CONSTRUCTION work is to begin “within weeks” on the 299 MWe Teesside Renewable Energy Plant (Teesside REP), after the company planning it, MGT Power, concluded the financing arrangements.
MGT Power was granted approval for the £650m (US$840m) combined heat and energy (CHP) plant in 2008, but has faced funding problems. However, the company has now agreed a partnership with Macquarie Capital and Macquarie Commodities and Financial Markets to fund the scheme. The Macquarie companies and Danish pension fund PKA will become the joint owners of the MGT Teesside plant.
Teesside REP will burn sustainable wood pellets, largely sourced from the US commercial forestry industry, and will be one of the largest biomass power stations in the world. It will generate around 2.4 TWh/y of electricity, enough for around 600,000 homes. It will account for 5.5% of the UK’s renewable energy target and save approximately 1.2m t/y of CO2 emissions. The plant will create 600 jobs during the construction period, and 100 during operation.
Spain’s Tecnicas Reunidas and South Korea’s Samsung Construction and Trading have been awarded the engineering, procurement and construction (EPC) contract. Teesside-energy and process industry company the px group, Poyry Energy, RPS and Mace will provide various support services.
“The Tees REP project has had to overcome many hurdles in development but we have now successfully reached the next stage despite the difficult financing environment. Support from the local region and a big team effort from Macquarie and all of the different parties involved in the project were instrumental in getting there. We can’t wait to get work started on site and make this project a huge success for the Teesside region,” said MGT Teesside CEO Ben Elsworth.
Teesside REP is expected to begin generating commercially in 2020.
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