Harmony Energy Income Share Discussion Threads

[cc2014] 21/4/2024 11:10

Additionally it seems unlikely they fill and discharge the batteries to 100 and 0 unless the spread was more like 100 due to battery degradation

[nickrl] 20/4/2024 23:21

@llef thats per MW though?

Would say that £30/MWh spread twice day isn't viable in the current market as when renewables have low penetration the spread closes considerably. They can get more in the BM if called on but that is the problem currently albeit improving.

[llef] 20/4/2024 17:37

@nickrl, ok thanks.

Just made a back of teh envelope calc, if you have a 2 hour battery, and charge o/n and release in morning peak, charge in pm and release in evening peak, and you make 30 quid margin each time, and you do that 365 days a year, then you generate 2*30*2*365=120*365 = £43,800 a year.

That would seem to me, to be as good as it could get for battery trading?

Would that on its own, be sufficient for HEIT to build out its pipeline, pay interest and pay a dividend?

[nickrl] 19/4/2024 10:58

@llef at least a third of BESS assets aren't in the BM so rely upon the wholesale market for revenue and i believe can register for the frequency response services and some are using them to manage their own trading accounts.

[cruelladeville] 18/4/2024 16:14

It's not that BESS can't do it. They're just not big enough yet. Arguably, they shouldn't be getting that big anyway because at very large scale other technologies are more suitable. But the UK for some reason is very slow to deploy technologies such as cryogenic air energy storage or compressed air energy storage plants. There's a couple of small cryo plants built with more to come. But as yet we haven't got a CAES plant built. Both those technologies fit nicely between BESS and pump storage hydro in terms of capacity. There's possible hydrogen storage in the future but low round trip efficiency is a big problem and as yet there's no gas turbines on the market for 100% hydrogen combustion.

[llef] 18/4/2024 14:20

@nickrl, ahhh ok thanks.

But if they can trade in the wholesale market to take advantage of the opportunities such as those available tomorrow, why is there such a fuss being made about them not being utilised much for the BM?

After all, if they have committed their batteries to provide power in the wholesale market, then those batteries are not available for the BM are they? Or have I misunderstood the relationship between the wholesale market and the BM?

Thanks

[nickrl] 18/4/2024 13:59

@llef they don't need the BM can still trade in the wholesale mkt.

@CDV the issue for the ESO is batterries can't deliver enough oomph when its needed. Biggest problem they face is high wind in Scotland saturates the transmission capability so they have constrain off 100's of MWH for hours and only gas can pick up that load currently with BESS topping up. However some supersized batteries coming that will change the game.

[cruelladeville] 18/4/2024 13:40

ESO need their backsides kicking. They should be utilising battery storage before gas fired generation to help fulfil obligations to decarbonise the grid. Habits of a lifetime are obviously entreched in the grid control centre and they feel more comfortable dispatching gas fired generation. BESS should be doing 2x cycles at the moment every day to arbitrage the price difference off peak/peak and stabilise the supply/demand.

[jg231] 18/4/2024 10:14

Nickrl - an important detail is that the investment adviser is paid on lower of market cap or NAV here. It'll trail a bit but IA fees should now be <£1m

[dickiehh] 18/4/2024 09:13

Does this good news for HEIT translate across to GRID too?

[cruelladeville] 18/4/2024 09:04

With such high solar and wind generation, BESS facilities should be making hay. Current conditions are exactly what battery storage facilities are intended for. Buying opportunities here and GRID?

[nickrl] 18/4/2024 08:52

AGM trading update confirms what MODO and bessanalytics data have been saying over improved trading income. Its suggests an improvement on my assumptions above (#310) so maybe closer to breakeven than i thought but not clear if the figures include capacity market payments or not. They aren't giving anything else away but anyone who has the analyst report that pulled the rugged from underneath the BESS trusts could test their assumptions with this data. Anyone pushed the share price up a bit but hasn't helped GRID!

[cruelladeville] 16/4/2024 10:02

With wind and solar generation fairly regularly generating half to two thirds grid load I would have thought opportunities for BESS facilities are excellent. I note SSE has just brought a facility on line too.

[nickrl] 15/4/2024 21:17

Thing with HEIT is every BESS is registered in the balancing mechanism unlike GRID where less than half are so you get a pretty good view from bessanalytics of likely revenue generation albeit that isn't the exact revenue as they have to make a lot of assumptions.

The last few weeks has been above average wind production which brings the volatility into the market that provides optimum conditions for HEIT to exploit but will likely drop off as summer proceeds so wouldn't take it as the new normal but balancing reserve is certainly providing an additional boost. So using the 90 day average (40k/MW/yr) gives c10m trading income + capacity mkt payments of c3.4m ie 13.4. Expenditure we know on the loan is going to absorb 8.9m then looking at AR23 they provide an unaudited consolidated account of the subsidiaries which has the following costs

Investment Adviser 2.1m (will drop as NAV falls)
SPV costs 2.5m (presumably the running costs of the BESS sites)
Holdco costs 2m (no idea what they could be)

So no way dividend is being restored anytime soon based on 90 day average but at current 30 day rate there is a possibility of surplus cash to fund c1-1.3p dividend so at best barely 3% yield.

I'll keep it on watch for the time being but don't see divi restoration anytime soon.

[genista71] 15/4/2024 19:43

I think the rolling 90 day performance chart at the bessanalytics homepage is the most informative in terms of trends.

Problem with modo is that as soon as things go well, they shout it from the rooftops, in fact this month breaking form and doing an intra month update, but when it turns down they are silent.

The majority of their revenue come from the vested interests, not the investor side.

[erstwhile2] 15/4/2024 19:36

I think it's about time period. The last 3 months are poor but the last 7 days are better. So if you think very recent trends are reflective that's where the good news is coming from. But the 7 day is quite volatile, last windy weekend helped them out

[cruelladeville] 15/4/2024 18:47

What's happened now? I saw elsewhere that BESS generally has been doing better recently and that high levels of wind generation are helping with revenue.

[nickrl] 26/3/2024 20:22

According to bessnalytics HEITs assets have shown some improvement over last month and now running at 38k/MW/yr but that still well down on what it was. They also have the CM payments kicking in on various assets later this year to help further. Should at least keep them solvent but resumption of the dividend payment not yet locked in imv.

[george stobart] 26/3/2024 13:12

Effectively HEL is the shell company and Harmony is the ponzi scheme

[cc2014] 21/3/2024 09:55

But yes, the interconnectedness of HEL and Harmony has always been open to question as I have posted before.

I'm glad I did my research. I got out at 118p which now seems a very long time ago.

[cc2014] 21/3/2024 09:52

I suspect it's simple. The directors have paid themselves handsomely in the ZIRP area, extracted the profits from the company, overgeared HEL and the loan really is for working capital because revenues are drying up. Whether costs now exceed income I have no idea.

[spectoacc] 21/3/2024 09:27

@nickrl - if HEL have made tens of millions in the past few years (as the a/c's suggest), how come they now need £10m loan (at what on earth interest rate) for "short-term" working capital?

Isn't the whole thing a house of cards?

[nickrl] 21/3/2024 09:25

HEL needed HEIT to keep taking their developments to keep the bandwagon rolling thats now shuddered to a halt with the collapse in BESS revenue streams crashing HEIT. HELs funder must clearly sees there must be some value there to accept as collateral and actually energy commodities have been on an uptrend over last few weeks could give more volatility and improve revenues. Oh and an uptick in inflation!

[spectoacc] 21/3/2024 08:34

The accounts are certainly worth a read: