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AEG secures US$ 6 mn funding for CoalSwitch

Active Energy plc (“AEG”), the London quoted renewable energy, forestry management and timber processing business, on November 28th announced that it secured funding for its 1st industrial-scale CoalSwitch plant, enabling the next vital step of the technology‟s commercialization. The technology utilises low value wood, timber, forestry and pulp mill/ saw mill by-products to produce the world‟s first „drop-in‟ biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing unmodified coal powered fire stations globally. The funding will be provided as a 5-year loan instrument, bringing significant upside for the current shareholders of AEG. We note a STRONGLY POSITIVE impact of the news on the company and reiterate our target price of USD 0.234 per share (GBp 18.7).

Read more: AEG secures US$ 6 mn funding for CoalSwitch

AEG reports CoalSwitch burn test confirms earlier results, proves commercial viability [BUY]

On March 8, 2016, Active Energy Group [AEG LN], the supplier of timberland management and development services, industrial wood fibre and biomass coal replacement fuels, published the results from the burn testing of its CoalSwitch fuel at the University of Utah. The University both confirmed the potential of CoalSwitch fuel for the power generation industry, and that it delivered significant financial and environmental benefits over current biomass fuel solutions. 

Read more: AEG reports CoalSwitch burn test confirms earlier results, proves commercial viability [BUY]

AEG: From Forest to Factory to Fuel [BUY]

Since our initiation report on Active Energy Group in March 2015, a lot has changed. The JV  with the Canadian Metis aboriginal settlements (in which AEG has a 45% stake) finally received the go-ahead from the authorities in Alberta, albeit with minor conditions, to proceed with the deal on commercialization of the mature timberlands, and AEG now expects to begin forestry operations in 1Q2016. The company’s core business in Ukraine experienced some turbulence, including the break-down of the old chipping machine in July 2015 and the short-term spike in prices of raw timber as a result of the ban on roundwood export from Ukraine and Bulgaria. Despite that, AEG reported that it was able to get back on track with its capacity expansion plan, installing a new wood chipping line in October 2015, although the commissioning of the softwood wood chipping line is now expected in 2016. And last but not least, the company recently announced a 51% owned JV with Biomass Energy Enhancements LLC (USA) to exclusively commercialize a new biomass fuel manufacturing process (“AEG CoalSwitch”), stating that the new technology process could produce fuel out of timber residues and waste with energy content similar to coal, while simultaneously being contaminant-free. This will allow power generating customers of AEG CoalSwitch to use the new fuel in coal-fired power stations without costly retrofitting, reconstruction or output losses. 

Read more: AEG: From Forest to Factory to Fuel [BUY]
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