George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Genuine question: How likely do you think it is that SAE will be able to compete for a CfD?
I wouldn't like to be depending on £10 a share, but I would be delighted if it was! I personally find SP predictions incredibly difficult. For what it's worth, Myles McNulty, who seems to be respected on these boards, sees SAE attaining a "multi-billion valuation", which I guess would put the share price at greater than £4 a share? https://twitter.com/MylesMcNulty/status/1347483462404628485
Thanks OT. I can't see that - is it from here? https://documents.newport.gov.uk/PublicAccess_LIVE/SearchResult/RunThirdPartySearch?FileSystemId=PL&FOLDER1_REF=20/0748
For anyone looking for some encouragement, I would recommend having a look at the December 18th letter here:
https://documents.newport.gov.uk/PublicAccess_LIVE/Document/ViewDocument
I have to admit I had completely missed it and only saw it just now!
I think the general feeling on this board is one of cautious confidence. All the signs point towards the permit being granted and I don't think the risk of it not being granted is high. I think the reason it gets discussed a lot is that it is the only real short term risk left. From what we can read (https://publicregister.naturalresources.wales/Search/Results?SearchTerm=PAN-008534&sortBy=Date&filters%5BLocation%5D=&filters%5BLocalAuthority%5D=&SortRelated=Date) there is no obvious reason why the permit won't be granted, but of course there is always some element of risk. I think it would be fair to say that most of us would be surprised (not to mention disappointed) if the permit isn't granted.
1. Given the recent appointment of Reid as CEO, I'd be very surprised if both he and SAE aren't very confident of getting the EP, and Dr Poole doesn't seem inclined to extend the deadline in the correspondence. I can't remember offhand whether the deadline was for the decision or for finalising the application and evidence, but I think it's highly likely that deadline will be met.
2. The SP fluctuates by more than 10% on a day to day basis anyway. Of course, in the context of vaccinations and lifting lockdowns, it might be that the SP is lifted by 20% just because of general positive market sentiment. Personally, I would be disappointed not to see 30p on the back of an approved EP; EP approval is arguably the last major hurdle in de-risking Uskmouth. We don't get as much chat about the planning application on here, but from what I remember from my initial research, that seems much less likely to be problematic.
That's lovely! Merry Christmas everyone
Great news! I'm feeling very confident about the EP after reading that. I can't imagine that the FPMP will be at all problematic, so the water emissions looks to be the final important step.
OT: I wondered about that too. As you say, I don't think they can have officially appointed a contractor, but they are obviously going to make it an obligation in the contract and are confident that it can be met.
The next 6 - 12 months should be very exciting!
I've only held shares since May, but I expect to hold for at least the next 4 or 5 years, which I guess is pretty long term. I've been concerned about the environmental permit for USP a few times but I topped up at 15.09 pence a couple of days ago and SAE is my largest holding at about 50,000 shares.
I'm invested in them because of tidal, but in terms of share price I think Uskmouth and the joint venture in Subcoal will be most important for the foreseeable future. If we see another share price drop because of Covid/Brexit then then I wouldn't hesitate to buy more shares.
https://publicregister.naturalresources.wales/Search/Results?SearchTerm=PAN-008534&sortBy=Date
Dr Poole has given SAE until 08/01/21 to respond to all the section 5 notices or the variation application will be withdrawn. It seems that there are two (from 29/07/20 and 02/10/20) that haven't been answered satisfactorily and he's issued a further schedule 5 request today. Not the best news in the world - looks like there might be a lot of people working overtime over Christmas/New Year.
I haven't had chance to go over all the details yet but it sounds like there's quite a lot left to do on the modelling side (for "validation"). I'm a little skeptical we'll have a decision from NRW by the end of the year if they have this much information left to receive. Even if SAE supply all the necessary information by the end of next week, I can't imagine NRW working on it over Christmas to get it done. Hopefully it's not as bad as it seems.
OT: your description of the waste market resonates with my understanding
. From what I remember from what I've read, it seems that councils generally pay for the volume of waste that waste incineration (WI) companies take, and that these companies predominantly make their money from gate fees rather than sales of heat/electricity. These companies end up having some incentives (emissions limits? - I forget) to take the non-calorie-dense waste rather than the calorie dense waste which makes their waste to heat/energy plants very inefficient. SAE's Uskmouth model is so different because the pellet makes the sale of electricity a significant income stream as well - SAE will want the calorie dense waste rather than the calorie light waste. Whereas most waste incineration companies make their money primarily through gate fees, SAE should be profitable at both ends - they should make money for taking the waste AND for selling the electricity.
This from James Forsyth at the Times:
"But perhaps Britain’s biggest win from a Biden presidency will be greater co-operation over climate change. This is a growing interest of the Johnson government, ahead of the COP26 climate change summit in Glasgow next year. The prime minister is, in the words of one Downing Street, “obsessed” with it, regarding it as the perfect coming out party for post-Brexit Britain. One minister involved in the preparations for it says “climate change will be the single biggest change in their foreign policy and how they engage with the world”. The US formally left the Paris Agreement on climate change on Wednesday: for it to rejoin a successor agreement, signed under British auspices this year, would be a significant diplomatic achievement."
https://www.thetimes.co.uk/edition/comment/biden-victory-is-a-mixed-blessing-for-britain-xqbtlk6k8
Good news for the tidal division, I would have thought.
