(Boursier.com) — Enertime reports on the progress of the company.
Evolution of the European market
The very significant increase in the price of electricity on the European spot market will continue in 2022 with prices rarely below 200 euros/MWh. This market price ultimately determines a large part of the electricity purchase contracts in Europe. The delay in commissioning new basic electricity production capacities combined with the electrification of industrial processes and mobility can only accelerate the risk of electricity shortages. This increase and this risk of shortage reinforce Enertime’s strategy of offering high-power electrical energy efficiency solutions.
In this context, Enertime is currently participating in numerous tenders relating to the implementation of ORC (Organic Rankine Cycle) systems in order to reduce the electricity consumption of European industrialists.
Update on current projects
In France, Enertime was selected by Ademe for 3 investment projects in ORC systems, led by its subsidiary Énergie Circulaire: Énergie Grande-Synthe for FerroGlobe (Nord), Énergie Lagnieu (Ain) for Verallia and Énergie Fouquières for Recytech ( Pas de Calais). The FerroGlobe project subsidy contract has been signed with Ademe, that relating to the Verallia project has been validated by Ademe and is in the process of being signed, and discussions on the Recytech project contract will start soon.
A 4th project was submitted in October 2021 for Ademe funding as part of the energy efficiency/decarbonization calls for projects of the France Relance plan and the Company is preparing to participate in new support mechanisms for energy efficiency in France. The objective is to sign at least two Corporate PPA type contracts (power purchase agreements, contracts for the sale of electricity to companies) with industrial customers during the 1st half of 2022 and at least two others between the 2nd half of 2022 and 2023. These 4 contracts represent a potential order amount for Enertime of around 25 million euros.
In Europe, Enertime has responded or is in the process of responding to calls for tenders relating to the supply of ORC on “turnkey” waste heat recovery projects in Poland, Romania, Greece, Germany, Italy and Spain. These various projects mainly concern installations in glassworks and cement works, some of which are developed on an ESCO (Energy Service Company) model.
In Turkey, Enertime has submitted or is about to submit several offers of high power ORC systems for turnkey waste heat recovery projects in partnership with a Chinese company which is in charge of the “turnkey” installation. The company is confident in its ability to sign equipment supply contracts in 2022 with this Chinese partner.
In North America, the FASEP study contract (Fund for studies and assistance to the private sector) with CFE, the Mexican national electricity company, is progressing according to schedule and has made it possible to identify several significant projects. The company also works with Mexican industrial customers on factory equipment. In the United States, due to the 26% Investment Tax Credit granted to waste heat recovery projects in the country since the end of 2020, the Company is interested in this market.
In Asia, the Covid-19 pandemic continues to impact Asia as a whole and slow down the company’s commercial efforts in this region. Enertime is currently focusing on Thailand, China and India. The Company is also exploring new opportunities in Central Asia.
Innovation
European projects : Enertime in a voluntary approach to improve its technical offer ORC and Industrial Heat Pumps above 100oC and to promote its innovative solutions on a European scale. To finance these developments and promote the Company and its ESCO offer, Enertime submitted 2 European grant applications in consortium with European companies and laboratories as part of the Horizon Europe program, a very competitive but very well-funded program. These two projects, Decagone for ORCs and Push2Heat for high-temperature heat pumps, have been selected by the European Commission (see press release of January 19, 2022) and will be the subject of subsidies of up to 8.5 ME paid over 4 years with a first installment of around 25% upon signature of the financing agreement scheduled for September 2022 at the latest.
Electricity storage : Enertime is currently in discussions to take a minority stake in Stolect in order to be referenced as the preferred supplier of the turbines and compressors required for Stolect’s facilities. This investment would be associated with an engineering order for the definition of the turbomachines of the first Stolect project planned in Rennes, the financing of which is partly secured through a European subsidy within the framework of the Feder program. Stolect is planning a second fundraiser at the end of 2022/beginning of 2023 to complete the financing of this first project. Enertime does not intend to participate in this second operation.
Hydrogen : Enertime has launched the development of a very high pressure hydrogen compressor, intended for the energy storage and mobility market. As such, Enertime has obtained funding from the Île-de-France Region and BPI France as part of the Innov’up program which allows it to validate the proof of concept with the objective of carrying out an industrial pilot from 2023.
Update on 2021 earnings forecasts
Enertime currently has in operation 6 ORC machines for 9 MW installed, 2 ORC machines for 2.9 MW in commissioning/assembly and a 2.5 MW gas expansion turbine at the start of commissioning. Recurring revenue related to the maintenance and after-sales service of these machines should represent around 200 kE for the 2022 financial year. The effects of the Covid-19 health crisis continued in the second half of 2021, thus the results of the second half of 2021 should be close to those published in the 1st half of 2021. Nevertheless, with regard to the projects under development, in particular via the subsidiary Energie Circulaire, Enertime remains confident in its ability to record a significant increase in its turnover over the next few years, which should enable it to achieve a break-even operating performance in 2023.
Financing of Enertime and its subsidiary Energie Circulaire
Enertime has mandated the consulting firm Echosys Advisory to support it in arranging the necessary financing for the ORC projects carried out by its subsidiary Energie Circulaire in France and abroad. The funding targeted could represent a total amount of 25 ME and could be realized in capital or short and long term debt.
Furthermore, in order to support the expected growth, Enertime plans to strengthen its equity through a capital increase of several million euros in the coming months.