TEG.L Regulatory News (TEG)

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

Re: Perth AD Plant and General Update

TEG Commissions Perth AD Plant

The TEG Group Plc (AIM: TEG), the AIM listed cutting edge green technology company which develops and operates composting and energy plants, is pleased to announce that it has commenced full commissioning of the Anaerobic Digestion ("AD") plant that it has been constructing for TEG Biogas (Perth) Limited, the joint venture between TEG and Albion LLP that was announced on 26 July 2010. The AD plant successfully underwent testing in October 2011, including the initial charging of slurry to the facility.

As is standard practice in the AD industry, the AD plant commissioning will include a period of gradual increase in waste feed rates (known as a "ramp up") and is expected to reach full capacity by the end of Quarter 1 in 2012. Power generation will commence during Q1 of 2012. At full capacity, the AD plant will process 16,000 tonnes per annum of waste, generate up to 0.7MW of electricity and provide up to 0.2MW of heat to be supplied to the Binn Eco Park. 

Elsewhere, the Company is pleased to confirm that plant operations continue to meet the Board's expectations, the operating plants are performing well and the Company expects to have processed record levels of waste during 2011. The regulatory environment continues to favour the Company with significant pressures being observed on some alternative technologies.

The Dagenham project is moving towards completion and though financing conditions remain challenging it is still anticipated that Financial Close ("FC") will be achieved in 2011. The plant will process up to 50,000 tonnes per annum of waste in the first phase of development and is capable of generating in excess of 1MW of power, enough to power 2000 homes. Planning committee approval has been achieved and the Company awaits confirmation of planning permission. A further announcement on progress with the project will be made in due course.

Construction of the Bolton (Exide) plant, the fourth facility under the Greater Manchester Waste contract with Costain Limited ("Costain"), has commenced, though TEG's construction activity will not now begin before Quarter 1 of 2012 following the completion of groundworks by Costain. Final agreement on milestones and phasing of revenues is still to be reached with Costain. 

Commenting, Mick Fishwick, Chief Executive, said:

"The commissioning of the Perth AD plant heralds an exciting step change for TEG and we look forward to generating revenues from energy production for the first time, alongside the established revenues from our composting business. We have a significant number of projects in hand and I look forward to the development of further AD and composting plants in the near future".

ENDS

Editor's Notes:

TEG

TEG provides state of the art technology for handling organic wastes. Its in-vessel composting (IVC) system is one of the few approved technologies capable of treating animal by-product (ABP) waste and it is now providing an anaerobic digestion (AD) technology to produce power from food waste. Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost). The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs"). TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets. The TEG processes are an economic and sustainable alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies in Europe capable of treating this waste, is a natural process producing compost as an end product. The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease. TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.

Collaboration with UTS

UTS Biogastechnik GmbH is one of the world's leading biogas companies offering services in the planning, construction, delivery and installation of biogas plants and their key components. The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base. UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited, to service the United Kingdom & Ireland markets.

TEG Biogas (Perth) Limited

TEG Biogas (Perth) Limited ("TEG Biogas") is a joint venture company established by TEG with Albion LLP. TEG Biogas is constructing a 16,000 tonnes per annum AD plant at TEG's Glenfarg site to produce 0.7MW of electrical power and 0.2MW of heat that is to be used by Binn Eco Park. The facility is due to be completed in 2011.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners. The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste. Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year.

NOFCO

The Natural Organic Fertiliser Company Limited ("NOFCO"), a subsidiary of TEG, is a marketing company specialising in the development of end markets for compost products, an important aspect of all plant developments and key to local authority development. The company has an expertise in the development of agricultural and horticultural markets and this capability is provided to customers to enhance TEG's overall service offering.