Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
"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?
You're right I think - I've not seen an update from the company about this. however according to the CFD website they have achieved this milestone.
https://dp.lowcarboncontracts.uk/dataset/cfd-contract-portfolio-status
Found it: Friday morning on the today show. Three mentions of tidal energy in a ten minute interview - very encouraging.
https://www.bbc.co.uk/sounds/play/m001w19n
@strangy I'm not 100% sure but from what i've read I think each cfd project has a milestone delivery date (MDD) when the developer needs to provide evidence that they have either (a) spent lots of money on the project or (b) signed key supply contracts. The situation for allocation round 4 is described at the link below . The MDD is 18 months after CFD contract signature. All round 4 CFD contracts were signed by early August 2022 so the MDD is imminent.
https://www.cfdallocationround.uk/sites/default/files/2021-10/Allocation%20Round%204%20online%20launch%20event.pdf
If I'm right then SAE won't have the money to spend to take route (a) so they will follow route (b) and we could see an announcement very soon on contracts for phase 2. i suppose they only need to tell LCCC and not the rest of us but this seems like important information that should be made public.
if a developer fails to meet this milestone then (from the link above) LCCC has the right to cancel the project, though they don't have to. It's possible LCCC would show leniency to an emerging technology. Offshore wind projects are struggling so there might be news about this in the next few days if developers walk away from their CFDs.
Did it get to 1.8? I don't think we've been at 1.8 since December 2022. Highest I saw last week was 1.65. Look at the technical chart.
But I agree, this share does appear to drift down quickly following good news. Hopefully we'll see a step change in the next week or so following the milestone delivery date for round 4 of the CFD.
Mehmet, the Proteus turbine (AR1500) wasn't in constant operation for 4 years before it was removed. It was deployed in March 2022 after a pitch system upgrade and removed in June 2023, 16 months later. Before that, it was out of the water from August 2020 for the pitch upgrade. So in total it's been deployed for about two of the last 4 years.
This RNS mentions the AR1500 deployment in March 2022
https://www.lse.co.uk/rns/SAE/tidal-turbine-re-deployment-at-meygen-site-ylu0myeg6ooy10g.html
This RNS from July 2023 confirms that the AR1500 (turbine 4) was removed in June.
https://www.lse.co.uk/rns/SAE/sae-successfully-deploys-upgraded-turbine-fqapqcjj9v5zy86.html
This RNS from Dec 2020 says that the AR1500 was recovered August 2020.
https://www.lse.co.uk/rns/SAE/operational-update-dmysp8grt1a0fd5.html
I'm sure some wind turbines are switched off today but many others are going like gangbusters. Wind is generating 21 GW and meeting 50% of UK grid demand. That's equivalent to 3500 6MW Meygen phase 1 projects operating flat out.
Also, one of the Meygen turbines is not in sea but sat on shore at Nigg. I don't think this is great to see since it means it's costing money rather than generating revenue. I'd like to see a solid track record from the 1.5MW Proteus turbine - high availability, high load factor over several years - before investing in an array of 3MW Proteus turbines.
Thanks @altolusso, good idea.
https://saerenewables.com/wp-content/uploads/2023/12/2023_12_01_SIMECAtlantisEnergy_proposal_final-draft-002.pdf
"We do appreciate that these new extension requests may not be welcome, but since we do not expect to have the
funds needed to repay all debentures on the current maturities in 2024, we are at high risk of going into default
and then into administration."
The proposal to bondholders is to agree to a 5 year extension to their bonds or risk losing their premium. Given that Hobson's choice I'd expect existing bondholders to reluctantly agree to this, but who knows. More concerning is the chilling effect this might have on potential future investment.
Mister_tidal up to a few days ago the bonds could be traded on the Abundance platform. It's not just that there's no-one selling - the listings for these projects have also disappeared from the platform.
marshall2k - thanks for the info. it seems the bondholders know as much as we do, though they learned it a bit earlier which might explain the bump in share price.
oldtramp - great find! Things have changed since this was issued, with further payment deferrals and sale of the turbine division, but this looks like a good summary of the SAE Abundance bonds.
Curious that there's not been an RNS about whatever caused the Abundance bonds to be pulled from the market. This was clearly price-sensitive information given the big jump in share price. Are there any Abundance bondholders reading this who can provide insight into what's going on?
The RNS says turbine 4 was removed. That's the atlantis ar1500 turbine - see the reports below.
https://rtsys.eu/wp-content/uploads/2020/09/Jasa_Usecase.pdf
https://tethys-engineering.pnnl.gov/sites/default/files/publications/AWTEC2018-367.pdf
other than the wet mate, i'm not sure what upgrades proteus installed on the andritz turbine (t2). but id be very surprised if sae asked proteus to make any significant changes to the andritz pitch system. an andritz turbine has been operating 5 years non stop at meygen. that pitch system works just fine. if it aint broke, why fix it?
Thanks Mr T, i dont think we can complain about the service! i think its unlikely theyd risk removing a turbine just to check the mechanism so i expect its back in nigg but lets see if they say anything.