Green light for �60 Million Sembcorp renewable energy project

7th January 2005

One of the UK’s largest biomass renewable energy projects has been given the green light on Teesside.

Utilities and services company, Sembcorp Utilities UK, is to invest a total of £60 million in a new wood-burning power station.

Known as ‘Wilton 10’, the pioneering biomass project will create around 400 jobs during construction and 15 permanent jobs within Sembcorp Utilities UK. The project will also secure and create job opportunities within the farming, forestry, construction, wood recycling and transport sectors.

It will generate 30 MW of electricity - enough to power around 30,000 homes - and will be operational by mid-2007.

Around £10 million of the investment has come from a grant made under the Bio-energy Capital Grants Scheme. Sembcorp has financed a significant element of its investment through a long-term project finance loan with French bank, Calyon, the corporate and investment banking arm of the Crédit Agricole Group.

A feasibility study is also being undertaken into the possibility of creating a separately owned and operated wood recycling facility on the Wilton International site to support the project and Redcar and Cleveland Council’s recycling initiatives.

Wilton 10 will operate separately to the existing 197 MW Wilton Power Station, but will be partially situated within the existing building.

SembSolutions, Sembcorp Utilities UK’s in-house project team, will oversee the project with Foster Wheeler as the main boiler contractor.

Sembcorp’s new ‘wood to energy’ approach comes in response to a Government call, following the 1997 Kyoto Agreement, for more energy throughout the UK to be generated from more environmentally friendly renewable sources.

Generating power and steam by the burning of renewable fuels instead of fossil fuels helps combat global warming and Wilton 10 will play a role because the carbon dioxide emitted to atmosphere is that absorbed by the trees during their growth cycle.

The new power plant has been designed to meet all the UK and European emissions targets by applying Best Available Technology (BAT) and Sembcorp will be submitting an application to the Environment Agency for a permit to operate the plant.

Paul Gavens, Sembcorp Utilities UK managing director, said: “This investment is extremely good news for Sembcorp, the Wilton International manufacturing site and the people of Teesside and the North East. It will sustain jobs and play a part in helping the Government meet the UK’s climate change and greenhouse gas reduction targets.

“Such a demonstration of faith by our parent company in Singapore is just reward for the hard work and effort of our employees and contractors in the two years since Sembcorp took over the business.

“Renewable energy presents an entirely new business opportunity for this region and one that we’re keen to be a part of. We believe this investment will transform our operations and offers us a great platform from which we can move forward to a brighter, greener future.”

The new power station will require around 300,000 tonnes of wood a year. This will come from a variety of sources and some will be stored on the site prior to being fed into the boiler in the most combustion efficient way.

The wood will comprise specially grown energy crops, wood from conventional forestry, sawmill chips and recycled timber.