Amid the mind-boggling growth in global power demand, real estate is undergoing a shift from passive consumers of energy to active energy participants.

As buildings become increasingly capable of generating, storing and trading electricity, they are undergoing a shift, becoming a critical part of the energy ecosystem supporting the relentless demand for energy (and physical space) from AI, data centres, electric vehicles and industrial electrification – a phenomenon coined the ‘energy expansion’.

Learn more in this panel discussion at the CommBank Momentum event in Sydney in late 2025. Speakers are:

Luke Billiau, head of capital markets – Australia, JLL; Carly Wishart from hyperscale data centre provider AirTrunk; Taryn Gupta, managing director and CEO, Stockland; and Frank Calabria, chief executive, Origin Energy.

Chau Le

My name is Chau Le. I'm the General Manager of the E-mobility team at Origin. And on behalf of Origin and JLL, I would like to welcome and thank everyone for joining us today for what should be a very insightful and inspiring conversation on redefining the energy transition. Before we begin, I would like to acknowledge the Gadigal people of the EORA nation who are the traditional custodians of the land on which we meet today and pay my respects to their elders past and present. We're delighted to have such a strong group of leaders, innovators, and decision makers with us today in the room. Mornings like these are all about connection, all about building relationship, sharing insights, and discovering new opportunities that move our organisations, our industries, and our nation forward.

Chau Le

Australia is at a critical moment in the energy transition with political and community and media attention. This transition creates a unique intersection between the energy sector and all major sectors in Australia. So our conversation this morning aims to explore how the energy transition is reshaping the financial and operational performance of Australia's largest enterprise and seek to move beyond the debate to explore real life examples of how new energy solutions is helping to drive improvement in the performance, resilience, and value creation of organisations. I'm extremely honoured to be able to introduce an exceptional panel of industry leaders who will bring deep experience and insights on the topic of redefining the energy transition, resilience, sustainability, and value creation. So if you can join me in welcoming the first panellist who is none other than our fearless leader, Frank Calabria, CEO of origin, one of Australia's leading energy companies operating across retail, power generation and LNG. Next we have Turin Gupta, who is the CEO MD of Stockland, which own funds develop and manage one of Australia's largest portfolios of residential land lease com communities, retail town centres and workplace and logistic access. Carhart, the managing director, corporate and International Air Trunk, a Asia, and Japan's leading hyperscale data centre provider driving cloud and AI growth across the region. Thank and Luke biu, the interim CEO for Australia and New Zealand of JLL are leading professional services firms specialising in commercial real estate and investment management across Australia's major markets. So welcome Frank Turon, Carly, and Luke.

Chau Le

The first theme that I would like to explore is just to take stock of the key trends that we are seeing in strategic energy and assets across the sectors. So Frank, the energy transition is progressing slower than many would like, but progress is happening. What is the path forward from here and what will this mean for businesses over the next five years?

Frank Calabria

Okay, thanks chow, and good morning everyone. Thanks for coming along. I think there are a few different themes around the transition right now. Firstly, from an overall building out of the system, it's certainly slower, but probably due to probably one critical thing really that transmission's taking a lot longer and taking is much more costly approvals planning and a lot of productivity aspects that you would see in other parts of your business. But behind the metre is going much faster than I think anyone would've anticipated six months ago. The adoption of storage assets behind the metre have absolutely exploded. And so therefore I think people a little like the early phase of rooftop solar, I think people are underestimating the technology cost curve reduction of both storage. And I think you'll see that in transport and what was no, what was not economical six months ago, 12 months ago is fast becoming a changing landscape for customers. So we probably see a lot of that. We see a lot of grid-based storage coming in, but the big thing that I'm sure many of you are looking at it when you actually think about energy and energy costs is, a good example for us is Eraring people initially would've said we were shutting this plant several years ago. I think the true nature of what it takes to replace the energy system is becoming more evident and those investment decisions are, are, are more challenging. And a good example of that today is the cost of building a wind farm is dramatically higher than it was three years ago, just like it would be if you were developing large scale developments in real estate. And that's going to the underlying cost of energy and that's making it more challenging to replace that. We find a lot of the other stuff is much easier and we can talk about that as to how we work with customers. But yeah, that's probably the key one.

