just going to focus on generation first, so this is where we create power. We do this in power plants. And the way I want to think about this is the analogy of a tandem bicycle. Think of each cyclist as a power plant. The pedals is
how they contribute power to the grid. The grid is the chain connecting the bicycle, and so the first thing you notice is that for the tandem bicycle to work, each cyclist or each power plant has to be pedaling at the same speed. The same is the same is true for the power system. And so let's just assume
that demand is constant. That's broadly the equivalent of the bicycle pedaling across the flat and so obviously you still have to add power if demand is constant, So those cyclists, those power plants are still contributing power.
Now.
Interestingly, what happens is if demand increases. We can think of this as the bicycle reaching a gradual incline, so it's going uphill now, and so for the system to work, the cyclists have to keep pedaling at the same speed they were before. And I think intuitively, anyone who's cycled before will know to keep pedaling at the same speed. If they're going uphill now, we need to pedal with more effort, and that's what that's what happens in the
power system. So if demand goes up in the system, the power plant connected to that system have to generate more power to meet that demand. The opposite is true as well. So if demand falls, you think of that as going downhill on this bicycle. Each of those cycles or power plants now has to contribute a little less power, but as always, they have to keep pedaling at the same speed. That speed is in Europe fifty hurts, so fifty times a second they're peddling, and in the US
that's sixty hurts or sixty times a second. But that's the sort of very basics of how power system strings together. And obviously the case of two people on a bicycle is very simple. There's many, many, many many power plants in some of the larger systems, and things start to get a bit more complicated. But that's the basics of how we balance supply and demand in the power system and coordinate synchronization of power plants of generators.
So, actually, let's dive into this because I feel like you've framed the criteria that has to be met. You know, let's say this isn't a tandem bicycle. It's a bicycle that has thousands all pedaling on it all at once. And although this isn't true in real life, we've decided that they have to maintain the same speed of pedaling. So that's that makes sense. That's the challenge that we
have to meet. And as you say, you go up a hill, in order to maintain that seats top of pedaling, collectively they need to put more effort in, and when they're going downhill they need to put less effort in. In a way, I feel like the bicycle analogy states the problem that the system has to keep spinning, and there's lots of different contributors, all of whom are putting in effort, and they might be putting in different amounts of effort. So maybe you don't have to carry on
using Ian's analogy. But what I suppose we still need to understand is how we telling all of those cyclists individually, or how those power plants individually, how much effort they need to be putting in, and what is the role of the power market in that. How does it do that?
So let's take Ian's analogy and say that they're every cyclist or bicycle is a power plant, and all of these cyclists are basically cycling at various different class like
they're paid at different costs. In a power market, we often think about basically like the entire fleet of power plants or the entire fleet of cyclist, and every different cyclist is kind of being paid to cycle at a different costs, which we call short run marginal cost for power plants, and they're kind of stacked from the cyclists that can cycle at the cheapest amount to the cyclist that can cycle at the most expensive amount. So like an all star superstar cyclist.
Stepping out of the analogy for a moment, because I think you've talked about a really important concept, short run marginal cost. Can you just define that in literal terms.
It's just the cost to basically generate electricity.
Of an individual plant.
Of an individual plant, and it's often determined based off of the fuel costs the operating expenditure of any given power plant. In general, for renewables, that fuel cost is zero or minimal, and for other types of thermal generators it's based off of the thermal recas source like coll or gas.
So, to make it really clear for people not familiar with this concept, this short run marginal cost doesn't include the cost of building the plant. It's the instantaneous cost. It's the difference between deciding not to generate a megaa hour of electricity and generating it. How much does it cost you to decide to make that decision precisely?
Yes, And so I mean if we're going to get out of the bicycle analogy. The stack of like short marginal cost of every single power plant based on the least cost to the highest cost is known as a merit order. And what determines power prices is where that supply of resources hits demand. So demand might be changing various amounts throughout the day, and wherever demand hits the
cost produce electricity. That is then the power price at a power market, and all the generators that are less than that power price ends up generating electricity and get paid that power price, and everything that is more expensive to actually generate don't.
