Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Firstly thank you for your cordial words
I have been retired as a Director from WtE sector a number of years, but came across an LSE posting which was somewhat extravagant in praise for sector which I couldn't leave alone
Gasification and its cell mate pyrolysis has had a problematic pedigree as maybe be seem from https://ukwin.org.uk/files/pdf/UKWIN_Gasification_Failures_Briefing.pdf ; Teeside /Billingham still seems to attract loads of interest but there would be totally insufficient feedstock for all - you need a 20 year supply deal written in stone.
Investment losses have exceeded £1b with the best of them loosing money, which encouraged plagued by a number of "undesirables"
But projects have got a lot bigger which saw the back of them,
More recently gasification are becoming mainstream as in www.cogenuk.com/ who done a number of gasification using Japanese and other technologies however all the partners involved in their projects have to financially guarantee construction & operating performance maybe up to £200m to £300m so big boys only need apply- good credit essential
But gasification is also competing with incineration (moving grate) a known technology with much lower risks and subsequently much lower cost of capital. New incineration projects are announced every week see www.letsrecycle.com/news/latest-news/ although burning waste is not always welcome as you know
But given lower risks of incineration you can get a lot more debt at a cheaper cost than equity maybe exceed 75% gearing with proven players , partners and technology; and each partner be it an EPC or O&M must financially guaranting up to cost of project, you may be able to cover some by insurance but they can't fix outages!
For Gasification funders may want sponsors to put up to 75% in equity even if team has list of projects as long as your arm
However I cannot see any project working at £25/Mwh current wholesale spot price www.nordpoolgroup.com/Market-data1/GB/Auction-prices/UK/monthly/?view=chart - this is whole new territory
I don't know of the Greek projects or EQT in anyway but roughly only 40% of some UK WtE projects is attributable to developer of that may get c10% to 20% GP
Remember this is not without competition I could easily name you a dozen gasification cos in UK & EU
As said I don't think its an Amazon!
I hope that helps
Welcome to LSE asclepius. I see you are Newbie to the site.
I really do welcome your input. Purely because I have a lot invested in here, & I am constantly questioning if I have missed anything!
On to your post. The point I was making was the progress that's been made. EQT have clearly provided meaningful test data on the feedstock to have the offer made.
This alone must have took a lot of hard work & effort from David & the team.
This data can now be rolled out to & used for projects world wide. David is systematically breaking down each & every barrier in order to be in a position to deliver projects of such scale.
You make some interesting points, I'm sure the project will need to work at a microeconomic level before this proceeds. Although, with less & less countries accepting UKs waste I think the government are very motivated
for this tech to succeed. EQT seem well placed now to prove their technology works to the extent required to make the economics work & progress to this point.
Furthermore, the macro economic debate of north Vs south England is probably not going to be relevant in USA, Spain, France, Greece, the Balkans or anywhere else interested in this tech
What we do know for a fact is that right now we are in discussions for 2 more of these in Greece. The progress here can only help those discussions.
Its nothing to do with what the South Easteners is but that most WtE plants are situated in the North , planning approvals for waste South East is notoriously very difficult if not impossible , but that's where they are needed - so waste gets trucked by the 1000 or on trains,with Rotterdam now being effectively shut to our RDF exports given taxes
Waste companies are well aware of geographic imbalance
Arseclepius I have nothing against people from the South (born in London grew up St Albans happy memories) but this is a classic "Southernist" attitude. If it aint below watford gap whats the point. I hope this succeeds even more now let's hope you stay on 1 post for the immediate. GL all genuine holders. MFU
The last thing I want to be is some Jonah, although I do admire the sheer enthusiasm for the stock but I fear it is misplaced
The Billingham site is in a region awash with fully consented sites , about a dozen maybe a quarter of those will get done
Pity plant not in South East where it is needed
And that quarter will have enough financial resources to fund it - might get 50% gearing at best so say £100m in equity
However the wholesale price of electricity fallen through floor in fact you had to pay to get rid of it the other weekend up to £40/Mwh
So a story of untold wealth from EQT may not be on the agenda
?
Very nicely put!
Agree
Short term these are massively inflated due to the emissions requirements & EU Green deal David spoke about.
His quote was winter is coming for the old infrastructure - Brilliant!
Probably but I think that long term underlying earnings growing a PE of 20-25 makes sense.
Much more important is when EQT can become a carried equity partner in a stream of projects all with 40 years revenue horizons.
That’s when the crazy numbers make sense and Mr Palumbo gets his £50m bonus!
That sounds prudent.
Take a look at the revenues & earnings in PHE & ITM though. This sector is attracting a huge premium just now.
PE’s in the 20s?
Add the revenue of just a couple of these large projects, factor in the PE ratios for similar companies the Green Energy sector & work out an MCAP & share prices for EQT, makes you think
Also having a proven track record for the supporting issues like insurance most likely cuts the project timelines which is especially important for smaller cookie cutter projects where the capital needs to start paying for itself as soon a possible.
Hell I am starting to like this stock!
Totally agree David.
Additionally, what im seeing, is, David is quite content to keep the lights on at the moment by taking on some of the smaller projects, where cash flows will be recognised quicker, whilst doing the heavy lifting to enable the large RDF projects to dominate the pipeline.
Billingham + the 2 in Greece make this a very exciting time.
It was interesting I thought that it was the first thing DP mentioned when asked about progress. Normally the most important thing comes to mind first - an indépendant vindication of the tech by typically rather pedantic folk (underwriters)...
This actually could become a serious advantage for EQT.
It’s clear from DP’s comments that this insurance is financially important to the economics of any project therefore assuming Eqtech can deliver the Billingham project to standard over the coming year its likely they will have a significant “Insurance Advantage” over incoming companies without a commercial track record. Perhaps this is an upside paid for by dilution and delays in former times?
Billingham – Technology Warranty Insurance Proposal Received from specialist underwriter, happy with it – Expect premium to reduce in future projects. THIS IS WHAT HAS PAVED THE WAY FOR THESE PROJECTS TO PROCEED. ANY IDEAS IF THIS HAS BEEN OBTAINED THROUGH PROVIDING RESULTS THROUGH ALL THE UNIVERSITY TESTING? - OUTSTANDING ACHIEVEMENT
This has helped gain traction with knowledgeable investors – Term sheet in issue
Full quotation for grid connection received, far less than expected - Increases viability
“Billingham not just fully transformational project for EQTEC, but also for the waste elimination infrastructure in the UK”
In the process of producing the Legal documentation with COBRA - THIS MUST BE FINAL STAGES SURELY?