Chau Le

Last month I, I heard you speak at the energy summit, and one of the thing that stuck with me is this is a shift in the dialogue from energy transition to energy expansion.

Frank Calabria

Yeah, I think the big thing there with I think people are truly underestimating and Carly and, and Tarun can talk to their own segments as well as Luke, but people have got in their minds that we're transitioning from one source of supply to the other, people have completely underestimated the amount of electrification load that's coming onto the grid in the next decade, which is obviously more challenging as you think about it as customers because you're now competing for new sources of energy and that additionality. So if we were thinking it was hard to build and you were therefore closing existing plant, that's becoming I think a bigger challenge. And I think no one's really squared that circle. You can see it's a big driver of productivity in New South Wales. Their biggest developments would be all energy infrastructure and data centre developments. Yet I'm not quite sure people have come to grips with the fact that we're going to have to build more than we what we have today for electrification load. And so I think we want to change the narrative beyond transition to expansion because all of you are competing to, to, to find the best energy solutions. Mm. Yeah. So that's probably key. And,

Chau Le

And in this shift it's not just about emissions, it's all about, it's also about the opportunity for businesses to create value in, in this energy expansion. So Tarun, just following on from that, could you talk about some of the innovative energy transitions solutions in your space and the benefits that flow for both Stockland and your customers?

Tarun Gupta

Thank you. Good morning everyone. You know, we've got an energy expert here, but what, what I'll bring to life hopefully this morning is how in our industry in real estate, which is a big consumer of energy and carbon, the sorts of things we are doing to, to be more sustainable. I think that's the angle I'll come from. So we did our ESG strategy, quite a comprehensive review about two, three years ago. And one of the fundamental things that we changed was that sustainability and the four pillars of our strategy are decarbonisation, circularity, resilience, and social impact. Instead of having that in the sustainability team at the corporate level, we made the executive in charge of project management and delivery Petie Walker, where every dollar of expenditure that we do as a developer and most of our is new developments goes through Petie and she's also the head of sustainability. So that is quite a profound difference because every time you now draw something, you come at it from a different angle and you, you make different choices so you can embed sustainability and smart choices when you start. So I give you that context because that then leads to innovation and, and you have to innovate to do things better. And the other other key principle we put in our strategy was that it has to be economically sustainable. You know, we are a listed company with expectations on returns and everything we are doing in sustainability is measured on an investment return. So I'll give you one example. There's many, I'm sure they'll come up, but the one we did recently with a company called Energy Bay. So our base case was we were putting solar panels on our shopping centres and logistics assets. Normally everyone's doing that, but we did a deal with Energy Bay, which really what's been done is instead of us as the real estate company spending money on energy infrastructure, which is really not our core business, we let out the space on the roofs, they spent the CapEx, they being Energy Bay, and in return they got a 30 year concession from us to access our customer base. So economically that's a, you know, win-win for both parties. But the real innovation came where they, you know, in shopping centres and in logistics, you generate excess energy than you need. So our tenants are getting green energy, but the excess energy through an inter asset trading agreement with Energy Bay, we are directing to all the residential homes in our portfolio. So if it's being generated in New South Wales, we can actually enter asset trade into homes and land lease communities in Queensland. So we've created a circular loop of renewable energy within our company. So that, that's it, that's one example and it's about 50 megawatts already under construction and we think that'll expand.

Chau Le

Wow, that's a fantastic example of how this energy transition/expansion is a really great opportunity to position businesses as leaders in sustainability and innovation and create value, both tangible and intangible value in the eyes of the customer and for the organisation. Turning over to you, Carly, how is Australia placed to capture the growth in AI and what advantages does the Australian market have in comparison to other APAC regions?

