Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Calling Biden a commie is being unfair to commies
Hahaha. If you think Biden is a communist you'll be ticked a very deep pink if we ever meet seffon
Hi MEM,
In my view the New Fortress Energy bid is quite crafty and data centres are the only reason they're still in the game.
From page 5 of their 2018 AR: "We look to build terminals in locations where the need for LNG is significant. In these markets, we first seek to identify and establish “beachhead” target markets for the sale of LNG, natural gas or natural gas-fired power. We then seek to convert and supply natural gas to additional power customers. Finally, our goal is to expand within the market by supplying additional industrial and transportation customers."
So they firstly throw a power station into the mix, thus creating a demand for their LNG. Now they know that Ireland love their data centres. The parent, Fortress Investment Group is owned by SoftBank and they're big on data centres. The NFE bid promises a data centre 'campus' in Shannon. Its a win-win for Fortress, as they get to flog the Irish some data centres and create even more demand for their LNG. If the Irish greens are serious,, they'll see this for what it is but there must be some competing interests that quite fancy the extra inward investment and jobs. The only sticking point for Fortress is the origin of the gas itself. From what I can see they get all of their gas from third parties, so I'm not sure how they could guarantee its provenance and satisfy the Irish that it it non-fracked. We'll see.
Mick
https://ir.newfortressenergy.com/node/6586/html
https://www.thetimes.co.uk/article/new-fortress-energy-to-set-up-shannon-data-campus-d0bzsndxw
Hi MEM,
I don't know specifically about any data centres being planned for Ireland but I do know very well how these things are financed because they are very expensive and long term assets (so suitable for structured finance solutions).
Structured finance solutions (high levels of low cost debt, basically, thus maximising equity returns) work very well when the risks are low (strong offtake agreements, government incentives, political stability, etc).
The introduction of any kind of significant risk factor that can't be insured out will always change the debt:equity ratio. Out simply, you have to put up more of your own money and that can produce balance sheet pressure for the operator and reduce equity returns.
Ireland has, historically, benefited in the data centre sector from the assumption that the energy supply was no problem. That is now rapidly becoming a probably un-insurable risk and that will necessarily affect investment decisions.
But added to that new risk factor needs to be added another.
Ireland has historically been attractive to data centre companies because of its low corporate tax rate (12.5%). That was especially attractive to US companies.
But now there is a bunch of economic illierates/communists running the US government (Biden, Harris, Yelland) and they are yelling and shouting about a) increasing US corporate tax rates to 28% - but, much more dangerously for Ireland, these muppets are trying to force through a global minimum tax rate of 21% to be paid by any American company, irrespective of the jurisdiction they operate in.
That would totally negate Ireland's tax attractiveness for US companies.
It is possible that this insane scheme by the communists may not actually get through the House but it certainly becomes another risk factor in the mix.
So, for Ireland, suddenly there are now 2 key risk factors that have just arrived - security of energy supply and tax issues - and that should cure any complacency.
They can't do too much about US tax policy but they can address the security of energy supply issue. Rather sooner than later.
Evening.
Would anyone know of future plans in Ireland re Data Centre's in the planning stage, being built or about to be commissioned, we might be able to forecast the 'pinch point' for an average day re future electrical usage ie when the lights go out.
The world is finally starting to wake up to the fact that IT is not a carbon free industry whether that relates to working from home, online banking or internet shopping rather than driving into out of town retail parks. I worked in IT for years never giving a second thought other than reminding our staff to turn PCs off each evening for the good of the planet.
Elon Musk's refusal to accept Bitcoin should help concentrate minds of of Dublin's decision makers as it's the data centre Capital of Europe. He's not letting matters lie either and glad someone drawing attention. The Bitcoin mines in China and Mongolia are mainly powered by dirt cheap, state subsidised electricity from power stations burning as much coal as possible before the world agrees enough is enough.
https://www.cityam.com/bitcoin-gets-the-jitters-as-elon-musks-curious-meddling-continues/
As to the energy-data centres relationship, that is a key factor in Ireland, where, for many years, they have built a very powerful niche there (well-educated workforce, low taxes).
Energy was just assumed in the mix as a given (partially because historically they projected energy usage as being linear to GDP).
That relationship has ceased to be true.
The energy consumption/requirements in data centres is through the ceiling and, probably, in an exponential relationship to GDP.
To give an example, Bitcoin "mining" (basically algorithmic processing in data centres) is, probably, one of the most energy-intensive processes in human economic history.
There are many estimates but, broadly speaking, it would seem that, annually, Bitcoin "mining" consumes more energy than a country of the scale of Egypt.
Much of that "mining" is done in China (with strategically engineered low power costs and low labour costs).
Ireland is a decent scale player in the data centre space globally but, unlike China, it is a high IP (intellectual property) economy with commensurately high labour costs and high power costs (significantly because it has environmental damage considerations which do not apply in China).
Ireland has always assumed that stability of power was a given and sought to compete in the data centre market on the basis of its high quality labour force (albeit at a cost - but that matters much less in high-IP sectors) and its low corporate tax rates.
The "given" (stability of power supply) has always been a base assumption of Ireland's (successful) drive to become a significant player in the data centre space.
If, as seems to be rapidly becoming the case, that very assumption starts becoming instead a high-risk factor, there become very real challenges to the whole sector in that country.
Chaucer famously wrote "Time and tide waits for no man". The same is true for global data centre operators who will not wait for reviews and poltical paralysis - they will rapidly move operations to locations which offer the greatest energy stability.
Because, for them, stability of energy supply is actually much more important than the cost - because the costs of a systems failure can destroy their business in days, even hours (ask Robinhood).
I would like to hope and believe that the Irish government is aware of these realities.
And, as I have said before, the Irish government can do whatever they want to do - all I care about is the advancement of PRD's VALUE.
And I think the grasping the enormity and imminence of the power problem for them might be helpful to PRD.
GRH,
Thank you for what I think was a really excellent analysis of the situation and for having contributed the time and effort to actually write it all down.
I have written myself before about the time-delta issue - how much time may it take to actually realise the value delta (difference from current price to its real value) - no-one wants to be sitting around waiting for a stock to double in 20 years.
But the inter-relationship between time and delta is a dynamic one.
If the delta is potentially massive, the time taken to achieve it becomes of rather less importance (within reason).
It seems to me that the VALUE delta in PRD might be massive and thus the time trajectory towards crystallising it is just fine.
I happen myself to think it may not take too long (even if the timing of Ireland might not be really be described as instant gratification), but the scale of the potential delta across the trifecta makes any slight slippages in timing of negligible consequence.
Of course, DYOR x 100 but I think your very clearly presented posts today provided some seriously valuable input into understanding just how valuable PRD could be.
So, much appreciated.
I came for Morocco
I have been very impressed by the success in T&T
but the potential in Ireland is off the scale
TRIFECTA ON STEROIDS?
ATB