Member Info for littlegrandma

PS. A test of the new retrieval mechanism under operating conditions might even have been something required by an insurer to renew an insurance policy.

If the turbine taken out was the AR1500 as munin suggests, it would be the first time that the new connection system had been tested in terms of lifting a turbine out in operating conditions after a year of operation, so perhaps it was just a test of that improved installation system carried out while they had the equipment on site and were doing maintenance inspections. If that was the case it would make sense that they replaced it after a brief inspection, and might explain the mysterious absence of mention of removing a turbine from the press reports.

The turbine which was taken out must have been the Andritz one, which had the best record of any of the turbines having been in for nearly five years - which probably explained barnacles etc. The turbine which has been out of the water most since generation began would almost certainly be the SAE built AR 1500, although some of that long down time was presumably because of modifications.

The alternative to granting the extension was, I believe, to bankrupt the company. But I doubt if the bondholders would have got their money back that way. Either way, the 2017 bonds and the 2018 bonds plus interest eat up almost the complete value of the anticipated securitisation of the income from the Uskmouth battery storage scheme, leaving what, I wonder to pay off the 2019 bonds and interest which come due next year?

PS. I believe that the income per MWH is constant, but can't remember where that information was. IIRC, the phase 1 price was set at £305 ish per MWH in total and the terms meant that in the unlikely (at that time) event that the market price exceeded that, the excess was repaid to the UK Gov company set up to administer the scheme. So the recent high prices would be of no benefit to SAE, if my fallible memory is correct.

Spent a long time, quite a long time ago, looking at the Meygen figures which were fairly clear in the notes to the annual accounts, the only mismatch being that the cumulative figure given for power generated was not provided for the dates that matched the accounts. The figures were stark. Operating expense (presumably mostly in / out turbine servicing etc) plus project interest cost exceeded income each year over a five year period by a substantial amount, iirc. Then you had normal depreciation cost for the turbines and amortisation of all the intangible intellectual assets that had been put into capital values to be deducted leaving a loss which, imo, will make it difficult to raise the phase two cash in the timid UK. The only way I can see them getting that phase done is a big US investor with vision.

I don't think phase 1 of Meygen has ever achieved even cash breakeven, never mind profit, and don't think it is achieving that now. That doesn't bode well for the financing of phase 2, and imo means that unless all the debts went with proteus, the next AR, if it gets released, will get the thumbs down from the auditors.

If the third turbine is anything to go by, the fourth might be installed by end of July, four months later than the date given in several RNSs. SAE have a long record of extremely optimistic predictions in RNSs. The RNS announcing the splitting up of the company was, as usual with SAE, very vague, iirc. It did not give any indication about where the various debts ended up, or who would carry out the modifications and servicing of the fourth turbine. for example. IIRC Proteus was stated to be the company that designed the Atlantis turbines and was responsible for installation and retrieval of them - no mention of building or modifying them.

It looks probable that my original expectation / prediction that the BESS scheme would get the final green light by end of May 23 will prove to be too optimistic. I now doubt if anything will happen in terms of BESS, the 4th turbine installation, or progress on Meygen phase 2 before 2022 final results are released (or SAE go bang), by the final possible date at the end of June, which will allow all relevant parties to judge the likelyhood of SAE survival.

They don't have any money to spare on PR stuff or RNSs. They need to save all they can to pay management salaries!

Quite a decent update in these difficult times. Must check to see the proportion and destination of exports in the last AR to get an idea how our "longest recession in a century" will hit us!

which never happened thanks to half witted politicians!

The other thing which SAE had, which has now been allowed to lapse, and was recently written off, was lots of licenses around the UK for sea bed installation areas for turbines and corresponding land corridor wayleave rights for power transmission. These were a very strong selling point for the original Atlantis Resources years ago as they represented brilliant forward thinking for a strong tidal generation surge.

The rate of increase in tests from Q1 to Q2 was about 17%, but if that rate of increase continued for the rest of the year it would give income of not much over $4m if I've worked it out correctly. They would need 50% increases for the next two quarters to reach $10m I would think.

As expected, the RNS doesn't really tell us much. But I'm still of the opinion that either a large chunk of the debt went with the sale, or SAE will not make it to the next AR. It all depends on which subsidiaries went, and what loans were guaranteed on their assets, imo.

mister_tidal,
If SAE survives until the next Annual Report is published, you will then have full details. If we got that far, it would be about next June, iirc.
This is either, imo, a way of "saving" the company from bankruptcy by effectively giving the majority of the real value of SAE to a private equity company which takes with the transfer all, or nearly all, of the bank debt, leaving SAE with just Meygen, the questionable potential for power station conversions, and a small percentage of the new company, which fits quite well with my expectations as posted on this forum before.
Or, SAE is going to go bang.

That would explain the low price.

The thing which I believe is the most important point in this situation is, did the debt go with the rest of it. I reckon it probably did. The lenders would have seen the distinct probability that SAE were in great danger of going bankrupt and would surely have welcomed this move if the debts were transferred, with the rest of it, to a company backed by a private equity concern with loads of cash to invest (and repay debts).

For a while there, this board was a good source of sensible debate, but it seems to be drifting into the usual nonsense again, what a pity.

