Plans for a new biomass plant in East Anglia have taken a major step forward, after a coalition of Danish investors announced they were backing the project through a 1.6bn DKK (£170m) investment.
PensionDanmark and BWSC confirmed yesterday they had reached financial close on the 44.2MW Snetterton project, which is now expected to be completed by spring 2017.
The vast majority of the funds – 1.4bn Krone – has come from PensionDanmark, with the remainder provided BWSC. It will be the second biomass plant financed by the joint venture, following the construction of the 40MW Brigg project in Lincolnshire last year.
Like Brigg, Snetterton will be powered with sustainably sourced straw, and the companies have secured a 12 year supply deal that is expected to provide enough energy to the equivalent of 82,000 households each year. It is also expected to avoid the release of 300,000 tonnes of CO2 per year.
Torben Möger Pedersen, chief executive of PensionDanmark, said the collaboration aimed to deliver both environmental and financial returns. “We have high demands to the industrial partners we work with on joint ventures, and BWSC fully live up to our expectations,” he said. “We have to secure our members a good and steady return, and this cooperation delivers that.”
The deal was also welcomed by David Williams, chief executive of Eco2, the company that teamed up with original developer Iceni Energy Ltd last year to take the project through to financial close.
“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,” he said in a statement. “As a company, we are successfully operating on a global scale, and this latest deal is the third of its kind in the past three years, totalling £490m. The sale reaffirms Eco2’s prominent position as the leading biomass developer in the UK.”
Darren Williams, commercial director at Eco2, said the project would deliver a boost to the local economy. “Building the plant will result in an £11m annual investment in the East Anglian agricultural economy from fuel supply contracts by sourcing all straw from within the region where possible,” he said. “In addition, it is expected that the Snetterton Biomass Plant will provide up to 36 permanent jobs when operational, plus a further 50 jobs in fuel transportation. During construction, a maximum of 250 people will be employed on the site each day.”