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Let's see what today brings in the SAE merry go round?
To be honest Eric is probably not the best person to ask for advice.
I am not either but there is a wealth of info on the forum.
My gut feeling is that it won't go much lower and will hopefully bounce back if and when there is info about Uskmouth.
This may also be coupled with what happens with GFG and Greensill.
Up in the air really.
Yes, the Financial Times have had success with their investigations into Gupta.
On Tuesday the FT talked about its success in getting the Bank of England to force a Gupta owned lender (Wyelands) to return retail deposits that, apparently, had been 'routinely re-routed' to Gupta's main operation through a network of shell companies.
Then the same article goes on to talk about Gupta failing to pay taxes due to HMRC.
This is so bad - not only is Gupta failing to pay his creditors and govt loans, he is not able to pay his taxes.
HMRC, financial regulators, the newspapers and generally everyone else is all over this collapse. No point shooting the messenger.
Looks like SG is now in the process of refinancing.
I would assume that this could take months so it could go either way.
I still have a gut feeling that SUP will get planning permission, however not as confident as I was....
Having looked back it is hard to fathom the 40%+ decline in the SP over the last month.
The SP at the moment is a complete steal.
Thanks Mehmet, that's really helpful
I don't really have insight on specific places, but remote islands have famously high (and polluting) energy costs from diesel generation - Sark is always the go-to example, but a lot of planning and subsidy for renewables has often had exceptions made specifically for remote islands for this reason. I suspect you can find some evidence of prices on other islands, and of course Alderney is another Channel Island which would of course be taking power from our Raz Blanchard project, once complete.
The Parliamentary select committee meeting that did the rounds on here a while back has a lot of this basic thinking - the Orbital CEO featured and indeed it was good to see in some ways a sector developing to such a point where you have a meeting on tidal and Simec and Nova weren't even there because the number of companies with commercial potential is growing. I think the cost curve (and EU targets) suggest perhaps around £100Mw by the end of the decade - but of course targets work in such a way that offshore wind was meant to be £100Mw hour by 2020 and is now coming in at £50. I presume the same can be achieved in tidal, but it needs backing - the EU will provide it in Europe I'm sure, but remains to be seen whether UK industrial strategy is just a Conservative party branding exercise.
I'm sure you can research many sites globally where tidal might be competitive due to high energy prices - you will probably find more info on the Nova and Simec websites (which I guess you've already scoured), perhaps on Orbital's, but really the key is government support so that it can go beyond finding specific locations and just become an obvious generation method for grids worldwide - as with wind and solar. The UK coastline of course would make it an ideal beneficiary if that ever happens, it'd just be nice if we were making and profiting on the technology, rather than buying it from Danish and German companies.
MMS are testing the patience... just HOLD and watch this move up if not today may be next week...
No longer NT to sell in volume. Looks like the tide is turning (no pun intended). Can see this finishing blue today as traders pile in. GLA
the other thing to factor in is the PPA's - for example TC once said that he thought they could make a success of meygen without the govt support if they sorted the hyperscale data centre there as an offtake partner.
i guess at this stage there is a lot of dancing around between meygen expansion / govt support / data centre PPA - and SAE will want to maximise the position with all three and it will be a delicate balancing act.
Again ALL buys showing in RED and buyers are increasing daily... BOUNCE have to come at some point.
@Mehmet
Case in point re: people with greater knowledge and understanding of these things.
Do you have any recommended readings or viewings to get a better grasp of it all? What I find hardest is knowing where to start.
Your comment seems to imply that even within the UK, what counts as a competitive strike price varies by location: do you know where I can find out more about any of that?
Thanks!
I am quietly confident for Simec in the new structure of the CfDs. Wave power is nowhere beyond pilot stage anywhere, and the one to watch out for is floating offshore wind, which is a technology with massive backing from big oil, including Total and Equinor, and of course has much knowledge from regular offshore wind technology to build on. With this level of support, my worry would be floating offshore coming to dominate the new Cfd structure structure every bit as much as regular offshore has the existing one - which would in some ways defeat the purpose of an objective to diversify technologies.
For the tidal sector as I understand it, nobody can compete really with Meygen. The new Orbital Marine O2 turbine may I think be more powerful than the Atlantis ones, but is larger, at a much earlier stage of development, and Simec have more work already done on scaling production and deployment. Atlantis turbines are also sub-sea, while Orbital's floats, and visibility in pristine environments is a growing issue for renewables, so the sub-sea element is in our favour, though it's hard to say to what extent these things will be factored-in. Naturally the ideal would be government seeing the UK lead in tidal, and the huge advantage of a totally predictable renewable energy source, and creating a pot for tidal itself.
It should also be noted that even at a very high £250/Mw strike price, that still represents competitive power pricing in some places. The Channel Island of Sark, with a famously corrupt and diesel-burning electricity grid, has average power prices upwards of £600/Mw. These remote island communities can be a key part of developing a tidal strategy, and Nova Innovation have already got (smaller) turbines deployed in Shetland and Nova Scotia, but of course the key to really driving forward the technology would be building Meygen up to an 80MW scale, with all the revenue and R&D that entails, so that costs could then be brought down substantially to meet the genuinely vast addressable global market for tidal, rather than picking up projects piecemeal.
