Kedco plans five U.K. biomass facilities

For £59 million ($92 million), Kedco Plc, an Ireland-based gasification and anaerobic digestion technology developer, plans to bring five biomass combined-heat-and-power (CHP) plants to the U.K.

The company finalized a loan agreement for a 4 MW biomass facility in Newry, Northern Ireland, through the Royal Bank of Scotland Group Plc’s Ulster Bank. Gerry Madden, CEO and finance director for Kedco, said although there are no official agreements in place for the other facilities spread throughout the U.K., the success of the Newry facility could be an indication of Ulster Bank’s commitment to biomass.

“The Newry plant is a game changer for the company,” Madden said. “The signing of the banking facilities with RBS for the Newry Biomass Plant is an endorsement of the company’s strategy to build biomass energy plants in the UK…[It] allows the company to now pursue the opportunities represented by the other plants in our pipeline.”

One of those plants is a 12 MW biomass facility in Enfield, North London. To finance the facility, Kedco is looking for up to 70 percent debt financing. Madden said the Enfield facility and the other proposed plants would either gasify wood waste, or process food and agricultural waste in an anaerobic digester. An outside EPC (engineering, procurement and construction) contractor will be used to build each facility, according to Madden, and each will be managed by in-house personnel.

The recent loan approval for the Newry plant is only one reason Madden and his team are excited about their efforts to develop gasification and AD. “We believe this sector is like wind power was five years ago,” he said. “The biomass sector is now felt by some commentators to have the best risk return profile in the renewable energy space.”

That positive outlook for biomass should overcome the current debate and debt crisis that has overtaken Europe during the past two weeks, he added. “Whilst the Eurozone crisis adds to uncertainty in an uncertain world, the U.K. government has been quick to address perceived uncertainty in relation to its commitments to the biomass sector through ‘grandfathering,’ and by bringing forward the ROC (Renewable Obligation Certificates) banding review.” That review, conducted by the U.K. Department of Energy and Climate Change, is designed to ensure renewable developers continue to receive the appropriate level of support necessary to maintain investments as market conditions and innovation within sectors change and evolve.

“Kedco’s signing of banking facilities for a biomass project and Helius Energy Plc’s recent announcement of project finance for a dedicated biomass project in Scotland shows that there is now appetite among leaders and investors for these types of projects,” Madden said. “We believe that there is a strong future for biomass and that this renewable sector is just entering and important growth phase.”

Kedco has already formed a partnership with Bekon Energy Technologies, a German-based AD developer and technology provider that will supply Kedco with its dry fermentation biogas technology, which produces methane from organic matter with a high content of dry matter.