Trading Emissions narrows loss under threat of Polish regulation
Trading Emissions
0.76p
17:00 17/05/18
Closed-ended investment company that specialises in renewable energy projects and emissions instruments, Trading Emissions, announced its results for the six month period to 31 December on Monday.
Financial Services
15,999.21
17:14 04/10/24
FTSE AIM All-Share
738.36
16:54 04/10/24
The AIM-traded firm reported nil realised gain on carbon assets for the period, down from £4k in the same period a year earlier, while its realised gain on private equity assets was £9k, swinging from a £236k realised loss.
Its net positive change in the fair value of private equity assets was £419k, compared to a negative change of £532k in the first half of the 2016 financial year.
Investment services fees were nil, compared to £142k, and administration fees were in line with the prior period at £106k.
Net foreign exchange losses were £6k, compared to gains of £72k, and its other net operating expenses were £519k, almost the double £215k reported at the same time last year.
Trading Emissions said its total operating loss was £203k for the period, narrowing from £336k.
“During the six month period ended 31 December 2016, we sold two of the company's five Italian solar operating subsidiaries held through TEP Solar for net proceeds of €9.6m including dividends, of which €3.0m is held in escrow,” explained chairman Martin Adams.
“Conditional on no claims being received from the buyer, Sonnedix, we expect €1.0m to be released to TEP Solar in December 2017 and €2.0m in December 2018.
“Our efforts continue to try to resolve the various operating issues at TEP Solar's three remaining Italian solar operating subsidiaries.”
Adams said that as a result of Poland's Renewable Energy Law enacted in July 2016, coal would continue to underpin the supply of energy in Poland.
“Nevertheless, under the new law, at least one auction of renewable energy sources should take place annually, with supply contracts being awarded to winning bids for up to a maximum of 15 years.
“The first auction under the new law took place in December 2016, where selected renewable technologies were permitted to bid in one of four different technology baskets.
“Only projects with planned capacity of up to 1 MW could participate in the first auction.”
The Polish Government did not appear to assign a high priority to wind projects given the structure of the auction baskets and the recent amendments to the taxation and permitting regulations, Adams said.
“The terms of the 2017 renewable energy auctions have not yet been determined.
“Winergy, which acquired TEP Renewables' Polish wind farm interests in 2014, intends to bid at the 2017 auctions.
“In order to support Winergy to bid competitively under the 2017 auction processes, we are discussing further amendments to the structure of TEP's receivable.”
Included in the recent legislative muddle affecting wind power projects was the threat that all of the company’s current building permits would expire if not utilised by May 2019.
“If this threat materialises, the only part of our project that is likely to be constructed is that which is supported by bids won by Winergy at the 2017 renewable energy auctions.”