SIMEC ATLANTIS ENERGY LIMITED
(“SAE”, the “Company” and, together with its subsidiaries, the “Group”)
SAE achieves a major milestone in the delivery of one of the UK’s largest BESS projects
SAE is pleased to announce that it has secured the necessary grid variations for the 230MW / 460MWh battery energy storage system (BESS) at the Uskmouth site and has completed the novation of the grid connection agreement. With excellent progress being made, the project is on track to be operational by 2024.
SAE announced on 24 May 2022 that it had entered into an agreement with Energy Optimisation Solutions (“EOS”) and Quinbrook Infrastructure Partners (“Quinbrook”), via their portfolio company Uskmouth Energy Storage Limited (“UES”), to deliver a 230MW / 460MWh battery energy storage system (BESS) at the Uskmouth site. The announcement further noted that the project was expected to deliver approximately £40m in revenue to the Company over 30-years, of which approximately £11m was expected to be paid within 18 months, subject to the achievement of certain milestones, the first of which was the novation of the grid connection agreement which has now been completed.
SAE is also pleased to announce, following the novation of the grid connection agreement to EOS, that it has received an initial £6m payment from UES, which is in the form of a loan. The loan is interest-free over the period of the option agreement and will be repaid from the £6m development premium that is payable on the award of planning. Planning is well progressed with the planning application for the project having now been submitted. Planning permission is expected to be awarded in Q4 2022. A further £4m development premium will be received on financial close of the project and entry to the lease. The financial close is scheduled for Q1 2023.
As part of this transaction, a £2m convertible loan from SIMEC Group, an approximately 29.7% shareholder in the Company, has been repaid. SAE now has no loans outstanding with any SIMEC Group company. SAE announced on 22nd March 2022 entry into a Heads of Terms with the SIMEC Group which committed SAE to establish a new company owned 85% by SAE and 15% by the SIMEC Group to hold the land and assets required to progress sustainable energy projects at the Uskmouth site. SAE is pleased to announce the entry into the necessary Shareholder Agreement and land agreements required to fulfil the Heads of Terms and which will be utilised to share the revenues from the BESS project in proportion to the SPV shareholding. It should be noted that the £2m convertible loan being repaid to Simec Group is netted off their 15% revenue share.
SAE continues to focus on its three core objectives:
- delivering maximum value from the Uskmouth site;
- delivering the next phases of the MeyGen project; and
- developing international opportunities for its coal-fired power station fuel pellet conversion business
Todays’ announcement is a key next step in delivering value from the Uskmouth site. We have made excellent progress in securing the necessary planning approvals and the project is on track to begin construction, as planned, next year. SAE has further land and infrastructure available at the Uskmouth site and is progressing further BESS projects and exploring other energy projects to deliver maximum value from the Uskmouth site for our stakeholders. SAE will continue to update the market as these initiatives progress.
Securing Government support through the recently awarded Contract for Difference (CFD) for a further 28 MW of tidal stream power at the MeyGen site was a significant milestone for the Company. SAE confirms MeyGen entered the CFD with the Low Carbon Contracts Company (LCCC) on 28th July 2022. Within 20 business days of entering the CFD, MeyGen was required to satisfy a number of Conditions Precedent to ratify the agreement with the LCCC. SAE can now confirm this first contractual milestone has been fulfilled.
MeyGen is already the home of the world's largest tidal stream array, the world's most powerful tidal stream turbines, and the world's largest consented tidal stream site. At the end of 2021, MeyGen accounted for 75% of the total global tidal stream output, a huge achievement for this landmark project. With the potential to expand up to almost 400 MW of installed capacity, this is a site that can deliver tidal stream at scale, at a cost equivalent to nuclear, and with the only predictable renewable generation available today. SAE is working to achieve the CFD timeline, which will result in the Milestone Delivery Date being achieved in Q1 2024 and financial close later in that year.
The expertise that the Company gained in the development of the Uskmouth conversion project has significant value and the opportunity to be applied to other coal conversion projects. SAE has a ready-made solution to address the increasing challenges relating to energy security, electricity price, and the continued need to find alternative low carbon solutions to coal. SAE has identified, a number of exciting coal conversion opportunities in Europe to which to apply the expertise it gained at Uskmouth. SAE will continue to explore these opportunities.
For more information, please contact
|SIMEC Atlantis Energy Limited||+44 (0) 7739 832 446|
|Sean Parsons, Director of External Affairs|
|Investec Bank PLC – NOMAD and Joint Broker||+44 (0) 20 7597 5970|
|Arden Partners PLC – Joint Broker||+44 (0) 20 7614 5900|
Notes to Editors
SAE is a global developer, owner and operator of sustainable energy projects with a diverse portfolio in various stages of development.
24th May: Link to BESS announcement: http://saerenewables.com/sae-signs-40m-contract-for-one-of-uks-largest-battery-storage-projects-at-uskmouth/
22nd March: link to HoT announcement: http://saerenewables.com/sae-signs-heads-of-terms-to-progress-uskmouth-sustainable-energy-park/