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2026.10.05 | TB | Energy | Flow Power BESS & Contracting

原标题：Flow Power – BESS Adoption Implications & Contracting Dynamics

#energy #battery

Third Bridge · 2026-10-05

Analyst-led • 23 Sep 2026

Companies: SHEL GB, AGL AU, ENGI FR, ORG AU

Tosh Szatow (TS) Head, Energy Solutions at Buildings Alive Pty Ltd

Jet Woo (JW) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

JW [00:00:04]: Welcome to Third Bridge's Interview entitled Flow Power – BESS Adoption Implications & Contracting Dynamics. I am Jet Woo, and I will be facilitating today's Interview with Mr Tosh Szatow, former Head, Growth and Innovation at Progressive Green Pvt Ltd (Flow Power).

Before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

TS [00:00:49]: I agree.

JW [00:00:51]: Could you please begin with an one-minute introduction of your background?

TS [00:00:57]: Yes, sure. I've worked in energy markets in Australia for about 20 years, a mix of policy research and advocacy, science research and then also roles in start-ups and scale-ups, so almost all of my experience has been focused on distributed energy solutions, so solar battery, energy efficiency, smart energy management and how to get value out of those assets within the energy market structure that we have here. That's my background.

JW [00:01:35]: Could you elaborate what your role was in Flow Power?

TS [00:01:42]: Yes, sure. Initially, I was hired in more of a technical sales role, but after three months my role changed to this growth and innovation manager, which was basically thinking about five or 10 years ahead in the energy market, what will the energy market look like and what would our customers need and then working backwards from there to essentially build out new products, new services within Flow Power, but also to find early adopters, customers that were maybe a bit ahead of trend and keen to trial those new products and service with us before they were the mainstream.

Questions

00:02:28] How would you describe Flow Power's business model regarding the core business segments or the operational structure?

TS [00:02:39]: I'll say that the business model is really share price risk with customers so that customers can lower their energy costs. That's the premise of the model really. The vast majority of the customers and revenue comes from large commercial and industrial users of energy who are willing to accept full or partial exposure to wholesale price risk because they know that if they manage their demand and avoid high price events and shift demand to low-price times, they can materially reduce their energy costs.

00:03:24] Would you say there are particular industries where the C&I [commercial and industrial] users are from?

TS [00:03:31]: Yes. Probably agriculture, the company has a pretty strong history in agriculture, so (audio distorts 03.39) any kind of farming operation where there's a lot of water pumping for use of irrigation suits Flow Power really well. Flow Power has got a very good brand around renewables and sustainability credentials, so had a pretty strong customer base, like Australian offices, Australian operations of particularly European headquarter companies that had strict benchmarks or strict targets around sustainability, very strong with councils, universities, had quite a few in freight logistics and niches like that, probably surprisingly not well represented in commercial buildings. Commercial buildings in Australia are about 30% of energy demand and commercial buildings typically have a pretty good fit with wholesale price, but Flow Power is almost no customers in that segment, so you make a that off of what you will, but there's probably a growth opportunity there.

00:05:01] You mentioned Flow shares volatility in energy prices with customers, and this enables customers to get lower energy costs as a whole. Does this mean the company generates its revenues or margins as a portion of the savings generated by customers?

TS [00:05:31]: I'm not aware of Flow Power having that kind of shared savings model because energy is obviously very commoditised as a sector, so customers are always chasing a cheaper, better deal, so basically, if Flow Power can help someone lower their energy costs, those customers stay loyal. Essentially, they churn less, and that's where a lot of cost for a lot of retailers pile up, so my understanding is yes, Flow Power probably has, if not simply industry lowest, but one of the lowest churn rates, so our customers tend to stay. They're loyal. They'll often sign long-term… It's less about sharing savings or making more margin, but when you lower churn rates, the switching of customers or customers leaving you, then your margins actually improve.

00:07:09] Could you break down Flow's revenue or earnings in percentage terms across selling renewable energy vs generation, storage and energy automation?

