The revenue results of Earthrenew’s (ERTH.C) power production facility in Strathmore, Alberta for the first two months of 2021 show the plant generating up to 4 MW per hour through low-cost natural gas to run their Rolls Royce turbine.
The totals for January and February for this year were 845.17 Mwh of electricity, which it sold into the provincial grid for $342,727 in sales revenue, bypassing the revenue for that time the previous year, which was $118,222. The Strathmore Plant is designated a peaking plant, which is when electricity gets supplied to the grid as a top-up effect after certain minimum power price thresholds are bypassed. It helped pull in an extra 77% gross margin on electricity production.
“Freezing temperatures pushed up demand for electricity throughout the early months of 2021. Additionally, severe storms at the site of provincial and country interconnection points impacted supply to our own province providing the opportunity for us to fill a supply gap in the system as people rushed to warm their houses. While this combination of events was opportune, we were delighted to be able to take advantage of the supply drop and generate unexpected revenue that we can apply to our operations. As we come out of COVID, we see increasing electricity demand continue to drive-up electricity pricing,” said Keith Driver, CEO of EarthRenew in a press release.
Power Reserves in Alberta
In other related news, Earthrenew announced that they’ve executed an agreement originally formed earlier this month with the North American division of the electricity company, Enel-X, to be involved in an operating reserves program in Alberta. The program will include ERTH being compensated for providing short-term power supply to the Alberta power grid in support of grid stability.
“Looking ahead, we plan to supplement our electricity peaking revenue by participating in the operating reserves program with Enel-X. This will allow us to further optimize revenue, without sacrificing our ability to take advantage of peaking events,” said Driver.
Earthrenew is going to continue providing power to Alberta’s grid when electricity prices are up, but this program will give them the opportunity to make more money when times aren’t optimal for generating power. The agreement puts ERTH on-call for generation should the market hit a supply snag and the Alberta electric System Operator needs reserves to balance supply and demand.
EarthRenew’s shares dropped a penny and a half today, and are presently trading at $0.37.
Full disclosure: Earthrenew is an equity guru marketing client.