Quantum Data Energy

Time it right

Good Morning Team.

A brief note today on Quantum Data Energy.

The company is a UK-based developer, operator and owner of flexible generation power assets — flexgen in industry shorthand.

The idea is simple.

Fire up gas-powered generators at times when the national grid is under stress from intermittent renewables like wind and solar, and sell that electricity at a premium to the wholesale price.

The UK’s electricity grid is increasingly dependent on wind and solar, both of which are inherently unreliable — the wind doesn’t always blow, the sun doesn’t always shine.

When renewable output drops suddenly, the grid needs fast-response backup power immediately, and that’s where flexible generation comes in.

These aren’t baseload power stations running 24/7 — they’re more like a rapid response unit, firing up when called upon and earning a premium for the privilege. The National Grid pays more for power that can be delivered on demand, on short notice, when it’s needed most.

Real Revenues, Real Premiums

Their flagship asset is Pyebridge in Derbyshire. In 2025, it generated £1.6 million in revenues from just 5.6 MW of average production — roughly £291,000 per MW per year. It sold electricity at an average of £135/MWh, outperforming the wholesale market price by 67%.

In January 2026, it hit a new record — 1.8 GWh generated in a single month, running for an average of 18 hours a day.

Year-on-year, total revenues grew 136% and electricity generation grew 71%.

Portfolio Today

At the start of 2025, QDE had one asset. By early 2026, the picture looks materially different:

• Pyebridge (8.1 MW, Derbyshire) — fully operational, generating record revenues, 100% owned by QDE

• Hindlip (7.5 MW, Worcestershire) — fully funded in JV with Powertree at project SPV level, in active construction, pre-commissioning expected April 2026, commercial operations expected Q2 2026

• Bordesley (5 MW, Birmingham) — financial close completed 9 March 2026. QDE has signed a binding investment agreement with Power Balancing Services (PBS). PBS will invest up to £1.75m, QDE up to £1m, with the remaining capex funded via an external bank debt facility. PBS receives a 65% equity stake; QDE retains 35%. Construction has commenced. Commercial operations targeted Q4 2026

• Stather (2.4 MW, Lincolnshire) — operational

• 25 MW development pipeline — acquired in mid-2025 at significantly below-market cost

• 7 MW brownfield acquisition — in advanced due diligence, grid connection confirmation from the DNO expected around end of March 2026

Following Bordesley’s construction, QDE will have approximately 20 MW in production and a near-term development pipeline of a further 28 MW — totalling roughly 48 MW in the runway.

The Bordesley deal also illustrates the capital discipline at the core of QDE’s model. A typical new-build 5 MW flexgen project costs around £3.5m to construct.

By bringing in PBS as a co-investor at project SPV level, QDE gets an income-generating asset on its books with a £1 million equity contribution — limiting dilution at PLC level while still growing the portfolio.

The Hindlip deal (£5 million of external funding with no obligation from QDE) was the proof of concept. Bordesley confirms it as a repeatable model.

QDE is also looking forward to the upcoming Capacity Market T-4 contract auction and expects to win a 15-year contract for its Pyebridge 8.1 MW asset. If secured, this would materially boost the asset’s guaranteed long-term income and further de-risk the flagship project’s revenue profile.

Investment Case

The CEO’s stated target is 300 MW. QDE is at roughly 23 MW operational or under construction — a long road, but one being funded without diluting shareholders at PLC level.

The revenue maths are worth laying out. QDE reports average revenues of approximately £290,000 per MW per annum across a rolling 12-month period. Applied across the portfolio as it comes online:

• Pyebridge: 8.1 MW fully operational = ~£2.35m per annum

• Hindlip: 7.5 MW from Q2 2026 = ~£2.18m per annum

• Bordesley: 5 MW from Q4 2026 = ~£1.45m per annum

• Stather: 2.4 MW = ~£0.70m per annum

That’s a combined portfolio of roughly 23 MW approaching £6.7m in potential annual revenues by end of 2026 — if all projects hit their timelines and perform at Pyebridge-equivalent levels.

At a market cap of approximately £5 million, that revenue trajectory is striking. Infrastructure assets with stable, recurring revenues typically trade at multiples of revenue. Even allowing for the micro-cap discount, the gap between the current valuation and what the portfolio could plausibly generate is hard to ignore.

