Billion dollar plan to give UK world’s biggest biomass power station

MGT Power, a UK-based generator, has moved closer to obtaining the $975m it requires to construct a 300MW biomass plant in the north-east of England after Australian investment bank Macquarie Group agreed to raise funding and take an equity share in the project.

The scheme, which would be the biggest purely biomass burner in the world, is to be built on the River Tees at Teesport in North East England. It won planning consent in 2009 and was intended to begin on site in 2011 and complete by 2014. However, the project has been delayed by uncertainty over the UK government’s stance on biomass, which prevented MGT reaching financial close.

The Tees Renewable Energy Plant was one of eight schemes awarded a generation contract under the government’s Contracts for Difference scheme. This guarantees a preferential fixed price for energy and security of demand, but was subject to approval by the European Commission.

MGT estimates that this plant will create 750 construction jobs and 150 permanent jobs, as well as cutting Britain’s carbon emissions– Ed Davey, former secretary for energy and climate change

The final regulatory hurdle was cleared in January when the commission ruled that the contract did not break the state aid rules. A spokesperson said: "the project would further EU energy and environmental objectives without unduly distorting competition in the single market."

The plant will burn 2.5 million tonnes of woodchips a year, generating enough power for 300,000 homes – although most of the energy is in fact to be used for the Teesside chemical industry cluster.

The fuel will be obtained from sustainable sources in the US and Europe, and will have up to 82% lower carbon emissions than typical coal and gas-fired plants. It is estimated that the plant will save 32 million tonnes of carbon compared with a fossil fuel plant over its 30-year lifespan.

When built, MGT’s Teesside power station will be the UK’s biggest biomass burning plant. The company is aiming to start construction on-site by early 2016 and begin operation in 2018.

Ed Davey, the former secretary for energy and climate change, said in January: "Our renewable energy plans are driving new green jobs and green growth. By bringing together combined heat and power and biomass plant, MGT estimates that this plant will create 750 construction jobs and 150 permanent jobs on Teesside, as well as cutting Britain’s carbon emissions.

"Renewable electricity generation has been booming across the UK, and we are seeing record levels of renewable investment. Teesside is now well placed to be a major hub in this future green economy."

Image: A computer-generated image of the final plant (Source: MGT Energy)

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