Carly Wishart

00:14:11

Chau Le

Thank you. It's such a great opportunity to be able to capture that 30 gigawatt and a line share of that 30 gigawatt. And like you said, I think it requires deep partnerships between energy and property as well as data centres to be able for Australia to be able to do that.

Carly Wishart

I think it's the most critical aspect and without that and, but without being transparent with, with partners and, and talking about it early, you know, the, the planning cycles can be five years sometimes and we just don't have five years. We're building data centres in two and three years and, and we just don't, we've got to shift the way we think about building infrastructure if we are going to be successful here in Australia.

Chau Le

Yeah, fantastic. And over to you Luke, so JLL recently established its energy and infrastructure team in APAC. Can you explain the strategic rationale behind this move and how you're seeing the convergence of energy and real estate to create new investment opportunities and what role do you think property owners should be playing in Australia's energy transition and how are you helping property owners to unlock value for the shift?

Luke Bitu

Good morning everyone. It's a pleasure to be here. In terms of our coverage across the region, we're 12 months into our journey. Andy Powell, who's in the room leads our capability across Australian New Zealand and it has been the last piece of the platform puzzle. In Europe, we've been in this space, energy and infrastructure for over a decade. At last count there was $20 billion of enterprise value that we've being advisors on and we are the number one advisor in the best space. So when you look at the, the global experience, we certainly have a huge amount of coverage. North America is exactly the same. We acquired a business recently - Javelin Capital, which again doubled our capacity and coverage in the North American space. So it is very much for us, the last piece of the puzzle, and it wasn't a question on opportunity, it was more a question on timing and there's a couple of elements with respect to timing, which became apparent about 12 months ago. I think firstly the capital base was evolving, so the LP capital that sat behind a lot of the managers locally started to shift their allocations away from traditional sectors into alternatives, including energy and renewables. So that evolving capital base meant we needed to accelerate the coverage and the capability that we've got in this space. And then secondly, there's been a huge amount of adjacencies to traditional commercial real estate sectors. If we, I think about our agribusiness capability, they've come up against renewable with land access agreement, see as an example, linear transmission lines, easements and and so on and so forth. So there is a lot of adjacencies to, to agribusiness and of course when we talk about data centres, the adjacencies to logistics as well. So when we talk about the clients and the evolution of, of what they're thinking, there's, there's been a very clear shift recently where there's been this focus on operational excellence and a big part of operational excellence in, in our experience remains to be energy and, and also sustainability. So the discussions that we're having with a lot of these capital is how can we shift from being, you know, passive consumers of, of energy to more active participants of the ecosystem. So when you talk about commercial real estate assets, when you think about battery storage or the EVs, when you think about the rooftop space on top of the logistics assets in Australia, that is the evolution that a lot of the capital is now talking about. So transitioning from passive to more active, but in terms of the opportunity for us, it's, it's amazingly exciting. I don't think it changes the appetite for capital deployment into, into the traditional sectors. I see it very much supplementing that moving forward.

Chau Le

So I hear from here it's about operational excellence, it's about opportunity, but also about creating resilience. So the next theme I want to explore is how organisations can future proof their portfolio in this environment where we're hearing that energy demand is going to double to quadruple from accelerating electrification from the growth in electric vehicles, from the growth in demand from AI and data centres. So where the opportunity lies for businesses to support this growth in energy demand, but also protect their own businesses from potential volatility in, in the energy sector. So over to you, Frank. Origin is working with many large organisations to transform their energy assets as well as deliver value. What trends are you seeing in these large organisations?