My guess would be this OHS
https://www.ft.com/content/18ade542-d2a9-438a-ba5c-37b51475993b
https://www.theguardian.com/business/2020/nov/05/bank-of-england-launches-new-150bn-stimulus-package
Thanks OT, that's a good read. I find this bit encouraging:
"Where BAT-AELs cannot be met, you will need to request a derogation. This would need to be demonstrated by the operator in their response. To do this, you must provide sufficient technical and commercial information to demonstrate that achieving that BAT-AEL would lead to costs that are disproportionately high, compared with environmental benefits because of one or more of:
the geographical location of your installation
the local environmental conditions around your installation"
So far they haven't even discussed the possibility of derogation (unless I missed something?) . Certainly, it seems like even if they can't meet the standards NRW are asking for (which they may be able to anyway), there are other options they could explore to get the permit. Shares are so cheap at the moment I might just buy some more on Monday anyway...
I'd have a look at the correspondence (https://publicregister.naturalresources.wales/Search/Results?SearchTerm=PAN-008534) dated 20/10/20 - it sounds like we could have quite a bit longer to wait I'm afraid. Consider this bit:
"We consider it likely that this will involve your air quality modelling consultants to re-calculate and map the magnitude of exceedences of PC and PEC, and your ecologist, to consider in detail the likely impact of the modelled emissions/pollutant concentrations."
So NRW are saying that they think SAE need to go back to consultants and ecologists and do some of the modelling again.
To be honest I'm getting a little nervous re-reading that email. For example, here:
"We have provided some detailed information above as to where we consider that the information provided in the Schedule 5 response does not meet these requirements, but cannot advise you on your application. We note the level of detail in your original application in respect of these matters (Appendix H sub-appendix C, and Appendix L) and consider that for a response to be satisfactory, it would need to be of comparable detail and follow the guidance/standards identified in those initial submissions, in respect of the key “new” issue of Nutrient Nitrogen Deposition in exceedance of the critical load."
That sounds to me like when SAE were told by NRW that they would have to meet the BAT-AELs for a new plant rather than an old one, and consequently had to revise down their estimations of environmental impact, they might have fudged the numbers slightly. Possibly I'm reading far too much into it , but I am now worried that SAE can't actually meet the BAT-AELs and are trying to get one past NRW. I haven't sold my existing shares yet but I'm slightly hesitant to buy more at the moment (or on Monday) even though the share price is a bargain right now.
As always, if anyone has any expertise on the issues Dr Poole discusses in that correspondence I'd love to hear your thoughts.
Thanks OT, I missed your earlier post - I'm not often up and about at 05.46!
It would be great news if wind does get put in a separate pot! I haven't run any numbers but I imagine there would be a decent chance of tidal being long-term profitable with a suitable CfD? Whilst, in the near future, I think it will be Uskmouth and the pellets that drive SP growth, it was (and remains) tidal that primarily attracts me to SAE as a renewables company.
Of course, being able to profitably convert coal power stations to waste to energy plants on mass would also do wonders for global GHG emissions.
That's quite a significant drop! I hope it lasts through until Monday when I'll have more cash free to buy up.
Anyone know why the drop? Is it just random? As long as I'm not missing any news I'll just buy the dip.
Perhaps it's because of all the second-wave panic? SAE shouldn't be affected at all though...
If Biden gets elected next week I'm expecting most renewable stocks to soar. Not sure if SAE will be affected but I have holdings in other renewables and looking forward to a good couple of weeks. Anybody got any sense of whether SAE would benefit? I think if democrats win the senate as well as the presidency we might benefit just because of the tidal division...
I had a read through the links that OHS provided on Tuesday and the most relevant variation applications seem to be the one for Aberthaw which was Duly Made on 31/03/17 and the Lynemouth variation application received on 28/07/11/. Both were eventually approved. The Lynemouth variation is less comparable to SAE as far as I can see so I'll concentrate on the Arbethaw one.
The Aberthaw application is fairly recent (only 3 years ago) and was also an application to change the fuel source (to 100% biomass) and took 6.5 months from being Duly Made to the application being determined. The gap between the final bit of information being received by NRW (15/09/17) and the application being determined (11/10/17) is less than 3 weeks.
For contrast, the SAE variation permit was Duly Made on 11/03/2020 (note that this is a different date to the date the application was submitted) and we are currently about 7 months in.
You can interpret this as good news (we can expect the decision to be made soon) or bad news (this decision is causing more difficulties so maybe it's less certain). Personally, I'm pretty confident that the permit will be granted eventually, but I suspect NRW will demand SAE to meet higher regulatory standards than SAE were initially expecting.
For my own portfolio, I'm happy for the permit to be delayed by a few months (as long as it is eventually approved) as it gives me more opportunities to potentially increase my holding. The dream would be that it dips below 20p again so I can buy more before hitting 60p - 70p by March 2021
As NRW state several times, the environmental permit is awarded based on law, not preference: if SAE can unambiguously meet the legal requirements then NRW are compelled to award the permit. If SAE are certain that they meet these requirements (which they seem to be) then the permit side of things, at least, would seem to be derisked as OT says.
Celery: (re: brexit)
As far as I'm aware, for the Uskmouth Powerplant the only real connection with Europe is with N+P, the (co)supplier of the pellets. My understanding was that the pellets were originally supposed to be being made in the UK (Teeside?) and so would presumably be unaffected by brexit. I guess if the value of the pound plummets, the N+P side of the contract might get more expensive but the pellets are already so cheap to manufacture relative to gate fees that I can't see it being a problem. However, I do have vague recollections of reading N+P stuff about factories moving to Europe. That might not have been related to SAE though - I'll have to check. My point about Brexit was more that I expect share prices in general to fall if there's no deal forthcoming and that that would be nice for those of us that are still buying more shares. Long term I don't expect Uskmouth to be majorly affected by Brexit.
As for the effect of brexit on Tidal projects, I will defer to the others on the board who are far more knowledgeable than me. I have no idea how it might not affect the project in Normandy, for example. I know that Project Stroma gets/got European Commission funding, but I don't know if that will be affected. Either way I suspect that it is Uskmouth and not tidal that will move the sp for the foreseeable future.