Wrap Text
MED Pyebridge Update
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
(‘Kibo’ or ‘the Company’)
Dated: 27 February 2023
Kibo Energy PLC
('Kibo' or the 'Company')
MED’s Pyebridge Has Significant Enhancement of Income Following Capacity Market
Auction Results and Update of Trading Results for 2022
Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable energy-focused development company,
is pleased to note the positive announcement by its subsidiary, Mast Energy Developments (‘MED’),
with regards to its current flagship and producing asset, the 9 MW Pyebridge synchronous gas-
powered flexible generation facility (the ‘Site’ or ‘Pyebridge’). The update specifically refers to the
Site’s Capacity Market (‘CM’) contract and the outcome of the recent Capacity Market Auction
results as well as an overview of the key highlights with regards to the Site’s actual performance for
2022, both operationally and economically. The full announcement can be viewed at
https://polaris.brighterir.com/public/mast_energy_developments/news/rns/story/r77nkjr and as set
out below.
Louis Coetzee, CEO of Kibo Energy said: “The Pyebridge site’s performance during 2022 has
exceeded our expectations, outperforming the average market price by 88% and highlighting MED’s
ability to provide significantly better returns compared to the market. Furthermore, MED is on track
to bringing its next project, Bordesley, into production later this year along with advancing the
development of the rest of the projects within its portfolio”.
Full MED announcement:
Mast Energy Developments PLC
Pyebridge Has Significant Enhancement of Income Following Capacity Market Auction
Results and Update of Trading Results for 2022
Mast Energy Developments PLC ('MED' or the 'Company'), the UK-based multi-asset owner and
operator in the rapidly growing Flexible Energy market is pleased to announce an update with regards
to its current flagship producing asset, the 9 MW Pyebridge Synchronous Gas-powered Flexible
Generation Facility (the 'Site' or 'Pyebridge'). The update specifically refers to the Site's Capacity
Market ('CM') contract and the outcome of the recent Capacity Market Auction results, as well as an
overview of the key highlights with regards to the Site's actual performance for 2022, both
operationally and economically.
Capacity Market
Upon acquisition of the Site by MED, it had a pre-existing T-4 CM contract at a tariff of £8/kW/pa
with a contract value of c. £60k per annum. Due to the UK energy market having moved significantly
since the Site previously obtained the aforementioned contract, MED took a strategic decision to
forego the contract in favour of applying for new replacement CM contracts in the 2022/2023 CM
bid window. Consequently, MED applied for and was successful in pre-qualification to bid for two
new CM contracts, being a T-1 and a T-4 CM contract. Following the preparation of a robust CM
Auction bid strategy, MED is pleased to announce that pursuant to the recent Capacity Market
Auctions and subsequent results, its T-1 bid cleared at £60/kW/pa and, its T-4 bid cleared at an
unprecedented historic record price of £63/kW/pa.
The Directors are pleased at the success of MED's strategy to replace the Site's previous low-value
CM contract with new replacement contracts at significantly higher tariffs. The Site's new
replacement T-4 contract at £63/kW/pa compared to its previous T-4 CM contract at £8/kW/pa results
in a c. 7.5x (or 750%) uplift in income. The new additional T-1 CM contract, which the Site did not
have before and is a new additional contract, will further enhance the Site's revenue significantly.
The Site's new T-1 CM contract has a revenue value of c. £308k per annum and its new T-4 CM
contract has a revenue value of c. £324k per annum (the latter up from the previous T-4 contract's c.
£60k per annum). Both contract values will increase the Site's revenue profile accordingly.
Pyebridge Trading Update
Following the period of the Site's post-acquisition optimisation (see RNS dated 5 July 2022), and
since starting full-scale production during March 2022, the Site generated the following actual
performance figures for the c. 10-month period March to December 2022 (the 'Period'):
* Electricity Generation Sales Revenue for the Period: c. £1.054m,
* Total Electricity Generation Output for the Period: c. 2,738 MWh, and
* Average Electricity Generation Sales Price achieved per MWh sold for the Period: c. £385.
Both the achieved generation production and sales price outperformed the market, with the market's
average wholesale price in 2022 coming to only c. £204 per MWh, resulting in an 88% performance
above the market and validating MED's strategy and ability to outperform the market. MED's success
in this regard is mostly related to the astute utilisation of Artificial Intelligence ('AI') and Machine
Learning ('ML') techniques related to its trading algorithm, in conjunction with its PPA Route-to-
Market partner, Statkraft.
The Site's previous financial performance led the Company to increase its expectations of Pyebridge,
which were set out in the Pyebridge Trading Update RNS announcement dated 19 October 2022. The
Company confirms that due to unexpected variables during the period under review, including the
generation of unprecedented record levels of electricity generation from renewables, most notably
wind (which is a hedge to reserve power) from September to December 2022 in the UK, and which
went beyond those considered possible by the Company when issuing its expectations, the previously
stated expectations are no longer valid. This is a consequence of the increase in electricity generation
from renewables reducing the reserve power required across the UK during this period and
consequently impacting the electricity generation sales at Pyebridge.
Pyebridge Asset Value
Following the Pyebridge SPA deferred consideration settlement (see RNS dated 16 December 2022),
the total effective acquisition purchase price for the Site was reduced to c. £2.1m.
During the Site's recent annual insurance cover policy review, the Site's asset value was independently
confirmed at c. £6.3m (on a conservative replacement cost basis). The Site's fair asset value compared
to its purchase price therefore highlights the significant upside that MED's investment in Pyebridge
has established.
Pieter Krügel, MED CEO, commented: "We are pleased to report that Pyebridge obtained new
Capacity Market contracts at considerably higher values, which will significantly enhance the Site's
revenue profile and profitability. Moreover, we are pleased with the Site's actual performance during
2022, with specific reference to the 88% outperformance of the average market price, highlighting
our ability to provide significantly better returns compared to the market. We are confident in our
ability and strategy to keep delivering outperformance during 2023. Finally, the Site's fair asset value
compared to its acquisition price furthermore highlights MED's ability to identify and acquire sites at
an attractive discount in order to enhance value for its shareholders.
Further, we are advancing the development of the rest of our projects in the portfolio and looking
forward to bringing our next project, Bordesley into production later this year.
"MED has a very exciting year ahead, being well established and positioned to fast-track production
and growth. We look forward to updating investors with further key developments during the year
ahead."
This announcement contains inside information as stipulated under the Market Abuse Regulations
(EU) no. 596/2014.
**ENDS**
For further information please visit www.kibo.energy or contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
James Biddle Beaumont Cornish
Roland Cormish +44 207 628 3396 Limited Nominated Adviser
Claire Noyce +44 20 3764 2341 Hybridan LLP Joint Broker
Damon Heath +44 207 186 9952 Shard Capital Partners Joint Broker
LLP
Zainab Slemang Investor and Media
van Rijmenant zainab@lifacommunications.com Lifa Communications Relations Consultant
Johannesburg
27 February 2023
Corporate and Designated Adviser
River Group
Date: 27-02-2023 11:20:00
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