RE: VSA20 Aug 2018 10:48
It's perhaps worth posting VSA's full comment :
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VSA Comment
This sale represents the first commercial order of RED’s Gen3 product following its formal launch in late June. We would expect the order to be fulfilled by early 2019. This order helps validate the RED proposition for the deployment of flow machines in highly reliable energy infrastructure applications and could lead to a significant number of follow-on orders.
Anglian Water has more than 1,200 water and wastewater treatment centres, suppling more than six million customers. It currently satisfies around 15% of its annual electricity demand through the use of renewable energy assets (c106GWh). Although 85% of this is provided through sewage gas anaerobic digestion facilities (c24 hour generation, where storage is not required), the balance is provided by wind and solar projects, where flow machines can be economically deployed.
Anglian has a target of doubling the proportion of its electricity generated from renewables to 30% by 2020. The collaborative partnership agreement to optimise energy storage across water utility sites will help Anglian achieve this goal and could lead to many more orders for RED’s product over the next five years.
Looking more broadly across the water sector, in England alone there are more than 1,000 water treatment facilities and more than 6,000 wastewater treatment works. Given that solar power generation is increasingly being co-located at these sites, these represent high priority targets for the RED sales team. With a relatively short-time until deployment (by Q1 2019), this site should help encourage additional orders from across the wider water sector.
We maintain our BUY recommendation and target price of 22p.
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- bearing in mind of course that VSA is the (joint) company broker, but I wouldn't underestimate the importance of getting a foot in this door!
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