Frank Calabria

Yeah, there's plenty of trends and, and everyone will be sitting here thinking their business is unique. But I think if you step back from what we're seeing right now is it is very much, we're in a, a state of play where we're moving from people that are thinking about commodity and risk management to this evolution towards energy systems. Now everyone will have their own context, but those systems are becoming more integrated over time and I think it's worth keeping in mind what are the objectives you're trying to seek to achieve. And you heard Tarun that was therefore when he established that it was associated with both sustainability but economic and also decarbonisation and circularity. What we're seeing now is that people are therefore looking at that puzzle with not just the commodity and the risk, but also what's the opportunity and how do they have to think about their own businesses. It's not uncommon for us to have seen key retailers and manufacturers saying we cannot manage any risk, we've just got to be all on 24 by seven. But what we're seeing now is that that's shifting. The most notable examples historically, and this is historically was smelters that were literally energy traders. Let's be clear and you're going to find, I think that data centres assume that role, but for many of you and all of your organisations, we're seeing quite a dramatic shift. An example that we've made public is Kohls, which is essentially we've got an arrangement with Kohls where they're essentially, I've seen say their energy by 25% simply because of the way they're now integrating solar battery storage on site displacing diesel, but also then enabling them to be more flexible about when they run chillers, for example, every single day. But that does come down to how you think about your businesses, the risk management and the opportunity associated with that and not knowing which all of your roles are. But there's no doubt there's someone in your organisation that generally comes from engineering or operations and said, that's impossible. I can tell you there's lots of organisations that are, that are now going on that journey quite dramatically because let's be clear, there's value, but secondly it's also can, can contribute towards those goals. So that's an example. There are many others and then the other, so there's a lot of trend in terms of therefore I would say right now onsite storage and, and and a lot of those storage solutions where you can both participate in the market connect to get wholesale benefit at the same time as storing and therefore managing your own energy use is quite a significant one. Solar's been around for some time. We find - well there's other services that we provide, but probably the other key thing that we think is going to dramatically shift over time, and I think it's probably infrastructure driven just to how quickly, but I don't think, I don't think everyone's watching now is - we're we're going through quite a cataclysmic shift in, in E-mobility in electric vehicles. The cost of vehicles particularly for urban applications. And we're finding large clients are now moving entire fleets. And so that is moving and that does come down to use case and everything. So it's not for every single use case, but I think one of the recent examples is I think Sydney Water for example, replace like a fleet of 50 vehicles. So what we're seeing is quite a lot of that is playing out. My main message on all of this is that everyone will have their own individual circumstances, but it is a bit of a mindset shift that you're thinking now about how to utilise both assets on site, other services and thinking more deeply about how do you want to solve the problem that you are because everyone's trying to also optimise cost and economically and today as well. So there's lots of solutions right now and I think we're seeing an enormous shift going on right now where the, the level of inquiry I think on storage is three times in the last, in the last it's gone up threefold I think in the last sort of six months. But that's an example. I think there'll be others that are emerging in lots of technology right now and that won't be for everything and there'll be people here in large industrial companies that can't displace heat load and that's absolutely the case, but what what we're seeing is just an enormous shift going on right now and, and that's what we're we very much focused on in terms of serving business customers.

Chau Le

Thank thanks Frank. So the opportunities for businesses are there, it just requires a different, a new way of thinking in relation to the assets that you've got, any additional assets that you want to invest in and thinking about not just from an operational and risk management perspective, but also from an any additional value that you can capture.

Frank Calabria

Yeah, and I think one of the things is that, and Tarun gave a good example that's quite often integrating the commodity supply as well as the risk management as well as assets. So it is actually a, it's a broad suite of things that then come together. So, and everyone as I say, will have their own circumstances, but there's lots of solutions that are, that are emerging and, and I think in today's business, if you're not focused every, every day on improving the bottom line, then, then, then you're actually falling behind. But there's lots going on out there.

Chau Le

Yeah. And turning over to you Carli so data centres are going to be one of the largest consumer of energy and it needs a secure and efficient supply of energy. What future focused solutions are you exploring and also interested to hear your perspective both in Australia as well as globally?

Carly Wishart

00:27:18

Chau Le

Yeah. Fantastic. And then turning over to you Tarun, you recently announced a data centre partnership with EdgeConnex. Where, where do you see the opportunities and the point of difference for Stockland in this space after hearing like all of the requirements and demand from data centres?