TS [00:07:47]: Yes. If we go back and said, there's probably two major pieces of the business, and then there's some peripheral stuff, so by far, the biggest chunk of the business, I don't know exactly what it would be in revenue terms, but probably over 70% of the business would just be selling energy into commercial industrial users. I actually don't have a figure for what percentage of that would be green energy, but yes, essentially all business, the vast majority of revenue and profit comes from the selling energy to large end users. We also have a project development business, so Flow Power will develop its own renewable energy projects, so from site acquisition through the connection agreement and actually building out projects, so there's a fairly, not massive, but a team of about 15 or 20 people in the project side, whereas there's maybe 130 supporting just core selling of energy. Be able to that 15 or 20 people developing projects, it's a material part of the cost base and naturally, where we own and operate our own renewable energy assets that helps us find customers obviously, and maximise margin, so it's hard to apportion what share of revenue would you attribute to, say, the project business vs the team that's selling that energy.

Yes, but that's probably by headcount, it's probably 70% selling energy, 20% developing projects and the other 10% is the peripheral stuff around helping customers with energy management or doing solar battery assessment, so I think Flow Power, I think it's public, they bought a business called Solar Choice.* Flow Power is not doing its own solar battery installs behind the meter any more. It does that through, it's more like a competitive tendering solution that Flow Power offers now, so instead of delivering solar battery itself, it will put a job out to the market. Then with the customer, they'll choose the best SAPC for the job and then make a margin on whatever that sale is. That acquisition and model is new to Flow Power after me leaving, so I'm not quite sure how big a slice of the current revenue that business would be, but if I had to guess, I would say somewhere between 10% and 15%, it will be small.

*Expert mis-spoke. Flow Power partnered with Solar Choice, not acquired.]

JW [00:11:07]: Flow states in its website that it has some residential solutions. Is that a very small contributor to the company's performance?

TS [00:11:20]: Yes. When I was there, the resi product was just being launched, so I'm not sure how many customers that would be, but certainly, a very small slice of the revenue would come from residential customers. The main competitor there to Flow Power would be a company called Amber, so it's the same model for C&I, the residential customers get exposed to the wholesale price and then the idea is that they would have a battery which helps them charge at cheap times, discharge expensive, but also an app and interface that helps them look at their energy demand in real time, get forecast and warnings when prices are high and then manage their energy around that, those forecasts, too.

00:12:11] What do you think are Flow's core drivers of growth and profitability over the next 1-3 years?

TS [00:12:23]: This way, yes, my views might be very different to Flow Power's, but I think there's a big change coming in the energy market driven by green credentials, if I can simplify that. At the moment, any company that has an emission reduction target does their emissions accounting on an annual basis, you tally up your annual energy demand, you tally up, you look at the average emission intensity of that energy use and you get some sort of number, some sort of carbon tonnes. The way the industry is changing is for compliance reasons, for brand credibility, for all these reasons, companies are going to have to do more like real-time emissions accounting, so they're going to have to look at hour by hour, what is the emission intensity of their energy demand and that's where they'll get their annual emissions number from, so what that will mean is that will create a very strong incentive for companies to more actively manage the timing of their energy use, so it won't just be, manage to only use energy when is cheap. You might really need to do that to meet your emission reduction goals as well, so that sustainability and price objectives will become much more tightly aligned.

I think that's where a company like Flow Power, it's just like turbochargers for business for them basically just creates more demand for the same thing that they already do. Then you can push into commercial buildings, in particular, office towers, retail shopping centres, which are often owned by blue chip investors that have these tighter emissions accounting standards as well. I think that's a big one. Batteries in general support Flow Power's growth because batteries help deal with… One of the main reasons why a customer wouldn't sign up to Flow Power is because they don't want wholesale price risk. Even if they think they might save a bit of money, they don't want the volatility in their bills around that, so with batteries becoming cheaper and cheaper, that can take that issue away for customers to some extent.

JW [00:15:02]: If batteries get cheaper, wouldn't that also potentially incentivise customers to do it in-house?

TS [00:15:12]: Yes. It's like if a customer owns their own battery, they still might sign up to Flow Power because the contract will also for managing that battery well. Does that makes sense? Basically, the more it's simplistic, but the more people have batteries, the more people there should be willing to take wholesale price, so it's like your addressable market grows in a way. This is basically what else pushing that growth in the innovation. The other big segment is just electric transport, so obviously, electric cars, but I think electric trucks, let's say if I'm driving (inaudible 16.07) giant trucks, if all the trucks in Australia go electric, it becomes the single biggest energy user in the country, bigger than commercial buildings, probably bigger than data centres and electric trucks where they can change the timing of their schedules and charges, charge a few days can get massive cost reductions in energy, so I think Flow Power has got a really big opportunity to chase the electric trucking market and just grow with that market does be a retailer of choice to that industry basically.

