Carlyle: Investing in Power Is 'Significant Opportunity'

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00:00We look at investing in the power markets as a significant opportunity for us,

00:05and that is primarily a new power generation capacity.

00:09And the approach that we've always taken at Carlyle,

00:12that it is all of the above in the sense that, yes, absolutely,

00:16we're going to invest in renewables and storage capacity

00:19to make sure renewables can be, to a certain extent, dispatchable.

00:24But we do invest in thermal capacity as well,

00:27so combined cycle capacity or peaking capacity.

00:30So we have that approach, and we will continue to deploy capital

00:33in power generation capacity.

00:36You know, there have been a lot of large-cap announcements

00:40that are attracting a lot of attention.

00:43There have been a lot of transactions, especially for natural gas-fired capacity,

00:47so thermal capacity.

00:49We take the view that as infrastructure investors,

00:53investors are allocating capital to us not out of their energy private equity bucket,

00:58but out of their infrastructure bucket,

01:00which means that we have a very thoughtful and deliberate approach

01:04to taking merchant or commodity price exposure within the assets that we invest in.

01:11So oftentimes, if we're investing in renewable energy assets,

01:13we want to see a base level of our cash flows contracted on a long-term basis.

01:18I would just caution that people should be careful

01:21as they think about return expectations

01:24and some of these projections of where power prices could go.

01:28We know there's going to be a lot of growth.

01:31We'll see how much of that growth materializes over what time period.

01:36So we tend to be very cautious about how we think about merchant capacity

01:40versus contracted capacity.

01:42But yes, we see power investing as a significant opportunity set for us,

01:48and that includes greenfield as well as brownfield investment.