Tarun Gupta

EdgeConnex is an international private data centre operator founded in the US. They're in about 20 countries, most of the continents, and again, growing very rapidly. And they were looking at Australia, we have a strong land, land positions in Sydney and Melbourne, our logistics assets, a lot of them are in the strong availability zones, but we are a real estate developer. We are not a operator of data centres. So pragmatically we wanted to deliver - the customers are looking, hyperscalers are looking for end-to-end solution. We've already done a cold shell data centre in Macquarie Park. We did that five years ago, 42 megawatts. So we can do the real estate part, but the, the balance is why we partnered with EdgeConnex. So Stockland brings obviously land, power, you know, ability to get power planning and you know, the servicing of the size. That's our everyday business. And of course we are local player here and EdgeConnex is bringing really international best in class expertise and strong relationships with hyperscalers. And we think that combination offers a good alternative to the huge demand in, in this market. So that, that's what we focused on. Back on the energy question, energy and sustainability question, you know, again, we've got we think net zero one and two in data centres. You know, we've got strategies to mitigate that and, and be quite efficient. Water, the technology edge is bringing, in most instances we only need portable water, so we we won't be draining water resources. And then it comes to the energy use in operations and hyperscalers are looking for green solutions. So you know, Frank, you'll be helping us with some renewable. So, so yeah. But, but that, that last part is, is the, the harder part to solve. But as, as has been said, this is critical infrastructure for Australia's competitiveness. It's just we got to find pathways that are the most efficient and have, don't have a big opportunity cost on, on the community.

Chau Le

Yeah, and this really highlights the need for deep partnership between data centres, real estate, just all this energy. So Frank, what, what is Origin hearing from our data centre clients about what they need?

Frank Calabria

We've got people that are participating in the sector, but the, the key thing we are thinking is like, so number one is being connection. So connections the big thing right now and there's a fair bit of expertise to be deployed to actually make sure that connection can happen timely. You can see a response. I mean, I think the sort of the number of connection requests, I think I saw something like Gemina had four gigawatts, Ausgrid or AusNet, you know, another 10 gigawatts, you know, so these are huge numbers of connection requests. And so there's a fair bit in, in actually managing that closely followed by clearly the supply when you're getting to large scale, how do you bring enough new energy supply in? And remember this is one of the challenges associated because here you've got a retiring set of ageing coal assets, we've got to get the timing right, a replacement of energy that's got to come in for that, the backup energy that's required for that. And then now we've got electrification demand, particularly through data centres coming there. So I think closely followed after the connection point is really then how to supply and how do you, how do we manage that? But that's probably the key thing that we're seeing right now. So we're certainly spending a fair bit of time with a whole range of customers and regarding that particular point. And there's a lot of detail that's involved that both Carly and Tarun can talk to you, but there's obviously very big differences to inference, you know, that can be 150 kilometres out and you can see that everyone's focusing on that because that's actually, can you develop that a lot easier out there versus what you're doing within grid and therefore how do you manage the connection within that? So we're going to need to, to work hard on that. Also, spend a fair bit of time last week this week I was with New South Wales government. I mean that's one of the reasons why they brought the, the IDA, the development authority because they realised that the economy is going to be driven by productivity. Productivity if you are linking it. The top 20 projects are energy infrastructure and data centres. So if you are looking at an economy, there's a big drive towards getting that and that's where planning and insects much more broadly into tour's business beyond that into housing. But that's actually a big thing right now and how do, how do people, how do people deal with it? But that's, that's where we're spending a fair bit of time at it right now. And and how do you then decide which of the projects that are coming on and everyone competing heavily for it?

Carly Wishart

Do you mind if I just add, add a comment in there? I think you, you've, you've hit it in terms of the, the grid connection is, is critical and, and you know, there's a lot of applications in market today that, that, you know, some have projects behind them and others, others don't. And I think that's a really, you know, call it phantom demand. I think Oxford economics have just released a report that talked about, I think there's 44 gigawatts of applications in right now in Australia. They think eight gigawatt is real. So that's one in five applications. So it's going to be really important as an industry and how again, we work with the likes of our transmission partners and our governments to, to sort out what is real versus what is phantom. Because otherwise we are dealing with something that is overwhelming, overwhelming and, and, and frankly not real. And I think that's where good actors have to be really transparent. AirTrunk being one of them on, on planning and being really clear early with our, with our partners and stakeholders on, on our projects and what, what we want to build where.