So just to really, I only want to spell this out for people who are not familiar with this. And by the way, we have a great note on merit orders that we published recently if you want to see more. This is like, if we're thinking in economics terms, this
is a supply curve for power. You stack it up with who would be willing to deliver power at the cheapest price, all the way to the ones that would deliver it at the most expensive and collectively, when you sort of add it up, that gives you a curve that says how much the price of power should be
at different degrees of demand. Correct, And then the idea is is then that if everyone is acting logically for a certain level of demand, we should get a price should be formed because of all the different players basically playing in their bid. And everyone who generate is everyone who is generating at or at a cheaper cost than the power price, and everyone who sits idly not generating for them it would have been not profitable to generate.
Is that what we're saying? Yeah? Got it? So the price is maybe a byproduct of balancing supply and demand rather than a measure of the inherent value of the power. Is that a fair statement, I'd say so.
Yeah, it's it's definitely a way to figure out the balance between supply and demand.
Got it? Ian? Yeah, do you have anything to add to this description? Can you relate it back to your cyclists? I can, Tom, okay, because Helen Helen broke it down into literally how it works. Yeah, let's related back because I do think your cyclist analogy is kind of is very evocative and cool. So let's see if we can map it. But what Helen just said onto your analogy. So what Helen just said was great, that's exactly how
it works. The one thing to add is that the largest markets, and when we talk about power markets, what we're generally describing the wholesale power market is traded in hourly blocks. And so we do that analysis. We list all the cyclist or power plants from cheapest and more expensive. We go our power supply curve to where our demand is, and then that's the price that's set. But we tend to set that price for an hour at a time. And I think it's.
Quite obvious to see that the actual power system, we don't all coordinate our actions as consumers to keep demand constant for an hour. So we'll sort of peg the average amount for an hour where we think it will be. But then within that every second, every fraction of a second, people are turning on kettles, TVs, computers, etc. So the actual instantaneous demand varies quite a lot. And so this is where we get to the next layer of complexity
is ancillary surfaces. And this is sort of an umbrella term to describe that everything has to go on under the hood to keep those finer adjustments going, to keep the system ticking along. And so one of the ancillary services to mention is inertia. So to go back to our bicycle, the way to think about inertia, So inertia is if everyone's pedal was really, really, really heavy, and so it takes a lot of effort to change this speed at which those pedals are moving. So this is inherently.
Really badly designed bike.
Well, technically everyone has three pedals, so it starts getting confusing. But so imagine these three pedals are really really really heavy, and if you want to go up a hill, this is a good thing because it means there's a lot of energy in those pedals. So for a brief moment after we start going uphill, energy can be lost from that spinning mass of the pedals and given to the system and we don't really notice. So inert is a good thing because it makes the system a lot more stable.
One of the great things about the traditional form of power generation coal and gas, et cetera, is they have these great, big, hulking steam turbines, and I mean there's huge power output goes through these things. So they are just like monumental masses of spinning metal which add a lot of inert to the system and keep everything very, very stable. And so I mentioned the speeds we were
spinning out before, So take the US as an example. Again, sixty times a second, we can actually measure inertia, and when we see the pedals slowing down slightly, that's the signal to the rest of the system to either or subtract energy to make things more stable. And this is second category of nilary service markets we start talking about frequency regulation and other things, and these are just I mean, various markets have will have five minute trades for these
and et cetera. But they're just basically you're on call to provide slight adjustments in power output to balance that divergence from what we said the power level was going to be for the whole hour versus what it is in this five minute interval or this one second interval, et cetera.
So does that mean there's cyclists maybe who are on this bike whose pedals are spinning, because everyone's pedals are spinning and they're not actually pushing at all necessarily, but they're they're sort of moving their legs without really pushing, but if there is a slight adjustment up or down, then they're spinning pedals and maybe a little bit of input from their legs will be making those corrections.
Yeah, So they can either be completely idle and waiting and raring to go, or they could be just at say eighty percent of their capacity and they've got room to move either up or down. And how much power they contribute got it?
And so who's paying them? Is there just a separate market that they're involved in to get paid for doing that.
