Tuesday, January 21, 2014

News: Maltby powers strong trading for Alkane

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Alkane Energy, one of the UK's fastest growing independent power generators, has reported strong trading performance for 2013, the year it began producing energy at the Maltby Colliery site in Rotherham.


The Nottinghamshire company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. It raised £6m in equity funding to complete a £7.5m deal to buy coal mine methane (CMM) assets at Maltby last year.

Now the UK's largest generator of electricity from CMM, Alkane posted a trading update for the six months ended December 31 2013 showing that performance has remained strong with output increasing 15% year on year. For the period, the group said that it expects to deliver electricity of circa 192 GWh, compared to 167 GWh in 2012.

The boost in output was due to the 11MW Maltby operations which Alkane said is performing ahead of plan.

Underground operations ended in March 2013 at the Maltby site that occupies 500 acres and employed over 500 staff and contractors. It is the last coking coal mine left in the UK and produced both high quality coking coal and power station coal.

A decision was made to mothball the mine following no viable alternative solution being found to geological reports that indicated that the risks associated with mining a new panel, called T125, had not significantly reduced and that the panel is not viable on health & safety, geological, and financial grounds.

Neil O'Brien, chief executive officer at Alkane, said: "Alkane continues to invest in new facilities as the UK Electricity market faces an increased risk of an energy gap over the coming years. 

"2013 has seen the successful integration of the Maltby acquisition and improved performance from our Power Response sites. It has been our 10th successive year of output growth and we remain confident of future prospects."

The board at Alkane expect that the financial results for the year ended December 31 2013 will be in line with market expectations. In the six months ended 30 June 2013, Alkane reported that revenues more than doubled compared with the same period in the previous year from £5.3m to £11.1m. EBITDA (earnings before tax) rose to £3.3m from £2.1m.

Alkane has more than 800 sq km of acreage under various onshore Petroleum Exploration and Development Licences (PEDLs). Alkane retains a 100% interest in the majority of these PEDLs, which extend to all of the hydrocarbons recoverable from these licence areas. This includes any CMM, natural gas, coal bed methane (CBM) or shale gas. Alkane has the licence for PEDL 43, which covers the Maltby site, but is yet to come forward with plans to extract shale gas by the controversial method of hydraulic fracturing (fracking) and continues to focus on the coal mine methane.

In December, Alkane commenced generation at a new site on the Prince of Wales Colliery in Pontefract. It represented the fourth collaboration with Harworth Estates who are a regular partner to Alkane.

Based on the Advanced Manufacturing Park (AMP) in Rotherham, Harworth Estates is one of the largest landowners in the UK with access to over 30,000 acres of land.

Alkane Energy website

Images: Alkane Energy

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