Uskmouth Power Station Conversion Project Update

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.

 16 July 2020

SIMEC ATLANTIS ENERGY LIMITED

("Atlantis ")

Uskmouth power station conversion project update

As per the operational update issued on 14^th April 2020, Atlantis provides the following programme delivery update for its flagship Uskmouth power station conversion project and announces that it has engaged data centre development specialist TechRE to explore options to locate edge and hyperscale data centres within the Uskmouth power station development envelope at Newport in Wales.

The Uskmouth project seeks to re-purpose a coal-fired power station to operate using waste-derived fuel pellets consisting of 50% waste biomass materials with the remaining fuel pellet content made up of plastic wastes which are unsuitable for recycling. Following full conversion, the Uskmouth power station is expected to generate 220MW of baseload electricity from this sustainable fuel source.

Having adjusted for current expected COVID disruptions, Atlantis has determined, in consultation with stakeholders and potential financiers, that the project will now be developed in two phases.  The initial phase will comprise the conversion of the first 110MW generation unit at the power station ("Phase 1"), and upon successful commissioning of Phase 1 it is intended that a second unit ("Phase 2") will be converted to increase the total net output from the station to 220MW.  

As announced in June 2020 following successful completion of large-scale combustion testing, final design studies are now underway to inform the scope of the Engineering, Procurement and Construction ("EPC") contract. The EPC tender process will be a global tender process for qualified participants. The EPC contract negotiations are now expected to conclude in early Q1 2021 with an announcement of the successful bidder and/or consortium shortly thereafter. The terms and conditions of the EPC contract will determine the final structure of the project finance package. Financial close is therefore expected to occur in late Q1 2021 or early Q2 2021. The conversion works for Phase 1 are expected to take 18 months from commencement of the EPC contract.  Atlantis will seek to achieve financial close for Phase 2 as soon as possible following commissioning of Phase 1.

Development of private wire offtake opportunity with TechRe

Further, Atlantis has engaged data centre development specialist TechRE to explore options to locate edge and hyperscale data centres within the Uskmouth power station development envelope. It is proposed that power could be delivered through a private wire network under a long-term power purchase agreement to owners and operators of these data centres built onsite at Uskmouth.

Tim Cornelius, CEO of SIMEC Atlantis Energy, commented:

"The continued focus on the transition to a carbon neutral economy has received fresh impetus as a result of the impact of COVID-19 and countries around the world are looking at the opportunities presented by a move to a carbon free economy as a way to create jobs and generate sustainable prosperity.  The Uskmouth project is leading the way to a sustainable future and we are delighted that so much progress has been able to be made on this important project despite the disruptions we have all experienced so far during 2020.

"The decision to phase the conversion into two stages is prudent as it de-risks supply chain timelines, fuel supply and most importantly the timeline to first electrons exported to the grid and therefore revenue generation. Further, we are delighted to be working with TechRe on the potential development of a large, private wire supply contract to data centre operators at Uskmouth. This could become one of the most exciting corporate PPA projects in the UK, demonstrating how the digital economy can work hand-in-hand with sustainable energy generators to establish more data centre capacity in the UK to meet ever growing demands in an ethical and responsible way."

Henry Sutton, Head of EMEA Projects at TechRe Consulting, commented:

"TechRe is delighted to be working with Atlantis to help develop initial designs and identify potential anchor customers for an exciting new data centre campus to be located next to, and sustainably and responsibly powered by, this ground breaking conversion project.

Data centre end users are increasingly requiring access to renewable power to power the digital economy and a key competitive advantage from this project will be the lower power costs generated by a sustainable supply provided by private wire connection. The Uskmouth site will be attractive for hyperscale, wholsesale colocation and internet edge operators and will form a unique, fully connected and sustainable tech hub".

For more information, please contact:

SIMEC Atlantis Energy

SIMEC Atlantis Energy is the global developer, owner and operator of sustainable energy projects with a diverse portfolio in various stages of development. This includes a 77% stake in the world's largest tidal stream power project, MeyGen,100% ownership of the 220MW Uskmouth power station conversion project and 100% ownership of Green Highland Renewables, a leading developer of mini-hydro power projects.

www.simecatlantis.com