00:16:46] How well positioned is Flow Power in customer-owned battery management and the electric trucking market? I assume the company is well-positioned in the first one, but what about for electric transport?

TS [00:17:00]: Electric transport is reasonably well positioned. Funny enough, a lot of the customers, Flow Power actually supplies energy to a lot of freight logistics companies that are just using diesel trucks, so they're already supplying energy to the sites that are going to be natural places for electric car charging. There's one company in particular in Australia, electric trucking company that's having quite a bit of success. I got Flow Power with them. I don't know if they're still a customer.It's a market where you don't need to win five or 10 key accounts and you probably win the vast majority of that market. It's just a pretty small concentrated. I go back to, I think out of that, there's like 400,000 or 500,000 trucks, we do have articulated trucks in Australia. The ownership of those trucks has got a funny distribution tail, so there's five or 10 companies that own a massive chunk of those trucks and then everything else is owned by mom-and-pop operators, so if you just do a good job with the five or 10 big guys, you can really own that market.

00:18:29] Do you see any core challenges for Flow over the next 1-3 years?

TS [00:18:36]: Yes. The only big challenge is technology integration. Again, you're exposing customers to wholesale price, maybe they've got a battery, maybe they're relying on some energy management system to take a price forecast or take a warning about future prices and make some automated or otherwise decision on when to use energy and when not, so Flow Power needs to own that technology solution internally or needs to be really good at integrating with other hardware and software so that customers get a good experience. At the moment, the evidence is that Australia has had a huge growth in residential batteries I think maybe 400,000 or 500,000 batteries or something got installed. In the last 1.5 years or so and I think anecdotally, like reasonably robust, not like… Most of those batteries are being poorly managed and there's a bit of a fragmented ecosystem of hardware, software and solution providers in that space.

JW [00:20:06]: In terms of being poorly managed, do you mean when the batteries are being charged and when they are being utilised?

TS [00:20:16]: Correct. I haven't seen this with the Flow Power customer. I've seen it with other retailers who offer a similar product to Flow Power to residential, where a lot of friends that I talked to are working in the energy industry, so they're pretty clean obviously, and they've often worked out that the charge and discharge for their battery is essentially costing them more money than if they were doing it themselves, so yes, that's quite a common story and then people end up switching retailers or trying to find different control solution or it becomes a bit of a mess to clean up, but it's like even if wells up at Flow Power and we're looking at partnering with some of the companies in that space, if you were doing like a AUD 5m battery project or bigger, you had really good options, really good software that you could integrate with and it would do a really good job of optimising the charge discharge, whereas anything under a AUD 5m battery, the cost of a good solution was too expensive to justify and then you just like fishing around for someone who's got a robust solution at a decent price, which we found pretty hard to land.

00:22:00] Why do you think it's difficult to find a provider with a robust solution and reasonable price?

TS [00:22:10]: Yes, it's a good question. It's probably like harder to… It sounds really easy because it's all just data and software, but if you're doing the control via an API signal, for example, you need a really robust internet connection and if the internet connection drops out and that's the reason why something wrong with the battery, then potential level. Often, if you're relying on a home wifi or some sort of Bluetooth connection for that data or control, that's not robust, but also you've still got to be able to predict if you're exposed to the wholesale market, you're still going to be able to predict what the wholesale price is going to do for the day and then make adjustments throughout the day if your prediction is wrong and even the very best control solutions in that space probably only capture 75% or 80% of perfect foresight, the value, the perfect foresight would in theory give you the best solutions maybe (audio distorts 23.34) so which means if you've got an average method for predicting the price and making adjustments hours were out of, maybe you capture 60% of perfect foresight and then 60% of perfect foresight is actually not that much better than a set and forget regime where you just say, charge at 10:00 to 14:00 and discharge at 17:00 to 19:00 or something. It's one of the things it's harder to do than it sounds and I guess, in a way that industry is a bit immature like residential batteries just really took off in the last couple of years or in the last one year, so it probably hasn't had the time for service providers to cut through mature and perfectly cells in a way.

