Active Energy Regulatory News (AEG)

Active Energy Group PlcUnveils Potentially Game-Changing Biomass Fuel Granule Technology

at International Event in Belfast 20-22 May 2014

AEG Pelleting Limited ('AEGP'), a newly incorporated subsidiary of AIM-quoted Active Energy Group Plc (AIM:AEG) ("The Company"), is unveiling a revolutionary Biomass fuel granulating solution to an invited audience of international partners, industry specialists and potential project development investors at a demonstration event being held in Belfast on May 21-22 2014.

Using a newly developed pilot plant built in Belfast, the granulation system has successfully converted industrial/agricultural by-products, including sawdust, into high-value Biomass fuel granules suitable for use in micro-CHP (Combined Heat & Power) commercial and residential boilers and large-scale power plants.

The granulation process has been developed over the past twelve years by two British inventors, John Gilbert and John Webster, working in association with Queens University Belfast. The two inventors have recently entered into an exclusive global licensing and partnership agreement with the Company the terms of which include the development of the technology from pilot plant stage to full commercialisation.

Active Energy Group Plc is one of Europe's fastest-growing suppliers of wood chip for Biomass fuel for power plants, and is exceptionally well-positioned to commercialise the core technology, and roll it out internationally.

The Belfast event, at AEGP's new research and development facility in Carrickfergus and at the Hilton hotel in the city centre, will be the first demonstrations of how the potentially game-changing granulating technology is set to address a major global problem, being the disposal in a safe and environmentally-responsible manner of the millions of tonnes of sawdust by-product generated each year by the sawmill and timber processing industries.

The AEGP system transforms that sawdust into valuable Biomass for Energy (BFE) fuel granules for use in power plants and micro-CHP boilers, a market that AEGPs parent company, Active Energy Group Plc, currently addresses via its extensive European BFE wood chip operations. 

Biomass, which is the main source of renewable energy worldwide (estimates vary from 44% to 65%) already provides some 10% of the world's primary energy supply, and has the potential to satisfy a large proportion of global energy demands. In Europe, Biomass-generated power provides as much as 20% of the national energy consumption in countries such as Finland and Sweden, and is a central plank in the EU strategy to dramatically increase the share of energy produced from renewable resources.

The EU is also actively promoting Biomass as a means of reducing fossil fuel emissions associated with climate change. The EU 2050 Energy Roadmap is broadly based on the premise that Biomass fuel will be critical to decarbonisation, and states that 'decarbonisation will require a large quantity of Biomass for heat, electricity and transport'.

As a result, demand for Biomass fuels has grown substantially in recent years, a trend that is expected to continue at an ever-increasing rate. As evidence of that, more than half of the generating units at the Drax power plant in North Yorkshire - the largest power plant in Western Europe, which currently produces 7-8% of the UK's total electricity requirements - are being converted to burn Biomass fuel, a move that will require millions of tonnes of feedstock each year.

Although there are substantial supplies of Biomass raw material within Europe, European producers are unable to cope with demand, so that much of the fuel for power plants - including that for Drax - is being imported from the Americas, mainly the Southern USA, Canada and Brazil. However, many European Biomass power plant operators are finding it increasingly difficult and costly to secure reliable long-term supplies of BFE fuel, and some recently completed Biomass power plants are lying dormant.

In the opinion of the Directors, the primary cause of the European supply bottleneck is that current fuel pelleting solutions have a number of critical drawbacks: they are expensive and inefficient; they utilise substantial quantities of gas or electricity for heating and drying and require large-scale industrial facilities, often situated in remote locations, and so further energy is expended and emissions produced by delivering raw material feedstock to them.

The AEGP system has the potential to revolutionise the Biomass fuel industry by addressing each of the issues above. AEGP's high-capacity, compact granule manufacturing equipment is expected to cost less than 50% of existing pelleting solutions, requires neither gas nor heat for drying and will utilise substantially less power per metric tonne produced. Crucially, the core processing units are mobile and can be installed on-site at raw feedstock facilities.

For every tonne of raw timber processed at sawmills, it is estimated that approximately 50% ends up as sawdust and other by-products that cannot be used for landfill and have very few industrial applications. Although some mill operators succeed in selling this material to Biomass fuel pellet manufacturers - often at very low prices, as the cost of long-distance shipping sawdust residue to remote pelleting plants is prohibitive - most are left with no option but to pay third-party contractors to have it removed.

Commenting on AEGP, Richard Spinks, Active Energy Group CEO, said; "My colleagues and I are delighted to be unveiling the new system here in Belfast, where this ground-breaking granulation technology was created, developed and supported over the past twelve years. It takes passion, vision and dedication to conceive an idea and then take it through to commercialisation. John Gilbert and John Webster have all those qualities, and we are delighted to be in partnership with them.

Together we are excited by the game-changing potential of AEGP's granulating solution, as it addresses the very obvious need for such a solution and the equally strong need for sustainable high calorific Biomass fuel. We are confident that the pilot plant we are unveiling today will amply demonstrate the potential of a full-scale commercial system to work in an efficient, environmentally responsible and cost-effective manner and can speedily be scaled-up to service the needs of large corporations.

This exhibition brings together all the different parties interested or already currently working with AEGP creating an opportunity for all, to view the technology and hear directly from the AEGP team."

Enquiries:

Active Energy Group plcRichard Spinks, Chief Executive Officer Tel: +380 503 942 702

WH Ireland (Nominated Adviser and Broker) Chris Fielding Tel: +44 20 7220 1666

Novella CommunicationsTim Robertson / Ben Heath Tel: +44 20 3151 7008

About Active Energy Group:

· Company website: www.active-energy.com

· Active Energy Group Plc, a London Stock Exchange-listed company (AIM: AEG), is an established supplier of wood chip and other products for Biomass for Energy fuel (BFE) and MDF manufacturing.

· The Group is led by a highly experienced and dedicated management team with a proven track record of working in the industries and regions from which its revenues are generated.

· In June 2013, AEG acquired its major trading partner and raised in excess of £3 million to facilitate future growth and expansion of its international production and shipping facilities.

· The Group currently operates from Ukraine, where it is the largest producer and exporter of MDF-quality wood chip; as well as Spain and Montenegro, from where it provides BFE Biomass wood chip fuel to power plants in Italy.

· European Biomass for Energy (BFE) Market:

o Biomass-fuelled power is expected to account for over 50% of European renewable energy, according to an EU directive on National Renewable Energy Action Plans.

o EU directives and continued commissioning of new Biomass and CHP power plants in Europe continue to generate additional demand for Biomass fuel, with little visibility on where that fuel will be sourced.

o The European Renewable Energy Council (EREC) estimates that Biomass-based energy production will grow from 43TWh (Terawatt Hours) in 2005 to 250TWh in 2020.

o Key NGO bodies such as the European Biomass Association and Eurelectric (the European Union of the Electricity Industry) advocate establishing harmonised, binding sustainability criteria for solid Biomass fuel.