TIDMKIBO
RNS Number : 1302R
Kibo Energy PLC
27 February 2023
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: 27 February 2023
Kibo Energy PLC
('Kibo' or the 'Company')
MED's Pyebridge Has Significant Enhancement of Income Following
Capacity Market Auction Results and Update of Trading Results for
2022
Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable
energy-focused development company, is pleased to note the positive
announcement by its subsidiary, Mast Energy Developments ('MED'),
with regards to its current flagship and producing asset, the 9 MW
Pyebridge synchronous gas-powered flexible generation facility (the
'Site' or 'Pyebridge'). The update specifically refers to the
Site's Capacity Market ('CM') contract and the outcome of the
recent Capacity Market Auction results as well as an overview of
the key highlights with regards to the Site's actual performance
for 2022, both operationally and economically. The full
announcement can be viewed at
https://polaris.brighterir.com/public/mast_energy_developments/news/rns/story/r77nkjr
and as set out below.
Louis Coetzee, CEO of Kibo Energy said: "The Pyebridge site's
performance during 2022 has exceeded our expectations,
outperforming the average market price by 88% and highlighting
MED's ability to provide significantly better returns compared to
the market. Furthermore, MED is on track to bringing its next
project, Bordesley, into production later this year along with
advancing the development of the rest of the projects within its
portfolio".
Full MED announcement:
Mast Energy Developments PLC
Pyebridge Has Significant Enhancement of Income Following
Capacity Market Auction Results and Update of Trading Results for
2022
Mast Energy Developments PLC ('MED' or the 'Company'), the
UK-based multi-asset owner and operator in the rapidly growing
Flexible Energy market is pleased to announce an update with
regards to its current flagship producing asset, the 9 MW Pyebridge
Synchronous Gas-powered Flexible Generation Facility (the 'Site' or
'Pyebridge'). The update specifically refers to the Site's Capacity
Market ('CM') contract and the outcome of the recent Capacity
Market Auction results, as well as an overview of the key
highlights with regards to the Site's actual performance for 2022,
both operationally and economically.
Capacity Market
Upon acquisition of the Site by MED, it had a pre-existing T-4
CM contract at a tariff of GBP8/kW/pa with a contract value of c.
GBP60k per annum. Due to the UK energy market having moved
significantly since the Site previously obtained the aforementioned
contract, MED took a strategic decision to forego the contract in
favour of applying for new replacement CM contracts in the
2022/2023 CM bid window. Consequently, MED applied for and was
successful in pre-qualification to bid for two new CM contracts,
being a T-1 and a T-4 CM contract. Following the preparation of a
robust CM Auction bid strategy, MED is pleased to announce that
pursuant to the recent Capacity Market Auctions and subsequent
results, its T-1 bid cleared at GBP60/kW/pa and, its T-4 bid
cleared at an unprecedented historic record price of
GBP63/kW/pa.
The Directors are pleased at the success of MED's strategy to
replace the Site's previous low-value CM contract with new
replacement contracts at significantly higher tariffs. The Site's
new replacement T-4 contract at GBP63/kW/pa compared to its
previous T-4 CM contract at GBP8/kW/pa results in a c. 7.5x (or
750%) uplift in income. The new additional T-1 CM contract, which
the Site did not have before and is a new additional contract, will
further enhance the Site's revenue significantly.
The Site's new T-1 CM contract has a revenue value of c. GBP308k
per annum and its new T-4 CM contract has a revenue value of c.
GBP324k per annum (the latter up from the previous T-4 contract's
c. GBP60k per annum). Both contract values will increase the Site's
revenue profile accordingly.
Pyebridge Trading Update
Following the period of the Site's post-acquisition optimisation
(see RNS dated 5 July 2022), and since starting full-scale
production during March 2022, the Site generated the following
actual performance figures for the c. 10-month period March to
December 2022 (the 'Period'):
* Electricity Generation Sales Revenue for the Period: c.
GBP1.054m,
* Total Electricity Generation Output for the Period: c. 2,738
MWh, and
* Average Electricity Generation Sales Price achieved per MWh
sold for the Period: c. GBP385.
Both the achieved generation production and sales price
outperformed the market, with the market's average wholesale price
in 2022 coming to only c. GBP204 per MWh, resulting in an 88%
performance above the market and validating MED's strategy and
ability to outperform the market. MED's success in this regard is
mostly related to the astute utilisation of Artificial Intelligence
('AI') and Machine Learning ('ML') techniques related to its
trading algorithm, in conjunction with its PPA Route-to-Market
partner, Statkraft.
The Site's previous financial performance led the Company to
increase its expectations of Pyebridge, which were set out in the
Pyebridge Trading Update RNS announcement dated 19 October 2022.
The Company confirms that due to unexpected variables during the
period under review, including the generation of unprecedented
record levels of electricity generation from renewables, most
notably wind (which is a hedge to reserve power) from September to
December 2022 in the UK, and which went beyond those considered
possible by the Company when issuing its expectations, the
previously stated expectations are no longer valid. This is a
consequence of the increase in electricity generation from
renewables reducing the reserve power required across the UK during
this period and consequently impacting the electricity generation
sales at Pyebridge.
Pyebridge Asset Value
Following the Pyebridge SPA deferred consideration settlement
(see RNS dated 16 December 2022), the total effective acquisition
purchase price for the Site was reduced to c. GBP2.1m.
During the Site's recent annual insurance cover policy review,
the Site's asset value was independently confirmed at c. GBP6.3m
(on a conservative replacement cost basis). The Site's fair asset
value compared to its purchase price therefore highlights the
significant upside that MED's investment in Pyebridge has
established.
Pieter Krügel, MED CEO, commented: "We are pleased to report
that Pyebridge obtained new Capacity Market contracts at
considerably higher values, which will significantly enhance the
Site's revenue profile and profitability. Moreover, we are pleased
with the Site's actual performance during 2022, with specific
reference to the 88% outperformance of the average market price,
highlighting our ability to provide significantly better returns
compared to the market. We are confident in our ability and
strategy to keep delivering outperformance during 2023. Finally,
the Site's fair asset value compared to its acquisition price
furthermore highlights MED's ability to identify and acquire sites
at an attractive discount in order to enhance value for its
shareholders.
Further, we are advancing the development of the rest of our
projects in the portfolio and looking forward to bringing our next
project, Bordesley into production later this year.
"MED has a very exciting year ahead, being well established and
positioned to fast-track production and growth. We look forward to
updating investors with further key developments during the year
ahead."
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014.
**ENDS**
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive
Officer
James Biddle +44 207 628 3396 Beaumont Cornish Nominated Adviser
Roland Cormish Limited
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Claire Noyce +44 20 3764 2341 Hybridan LLP Joint Broker
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Damon Heath +44 207 186 9952 Shard Capital Joint Broker
Partners LLP
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Zainab Slemang zainab@lifacommunications.com Lifa Communications Investor and
van Rijmenant Media Relations
Consultant
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Johannesburg
27 February 2023
Corporate and Designated Adviser
River Group
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END
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