Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
This
https://zodiakmalawi.com/nw/national-news/66-news-in-southern-region/4889-govt-to-sign-agreement-with-mkango-resources-ltd-july
was written 2 days after the site visit:
https://mobile.twitter.com/itmonlinetv/status/1540424420828790785
So hopefully this month.
I do wonder if one of the "few fiscal and non-fiscal issues" that are apparently stalling talks here:
https://times.mw/government-advances-on-mining-deals/
has anything to do with this quote
“Our negotiations are being guided by the new Act and based on the calculations by experts, Malawi is getting up to 65% of revenue from the mine."
from here:
https://miningtradenews.net/malawi-to-substantially-benefit-from-kayelekera-uranium-mine/?fbclid=IwAR3EzotR5d2D85gQbgQy010m2frgZbvhicyHnqYJD8Uvkmnn-OPaXeIPiKc
Different mine of course, but 65% sounds like a lot.
hmmm... not sure what you mean by "it was not a operational plant anyway" - you don't need to do research more extensive than reading the planning permission documents (or even just the Uskmouth power plant Wikipedia page) to know that isn't true. Uskmouth B first started burning coal in the 1960's. Looking at your post history, I'd guess you're either a ramping swing trader or a naive investor who hasn't done their research.
You might be right that Uskmouth B wouldn't be decommissioned straight away, but that's not relevant when you're looking at the asset values to value a company - you don't get to pick and choose which parts of the company to include in your valuation. The fact is that SAE own Uskmouth B and if it doesn't get planning permission, as seems very likely at this point, then decomissioning costs have to be factored in to any asset valuation. You could conceivably ignore Uskmouth if you were valuing based on revenues from Tidal and hypothetical APAC-based Subcoal deal, but that wasn't what Levon was talking about when they made the thread. By all means hold shares of Simec - I wasn't advising anyone to sell anything - but don't throw your money away because it's "dirt cheap" if you don't know what you're holding here.
That's what I'm on about.
You might be right but if you're just looking at asset value, be aware of the possible costs of decommissioning Uskmouth if it doesn't get PP. I had a look at the numbers on it in April. I'll copy-paste it here in case it's useful:
09 Apr 2021 11:57
@Pask
Honestly, I struggled to find good information. The best I could find was this:
https://media.rff.org/documents/RFF20Rpt20Decommissioning20Power20Plants.pdf
but I can't attest to its reliability.
Table 1 on page 3 gives estimates for the US on a thousands of dollar per megawatt basis. The range is pretty huge. For coal it gives:
Min: $21,000/MW
Mean: $117,000/MW
Max: $466,000/MW
bear in mind that for decommissioning purposes Uskmouth is a 330MW plant (3 x 110MW of which SAE planned to convert 2).
So if the above source is reliable you're looking at anywhere between £5 million and £110 million. The mean value works out at £28 million. I think we can safely rule out the upper range and if I had to guess I'd say SAE would be toward the lower end. You can rule out the upper end simply because SAE were planning on running the plant for 20 years with an EBITDA in the range of £30 million to £50 million. For it to be a profitable venture I would have thought decommissioning would have to be a lot less than the £110 million figure.
I'm no expert though, so I'll happily concede to anyone who claims greater knowledge.
You also have to factor in the underlying value of the land - SAE will presumably be able to sell the land in Newport post-decommissioning.
If anyone has access I would appreciate a summary of the information available:
https://adisinsight.springer.com/drugs/800056369
I don't understand this note at all - it seems to me that the EP from NRW is pretty much a given. Getting an EP comes down to showing that you can comply with the emissions regulations, and I don't believe for one minute that SAE can't.
It's the planning permit that's posing a problem, because that's political rather than procedural. The Welsh Government have been as clear as they possibly could that they don't want anymore WfE and I don't see any evidence that they have changed their minds. Without PP, I'm unaware of any way in which they can safely transport and process the Subcoal for burning. They'll be in the strange position of having permission to burn it, but not having permission to build the structures they need to burn it. It's a bit like if you were told that there was plenty of petrol, just no way of getting hold of it: all well and good that it exists, but of no practical use to anyone.
My suspicion is that NRW will grant the EP, the WG will reject PP, and then SAE will announce that they will burn coal for the remainder of the existing permit length at Uskmouth. If that does happen then the share price will probably increase from here. I'm not trading it however as I have no interest in owning a coal plant.
I'm keeping an eye on it because I want to see the Subcoal tech be successful, and I will buy in if and when they manage to get that rolling somewhere else.
This has been a long time coming - I do think this was predictable several months ago, as this thread shows.
I would be tempted to buy in at 2.5p - £2500 for 100,000 shares is crazy cheap, but I think the Uskmouth rejection could be just around the corner and that makes me hesitant.
