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TPI Files Bankruptcy, Ørsted Fundraising Round

The crew discusses TPI Composites’ chapter 11 bankruptcy filing and Ørsted’s $9 billion fundraising amid financial challenges. Joel gives an update about the 2026 Melbourne Wind O&M Conference.

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You are listening to the Uptime Wind Energy Podcast brought to you by build turbines.com. Learn, train, and be a part of the Clean Energy Revolution. Visit build turbines.com today. Now here’s your hosts, Alan Hall, Joel Saxon, Phil Totaro, and Rosemary Barnes.

Allen Hall: Welcome back to the Uptime Wind Energy Podcast, Joel Saxon.

Is in Australia. You want to tell everybody where you’re at at the moment?

Joel Saxum: Yeah, we’re down in Melbourne. I’m here with Matthew Stead from Ping as well. Uh, Rosemary was supposed to join us, but uh, of course she’s under the weather. Uh, but we are down here doing basically a, a tour to Melbourne, uh, I guess you could say, of the wind industry.

So if you don’t know in Australia, a lot of the wind operators, uh, and ISPs, uh, and OEMs, to be honest with you. Are located here in Melbourne, uh, and we are talking to them all about the conference that we’re gonna put on this February. Uh, it is a, the, the new and improved version of the, [00:01:00] uh, successful one we did last year.

So we’re taking the feedback that we got right after the event last year, uh, connecting with these, uh, all the stakeholders down here and seeing what do they, what do they want to hear for the next one? What did we do well? What could be better? Uh, we’re looking at venues, we’re doing kind of all the above to get this, uh.

Conference up and running, and I know, uh, Matthew and I, I think we’ve had four to five meetings a day, every day. Um, thank you to the people that we’ve met with, if you’re listening, because it’s been really good for us, uh, very engaging, lots of feedback. So I think we’ve got a, we’ve got a good list of speakers lined up and then also, um, content for next year.

That’s great. So what we’re looking at right now as well, uh, if you’re inking this on your calendar. For the, uh, wind energy o and m 2026 conference here in Melbourne is February 17th and 18th. This year we’re gonna do two full days of, uh, panel discussions, round tables, and all kinds of information sharing.

[00:02:00] Uh, the goal, of course, just like last year, gather up some of the smartest people in wind and share strategies that you can take back, uh, for operations and maintenance and, and action within your company.

Allen Hall: And Phil Tarro of Intel stores out in California. And Phil, this has to be one of the. Busiest weeks in wind on the investor side.

So much happening. Osted, uh, is going to issue a $9 billion emergency fundraising round. And I want you to frame this a little bit. I, I, I’ve heard so much on the news and been reading a lot about this, but there’s several undertones, several things happening at the same time and there really hasn’t been a clear path as to why.

Osted has decided to go forward on this fundraising round?

Phil Totaro: Well, effectively it stems from two big things. One is obviously they had shown some financial losses, uh, recently, and this is going back a couple of [00:03:00] years now that had necessitated. You know, companies like EOR coming in and taking a 10% stake, um, just to bolster them again, we, we talked on the show before about the fact that they’re not necessarily wanting to take over, although now there’s some people in, you know, Denmark, that are kind of pushing the Danish government to sell off their chunk.

And the presumption is that it would be sold to, to somebody like eor. So we’ll still see if that’s possible or even. You know, uh, likely to happen, but there’s a project here in the United States called Sunrise Wind, which Ted was hoping to sell off a chunk of to a co-investor and. Because of some of the rule changes around, um, tax credit qualification, they’re probably not going to be able to move forward in the way that they had hoped to, um, with that stake sale.

And as a result, [00:04:00] it’s leading them to absorb a lot of the, um. You know, financial losses from, you know, some of the delays and, and other issues that they’ve had with getting a lot of these offshore projects, you know, uh, up and running. Uh, it’s, it’s kind of forcing them to do this capital raise to be able to provide themselves with enough cash to be able to continue operating.

The

Allen Hall: Sunrise Wind Project was a partnership between Orit and Eversource, and Eversource pulled out of that roughly a year ago. And the other one, which had a partner that, uh, Ted had who pulled out was for Ocean Wind one and two, which was PSEG, which is a New Jersey power company. Eversource being a northeastern power company, essentially those two pulled out like in 2023 and 2024 when the price of steel went up, inflation was high, the cost of the projects went up.

