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Nearest tube - Town Hill
Town Hill tube? Where's that?
Tower hill Looks like a typo
I wonder if JW will slip out the cost estimates for the FEED study before this meeting in early December?
If on schedule, they will have been completed this month.
Olderandwiser, I'm hoping we have some form of equity funding in place or at the least an offtake partner announced by then.
Brewsea,
I think an offtake partner announcement is far more likely than an equity funding one, simply because the funding partner will want to pore over the detailed FEED cost estimates first.
You're probably right Olderandwiser but there's an outside chance an equity funder is already pouring over the details. I like to dream.
Finally got a chance to listen to the BEIS Select Committee's programme.
It would appear Duncan Burt director of operations for the national grid system believes the system is adequate. That may well be the case but as Dr Laura Cohen who is from the gas security group and chief executiveof the british ceramics federation and Roddy Monroe chair of the gas storage operations group and former head of regulatory affairs at Centrica Storage, were at pains to point out that if gas supply is tight then it doesn't matter how adequate your system is if there is not enough gas stored in reserve in our own country then we will always be at the beck and call of other countries.
Laura and Roddy also seemed to be campaigning for fast cycle gas rather than seasonal gas.
I hope Rachel Reeves chairwoman for the BEIS Select Committee and the rest of her committee get the message. Antoinette Sandbach the Conservative MP certainly understands the pickle we are in.
Indeed, Brewsea. I thought the NG guy is living in a Polyannaish world, unable or unwilling to accept the possibility of a serious supply outage could have on both UK domestic and industrial customers, however short-term in duration.
The issue for IslandMagee, however, is different. Roddy Monroe stated on several occasions that the economics didn't justify a replacement for Rough, however tight is the effective spare capacity at peak demand. But we are interested solely in whether or not the economics justify a commercial ROE for a fast cycle storage facility, not a seasonal one. We aren't going down the seasonal route, AFAICT. The Select Committee may make some noises about marginal tax incentives for storage providers generally, but these will be medium term in coming through, if at all, by which time the equity funder(s) will have had to commit to the project with a FID by mid-2019.
No, the case for IslandMagee will rest crucially on the FEED cost estimates to be calculated this month. Any improvement on the £300mn full-cost indicative projection which enhances the IRR from 15% will surely make this project fly, with or without government assistance. Cost overruns beyond £300mn may add a question mark to its viability.
I have no insight into which side of the central cost case we will see in the FEED study, but I am encouraged by the statement in the January 2018 presentation, "One of the Board’s objectives for the FEED is identifying ways to reduce the project capex".
Great post Olderandwiser. Fully agree with the points you make. Kicking the can down the road a bit whatever decisions the BEIS make going forward, it will have the potential to affect Islandmagee storage considerably.