Basically that's known as ancillary service markets. It's a secondary market where like resources are just paid instead of in terms of dollar per mego hot hours, so dollar of energy into dollar per mega loat of available capacity. So it's just a payment of being available aus some type of performance adder.
So then there's another market structure that gets talked about a lot that can be overlaid onto all of this, which is capacity markets. So, Helen, do you want to explain the role of the capacity market.
They're actually quite similar to ancillary service markets and that it's payment of availability, but instead of it being payment of availability for like instantaneously ramping up or ramping down at like a five second interval. It's kind of payment
of availability for given long term time period. Capacity markets think of it as like long term planning, So it's having resources available or being able to have resources available at like summer peak demands or winter peak demands, and resources, particularly thermal generation resources are paid to basically be available at these peak demand periods.
So, to take it back to Ian's analogy of the bike, there are some cyclists who most of the time aren't really pushing and therefore are not really making any money because everyone's getting paid for pushing. But they've been paid to come along for the ride, to be on the bike because we know that at some point there's a really steep hill and they're going to be needed for that steep hill. So they weren't otherwise going to come
along on this ride. They were going to go home and have a cup of tea rather than be on the bike. But there's this market that says, we know how many people were going to need for this entire journey, and so even if instantaneously you're not doing much, we are going to pay you to just come along so that when you're needed, you're there. Is that a correct mapping of what you've said onto the bike analogy.
I think that's that's perfectly right. But there's also another reason why you'll have spare cyclists too, and that can you continue ther bike analogy. Sometimes people fall off the bicycle. So this happens, very terrible bike people fall off it. Yeah, but I mean basically, all power systems, to ensure stability
and reliability, should be keeping around enough spare capacity. So if the largest generator, like the strongest cyclist, happens to fall off, there's enough spare capacity elsewhere in the system to come online and fill that gap.
Got it. So we're planning for a certain amount of carnage in the journey. I want to move on to a really important part of this discussion, which is how power markets need to change during the energy transition. And we kind of touched on some of this already. We talked about maybe the price goes really low when there's a lot of wind blowing, which is kind of like
some of the cyclists on your bike are inconsistent. Sometimes the wind blows and they react to that by pedaling really hard, or when the sun shines they pedal really hard, and everyone else has to adjust to that. But using Helen's idea of the merit order, you can see that you end up in the really sort of low price parts of that curve. And I mentioned that the price that is set in a wholesale power market isn't necessarily
a measure of the inherent value of the power. It's just a byproduct of this system of balancing supply and demand. The analogy I always use is is, in that system of balancing supply and demand, if the wind was blowing really hard one day, and wind in a particular market was generating enough power to satisfy all of the needs of the market, and it has zero dollars per mego on our short run marginal cost, then the power in that market would be free. The price that the market
would form would be free or there or thereabouts. But the value of that power is not zero to society. It's still powering factories, putting people's lights on, running it infrastructure, so it's not truly valuing the power. So it kind of leads me to my last question is we can see how renewables create a new dynamic in this power market system, So how do power markets need to change to enable the energy transition and how could or should they change.
So I think the wind example is a really good one, Tom, And to bring it back to the bicycle, wind is like having a sail on this bicycle because for the most part, wind is there's no pedals, they're not connected.
Sorry, my cyclist that suddenly signed pedaling was wrong. It's a sale on the bike. It's a sale on the bike.
And just like a real world sail, if we get a big gust of wind all of a sudden and we haven't planned for that, we might be pedaling too hard. Similarly, if the wind drops all of a sudden, we need to make sure we've got enough cyclists on hand to pick up the slack. And importantly, that sale is not connected to the chain, so they don't contribute power in the same way necessarily as these thermal generators, so there's
there's less inertia on the system from having wind. Taking it back to your question about how things are changing with renewables, I think, well, firstly, this discussion about renuneration is really important. Might even throw it to you, Helen, the pp What are they?
What is it? What is a PPA? And how does that? Why does that matter?
For renewables.
A PPA is a power purchase agreement. And what a PPA is is where basically an off taker, usually some type of utility or maybe a large corporate is paying directly to a generator for energy and it's it's a payment of a dollar per megoat hour. It's usually an additional revenue stream outside of energy markets for that type of generation.
