10 Jan 2012 07:00
10 January 2010
Camco International Limited
North America update for the six months to 31 December 2011
Camco International Limited ("Camco"), a global developer of clean energy projects and solutions to reduce greenhouse gas emissions, is pleased to provide the following North America update for the six months to 31 December 2011.
Highlights:
·; Camco's 4.5MW biogas project in Idaho commenced operations and is generating power
·; Camco has invested capital during the period to qualify an additional approximate $50 million in future biogas power projects for the United States Treasury's 1603 cash grant program
·; Camco anticipates a further portfolio of several biogas projects of approximately $150 million to commence construction over the next 24 months.
·; 27% increase in issued carbon credits
·; Pre-compliance carbon prices for California increased during the 4th quarter 2011 following regulatory approval of California's cap-and-trade program.
Scott McGregor, Camco CEO, said:
"It is fantastic to see our strategy of entering the clean energy projects business over the last 2 years now taking shape into a larger portfolio of projects which provide the company with stable long term returns from electricity sales over 20+ years and exposure to carbon revenues and other by-products.
The approval of California's cap-and-trade regulations in October 2011 has created a compliance market for carbon credits from agricultural projects. Camco's existing carbon portfolio, our origination capability and our commercial expertize in North America means we are well-placed to realise revenue growth as the California market matures and expands to encompass other states and provinces over the medium term".
Projects Business:
Camco's dairy biogas project in Idaho is now operational and generating power. The project is wholly owned by Camco and operated by the Camco led AgPower consortium. This 4.5MW project is designed to produce biogas from cow manure of over 15,000 cows which fuels the generation of renewable electricity. The project cost is less than $25million and will avail of federal grant programme funding established by the American Recovery and Reinvestment Act of 2009 totalling 30% of the construction cost. Operating revenues are generated from a 20-year power purchase agreement, fibre sale contracts, renewable energy certificates and carbon credits, which are qualifying compliance instruments under California's cap-and-trade regulations.
Further capital expenditures were made by the 31 December 2011 deadline in order secure federal grant funding (which provides a grant of up to 30% of construction costs for a portfolio of similar biogas power projects of approximately $50 million capital costs. Construction of these projects is expected to be completed in 2013. Combined, these projects are expected to utilise manure from over 30,000 cows and will generate revenue from long-term power purchase agreements as well as multiple additional revenue streams including the sale of fibre and carbon credits.
Camco anticipates a further portfolio of several biogas projects of approximately $150 million to commence construction over the next 24 months. These projects will primarily be contracted with existing Camco clients to expand Camco's portfolio of projects focussed on biogas production.
Biogas Project Market:
The agriculture methane sector is a growing market in both clean energy and carbon offset generation. Agricultural greenhouse gas emissions represent 7.4% of total US emissions and have become a major focus for biogas production and carbon emission reduction project incentives in the US market. The US Department of Agriculture (USDA) and Environmental Protection Agency (EPA) are specifically targeting deployment of anaerobic digesters at livestock facilities in the United States. Biogas projects focused on processing manure from dairies are eligible to generate carbon credits for compliance under California's greenhouse gas regulation program as well as voluntary carbon credits for the Climate Action Reserve.
According to the USDA, anaerobic digestion of manure from livestock operations in the US has the potential to produce more than 1,500 MW of base load generation and reduce over 34 million tonnes CO2e annually of greenhouse gas emissions.
Carbon Business:
Camco's North America carbon portfolio has continued to expand through 2011 with 2.5 million tonnes now under management, an increase of 25% over six months. Camco holds the largest number of "Livestock Gas Capture/Combustion" projects registered under the Climate Action Reserve (CAR) standard. Livestock projects are an approved offset project type under the California Cap and Trade scheme due to begin in 2013.
Nine Camco projects have now achieved registration under the CAR standard.
Camco has monetized over 130,000 credits from CAR agricultural projects. California cap- and-trade participants are looking to hedge their compliance requirements for the beginning of the scheme in 2013 by buying credits from approved offset project types.
Tonnes under management (2011-2022) | ||
as at 28 July 2011 | as at 06 Jan 2012 | |
Under Management | 2,001,000 | 2,499,000 |
Registered | 1,004,500 | 1,019,000 |
Undergoing Registration | 996,500 | 1,480,000 |
Issued to date | 281,061 | 356,061 |
Carbon Credit Market:
Camco has a portfolio of carbon offsets which is uniquely positioned for current and future sales into the California carbon market, anticipated to be the second largest carbon market in the world. The demand for California Carbon Offsets (CCOs) under the program is expected to be at least 200 million over the first three compliance periods (2013-2020). The market for California Carbon Allowances (CCAs) began trading in 2011. The infrastructure for converting Climate Reserve Tonnes (CRTs) into fully compliant credits is expected to be developed in early 2012. The California cap-and-trade scheme has a built-in floor price of $10 for CCAs starting in 2013 rising 5% per year plus inflation.
Enquiries:
Camco | +44 (0) 207 121 6100 |
Scott McGregor, Chief Executive Officer | |
Shirona Partem, Investor Relations | |
Singer Capital Markets (Camco Nominated Adviser and Broker) | +44 (0) 20 3205 7628 |
Jonathan Marren | |
Kreab Gavin Anderson (Investor Relations Advisor) | +44 (0) 207 074 1842 |
Ken Cronin | |
Citigate Dewe Rogerson (PR Advisor) | +44 (0) 20 7638 9571 |
Chris Gardner / Malcolm Robertson | |
Notes to editors:
About Camco
Camco International Limited (Camco, AIM: CAO) is a global developer of clean energy projects and solutions to reduce greenhouse gas emissions with operations in the US, the UK, China, Africa, Russia and SEA.
Camco has a 20-year track record in project development, technical delivery and policy development, working with local industry, multinational companies, governments and regulatory bodies.
The Carbon Project Development business has created one of the largest emission reductions portfolios and has structured ground breaking and innovative arrangements for the sale and delivery of emission reductions to compliance and voluntary buyers.
Camco's Clean Energy Project Development and Investment teams collaborate with industry, project developers, equipment providers and investor groups to create emissions-to-energy projects and maximise sustainable energy production across a range of industries; including agricultural methane, industrial energy efficiency, coal mine methane, municipal solid waste, biomass and landfill gas.
The Energy and Carbon Advisory teams provide strategic, commercial and technical expertise accrued over two decades to deliver low carbon energy and sustainable development solutions.
www.camcoglobal.com