Danish company expands in Biomass heat and power in UK
Welsh renewable energy company Eco2 has sold its 44.2MW straw-fired biomass plant in Snetterton, East Anglia to BWSC PCL in a £160 million (€201.7 million) deal. BWSC PCL is a joint venture between Burmeister & Wain Scandinavian Contractor and the investor PensionDanmark.
This marks the second deal of its kind to BWSC PCL, following Eco2’s sale of its Brigg straw-fired biomass plant in North Lincolnshire to the venture in 2013.
The Snetterton Renewable Energy plant will be primarily fuelled using locally sourced straw and will generate enough electricity to meet the needs of approximately 82,000 homes. It will result in an annual CO2 emissions reduction of approximately 300,000 tonnes.
Originally developed by Iceni Energy, the plant received planning consent in July 2012. Iceni Energy and Eco2 partnered in May last year to take the plant forward to financial close.
Eco2’s CEO David Williams says: ‘This is a significant deal for the UK biomass industry, and the second sale Eco2 has completed with BWSC PCL on a sustainable-scale straw-fired biomass plant. We have a longstanding relationship with BWSC, who we also worked with on the sale of Wales’ first commercial-scale biomass plant in Port Talbot in 2006 – the Western Wood Energy Plant. ‘This latest deal is the third of its kind in the past three years, totalling £490 million.’
The investment in Snetterton is of DKK1.6 billion (€215 million). PensionDanmark invested DKK1.4 billion, which is financed through Copenhagen Infrastructure I, managed by Copenhagen Infrastructure Partners, while BWSC invested the remaining DKK200 million in the plant.
BWSC is in charge of constructing, operating and maintaining the power plant throughout a 15-year period. The new power plant is scheduled to be up and running by spring 2017. The power plant will have a capacity of 44.2 MW equivalent to the average energy usage of 82,000 households, and the company has contracted for supply of straw for the next 12 years.
“There are great perspectives in this kind of cooperation. We have high demands to the industrial partners we work with on joint ventures, and BWSC fully live up to our expectations. We have to secure our members a good and steady return, and this cooperation delivers that.” Torben Möger Pedersen, CEO of PensionDanmark.
“There are great advantages in a more direct cooperation between financial and industrial partners in the energy sector. It is not always easily established, but this cooperation is a good example of how it can be done, and benefits all parties involved.” Christian Skakkebæk, Senior Partner in Copenhagen Infrastructure Partners.
Facts about the project
- Snetterton Renewable Energy Plant is a biomass-fired power plant, which primarily will be fired with locally produced straw, and will have a capacity of 44.2 MW. The production will be equivalent to the energy consumption of 82,000 households and will result in a yearly CO2 reduction of 300,000 tons.
- BWSC shall construct of the biomass-fired power plant, and will also be in charge of the operation and maintenance of the plant over a 15-year period.
- The power plant is expected to be in operation by the spring of 2017, and is based on energy technology developed in Denmark. The main part of the power plant is a boiler from the Danish company Burmeister & Wain Energy (BWE), which is especially suited for firing with straw.
- The Snetterton project developers are Iceni and ECO2, who also developed Brigg.