00:24:43] You mentioned that the changes in emissions accounting and electric transport will be the key contributors to the industry's growth. Are these the same drivers, or are there other drivers for profitability?

TS [00:25:17]: I'm not sure. You might get better profit margins. It's probably a useful analogy, so in about 2016-17, Australia started to see a lot of large-scale renewables and Flow Power was early on that and was selling renewables via power purchase agreements, these seven-year, 10-year agreements and the companies that got into that early and did that well, they're able to do that with good margin before things got really competitive. If you're trying to do a PPA now, it's super competitive from doing great margins and if you sign up someone to a seven or 10-year agreement at a good margin, it's like baked in. Maybe this transition to more real-time emissions accounting will mean you don't just sign a PPA, you sign a time match PPA. You might see a similar dynamic, maybe the first movers or the early movers are able to sell those time match PPAs at a really good margin and bake that in. I said, 17 years plus. That's speculative, but there is a parallel to how PPAs work and Flow Power being able to capitalise on that.

JW [00:26:54]: As long as Flow is early, whether it's for the BESS [battery energy solutions systems] or EV solutions, the PPAs [power purchase agreements] will still be attractive. Is that what you're saying?

TS [00:27:22]: I'm saying if you're an early mover in a market where customers are happy to pay a premium, then you can grow obviously, revenue but grow margin as well. Any interest like cosmetics, food, if there's some new trend and customers with money are happy to pay a premium for whatever that thing is, if you're early and not only do you grow fast, you can potentially grow your margins as well. Maybe that's what happens with time matching with renewables in particular, less so like electric trucking or people with batteries, probably doesn't have the same dynamic, but if time match renewables or time match PPAs follow the trend of power purchase agreements from 2016, then the first, I don't know, say, 3-5 years of selling time match PPAs will probably come with pretty healthy margin. It's obviously where a lot of the new growth could be as well.

00:28:42] Could you break down the difference between time-matched PPAs [power purchase agreements] and regular PPAs?

TS [00:28:51]: Yes. Under a regular PPA, typically, you will say, "Okay, I want to buy 5% of the output of a solar farm, whatever," and you're getting the energy value of that, but then you're also getting the green certificates that get created and the green certificates, historically, they've acted a bit like a carbon offset. Let's say, over the course of the year, whatever your energy use results in 100 tonnes of carbon, then you want 100 tonnes worth of green certificate of that solar farm, but you just need it on an annual average basis and usually in a PPA, some level of time matching will just naturally occur, but it's not contracted, so if you sign a PPA with a solar farm, Flow Power and say, okay, we expect 50-60% of your energy demand to be matched to that solar farm in real time, so you're getting a price hedge. Then for all the times that you're not naturally hedged, there are options like maybe buy a wind PPA to top up or you take a financial contract to hedge against prices above a certain level or whatever, so that's how PPA has worked today. The time match PPA, the customer will say, "No, no, I don't care about the annual average. I need a green certificate. I need to be 80% renewable. I need 80% of my energy use to match renewable supply more or less in real time.

It's probably going to land at hourly intervals and so Flow Power has to say, "Okay, we expect whatever, 50-60% natural time matching to occur. How do we guarantee and deliver the gap to 80%?" That's where Flow Power might say, "Oh, we can sell you a battery behind the metre, and we're going to charge that battery on renewables, and this is how we're going to get to the 80% number or maybe instead of just a solar farm, a solar farm with a battery and the control regime for that battery is managed to help deliver this time matching goal for various customers. There's more at stake for the customer, the mechanism for the green certificate for time matching what we called a renewable energy guarantee of origin, so companies can create those now. If you go through your historical energy data and you're like, "Oh, we don't have a renewable energy guarantee of origin for these days or this month or whatever, two or three months ago, you can't go back in time and generate a REGO for that time. It's either there or it's not. They're available to buy in some open market or not, so there's more at stake.

If you're some global brand or whatever and you're reporting publicly on your emissions and you've said whatever we're going to be 90% time match, 95% time match, the stakes are pretty high if that doesn't happen and so potentially, retailers will be able to charge a premium for doing that and guaranteeing that outcome.

00:33:00] How many of C&I PPAs do you think are time-matched vs regular renewable?