Well, I would assert that does the PPA really solve this fundamental challenge or is it just a band aid plastering over it? Because you're you're a generator and you sell it to a customer, and so then you get a guaranteed revenue stream and a customer basically owns the off take that they've they've paid for. But then the value of that off take is still then getting determined
by this wholesale market. Surely, and ultimately, if we still see that value getting crushed in wholesale power markets, over time, people are going to be less and less willing to pay a decent amount for a PPA. So it just doesn't it just defer the problem for a.
Little bit, I would say, So with increasing amount of renewables, you're basically to go back to the cyclist's analogy like you're going to have a lot of bicycles that are either going to only be cycling when the wind is blowing or only be cycling when they're sunshine, right, and so you end up needing more cyclists that are able to actually start and stop or cycle harder or cycle slower, depending on the specific cyclists that only cycle when the
sun is shining or the wind is blowing. And so power markets need to change in a way to like incentivize cyclists that can start and stop really quickly. So maybe having more nuanced capacity markets, or like additional ancillary services, or even rethinking the entire structure of how we think about resource planning. Those are all different things that probably as we have more renewables, will need to actually consider.
And that there may not be a perfect way of doing this already. You can sort of see slightly different approaches. I think probably fair to say that the out that Australia in Texas are taking slightly less emphasis on capacity markets and guaranteed payments and more emphasis on having very high emergency pricing, if that's a sort of stretch that definition. So if you're one of the few cyclists that can
still pedal. When the grid really really needs you, you're going to get paid ten times, fifty times, one hundred times what you might normally get paid, and so you can make a huge fraction of your annual revenue just
in a handful of hours. And then other markets they want to manage that volatility and in slightly different ways, so they'll de emphasize how much you might get paid in a single hour, but then the capacity payments, the guaranteed revenues just for sort of sticking around, will be a bit higher.
I feel like there's two problems here. One is, when you have more renewables, you need to have a way to guarantee that dispatchable generation, whether it's thermal generation or batteries, can stay online. And I think what you've both just described to me deals with that problem. The second problem is that the market is not correctly valuing the power that wind and solar is bringing to the market. How do we solve that. Do we have to go back to a regulated system or is there some hybrid.
I think there's definitely a hybrid, And I think that you want to use the beauty of the power system to correctly value renewables, and so that you've got a system which already has a lot of renewables. Since there's energy, we're not using this too much solar, you probably don't want to incentivize more solar in that system.
To answer your question, do we go back to like a regulated system, I think we need probably more regulation of some sort. I use to cover en inergy storage. And a key trend that we saw in one of our market outlooks was that a lot of different regulators were basically creating carve outs in their capacity markets. We're creating top down regulation to like basically incentivize energy storage in a very top down policy way, in a kind
of like integrated resource plans or utility planning process. Current market structure clearly doesn't do a good job valuing clean dispatchable resources. And oftentimes when we think about renewables, it needs to be paired with some type of clean dispatchable resource to actually be able to meet demand. And so the current market structure doesn't work necessarily that well, and so new frameworks need to be made, whether that's fully regulated or other types of different constructs.
I'll just wrap with a thought about both of your responses. You're both power market experts and this question of valuing renewables and the correct way to value renewables. I think you both have different ideas of how that could happen, but it's not obvious. I think this is a thing.
It's a really tough question, even for you guys. Helen made the point earlier that power markets and power systems and the way their structure have always evolved, and so maybe we're looking at the next step of evolution, and there are all sorts of different factors that could determine what the right answer is. So, for example, the way power markets are currently set up, demand is almost completely
inelastic relative to price. Now some of these problems go away with more elastic demand, and we're seeing potentially all sorts of new sources of demand that would be more flexible, would be able to bring that We don't have the answered this question. It's an entire research topic for us. So you know, maybe it's unfair me putting Helen and Ian on the spot, but this is why I think this is such an interesting and you know, for the power nerds of for everyone else, it's such an important question.
So let me just wrap by saying thank you to Helen. Thank you to Ian. It's been a really fascinating discussion. Helen, thank you for joining. Thank you, and Ian, thank you for joining. Thank you.
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