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 at the Port of Tyne in north Teesside. 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.
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.
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