REG - Harmony Energy Inc. - AGM Trading Update

Harmony Energy Income TrustAnnouncement

18/04/2024 07:00

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RNS Number : 0491L  Harmony Energy Income Trust PLC  18 April 2024

18 April 2024

Harmony Energy Income Trust plc

(the "Company" or "HEIT")

 

AGM Trading Update

Harmony Energy Income Trust plc, which invests in battery energy storage
system ("BESS") assets in Great Britain, will hold its Annual General Meeting
at 10.00 am today at the offices of Berenberg at 60 Threadneedle Street,
London, EC2R 8HP. At the meeting, the Investment Adviser will provide a
high-level portfolio and operational update for the 11 week period ended 15
April 2024.

 

Portfolio & Operational update for the period 15 April 2024

·         On 11 March 2024 National Grid ESO launched the Balancing
Reserve ancillary service.

·         At the same time, National Grid ESO also amended the "15
minute rule" - a key constraint which had restricted the duration of actions
awarded to BESS projects in the Balancing Mechanism.

·        The Investment Adviser previously indicated that these two
events would increase opportunities for BESS in the Balancing Mechanism.
 Indeed, volumes (in MWh) captured by the Company's portfolio from Balancing
Mechanism activities have grown by 313% (January versus March), and the
proportion of the Company's monthly revenue derived from Balancing Mechanism
has increased from 15% (January) to 34% (April month-to-date).

·     In addition to the above, we have also witnessed increasing wholesale
market spreads caused by high   penetration of wind generation in Great
Britain during periods of low demand.  This leads to low wholesale market
pricing (and even periods of negative pricing) during which BESS has
opportunity to be remunerated for importing power and subsequently selling at
higher prices.

·     As previously communicated, growing revenue opportunity in the
Balancing Mechanism and/or wholesale   markets is advantageous to 2-hour
duration BESS, as both markets are priced in £/MWh, rather than £/MW.

·     Like-for-like revenue (including Capacity Market revenue) has
improved by c.58% from c.£45,500/MW/Year (January full month) to
c.£72,000/MW/Year (April month-to-date):

 

 Month             Like-for-Like Portfolio Revenue

                   (unaudited and rounded to nearest £100/MW/yr)
 January 2024      £45,500/MW/Year
 February 2024     £45,600/MW/Year
 March 2024        £59,400/MW/Year
 April 2024        £72,000/MW/Year

 (month-to-date)

 

·           In addition to the above, the Company has recognised
additional revenue during February 2024 relating to:

o   the Embedded Export Tariff ("EET") being accounted for in February.
The EET is retrospectively awarded to generating assets in certain zones (in
the Midlands and South of Great Britain) which exported power during the three
half-hourly periods of highest demand during the winter months
(November-February inclusive); and

o   adjustments to prior periods to account for reconciliations of revenue
from Elexon and Tesla (in their role as revenue optimiser).

Taking into account these adjustments, the total revenue for February 2024 was
£80,800/MW/Year.

The Company will publish further commentary (as well as further updates on the
portfolio and an update on its strategy in relation to dividends and other
methods of delivering value to Shareholders) in its next quarterly trading and
net asset value (as at 30 April 2024) update before the end of May 2024.
 Until such time, the dividend policy remains as set out in the recent Annual
Report and Accounts.

END

 

 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

 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 Ordinary 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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