SIMEC Atlantis Energy Limited Uskmouth 220MW Conversion Project Update (4537F)

TIDMSAE

RNS Number : 4537F

SIMEC Atlantis Energy Limited

15 July 2019

The information contained in this announcement is inside information under the Market Abuse Regulation (EU) No 596 / 2014. The person responsible for arranging the release of this announcement on behalf of SIMEC Atlantis Energy Limited is Tim Cornelius, Chief Executive Officer of SIMEC Atlantis Energy Limited.

15 July 2019

SIMEC ATLANTIS ENERGY LIMITED

("Atlantis" or the "Company" ")

Uskmouth 220MW Conversion Project Update

A stable flame has been achieved in testing proving the combustion performance of 100% waste derived fuel pellets for the disruptive Uskmouth conversion project in Wales

SIMEC Atlantis Energy Limited ("Atlantis"), the global developer, owner and operator of sustainable energy projects worldwide, is pleased to issue an operational update on the conversion of the Uskmouth power station in Newport, South Wales.

Uskmouth - which previously was coal-fired - is being converted into a 220MW baseload power plant which will use fuel pellets derived from waste. The pellets contain a high proportion of plastic waste which cannot be economically or technically recycled and so may otherwise be sent to landfill.

Key Milestones

 
             --   The Uskmouth conversion project is on track to commence operations 
                   by 2021 
             --   Front End Engineering Design ("FEED") tests and studies have been 
                   successfully completed by the FEED partners WSP, RJM and SSF*: 
                    --   A stable flame has been achieved in medium scale testing, 
                          proving the stable combustion of 100% waste derived 
                          fuel pellets 
                    --   These results correlate to the computational fluid dynamics 
                          model and confirm a stable self-sustaining flame with 
                          combustion performance within expected parameters 
             --   A contract tender has been issued for the design, supply, installation 
                   and commissioning of the full combustion system, including large 
                   scale combustion testing 
             --   A review of the plant life extension and return to service for all 
                   areas of the existing plant has been completed by WSP and RJM, enabling 
                   the commencement of intrusive return to service surveys for the 
                   220MW conversion 
             --   In June, N+P Group started commissioning a new pellet facility in 
                   Teesport, England, which is capable of supplying fuel to Uskmouth 
                   power station (three further UK facilities are planned to also supply 
                   fuel to the project) 
             --   Environmental planning and permitting for the project is progressing 
                   well and the project has now reached a design freeze for Environmental 
                   Impact Assessments, which is a critical milestone in the planning 
                   application process 
 

Next steps

 
             --   An industrial scale fuel production run and milling test will take 
                   place in H2 2019 
             --   The contract for the combustion system will be awarded in H2 2019 
                   after which industrial scale combustion tests are expected to be 
                   carried out 
             --   A comprehensive intrusive inspection and testing programme for the 
                   return to service works will be undertaken through Q3 and Q4 2019 
             --   The appointment of financial advisers is expected in Q3 2019 to 
                   advise on the financial close of the conversion project which has 
                   an estimated capital cost of approximately GBP185m 
             --        A full contract tender for the remaining conversion works is to 
                        be issued in Q1 2020 
             --   Following the design freeze, the planning permission and permitting 
                   applications are under development with submission targeted by end 
                   of the year 
 

Key facts

 
             --   The project is the world's first conversion of a coal fired power 
                   station to use waste derived fuel and is expected to generate 220MW 
                   of baseload electricity 
             --   It is one of the largest waste to value projects currently under development 
                   in Europe 
             --   The project is expected to cost approximately GBP185m and will extend 
                   the operational life of the Uskmouth power plant by 20 years 
             --   Following conversion, Uskmouth will use approximately 900,000 tonnes 
                   per annum of fuel pellets derived from waste which might otherwise 
                   have been sent to landfill 
             --   Over the 20-year life of the project it is estimated that this will 
                   amount to waste with a volume equivalent to more than 46,000 Olympic 
                   sized swimming pools, or a landfill site the size of London to a depth 
                   of 73 meters 
 

David Taaffe, Director of Project Delivery at SIMEC Atlantis Energy, commented:

"We are extremely pleased with the progress being made at the Uskmouth conversion project which is on track to become operational in 2021.

"Today we are announcing a significant milestone for the project. FEED tests and studies have been successfully completed, with the largest test burn of the waste derived fuel pellets completed to date, and tenders have been issued for the next phase of the conversion.

"Once operational, Uskmouth is expected to generate 1,500GWh of sustainable energy every year, enough to power just under 500,000 UK homes. The new fuel pellets provide a use for waste which might otherwise be destined for landfill or incineration, instead of efficient electricity production.

"This is the world's first conversion of a power station from coal to 100% waste derived fuel and the project will be the blueprint for other conversions around the world. We are already receiving high levels of interest from other asset-owners looking to replicate the Uskmouth conversion process."

Tim Cornelius, Chief Executive Officer at SIMEC Atlantis Energy, commented:

"We are ramping up investment in the Uskmouth conversion project this year as it is such an important project to our shareholders, the environment and the Welsh economy. The Uskmouth team are world class. This project has become an important blueprint for the plans of coal fired asset owners and policy makers around the world. It will also be transformational for Atlantis in terms of revenue and cash flow generation.

"The regeneration and repurposing of coal fired power stations to consume waste derived fuel and deliver baseload, low cost electricity is the utopian industrial story for governments around the world."

* WSP UK Limited ("WSP"), RJM Corporation Technical Services Limited ("RJM") and Simec Subcoal Fuels ("SSF"), a 50:50 joint venture between N+P Group and SIMEC Energy.

Click on, or paste the following link into your web browser, to view the associated PDF document.

http://www.rns-pdf.londonstockexchange.com/rns/4537F_1-2019-7-14.pdf

Enquiries:

 
 SIMEC Atlantis Energy Limited                 via FTI Consulting 
 Tim Cornelius, Chief Executive Officer 
  Andrew Dagley, Chief Financial Officer 
 
 Cantor Fitzgerald Europe (Nominated 
  Adviser and Joint Broker)                   [phone] 
 Rick Thompson 
  Richard Salmond 
  David Porter 
 
 J.P. Morgan Cazenove (Joint Broker) 
  James Deal 
  Michael Wentworth Stanley                  [phone] 
 
   FTI Consulting                             [phone] 
 Ben Brewerton 
  James Styles 
  Molly Stewart 
 

Notes to Editors

SIMEC Atlantis Energy

SIMEC Atlantis Energy is the global developer, owner and operator of sustainable energy projects with a diverse portfolio of more than 1,000 megawatts in various stages of development. This includes a 77% stake in the world's largest tidal stream power project, MeyGen, and the conversion of the 220MW Uskmouth Power Station.

In 2017, SAE entered into a strategic partnership with SIMEC, a member of the GFG Alliance, to convert the Uskmouth Power Plant to use an end-of-waste fuel pellet to generate electricity. The plant is expected to enter commercial operations in 2020 and will sell its power to GFG Alliance companies under two 20-year power purchase agreements. A successful conversion will tackle the pressing issue of non-recyclable waste in the UK and will form the blue-print for other large-scale conversion projects across the globe.

www.simecatlantis.com

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July 15, 2019 02:00 ET (06:00 GMT)