On the other hand, the last time they did a placing at 14p they released good news a few days later and everyone who bought in made a packet. I don't know what I'll do. I certainly wouldn't buy in with any money I couldn't afford to lose.
Good luck to everyone who buys in.
A bit of chat in the other thread, but I think this deserves its own topic.
Personally, I don't think there was any good news in the draft budget notice.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1016774/cfd-ar4-draft-budget-notice.pdf
As Alnew pointed out, there is a £24 million minima (not maxima) for floating Offshore Wind (FOW) from Pot 2, leaving only £31 million for the remaining technologies + any excess capacity FOW can provide under the strike price. If you look at the table of ASPs, Tidal Stream is 2nd highest. Given that ASPs are calculated so that 25% to 50% of the possible supply curve is deliverable for less than the ASP for any given technology, I think it is highly unlikely that any contracts will go for anywhere near a strike of £200/MWh. Unless Atlantis can put in a bid far, far below the ASP - significantly below £100 I expect - then I don't think they'll be winning any contracts as things stand.
It's incredible to me that there is such a small budget for pot 2 given the relatively stringent ASPs anyway - why not have secondary ASPs calculated at 5% of supply for which no cap applies, so that a small number of projects from each tech always get some funding? As it stands, less well developed technologies don't get any projects set up and so progress is frustratingly slow. It's maddening that they don't fund a small number for R&D purposes.
The biggest ray of hope is this line from p.4:
"Any additional minima will be set out ahead of, or in, the final budget notice. "
I couldn't see the Guardian article SARS referenced, but if someone could link to it I'd appreciate that. If there is a minimum (pot within a pot) for tidal then I'd expect a large SP movement, but otherwise I don't think a CfD is on the cards.
For anyone interested, the strike price methodology is here (see page 8 for the percentage I quoted):
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1016681/cfd-ar4-asp.pdf
Monthly Update:
Having had a chance to reflect after 6 months with the company I am so proud of the team and all they have achieved. It’s great to look back at the story of MeyGen, the milestones and achievements, and it reminds us all how far we have come. My focus is the delivery of our projects and I am pleased with the progress we are making. Our partnership and project with Remediiate has the whole team excited. I hope to be able to share more information on this to help explain the process and how it will work at the converted station, but I am delighted that work has already started and the Remediiate team are already becoming regulars on site. If we can build on this spirit of collaboration to deliver solutions to our global challenges then I think we all can benefit; I see this at Uskmouth but also in tidal and hydro where collaboration is the key to the future. I hope you enjoy this update and we at SAE will look forward to keeping you updated on our journey.
-- Graham Reid --
Sustainable Fuel Pellet Conversion
The Journey of the Fuel Pellet
How will the new fuel pellet create power for South Wales? How does the process differ from when the station ran on coal? How much needs to be changed to accommodate the new fuel pellet? Phil Jenkinson, our Conversion Engineering Manager, is here to answer these questions and to give you a tour of how the new fuel pellet will generate energy for South Wales.
Tidal Energy
The Journey so far
This month we’re taking a look back at the history of our tidal energy projects and how we have reached where we are today.
Our AR1500 tidal turbine was installed at our MeyGen site between Scotland’s northernmost coast and the island of Stroma. The 1.5MW tidal turbine was installed onto a gravity based foundation alongside three other turbines.
Since then, the MeyGen tidal array continues to generate clean, renewable energy, and to date has generated over 37GWh of clean, renewable tidal energy.
Over the years we have received great support from the Scottish government, and we have hosted many visits to our workshop at Nigg Energy Park and our MeyGen site in Caithness. Last year, we welcomed Nicola Sinclair, Donnie Mackay, Struan Mackie, Karl Rosie and Derek Louden to our workshop at Nigg Energy Park, to discuss the future of tidal energy in Scotland.
Turbine Maintenance
Our tidal turbine workshop at Nigg Energy Park has been a hive of activity recently, with both the AR1500 and the Andritz turbine number one onshore for planned quarter-life maintenance. Whilst in the workshop, the turbines have undergone basic routine maintenance, including oil and filter changes, and will soon be ready for reinstallation at the MeyGen site in Caithness. Currently, there is very limited availability for suitable offshore vessels. With this in mind, we will be installing both turbines in one offshore operation, reducing overall costs when compared to two separate vessel hires.
There are a bu
Renewable energy from wind and sun is at the mercy of the elements. Wind turbines stop when the wind drops and solar panels need daylight. But energy from the tides works whatever the weather, and is ultimately driven by the orbit of the moon and its pull on the oceans, which makes tidal energy entirely predictable.
