Posted on: 07/07/2020
One of the largest power purchase agreements (PPA) seen in the UK Energy-from-Waste sector has been signed.
Under the 15-year PPA secured after a highly competitive tender process, leading independent SmartestEnergy will buy the electricity generated by the new Newhurst Energy-from-Waste ('EfW') facility in Leicestershire.
The facility, which supports the Government's drive to reduce reliance on landfill and treat more non-recyclable waste at home, will provide 350,000 tonnes of treatment capacity a year for non-recyclable waste and will also generate up to 42 megawatts of electricity, enough to power around 80,000 homes.
Joint venture partners Biffa and Covanta Holding Corporation, together with Macquarie's Green Investment Group (GIG), recently announced financial close on the facility, which is expected to start operations in 2023.
Robert Luke, Head of Renewable Origination for SmartestEnergy’s Smart Generation team which works with generators to optimise the value of their assets, said:
“Generators are increasingly looking for innovative approaches to help them play their part in the development of a smarter energy landscape in the UK and our persistence and willingness to find commercial and legal solutions on this project has underlined SmartestEnergy’s credentials as a next generation company.
“The scale and complexity of this agreement required SmartestEnergy to develop a commercial solution that delivers value for all the partners and investors involved.”
The agreement, finalised after a tender process which began in August 2018 and was conducted by Cornwall Insight, includes a number of bespoke features to help maximise the asset’s potential through existing and future route to market opportunities.
Over 300 jobs will be created during the construction of the facility. Many opportunities will also be created for the local supply chain with a commitment from the project to purchase goods and services from local companies wherever possible.
The project combines Biffa's expertise and scale in waste management and control of significant feedstocks with Covanta's development and operational experience in Energy from Waste. Biffa will provide 70% of the fuel for the facility each year, from its existing local waste collection services, and Covanta will supply operations and maintenance services.
The Newhurst facility is one of two Energy from Waste projects currently being proposed by Biffa, Covanta and GIG. The joint venture is also proposing a plant at the Protos Energy Park near Ellesmere Port in Cheshire.