AGM Statement and Trading Update

RNS Number : 7750L

Alkane Energy PLC

30 April 2015

 

30 April 2015

Alkane Energy plc

("Alkane" or the "Group")

 AGM Statement and Trading Update

The Board of Alkane Energy plc, the independent gas to power producer, will make the following statement on current trading at the Group's Annual General Meeting to be held at 11.00am today.

The encouraging step change in performance we saw during H2 2014 has continued into the start of 2015.  Overall output in the first three months of 2015 has increased by 26% to over 60GWh (2014: 48GWh). Alkane's strategic move into power response accelerated with the four sites acquired last year and we are therefore benefiting from increased winter and availability payments.  Consequently the increased output and system payments have resulted in a 43% revenue increase in the core generation business during the first three months of the year in comparison to 2014.

Market selling prices for base load output have seen downward pressure since the final quarter of 2014. Nevertheless we continue to forward contract in the market and the Group now has 86% of expected 2015 base load output contracted at £52/MWh, 45% of expected 2016 output contracted at £50/MWh and 6% of expected 2017 output contracted at £50/MWh.

Neil O'Brien, Chief Executive Officer, commented:

''The strategic investments made in 2014 have provided the strong momentum we have experienced in the first three months of 2015.  As a result we are confident of making further progress in the current year.''

Notes to Editors

For more information please contact:

Alkane Energy plc Neil O'Brien, Chief Executive Officer Steve Goalby, Finance Director	01623 827927
Liberum Clayton Bush	020 3200 2000
VSA Capital Group Limited Andrew Raca	020 3005 5000
Hudson Sandler Nick Lyon Alex Brennan	020 7796 4133

Background information

Alkane is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both base load and fast response capacity to the grid. Alkane has a total installed generating capacity of 145MW and an electricity grid capacity of 160MW.

Alkane's base load operations, where power is generated 24/7, are centred on a portfolio of coal mine methane ("CMM") sites.  Alkane has the UK's leading portfolio of CMM licences, enabling the Company to extract gas from abandoned coal mines.

Power response sites are connected to mains gas and produce electricity at times of high electrical demand through peak running, or in order to balance the electricity grid through participation in the National Grid's short term operating reserve programme ("STOR"). Participants in STOR are paid premium rates when called upon by the Grid to meet temporary supply shortages. Alkane now operates 98MW of power response, one of the UK's largest power response businesses, with contracted STOR revenues extending out to 2025.

Alkane has been awarded 101MW of Capacity Mechanism Agreements starting from October 2018, with 55MW existing sites being secured on one year agreements and 46MW new sites on 15 year agreements over the period to September 2033. 

The Group operates from 27 mid-size (up to 25MW) power plants across the UK, 13 CMM only, seven mains gas only, six using both fuel sources and one using kerosene only. Alkane uses a combination of standard modular reciprocating engines and gas turbines to generate the electricity and sells this power through the electricity network. The engine units and other plant are designed to be flexible and transportable allowing additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.

In June 2014 Alkane transferred its shale gas interests to Egdon Resources plc.  It received 40 million Egdon shares making it the largest shareholder in Egdon, the UK's third largest shale operator.

More information is available on our website www.alkane.co.uk

 

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