The Outer Hebrides has a wealth of potential renewable energy from strong tides, some of the best in the world, but how can it be tapped? A tidal-powered turbine has recently started to generate electricity in Orkney in what is claimed to be the most powerful tidal generator in the world. It is anchored in a sea channel known as the Fall of Warness, where the Atlantic meets the North Sea and where twice a day a huge mass of water races through a narrow channel at great speed.
The turbine floats on the sea surface where the fast-flowing waters of the tide drive rotors attached to the legs of the structure. When the tide comes in it can start generating power, and when the tide stops the blades simply turn round and start generating power in the other direction.
That generates two megawatts of clean power that is fed through a sea cable to the local onshore electricity network and can meet the yearly power needs of 2,000 homes. The electricity is also used to generate hydrogen by passing an electric current through water. The hydrogen is used for heating buildings and powering harbour and ferry operations in Kirkwall and for hydrogen-powered vehicles.
Other tidal power projects are also generating power or under way in Scotland. Four turbines are active in the tides of the Pentland Firth, which divides Orkney from the mainland, generating enough electricity for 2,600 homes, with more turbines planned in the hope of supplying 175,000 homes.
Tidal energy is an important part of renewable energy, and in Orkney wind, tide and wave energy can generate enough surplus power to export to the UK national grid.
--- End Article ---
I think you've oversimplified a bit there on your first case littlegrandma. Sure, the emissions are about same when measured at the power plant, but the counterfactual is really important. If you don't burn coal then that carbon stays locked up in the ground and never gets released into the atmosphere; this means that when you do burn it the carbon that it releases is 100% additional.
The same is not true for waste derived fuel. As you pointed out in your comment, there are two relevant factors. The first is that some of the carbon released - the 50% unrecyclable paper and cardboard - is not additional to the atmosphere on relevant time scales because it was absorbed by the tree from the atmosphere during the tree's lifetime. Over a 100 year timeline say, this portion is carbon-neutral.
The second relevant factor is that all of the waste input would have been created anyway and decomposed via a methane pathway in a landfill. In this counterfactual, the greenhouse gas impact of the methane is greater than the greenhouse gas impact of combustion as Subcoal because methane is more potent than CO2 and because it decomposes into CO2 after a couple of decades anyway.
The only way Subcoal becomes a problem is if it prolongs our dependency on fossil-fuel-derived plastics. Call me a pessimist, but I don't think that's going to be a danger in the foreseeable future.
There was also a fair bit of discussion about wasteknotenergy a while back too. They're a competitor in the WfE space, though they're not publicly traded.
https://www.wasteknotenergy.com/
Not sure if it's exactly what you're looking for Wenglish, but the wikiwaste page is useful and also has an incomplete list of companies that work in the area.
https://wikiwaste.org.uk/index.php?title=Category:Waste_Companies
I would have thought he was referring to the annual report to 31st December 2020. Last one we had was for 2019:
https://simecatlantis.com/wp-content/uploads/2020/08/SIMEC-Atlantis-Energy-Annual-Report-2019.pdf
It was delayed last year because of the pandemic but I think we should expect it in July this year.
Thanks! I thought I was being generous using that since those losses were less than the previous year (and I was only doing back of the envelope sums) but if you're right then that would be very encouraging for shareholders. On that basis they would be pretty close to profitability on tidal?
I don't have time this week, but I might have a deeper dig into their finances when I get time.
And if you want the Uskmouth-PP-is-approved-before-mid-August case, I think the SP could plausibly settle in the high 40s or low 50s in that scenario. Suppose you had a placing at 40p. If I were Reid I would raise about 18 months of cash with about 45 million shares (<10% dilution), which would see SAE through to profitability. SAE would surely have a market cap of over a billion within a few years of Uskmouth being converted.
For clarity:
I have no position in SAE at the moment because I don't think Uskmouth will be approved, but I would buy in at 40p if Uskmouth PP is approved (and cry about the shares I sold at ~11p). I would not buy in any of the other scenarios until I saw a resolution to Uskmouth and a plausible path to profitability.
Some back-of-the-envelope numbers:
Cash position was £9.8 million as of June 30th 2020. Since then, they've received £4 million from share placements. The most recent figures we have for cash burn are about £1mil/month for the first half of 2020. This may have been affected by furlough (i.e. government paying some wages), but we'll ignore that since the RNS attributes it to increased revenues from Atlantis engineering and Meygen.
(£9.8 mil + £4 mil)/1mil ~= 14 months of cash from June 30th 2020: they will probably run out of money before August 30th 2021.
The best case scenario (that seems plausible to me) is that the government announces a CfD pot within a pot structure for AR4 in the next month or two, and the share price rises as a result. If they are smart, and I think Reid probably is smart, then they will announce a placing straight after that with an update on their hopes/expectations for CfD revenues.
