WIND.L Regulatory News (WIND)

28 Sep 2007 07:04

Renewable Energy Generation Ltd28 September 2007 28 September 2007 Renewable Energy Generation Ltd ("REG", "the Company" or "the Group") Completion of share purchases in Living Power Limited and Living Fuels Limited Renewable Energy Generation (AIM: RWE), the developer, owner and operator ofrenewable energy projects, announces it has completed its purchase of LivingPower Limited ("Living Power") and Living Fuels Limited ("Living Fuels") inpursuit of the opportunity to utilise used cooking oil ("UCO") to fuel dieselgenerators in the UK. The rapid cash flow profile of this business complementsthe investment cycle for our core wind energy business. REG has acquired an 80% interest in Living Power and a 20% interest in LivingFuels. Both businesses were established two years ago. The total considerationfor both transactions is £1.1 million. Generation of power from used cooking oil in the UK benefits from strongfinancial and policy support throughout the supply chain. Living Fuels aggregates UCO, using a proprietary process to clean the oil to aquality where it can be used to fuel diesel engines. Living Fuels has beenrapidly expanding its oil collection and processing facilities. Its supplycontracts are typically with large corporate clients, seeking a long-termsolution for the environmentally sound disposal of large volumes of oil.Living Fuels is securing longer term off-take contracts in excess of five years. Living Power generates electricity from diesel engines fuelled by UCO. LivingPower has an immediate pipeline of projects in excess of 10MW and expectssubstantial further growth in the next two years. Capital costs are relativelylow at less than £300,000/MW and the technology used comprises "off the shelf"diesel engines. Thus technology risk is relatively low whilst the dispersednature of the generation means operational risk is also reduced. REG's UCOprojects will have high utilisation, typically generating for some 7,500 hoursper year and the electricity produced qualifies for Renewable ObligationCertificates. We expect the first projects to be completed in the first half of2008 from when they will make a significant contribution to REG Group earnings. REG will sell electricity generated from its UCO projects to Smartest Energy,part of the Marubeni Group of Japan. As with REG's UK wind projects, ROCsgenerated will be sold on an opportunistic basis to take advantage of currenthigh pricing. Once operating, surplus cash provided by the UCO generation business will beused in the continued expansion of REG's UK wind business where a number ofprojects are either in procurement or likely to enter procurement over the nextfew months. Andrew Whalley, Chief Executive Officer said: "This is a tremendous opportunity which REG has been quick to capitalise upon.It will complement our fast growing UK wind business allowing us to leverage thesame skill sets deployed by our UK team. We have a lot of interest from largecompanies and municipalities wishing to deploy this generation technology andsee a very bright future for the business." Enquiries Renewable Energy Generation Andrew Whalley, Chief Executive Officer +44 (0) 1483 400 425 Bell Pottinger Corporate & Financial Nick Lambert / Amy Rajendran +44 (0) 20 7861 3232 This information is provided by RNS The company news service from the London Stock Exchange