REG - SIMEC AtlantisEnergy - SAE achieves milestone in BESS project delivery

SIMEC Atlantis EnergyAnnouncement

30/08/2022 07:16

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RNS Number : 4539X  SIMEC Atlantis Energy Limited  30 August 2022

 

 

 

RNS

30  August 2022

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 22(nd)
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 28(th) 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
 Jeremy Ellis

 Ben Griffiths

 Shalin Bhamra

 Arden Partners PLC - Joint Broker             +44 (0) 20 7614 5900

 Ruari McGirr

 Simon Johnson

 

Notes to Editors

 

SAE is a global developer, owner and operator of sustainable energy projects
with a diverse portfolio in various stages of development.

https://www.simecatlantis.com/ (https://www.simecatlantis.com/)

 

24(th) May: Link to BESS announcement:
https://simecatlantis.com/sae-signs-40m-contract-for-one-of-uks-largest-battery-storage-projects-at-uskmouth/
(https://simecatlantis.com/sae-signs-40m-contract-for-one-of-uks-largest-battery-storage-projects-at-uskmouth/)

 

22(nd) March: link to HoT announcement:
https://simecatlantis.com/sae-signs-heads-of-terms-to-progress-uskmouth-sustainable-energy-park/
(https://simecatlantis.com/sae-signs-heads-of-terms-to-progress-uskmouth-sustainable-energy-park/)

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