Chau Le

Yeah, that's, that's an interesting stat, locally. Turning to the global perspective, Luke, how are landlords thinking about creating more resilient assets in response to this unprecedented growth in energy demand? And what are you seeing internationally that Australian property owners should be preparing for?

Luke Bitu

Yeah, look, I think generally speaking, we probably as a, as a market don't do ourselves as much service as we should, particularly when it comes to the NABERS certification. I think globally, the NABERS certification is, is certainly right up there in terms of the focus on sustainability for, for commercial estate assets. From a global perspective, I think, like I said earlier, there is this now focus from being less passive, more active, and with that comes this transition from cost centre to revenue base as well. And I think when you look at the office sector in particular, we've just released a, a report around the decarbonisation of office markets across Australia. And you think about the demand associated with that tenant base. The, the stats are quite overwhelming. There's about 80 to 90% of of major tenants in Australia have a, have a net zero commitment. And there's this complete disconnect at the moment between the supply and the pipeline. And this is for all assets, the supply and the pipeline, the complexity, the challenges, the financing associated with that supply and the tenant demand. And that's being recognised globally as well. So I think when you look at how you can be a point of difference, I think the point of difference is really what is standing out from, from the international perspective, because they have learn the lessons in Europe. So applying that in the domestic context is, is super important. And you know, there's a lot of work getting done at the moment to, to try and justify that as well.

Chau Le

Yeah. So the, the shift in the capital from passive to active and just the requirement for capital to fund, yeah. All of these assets and investments. So that leads on to the next theme very nicely, which is all around innovative and new financing and investment models and how these can act as enablers to democratise both the access to energy as well as decarbonisation, especially for the property and manufacturing sectors. Carly, what has AirTrunk's experience been with finance and partnership models to help accelerate this shift to cleaner and more flexible energy?

Carly Wishart

00:38:48

Chau Le

Yeah, I like how you say partners with finance parties but also customers because they're also a big stakeholder in, in this energy transition. So, so Luke, how are more sustainable assets providing better value for your customers?

Luke Bitu

Well I think, you know, of years past it was the subjective brown discount, green premium. I just referenced the report that we release, you know, the data is quite stark, again when you look at the office stats and we, we assessed assets that were five and a half or six star NABERS credentialed and we looked at those relative to the general market. And if you just look at the, the additional rent that you can generate, it's about 7% versus the additional, you know, the traditional market, when you look at the vacancy, it's about 5% less than those assets. You know, to put that into context, the Australian office market's currently running at about a 15% vacancy row. So you've got a distinct advantage when you've got well credentialed assets. When you think about the cost of capital, they're attracting yields that are 45 basis points tighter than the rest of the market. So there is data now that substantiates that, that value proposition. And I think moving forward and there's a, there's a point in, in the report which talks about this situational opportunity and that there's this confluence of, you know, this increasing demand and the demand from our perspective has never been as clear as it is today from, from tenants in particular. You've got a reducing supply pipeline so you've got a disconnect between supply and demand and then now you've got evident value creation. So I think that is the opportunity that investors are seeing. And as it relates to, to Australia, I think globally we are very, very well positioned and we touched on a couple of those key points earlier from a a migrational perspective, population growth, economic, so we all know about the, the reasons for why investing in Australia, when you look at that situational opportunity and you overload that, that global context, I think it's super exciting for a lot of the investors into Australia.

Chau Le

Yeah, thank you. And then over to you Tarun, how has Stockland accessed innovative partnership models to support business growth?

