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Highlights
- Renewable energy firm Simec Atlantis Energy shares dropped on Thursday after its Uskmouth project plans were referred to the Welsh Government.
- The project aims to convert its coal fuel powered plant in Uskmouth to a sustainable source of fuel.
AIM-listed renewable energy company Simec Atlantis Energy’s (LON:SAE) shares dropped sharply today, falling over 35 per cent, after stating that its Uskmouth power station’s permit was delayed due to being referred to the Welsh Government.
The company is seeking a permit variation for its Uskmouth power station project to convert the coal fired plant to a fuel pellet waste powered plant in order to lower carbon emissions.
The company’s project plans are going to get delayed after the government sponsored independent body, the Natural Resources Wales (NRW) was blocked from deciding on the project’s permit conversion plans and was asked to refer it to the Wales government instead.
Simec Atlantis Energy’s (LON: SAE) share price performance
Simec Atlantis Energy’s shares were trading at GBX 1.48, down by 35.87 per cent on 7 October at 12:28 PM BST. Meanwhile, the FTSE AIM All-Share index, which it is a part of, was trading at 1,200.96, up by 0.07 per cent.
(Image source: EODHD/Others)
The company’s market cap was at £14.98 million, and it has a negative year-to-date return of 93.12 per cent.
Simec Atlantis Energy’s Uskmouth power plant conversion decision
The NRW, which was handling the project’s permit determination for over a year, had previously indicated that they would likely grant the permit variation subject to meeting certain conditions after following a public consultation. The permit was initially scheduled for September.
However, after a reported legal, internal review of NRW’s decision, the company was notified that their permit determination had been directed to the Welsh Government instead.
The company criticised the move, stating the delay in granting the permit was a blow to South Wales. Simec Atlantis also added that the renewable energy project was a key project, especially as Wales has been facing a deepening energy crisis as gas prices soar and as Wales presently has intermittent access to renewable sources of energy.
Simec Atlantis Energy’s financial performance
The company had raised about £ 2.6 million in September through an oversubscribed share placement offering. The proceeds from this offering were planned to be used for the Uskmouth conversion, along with other areas.
Simec Atlantis Energy recently reported its H1 2021 loss before tax at £10.7 million, compared to a loss before tax of £6.2 million in H1 2020
The company attributed the losses to a lower revenue performance for its MyGen project. The company owns 77 per cent in the MyGen project, which is one of the world’s largest tidal stream power projects.
Its other projects include the 220 MW Uskmouth Power Station conversion project, in which it has a 100 per cent ownership. It also has 100 per cent ownership in a mini hydrogen project development plant, the Green Highland Renewables.
Bottom Line
Simec’s Welsh Government referral induced project delay comes amidst the UK government’s deepening energy crisis, and when the UK business secretary Kwasi Kwarteng stated today that the country’s decarbonisation plans would better help insulate households from gas price volatility.
The government had stated in early October that it plans to decarbonise the UK by 2035, 15 years ahead of its earlier net zero target. The accelerated timeline is due to the UK government’s aim to help in securing national energy security.
