Harmony Energy Income Share Discussion Threads

[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:

[cc2014] 21/3/2024 08:30

That's a most interesting RNS.

Harmony, the owner of the fund manager have lost around £15m on their shares if they bought them all at IPO.

Now they have taken out a loan against the shares and most likely a bunch of other assets for "working capital purposes"

It doesn't look too clever especially since their revenue from HEIT has moved than halved as they charge on share price not NAV.

[nickrl] 20/3/2024 19:05

Interesting new shareholder Nicholas Norman Cournoyer appeared today with 3%.

[igoe104] 19/3/2024 12:37

Heit and Grid will be in limbo until they gets some clarity on the dividend. The situation with the National grid has improved from January but I guess the directors of both companies are seeing if the improvement will continue and continue for the medium or long-term before making any market announcements, of restalling any type of dividend...

I'd imagine these reits and investment trusts like Seit will improve in H2 when hopefully interest rates start coming down..

[cc2014] 19/3/2024 12:21

Same on GRID but not GSF

[igoe104] 19/3/2024 12:15

Big fall today...

[cruelladeville] 14/3/2024 11:03

More of the same please, Mr Market.

[cruelladeville] 13/3/2024 09:26

Just nice to see share price not sliding for once.

[rambutan2] 12/3/2024 20:34

Interesting bottom fisher:

[cc2014] 08/3/2024 10:51

yeah sure.

Companies house shows the NatPower UK was registered in Oct 2022 with a capital of £1000 and hasn't yet filed any accounts

It's parent company NP Holding Sarl was set up in 2020 with a capital of £12,000 euros.

There is a web of companies.

I am very doubtful it is an actual investment more an aspiration or the first stage in planning which doesn't mean anyone will come forward to fund it.

[cruelladeville] 08/3/2024 09:52

Something doesn't add up here. Announced yesterday is an investment in 60gwh of battery storage in the UK. Somebody has confidence? Link https://www.theengineer.co.uk/content/news/multi-billion-investment-to-deliver-60gwh-of-battery-storage-to-uk/

[cruelladeville] 06/3/2024 16:31

Actually, forgive me there. For "battery storage" I should have written "energy storage". For net zero to happen, huge swathes of gas fired generation has to be displaced by energy storage. We're talking terawatt hours here, far beyond (current) battery capability.

[nickrl] 06/3/2024 16:07

@CDV batteries wont displace gas directly but for sure as renewables penetration increases BESS requirements should increase to compensate for their lack of absolute certainty on output compated to thermal plant ie on the latter you dial in the MWs you want and the generator will deliver it. You dont get that with solar and wind which is where BESS units smooth out the variability.

[cruelladeville] 06/3/2024 14:45

Well, a couple of things. They already said the cycling of the batteries is much less than they would like. And they do have four Tesla plants which as fast I am aware have state of the art optimisation hardware and software. There's a great deal of gas fired generation that has to be displaced by lower carbon battery storage.

[cc2014] 06/3/2024 14:21

@nickrl.

FWIW I think the balancing mechanism will get sorted over the next 3-6 months and revenues will begin to flow to the battery providers. There appears to be a huge lump of batteries coming on line over the next few quarters which will keep prices depressed but my guess is that it will start sorting itself out towards the end of the year. Not to the long run prices in HEITs NAV model but to something measurably higher. Regrettably I expect HEIT will have to bin the next dividend as well and then cut it to a lower level.

I'm sort of open to persuasion that this could be the bottom and might not be a bad entry point but on the other hand I worry about one more step down in the share price first as the dividend gets binned next quarter.

I also worry that HEIT is at the top of tables in terms of it's revenue even when compared with other new two hour batteries and that either means they have better optimisation (I'm very doubtful on that) or they are thrashing (cycling) the batteries more often which will impact on battery life but no doubt will not show up for a while.

[nickrl] 06/3/2024 12:43

@CC2014 very well stated although i do see potential upside in the balancing mechanism revenue if ESO ever get the algorithms to start treating BESS assets equally. Next reset is 12th March to move to 30m dispatch. That said it won't help get the divi reinstated anytime soon and the advisers as we both recognise are banking on energy prices moving up as well as daily spreads to deliver that outcome. Never had much hope for these and the Ukraine debacle created a false horizon and these and GRID got carried away especially GRID a d personally dont get why their share price isn't down as much the Bessanalytics data is even worse!

[cc2014] 06/3/2024 11:23

Cruella - I've found a better way to explain HEIT's problems and the massive issue of too many batteries relative to renewables in the UK.

BESS analytics shows Harmony are currently getting £4.58/MWh


GSEO who have a battery in Australia are getting £102.56/MWh
From the December factsheet.
Following the completion of the construction of the co-located 2 hour 4.95MW battery energy storage system (“BESS”) in South Australia, the solar and storage hybrid system captured attractive power prices in the intraday market. In November 2023, the average captured price for BESS was over A$200/MWh,

That's 22 times as much!

[cruelladeville] 06/3/2024 10:45

Thanks, I see your point. For those in at IPO, it might make some sense to average down on buying price to make a half sensible exit a bit easier if/when the share price recovers somewhat.

[cc2014] 06/3/2024 07:42

Cruella,

I doubt that a presentation aimed primarily at PI's is going to have any significant impact on the share price on the day it's done. Most of the money will be fund managers/institutions and the like and they will have had all this information days if not weeks or months ago.

The NAV isn't realistic though is it? They've knocked down the short term price forecasts (to levels which still look way too high imho) and left the long term ones as they are. If you believe the long term numbers then fair enough, HEIT is a bargain, but clearly the city boys and girls do not.

As for selling the assets off which HEIT have committed to considering as have all the other battery, solar and wind providers we discovered they've more or less done nothing about it. Has any battery provider managed to sell an asset at any price yet to anyone except through an in-house related party transaction? No. It's not going to happen despite all the bluster because the NAV's are all wrong. Amd if they do start selling them off at say a 25% discount which would still be NAV enhancing that's going to cause deep questions.


HEIT is and always has been covered in red flags. When within the first 5 minutes of the presentation they are talking about the value of their 500Mw pipeline, through their related parent company, I have to think they are barking mad? The City is screaming at them to de-lever and cut the debt, yet with a discount to NAV of 65% even mentioning the idea of more than doubling the size of the fund is misplaced.


Overall I was left with a view that the forecast revenue curve is wrong and more and more batteries coming on line at a far higher percentage rate than renewables is going to put even more pressure on the revenue curve.

HEIT may or may not be a good price here but I'm waiting for lower. There are plenty of other places I can put my money which offer a 10% return where I have good visibility of what's going on, so 37p to buy doesn't float my boat at this time.

[nickrl] 05/3/2024 18:59

Investor meet presentation was quite informative today on the background to the issue but the whole future hangs on forecasts currently being used to be affirmed when they are updated in April. They demolished the original broker note that did for the share price a few weeks ago and said the broker note had been updated - hasn't helped the share price today. They are suggesting the lower prices are just an aberration and things will improve. Maybe but they didn't address the bow wave of assets coming on line and are happy to quote Mondo data but not from the most up to data. Did say the revised dispatch rules from 15-30mins has been delayed so at least explains why initially thought that change had no impact. Now supposed to be implemented from 12th March.

[cruelladeville] 05/3/2024 18:53

So, I listened to the investor presentation on YouTube, sounded quite candid and there didn't seem to be any more new bad news. And the shares drop by another >5%. I don't understand at all?If the NAV numbers are realistic and there's still new projects being invested in, it seems to me the best thing HEIT could think about is selling all the assets off and returning the value to the shareholders.