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Overall gas-red power M&A in the UK rose from two deals worth GBP 345m in 2015 to eight transactions worth GBP 1.7bn in 2019, according to Infralogic data. Although the market slowed down in 2020, more deals were launched with investors including Foresight-backed Mercia Power Response, Jones Lang Lasalle and Octopus Investments putting gas-red plants on the block. Elsewhere in Europe, German investor Ikav took a majority stake in an EUR 500m portfolio of gas peakers under development by Metaenergia in Italy in May, with MEAG providing debt nancing.
Corcel, Claireld and Portland Advisers declined to comment.
Arlington Energy did not respond to a request for comment.
Apologises for the number of posts, had to paste it off internet onto blank word doc, then copy and paste onto here
Some of Green Frog’s gas-red plants were spun off into a company called Viridis Power and sold to I Squared Capital’s Conrad Energy last year. Europe M&A and privatisation: Preconstruction M&A Sector: Location: Published: Author: Power United Kingdom 13 October 2021 Stefano Berra SparkSpread P&E Inframation
SPONSOR SEEKS EQUITY INVESTOR FOR UK GAS PEAKERS 13 October 2021 | 12:18 BST Battery, power and mining rm Corcel is looking for equity investors in two UK gas-red peaking power projects under development totalling 100 MW, sources familiar with the deal said. London-listed Corcel is working with advisors Claireld and Portland Advisers to nd investors that will provide funding and take a majority stake in the Avonmouth and Tring Road projects, which are set to have a capacity of 50 MW each, according to the sources. The two projects, which Corcel is developing with Arlington Energy, another battery and exible power specialist, have a total funding requirement of GBP 53m, added the sources. The sponsors are also considering raising debt for the schemes, they said. The projects are shovel-ready, having secured grid and gas connection, planning permission and land rights. They are expected to take part in the UK’s next capacity market auction next February, in which suppliers compete for 15-year tariffs in return for offering backup capacity to smooth supply shortfalls. The plants will be red with multiple reciprocating gas engines, which have a much faster start-up time than gas turbines. The projects also expect to generate income by offering grid balancing services and selling electricity on the day-ahead market, in addition to capacity tariffs. Corcel is also considering working with the potential new investors on a further 270 MW pipeline of other peakers and energy storage sites, added one of the sources. Corcel bought a 40% stake in the Tring Road project, outside the town of Aylesbury, from Arlington Energy for GBP 400,000 last May. In the same month it acquired exclusivity rights over 100% of the Avonmouth project near Bristol for GBP 144,000, with Corcel taking charge of the projects’ nancing and Arlington leading construction and operations. At the time of the acquisitions, the company said it received third party estimates that Avonmouth would generate annual gross margins of between GBP 67,000 and GBP 101,000 per MW each year, while Tring Road would generate between GBP 103,000 and GBP 147,000. In addition to these projects, Corcel owns a 100 MW battery energy storage project in Burwell, Cambridgeshire, and has mining development projects for battery metals in Papua New Guinea and Canada. Appetite for fossil fuel-red power plants among investors including infrastructure funds is waning, but gas-red peakers have recently attracted interest due to their role as a complementary power supply to growing intermittent renewables. However, they face increasing competition from fast-developing battery storage technology. In one of the latest deals, Investment Management Corporation of Ontario (IMCO) bought UK exible power generation platform Green Frog Power, which has a mix of gas, diesel and battery projects.
you infer that we have the upper hand. The grid connection agreement has a lifespan. It runs out. So who is in the driving seat? If I were the new owner re negotiating the lease, I'm sorry to say I would run it to the wire for the person with the expiry date, see who breaks first.
By the comments here regarding it. It sounds like a large portion of nothingness and a complete waste of time. He obviously likes the sound of his own voice. Parsons should have done it. not the monkey
With the Burwell negotiations ongoing I suspect looking at other sites is part of the negotiating/strength Corcel are applying because we own the grid connection. I personally feel they will come to an agreement as it is in both parties interest to do so.
I was encouraged by the Nickel project update, still looks like plenty of news over the coming months.
I think the problem is that the new owner is a flexible power company and (I imagine) is hoping for more than a rental income. Again, one wonders how Scott doesn’t see these issues coming. Sorry, Burwell makes me grumpy
I don't understand why it's so difficult to do a lease on Burwell. I understand it has a new owner and that said he either wants to lease it or not ... it's just a piece of land not the empire state building...
Just reading through. Frustrating for me that they are now considering alternative land for Burwell. I raised that possibility with the company by email months ago and they basically said they’d thought about it but not much, because a grid connection is tied to a particular parcel of land so if you move to a new plot of land it’s effectively a new project. Now, if that’s right, the fact that we’re resorting to it now must mean the original plan is going pretty badly? Or, if switching to new land is a decent option, why was it pooh-poohed when I raised it ages ago? As I say, frustrating. I think they need to come clean about Burwell (as, in fact, Torreguas has been saying for ages)
@Metalhead25, Exactly but it does point to other strategic options, and this is why I was asking the question. I'm happy with the answer as it does suggest that the placing would be the last option. I just hate companies that take the placing option before using other options first, it's like "there is the cow", and I'm going to milk it..... rather than "lets fatten the cow before we milk it" and I prefer the latter. Seems a sensible approach and historically that hasn't been the case in my experience so I'm happy with the answer and a 10 x uplift on value would be great 15 pps on today's starting bid :). GLA TLM