Incidentally Strangy83, although I understand your reluctance to accept that the claims of drastic CO2 emissions for the use of the fuel pellets planned for Uskmouth was BS, it really was.
If you want to actually investigate the facts, as I did when unable to find back up for the claim in the original stuff on SAE website when they gave away half the company for Uskmouth and a story, you might look at:
Drax annual reports from way back up to date. I'm sure I posted details about the discrepancy I first noticed in them about a week into January. The most telling thing was the way that over the years since they first began burning biomass about 20 years ago their claimed CO2 emissions went steadily down year after year as the biomass combustion increased. They avoided as much as possible explaining that they just didn't have to measure CO2 from Biomass under EU and UK rules, but right from the early days began gently bleating about the need for Uk gov support for Carbon Capture and Storage. As their CFD, or whatever it is, comes closer to running out in 2027, iirc, the "bleating" has become steadily more regular, to the extent that I believe BECCS as they now call the expected scheme is mentioned in last years AR about 100 times I would think.
Other areas of research would confirm that burning paper, as a wood product, is more carbon intensive (ie Co2) and less energy intensive than coal, but in order to be allowed to discount the CO2 emissions in co firing of biomass you have to have 50% biomass, funnily enough exactly what the pellets contain. Burning plastic produces less CO2 than coal but a number of other nasties, which were sort of mentioned in the Arden report schematic with an added clean up operation on the emissions.
The other things I noticed in the Arden report, which was commissioned by SAE, was that despite the RNS announced in June that the successful test burns in Japan provided results which were then being used for FEED design, the Arden report, published a few weeks later on 17th July 20, claimed that the test results were not yet available. That report also, imo, completely ignored the residue disposal question, which is where the extra pollutants in plastic needed to be considered. In the meantime, the EU and Japan are now apparently looking again at the whole principle of Biomass burning in terms of its viability and compatibility with climate action promises, as presumably others will in due course, and imo, that has always been the most likely reason that a 20 year commitment at Uskmouth was rejected.

Continued:
In a situation where the world is at last beginning to face up to the global warming consequences of emissions, that is a very big impediment.
2. There is a definite move away from plastic packaging, although it is slow being consumer driven, and the recycling of plastics and curtailment of use and manufacture of those which can’t be recycled is underway. When looked at on say a twenty year basis the energy used by the selection and transport of an increasingly rare and perhaps distant material is detrimental.
3. Gas fired generation is far more efficient and releases less than half the CO2, I believe. Although at the moment we are getting our knickers in a twist over gas, the world has plenty of sources and the current panic and price problem is short term I think. For example, Germany is the country with the biggest “Russia” problem `aiui, but they take delivery of four FSPOs to convert LPG back to gas this Winter, I believe and have negotiated supplies from Quatar. I’ve never understood why we don’t build gas power stations at fracking sites and pump the CO2 back into the depleting reservoir to push more gas out. The last time I looked our gas generation capability could damn near power the UK.
4. Imo we have drastically underutilised hydro generation capabilities which could be quite quickly brought into play if the regulations governing it were made more sensible, as they should be for what ought to be one of the cheapest and most reliable energy sources as well as the most environmentally friendly. Obviously there are fast growing contributions from most of: wind, solar, tidal, appliance efficiency and insulation as well.
5. The belated waffle about a partnership to remove carbon from the Uskmouth emissions over a year ago, which has since gone quiet, was effectively an admission that the carbon emissions were a serious problem. Carbon Capture and Storage has been the subject of major discussions between Gov & power station owners for at least the last 15 years. The latest from Drax, which now burns just biomass and is approximately 30 times the size of Uskmouth, iirc, is that a decision to construct a CCS facility COULD be taken in 2024, if the Gov comes across with support. The original plan many years ago, iirc, was to connect up quite a few power stations to such a system including Drax, Eggborough, Ferrybridge etc, so this is not an easy solution anywhere in the world which would support the SAE coal fired power station conversion proposals.

Apologies for the long post.

OK Strangy, as you accept contrary opinion in the spirit it is given without all the usual BS about the intentions of the poster, I’ll explain my view of the problems with the Uskmouth project and its ilk. Bear in mind that most of the world is now committed to zero emissions by 2050 and projects like Uskmouth need a long life – perhaps 20 years - to justify investment and take a few years to fund, build, and commission.

Financial weaknesses:
1. The plan relied very heavily on “gate” income, which in turn relied heavily on government maintaining penalising taxes on waste disposal by tipping. This made the whole scheme very vulnerable to both tax changes and local authorities or companies finding a more economical receiver for their plastic or paper waste. Would similar tax regimes be in existence to create the “opportunity” in other countries and would they regard them as fixed long term?
2. On an industrial scale the technology of the scheme was untried making it vulnerable to construction cost overruns and maintenance costs, bearing in mind the confident original predictions about likely construction cost overruns and expected power outputs at Meygen phase 1, which both proved to be incredibly optimistic.
3. The long term availability of plastic waste is surely questionable. For example, my local authority has in the last six months gone from being only willing to recycle plastic with the 1 symbol in the recycling triangle to accepting almost all plastics for recycling except black plastic.
4. As I understand it, there are only six plants in the world making unrecyclable plastic and there is considerable political pressure to close them on environmental grounds.
5. From memory, the efficiency assumed for the converted station was only a couple of percent better than the more recently constructed “energy from waste” plants which local authorities have approved in many parts of the UK. I think, but I’m not certain, that those many EfW plants all have restrictions on the tonnage of waste they are allowed to burn, presumably based on the expected waste volumes generated in the areas of the local authorities who approved the plants . The intention being perhaps to ensure that the waste contractor who built and ran the facility couldn’t bring huge amounts of rubbish in from further afield. If those plants have significant unused capacity, which I suspect they do, the newly unified major authorities which seem to be springing up throughout the UK must be very tempted to use that capacity to their financial advantage, which again makes material sources for pellets more uncertain.

Environmental weaknesses.
1. The thing which always troubled me, and which was eventually perhaps reluctantly revealed in the long since removed report on SAE’s website was the fact that this technology does not provide an actual C02 reduction when compared to burning coal.