REG - Corcel PLC - Update : Gas Peaker Capacity Market Auction

CorcelAnnouncement

24/02/2022 13:15

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RNS Number : 7477C  Corcel PLC  24 February 2022

 

Corcel Plc

("Corcel" or the "Company")

 

Update : Gas Peaker Capacity Market Auction

 

24 February 2022

 

Corcel, the natural resource exploration and development company with
interests in battery metals and flexible energy generation and storage, notes
the provisional results of the T-4 Capacity Market Auction for delivery in
2025/26 ("T-4 CM Auction" or "T-4 Auction"), that took place on 22 February
2022.  The Company's Avonmouth gas peaking project ("Avonmouth" or the
"Avonmouth Project") was successfully entered into the T-4 Auction and has
been provisionally awarded a 15 year Capacity Market contract by National Grid
Electricity System Operator ("National Grid" or "NGESO").  The final results
of the T-4 Auction will be published by NGESO on 4 March 2022.

Highlights

·    T-4 CM Auction cleared at a record high of £30.59/kW/annum

·    Avonmouth gas peaking project (where the Company has rights over 100%
interest subject to successfully funding the project) provisionally awarded a
15 year Capacity Market contract with National Grid providing guaranteed gross
revenue of c.£1.5million per year

·    Revenue projections being revised for all flexible energy projects

·    Peaker portfolio fundraising progress continues with multiple parties
in due diligence and potentially expected to bid during March

The Company notes the results of the recent T-4 CM Auction, that took place on
22 February 2022, where a clearing price of £30.59/kW/annum, the highest
clearing price achieved to date in the UK and some 70% above last year, was
achieved.

Following an application into the Capacity Market auction by FPC Electric Land
Limited, the Company's partner and landlord of the site, the Avonmouth Project
has been awarded a 50MW Capacity Market contract which equates to a guaranteed
annual gross revenue of c.£1.5million, index-linked over a 15 year
consecutive period, beginning in 2025.  The Company cautions that its rights
to 100% of the Avonmouth Project remain conditional on a successful completion
of the existing project funding process and project construction and that
commercial terms with FPC Electric Land Limited around the sharing of the
benefit of the Capacity Market contract are still to be negotiated.

As a result of this year's exceptional Capacity Market clearing prices and
increased energy price volatility, all of Corcel's flexible energy project
economic models will be updated, and brought in line with revised industry
projections.

Scott Kaintz, Chief Executive, commented: "We are delighted with the results
of this year's T-4 Auction and that of our project, thanks to our partner FPC
Electric Land Limited, which was able to pre-qualify and enter into the
auction.  The large increase in the clearing price as compared to previous
years is reflective of the UK's fragile energy network, and the uncertainty of
supply that has arisen, as the country transitions from primarily base load
suppliers to renewable energy sources.  We believe these results only serve
to emphasis the importance of transitional energy assets such as our gas
peaking and battery energy storage projects.

This is a highly encouraging step towards closing funding on our gas peaking
projects, and means that a large part of anticipated revenues at Avonmouth are
effectively guaranteed. We look forward to updating shareholders on additional
progress shortly."

The Capacity Market is a mechanism used to procure capacity (by providing the
necessary payments to enable plants to deploy or remain operational) to ensure
total generation on the national grid is sufficient to meet security of supply
standards.  Further information on the Capacity Market can be accessed
through the Electricity Market Reform Delivery Body's website via the
following link:

https://www.emrdeliverybody.com/SitePages/Home.aspx
(https://www.emrdeliverybody.com/SitePages/Home.aspx)

 Scott Kaintz, CEO                                    Corcel Plc       020 7747 9960
 James Joyce / Andrew de Andrade, Nomad & Broker      WH Ireland Ltd   0207 220 1666
 Simon Woods, Public Relations                        Vigo Consulting  0207 3900 230

 

This announcement contains inside information under Article 7 of Regulation
(EU) 596/2014.

 

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