SIMEC Atlantis’ tidal turbine for MeyGen project (Courtesy of SIMEC Atlantis)

Power sales from MeyGen bring in €4.5M to SIMEC Atlantis as co-location with storage emerges as option

The power sales from the MeyGen tidal energy project have reached €4.5 million in 2022, according to the developer of the project SIMEC Atlantis Energy, which also unveiled plans for potential combination of the tidal power scheme with its battery energy storage systems (BESS) business.

SIMEC Atlantis’ tidal turbine for MeyGen project (Courtesy of SIMEC Atlantis)

According to the financial statement from SIMEC Atlantis for the full year ended December 31, 2022, the power sales from the MeyGen project rose from €2.7 million in 2021 to €4.5 million in 2022.

The company said the rise reflects the successful deployment of two turbines in March and September 2022 at the MeyGen offshore site, located between Scotland’s northernmost coast and the island of Stroma.

The Phase 1A of the MeyGen project continues to perform above expectations, with availability above 90% and the significant milestone of 50GWh of generation recently achieved. This represents more than 70% of the global generation of tidal stream electricity, SIMEC Atlantis said.

Now, the company is looking into the opportunity to combine two of its core business areas – tidal stream energy and BESS.

According to the company, it is exploring the co-location of tidal energy, as the most predictable source of renewable energy, with BESS to deliver a real baseload solution.

“There is an appetite in government to see this type of energy solution developed, and we think the MeyGen site is the perfect location. We are working on a BESS project of 287MW with a grid connection date of 2027, which will complement the tidal stream project. There is a lot of work being done to unlock this opportunity, but it represents the next step in our evolution,” said Graham Reid, CEO of SIMEC Atlantis.

Reid reiterated that the company’s ambition remains to deliver utility-scale tidal stream energy at the MeyGen site.

“A major change in the tidal stream business is to mirror a similar model, like other renewable industries, where the development business is separate from the technology business. This allows us to prioritise the delivery of the site and work across the turbine industry.

“This meant in October 2022 we agreed to the sale of a majority stake in our Advanced Tidal Engineering and Services division (ATES). This was the best option for the business. As well as allowing us to focus on site delivery it also helped us achieve our focus on reducing operating costs, and together with the net sale proceeds, provides additional funding to support group operations and the development of key projects,” Reid added.

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SIMEC Atlantis’ financial performance in 2022

SIMEC Atlantis recorded a loss before tax of €12.9 million in 2022, compared with a €86 million loss in the prior year.

The improvement in the results is driven by a €5.8 million reduction in operating expenses coupled with a €2.3 million improvement in the Uskmouth sustainable energy park valuation compared to the recognition of €61.6 million of non-cash impairment provisions in 2021, and a reduction of €8.6 million in depreciation and amortization expenses.

The company also recognized a €2.8 million loss on sale of the Advanced Tidal and Engineering Services (ATES) division.

SIMEC Atlantis’ revenue fell from €10.8 million in 2021 to €9.8 million in 2022. This reflected the completion of the Japanese consulting contract in 2021 and the impact of the sale of Green Highland Renewables in 2021 offset by an improvement in the performance of MeyGen and income from the sale of metals and consumables at the Uskmouth power station, according to the company.

Total expenses for the year (excluding depreciation and impairment) were €13.5 million, down from €19.3 million in 2021.

The reduction in expenses reflects the completion of the restructuring of the group during 2022 with average headcount falling from 81 to 22 full time employees and lower costs incurred on MeyGen operations.

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