So they’ve been out for a little while still. [00:05:00] It was in that interim that Osted just wasn’t able to find anybody to join in on those projects. And it does seem strange, and again, I want to get to this point. All the US investment and offshore, all the US companies are all out. Basically you have EOR and you have Osted Dominion.

Dominion. Okay, that’s true. But Di Dominion is sort of a different animal.

Phil Totaro: The the reality is, yes, is the short answer to your question, Ellen, that they, they had tried to find another co-investor after, um, Eversource pulled out. The challenge with that was that there. Has has also been, um, an effort by the project developers to try and renegotiate the PPA prices.

Eversource was gonna be one of the main off takers for this. They don’t wanna have to absorb a significantly higher price. And then have to find ways of passing [00:06:00] that on to to customers. And it’s also what led to this challenge of sted not being able to find a new co-investor after Eversource pulled out.

Um, you know, with interest rates being so high. And not being able to renegotiate the PPA anymore. Y you know, the developers that are still, you know, have their lease areas and, and are pursuing their projects. They’re locked in to whatever they’ve got at this point. If nobody else wants to come on board, then it’s up to Ted to basically eat the entire cost of this thing and thus, you know, a major contributor to the capital raise.

Allen Hall: So the discussion online is that the Trump. Administration sort of forced this to happen. That isn’t necessarily correct. I think a lot of this has started a year or two ago. You remember also. Phil with Ocean Wind one and two, the exit fees with the state of New Jersey. I think that Osted was [00:07:00]going to have to pay somewhere around $300 million to the state of New Jersey, and I think they ended up paying less than half of that at the end.

But it’s still a lot of money. There’s a lot of money in exit fees that Osted has paid over the last two years roughly, or, or buybacks. They, they paid Eversource to get

Phil Totaro: out. Essentially just to also clarify, you know, what, what the administration’s done has not helped. I think we can all agree on that. The, but the reality of it is that yes, they, they were already in a bad situation that got made even worse by.

Increasing the risk of, you know, particularly a foreign investor coming in and, and being a co-investor in, in this project. Obviously there are any number of utility companies in the United States that could have, you know, uh. Co-invested in, in this project along with Sted. They chose not to because they don’t like the economics of offshore wind.[00:08:00]

Uh, and that’s just the, the reality at this point in time. Uh, I mean, duke Energy this week, or I guess last week as, as this episode airs also just announced that they’re gonna cancel their two North Carolina projects because of the same thing. It’s, it’s basically down to the economics of the project.

And at the end of the day. If you’ve got somebody in the administration that’s making, you know the, the investment environment look even worse than what it already was before he even came into office, then it’s going to necessarily, you know, take more options off the table for. Potential investors that could have come in and at least helped, uh, kind of share the, the risk and, and, you know, reduce the amount of, of capital outlay that OSTED would’ve had to make just by themselves.

In my

Joel Saxum: mind, with this new kind of like P-T-C-I-T-C cliff coming, there’s no [00:09:00] reality where, uh, capital gets cheap enough, interest rates get low enough in time for any of that to change like that, that’s just not gonna happen. We’ve got 18 months and we need to, it would have to come down by percentage points, not basis points.

And I don’t think that’s going to, there’s no reality of that happening. I think

Allen Hall: that’s true, generally speaking. Right? But I think the problem is, is where are the New York’s and the Massachusetts of the world gonna be able to get power from? They need this, they really do need offshore wind. The prices of electricity there, uh, if you’re a consumer, is about $300 a megawatt hour.

That’s what I was paying in Massachusetts to buy power on the grid. So $150 a megawatt hour coming off of the, uh, you know, offshore wind farm. Yeah, wholesale still is, is high compared to other parts of the United [00:10:00]States, but as it’s half of what I was paying as the consumer. So there

Phil Totaro: is, uh, a dichotomy there, right?

Yes. But keep in mind, that’s only for the generation cost. So where, where I am in California, I pay basically $380 a megawatt hour for electricity as a consumer. Now half of that. Is generation. The other half is, uh, split between the transmission and distribution cost plus the overhead to Southern California Edison as the utility.