Tarun Gupta

00:46:20

Chau Le

That's right. Yeah. And, and I really like the two examples that you gave where you were able to put in place distributed energy assets on your premises without incurring that upfront capital investment. Partnering with energy retailers or financiers providing benefits to your customers, earning margin for yourself but also creating value for the planet.

Tarun Gupta

One little 30-second story. It's a funny part I told Frank. So in WA we had a project, we launched it and it's fully electric because normally you'd have gas and you know electric stoves. 60% of the demographic is from the Indian subcontinent. I see some of the people here from the Indian subcontinent who'll relate. So we launched it, a lot of fanfare, people coming in and this is where you got to keep it real and a lot of inquiry and we didn't sell a single home and we are going, what's going on? You know, it's great affordable homes. And then we investigated it and we call it roti gate in Stockland on electric stoves. You can't puff up a roti, you put up, it'll burn. So all the cooks in the household were coming going, nah, this is a few years ago. So yep, electrification, great idea, bad for business. But then we came up with a solution. You can buy a 50 cent stand from Amazon and if you put it there on the after the pan, you put the roti on the stand and it puffs up. So we solved it. But you got to keep it real.

Chau Le

I love how you're bringing in Amazon as well as cooking and chef into this partnership on, on that point around financing models where organisations can create value without incurring that upfront capital investment. Frank, we've seen measurable return on investment for many of our clients without putting in that large upfront investments. Is finance a barrier for clients and and what are the most popular financing?

Frank Calabria

Yeah, look, I think the capital models and financing are increasingly, they're just, they're less of a barrier. But I can't pretend to know everyone's individual business requirements here. But what we're finding now is you can see what's happening with, with our business model is that increasingly we're owners of assets for the same reasons that Tarun raised earlier. The fact is that a lot of that energy infrastructure is not core business for people. A lot of people do think about the paybacks for those, do they want to allocate that to their, that capital requirement or something else? And so we're increasingly seeing that emerging energy as a service. Baiada, Ingham's, a whole bunch of customers are actually then saying they are guaranteed savings, therefore that's even a service provided where people are actually contracting for the energy saving over time and guaranteeing and writing it into elongated contracts. So there are definitely a lot of business models emerging, A lot of distributed assets are becoming an asset class in their own right. The establishment of funds. We obviously have a lot of vehicles, have a lot of, on a lot of behind the metre assets on our balance sheet. We increasingly see that as a core part of providing the service to customers but not just us. CBA are here as well. A good example, which is not dissimilar to the one that Carly gave is that, you know, Howard Smith Wharves, which is big development in Brisbane, essentially we entered into an agreement with them and that was around how we could therefore decarbonise and hit a certain standard in exchange for them being able to secure funding funding from CBA that was also a sustainable loan at a better margin spread. So I would just encourage people, particularly if you've come from a traditional commodity procurement perspective or even risk management or even coming from those areas that what we're finding now, it may well be different in different parts of the organisation, but what we're finding increasingly is it's becoming a, it's becoming an investment decision and how do you go about that on the journey And, and we, we we're happy to provide that in any way, but we're seeing that increasingly emerge so it's less of a barrier today and I think increasingly those, those asset classes will attract very, very competitive costs of capital. So we just say that that's actually very, very rapid adoption. We're finding more broadly across the market. Yay.

Chau Le

We're going to open up for questions from the audience. We've got a few minutes to do this so please put your hand up if you've got questions for our panellists and there will be a mic going around.

Phil Watts (Boral)

