Monday, November 24, 2008

Ten more years!

Just listening to the soporific Alistair Darling and the pre-budget statement.

High excitement as he extends the RO by ten years to 2037 - which should at least give a boost to companies exposed to ROCs (Novera springs to mind, and I think it means that companies which substantially don't meet their obligation under the RO (Eon, RWE, British Energy, Centrica based on 2006/07 RO data) might face more costs than they thought at this point yesterday.

Don't forget shares can go down as well as up, and I'm not licensed to give investment advice etc

Friday, November 14, 2008

Additions to tidal list

Following a couple of interesting recent conferences, we've added some new companies to the list of tidal device developers on the Redfield website links page.

They are:

  • C-Energy - EcoFys led Wave Rotor (workable in tidal setting too)

  • Cetus Energy - Australian-based horizontal axis bladed turbine

  • Firth Tidal Energy - no website available yet (although the link is there)

  • Hydro Mine - high energy tidal turbine concept

  • Minesto - developing new "Deep Green" tidal plant concept

  • Verderg - marine engineering firm with energy capture technology applicable to tidal fences

And we've updated the links for Hydro-Gen and Tidalstream too.

Sunday, November 09, 2008

Trident joins the "metal in the water" club

Trident Energy was covered in the Eastern Daily Press online news site the other day.

Trident is joining the somewhat exclusive club of companies which have deployed significantly-rated wave (or tidal stream) devices in the water. The plan is to deploy this scale prototype for 3-6 months, before designing and deploying a 1 MW device.

Redfield's reaction to this prototype is
  1. gosh- Trident's emerged from the left field, we weren't previously aware that Trident was at this stage of development (largely as the website was essentially a placeholder until very recently(/li>
  2. it looks a bit flimsy (although East Coast waves are relatively benign)
  3. there looks to be a fair bit of material for the rated power output (which we interpret as well under a MW, based on comments on the company's website

This announcement comes as part of the launch of the Orbis Centre (the Renewables East hub building - aiming to generate employment in offshore renewables.

Tuesday, November 04, 2008

SSE sells down on Greater Gabbard

SSE has just announced the sale of a 50% interest in the Greater Gabbard offshore windfarm development to RWE (in the guise of npower renewables) for £308 million (which includes reimbursement of the 50% share of past capital costs).

So let's look at the values:

GG is planned to be 504 MW and is fully consented. A price of £308 million for 252 MW equates to £1.2 million per MW, but this number is confused by the capital reimbursement being made to SSE for money they've already spent on RWE's behalf.

SSE bought the 50% interest in GG from Fluor for £40 million earlier this year before any real money had been spent. So, if there's no uplift in the actual value of the project, this implies that the partners have spent around £500 million on turbines, steel orders and other big-ticket items since May.

Our instinct is that it's unlikely that SSE could have gone through all of this amount in six months (although it's not impossible: the turbine supply agreement was announced in May and might be worth a total of £750 million, although its unlikely that a large proportion of that money has been spent).

If our instinct is right, it suggests that SSE has pulled off an extremely nifty deal, stepping into a consented project and reaping all of the benefit of taking it to financial close., but the developers won't have spent all of that yet.

As an aside, we'd expect RWE to have negotiated the right to acquire the ROCs from the project, but this may not concern SSE which is currently in almost full compliance with the Renewables Obligation and presumably thinks it would have been oversupplied with ROCs if it owned all of GG. We also note the interesting detail that the project cost is now described as £1.3 billion excluding the connection to the electricity grid.