SAE Renewables (LON:SAE) is making significant strides in reshaping the UK’s energy landscape. Analyst Daniel Slater from Zeus Capital highlights SAE’s focus on Battery Energy Storage Systems (BESS) and tidal power. With considerable government support and a robust project portfolio, SAE is positioned for substantial growth.
Battery Energy Storage Systems (BESS)
SAE’s BESS portfolio is central to its renewable energy strategy, boasting 1.3GW of projects across Wales and Scotland. A notable 230MW project has already been sold and is progressing, underscoring these ventures’ feasibility.
Key Highlights of SAE’s BESS Portfolio
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- Extensive Project Pipeline: SAE has 926MW of development projects at Uskmouth in Wales and Mey in Scotland, expected to drive significant growth.
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- Land and Grid Connections Secured: Secured land and grid connection offers at Uskmouth and Mey provide a solid foundation for future BESS deployment.
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- Initial Project Success: The sale of the 230MW BESS project at Uskmouth for £19.9 million highlights the potential for additional investment in upcoming projects, crucial for funding capital expenditures (CAPEX).
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- Financial Projections: SAE’s BESS portfolio could support an annual EBITDA of around £34 million by the early 2030s once operational.
Tidal Power: The MeyGen Project
SAE’s MeyGen tidal stream project in Scotland is a vital part of its renewable energy portfolio. With 6MW already operational and government Contracts for Difference (CFDs) for an additional 50MW, it represents a significant growth opportunity.
MeyGen’s Potential and Achievements
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- Proof of Concept: The existing 6MW project has generated over 63GWh of electricity, validating SAE’s technological approach and leadership in tidal stream power.
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- Future Expansion: With a total site capacity of 398MW, MeyGen offers significant potential. Recent CFDs support further development phases, laying a foundation for investment and growth.
Valuation and Outlook
Analyst Daniel Slater values SAE’s BESS business at 5.9p per share and the tidal business at 1.4p per share, totaling 7.3p per share. This valuation reflects potential growth from ongoing project developments and strategic partnerships.
Slater states, “We believe progress of the project portfolio, particularly the BESS projects, should drive the share price over the coming months and years.”
Strategic Positioning in Renewable Energy Market
SAE is strategically positioned to capitalize on the UK’s renewable energy targets. With a robust portfolio of BESS and tidal projects, government support, and strategic partnerships, SAE has the potential to drive significant growth and value for shareholders. Investors should monitor the company’s progress in securing funding, advancing project developments, and achieving key milestones.
Original Story at www.directorstalkinterviews.com