Biomass power station investments

New European emissions rules have led to a suspension of operations at one of the North East’s few remaining power plants. However, good news for the 130+ employees is that the shutdown should be temporary. The European Commission (EC) gave the go-ahead for the biomass conversion of the Lynemouth power plant in late December, which was owned, at the time, by German energy giant RWE. A spokesperson for RWE said in the days before the sale, that it was in the process of finalising pellet importing contracts.

The Northumberland plant has since been bought by Czech-Slovak energy investment group Energetický (EPH), which says it plans to proceed with the £100m switch from burning coal to wood pellets.

RWE's finance deal with the UK Government will still apply and is a very attractive one. It has been guaranteed payments of £105 per MW/h from the Lynemouth plant when operational under an early Contract for Difference (CfD) which is more than twice the current wholesale electricity price.

These latest twists in the North East's biomass sector follows two pieces of good jobs news last year and have the potential to create and sustain almost 800 jobs during construction and operation. Earlier in December work began on a new £160m biomass power station at Port Clarence Teesside by Glennmont Partners. Whilst RES pulled out of a £250m scheme saying the uncertainty over the future direction of Government policy had quelled investor enthusiasm for the project and the developers behind a major scheme on Teesside, the £400m MGT Power biomass plant, have yet to announce a start date despite receiving an early CfD and State Aid clearance from the EC.

For more information, help or advice please contact Andrew Davison on 0191 211 7950 or email [email protected].