£130m Biomass CHP Plant Financed at Discovery Park, Kent.

The fund Copenhagen Infrastructure II and Burmeister & Wain Scandinavian Contractor A/S (BWSC) have acquired 100% of the biomass-fired combined heat and power plant project Kent in the UK developed by Estover Energy Ltd and at the same time taken the investment decision to construct the project. The total investment in the Kent project will amount to approximately GBP 160m.

The Kent biomass power plant will have a capacity of 27.8 MW and will be fired primarily with virgin wood sourced locally in the UK. The power plant is expected to be in operation during the summer of 2018.

The power plant will be constructed by BWSC which is also the business partner of Copenhagen Infrastructure Partners (CIP) on two other biomass plants in the UK. BWSC will furthermore be responsible for operation and maintenance of the plant under an O&M contract for up to 20 years.

The plant will be able to produce power corresponding to the power consumption of 50,000 households. Heat and some of the power will be delivered to Discovery Park. Discovery Park is one of the UK's leading science parks located in Sandwich, Kent, a global hub for science, technology, business and enterprise.

The entire biomass required will be sourced under a long-term contract with Euroforest, one of the largest virgin wood suppliers in the UK. The plant will deliver CO2 savings of approximately 100,000 tonnes every year.

The project is located in Kent near Sandwich in the UK and has been developed by Estover Energy Ltd.

The total investment in Kent amounts to approximately GBP 160m of which Copenhagen Infrastructure II K/S will invest around 80% and BWSC around 20%. Estover Energy Ltd will once commercial operation commences hold a minority interest in the project.

Christina Grumstrup Sørensen, Senior Partner at CIP

Our investment in Kent builds on our good experience with the UK biomass power market which to date includes the Brigg project which was commissioned in January 2016 and the Snetterton and Templeborough projects that are under construction and planned to be commissioned in 2017. The Kent project presents an attractive investment opportunity for CIP in a country with a well-established and stable regulatory regime. The investment is aligned with our strategy of developing projects benefitting from long-term contracts with strong industrial partners in order to deliver stable returns for our investors”.

Anders Heine Jensen, CEO at BWSC

“The Kent project is BWSC’s eighth turnkey biomass power plant project in the UK within the last 5 years, and it underlines our strong position on the UK renewable energy market. The project also illustrates the value of the close cooperation between strong financial and industrial players in the energy sector resulting in attractive business opportunities and investments for both parties. With the Kent project, BWSC has once again strengthened its role as market leader within constructing, operating and owning energy efficient power plants”.

Copenhagen Infrastructure Partners

Copenhagen Infrastructure Partners K/S (CIP) is a fund management company founded in 2012 by senior executives from the energy industry and PensionDanmark. CIP is owned and managed by the five partners, Jakob Baruël Poulsen, Rune Bro Róin, Torsten Lodberg Smed, Christian T. Skakkebæk and Christina Grumstrup Sørensen. All five partners have extensive experience within infrastructure investments and mergers & acquisitions. CIP currently manages the funds Copenhagen Infrastructure I K/S, CI Artemis K/S and Copenhagen Infrastructure II K/S. Copenhagen Infrastructure I K/S and CI Artemis K/S both have PensionDanmark as founder and sole investor, while Copenhagen Infrastructure II K/S has 19 Danish and international institutional investors: PensionDanmark, Lægernes Pension, PBU, JØP, DIP, Nordea, PFA, Nykredit, AP Pension, SEB Pension DK, SEB Pension SE, Lærernes Pension, Oslo Pensjonsforsikring, Villum Fonden, KLP, a UK pension fund, Widex, LB Forsikring, and EIB (with the backing of the EU through EFSI). www.cip.dk

