Member Info for Pask

*From the company update

I'm still confused about Proteus.

"This month we were formally awarded a 59MW, £200m+ project for MeyGen, which will take ~3 years to deliver. As explained above, Proteus will form an alliance agreement with GE-Vernova and SKF, and take the lead in contracting with MeyGen to deliver and operate this 59MW. The division of contract revenue across the alliance parties is subject to commercial discussions to come, ahead of contract execution in 2026, but a minimum one-third (£70m+) in construction revenue for Proteus can be assumed, with another ~£100m in operations and maintenance revenue to Proteus over the 15 year CfD period. This equates, with this work alone, to over £170m in turnover, commencing in 2026."

This is great and all, but how are they going to get the money to deliver on this? My understanding is they were awarded the right to the 200m contract, but still need the funds to deliver. SAE would assumably get a slice of the profits for this via being the ones holding the CfDs. So either SAE/Proteus go through NWF/GBE, or they have some private financers already.

Anyone else able to explain this? Everyone from SAE/Proteus seems reasonably confident, but I feel I am missing something.

Why am I not surprised?

https://www.ft.com/content/6c0f13ec-ec01-4778-b975-d582acb6083f

"The National Wealth Fund was meant to be a new, standalone body which would help heavy industry decarbonise. That’s not what happened. Instead Labour has simply rebranded the UK Infrastructure Bank (set up by Rishi Sunak three years ago) as the National Wealth Fund and promised it some extra cash.  Rachel Reeves has quietly cut by a fifth the new money she is investing into the NWF from £7.3bn to £5.8bn. The Treasury says the missing £1.5bn would still be spent on priority areas. Steel is the obvious one."

The only saving grace is that the NWF has an enhanced risk appetite. According to the FT, the Labour right (Rachel Reeves, Pat McFadden ,Morgan McSweeney, etc) have wanted to reduce the "green crap" because they were worried about attacks from the Tory press. Joke of a country. Honest to god, we'll only be able to generate economic growth once we get a grip on the British press. They are toxic, and have actively ruined this countries prospects time and again. Dominic Cummings was right that the political class are more concerned with TV and Newspaper headlines than running anything.

From a source form ADVFN:

https://www.current-news.co.uk/proteus-power-conversion-and-skf-marine-partner-to-supply-tidal-turbine-generation-systems/

"The companies will first focus on the supply of a minimum 59MW to MeyGen PLC, to be carried out under a £200 million engineering, procurement, and construction (EPC) contract."

My understanding is that there is no contract, yet it is something they hope to get. To be honest, looking at the changes in the UKIB/NWF I wonder is SAE have had a consultation with UKIB/NWF to see if they are eligible for funding. What's other people's take on this. Is it unrealistic?

At least Jaknife feels we have a year to kick the can down the road, although someone mentioned about Nov debt repayments.

Maybe we could get something via NWF, but this is on the assumption that their investing policy has changed to increase risk appertite.

I suspect we won't be able to rely on GBE (for whatever that was worth). I've noticed there has been a lot of talk in the comments in companies not having any viable projects to invest in (e.g., planning, connection issues, etc).

Are there any reasons why MeyGen might not be a viable prospect for other companies (minus the debt). I believe we have all the prerequisites, we just need the investment now. Any other takes?

Following my concern, I have seen this from the FT:

"Adam Bell, director of policy at consultancy Stonehaven, and former head of energy strategy in the energy department, said the allocation reflected the fact that GB Energy was at an early stage in its foundation. It’s what you need to get officers, start hiring and start making commitments. If it was £2bn this year, I would question their ability to spend it in time,” he said. “If it’s still £125mn in the second year of operation, that’s when we would start to raise questions.”

"The figure includes £25mn of seed capital to establish the company, which will have its headquarters in Aberdeen, Scotland. The other £100mn is capital funding for clean energy project development, which is typically carried out through partnerships with private sector operators. By contrast, the government set aside a large funding boost of £3.9bn in 2025-26 for the development of the UK’s first carbon capture and storage clusters. "

“Further funding will follow in the multiyear spending review when GB Energy will have built the capacity and capability to ramp up its activities, and we will meet our £8.3bn commitment over the parliament,” it added. Ministers have indicated that they expect much of the initial funding from GB Energy to be given to solar energy projects, which tend to be quicker to launch than other renewable infrastructure."

https://www.ft.com/content/82b83336-6c67-4188-8aa4-174285257322

oh for **** sake, bloody mind fog! i forgot to condense some of the paragraphs there. it is still an intresting read, for those intrested.

Okay, I've done some Sleuthing.

https://www.gov.uk/government/news/record-breaking-international-investment-summit-secures-63-billion-and-nearly-38000-jobs-for-the-uk

It's £63 billion in private investment (published 14 October 2024) available to the UK state.