The reality is that yes, the, the generation cost may be 150 bucks, but they’re still gonna have to raise prices for consumers to be able to sell them the power because you have to factor in the transmission and generation cost, and they’re gonna wanna maintain at least a 20% overhead on all that. And because that’s literally their profit margin.

Allen Hall: Well, Phil, what I’m trying to get at is the other half of the equation, the [00:11:00] transmission distribution piece is not cheap. So we, we force all the, the generation side to be as low as possible, but the people in the middle, it’s the middlemen, as they would call it, are taking a substantial amount of the money that you’re paying for electricity today.

So yes, offshore wind is expensive. So is transmission and distribution. And you would think something has been around for 30, 40, 50 years, transmission and distribution, most of it in the United States has been around at least that long. You think that the cost of that would come down over time and it really hasn’t.

Uh, which the economics doesn’t make any sense about that. So when it’s, when we’re talking about Ted, like, yeah, yeah, yeah, all this is not great for Ted, but there is something wrong with the system

Phil Totaro: where Ted can’t make this work. Which is also why we probably shouldn’t have the government canceling transmission projects because we need them and taking, you know, 700 million plus [00:12:00] dollars out of the, um, you know, department of Energy’s grant budget for transmission projects.

I mean, this is a time when we need a lot of that technology, but because it has any association with wind and solar, it’s getting pulled. So, uh, you know, uh, that’s a, that’s a decision that’s been made by the DOE

Joel Saxum: Phil and I, and I back this one up. I saw this just, uh, yesterday. I think there was like a, a double digits coal projects pushed forward.

I don’t know if you saw that. There was like a, there was a pre, there was a press release where there was like something like 11 coal projects or something like approved to move forward and it’s like. This is, this is yesterday. This is yesterday’s technology. We’re moving forward. Why are we pushing coal?

And there was a guy on Fox News talking about it, and he was saying. They were saying like, well, have you made strides for coal to be cleaner? Because of course you have. And he was like, no, there’s always gonna be a footprint. [00:13:00] Like there was no, there was no like, yeah, we’ve done this clean coal thing. He’s like, ’cause Trump deal talked about it as clean coal.

And uh, they were like, well, you know, it’s coal. There’s always gonna be a footprint with mining. So

Allen Hall: yeah, that’s our re that’s our reality. Are we still gonna dig rocks and then burn them? Is that the plan? Because it does seem a little bit easier to take the wind and turn it directly into electricity.

Same for solar. Turn the sun into electricity without having people digging rocks and moving rocks and transporting rocks and trails to rain and fires and the whole bit. It’s insane

Phil Totaro: right now. Well, for those that also don’t understand wind and solar, by the way, contribute $3.5 billion annually to. Lease payments to landowners directly and to state and federal tax coffers.

So, you know, you, you wanna explain why that’s not [00:14:00] worth something. I’m, I’m prepared to hear it as an American citizen. You can also explain to me, if you’re the government, why you’re canceling lease auctions at Boem, that would’ve generated $1.8 billion for the federal government. That’s revenue that you’re literally throwing away.

Even if you don’t like wind, you don’t wanna see it. It wasn’t not like it, it’s not like it was gonna get built during, you know, his presidency anyway. Why not at least take the money? And then the project developers can go build it, which by the way, they’re gonna do anyway. They can just go build the projects after you leave office.

So you know what? You can’t paint yourself as being pro-business when you actively turn away money.

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I’ve used the word cliff to describe the drop off to rosemary the other day. It dropped a ton. It hasn’t. If you, I went back and looked at like the 10 year on Sted stock. It was doing great in like 20 20, 20 21 just after COVID, and it’s come down quite a bit since then. But Sted, as an organization is still making money now, not making money as fast as they were before, but they’re still making money.

What? Does this really mean in terms of the long-term outlook for Ted?

Joel Saxum: Well, I know it’s, it’s got the industry of buzz, right? I think I, I woke up, uh, of course I’m in Australia right now, so the time zone’s a little weird, but I woke up with a large handful of [00:16:00] messages from friends around the world. Did you see Orid stock price?

Did you see, or stock price? Um. I think that, uh, I mean, we’ve kind of, we know the situation we’ve talked about on the podcast a lot about what’s going on in offshore wind and the, you know, the impairments on projects and the difficulty in financing and kind of the headwinds that they’ve been facing or as a whole.

