Harmony Energy Inc. - Company Update

Harmony Energy Income Trust

17/10/2023 07:00

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RNS Number : 3006Q  Harmony Energy Income Trust PLC  17 October 2023

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION, TRANSMISSION, FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION
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LAWS OR REGULATIONS.

 

17 October 2023

 

 

 

 

Harmony Energy Income Trust plc

(the "Company" or "HEIT")

 

Company Update

Harmony Energy Income Trust plc, which invests in battery energy storage
systems ("BESS") in Great Britain, is pleased to announce the successful
energisation of two BESS projects:  the 198 MWh / 99 MW Bumpers project,
located in Buckinghamshire; and the 99 MWh / 49.5 MW Little Raith Project in
Fife, Scotland.

Both projects were energised ahead of schedule and take the Company's total
operational capacity to 555 MWh / 277.5 MW, which means that the Company's
portfolio is c.70 per cent. operational based on total capacity.

The Bumpers project becomes the Company's largest BESS project, and the
largest in Europe (by MWh), being 2 MWh larger in capacity than the Company's
Pillswood project. The Company now owns two of the three largest operational
BESS assets in Europe (by MWh).

The projects were developed by Harmony Energy Limited and construction was
managed by Tesla with oversight from the Investment Adviser's project delivery
team. They will be operated through Autobidder, Tesla's algorithmic trading
platform, along with the Company's existing Pillswood, Broadditch and Farnham
projects.

The Company's final seed portfolio project, Rusholme (70 MWh / 35 MW), has
completed construction and has been cold commissioned. This project is
currently awaiting confirmation of the energisation date from the relevant DNO
which is now expected to be in Q1 2024.

The Company's Wormald Green and Hawthorn Pit projects (acquired in December
2022) are under construction, which is progressing in line with their
timeframes, with the Investment Adviser's project delivery team overseeing
progress.

An overview of the Company's portfolio is as follows:

 Project                     MWh / MW       Location       Target Commercial Operations Date(1)  Status
 Pillswood                   196 / 98       Yorkshire      Operational                           Operational
 Broadditch                  22 / 11        Kent           Operational                           Operational
 Farnham                     40 / 20        Surrey         Operational                           Operational
 Bumpers                     198 / 99       Bucks.         Operational                           Operational
 Little Raith                99 / 49.5      Fife           Operational                           Operational
 Total Operational Capacity  555 / 277.5

 Rusholme                    70 / 35        Yorkshire      Q1 2024                               Cold Commissioned
 Wormald Green               66 /33         Yorkshire      Q1 2024                               Under Construction
 Hawthorn Pit                99.8 / 49.9    County Durham  Q2 2024                               Under Construction
 Total Portfolio Capacity    790.8 / 395.4

(1) Dates are calendar quarters.

 

UK BESS Market Update

Whilst the UK Market for mainstream ancillary services has moved towards
saturation, as fully expected, the Market for longer duration 2-hr batteries
has seen positive trends in recent weeks.

Portfolio revenues have trended upwards during September, driven by a 25%
increase in day-ahead wholesale market price spreads compared to August, as
Europe demand for gas increases in preparation for winter. September also saw
various instances of negative wholesale pricing caused by high wind
generation. As previously seen in July, negative wholesale prices provide an
opportunity for BESS to be paid to charge, increasing demand on the network.
2023 has seen more instances of negative pricing than any previous year, which
coincides with the milestone achieved in June when the total capacity of
installed wind generation in GB overtook combined cycle gas generation for the
first time.

Longer duration batteries can trade more MWh than shorter duration batteries,
and therefore any widening of wholesale spreads is advantageous for longer
duration batteries.

From October onwards, the Company's portfolio also began to benefit from
contracted Capacity Market payments as Pillswood, Broadditch and Farnham
commence delivery of their respective T-1 contracts.  As previously
announced, the early energisations of Bumpers and Little Raith has allowed the
Company to procure an additional £403k of revenue (not previously budgeted)
by acquiring additional T-1 Capacity Market contract capacity. The Company
expects to procure further contracts in the coming weeks.

A further update on the Market and portfolio operations will be provided
alongside the Company's next NAV update for the period to 31 October 2023.

Norman Crighton, Chair of Harmony Energy Income Trust plc, said:

"The Board is very pleased with progress, as the portfolio is now
approximately 70 per cent. operational in advance of the winter period. The
fact that the projects are being delivered earlier than expected, in a
challenging environment where delays are well publicised, is a testament to
the strength of Harmony's delivery team and the strength of our relationships
with suppliers and DNOs. To have delivered 555 MWh / 277.5 MWh through
construction to operational by the second anniversary of the Company's IPO is
a significant achievement."

END

 

For further information, please contact:

 

 Harmony Energy Advisors Limited
 Paul Mason

 Max Slade

 Peter Kavanagh

 James Ritchie
 info@harmonyenergy.co.uk (mailto:info@harmonyenergy.co.uk)

 Berenberg                                                    +44 (0)20 3207 7800

 Gillian Martin

 Ben Wright

 Dan Gee-Summons

 

 Stifel Nicolaus Europe Limited                                   +44 (0)20 7710 7600

 Mark Young

 Edward Gibson-Watt

 Rajpal Padam

 Madison Kominski

 Camarco                                                          +44 (0)20 3757 4980
 Eddie Livingstone-Learmonth

 Georgia Edmonds

 JTC (UK) Limited                                                 +44 (0)20 3832 3877
 Uloma Adighibe

 Harmony.CoSec@jtcgroup.com (mailto:Harmony.CoSec@jtcgroup.com)

 

LEI: 254900O3XI3CJNTKR453

 

About Harmony Energy Advisors Limited (the "Investment Adviser")

 

The Investment Adviser is a wholly owned subsidiary of Harmony Energy Limited.

 

The management team of the Investment Adviser have been exclusively focussed
on the energy storage sector (across multiple projects) in Great Britain for
over seven years, both from the point of view of asset owner/developer and in
a third-party advisory capacity.  The Investment Adviser is an appointed
representative of Laven Advisors LLP, which is authorised and regulated by the
Financial Conduct Authority.

 

Important Information

 

 

This announcement does not constitute an offer to sell or the solicitation of
an offer to acquire or subscribe for shares in the Company in any
jurisdiction. This distribution of this announcement outside the UK may be
restricted by law. No action has been taken by the Company that would permit
possession of this announcement in any jurisdiction outside the UK where
action for that purpose is required. Persons outside the UK who come into
possession of this announcement should inform themselves about the
distribution of this announcement in their particular jurisdiction.

 

This announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's plans and/or the plans of one or more
of its investee companies and their respective current goals and expectations
relating to their respective future financial condition and performance and
which involve a number of risks and uncertainties. The Company's target
returns are a target only and there is no guarantee that these will be
achieved. This Company cautions readers that no forward-looking statement is a
guarantee of future performance and that actual results could differ
materially from those contained in the forward-looking statements.

 

It should also be noted that any future NAV per Share announced by the Company
in due course will, in addition to the matters described in this announcement,
also be affected by valuation movements in the Company's portfolio and other
factors including, without limitation, purchase prices of battery energy
storage systems and components, project development and construction costs,
income and pricing from contracts with National Grid ESO and other
counterparties, the potential for trading profitability in the wholesale
electricity markets and/or Balancing Mechanism, performance of the Company's
investments, and the availability of projects which meet the Company's minimum
return parameters in accordance with the Company's investment policy .

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