UK Green Investment Bank and Foresight Group forge investment consortium are to construct £47.8m renewable energy plant in Birmingham.
The UK Green Investment Bank (GIB) and Foresight Group (Foresight) have today announced the investment of £47.8m by a consortium of investors into the construction of a new 10.3MWe recovered wood gasification venture in Tyseley, Birmingham, to be known as Birmingham Bio Power Ltd.
The consortium comprises GIB, Balfour Beatty plc, Eternity Capital Management Limited, Foresight’s UK Waste Resources and Energy Investments (UKWREI) fund, in which GIB is a cornerstone investor, and GCP Infrastructure Fund (“GCP”) with the developer, Carbonarius.
The project, the first of its kind in the UK, will be built on the Webster and Horsfall site, and is expected to become operational by early 2016.
The plant will convert recovered wood into electricity using gasification technology, a form of advanced thermal treatment of waste where the carbon-based material in the waste is converted into a gas, which is used to raise steam. This is then passed through a turbine to produce electricity.
Shaun Kingsbury, chief executive of UK Green Investment Bank, said: “As the UK works towards its targets to generate more power from green sources, it’s important that we bring on new technologies. I’m pleased the Green Investment Bank has been able to support the first gasification plant of its kind in the UK and hope it offers a positive demonstration effect that others will follow.
Vince Cable, Business Secretary – “It is encouraging to see this innovative new technology coming to the UK for the first time. This investment will create green jobs and help the environment by reducing carbon emissions and converting wood diverted from landfill into cleaner energy for thousands of homes and businesses”
“The project also highlights the wider economic benefits of investing in new green technologies with a hundred new jobs to construct the plant, 19 good quality new jobs in its ongoing operation and a long term contract for a local small business.”
Business Secretary Vince Cable said: “It is encouraging to see this innovative new technology coming to the UK for the first time. This investment will create green jobs and help the environment by reducing carbon emissions and converting wood diverted from landfill into cleaner energy for thousands of homes and businesses. It is also good news for the local area helping to build a stronger economy by creating over 100 private sector jobs in Birmingham.”
The project will be supplied with around 70,000 tonnes per annum of Grade A-C recovered wood secured under a long-term fuel supply contract from JM Envirofuels Ltd., a Birmingham based SME. It is also expected to create more than 100 engineering, construction and project management jobs and 19 full time jobs once operational.
Over its expected 20 year lifetime, the new plant is forecast to supply enough renewable energy to power 17,000 homes each year and is expected to deliver a reduction in greenhouse gas emissions of around 2.1m tonnes of CO2 equivalent, and to save around 1.3m tonnes of wood from landfill.
Carbonarius is a Joint Venture between O-Gen UK and UNA Group. MWH will be responsible for building and operating the plant under the Engineer, Procure, Construct (“EPC”) and five-year Operations and Maintenance (“O&M”) contracts.
GIB is directly investing £12m by way of preferred loan stock. Through its cornerstone investment in the Foresight managed fund, UKWREI, it is indirectly investing a further £6.2m in equity in the project. Equity co-investment, on the same terms as the UKWREI, is provided by Eternity Capital Management who are investing £6.2m and Balfour Beatty Investments, whose £12.4m completes the c. £24.8m equity investment in the project. GCP Infrastructure Fund (GCP) is providing the final £11m as preferred loans.