REG - SIMEC AtlantisEnergy - SAE takes full ownership of BESS project

SIMEC Atlantis EnergyAnnouncement

07/08/2024 07:00

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RNS Number : 4406Z  SIMEC Atlantis Energy Limited  07 August 2024

7 August 2024

 

 

SIMEC Atlantis Energy Limited

("SAE Renewables", "SAE" or the "Company")

 

 

SAE takes full ownership of 120MW/240MWh BESS project at Uskmouth

 

SAE has achieved the next step in delivering its 'Building a Sustainable
Future to 2035' strategy by taking full ownership of the 120MW Battery Energy
Storage System ("BESS") project at the Uskmouth Sustainable Energy Park
("USEP"). According to the Company's latest estimates, the BESS project will
generate average annual revenues of £12m and annual average EBITDA of £9m
per annum in its first five full years of operation. The estimated capital
cost of the project is £65m, which includes the deferred consideration and
transaction costs.

 

On 6 August 2024, SAE completed a Share Purchase Agreement ("SPA") with Enso
Green Holdings Limited ("EGHL"), a joint venture between Cero Generation
Limited and Enso Energy Limited, to purchase all the shares in a 120MW/240MWh
BESS project at its USEP. SAE has paid EGHL an initial consideration of £299k
under the SPA, to acquire 100% ownership of the development vehicle, Enso
Green Holdings E Limited, the vehicle which EGHL used to develop the BESS
project and hold the grid connection, land option and planning application.
Under the SPA, when the project reaches financial close, SAE will pay EGHL an
additional amount of £3.85m as a deferred consideration, in recognition of
their contribution to the project development to date.

 

This acquisition is a key part of SAE's recently announced strategy to become
an owner and operator of its future energy projects.

 

The BESS project will be built on the site of the old cooling towers, which
SAE is pleased to report have already been demolished in preparation for the
construction phase. The project received planning permission in January 2024.
The cooling tower site is large enough and has planning and grid connection
rights for a BESS of up to 4-hour duration. For the UK government to achieve
its Net Zero targets 4-hour plus duration BESS systems will become necessary
in the future. This project is being developed with the ability to expand from
the initially planned 2-hour duration, 240MWh capacity, up to 4-hour duration
and 480MWh capacity.

 

The BESS project's target grid connection date is October 2026 and it will
connect into the existing grid infrastructure on the USEP site. During the
first half of 2024, SAE completed an extensive tendering process for the BESS
project and has selected a preferred technology supplier and an Engineering,
Procurement and Construction ("EPC") contractor for the Balance of Plant
("BOP"). SAE is working closely with these two parties and their supply chain
in developing the contracts and delivery programmes and anticipates
construction starting in 2025 and taking around 18 months.

 

SAE is now working to bring the BESS project to financial close with Elgar
Middleton appointed as Financial Advisers to assist with sourcing an equity
partner and securing construction finance. WSP have been appointed as Owners
Engineer to support the EPC contract development, prepare for technical due
diligence and oversee construction. Leading BESS power purchase agreement
("PPA") commercial advisers, Pexapark AG have been appointed to help with the
procurement and negotiations on the PPA Optimisation Agreement, which will
provide the long-term revenue streams for the project. In summary, the tender
process for the build of the project has now been completed with final project
technical development and EPC contract negotiations well underway.

 

This is the second BESS project at the SAE owned USEP. Completing this SPA
will enable SAE to progress to close the project financially and then build,
own, and operate it.

 

Graham Reid, CEO of SAE Renewables, commented:

 

"We have set a clear strategy to become an owner and operator of our projects
and this announcement is a key next step in achieving this. A huge amount of
work has already taken place to reach this milestone, demonstrating how SAE
continues to hit its targets and deliver for its shareholders."

 

 

 

 

This announcement contains inside information as defined in Article 7 of the
EU Market Abuse Regulation No 596/2014, as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018, as
amended, and has been announced in accordance with the Company's obligations
under Article 17 of that Regulation.

 

For further information, please contact:

 

 SAE Renewables                                           +44 (0)7739 832 446

 Sean Parsons, Director of External Affair

 Strand Hanson Limited (Nominated and Financial Adviser)  +44 (0)20 7409 3494

 Richard Johnson

 Rory Murphy

 David Asquith

 Zeus Capital Limited (Broker)                            +44 (0)20 3829 5000

 Louisa Waddell

 Simon Johnson

 

Notes to Editors

SAE Renewables is a global developer, owner and operator of sustainable energy
projects. SAE owns the world's flagship tidal stream project, MeyGen. SAE is
also the owner of the Uskmouth Power Station site that is being repurposed
into a sustainable energy park, initially housing one of the UK's largest
battery energy storage projects. https://www.saerenewables.com/
(https://www.saerenewables.com/)

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