Burmeister & Wain Scandinavian Contractor A/S

Burmeister & Wain Scandinavian Contractor A/S (BWSC) is a Danish engineering and contracting company which develops, builds, operates and owns high-performance biomass, biogas and engine based power plants. The majority of the projects are supplied as turnkey plants, and BWSC has delivered more than 178 power plants to 53 countries worldwide with a total capacity of more than 3,500 MW. Currently, BWSC has ongoing construction and O&M activities in England, Northern Ireland, Surinam, Lebanon, Sri Lanka, Kenya and Mauritius. BWSC generated a revenue of DKK 2.1bn in 2015, and the order book amounted to DKK 6.6bn at end-2015 and has more than quadrupled in the last 4 years. BWSC originates from the stationary engine division of Burmeister & Wain (B&W), which has built and installed diesel engines for power plants since 1904. BWSC was established as a separate specialist company in 1980 and was acquired by Mitsui Engineering and Shipbuilding Co. Ltd. in 1990. www.bwsc.com

Estover announces successful financing of £138m Cramlington biomass CHP

Artists impression of the Cramlington Biomass CHP Plant

Estover is pleased to announce financing for the Cramlington CHP project in Northumberland. £48m of equity has been committed by John Laing Group plc and the UK Green Investment Bank plc alongside £90m of debt from Barclays Bank plc, with an export credit guarantee from EKF.
 
The 27.7MWe biomass Combined Heat and Power (CHP) plant will power the equivalent of 52,000 homes and will reduce greenhouse gas emissions by the equivalent of taking 25,000 cars off the road per year.
 
Construction will commence immediately, with completion expected in late 2017. Once operational the plant will be fuelled by wood sourced from the local area.
 
Electricity generated will be sold via the grid as well as being supplied to local businesses. The plant will provide renewable heat to neighbouring manufacturers. 

Estover is retaining an equity stake in the project, and a 12-year contract to provide ongoing general management, project & construction management services, as well as fuel management services for the project. This will be delivered by Estover's specialist Management Services business, which also services the Speyside CHP project in Moray, Scotland.

 
Marcus Whately, Co-CEO of Estover, said:
 
"This is fantastic news for the North East and for Estover. It means more jobs in forestry, and a secure energy supply for industry. Twice the size of our first plant in Scotland, it shows Estover is becoming a real force in these long-term energy and infrastructure projects."
 
Max Aitken, Co-CEO of Estover, said:
 
“This demonstrates that Estover’s innovative approach to developing power projects is able to attract the highest quality investors. This is the second time that GIB and John Laing have invested in an Estover project and the first time Barclays has lent to a UK biomass project.”
 
Nial Gemmell, Director at Barclays Bank plc, said:
 
“With Barclays’ strong track record in supporting renewables projects we saw our part in such a high-profile project through the provision of debt finance as a natural fit. Working with GIB, John Laing Group and Estover to help deliver this deal further demonstrates our continued commitment to the UK renewable energy sector.”
 
Ross McArthur, Managing Director of Renewable Energy at John Laing Group plc, said:
 
“Our investment in Cramlington biomass CHP plant builds on the success of our partnership with Estover and GIB established on Speyside Renewable Energy plant. This exciting new project demonstrates the valuable contribution biomass can make to delivering renewable heat in the UK.
 
Cramlington adds further depth to John Laing Group’s growing portfolio of renewable energy assets in the UK and internationally.”

Ed Northam, Head of Investment Banking at the UK Green Investment Bank plc, said:
 
“The Cramlington plant promises to create local jobs, support an industry whose vitality is essential to the growth of the regional economy and help cut UK greenhouse gas emissions while promoting the country’s adoption of green energy sources.”

Estover announces £74m Speyside CHP

  • New biomass Combined Heat and Power (CHP) plant in Speyside, Scotland will generate enough renewable energy to power more than 20,000 homes.
  • The iconic Macallan distillery will use the heat generated by the plant in the form of steam, a critical component of the distillation process.
  • John Laing and the UK Green Investment Bank to invest £26m, alongside £48m debt to be raised from the bond market. The bond will be guaranteed by Infrastructure UK, part of HM Treasury.