Okay. Good morning Phil Watts from Boral Limited. Great to see Stockland using our product. Thank you. Perhaps a few comments and resulting in a question. So in Boral construction materials, we manufacture cement, we're got high emissions and of course a lot of capital investment. And one of the things I've looked at is the optionality. You know, if we are decarbonising where can we do it? What's the easiest place and the like. And it sort of made me think about these data centres and just how much electrical energy they're seeking. So we, we have our largest concrete batching plant down near the airport in Sydney. It has pick a number 60 concrete agitated trucks that are used to deliver concrete. They're on the road all day and we were looking at, if I was to electrify yeah say battery, we would go from say a 750 KVA substation on site to a seven megawatt electrical demand. And that's just a small distributor sort of logistics centre if you call it that. And, and then I hear numbers like gigawatts thrown around for data cells and of course I spent the first half of my career in electrical networks. I was the asset manager in the, in the Sydney area for distribution assets. And I don't think people understand the capacity of a cable and how much energy transfer society is seeking to move. So our cement works at Berrima. I thought ah, well well what, what would it take to put on hydrogen there? And we've used a lot of alternative fuels to replace coal and the balance of the coal can I put on hikes and it would take a major upgrade to the local, you know, 132 kv centre from Endeavour Energy that consume most of the energy in the region and half the capacity of the line that goes to Port Kembla who are also seeking to decarbonise remove gas and all, all that type of thing. And in my formal life I used to also set tariffs and I understand the networks are essentially a fixed cost and every time we talk about our energy we're talking about energy cost reduction because of generation, local generation, distributor generation. But at the end of the day, no one's saying they're disconnecting from the grid. And so I think about the whole cost to society of this investment. People are investing in generation on site, we're still going to increase capacity of the networks to be able to support all this energy during storms or overnight and this type of thing. I'm just wondering whether in your businesses you're thinking about that next phase and what it means for electricity, fixed cost tariffs which had to be passed through to customers and then perhaps Carly in your business whether the idea of placing data centres on the edge of metropolitan areas where you get easier access the these are big questions and there's a lot of funding in areas that you haven't touched on. I'm just wondering whether they've got any comments on on that aspect of the

Frank Calabria

01:00:03

Phil Watts (Boral)

I think the fixed cost element of,

Frank Calabria

Oh I think that's a big thing. I'll be honest with you. That's a big thing coming and it's not fixed charged yet as you know, it's mainly volumetrically charged and it's capacity charged. But it is if you are thinking forward to this sector, and Carly worked in the sector for a long time as well. If you think long term, unless you're disconnecting from it, you've either got two choices, you're writing down those assets or they're becoming capacity assets and if they're capacity assets, then everyone's got them as insurance policy. No one's played that through completely, but it will, it will be a long run. It won't be yet, but it'll be a long run consideration about more charges being fixed would be my, my, my hypothesis. But that's a long way to go.

Carly Wishart

Maybe I quickly pick up on the location aspect. I mean, historically, data centres, you're right. Majority of our data centres in Australia today are located in metropolitan Sydney, Melbourne. And that's been a requirement. One, because location is number one driven by our customers. You know, we, we don't build data centres where people don't want them. So the demand, we have to build them where the demand is. And historically that has been in metro cities, and that's been important because A - the customers wanted it, B - fibre access to resource latency requirements, the likes of Amazon and Microsoft have availability zones and, and having cloud compute in their availability zones is, is important. So that's been, I guess, a look back. When you look forward and you think about AI, there's two, two elements. I won't get into too much detail, but if you think about inference, you know, those workloads, I expect will be still closed to metropolitan cities where our end users of AI will be. Where I think the opportunity presents itself now is with training workloads where the latency requirements are not as stringent as inference. And that does give opportunity to saying, well, building on edge of cities, going to more regional locations, making sure you still have connection, water access and, and fibre as you need. But it does present the, the industry, I think with more flexibility. And I think how we look at demand holistically, you know, you can see or I can see a world where you just don't look at data centre demand. You could look at what is cloud, what is inference, what is training, and then build, you know, supply strategies around where that can be located versus historically being largely in Sydney and Melbourne Metro.

Chau Le

Thank you so much for the question and we'd love to help you electrify your truck. So conversation with you afterwards. We're at time, so I'd love for everyone to join me to thank Frank, Tarun, Carly and Luke for sharing your insight perspective. And thank you everyone for joining us this morning. We hope you found the conversation on redefining the energy transition, insightful and hopefully we've inspired some new ideas on how your organisations can take the opportunities to create value, either through investments or partnerships or new financing models. So thank you very much everyone.