Mast Energy Provides Business Update

Source: www.gulfoilandgas.com 6/13/2024, Location: Europe

Mast Energy Developments PLC, the UK-based multi-asset owner, developer and operator in the rapidly growing flexible power market, is pleased to announce an update regarding business operational matters.

Pyebridge
Further to the Company's previous announcement dated 21 May 2024, the 2nd Phase work programme regarding the refurbishment of the first of the Pyebridge site's 3x Jenbacher gensets is progressing well and according to plan and expected timeline. The latest status is that the new replacement genset long-block has been received from the supplier in Austria, the existing genset has been disconnected and craned out of the site and transported to Cooper Östlund's workshop. Cooper Östlund has completed the full rebuild of the genset, which involved the replacement of the genset long-block and the replacement and or refurbishment of all the various major and critical engine components onto the new engine block. Following the completion of the rebuild, the refurbished genset was transported back to the Pyebridge site, and successfully craned back into the facility. The final remaining step in the process is the recommissioning of the new genset, which is currently underway. It is expected that the first genset's overhaul work will be fully completed and the genset to start commercial operational running and revenue generation around end of June 2024, in line with the expected timeline.

To give more insight into the work-stream involved in overhauling the genset, including photos of key stages during the process, please visit the MED website, "Pyebridge Overhaul Story" webpage at https://med.energy/?page_id=4466.

As this process was completed seamlessly within the planned timeline and budget for the first genset, we expect the overhaul of the site's other two gensets to proceed similarly and thus meet our target to have all three gensets overhauled and operating optimally in due course, as previously announced.

In the meantime, the Pyebridge site's other two gensets remain operational and will continue to generate revenue via its PPA with Statkraft. Additionally, Pyebridge will also keep receiving its current Capacity Market contract's associated annual gross profit margin income of c. £308,000 from the government, as previously announced.

Additionally, as previously announced the Pyebridge site has secured further Capacity Market contracts to ensure minimum annual gross profit margin income as follows:

· T-1 2024/2025 CM contract - c. £183,000 gross profit margin income;
· T-4 2026/2027 CM contract - c. £312,000 gross profit margin income; and
· T-4 2027/2028 CM contract - c. £322,000 gross profit margin income.

MED expects to bid for and secure an additional T-1 Capacity Market contract for the 2025/2026 delivery year in the next upcoming Capacity Market auction, thereby ensuring uninterrupted minimum guaranteed income until 2028. The Site's existing Capacity Market contracts are all fixed one-year contracts. MED expects to apply for the maximum 15-year term and capacity T-4 Capacity Market contract in due course.

The Pyebridge site's Capacity Market contracts' gross profit margin income payments are in addition to its electricity generation trading revenue generation via its PPA with Statkraft. The plan and intention is to add a minimum guaranteed gross profit margin income floor component to its PPA with Statkraft (the "PPA Floor"). The PPA Floor value is currently expected to be at least around £50/kW/annum, subject to certain usual conditions such as assessment and agreement by Statkraft, which would equate to a minimum annual gross profit margin income of £405,000 in addition to the site's Capacity Market contracts' income payments.

Both the above referred longer-term Capacity Market contract and the PPA Floor are expected to be implemented once the Pyebridge site's planned overhaul work programme as referred to above has been completed, in order to provide further enhanced and longer term minimum guaranteed gross profit margin income to the site.

Pieter Krügel, MED CEO, commented: "We are pleased that the overhaul of the first genset at Pyebridge is progressing according to plan, timeline and budget, and near complete. We are looking forward to completing the overhaul work within the expected timeline, and once done, it will increase the Pyebridge site's income generation substantially. The successful completion of the overhaul of the first genset will also establish a proven blueprint to move forward with the overhaul of the site's remaining two gensets, as well as possible application on MED's other sites in due course in order to reduce capex costs.

"We are looking forward to updating the market with further progress across the board in due course."


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