Smart Energy Finances: SMS smart meters lift dividends and €15.1bn EIB green financing
This week’s edition of Smart Energy Finances sees Smart Metering Services (SMS) post lifted dividends, citing increased smart meter installations – up to 40,000 per month – and their first grid-scale battery project coming online.
Also of interest is extensive financing from the European Investment Bank (EIB) – €15.1b ($15b) – that will go into various areas, including batteries, household heating, energy efficiency, energy transmission and sustainable transport. And, in the midst of such extensive cash flow, US clothing company Patagonia has been donated to a nonprofit in the hopes of fighting climate change.
SMS strong H1: 40k monthly smart meters and grid-scale battery project
The Glasgow-based provider of services in utility connections, smart metering and energy management announced revenue growth of 21%; from £51.7m ($59.2m) in H1 2022 up to £62.7m ($71.8m) in H1 2022.
Smart Metering Services (SMS) stated that since the start of Q2 2022, their smart meter installations have increased to over 40,000 per month, 10,000 up from FY2021. As of June 2022, their total smart meter portfolio was up to 1.9 million, including 230,000 smart meters that had been added since H1 2022. They are hopeful of a further 450,000 installations in FY2022.
Additionally, the company’s grid-scale battery portfolio increased to 760MW, up from 620MW in December 2021.
January 2022 saw their first 50MW grid-scale site come online at Burwell, trading from which more than doubled the revenue of their energy management division.
According to SMS, dynamic containment and frequency service prices will soften over time as the volume of battery storage in the market grows. However, they also stated that there is still a fundamental need for the asset class to provide balancing services to the national energy network as there is currently only up to 4GW of energy storage connected to the grid.
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On the results and the company’s growth, CEO Tim Mortlock commented:
“We are pleased to see continued acceleration in our meter installation run rates, an increase in our smart meter portfolio and a new contract which adds to our smart meter order pipeline. Leveraging on our end-to-end platform, we have successfully built and begun to deliver a strong pipeline of grid-scale battery storage projects within a short period of time, with significant additional opportunities from this substantial and growing market.
“Our two recent strategic investments in EV charging infrastructure and energy data are complementary to our existing end-to-end business model and enhance our ability to accelerate other carbon reduction (CaRe) products and services, providing opportunities for further growth over the long-term.
“The global energy market is in a period of extreme turbulence and there is a fundamental need for the CaRe assets we originate and own. These assets enable the transition to a low carbon, flexible, secure and, of particular importance at this time to all businesses and consumers, low-cost energy system. We remain confident about the future growth prospects for the business.”
EIB €15.1 billion in green financing
The Board of Directors of the EIB has approved €15.1 billion in targeted private sector financing to support sustainable business investment and dedicated credit lines in Europe and around the world.
The financing includes:
- €4.4bn ($4.4bn) for climate action, clean energy and water
This includes new EIB financing to improve energy transmission, harness clean energy and adapt local water infrastructure to a changing climate. Also accommodated is support for financing initiatives targeting renewables generation in France and central Spain. The EIB also confirmed support for waste management schemes in Grenoble and large scale recycling projects in the Netherlands and Belgium.
- €6.1bn ($6.1bn) for targeted business financing and corporate innovation
This includes direct support for corporate research to develop more efficient batteries and household heating systems and strengthen aerospace innovation. Strengthened leasing finance for sustainable business transport in Romania was also approved.
The Board also agreed on initiatives to provide streamlined financing for green and sustainable business investment in Egypt and in countries across the Caribbean.
- €3.3bn ($3.3bn) for sustainable transport
The EIB Board authorised financing for new metro trains in Paris and Sofia, regional rail in Munich and train-trams in Karlsruhe alongside a new scheme to accelerate investment in low-emission business vehicle fleets across Europe.
- €1.3bn ($1.3bn) for health, education, urban development and housing
The EIB agreed to support construction of a new regional hospital in the Netherlands and research activities by the regional government in Madrid. The investment will go into building thousands of energy-efficient and affordable homes in Sweden and Austria, enhance fibre optic networks in Poland and accelerate urban development across Spain and regional development in Poland.
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“Earth is now our only shareholder.”
The Chouinard family has transferred all ownership over Patagonia – an American fashion company – to two new entities: Patagonia Purpose Trust and the Holdfast Collective. According to the company, every dollar not reinvested back into Patagonia will be distributed as dividends to protect the planet.
The Patagonia Purpose Trust now owns all voting stock of the company (2% of the total stock). The Holdfast Collective – a nonprofit “dedicated to fighting the environmental crisis and defending nature” – owns all the nonvoting stock (98% of the total).
According to the company, each year that profits – up to roughly $100m a year – that are not reinvested back into the business will be distributed by Patagonia as a dividend to the Holdfast Collective to help fight the climate crisis.
Patagonia will remain a B Corp and continue to 1% of annual sales to grassroots activists. Leadership of the company will not change – Ryan Gellert will continue to serve as CEO and the Chouinard family will continue to sit on Patagonia’s board while guiding the company’s controlling shareholder, the Patagonia Purpose Trust.
Yvon Chouinard, Patagonia founder, former owner, and current board member stated on the sale: “It’s been a half-century since we began our experiment in responsible business. If we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have…We’re making Earth our only shareholder.”
With Patagonia’s announcement, there is potential for a shift in how corporations and businesses approach their relationships with shareholders. The company illustrates how sustainability and green ethics can play an even larger role than simply another box to tick on the ESG checklist.
But that’s only my opinion. What do you think?
For this and other such updates happening within the energy transition, make sure to follow Smart Energy Finances, our weekly finance column on the energy investment landscape.
Cheers,
Yusuf Latief
Content Producer Smart Energy International
