A partnership between organic waste recycling company TEG Environmental and energy firm Alkane has emerged as the front-runner for a contract to develop a 7.5 million anaerobic digestion facility to treat food waste for three North East Wales councils.
The companies have been named as preferred bidder for the 15-year deal, which would involve building and operating a 20,000 tonne-a-year capacity anaerobic digestion facility on the site of a former abattoir at Rhaulit, near St Asaph.
The councils Denbighshire county council, Flintshire county council and Conwy county borough council are working together as the North East Wales Hub one of five Welsh council groupings procuring new food waste treatment capacity with Welsh Assembly Government (WAG) support.
The WAG will contribute 1.4 million towards the cost of getting the facility up and running as part the programme, which is known as the Food Waste Treatment Programme.
Together, the three local authorities expect to provide at least 11,000 tonnes-a-year of the food waste for the facility, with the remaining 9,000 tonnes-a-year of capacity filled by other councils and businesses.
The site is expected to generate nearly one megawatt of power, which will be used to run the facility itself as well as providing electricity for around 2,000 homes. It will also produce around 19,000 tonnes-a-year of fertiliser, which TEG and Alkane plan to use as a low cost fertiliser on local farms.
Joint venture
TEG and Alkane will form a joint venture company, known as NEAT Biogas Ltd, for the project, with TEG owning 70% of the company and Alkane owning 30%. NEAT will then fund and operate the facility, which is expected to bring in total revenues of around 30 million over the contract term.
TEG and Alkane will supply all plant and equipment for the project, although the AD technology will be provided by specialist AD firm UTS Biogas. TEG, which has traditionally focused on in-vessel composting, first announced its plans to work with both Alkane and UTS on AD projects in January 2010 (see letsrecycle.com story https://www.letsrecycle.com/news/latest-news/compost/teg-forms-new-ad-partnership).
NOFCO, which is a subsidiary of TEG, will manage the placement of the fertiliser produced by the AD process under a separate sub-contract.
Mick Fishwick, chief executive of TEG, said: We are extremely pleased to have been awarded this prestigious long term contract by the North East Wales Hub and we look forward to working with the Hub and to constructing our first AD facility in Wales.
It is also very pleasing to see our partnership with Alkane reach fruition and we look forward to working with Alkane in our new joint venture company.
His sentiments were echoed by Alkane chief executive Neil OBrien, who added: The Alkane/TEG collaboration deal is proving its worth combining our heritage in waste management and energy generation. There is a strong match of the skills of the two teams and we continue to work on a number of other AD projects.
Denbighshire county councils lead member for environment, councillor Sharon Frobisher, described the facility as a vital piece in the jigsaw to make it easier to recycle more food waste. Our new AD facility will be good for the environment, because it will generate electricity from the food waste that people have thrown away.
TEG expects to achieve financial close on the North East Wales deal by the end of 2011, and to submit planning and environmental permit applications for the facility this autumn.
If these are successful, construction will commence in the spring of 2012, with the facility becoming operational in 2013.
Hubs
The other four hubs procuring new food waste treatment capacity under the WAG programme are:
Central Wales involving Ceredigion and Powys, around 10,000 tonnes-a-year;
Heads of the Valleys involving Blaenau Gwent, Caerphilly and Torfaen, around 22,000 tonnes-a-year;
South West involving Bridgend, Camathenshire, Neath Port Talbot, Pembrokeshire, Swansea and Vale of Glamorgan, around 70,000 tonnes-a-year;
Prosiect GwyriAD (Gwynedd) involving Gwynedd, around 10,000 tonnes-a-year.
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Wales remaining councils, Anglesey, Wrexham, Cardiff and Monmouthshire, are not part of the programme because they already have food waste treatment capacity in place which is seen as sufficient to meet both the WAGs recycling and EfW targets and European landfill diversion goals.
A spokeswoman for TEG confirmed the company was bidding for some of the other projects, but could not reveal how many or which ones.
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