It is also, as I understand it, very much not a winner-take-all scenario. Each of these companies has its own USP (not SUP!) and individually makes the case for the entire sector. They are also generally smaller than Simec and, again in so far as I understand it, have done some really good innovation work on things like subsea connectors, to the advantage of Simec.
I should point out though, that there has been a positive development in this round of contracts insofar as offshore wind has been taken out of Pot 2 and put into its own pot so that less-established technologies (like tidal) don't have to compete against it.
Pot 2 (less established technologies): advanced conversion technologies, anaerobic digestion (above 5MW), dedicated biomass with CHP, floating offshore wind, geothermal, remote island wind (above 5MW), tidal stream, wave
My understanding of the auctioning process for CfDs is very limited, but I think for SAE to win one they would need to be able to offer to generate some amount of electricity at a strike price that was lower than (or at least competitive with) the other technologies in Pot 2. I don't know all that much about those other technologies, so I can't comment on how competitive tidal stream is.
If anyone does know how competitive tidal stream is, I'd be very interested to hear.
My buy at 11.30p showing as a sell FYI
Hi Operastar,
I won't claim to be any kind of expert, but my day job involves watching a lot of Parliamentary committee meetings so I end up knowing little bits through watching those. There are people on here who understand the tidal industry and CfD auctions far better than I do, but I'm happy to explain my understanding. CfD stands for Contracts for Difference:
https://www.gov.uk/government/publications/contracts-for-difference/contract-for-difference
First, think about a normal (non-CfD) powerplant because it will help with tidal and Uskmouth. A non-CfD power plant can either sell its energy to the grid, or find another buyer for it (a Power Purchase Agreement, or PPA). If it sells to the National Grid, it will be paid the prevailing wholesale price for electricity. You can see the recent history of wholesale electricity price here:
https://www.ofgem.gov.uk/data-portal/wholesale-market-indicators <-Just click wholesale price trends <- Electricity prices
So it has generally fluctuated between £40 and £50 per MWh - pandemic notwithstanding. To be profitable , your total costs associated with (buying and) running the power plant have to be less than the (wholesale price) * (electricity produced). So Uskmouth will eventually produce 220MW which means it would generate around £10,000 an hour if it were to sell to the grid.
If you have a CfD, you agree with the government in advance what you will be paid for the electricity you generate. This is known as the strike price. Essentially, whatever happens to the wholesale price of electricity, the government agrees to top that up to whatever amount you agreed on in the CfD auctions.
If you go here: https://committees.parliament.uk/committee/62/environmental-audit-committee/publications/oral-evidence/
and scroll down to January 27th there was a meeting about tidal. If you download that file and look at page 14 you'll see:
"Therefore, it is a ring fence or a provision within the CfD to allow tidal stream and other forms of new and emerging technologies to come forward at a higher strike price, an administrative strike price we advised through the BEIS marine evidence committee and through their call for evidence that that should be in excess of £200 per megawatt hour. We are talking about £250 per megawatt hour to bring this technology forward."
So a CfD with a £250 strike price would cost the government £200+ for each MWh you produce.
You can listen to the whole shebang here:
https://parliamentlive.tv/Event/Index/e7ef8ba0-418b-4b9d-9eff-9590f128135d
It's well worth a listen.
My impression from that meeting was that the ministers thought £200+ was too high, but listen for yourself and see what you think - they didn't say so explicitly.
Sub 11.0p imminent. Oh dear.
Let's see what today holds for the SP
That is a really good question.
I joined for the same reason and also thought that long term linking in with BJs 10 point environmental plan that this would be a great investment Ali g with the potential of the global tidal market.
Hi Silentalker
Since you seem to know something about these Government funding auctions, can you tell me what the "strike price of £200" means? Presumably not what the company hopes to win!. I was invested in Atlantis before it was rescued/taken over by SIMEC but cashed in as they never achieved much support from government in spite of me hammering away at my MP. I came back in when it became SIMEC-Atlantis hoping that the Uskmouth project (which seemed to be going well) would boost the tidal side which ,like others ,is what I am really interested in. I am still hoping that the Uskmouth side will be the boost needed if no further CfD money is forthcoming
I agree with you on that.
Let's hope that we are at the bottom as the drop today is minimal and the movement is minimal too.
Still feel that the unique selling points of SAE ref tidal, hydro and Uskmouth are all positive and at some point irrespective of the name above the door it will grow and be reflected in the SP.
I think the concentration on Uskmouth is more to do with its direct impact on the share price and profitability of SAE than forgetting about tidal.
Until we have a (profitable) route to market for tidal it's difficult to see progress in tidal positively affecting the share price. Hopefully there will be provisions for tidal in R4 of the CfD auctions, but from what I've heard in the environmental audit committee meetings, I'm not optimistic for the near term. Off the top of my head, I think we would need a strike price North of £200 to be competitive, and the sentiment in the meetings seemed to be that that was far too high. As I've mentioned before though, I have some speculative hope that the UK infrastructure bank announced at the budget might throw some money into tidal. That would be a great boost to SAE.
My buys showing as sells.....
All the discussion seems to be about Uxmouth, planning and the Company’s available financial possibilities. Are we forgetting the very successful tidal projects, especially the very fast supply and operation of the Japanese project ?
My interest has always been the tidal business which I see as a perfect non carbon contributor to future energy needs
It does for the moment seem to be on 11.5 and not moving.
Let's see where it is come close of play?