SIMEC Atlantis Energy Secures 15-Year Capacity Market Contract
Why we think this is good
The contract win provides SAE with a significant and long-term revenue stream, which should have a positive impact on the company's financial performance. While there are still some regulatory requirements to be met and the project is still in the financing stage, the contract win reduces funding risk and provides greater revenue visibility. However, the RNS lacks detailed financial information, and there are some execution risks and other uncertainties that temper the overall positive sentiment.
Key Points
- SAE secures 15-year contract to provide electricity to National Grid
- Contract worth £60/kW/year, potentially generating £7.2 million in annual revenue
- Contract win is an important component for financial close of AW1 Battery Project
- Contract still subject to regulatory approval
- RNS lacks detailed financial information, some execution risks and uncertainties remain
Summary
SIMEC Atlantis Energy (SAE) has secured a 15-year contract to provide electricity to the National Grid through its 120MW AW1 Battery Storage project. The contract will provide SAE with a fixed revenue stream of £60/kW/year, which could amount to around £7.2 million in annual revenue. This contract win is an important component as SAE works towards financial close of its flagship AW1 Battery Project at the Uskmouth Sustainable Energy Park. However, the contract is still subject to regulatory approval, and the RNS lacks detailed financial information, so some execution risks and uncertainties remain.