The new biomass Combined Heat and Power (CHP) plant near Craigellachie, Moray, will generate 87.4 GWh per annum of renewable energy – enough to power more than 20,000 homes. It will also generate 76.8 GWh per annum of renewable heat. Together, the carbon saving equates to 42,000 tCO2e per annum, the equivalent to taking over 18,000 cars off the road.

The project will create 123 jobs (100 in peak construction and 23 permanent) and support one of Scotland’s most important export industries.

The new CHP facility will contribute to reducing the cost of energy at The Macallan distillery by providing 90% of all of the steam needed in the distillation process. By using biomass to generate heat instead of natural gas, the distillery will reduce its greenhouse gas emissions by over 17,500 tCO2e, equivalent to taking almost 8,000 cars off the road.

The plant will be fuelled with sustainable forestry by-product sourced from the local area, one of the UK’s most productive forestry areas. A consortium of local growers and forest industry suppliers including Stobart Biomass Products Ltd. and UPM Tilhill will supply the plant.

Business Secretary Vince Cable said:
“This investment in Speyside will not only help secure jobs, boost a vital industry and support the local supply chain but also generate renewable energy for homes in Scotland.  Through our industrial strategy we are working in partnership with business to give companies the confidence to invest, securing green jobs and a stronger UK economy."

Chief Secretary to the Treasury, Danny Alexander said: 
“The Speyside guarantee is fantastic news for Scotland’s economic future. It will power thousands of homes with clean energy, and also support the whisky industry, a cornerstone of our economy, which brings in billions for Scotland and employs over 10,000 people.  
“Today, over £1 billion of infrastructure projects have now been brought forward as a result of the UK guarantees scheme and £36 billion worth of projects are pre qualified. Our action is creating the right conditions for more investment in our infrastructure and helping to build a stronger economy."   

Max Aitken, Co-CEO of Estover Energy said:
“This is a great step forward for Estover. To attract such high-quality investors for our first project is a ringing endorsement of the experienced team we've built up, and we look forward to financing our wider portfolio over the coming months.”

Marcus Whately, Co-CEO of Estover Energy said: 
“The Speyside project is the first of four similar projects that bring together some of the most respected names across several industries. The result is low-carbon energy for British industry, creation of rural jobs, and a major infrastructure investment for this part of Scotland.”

Estover Energy response to new DECC biomass calculator

Estover welcomes the report and calculator, which will specifically endorse the type of supply chain that we have spent the last five years developing.

As the Chief Scientist makes clear the report will be used to distinguish, in carbon saving terms, between good and bad biomass supply chains.

Biomass Combined Heat and Power (CHP) plants produce the highest carbon savings of all biomass energy technologies. This technology is a key part of the UK's low carbon energy strategy and vital for decarbonising energy-intensive manufacturing industries.

Estover's CHP plants will have full Chain of Custody information to demonstrate that all feedstocks are sourced from forests which are:

- Commercial plantation forests within an average of 50 miles from their local plant

- Sustainably managed to the UK Forestry Standard and licensed by the Forestry Commission

- Managed to produce a mix of timber products. This is primarily high quality timber for construction and furniture alongside low-grade arisings and residues for energy generation 

DECC have strict sustainability criteria which generators will be obliged to meet if they are to receive government support for biomass energy generation.

Our lenders and equity investors have placed further requirements on our supply chains which means that we will use this tool to develop and refine our supply chains and ensure that our plants far exceed DECC's sustainability standards.

EU Commission Publishes EU Forest Strategy

The European Commission has recently published a new document laying out the EU’s new forest strategy. The document calls for “sustainable forest management”, the use of forest land in a way and rate that maintains their biodiversity, productivity, regeneration capacity, vitality and potential to fulfil ecological, economic and social functions, and that does not cause damage to other ecosystems. Protecting the EU’s forest resources is the rationale behind the document, which aims to overhaul European forestry rules. It is unclear how this might interact with the UK sustainable forest management criteria in the RO or even a potential EU-wide Directive on sustainability criteria for solids and gases.