TS [00:33:22]: It's a tricky question. Most of my work, I'm exposed to companies that probably want to do time matching, so my perception of the market is maybe skewed like (audio distorts 33.35) needs to, but maybe it's more like any market has a natural distribution of pure sustainability through to buyers that don't care at all. It's obviously the ones that are pure sustainability and they're going to be doing this, maybe it's 10% or 20% of the C&I market. It's hard to tell. There's a wave of compliance drivers to this, so star ratings for buildings are a big driver of smarter energy use in Australia. Star ratings of buildings look like they're going to start rewarding time matching with people. If you're a major commercial property owner, office towers, retail shopping centres, you're heavily driven by star ratings. Even like hotels, that's a sector if you want to be a hotel that takes a booking from a government agency, which is a massive slice of the economy, government employ something like 25% of people, then chances are you either need your rating, your emissions need to be hitting a certain standard.

I don't know, I feel like in the short term, maybe it's only that 10% of brands that are chasing the sustainability purity, but the compliance could easily push that to 30%, 40%, 50%, companies having to chase this because they're either required to by law or they need to attract the customers that are applied to by law.

00:35:54] Battery prices have reduced significantly and Flow broke ground on its Bennetts Creek BESS [battery energy storage systems] facility in Victoria for 100MW on 22 September 2026. How do you see Australia's BESS fleet growing over the next 1-3 years? How is Flow positioned to capture this growth opportunity?

TS [00:36:39]: If I was in charge of Flow Power, that battery is a two-hour battery, so it's 200 megawatt hours of storage on 100MW of capacity. If I was in charge of Flow Power, I probably would not have done a two-hour battery. I would have done longer duration. The caveat is there's probably no reason why… I'm not close to that project, so I can't say the way, but you could always add more duration to that existing capacity, if that makes sense, so you started at 200 megawatt hour, but you could add another 200, 400, 600 over time and attach that to the same kind of 100MW of connection capacity. The reason being the way the wholesale price volatility is changing, so I think we're going to see less and less short-term spikes in energy price and probably more and more long duration high price events, particularly in winter as the group gets more and more reliant on renewables. There's a whole full day deep dive on the data science behind energy price volatility, what drives it, what might drive it in the future, but that's my take. In my new role, we do advise clients on this. Certainly, our guidance is to have a bias towards long-duration storage to our batteries.

We also saw that in this year, for example, that the evening price spike has really moderated because there's so much residential storage now discharging that evening peak price time, so that two-hour window where those two-hour batteries made all their money has evaporated this year. Whereas long-duration storage, it's going to be more and more valuable as the group tries to get to 100% renewable. I'm saying like I don't think Flow Power is badly positioned, but I don't want to talk about why to our battery and what are the options for growing the duration.

00:39:45] In July 2026, Zen Energy entered administration, leaving several large clean energy developments without a stable, long-term buyer for their power. How do you think this impacted the market and Flow as a whole?

TS [00:40:08]: Probably short term, it's negative because everyone has our reaction and maybe compares to Flow Power and assumes that Flow Power might have similar problems, but I think it's like one less competitor in the market is maybe a good thing in the medium to long term. I'm not close enough to all the commercial agreements that Zen has or Flow Power has how intertwined, but just from a market perception perspective, maybe there's a short-term issue just by association, but I think that passes pretty quickly. You see this all the time, people would assume, Zen went bankrupt, then maybe Flow Power is next, even if Flow Power is absolutely nowhere near that position.

JW [00:41:07]: It's not necessarily an industry contagion event. It could just be isolated poor management. Is that correct?

TS [00:41:16]: Yes, you see this all the time. Zen had some pretty high-profile people involved at the outset and maybe attracted more money than they should have. It's pretty easy for those companies to get floated when you've got some celebrity executives. They also had some underperforming wind assets. But you can be an offtake, you can resell someone else's wind farm that underperforms, but not be exposed to that underperformance yourself, depending on how you manage that. Whereas if you own or operate that wind farms, that… I'm just focusing on wind farms because the solar farms are much more predictable, but wind farms, there's a bit of a history there of… it's hard to do wind monitoring and projections well, basically, way harder than solar, so there's more risk attached to wind farms than solar. I think that might have also had a role to play with Zen.

