The developers of a proposed 240,000 tonne capacity gasification plant in Hull have secured a financial package to finance the construction of the facility after five years of planning.
Engineering specialist Spencer Group has struck a deal over the financing and build of the £200 million Energy Works (Hull) Ltd project – with funding via three new equity partners.
Bioenergy Infrastructure Group, Israel-backed investment group Noy Fund, and John Hancock through its affiliate Hancock Natural Resource Group (HNRG) have all invested in the waste plant.
Construction of the plant will begin in January 2016 and is to be undertaken by energy from waste facility specialist M+W Group. Spencer Group will meanwhile oversee the construction phase and carry out operations at the plant on behalf of the investors when it comes online in January 2018.
The CHP-enabled gasification plant has already received a £20 million grant via the European Regional Development Fund, and also secured backing under the UK government’s ‘contract for difference’ auction earlier this year – which ensures a guaranteed price for energy produced and exported up to 2033.
Energy Works and Spencer Group will source the plant via a ‘variety of suppliers’ with three prospective waste companies expected to be contracted to the facility.
With Impetus Waste Management currently contracted to treat Hull’s municipal waste via its contract with Air Products, feedstock will largely comprise commercial and industrial waste – although a municipal fraction could also be sourced from outside the council boundary.
According to a spokesman for the group, the Energy Works facility will use fluidised-bed gasification technology to create a synthetic gas from the pre-treated waste, generating around 25MW of power for the National Grid per year.
"We are very pleased to have assembled an impressive group of partners to fund and deliver Energy Works, enabling us to establish a facility with outstanding green credentials in our home city, which is becoming recognised as the UK’s leading centre for renewable technologies"
Asked whether investors saw large-scale gasification projects as a viable treatment option for residual waste, a spokesman said Energy Works would utilise a “rare and new” technology that is being used in the development of three additional facilities in the UK.
Commenting on the project, Charlie Spencer OBE, founder and executive chairman of Spencer Group and Chairman of Energy Works (Hull) Ltd, said a development of this scale “naturally poses many challenges” but congratulated the investors on their perseverance.
He continued: “We are delighted to have reached financial close and to have agreed a contract for the construction of Energy Works, which will enable us to move into the delivery phase of this pioneering development.
“We are very pleased to have assembled an impressive group of partners to fund and deliver Energy Works, enabling us to establish a facility with outstanding green credentials in our home city, which is becoming recognised as the UK’s leading centre for renewable technologies.”
Neil Bennett, director for M+W Group’s Global Energy Business Unit, added: “Energy Works will be the UK’s first major renewable energy project using Advanced Conversion Technology to reach financial close within the new CFD framework. Meeting the requirements of this subsidy regime was extremely challenging and I am therefore delighted that our solution is competitive, effective and bankable. We now look forward to delivering one of the UK’s most exciting and landmark renewable energy facilities.”