23rd Jul 2008 07:00
Press Release 23 July 2008
Renewable Energy Generation Limited
("REG" or the "Group")
Pre-Close Trading Statement - Full Year Trading in Line with Expectations
Renewable Energy Generation Limited (AIM: RWE), the international renewable energy group, today announces its pre-close trading statement in advance of announcing its preliminary financial results for the year ended 30 June 2008 on Tuesday 23 September.
Trading during the period was in line with management's expectations and the board continues to see significant potential across the business in the current year.
UK Wind Portfolio
REG has continued to consolidate its position in the UK market, where it has proven its ability to operate under difficult planning regimes. Specialising in small projects in good wind locations, REG built the only new project in Wales in 2007 and the first new project in Cornwall since 2001. With four projects successfully built during the past two years and another two expected to enter service late next month, REG is well placed to respond to the reformation of the wind market proposed in the UK Government's Renewable Energy Strategy, published last month.
In our most recent financial year the British Wind Energy Association reports that only seven new wind projects were built in England and Wales, partly due to planning and Ministry of Defence factors and long lead times for turbine procurement. However, the Government and opposition parties agree that the UK must make better use of its indigenous renewable energy sources to reduce dependence on imported fuels whilst meeting binding EU renewable energy targets. This strategy document includes recommendations for new incentives for micro generation and distributed energy, removing grid barriers to renewable energy providers and making the planning system more responsive.
UK Used Cooking Oil
REG's 6MW facility at Bentwaters in Suffolk was completed and commissioned on schedule. Used cooking oil collection services have been extended with encouraging early yields.
Canada Wind Portfolio
REG has completed the Can$75 million refinancing of its first four Canadian wind farms, totalling 39.6MW in capacity and constructed under the Ontario provincial Standard Offer Programme (SOP). This non-recourse refinancing with Fortis Capital has a 20 year amortisation period with a 15 year term.
A further three SOPs representing 30MW of additional capacity are scheduled for installation later this year and early next year. REG has also signed a turbine supply agreement with GE for 24 of its 1.5MW SLE turbines, which will be deployed on four new SOP sites scheduled to start construction during autumn 2009.
Ontario's provincial utility has now issued a Request for Proposal (RFP) for 2000MW of wind generation, significantly greater than previously anticipated. This RFP opens up opportunities for REG to submit tenders in excess of the previously planned 300MW. In line with its strategy, REG continues to assess opportunities for the submission of RFP bids jointly with external equity partners.
Over the last six months REG has carried out an extensive exercise to map all of the land it acquired when it bought AIM PowerGen in 2006. With further land options signed over the last year AIM has a notional pipeline of 5500MW spread across seven provinces of Canada. The renewables market is developing quickly as a result of more onerous environmental requirements allied to high fossil fuels prices. Given this, REG is actively exploring ways to capitalise on its Canadian investment and expertise.
Group
In line with the Group's transition from investment trust to operating company status, REG is currently undergoing a re-domicile of its registered office to Jersey.
Commenting on developments, Andrew Whalley, Chief Executive Officer of REG, said:
"REG continues to make progress across all businesses. We now have 57MW of operating wind plants in the UK and Canada and have successfully refinanced our first four Canadian wind farms. This was particularly rewarding given the current financial environment. We are continuing to crystallise value through the portfolio build-out, with 15 projects built or equipment procured over the past year, and we expect financial year 2009 to continue at the same pace."
ENDS
Contacts:
Renewable Energy Generation Limited Tel: +44 (0)14 8340 0444
Andrew Whalley, Chief Executive Officer
David Crockford, Finance Director
Numis Securities Limited (Nomad for REG) Tel: +44 (0)20 7260 1000
Nominated Advisor: Jag Mundi / Anthony Richardson
Corporate Broking: Charles Farquhar
Hogarth Partnership Tel: +44 (0)20 7357 9477
Julian Walker, Sarah MacLeod, Vicky Watkins
Notes to Editors:
Renewable Energy Generation Ltd (REG) is a world-leading renewable energy group. The Group's main business is the development, construction and operation of wind farms in the UK and Canada. It also generates power from refined used cooking oil in the UK.
The Cornwall Light & Power Co. Ltd: based in Cornwall, UK, it currently operates five wind projects in Cornwall, County Durham, Cumbria and Gwynedd, with a total capacity of 17.7MW and has a development pipeline of around 200MW. AIM PowerGen Corporation: based in Toronto, Canada, AIM PowerGen Corporation is one of Canada's largest independent wind developers and has a pipeline of over 5500MW of potential wind projects across seven provinces. REG Bio-Power UK Ltd: based in Norfolk, UK, it operates electricity generation plant fuelled by refined used cooking oil.Headquartered in Guernsey, REG was admitted to trading on AIM, a market operated by the London Stock Exchange, in May 2005 (AIM:RWE).
www.renewableenergygeneration.co.uk
Related Shares:
WIND.L