What it does
Tidal – MeyGen is a tidal project in the Pentland Firth comprising four 1.5 megawatt turbines installed on the site.
Simec Atlantis is the operator and largest shareholder at MeyGen, where plans are to increase markedly the number of turbines.
The company also recently formalised its joint venture in the stretch of water between France and the Channel Islands.
Normandie Hydrolienne has been established to harness up to two gigawatts (2GW) of power from the Alderney Race, the eight-mile straits that runs between Alderney and La Hague, France.
Atlantis has also been appointed to supply tidal generation equipment and offshore construction services for a demonstration project in Japan.
The Y1,800 (£13mln) project is in the straits of Naru Island and is being run by Kyuden Mirai Energy.
Waste to energy – Simec Atlantis is also converting the 220MW Uskmouth, Wales power station to run on waste pellets.
First revenues might be in 2022 with construction expected to take up to 18 months.
Simec Atlantis also is involved in research, consultancy, tidal projects in Indonesia, surface wave energy generation and tidal flows.
Hydro – Atlantis has acquired the maintenance business of GHR, which has long-term contracts at numerous power stations.
How it’s doing
The renewable energy pioneer said in its interim results statement that it continues to see encouraging progress on all its key projects notwithstanding the operational challenges presented by COVID-19 social distancing restrictions.
At the Uskmouth power station conversion project, SIMEC has recently achieved major technical, planning and commercial milestones.
Strong revenue contributions from the MeyGen tidal power project, offshore Scotland, helped the growth-focused company narrow losses significantly.
It reported a £6.2mln loss for the six month period, almost half the £11.8mln reported in the same period of 2019.
Revenues for the period totalled £7.93mln.
What the boss says: Tim Cornelius, chief executive
“We have continued to make material progress on our important portfolio of projects, where we connect carbon-cutting projects with industries looking to ensure that they can reduce their carbon intensity and be at the forefront of the green agenda.
“Each of our business units, being tidal energy, hydropower and power station conversions, have delivered exceptional performance under challenging conditions.”
- Uskmouth used as a blueprint for other conversion projects
- More strong generating numbers at MeyGen
- Cashflow from GHR contracts
What the broker says: Investec
Investec initiated its coverage with a ‘buy’ recommendation and 75p price target.
Analyst Martin Young described SIMEC Atlantis as “a triple play on sustainability” monetising end-of-life waste, tidal stream power, and small-scale hydro.
Already a world leader in tidal stream power, thanks to the MeyGen Phase 1 project in Scotland, the Investec analyst pointed to the Uskmouth coal plant conversion project as another potential “game-changer”.
Securing planning permission and reaching financial close on the Uskmouth are seen as catalysts by Investec. The project can provide value accretion and would put SIMEC Atlantis on a road to profitability by 2023.
Published at Tue, 01 Dec 2020 10:10:00 +0000-Simec Atlantis progressing on three fronts in renewables sector