AI Datacentre Angle

QDE has entered JV agreements with Carbon Zero Markets and Navon World targeting AI datacentre power supply, and has been progressing a proposal for a circa 10 MW combined heat and power project at a major UK holiday park.

The datacentre opportunity is not hype. Globally, datacentres consumed an estimated 415 terawatt-hours in 2024 — around 1.5% of total global electricity demand — with projections rising substantially by decade’s end as AI compute accelerates. In the UK specifically, grid connection backlogs are increasingly strangling new datacentre development, with companies being told to wait years for a connection.

QDE’s model becomes interesting in a different way here. Deploy modular, flexible generation capacity at or near a datacentre site and you bypass the grid connection queue entirely — solving one of the biggest bottlenecks in UK digital infrastructure. QDE has the expertise in grid access, gas access and modular power deployment to make this at least theoretically feasible at scale, and has explicitly stated its longer-term ambition to develop AI-focused power campuses.

What to Watch in 2026

• Near term: 7 MW brownfield acquisition completing — grid connection confirmation expected end of March 2026

• Q2 2026: Hindlip commissioning and first revenues — first major proof point that the JV funding model delivers operational assets

• Q3 2026: Warrant expiry from the July 2025 raise — the structural unlock for the share price (more on this below)

• Q4 2026: Bordesley commissioning — at this point QDE would have three assets generating revenue simultaneously

• Ongoing: Progress on the 25 MW development pipeline, AI datacentre JV developments, and additional non-dilutive project funding

The Share Price: Why It Hasn’t Moved, Why That May Be Temporary

Despite consistent operational delivery, the share price has been largely static. The explanation is mechanical rather than fundamental.

QDE raised £5m in July 2025 via a prospectus offering. Fundraises of this type typically come with warrants attached — rights for investors to purchase additional shares at a fixed price.

In QDE’s case, the exercise price is 4p per share.

When the market price ticks toward or above that level, warrant holders can sell into the rally, or the market’s anticipation of future warrant exercise creates selling pressure that keeps a lid on the price.

Hence the share price fall after the rally.

And now, the practical effect - the warrants are acting as a persistent ceiling.

The key detail is that most of these warrants are now used up, with the remainder expected to expire later in 2026. Once that overhang clears — likely around Q3 — the mechanical ceiling on the share price disappears.

For buyers today, the current price may be creating an entry window:

• Under 4p: You’re buying below the warrant exercise price. Warrant holders have no incentive to push the price up, and the overhang is at its most active — but you’re also getting in at the lowest relative valuation against a portfolio that is actively growing

• Between 4p and ~6p: Warrants could still technically be exercised, but holders would need to sell into a fairly illiquid market to realise the gain, making meaningful exercise unlikely. Some ceiling risk remains but it’s diminishing

• Above 6p/post-warrant expiry: The structural overhang is gone. At that point, the share price is free to reflect the underlying business — and with three revenue-generating assets, a 48 MW pipeline, and a Capacity Market contract potentially secured, the business looks poised for growth

The February 2026 Acceleration Capital raise — circa £1.2m at 2.5p per share — added shares to the register but was a modest, targeted raise to co-fund Bordesley capex.

The company was clear that existing cash reserves were sufficient for working capital.

Risk considerations

Of course, these are gas-powered generators operating in a dynamic energy market.

Revenue depends on grid dynamics, energy pricing, and the regulatory environment remaining broadly favourable to flexible generation. Operational issues at any site could impact revenues.

And execution risk on multiple simultaneous construction projects is real, even with experienced contractors. The 300 MW target remains a long-term ambition — the road from 23 MW is a long one.

The Bottom Line

Quantum Data Energy is a working flexgen business generating real revenues at meaningful premiums to wholesale prices. It has a capital-efficient JV funding structure that limits dilution, a growing portfolio with clear near-term milestones, and a speculative but credible AI datacentre optionality layer on top.

The warrant overhang has been a mechanical drag that makes near-term price momentum difficult regardless of news flow. But that drag has an expiry date — and the business behind it keeps executing.

By end of 2026, QDE could have three assets generating revenue simultaneously, a 48 MW total pipeline, and a Capacity Market contract on its flagship asset.

At a £5 million market cap, the market is either deeply sceptical, structurally constrained by the warrant overhang, or both.

Keep an eye on it.