26th Sep 2014 11:14
LONDON (Alliance News) - Camco Clean Energy PLC is set to grow its energy storage business, expected to take-off next year, and its consultancy services in Africa through further mandates, whilst relying on its US gas power plants for reliable income, Chief Executive Scott McGregor told Alliance News.
Camco is a clean energy development company which combines technical and commercial expertise to finance, develop, and operate renewable energy projects and storage technology. It has operations in the US and across Africa alongside its Renewable Energy Dynamics Technology Ltd energy storage business.
The REDT subsidiary spent 14 years developing the long lasting, environmentally friendly Vanadium Redox flow battery which can be used for a number of applications, including increasing the reliability of renewable energy or for off grid energy solutions.
On Wednesday, the company reported a narrowed pretax loss to EUR1.1 million for the first-half of 2014, down from EUR2.7 million in the same period of 2013. Revenue totalled EUR4.8 million in the first-half, from EUR5.1 million in the comparable period in 2013.
"We will continue to focus on a tight control of costs so that the growth we anticipate from our core businesses flows through to results for the benefit of all shareholders," said CEO McGregor in its statement Wednesday.
Administrative expenses totalled EUR3.4 million in the first six months of 2014, compared to EUR4.8 million in the first half of 2013. "We have also reduced the headcount in the business," Chief Financial Officer Jonathan Marren told Alliance News.
Looking ahead the company remains confident the potential for growth, "The global energy storage industry is to be worth USD10 billion in 2017, a third of that is expected to be vanadium flow battery share," said McGregor.
"We waited until we could manufacture the battery on a large scale to make it cheaper. Jabil, the second largest global manufacturer has allowed us to reduce the cost by 40%. This is important as there is only one other company, based in Austria, who have been selling the technology for two years, and although we have different patents, the underlying technology is the same. The only difference between the two systems is that we are 40% cheaper," added McGregor.
Jabil has over 60 manufacturing facilities in 33 nations worldwide, giving Camco access to a global logistics and delivery system. Camco also sells the product in various sizes, from 5 kilowatts to 5 megawatts for different markets, it said.
The company has launched a trial with ten customers - expected to complete early next year - with a 5000 unit pipeline between 2015-2017. "The sales of the batteries is to be fully realised next year, expect a sales announcement soon," said McGregor.
"The battery has transformed the company since January. The tech industry burns cash through research and development, but we used government grants to cover our costs. We are not a manufacturer, saving costs through Jabil and 80% of our sales and distribution will be through distributors. We are a tech design company which allows us to have lower operating expenditure and turn cash positive much faster," said McGregor.
Its African operations are run from five offices across the continent and offer consultancy services regarding renewable energy. "[Before] The consultancy business would only breakeven, it was not profitable," said McGregor. In July, Camco were awarded a GBP95 million fund from Green Africa Power to stimulate private investment in renewable energy in Africa.
"We competed with 50 companies for the GAP fund. We won due to our logistical advantage from our large footprint created by our offices. It has made this sector very profitable," he added.
GAP is an initiative of the Private Infrastructure Development Group Trust. The fund will offer long term loans and contingent lines of credit to privately-owned renewable power generation projects in the most under-developed countries in Africa.
Camco Clean Energy operations in Africa will generate recurring revenue from management fees and expects to use the GAP mandate as a springboard to securing further mandates, said McGregor. It currently operates a variety of services in 23 African countries.
Camco has refocused its consulting operations in Africa towards higher-margin activity and expects the benefits to come through in the second half of 2014, it said in its half-year results Wednesday.
In the US, Camco has a 6.6 megawatt biogas capacity through its Jerome facility and its Twin Falls facility, both renewable gas plants, which provide the company with consistent income.
"The Twins Fall facility is the second largest of its kind in the US," added McGregor.
"As with 2013, we do continue to expect to see seasonality in the revenue from power generated from the Jerome facility with the second half of the year benefiting from the higher prices set out in the power purchase agreement. We also anticipate this being the case with the Twin Falls Facility," said Camco in Wednesday's report.
"When we looked at how to develop our three operations, in the US, Africa and the storage business, we expected one to take off and rely on our US operations, but all three took off. We are in a very privileged position," McGregor told Alliance News.
"We had a problem with people using a past image of the company. We have been quiet for 18 months, but shareholders have the opportunity to look at the market. People are starting to take notice and although recognition doesn't hurt, we just want to deliver," added Marren.
Camco's shares were trading 23.44% higher at 5.55 pence per share Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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