00:42:46] How does Flow compare against the larger gentailers or companies that provide similar services in the market, such as AGL Energy, Shell Energy Australia and Engie Australia?

TS [00:43:04]: They're positioned pretty well. Again, it's for any buyer that cares about sustainability credentials, you're almost not looking at the big three. It's like Flow Power, Diamond Energy, to some extent, Amber and some others, if your concern is your brand and sustainability credentials, you're almost by default, not looking at anyone that's probably invested in coal and gas or has been a handbrake on the transition. They're well positioned in that regard.

JW [00:43:59]: These larger players, even though they have their own energy-generating assets, they are not well positioned because they're involved in coal and gas generation. Is that correct?

TS [00:44:15]: Yes. They've had a real history of getting into renewables and then not like Origin made this big play into solar and things probably like over 10 or 15 years ago and then after three or four years, they pulled out and then three or four years later, they changed their mind again. Yes, that's very hard to trust and not long ago, I was asked to just review some work that Origin Zero is like the business, the Origin Energy business that's doing solar, battery and VPPs. The customer was just deeply unimpressed Origin Zero was basically trying to deliver a solution as though Origin Energy didn't exist. Maybe it wasn't an integrated coordinated solution that Origin Zero was delivering. It was like really odd with the actual retail contract that customer on and now there was a major Sydney suburban council. There's a lot of that. AGL has been a bit similar like my (inaudible 45.44) coming in and a lot of people getting excited about the business changing, but it hasn't really changed and a history of getting into renewables and they're not and making bad investment.

Iberdrola has a good reputation as a competitor to Flow. Squadron Energy might be interesting, they seem to be more focused on heavy industrial, Flow Power doesn't really deal with heavy industrials. Squadron seems to be more focused on heavy industrials like steel and cement and things, but I think for that kind of medium to large C&I, Flow Power is really well positioned and probably well positioned for resi as well.

00:46:39] How would you compare Flow's position relative to pure-play retail aggregators such as Smartest Energy?

TS [00:46:52]: I heard Smartest Energy come up a bit. I probably don't understand enough about their model. I thought they were more of a broker than a retailer.

JW [00:47:01]: That's what I believe too.

TS [00:47:02]: Yes, just a completely different model and broker, you're just sitting between the buyer and seller and negotiating contracts, just a service layer, so Smartest Energy could create demand for Flow Power, depending on how that service runs. Maybe something to flag that I think is relevant is something like 80% of energy in Australia is purchased through a broker, so the vast majority of large energy users don't actually negotiate directly with an energy retailer. They do it through some intermediary like Smartest Energy.

JW [00:47:49]: What drives it, and would it not be more cost effective to negotiate directly?

TS [00:48:05]: I don't know if it's a legacy structure thing. I don't know if Australia is super different to other parts of the world. A lot of people do their home mortgages, for example, through a broker. People take some comfort from having a third party help them compare offers and negotiate on their behalf. Energy contracts can be quite complicated for larger energy users so, they're probably companies big enough to take on some risk kind of thing, but not big enough to have their own energy procurement team, but actually, even companies big enough to have an energy procurement team like specialist in energy procurement will still use a broker. In some ways, one of the bottlenecks on growth or potential tailwinds for growth of Flow Power is how they engage with that broker market.

JW [00:49:31]: Is there anything else you would like to add?

TS [00:49:41]: I'll just say, it's important to consider how Flow Power engages the broker market and how they leverage that for growth or not.

00:49:57] Regarding the typical contract structures for C&I PPAs, what do you see as the key challenges with different contract structures? How does Flow address these issues in contract structure?

TS [00:50:28]: I'm not quite sure (inaudible 50.31) with the question, but I think one issue is Flow Power and a bunch of people have is that so Australia is winding down. We've got a government scheme through which green certificates get created large generation certificates or LGCs. The decision made a while ago to wind that scheme down ends at the end of 2030, that scheme no longer exists and that's where every generator will stop generating LGCs, but they will generate renewable energy guarantee of origin, these REGOs that essentially like the time match version of an LGC, so one of the issues that Flow Power, and I think a bunch of people have is that because of that timing, most people that sign PPAs sign them with a 2030 end date, knowing that that's a logical point at which you would renegotiate or sign up to some different product. I don't know what percentage of it would be at Flow Power, but potentially, a material percentage of PPAs all end at the same time without an obvious… It's 2026, they're still trying to figure it out, but right now, there's not an obvious solution for how those PPAs might transition to PPA version 2.0. There's cash flow kind of risk there. Maybe the other element of your question is when you're signing a PPA, customers and buyers and sellers have to find some way of sharing price risk and performance risk.

