RWE Npower officially opened the Markinch biomass facility last month, having agreed to supply 17MW of electricity and 120 tonnes of industrial steam per hour to the adjacent paper mill operated by Tullis Russell.
However, administrators KPMG were called in to cooperative-owned Tullis Russell Papermakers Ltd yesterday (April 27), announcing 325 job losses and putting a further 149 at risk (see letsrecycle.com story).
The paper mill suffered cumulative losses of £18.5 million over the last five years and has failed to find a buyer, citing a long term decline in the paper market, weakening demand and the recent insolvency of a major customer.
RWE said it would be working with administrators KPMG and was “genuinely very sorry to hear of the announcement”, but stated: “Our power station at Markinch can run independently of Tullis Russell, and it will continue to operate.”
Construction of the RWE biomass facility, which can also supply around 25MW of electricity to the National Grid, began in 2010 (see letsrecycle.com story).
When asked by letsrecycle.com what would happen to the fraction of heat and power output supplied to Tullis Russell, an RWE spokesperson said today (April 28): “The plant will continue to generate the same output of energy and this will be exported to the grid.”
Suez Environnement
Some have speculated that the situation could cause a rise in gate fees for waste wood plants in the north of England and in Scotland should RWE need to adjust its operations in light of the changing situation at Tullis Russell.
But, also commenting today, one of the major suppliers of waste wood feedstock to RWE’s biomass plant, Suez Environnement, said that it is “far too early at present to know” what possible market impacts could be expected in the wake of the 200-year-old paper firm falling into administration.
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A spokesman for Suez Environnement, said today: “It is always very sad to hear of a business within our sector entering administration and our thoughts are firstly with those whose jobs are now at direct risk.
“Given that this announcement was made yesterday and efforts are undoubtedly being made by various parties to mitigate the impact of this announcement, it is far too early at present to know what, if any, knock on effects will result for the wider supply chain.”
Scottish Government
In the wake of yesterday’s news, the Scottish Government has said it will establish a joint taskforce with Fife council in order to “support economic growth and employment in the area, with particular focus on Glenrothes and central Fife”.
First Minister and SNP leader Nicola Sturgeon said: “Scottish Enterprise officials are working with the company right now to explore all possible avenues for support but given the potential impact of this news, I am today announcing the immediate formation of a Joint Taskforce for Fife. The Taskforce will be co-chaired by the Scottish Government and Fife council, with the Deputy First Minister John Swinney leading for the Scottish Government.
“It will work with the administrators to try to secure an alternative owner and it will look for ways to help mitigate the effects of job losses by putting in place appropriate support for workers to help them back into new jobs and training.”
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