"The investments follow immediate action taken by the new government to reform planning, focus on AI and data centre expansion, and set a clear commitment to net zero by almost doubling the funding for renewable energy projects. "

https://assets.publishing.service.gov.uk/media/6710cf42080bdf716392f558/NWF_IIS_Publication.pdf

"In line with these recommendations, we are creating the NWF to address these barriers,

catalysing more private investment and accelerating investable projects coming to market

across the UK.

To mobilise investment at pace, we are turbocharging UKIB to become more catalytic and from today it will operate as the National Wealth Fund. As the UK’s impact investor, the NWF will have a broader mandate, extending beyond infrastructure to support delivery of the wider Industrial Strategy in areas where an undersupply in private finance exists, working alongside the British Business Bank’s finance for smaller companies."

"More capital: the NWF will have a total capitalisation of £27.8 billion to catalyse investment that would not have otherwise taken place. It will inherit UKIB’s existing £22 billion capitalisation and have an additional £5.8 billion,

which will be committed over this Parliament. The government previously announced that £7.3 billion additional funding would be allocated through the NWF - the remaining £1.5 billion has been reserved to maintain flexibility

in how the government can best deliver against its aims for the NWF. With a target portfolio mobilisation ratio of 1:3, the NWF could mobilise at least £70 billion of private investment"

Found it:

"Great British Energy (GBE) will invest in clean energy generation in partnership with the private sector. It will work in lockstep with the NWF. As GBE scales up, we will set out how the two institutions will collaborate and complement each other. Initially, while it is established, we expect GBE’s investment activity, set by its strategy, to be undertaken by the NWF, in line with the NWF’s investment and operating principles. This will enable GBE to invest quickly and draw on the NWF’s experience and pipeline of projects."

Published 14 October 2024

I've looked at some of the other recent documentation on the National Wealth Fund. They appear to be the one's using the £64 billion of private investment. There was also a clause in there, that the NWF would take the place of GBE before it is set up, and that the NWF would focus on areas of oppertunity in the market which are cash strapped for now.

I'm going hiking now, so won't be able to find the exact documents for you Mr. Tidal. However, if you look into documents published recently around the NWF and the International Investment Summit, it may provide a clearer picture.

Also of intrest:

3.75 "Significantly increased the budget for the sixth Contracts for Difference allocation round, resulting in a record number of contracts".

"Secured £34.8 billion of private investment into the UK’s clean energy industries around the International Investment Summit"

Also, I have confirmed that it will be £125 mil for GBE for 2025-26:

"Delivering on the first steps of the clean energy superpower mission, with £125 million in 2025-26 for Great British Energy, which will be headquartered in Aberdeen."

Do we have any information on the International Investment Summit? I assume private investors would invest in more established technologies.

Https://assets.publishing.service.gov.uk/media/672232d010b0d582ee8c4905/Autumn_Budget_2024__web_accessible_.pdf

I'm not sure if this is a concern for us:

3.30 "Confirming £125 million for Great British Energy, which will be headquartered in Aberdeen. The government has also confirmed support for two electrolytic hydrogen projects in Scotland, in Cromarthy and Whitellee, and two in Wales,

in Milford Haven and Bridgend, to support low carbon hydrogen production and directly create good quality, local jobs."

Does this mean GBE will only have £125 million to invest in, compared to the 8 billion previously announced. I also can't see specific mention of tidal in the budget, though may have overlooked it.

Good news:

It's in the Lords, and they have completed their first reading.

Bad News:

The second reading will be on the 18th of November.

Link: https://bills.parliament.uk/bills/3738

Https://bills.parliament.uk/bills/3738

Should finish on the 29th I believe. Then it's the third reading.

Hopefully, when it's in the Lords, it should be quicker. However, I'm not sure.

It is. I thought it as well.

It's raised my esteem for the companies board currently.

I think the prevailing philosophy seems to be: "the ends justify the means" for the board. It seems they may not always act in ways which investors "like", but they do act in accordance to investors stratigic self-intrest.

yup. not much, but only what i could afford to loose. i have some cash in nova as well. none in orbital.

at the moment, sae is currently beting on energy parks and waiting on gbe bill to pass before they will know if they can get any investment from goverment to get meygen started. i'm more confident on the prospects, but still a huge gamble.

sinking ship. bailing buckets. but the weight of the water is gradually decreasing.

who knows?

that's how it is on this ***** of an earth.

Much thanks Mehmet for signposting me to the Proteus crowdfunder. Will take a look.

We're Waiting for Godot for now, unfortunetly.

And it doesn't...

Put the econ link into archieve today: https://archive.ph/

Or one of its sister addresses.