Um, at the end of the day, you can see, because I, this is my take, you know, I’m not an economist, but when I looked at, um, how the stock price fell and then it flattened right off. It was like, well, cliff, and then straight off I was thinking, okay, this is institutionalized money that understands what’s going on here and you lower that price than there’s the stock offering, so there’s a cheaper way to get into, or Ted here.

I don’t think it’s gonna affect the long, long term outlook of the company. Like the immediate stock share pricing dropped like a third. That sucks. Right? But it’ll come back, I think, and if you look at, like what you said, the 2020 on [00:17:00] trend, that trend follows a lot of other pure play wind companies as well.

I mean, I guess I, I, I would, I would consider or set a pure play wind company, even though they’re probably 90%. Because they dabble in some battery stuff and V two X stuff and some hydrogen, whatever, but they’re a wind company. Um, and if you watch the trend of other companies in the same space, like they’ve been getting beat up for the last four or five years, uh, during this COVID play, um, or since then.

So I think that, again, the long term run for them, they’ll, they’ll be healthy. They’ll come outta this, they’ll raise some money, um, make some moves so that, I don’t think it’s gonna be a big issue.

Allen Hall: Phil, same thought. Is it gonna be a big setback for Ted or are they gonna need to. Try to sell off some assets because that’s the talk around the industry is that.

They’re gonna do this fundraising effort, but at the same time, they’re gonna try to offload a couple of projects or things that have value today to improve their long-term forecast.

Phil Totaro: Yes. And I [00:18:00] would concur that that’s likely, but that’s also not to freak anybody out because Yeah, I mean, companies normally do this kind of an what they call an asset rotation.

Up until now, particularly with their offshore portfolio, they’ve owned. Almost a hundred percent of most of their projects and only, it’s only been in the past, like five years that they’ve even been adopting the philosophy of going in and getting, um, investment partners to come along with them. Um, and it’s, it’s also, uh, you know, it’s something.

That, that’s been possible through the capital markets as well. The, the problem for them is that they negotiated poorly probably about three, four years ago on some of these contracts that they worked out, particularly for the power offtake in places like New York or New Jersey, et cetera, that led them to these, um, you know, big.

You know, fees for pulling out of [00:19:00] projects and, and cancellation fees, et cetera, et cetera, that, um. It, you know, left them with a lot of, uh, debt and other kind of cash related liability on their books. So the capital raise is necessary. The, the project, um, you know, asset sales and, and things like that, the asset rotation that they can undertake, that’s also necessary in all likelihood.

My concern for Sted, the bigger concern here is. Whether or not they are really going to. Keep flowing cash into potentially unprofitable ventures.

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Uh, there is a lot of questions about TPI at the minute. They have an order book and they push out like 6,000 blades a year, something around that number. Oaktree capitals come in, it has backed them. [00:21:00] Chapter 11, if you’re not familiar with bankruptcy Methods, chapter 11, it allows you to continue to operate and reorganize and restructure your debt.

Chapter seven and some of the other ones are pretty much an immediate shutdown. So TPI is going to continue making blades or getting some funding. But Joel, this is actually a big hit to the GEs of the world who rely on TPI to produce blades. Is it though, right,

Joel Saxum: because you usually, in chapter 11, you usually have like a tiered, a tiered debt structure too, right?

There’s like, there’s Class A, class B, class C, right? So their debt to A TPI is normally gonna be. Raw materials, uh, logistics, those kind of things. Unless, and I don’t know how they do their business. Right. There may be a case where you’re like, ’cause TPI does a lot of work with ge, right? They may have ge, GE may be doing the logistics on their end, so that might not even be on TPIs side of things.

So it’s like. Building rent, [00:22:00] um, you know, uh, capital assets. So if they have loans out against buildings or some things like that, right. Those are usually class A type things where they get paid off first. It’s a little bit rocky, but they’re, they’re able to continue to work, right. So it’ll be, they’ll, they’ll be some changes, but it, they, it shouldn’t upset the wind industry.

Like it shouldn’t have set the supply chain.

Allen Hall: Well, it does introduce another layer of bureaucracy because once you enter into chapter 11, you can’t. Buy supplies, you can’t sell things as easily. It, it becomes much more transactional. You have to have approvals to, so you can’t start selling off assets behind the scene.