The worst case scenario is that the CfD budget notice isn't released in time or is unfavourable for tidal (e.g. no pot-within-pot) and/or the planning application for Uskmouth is rejected by the WG.
It's difficult to say what the share price would be doing in those scenarios. My guess is that with a really positive CfD budget they could expect to be profitable in the tidal division within a couple of years and, best case scenario, raise in the low teens. To raise at 14 pence (which seems highly optimistic given the current SP), it would cost about 10% dilution per 7 months of cash raised (50 mil shares times 0.14 pence gives 7 mil cash). An even better case scenario would involve some kind of deal in Asia (perhaps with Hana) to convert coal plants over there, but that seems pretty speculative at the moment and I'm not confident anyone will be willing to partner while Uskmouth hangs over them.
In the worst case scenario I mentioned, it doesn't look great. Suppose you could raise at 3p per share (which I highly doubt given the bad news we're imagining). It would cost you about 45% dilution to raise 7 months cash, and what's worse is that you wouldn't have any guarantee of funding from CfDs or from Uskmouth in the foreseeable future. They might need to raise more than 7 months cash, and at a lower share price. Frankly, if the CfD budget is unfavourable and Uskmouth planning is rejected, I would be sad but unsurprised to see a share placing at about 1 pence. This is mostly because, as I understand it, they will at some point have to find money to decommission Uskmouth on top of regular losses.
The relevant RNS in case you want to check my numbers:
https://www.lse.co.uk/rns/SAE/interim-results-unaudited-8cyb09iqtd82mga.html (cash position and cash burn June 2020)
https://www.lse.co.uk/rns/SAE/share-placement-agreement-0jj5m5e0lf0y0r4.html (first share placement Dec 2020)
https://www.lse.co.uk/rns/SAE/investment-under-share-placement-agreement-wpnyf0s2xaobuxe.html (second placement Mar 2021)
I'm not sure why the sp has dropped since the last RNS - seemed pretty positive to me - has anybody worked it out? I had a little look to see if it was anything to do with AR4 of the CfD auctions, but can't find any relevant news from the last week or so. I honestly expected the draft budget notice to be out by now. I can confirm that the decision about whether there will be a pot within a pot structure for tidal/wave hasn't been made (public) yet:
https://www.parallelparliament.co.uk/question/7071/water-power-finance
Anyway, I did find this:
https://committees.parliament.uk/writtenevidence/36290/pdf/
Someone else may have posted it already (I can't be bothered to scroll back through weeks of posts to see if anyone has) but I'd be interested to read any comments anyone has on it. The £250/MWh strike price concerns me - the committee definitely thought that was prohibitively high back in January - but it seems like a good submission of evidence otherwise. The promise that they can get below £90 might be encouraging to skeptics in parliament. The IPPA they propose is probably a no-goer. As a minister of state for BEIS points out here:
https://www.parallelparliament.co.uk/question/3950/water-power-finance
the IPPA proposal would be a tax-based instrument and would need signing off by Sunak. My feeling is that the near-term future of tidal would be better served pinning its hopes on Kwasi Kwarteng than on Sunak. If I were putting the case to Kwasi, I'd be emphasising the path to £90/MWh and the potential value of the export market if "Global Britain" can keep its position as a "world-beater" in the tidal market. If there is any substance to the government's rhetoric on environment and business - and I'm very skeptical that there is - then support for tidal is exactly the kind of place where you'd expect to see it: it ticks all the right boxes in terms of innovation, green tech, future-proofing, manufacturing, and British supply chains. And in a cabinet of mostly psychopaths and simpletons, Kwasi is one of the few who actually seems to have his head screwed on. There may yet be hope. We'll just have to wait and see.
No problem. Flicking through the attachments, it seems like it's a slight delay, but not really a problem. For one thing, it still sounds like the EP decision should arrive before the PP decision so the delay won't have any material impact. For another, my impression from the second email is that it would only be important if the application was granted and the plant was operating. I'd be very surprised if the EP isn't granted given that it's purely a regulatory and legal procedure. Happy to be corrected though.
You get the picture. They want more information and ask 4 questions. I don't have the expertise to evaluate it.
Sorry, it's not copying very well
2. For carbon monoxide (CO), please specify if you wish to apply for a half-hourly or ten-minute average ELV, as allowed by Annex VI, (Part 3, paragraph 1.5 & 2 and Part 8 paragraph 1.1(d))of the Industrial Emissions Directive:
As indicated above, it is normal practice for either a half-hourly or ten-minutely average to be applied, but not both. This is in accordance with the provisions of IED. :Irrespective of question (1) above and our BAT considerations, short term limits from IED for carbon monoxide would apply during periods of abnormal operation.
The two possible ELVs, reference periods and qualifying information are as noted in the table above.