Simec Atlantis Share Price (SAE)

Not much news around bit on Meygen here

https://www.offshore-energy.biz/world-first-eco-friendly-cable-protection-system-deployed-offshore-scotland/

And

https://www.linkedin.com/feed/update/ugcPost:7183740185308737536?trk=organization_guest_main-feed-card_social-actions-comments

It's all good but TSE does not eat up valuable land isn't an eye sore. What we don't know if it can compete in cost.

https://www.independent.co.uk/tech/renewable-energy-solar-climate-targets-b2529461.html

Wake me up at 10 GBX

The prospect of SAE ever actually owning any of the more than 100 x 3 MW turbines that could be deployed at MeyGen seems vanishingly small. Arguably there’s a more realistic prospect of SAE encouraging others to build, own and lease them to MeyGen in return for some of the money obtainable from selling power to the grid and from CfD payments over the next 15 years.

Perhaps the private equity backers of the Proteus management buyout believed it likely Proteus would be able to assemble and supply something like 9 x 3MW turbines to MeyGen by about the end of 2027 providing them with a decent ROI within a 5-year period. But an AR3000 is supposed to have a life-expectancy of 25 years. But how would you like to be able to buy a 3MW turbine deliverable in 2027, lease it to MeyGen for 5, 10 or 15 years, then sell it abroad second-hand for say 2/5 of its original cost and invest the proceeds in a newer (up-dated, even cheaper and more efficient) model that you could also lease to MeyGen then re-sell a few years later? The answer, blindingly obvious even to Timaeus, would be: “It depends what an AR3000 would cost!” It’s perfectly possible Timaeus is being grossly over-simplistic or is just completely wrong but it’s worth more than nothing to know now the strike-prices which will prevail well into the 2040’s and will start being payable from 2027 once turbines are turning.

Timaeus, perhaps over-simplistically, labours under the impression that the CfD’s were designed to support the deployment of large-scale renewable energy projects which probably wouldn’t otherwise happen because of the difference between the understandably high initial costs of pioneering the new technology involved and the level of payments normally receivable for supplying energy to the grid. It might be that no-one realistic ever expected to ‘make’ money from CfD’s in the sense of an ‘actual’ profit for a company whose shareholders could expect to ‘see’ any of the public money involved in dividend form.

If the interim accounts for the 6 months to 30/12/23 were to show a trading surplus, a wise shareholder might be happy to see those funds reinvested or used to reduce debt rather than distributed. Some investors might see improving the balance sheet and reinvesting trading surpluses as ways of adding value to a company’s stock eg by funding growth. By way of example, can anyone think of a company now doing OK-ish that was founded 20-odd years ago, launched its initial public offering in say, 2010, first turned a full-year profit in, let’s say 2020 and has never, ever paid a dividend? (Answers on a postcard, please, to the usual address and minus points if your answer is HS2).

SAE and Proteus would need to wake up, change course completely and start trying to reduce the cost of TSE a ‘lot’ if that wasn’t what they have actually been working on quite successfully all along. Of course, Timaeus could be quite wrong, but it looks like SAE sees its future as being an asset-light, specialist project developer. There have been many months to actually think through Chairman Duncan Black’s statement about the Group’s financial position (dated 25 July 2023) in the 2022 Annual Report making it crystal clear that SAE is not going to be building turbines or ‘seeking to compete’ with large scale wind and solar:

If the tidal power sector is to be viable, it needs well capitalised tidal turbine suppliers that can provide large turbine orders backed by the required warranties, which the Group is not able to provide given its financial position.

Black said restructuring the Group “has significantly reduced the Group’s operating costs and created a pure play sustainable energy and battery storage project developer…. We are not seeking to compete with large utilities and oil companies in delivering “commoditised” renewable energy projects such as wind and solar, but rather seek to identify innovative solutions to help aid the energy transition.”