Chapter 11 is a very structured environment that you have to operate in. You don’t want to be there if you can avoid it because it just makes things harder to do. But at the, at the same token, and Phil, maybe this is where part of the problem is, they have plenty of orders. But are they getting paid on time?

Which is my first question. Had they been getting paid when they should be getting paid? [00:23:00] And then second has quality issues, uh, about a year or two ago, sort of stacked up where they’ve had to do warranty claims and spend a bunch of money that they weren’t expecting to. Is that what led to this, uh, eventual chapter 11 filing?

Phil Totaro: Yes, all those did contribute. They also had issues, uh, and unexpected costs associated with their expansion. They had some strikes in Turkey where people wanted more money. Um, you know, there were any number of things that that occurred. But I, I wanna go back to this notion that they have up to $10 billion in liability on.

You know, uh, a company valuation of, what did you say before, Alan? It’s like a few million dollars market cap right now for TPI is $7 million and that’s down from a hundred million a couple months ago. That’s extremely concerning, uh, considering the fact. That a, they have such a wide range, you know, between 1 billion and 10 billion.

And [00:24:00] secondly, that obviously stems from the quality issues that go back a number of years. So, I mean, I remember us talking about it a year or two ago on the show about how they’ve brought, you know, uh, quality experts in and, uh, you know. Manufacturing head chief Technology officer, uh, even the CEO got replaced, uh, at one point because of, um, some of the quality issues that they had and how it was being handled by the previous management.

So presumably this is part of a strategy to, you know, again, restructured the debt certainly, but it. You know, these, the liability issues could still persist. Um, because even though, you know, you’re getting bankruptcy protection in chapter 11, um, nobody’s gonna want to come in and buy the company anyway.

You know, they, if they had entered chapter seven where it was a liquidation, then that’s [00:25:00] a scenario where you could have, you know, I, I wouldn’t necessarily. Necessarily say it would’ve been GE Renova comes in and, and buys them. But, um, it could have even opened up the opportunity for, you know, a foreign company to come in because their factories already have, uh, tax credit qualification.

Um, and so somebody could have stepped in and, and, you know, taking that over, but. This is, uh, uh, just the recognition that, okay, if they’re in chapter 11 and they’re restructuring their debt, it doesn’t mean that the debt goes away. It might get reduced. Um, and hopefully it gets reduced if it’s $10 billion.

Um, but because that’s, I mean, that’s literally almost their entire fleet of blades needs to be, yeah. Would need to be replaced.

Allen Hall: Yeah. And, and Joel, I think this is the real crux of this is. You can’t have a billion dollars in debt and operate a blade factory. [00:26:00] That doesn’t make any sense. Do they eventually clear this out?

What do you think is going to happen to TPI do. They just continue to operate. No one has any interest in it. They just continue to make blades and bring in some revenue and restructure the debt. I, I don’t see this ending

Joel Saxum: ending. Well, chapter 11 sometimes is a gateway drug to. Shutting the doors. Yeah.

That could be happening. And then, and then it’s fire sale because then the lawyers step in and you know, there, there’s oversight there. And someone could pick up the assets or the assets get parted out to try to pay back the debtors or the creditors, sorry. Uh, so you could see other blade companies, you could see some something odd or Sonoma and Aris, or of course, I don’t have the insight into those as much as.

Maybe Phil does, but you could see someone else buying this assets.

Phil Totaro: Yeah, it wouldn’t be Sonoma right [00:27:00] now because of the foreign ownership thing for the tax credit qualification, Joel. Um, but there are, you know, you mentioned one company that, that could be interested and has expressed interest in, you know, getting a, a footprint in the us but there’s also companies, you know, in, uh, other parts of the world that.

You don’t want to have a presence here in the States, uh, that wouldn’t necessarily be subject to, you know, the, the foreign entity qualification, uh, restrictions to qualify for tax credits. So there are possibilities for this long term. Does

Allen Hall: it leave a door open for a company to come in and clear the books, settle the debts on some level, and then you continue on as a restructured company?

Joel Saxum: Or this, or think about this one. And, and this is, this is a long shot, right? But does it leave a door open for someone to watch TPI fall on their face and start [00:28:00] up a blade company?

