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(Alliance News) - Africa-focused energy firm Kibo Energy PLC noted Thursday the reinstatement of the Capacity Market scheme by the UK government department of Business, Energy & Industrial Strategy.
The Capacity Market scheme was approved by the European Commission on Thursday last week. It provides financial incentives to UK power companies for providing back-up electricity when demand is at its peak, especially during the winter months.
The UK government said the decision means it can restart the Capacity Market scheme for making payments to power companies, including the GBP1 billion of deferred payments that have been suspended because of the standstill period as well as future capacity payments.
Following the scheme's reinstatement, Kibo said its UK shovel-ready project site Bordesley Power Ltd, owned by Kibo subsidiary MAST Energy Developments Ltd, has been conditionally pre-qualified for the 2022 three-years-ahead capacity market auction.
Bordersley also has been prequalified for the 2023 auction.
"The reinstatement of the Capacity Market scheme is recognition by the EU and UK government that there is a need to ensure security of electricity supplies in the UK. It means that the economics of flexible generation sites such as Bordesley improve, as it facilitates a steady payment for the duration of the capacity agreement (ranging between 1 and 15 years) to successful bidders, and I am delighted that Bordesley has pre-qualified for the auction," said Chief Executive Officer Louis Coetzee.
Shares in Kibo Energy were down 2.7% at 0.423 pence in London, while its Johannesburg shares were untraded on Thursday at ZAR0.12.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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