TIDMKIBO
RNS Number : 8004R
Kibo Energy PLC
31 October 2019
Kibo Energy PLC
(Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 31 October 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Bordersley Project: Notifications of Prequalification Decisions
for the capacity market
Kibo Energy PLC, the multi-asset, Africa focused, energy
company, is pleased to announce an update on its 60% owned
subsidiary, MAST Energy Developments Limited ('MED'), a private UK
registered company targeting the development and operation of
flexible power plants to service the UK reserve power generation
market. MED is developing a portfolio of reserve power generation
projects and Bordesley Power Limited ('Bordesley') is the first
shovel-ready project site in the portfolio.
Highlights
-- Reinstatement of the Capacity Market scheme by the department
of Business, Energy and Industrial Strategy, following the European
Commission's decision that the GB Capacity Market scheme is
compatible with EU State aid rules and thereby amongst others
enables the UK to make capacity payments under the GB Capacity
Market.
-- Bordersley has conditionally prequalified for the 2022 three
years ahead (T-3) Capacity Market Auction.
-- Bordersley has conditionally prequalified for the 2023 four
year ahead (T-4) Capacity Market Auction.
-- This conditional prequalification and potential subsequent
qualification will give the right to Bordersley to participate in
the auction to win a 15-year capacity market contract.
Louis Coetzee, CEO of Kibo Energy, commented, "Part of the UK
government's Electricity Market Reform package, the Capacity Market
aims to ensure security of electricity supply by providing a
payment for reliable sources of capacity, such as Bordersley,
alongside their electricity revenues, to ensure they deliver energy
when needed. This will encourage the investment required by the UK
Government to replace older power stations and provide backup for
more intermittent and inflexible low carbon generation sources.
The reinstatement of the Capacity Market scheme is recognition
by the EU and UK government that there is a need to ensure security
of electricity supplies in the UK. It means that the economics of
flexible generation sites such as Bordesley improve, as it
facilitates a steady payment for the duration of the capacity
agreement (ranging between 1 and 15 years) to successful bidders,
and I am delighted that Bordesley has prequalified for the auction.
According to the research by Aurora Energy Research, CM prices
should recover as lucrative site-specific benefits for peakers and
DSR become more scarce; CM is expected to clear in mid GBP20s/kW in
the 2020s, but the buildout of nuclear, wind and interconnectors
are key uncertainties"
What is the Capacity Market?
The Capacity Market was proposed following the Government's
comprehensive review of the electricity market. The objective of
the Capacity Market is to achieve long-term security of supply.
Set out in the UK Energy Act 2013, the Capacity Market (CM) is
one of the UK government initatives for ensuring security of
electrical energy supply for homes, businesses and industry. The CM
not only secures additional electricity supply for use during grid
stress events - which is increasingly important as energy demand
increases, and the UK moves to more intermittent, less flexible
renewable generation - but also creates an opportunity for those
with generation capacity to earn additional income.
The Capacity Market is a mechanism introduced by the UK
Government to ensure that electricity supply continues to meet
demand as more volatile and unpredictable renewable generation
plants come on stream. Commencing in 2018, it aims to ensure that
sufficient generation or load-management capacity exist in the
system to cope with times of stress on the network when, for
example, the wind stops blowing or there is a surge in demand.
Along with Contracts for Difference, Carbon Price Floor and
Electricity Demand Reduction, it aims to reform the UK electricity
market to deliver low-carbon energy and reliable supply, while
minimising the cost to consumers. The Capacity Market will operate
alongside the current Energy Market, supported by the Balancing
Services Market. As more intermittent renewable generation
technologies come on stream, the Capacity Market will provide
back-up generators and demand-side responders to help balance the
network at times of stress. Participants will be paid a per MW rate
for the capacity they offer to the market. This capacity needs to
be available when providers are called upon by National Grid at any
time during the contracted period.
Advantages to Bordersley for participation in the Capacity
Market
During the generation delivery year, generators with Capacity
Agreements receive monthly payments for their agreed obligation at
the auction Clearing Price. There are no financial losses for not
being able to deliver the pledged capacity. If generators do not
engage their capacity when required they will be penalised at no
more than 100% of the CM payment, therefore the financial benefits
available to generators through participation are significant.
Participation in the CM is a long-term arrangement and part of the
UK government's Electricity Market Reform package.
**ENDS**
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
Andreas Lianos +27 (0) 83 4408365 River Group Corporate and Designated
Adviser on JSE
--------------------- --------------------- -------------------------
Jason Robertson +44 (0) 20 7374 2212 First Equity Limited Joint Broker
--------------------- --------------------- -------------------------
Bhavesh Patel/Stephen +44 20 3440 6800 RFC Ambrian Limited NOMAD on AIM
Allen
--------------------- --------------------- -------------------------
Isabel de Salis +44 (0) 20 7236 1177 St Brides Partners Investor and Media
/ Ltd Relations Adviser
Beth Melluish
--------------------- --------------------- -------------------------
Notes
Kibo Energy PLC is a multi-asset, Africa focused, energy company
positioned to address the acute power deficit, which is one of the
primary impediments to economic development in Sub-Saharan Africa.
To this end, it is the Company's objective to become a leading
independent power producer in the region.
Kibo is simultaneously developing three similar coal-fuelled
power projects: the Mbeya Coal to Power Project ('MCPP') in
Tanzania; the Mabesekwa Coal Independent Power Project ('MCIPP') in
Botswana; and the Benga Independent Power Project ('BIPP') in
Mozambique. By developing these projects in parallel, the Company
intends to leverage considerable economies of scale and timing in
respect of strategic partnerships, procurement, equipment, human
capital, execution capability / capacity and project finance.
Additionally, the Company has a 60% interest in MAST Energy
Developments Limited ('MED'), a private UK registered company
targeting the development and operation of flexible power plants to
service the Reserve Power generation market.
Johannesburg
31 October 2019
Corporate and Designated Adviser
River Group
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END
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