I don't know how Flow Power's contracts would break down, but you can imagine if you're a customer buying 5% of the solar farm's output, but that solar farm underperforms or is offline for two months a year or versions of that, you'll be pretty upset. You're expecting a certain energy outcome, probably a certain green certificate outcome and you're not getting it, so often, there'll be clauses in there for handling what happens if a generation asset underperforms or who carries that risk and what remedies are in place as those risks play out. Certainly, I'm not aware of Flow Power being caught out on anything like that in any of its PPAs or assets and that could be a function of having a bit more control over those assets through the development cycle as well as how they manage the contract terms, so all Flow Power customers share that wholesale price risk basically, so new emergent retailers in Australia have often had three or five years of success. They're growing quickly. They've grown market share of the big guys, but they don't own generation and they take all the price risk for their customers and then you'll get a month of extreme high price events, and those retailers will go bankrupt and all the customers will go back to the big three.

That's been a fairly familiar pattern in Australia for 15 or 20 years for as long as I've worked in the energy market. Unless there's a bunch of stuff I don't know, I don't think Flow Power has the same risk because they always share price risk with the customers so Flow Power is not going to go bankrupt because we've had a month of high prices and Flow Power isn't hedged out properly. That risk just gets shared with the customers.

JW [00:55:06]: Flow is not a risk taker for the customers. It's distributed evenly. Is that correct?

TS [00:55:15]: Correct. Yes, correct. If your demand is high at a high price time, well, unfortunately, your bill is going to go up that month.

JW [00:55:23]: There are pass-through mechanisms.

TS [00:55:26]: Yes.

00:55:32] What are your thoughts on Flow's current management and its strategy looking forwards? Do you think the company is targeting the right segment of the market or the growth opportunities that you mentioned?

TS [00:55:59]: Yes, probably part of the reason for leaving Flow Power was not seeing and I'm not saying I'm right they're wrong, but my view of the growth opportunities and where we should focus was probably different to where Flow Power chose to focus. Again, I left or decided to leave 18 months ago. I can't remember how long, certainly over 12 months ago, maybe 18 months ago. Maybe things have changed a bit since then I'm not sure, but I think there's probably two things. It's what is the growth strategy, but also the technology piece. I flagged like if you're a retailer exposing old customers to wholesale price risk, I think you need to be really, really good at helping customers manage that price risk with physical solutions like a battery or turning off chillers and boilers and equipment for whatever when prices are high. I am not sure that Flow Power has the right people or skills or philosophy for solving that particular problem.

JW [00:57:38]: Would you say that is a cultural thing?

TS [00:57:45]: A strong philosophy of build everything in-house, a part of me likes that, but if you're not able to execute beyond pilots and trials, it's hard to build technology that scales basically across tens of thousands or hundreds of thousands of customers, so I think that is a risk for Flow Power. Do they have the right people and culture and philosophy to deliver the technology that their customers probably need or expect.

JW [00:59:10]: It could possibly be that the company's current management is not in tune with what the customers want. Would you agree?

TS [00:59:25]: Even if they are in tune, does the philosophical approach to solve that problem? Does it work? Flow Power has been in the market or as a retailer, I think, since 2008, but as a company since maybe 1996 or something like that, so you would expect Flow Power to have very good systems for helping customers manage demand and to avoid high-priced times and take advantage of low price times. I think that would be a reasonable expectation, so the question for anyone outside looking in is, okay, what is that technology solution? Is it robust? Does it scale? Where has it worked? Has it not worked in some situations, I got to run that to ground. It's not material in the sense that with different people and a different approach, you can solve that problem, but if a big chunk of the business valuation comes from technology, for example, or a technology capability in the business, then you really got to interrogate that because it's so important to their success.

JW [01:00:54]: Thank you so much for taking the time for this Interview. It's been a very informative session on Flow Power as well as the industry as a whole. I hope you have a good rest of your day.

TS [01:01:13]: Thanks so much.

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