The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register 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.
*monopile!
We had years ago Drew Blaxland rolling his eyes at running a hydraulic pitch adjustment mechanism rather than the eventual electric one.
We had every turbine with its own cabling because the subsea cable wasn't around.
Every turbine on gravity foundations and now moving to monopole.
Going from 1.5MW to 3MW turbine size is definitely a big question, but overall Meygen should be seen as a probably very successful R&D project in turbulent economic and political times that were hard to control for. It makes very little sense to expect a new technology to be immediately successful with only the first 4 examples of that technology in the water. Lots of sub-ideal circumstances not least of all share price but no reason not to believe that they didn't start out needing to learn pretty much everything, and as has been pointed out, SAE probably have done quite a lot of learning invaluable to the company and the sector.
I believe that they learned from every mistake... the turbines were not only repaired but optimized and you don't know this beforehand but they got smarter.
Got to agree with munin here.
Quite some time ago I did all the math and came up with some numbers back then. I think 27% capacity factor was what I came up with. Not bad but not great either.
Maybe this will improve and economics at scale may change all that.
I'd like to know at what point a reduction in capacity deployed will become visible in the LCOE. Simec lowered the cost from whatever to £300 to below £200 / MWh so far but now we're back above it.
Yes, still without the scale but here is where CfDs come into play.
If SAE can reduce the cost per MWh as the industry promises, then perhaps tidal has a chance.
It really depends on that and only that
"Anyone still worried that MeyGen can’t generate the revenue to pay for the turbines?"
I think "won't" rather than "can't" better reflects my concern here. I'm worried about the operating losses at Meygen. Happy to be corrected, but I think Meygen plc has made a net operating loss nearly every year since the array started operation.
The main reason being that all four turbines have not been in the water generating £150k/month as per the happy scenario painted below. At almost every point one or more turbines have been sitting under water awaiting recovery (not generating £150k/month revenue); being recovered by expensive vessels (costing £X00k); sitting onshore for months being repaired (not generating £150k/month and costing £X00k); or being redeployed (costing £X00k).
As a result, in most years the company hasn't covered it's operating costs. Debt has increased and investors have not been repaid. We've all seen what's happened to the share price.
Like many on this board I want tidal power to work - I want to believe! Can you explain to me why you think the issues affecting the Phase 1 array will not affect Phase 2? Why will this time be different?
(3 of 3)
Well, what about the debt – the loans and borrowings? The Abundance bonds are secured against the shareholding in MeyGen. So, if private equity want a proportion of SAE’s shares in MeyGen in exchange for supporting the roll out, someone is going to have to procure the release of those shares, presumably by discharging the loans and borrowings secured against them. Some SAE shareholders might welcome a deal that effectively writes off all of SAE’s £58m debts in exchange for the bulk of SAE’s shareholding in MeyGen. On the other hand, some (including Timaeus) would argue that carrying some debt can help keep takeover predators at bay, and that preserving a majority shareholding in MeyGen until the entire 398MW array is completed might ultimately be the only way SAE can ensure the MeyGen array gets built to full capacity.
Maybe a couple of decades after SAE’s IPO some economic historian will write about the intrepid investors who had the vision to hold their shares long-term and top-up at a penny a share giving them a slice of an income stream worth more than 7bn over 15 years. Perhaps some LTH’s and Abundance investors really just want to save the planet, whatever it costs. Or maybe 20 years from now it will all just be an obscure question in the general knowledge section of a Tuesday night pub quiz.