The fourteen year agreement, with energy firm Eco2 and investment partner Temporis Capital, is the second deal to be signed between the two firms.
In January 2015, Stobart agreed at contract to supply up to 250,000 tonnes of waste wood to fuel Eco2’s Margam waste wood plant in South Wales in January (see letsrecycle.com story)
Work to build the plant at Port Clarence, Teesside, is due to start shortly, with the facility expected to begin operations in early 2018. Danish energy-from-waste specialist Babcock and Wilcox Vølund will operate the plant, with building work to be carried out by Lagan Construction.
Once completed the plant will be capable of generating 40MW of energy per year. Stobart will begin supplying wood, which is expected to come from both commercial and local authority sources, from late 2017 – and anticipates that it will send around 3.5 million tonnes of material to Port Clarence over the lifetime of the contract.
Stobart Energy’s Transport business will be responsible for transportation of the material, delivering around 250 loads each week to Port Clarence.
Supply
In a statement on the Stobart Group website, the company stated: “The Board of Stobart Group Limited, the support services and infrastructure group, is pleased to announce the signing of a 14 year index-linked fuel supply agreement to a 40MWe waste wood-fuelled biomass plant at Port Clarence, Teesside, which has successfully reached financial close today. The supply will commence in late 2017.
“Port Clarence is scheduled to commence operations in early 2018 and will generate revenue for the Group’s Energy Division.”
Situated on the banks of the River Tees at Clarence Works, the proposed facility will have the capacity to process 325,000 tonnes of waste wood per year. The development is the largest of its kind that can be approved at local authority level, according to the developers.
The same site on the River Tees had previously been earmarked for another non-waste wood biomass plant in 2009, but developer Bio Energy Investments failed to attract funding for the scheme.
Funding for the facility is coming from equity firm Glenmont Partners with debt arranged and provided by Deutsche Bank and Danske Bank, supported by EKF, the export credit agency of Denmark.
Glennmont
As part of the transaction, the Glennmont fund will acquire 100% of the share capital of Port Clarence Energy Limited, while Eco2 Ltd will continue to be responsible for managing the facility once it is commissioned.
David Williams, chief executive of Eco2 Ltd, said: “This is the third project we have completed with Glennmont in the past four years. Over the last two years alone, we have raised a total of around £0.75 billion through the sale of four biomass plants, and as a team have amassed unrivalled experience in the development, construction and operation of over 510MW of biomass projects throughout the world.”
Eco2 has also been involved in the development of biomass plants at Brigg, Snetterton and Sleaford.
Commenting on the project, John Veje Olesen, managing director, Babcock & Wilcox Vølund, said: “Through the strong and productive working relationships we are establishing in the UK, noting this is the second Eco2 developed project we have successfully secured after Margam, our capabilities and associated benefits are being fully recognised not only by our potential customers, but by all parties engaged in the renewable energy sector.”
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