REG - Corre Energy B.V. - Operational Update

B Riley FinancialAnnouncement

10/03/2022 08:15

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RNS Number : 2728E  Corre Energy B.V.  10 March 2022

10 March 2022

Corre Energy B.V.

("Corre Energy" or the "Company")

Operational Update

 

Corre Energy is a leader in the development, operation and commercialisation
of Long Duration Energy Storage (LDES) projects and products that will
accelerate decarbonisation and enhance security and flexibility of energy
systems.

Our team has extensive experience and success in the energy sector - in
renewables, energy storage and hydrogen, including market-leading expertise in
modelling the capability of LDES to integrate large scale renewables.

 

Update Overview:

·    Demand for our unique Long Duration Energy Storage (LDES) solutions
continues to experience heightened interest from a range of market parties and
now Corre Energy will directly benefit from the EU's recently announced
"REPowerEU" plan. Under this plan, renewable permitting will be accelerated
and a hydrogen storage accelerator developed. This plan fully underpins strong
offtake demand from investment grade utility customers and commodity trading
houses for Corre Energy projects

 

·    Heightened geo-political risk, unprecedented electricity prices and
highly volatile CO2 pricing all support the EU's recent announcements on
"market actions" and "state aid." Corre Energy's ability to balance and secure
energy supplies play directly into these measures. With two EU Projects of
Common Interest (PCI's) in the Corre Energy portfolio, these recent
announcements should increase the approval probability of our projects in The
Netherlands and Denmark, with the associated benefits of probable improvements
to subsidy schemes

 

·    As part of achieving financial close of the Zuidwending ZW1 project,
Corre Energy has initiated a process of securing a long-term offtake
agreement. There has been significant interest with several investment-grade
entities submitting offers for long-term offtake of 10-15 years for 100% of
the output of the project. The outcome of this process is expected in H1 2022.
Key selling points of the ZW1 project are the storage duration of up to 84hrs
(3.5 days) output capacity of 320MW to enable integration of gigawatt
renewables and green hydrogen use

 

·    Overall market conditions are expected to trend favourably in the
long term for storage valuations and consequently offtake contract
negotiations. Consequently, the commercialisation program and associated
milestones have been optimised to take advantage of this demand and to enhance
economics. This is set against a backdrop of steady progress to date towards
achievement of key operational milestones for both ZW1 and Green Hydrogen Hub
Denmark (GHH)

 

·    The business continues to expand its interests and is in advanced
negotiations regarding additional projects in Germany, UK and US. There is a
high probability that an offtake agreement similar to the one being negotiated
for ZW1 can be achieved for such projects. The expansion of our portfolio with
increased customer demand means our unique LDES solution, which integrates
large scale renewables and utilizes green hydrogen will deliver a long-term
revenue stream which can be scaled across multiple markets

 

 

Key Statistics & Developments:

 Listing Date: 23 September 2021
 Listing Venue: Euronext Dublin
 Ticker: CORRE
 Share Price: €1.21 on 9 March 2022
 Shares in Issue: 62,018,846
 Market Capitalisation: €75mn
 ISIN: NL0015000DY3

 

 

Partnerships:

·    Siemens Energy - project and technology collaboration MOU signed

·    LDES Council - Corre Energy is an anchor member of the global council

·    EASE - council member of European Association for Storage of Energy

·    DEEP.KBB - partnership agreement in place with this leading
underground storage engineering specialist

·    Geostock - 10-year collaboration agreement in place

·    ECH2A - European Clean Hydrogen Alliance have highlighted ZW1 and GHH
as key Energy Transition investment projects

 

 

Customers:

·    As part of Corre Energy's process of delivering an offtake agreement
on ZW1, proposals for 10-15 year contracts have been received from a range of
investment-grade partners

·    Increasing customer demand points to a scalable revenue contractual
framework for pipeline project opportunities

·    Optimising commercialisation program and associated milestones to
enhance offtake and project economics given customer demand

 

 

Finance:

·    Fondo Italiano per l'Efficienza Energetica  (FIEE)  drawdown -
€11mln drawn by Q4 21

·    Infracapital - working in partnership to select senior debt provider

·    BEIS/NZIP (UK Gov. Business, Energy, & Industrial Strategy/Net
Zero Innovation Portfolio) - grant of £150,000.00 awarded Q1 22

·    Project ZW1 - grant reclaim of €1.7mln to CINEA (European Climate,
Infrastructure and Environment Executive Agency)

 

 

Key Appointments:

·    Representing Fondo Italiano per l'Efficienza Energetica (FIEE) Luca
Moro has joined the board

·    Allan Ralston, Chief Projects Officer

·    Jens Gravgaard, Project Director Green Hydrogen Hub Denmark

·    Alistair Metcalfe leading Legal function

·    Stephanie Casey leading Investor Relations function

 

 

Projects:

ZW1 has achieved significant progress to date

 Project Type      Hydrogen CAES
 Location          Netherlands
 CAES Capacity     Design improvements can yield up to 84hrs (3.5 days) output capacity of 320MW
                   in contrast to previous 12hr duration design
 CAES Generator    320 MW
 Reserved          640 MW
 Customer Offtake  Offers of 10-15yrs for 100% of output with revenue sharing

 

 

Milestones & Timeframes:

·    Customer contract and primary EPC framework - H2 22 to optimize
pricing and contract terms

·    Key development milestones of design, land and grid reserved are on
track for completion Q2 22

·    Strong customer demand is expected to continue into Q2 22 allowing
for optimal offtake arrangements to be achieved with customers

 

 

GHH is a world first and will act as the blueprint for remaining projects in
the pipeline

 Project Type           Green Hydrogen Hub
 Location               Denmark
 CAES Capacity          3 - 4 GWh

                        Design optimization could achieve a 1-1.5 day duration of storage
 CAES Generator         320 MW
 H2 Capacity            250 GWh
 Electrolyser Capacity  350 MW
 Construction           2023

 

 

Milestones & Timeframes:

·    Whilst early stage we see significant emerging customer demand with
three investment-grade entities currently engaging under a similar contractual
model to ZW1

·    Final customer contracts for offtake to be targeted for completion Q4
22

·    Given emerging drivers for accelerating renewables and green hydrogen
in Denmark, increasing customer demand is expected into H2 22

 

 

Contacts:

 Stephanie Casey  Investor Relations
 Email:           stephanie.casey@corre.energy
 Mob:             +44 7587 748402

 

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