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Learned something new tonight: I had marked some places in the text where there were audio dropouts and one or more words were missing or unclear. I bracketed that between a less-than sign and a greater-than sign.
Memo to self: - LSE considers such parentheses in a plain text to be tags and discards them. - If such "tags" contain a question mark, the tag itself and the entire remaining text behind it will be discarded.
Q1 part 4: David about Southport And at Southport as well, Southport has an incredible support from the local government. Damian Moore, the MP, has been very supportive on the project. We were mentioned in the house of commons (??) technology and the potential of our technology and the importance for energy security in the UK as well. And we have discussion already to use the hydrogen produced there for blending potentially in the gas grid. There is an input there. So we are using the projects from a strategic value as much if not more for just saying: “Let’s get the project through, let’s partner with the first large technology partner just because it’s a big company and let’s get on with it.”. This is we these are the only way that we will leverage, and we’ll build the platform for growth to really be able to be a global license source that will be able to create multi-billion revenues.
** Sorry, had to repost ths because LSW cut this off due to an accidental tag :-)
And at Southport as well, Southport has an incredible support from the local government. Damian Moore, the MP, has been very supportive on the project. We were mentioned in the house of commons (??) technology and the potential of our technology and the importance for energy security in the UK as well. And we have discussion already to use the hydrogen produced there for blending potentially in the gas grid. There is an input there. So we are using the projects from a strategic value as much if not more for just saying: “Let’s get the project through, let’s partner with the first large technology partner just because it’s a big company and let’s get on with it.”. This is we <
Deeside is a very high-profile site with a lot of support from the local government with the moratorium of planning for incineration. We got planning through because it’s the local and the central government start understanding that the technology is very different and much more versatile and environmentally sound. Deeside has Toyota as a neighbour taking more than 50-60% of the off-take. And again we cannot underestimate the importance of using all projects to attract more strategic partners. But from the funding point of view, from the technical point of view. We don’t delay the project just because of the delay. The technology is proven. The box is thick for us. We are thinking, how can we prove commercially the right business model in order to attract a broader range of funders and off-takes. So we use in this project like you know: Toyota is interesting to obviously for the biogas and the offtake of the power and heat, but now they’re saying “We’ll buy hydrogen as well if you produce it there.”. So the we opened this discussion as well and we attracted new partners because this project has such a high profile in terms of stakeholders, then other engineering companies, other funders, that want to have their own pr activities but also a real project that is going to be built in the next year or so and not in the next five years. They want to be involved in something that’s tangible(?) is real with a real offtake, not something that will say “we’re going to make hydrogen in 2025 and somebody is going to buy in the future”. No, it’s this “someone” that the off-taker is there now and the technology can be deployed now. So that’s the reason and in Deeside, we are looking as well with discussion to sell the spv, equity recover and development services fees and reconfigure this, announce soon a technology partner for the syngas to chemical update.
The Billingham project is the largest and most complex but it’s in the middle of Teesside and therefore we have a very very healthy set of potential industrial customers who can buy the offtake from us there. We also have a very large site and that gives us a lot of flexibility in terms how we use it. The planning permission for a 200,000 ton per year RDF to combined heat and power facility – the planning permission is done. The permits are done. The grid connection is secured. That is all ready to go. What we wanted to look at last year, though, is: “Do we want to really be in the middle of Teesside, offering combined heat and power? Is that the most interesting offtake for those industrial facilities there?”. We are next door to CF Fertilisers. We have BP now who are strong buyers of hydrogen in the area. We’re surrounded by Mitsubishi. We got Seqens Pharmaceuticals right next door and so on. There re dozens and we’re in touch with the Teesside local authority now, who are helping us to identify dozens of potential off-take customers, not simply for combined heat and power but for things like hydrogen, synthetic natural gas or even biofuels or other types of biofuels.
So what we did was we went back. We re-ran the financial models. We had somewhere, you know, around 22 different scenarios that we ran for this and what we’re now looking at is how we can have a multi-use facility.
The combined heat and power plant would only take one third of the land that we have there in Billingham. Surrounded by all those customers. And so now what we’ve done is: We are looking at how to make that a multi-use facility. And we’re following that up and we’re discussing that.
I am hopeful that in the next month or two we’ll be announcing a feed partner who will go and work with us on the front-end engineering design. That would then take us <> of work getting the detailed design ready. And although I’m doubtful that we’ll close it within the year, I think it’s a stretch right now to say that we nonetheless would intend to get revenues by getting investors involved in that and recovering some of the development fees that we are owed on that site.
With Deeside, David, you want to comment on Deeside?
Today, someone asked me about news on wood group and their current role. A good reason to re-watch the AGM video. I also had a look at the Q&A and have seen that there isn’t a transcription of the answer of Q1 available (which doesn’t mention Wood, but corresponds to wood because it’s all about the three UK plants). I felt free to note it down:
Q1: Financial close on the UK projects was delayed to this year. I think all investors are surprised that it would be delayed to h2. Is there any danger it won't be in thus years forecasts?
Q1-part 1: Jeff
I mean the first thing that we have to say is that we have three UK projects now. We deferred two of them at the end of last year. Billingham and Deeside. We did that because at that time we were recognizing new opportunities for them. I’ll come back and talk about that.
The third one of course is in Southport. And that is moving quite quickly. It’s a smaller scaled project, which in a way makes it more attractive, possibly because we can move it along more quickly. But also because it has a lower risk profile as perceived by investors, who are of course critical to us closing these deals.
So all three of those projects are in our forecast for this year. We intend to get revenue from all three of them and we are focused very heavily on that. In fact, we held a workshop last week with 15 people in our company, dedicated to the success of those UK projects.
Now, to get that revenue, the single biggest thing we have to focus on is getting investment into those projects and getting funders who are going to come in and/or lenders who are going to get involved in them. And as you know, it’s a tough market to be doing that. However, for the reasons that David was articulating earlier, the market for small scale localised technology delivery for the kind of energy, that renewable energy, that these plants will produce, is very very strong right now. Also the UK government’s interest in energy security and independence is also stronger than ever. And that plays very very well to what we’re going to deliver. Not only because we can use UK source feedstock: we can use locally source feedstock to deliver local energy solutions.