Harmony Energy Income Share Discussion Threads

[craigso] 09/11/2024 08:06

I picked up a little tidbit from the Gore Street Capital Markets day presentation.

They mention that a 2-hour system would cost £600k / MW to build in 2024. (roughly 25% lower than the £800k / MW it cost in 2022)

Apply that to HEIT's installed capacity and you get £240m. Take off the £130m of HEIT debt and you're left with £110m. (a bit less than the current market cap)

Obviously grid connections are important and operating assets are usually worth more than development projects, but it doesn't appear to be "cheaper" for bidders to buy HEIT assets close to NAV rather than just building their own.

[cruelladeville] 07/11/2024 08:47

Thanks. Myself, I think the management would have been very keen to tell us if utilisation by the grid control had significantly increased along with revenue. I don't think silence is a good thing since they were very vocal blaming low utilisation when things first started falling apart with the business.

[nickrl] 06/11/2024 22:33

If you are good at manipulating vast amounts of data you can download off Elexon all the offer/bids made each half hour for all generators and then see who was cheapest and then see if they were actually instructed or not. Organisations have produced this data in the past and even NESO have quoted it so just keep a watch on the likes of MODO. Utilisation of BESS has gone up and NESO have various other fixes that will further increase utilisation. Remember though this is just BM actions and your asset needs to registered in the BM which all of HEITs assets are unlike GRID which don't have many although they maybe hiding behind the virtual power traders.

[cruelladeville] 06/11/2024 21:01

Is there any information available in the public domain regarding the "skip rates" that BESS are now suffering? The grid controllers were passing over BESS capacity in favour of gas fired and other generation. It looked to be a major issue for HEIT and their two hour duration assets. I recall systems were being reworked to improve BESS utilisation by the grid controllers. But I don't recall seeing any information regarding any improvement in utilisation of HEIT or other company's assets? Does anyone know if utilisation and resulting revenue has improved?

[nickrl] 05/11/2024 17:50

@craigso all HEITs assets are 2hr duration but of variable capacity but looking at bessanalytics they have a large range on earnings which seems odd given they are all optimised by Tesla so does suggest some locational impact. Question to ask them next time they exposoe themselves to small investors

[craigso] 05/11/2024 17:30

Anybody have any insight into the individual assets?

I'm trying to get my head around whether this is simply a takeover play - perhaps another IT paying with shares - or whether there might be upside from selling individual assets for cash because some assets have specific attractions to specific bidders.

[craigso] 04/11/2024 10:37

Just two weeks ago it was "a selected number of parties have been invited to proceed to the second phase of the process, with negotiations expected to conclude by the end of 2024"

The only reason for an RNS would be somebody deciding to short circuit the sales process with a public takeover offer. But the share price hasn't budged, which it really ought to be doing if there was actually lots of "takeover chatter" in the market.

[cruelladeville] 04/11/2024 09:47

Oh well. They say silence is golden. No RNS this morning. Yet, anyway.

[sleveen] 01/11/2024 14:53

A juicy morsel for TRIG etc.

[cruelladeville] 01/11/2024 14:23

An offer anywhere near NAV and I won't be able to say yes quickly enough.

[george stobart] 01/11/2024 13:53

Takeover chatter re an upcoming RNS on Monday morning

Blue Horseshoe loves HEIT LN

[nickrl] 21/10/2024 17:20

Close Mgt 9.17 > 4.98%

[nickrl] 20/10/2024 19:35

@waterloo if your already connected though collocating a BESS wont need any further changes as long as you operate within the parameters already agreed.

[waterloo01] 20/10/2024 09:20

The connectivity issue has little to do with placing the battery near the power source, but in connecting that to the grid.

[nickrl] 20/10/2024 09:19

@craigso agree they should have mandated co located BESS at all solar and onshore wind sites as part of a development.

[craigso] 20/10/2024 06:21

Grid connections are indeed an issue. So much so that the "future" of BESS is co-locating with wind farms / solar parks. (BESS is mostly needed for when the wind isn't blowing and/or the sun isn't shining)

But since the market isn't currently remunerating BESS sufficiently, I'm not sure having immediately productive assets is quite the advantage it would otherwise be.

[cruelladeville] 19/10/2024 18:50

As far as I can see, the one big factor in HEIT's favour is it's grid connections. In a world where it can take up to a decade to secure a well placed connection to the grid, that has to be worth something? The rest of the stuff? Well, I can only think that construction and materials costs are now significantly higher than they were. A bid of ~90% of NAV would suit me just fine, I wouldn't be able to say yes quickly enough.

[craigso] 19/10/2024 17:29

Hopefully there is a sweetspot number where:

1. the buyer is getting a discount on replacement cost (i.e. what it would cost to simply build their own batteries)
2. it is close enough to NAV that it doesn't embarrass anybody
3. it provides a premium to the current share price

It certainly would make sense to sell the whole portfolio in one go. Even if you leave a few million on the table, the execution risk / costs would be much lower.

[williamcooper104] 19/10/2024 14:27

ROOF was c10% below NAV and ROOFs assets are a lot easier to value/more readily understood by the market than BEIS - they're basically just a bond proxy with little merchant/power risk

[sleveen] 19/10/2024 04:37

90p would suit me too.

[nickrl] 18/10/2024 15:45

@sleveen NAV is till too high. Battery mkt is saturated and even HEITs advantage is being whittled down by the new supersized batteries being commissioned.

[sleveen] 18/10/2024 15:27

ROOF have been bid at NAV and they have an eclectic mixture of assets.

Shout from the ROOF tops, HEIT will be bid for at NAV or thereabouts.

[cruelladeville] 18/10/2024 15:04

I don't think this is looking good at all. HEIT can't raise more capital. The business is far too small to survive stand alone. A partial sale with then leave a much too small remnant company to carry on. I can only envisage a complete liquidation of assets here. And buyers look to be playing hard ball. This is one stock I'm wishing I'd never heard of right now.