Allen Hall: I don’t think so. That’d be hard because there’s so much, there’s so much momentum right now with TPI. It’d be really hard to do that, be like, I’m gonna use an aerospace equivalent.

It would be like Boeing Aircraft and Spirit. And Spirit was Boeing at one point, then broke off and set up their own company and was supplying pretty much all Boeing. Uh, parts, but Boeing has reacquired it because it came in in trouble, very similar to the TPI situation. Not that TPI was owned by an OEM, but it does sort of lend itself to ge.

Renova designs are coming through TPI all the time in a couple of the manufacturers, for that matter. Somebody’s gotta do something. They need parts.

Phil Totaro: Yes, but here’s, here’s the reality and ’cause I’ve actually studied a bunch of the different m and a deals that have happened in wind energy over the years.

What happens in most industries with m and a is healthy company buys smaller, healthy, but growing company. In [00:29:00] wind energy, we don’t really have that. When m and a happens, it’s usually healthy company gobbles up assets of, you know, unhealthy company that are still valuable and then leaves the debt to somebody else like, and that’s why.

The chapter 11 thing is interesting because if they’re restructuring the debt, it means they can reduce it a little, but the debt is still gonna be there. If I’m going in and saying that the company’s worth 7 million in a valuation, but they have a billion dollars in debt even after, or during chapter 11, I’m not buying it.

Um, because who wants to absorb that? Nobody, nobody wants to do that. So the reality is, what Joel mentioned is are people gonna watch while this thing falls on his face? And then out of the ashes of, of this something new, uh, arises? Yes, I will actually agree with and support that notion. Not that I’m hoping TPI fails, but.

That’s [00:30:00] more likely to happen if the worst transpires and TPI can’t pull themselves out of this. That is more likely to happen than some, you know, angel investor, uh, or angel of an investor, uh, swoops in and, and grabs them up and, and says, you know what? We’re, we’re gonna. You know, keep you healthy and keep you going because you’ve got this $1.6 billion order book.

What, what we have in the wind industry are vultures who come in and they start plucking away at that $1.6 billion worth of order book and taking it for themselves. And, you know, the remnants of that carcass can go, you know, die in the desert somewhere.

Allen Hall: No, I, here’s, here’s my. 30,000 foot view of TPII hope they can make this work.

There’s a lot of workers and a lot of the wind industry that relies upon them. They cannot close. They need to keep producing and, and everything that’s happening in the world right now, uh, with Sted [00:31:00] is not great. But TPI has a bigger impact I think. In terms of where we’re going over the next five to 10 years, we need blades.

TPI makes a lot of blades. They’re pretty good at it, but the financial situation is just not good at

Phil Totaro: the moment. And keep in mind too that because of these changes in the law for production tax credits and investment tax credits, TPI needs to keep producing blades for now. Uh, which is one reason they were probably able to get this, uh, Oak Tree Capital.

Um, you know, financing, uh, to help them continue operating because they have to make deliveries for anybody that’s got, uh, turbines that they wanna safe harbor before the IRS rules change again, presumably at the end of this calendar year, we’re about. You know, another what, 15 to 20, 20 days away from seeing the first draft of whatever these IRS rules are gonna [00:32:00] be.

I’ve already covered, you know, ad nauseum. I think it’s the 18th or 20th. It’s soon. That’s what I mean. It’s supposed to be, you know, in, within the next few days here, um, that we see a first draft. But just keep in mind that a first draft is not the adoption of the rules. So we’re. We’re expecting that the final rules will be fully adopted by the end of the year.

If you haven’t safe harbored under the current rules, you need to do it now. That’s by the way, why Vestas just announced a 950 megawatt project in the us. Uh, they didn’t say who. Although if you want the details, contact us, uh, Intel store. We know. Uh. So, you know, the, but the reality is anybody that needs to safe harbor turbines needs TPI, particularly ge or even Nordex if they’re, if they’re, you know, getting some of these blades from Mexico, uh, now that most of their, their quality issues I think have been worked out.

Allen Hall: That’s gonna do it for this week’s Uptime Wind Energy podcast. Thanks for joining us. Check out [00:33:00] our uptime tech news where we talk about these subjects and a whole bunch more every week. It’s free. Just Google uptime tech news and you’ll get there. So we will see you next week here on the Uptime Wind Energy Podcast.

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