Plutus PowerGen PLC Commissions First 20MW Energy Site in the UK (1909O)

TIDMPPG

RNS Number : 1909O

Plutus PowerGen PLC

03 November 2016

Plutus PowerGen Plc / Ticker: PPG / Index: AIM

3 November 2016

Plutus PowerGen plc ('PPG' or 'the Company')

Successfully Commissions First 20MW Flexible Energy Site in the UK

Plutus PowerGen plc, the AIM listed power company focused on the development, construction and operation of flexible power projects in the UK, is delighted to announce that it has successfully brought its first power generation site in Plymouth into operation. Attune Energy is now operating at full output.

This represents a transformational milestone for the Company, acting as proof-of-concept in respect to PPG's strategy to become a predominant player in the flexible energy generation market, and providing the Company with immediate exposure to its revenue streams, which are:

   --     Short Term Operating Reserve (STOR) 
   --     Firm Frequency Response (FFR) 
   --     TRIAD 
   --     Merchant Power sales 

The Plymouth site also holds a capacity mechanism contract for 15 years starting in 2019 and is pre-qualified for next year's 2017 capacity mechanism contract. Plymouth is one of nine sites held in partnership with Rockpool Investments LLP ('Rockpool'), which has provided EIS funding for their development. Rockpool also currently pays management fees totalling GBP1.35 million per annum to PPG in return for overseeing the construction of the assets and for managing them on an ongoing basis.

Charles Tatnall, Executive Chairman of PPG said, "This is a landmark event for PPG. Now that our first flexible energy facility is operational, we look forward to increasing our sales substantially as we tap into the multiple revenue streams available to us over the coming months. These opportunities exist because National Grid and the Big Six are in need of a consistent source of power which blends with the intermittent supply currently being delivered by renewables. By providing power at times of peak demand, our projects will mitigate the risk of brown or blackouts and as demonstrated by recent announcements that we now have planning permission in place for seven projects, our portfolio is progressing well."

Please see below for further information on the revenue streams available to PPG:

 
  Mechanism                        Overview                                                           Counterparty 
-------------------------------  -----------------------------------------------------------------  ------------------ 
  STOR                             The Short Term Operating Reserve is a mechanism used by            National Grid 
                                   National Grid to balance the UK's 
                                   power supply at short notice. The STOR allows required 
                                   electricity supply to be decreased 
                                   (by incentivising major consumers to reduce demand) or 
                                   increased, by calling on a pool of 
                                   stand-by power generators. Under the terms of two-year 
                                   contracts, National Grid pays STOR 
                                   providers for making their capacity available, as well as for 
                                   delivery of electricity. 
-------------------------------  -----------------------------------------------------------------  ------------------ 
  Firm Frequency Response (FFR)    FFR is a service procured by National Grid to manage system        National Grid 
                                   frequency, the system-wide signal 
                                   that indicates whether energy supply exceeds demand or vice 
                                   versa. FFR allows a provider to 
                                   supply a service to reduce demand or increase generation, when 
                                   instructed by National Grid. 
                                   FFR is procured via monthly tender. To take part, generators 
                                   must be able to deliver a minimum 
                                   of 10MW, and be capable of responding within 30 seconds and for 
                                   sufficient duration. Similar 
                                   to STOR, providers are paid for availability as well as for 
                                   utilisation. PPG will compete 
                                   in the static market, whereby energy change occurs at a pre-set 
                                   frequency and remains at a 
                                   set level (as opposed to the dynamic market, where energy 
                                   changes in line with system frequency). 
-------------------------------  -----------------------------------------------------------------  ------------------ 
  Triad                            Triad is the scheme under which the National Grid charges          Energy Suppliers 
                                   energy suppliers significant sums 
                                   according to their use of the high voltage transmission network 
                                   during Triad periods - the 
                                   three half-hour periods of highest demand in a year, identified 
                                   after the winter. The principal 
                                   means for National Grid to cover its costs, Triad also serves 
                                   to incentivise users to limit 
                                   consumption during peak periods, thereby easing the need for 
                                   investment in the transmission 
                                   system. Through Power Purchase Agreements ("PPAs"), energy 
                                   supply companies pay flexible generators 
                                   of electricity to supply power to local distribution networks 
                                   during anticipated peak periods 
                                   (both for the power generated and for Triad avoidance), as 
                                   their generation reduces demand 
                                   on the transmission network. Generators must operate during 
                                   each of the Triad periods to be 
                                   eligible for payments. 
-------------------------------  -----------------------------------------------------------------  ------------------ 
  Merchant Power Sales             This is simply sales of generated power; when operating with an    Energy Suppliers 
                                   objective of Triad avoidance, 
                                   power is sold under a PPA, typically to a large UK energy 
                                   supplier. PPAs are typically of 
                                   a 5+ year duration. 
-------------------------------  -----------------------------------------------------------------  ------------------ 
 

**ENDS**

For further information, please visit www.plutuspowergen.com, or contact:

 
 Charles Tatnall   Plutus PowerGen Plc   Tel: +44 (0) 
                                          20 3705 8350 
----------------  --------------------  -------------- 
 Phil Stephens     Plutus PowerGen Plc   Tel: +44 (0) 
                                          20 3705 8352 
----------------  --------------------  -------------- 
 Ewan Leggat       SP Angel Corporate    Tel: +44 (0) 
                    Finance LLP           20 3470 0470 
----------------  --------------------  -------------- 
 Laura Harrison    SP Angel Corporate    Tel: +44 (0) 
                    Finance LLP           20 3470 0470 
----------------  --------------------  -------------- 
 Elisabeth         St Brides Partners    Tel: +44 (0) 
  Cowell            Limited               20 7236 1177 
----------------  --------------------  -------------- 
 Hugo de Salis     St Brides Partners    Tel: +44 (0) 
                    Limited               20 7236 1177 
----------------  --------------------  -------------- 
 

Notes to Editors

Plutus PowerGen plc is an AIM listed company focused on the development, construction and operation of flexible stand-by power generation sites in the UK. At present, the market dynamics for flexible power generation are positive as a result of the continued downward pressure on capacity available to National Grid to balance supply and demand, leading to their announcements about possible power shortages over the next few years.

Flexible Power generators such as PPG offer a viable and timely solution to the power capacity shortfall in the UK. To this end, PPG is initially focusing on delivering 200MW of capacity by the end of 2017 and currently has a project pipeline of potential development sites with 700MW of power generation capacity.

PPG has a straightforward multi-revenue stream model with large and stable counter-parties and is using project/EIS funding through SPVs to finance construction of the generation assets. This structure has the benefit of limiting dilution to plc shareholders as the assets are financed and built.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 03, 2016 03:00 ET (07:00 GMT)