REACT Energy plc

Clean Technologies

REACT Energy plc is a developer and operator of energy infrastructure using clean technologies in the UK and Ireland. The Group was founded in 2005 and listed on the Alternative Investment Market in October 2008 (AIM:REAC).

REACT was established with a view to take advantage of the growing opportunities in the clean energy sector. The Group is now a diversified renewable energy company with cash generating and development assets in UK and the Republic of Ireland.

In December 2013, the Group changed its name from Kedco plc to REACT Energy plc to create a stronger identity in the Renewable Energy and Clean Technology industry.

The Group focuses on the Biomass Electricity and Heat sector in the UK, with a capital cost of approximately £0.5 million to £40 million and an electricity output of approximately 4MW to 10MW and a heat output of 200kW to 1MW, and the Wind sector in Ireland. And, specifically focuses on the delivery of projects from green field opportunities, through the planning, grid and construction phases and into cash generating assets.

Biomass Combined Heat and Power (“CHP”) is the use of a power station to simultaneously generate electricity and useful heat. The Biomass fuel used to power the plants is primarily wood and waste wood.

One Mega Watt (“MW”) of output has the potential to provide power to up to 2,000 homes annually. 1MW of Power is produced by converting approximately 7,000 tonnes of wood and wood waste into energy.

The electricity and heat are sold to a third party utility company in the case of electricity generated, or heat end user in the case of heat generated.

Electricity Generation

The Group operates a project development model in the electricity generation area. REACT Energy identifies suitable project sites and then advances projects through the planning and environmental permitting process as well as specifying the appropriate power technology.

The Group then sources the appropriate project finance through a mix of Senior Debt and Equity partners to facilitate the build out and commissioning of the project. REACT Energy’s typical target is to retain an equity stake of at least 50% in each project post development and commissioning. The Group targets individual project internal rate of returns in excess of 15%.

The project development model enables REACT Energy to make substantial returns on its initial investment in the early stage development costs and planning and permitting costs in projects.

The Group’s target is to generate a return in excess of 3 times its original investment in any individual project. The typical investment horizon from concept to construction ready/finance ready is 3 years.

The Group will continue to develop and exploit its existing wind portfolio on the island of Ireland to provide jurisdictional and technology diversification and take advantage of opportunity.

The Directors believe that long term Power Purchase Agreements (“PPA”) with Blue Chip counterparties and qualification for Renewable Obligation Certificates (“ROC’s”) add significant value to the Electricity Generation Business Model.

The Renewables Obligation (RO) is the primary support scheme for renewable electricity generation in the UK, and places an obligation on electricity suppliers to source an increasing proportion of their electricity from renewable sources. The Renewable Obligation Certificate (ROC) is a Certificate issued under the Renewables Obligation to an accredited electricity generator for eligible renewable electricity generated within the UK. The Renewables Obligation is underwritten by the UK Government.

Heat Generation

Biomass Heat Generation plants typically range from 150KW to 1MW thermal capacity. They use wood as a sustainable fuel source, and utilise proven, mature technology.  The addressable market for the Biomass Heat only solution includes over 600 schools and universities, over 10,000 private hospitals and care homes, and over 5,000 country house hotels in the UK. 

The Directors believe that long term Heat Supply Agreements (“HSA”) with Blue Chip counterparties and qualification for the Renewable Heat Incentive (“RHI”) add significant value to the Heat Generation Business Model.

The Renewable Heat Incentive (RHI) Provides financial assistance to producers of renewable heat and is underwritten by the UK Government.