Please click the link below for the full document.

http://ec.europa.eu/agriculture/forest/

Planning granted at Discovery Park

Renewable energy company Estover Energy has today announced that planning consent has been granted by Dover District Council for its proposal to develop a £65 million biomass Combined Heat and Power (CHP) plant in the South East of England.

The specialist company will develop the local scale biomass plant at Discovery Park, one of Europe’s leading science and technology parks, located at Sandwich, Kent, supplying renewable heat and electricity across the 220-acre site and creating significant employment opportunities. The CHP plant will also supply low carbon electricity to the national grid, supporting the UK’s national target to generate 15 per cent of its energy demand from renewable sources by 2020.

The project represents an inward investment of approximately £65 million to the area and will significantly bolster the local economy. Construction is forecast to begin in spring 2014 and approximately 100 jobs will be created during this period. Once operational, a further 20 permanent jobs in positions at the plant and a further 20 jobs in the forestry and transport sector will also be generated.

The new facility will use conventional CHP steam turbine technology - proven to be reliable and clean - to generate 11-15 MW of power and 8-12 MW of heat, which would be enough energy to supply the equivalent of 21,000 homes with electricity. The biomass plant will use locally sourced low-grade wood fuel to generate renewable heat and power for the Park, significantly reducing its energy costs, carbon footprint and reliance on imported fossil fuel. The wood fuel will come solely from local forestry and woodlands, typically within an average distance of 80 miles.

Greg Barker, Minister of State for the Department of Energy and Climate Change and MP for Bexhill and Battle said: “Estover’s local-scale biomass CHP plant is an exciting opportunity to make an important contribution to our renewable energy mix.

By sourcing their fuel from the South East the wider benefits of developing a new supply chain are felt locally, helping to stimulate the rural economy and provide a much needed market to support coppice woodlands in south-east England. I congratulate them on this new development.”

Local MP Laura Sandys said: “I am extremely excited about Estover's CHP plant. By reducing energy bills and decarbonising the electricity and heat used at Discovery Park, the project will help existing businesses expand and attract new employment to the area. It is a fantastic contribution to what is fast becoming a centre for renewable energy in East Kent and I am thrilled that Government policies and Local Authority support have helped make this happen.”

Andrew Troup, Development Director, Estover Energy, said: “That our proposal was granted consent is testament to the Council’s commitment to renewables and its support for Discovery Park and the wider community around Sandwich. Our new biomass plant will help meet the energy challenges of the next two decades, it will be a great boost to the local economy and will stimulate long-overdue investment in the South East’s woodlands.”

Trevor Cartner, Chairman, Discovery Park said: “ We are delighted to welcome Estover Energy to Discovery Park. The benefits to us and to the wider region are significant and we are proud that we can now offer our tenants a clean and sustainable source of energy for the future.”

The location for the plant was chosen because of its Enterprise Zone status and extensive existing infrastructure, which the CHP plant can use to supply power to the whole of Discovery Park as it currently stands and as it continues to expand.

DECC publishes analysis on UK biomass use

Yesterday DECC published analysis of the use of UK biomass for electricity and CHP. This is based on the last 3 years worth of data reported to Ofgem under the RO, as well as survey responses from larger generators on their expected wood use over the coming 5 years.

Please click the link below for the report.

https://www.gov.uk/government/publications/use-of-uk-biomass-for-electricity-and-chp

David MacKay criticises NGOs’ misuse of Biomass Calculator data

BusinessGreen has obtained a letter sent by DECC Chief Scientist Professor David MacKay to FOE, Greenpeace and RSPB in May, criticising them for using the data without permission. He said:” I don’t think using the material in this context without specific permission accords with the spirit in which we shared the model with the reviewers.” Read the full letter at the link below.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225972/FOI_130887_combined.pdf