Last checked at 15 Jul 2019 07:00
The information contained in this announcement is inside information under the Market Abuse Regulation (EU) No 596 / 2014. The person responsible for arranging the release of this announcement on behalf of SIMEC Atlantis Energy Limited is Tim Cornelius, Chief Executive Officer of SIMEC Atlantis Energy Limited.
15 July 2019
SIMEC ATLANTIS ENERGY LIMITED
("Atlantis" or the "Company" ")
Uskmouth 220MW Conversion Project Update
A stable flame has been achieved in testing proving the combustion performance of 100% waste derived fuel pellets for the disruptive Uskmouth conversion project in Wales
SIMEC Atlantis Energy Limited ("Atlantis"), the global developer, owner and operator of sustainable energy projects worldwide, is pleased to issue an operational update on the conversion of the Uskmouth power station in Newport, South Wales.
Uskmouth - which previously was coal-fired - is being converted into a 220MW baseload power plant which will use fuel pellets derived from waste. The pellets contain a high proportion of plastic waste which cannot be economically or technically recycled and so may otherwise be sent to landfill.
Key Milestones
● | The Uskmouth conversion project is on track to commence operations by 2021
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● | Front End Engineering Design ("FEED") tests and studies have been successfully completed by the FEED partners WSP, RJM and SSF*:
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● | A contract tender has been issued for the design, supply, installation and commissioning of the full combustion system, including large scale combustion testing
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● | A review of the plant life extension and return to service for all areas of the existing plant has been completed by WSP and RJM, enabling the commencement of intrusive return to service surveys for the 220MW conversion
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● | In June, N+P Group started commissioning a new pellet facility in Teesport, England, which is capable of supplying fuel to Uskmouth power station (three further UK facilities are planned to also supply fuel to the project)
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● | Environmental planning and permitting for the project is progressing well and the project has now reached a design freeze for Environmental Impact Assessments, which is a critical milestone in the planning application process |
Next steps
● | An industrial scale fuel production run and milling test will take place in H2 2019
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● | The contract for the combustion system will be awarded in H2 2019 after which industrial scale combustion tests are expected to be carried out
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● | A comprehensive intrusive inspection and testing programme for the return to service works will be undertaken through Q3 and Q4 2019
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● | The appointment of financial advisers is expected in Q3 2019 to advise on the financial close of the conversion project which has an estimated capital cost of approximately £185m
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● | A full contract tender for the remaining conversion works is to be issued in Q1 2020
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● | Following the design freeze, the planning permission and permitting applications are under development with submission targeted by end of the year |
Key facts
● | The project is the world's first conversion of a coal fired power station to use waste derived fuel and is expected to generate 220MW of baseload electricity
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● | It is one of the largest waste to value projects currently under development in Europe
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● | The project is expected to cost approximately £185m and will extend the operational life of the Uskmouth power plant by 20 years
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● | Following conversion, Uskmouth will use approximately 900,000 tonnes per annum of fuel pellets derived from waste which might otherwise have been sent to landfill
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● | Over the 20-year life of the project it is estimated that this will amount to waste with a volume equivalent to more than 46,000 Olympic sized swimming pools, or a landfill site the size of London to a depth of 73 meters
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David Taaffe, Director of Project Delivery at SIMEC Atlantis Energy, commented:
"We are extremely pleased with the progress being made at the Uskmouth conversion project which is on track to become operational in 2021.
"Today we are announcing a significant milestone for the project. FEED tests and studies have been successfully completed, with the largest test burn of the waste derived fuel pellets completed to date, and tenders have been issued for the next phase of the conversion.
"Once operational, Uskmouth is expected to generate 1,500GWh of sustainable energy every year, enough to power just under 500,000 UK homes. The new fuel pellets provide a use for waste which might otherwise be destined for landfill or incineration, instead of efficient electricity production.
"This is the world's first conversion of a power station from coal to 100% waste derived fuel and the project will be the blueprint for other conversions around the world. We are already receiving high levels of interest from other asset-owners looking to replicate the Uskmouth conversion process."
Tim Cornelius, Chief Executive Officer at SIMEC Atlantis Energy, commented:
"We are ramping up investment in the Uskmouth conversion project this year as it is such an important project to our shareholders, the environment and the Welsh economy. The Uskmouth team are world class. This project has become an important blueprint for the plans of coal fired asset owners and policy makers around the world. It will also be transformational for Atlantis in terms of revenue and cash flow generation.
"The regeneration and repurposing of coal fired power stations to consume waste derived fuel and deliver baseload, low cost electricity is the utopian industrial story for governments around the world."
* WSP UK Limited ("WSP"), RJM Corporation Technical Services Limited ("RJM") and Simec Subcoal Fuels ("SSF"), a 50:50 joint venture between N+P Group and SIMEC Energy.
Click on, or paste the following link into your web browser, to view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/4537F_1-2019-7-14.pdf
Enquiries:
SIMEC Atlantis Energy Limited | via FTI Consulting |
Tim Cornelius, Chief Executive Officer Andrew Dagley, Chief Financial Officer |
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Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker) | +44 (0)20 7894 7000 |
Rick Thompson Richard Salmond David Porter |
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J.P. Morgan Cazenove (Joint Broker) James Deal Michael Wentworth Stanley | +44 (0) 20 7742 4000 |
FTI Consulting |
+44 (0)20 3727 1000 |
Ben Brewerton James Styles Molly Stewart
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Notes to Editors
SIMEC Atlantis Energy
SIMEC Atlantis Energy is the global developer, owner and operator of sustainable energy projects with a diverse portfolio of more than 1,000 megawatts in various stages of development. This includes a 77% stake in the world's largest tidal stream power project, MeyGen, and the conversion of the 220MW Uskmouth Power Station.
In 2017, SAE entered into a strategic partnership with SIMEC, a member of the GFG Alliance, to convert the Uskmouth Power Plant to use an end-of-waste fuel pellet to generate electricity. The plant is expected to enter commercial operations in 2020 and will sell its power to GFG Alliance companies under two 20-year power purchase agreements. A successful conversion will tackle the pressing issue of non-recyclable waste in the UK and will form the blue-print for other large-scale conversion projects across the globe.
www.simecatlantis.com