Europe's biggest biomass power station

by M Woodall, Impax Capital, UK

At an estimated cost of some 69 million (where is the UK pound) and a net electrical capacity of 38.5 MW, the Fibrowatt Thetford project will become the largest biomass-fired electricity plant in Europe. The developer of the project, Fibrowatt Limited, has already successfully developed, constructed and is currently operating two smaller biomass plants in the UK of 12.7 MW and 13.5 MW capacity (the projects at Eye and Glanford respectively). All three units use poultry litter (a mixture of straw, wood chippings and poultry droppings) as their main source of biomass; the only three such plants in the world that use this fuel.

The plant

The Thetford plant builds upon the well-proven technology of the two existing plants, with the benefit of experience allowing advances to be made. Thetford will take up to 450,000 tonnes/year of poultry litter, delivered into its 100 m by 40 m fuel hall, which has a bunker capacity of 10,000 tonnes (7 days supply). Previously, cranes have been used for fuel handling but, at Thetford, fuel will be taken from the bunkers by spiral screw augers, and taken by conveyor to the boilerhouse, where it will be blown into the combustion chamber of the Foster Wheeler boiler at a rate of 55 tonnes/hour. A conventional steam cycle powers the Ansaldo turbo-alternator.

The plant has a power output of 38.5 MW, and about 308 GWh will be exported to the grid annually. Air-cooled condensers are used, thereby avoiding condensate plumes. Flue-gas emissions from the 100 m stack are tightly controlled with lime added to reduce levels of acid gas and a bag filter system controlling particulates. Ash is blown by compressed air into hoppers where it is mixed to make nitrogen-free fertiliser, rich in phosphate and potash with trace elements. Environmental responsibilities such as air discharges, odour control, lighting, noise and water discharges have been sensitively planned and include the building of bunds and planting of trees to provide screening. The site base was lowered 3 m prior to construction, building heights were restricted, and many rooms and facilities have been constructed below ground.

Financing

In January 1995 Fibrowatt received a contract under the third round of the UK Non-Fossil Fuel Obligation for the 38.5 MW project.

The developers were close to finalising the project and the majority of the fuel had been signed up on long-term contracts. Taymel, a subsidiary of Taylor Woodrow plc, was chosen as the turnkey contractor and by the summer of 1995, the project was sufficiently developed to seek financing from third parties. The financing of this project used some novel structures, including use of third party junior debt, the first time that this financial product has been used in a UK power project.

In September 1995, Fibrowatt appointed Impax Capital as the financial adviser to the project company Fibrowatt Thetford Limited. Impax Capital's primary task was to raise the mezzanine debt and equity for the project. The project was to be financed using non-recourse investment and debt and its capital structure was envisaged to be as shown in the table.

Type of investment

Amount

Percentage of total

Senior Debt

57M

82.5

Junior Debt

8M

11.5

Subordinated Debt

2M

3

Ordinary Share Equity

2M

3

Total

69M

100

Fibrowatt and Impax Capital conducted a series of presentations to potential investors in December 1995 and January 1996. Concurrently, the Bank of Scotland joined forces with Westdeutsche Landesbank (WestLB) and obtained internal credit approval to underwrite jointly the senior debt in January 1996.

By March 1996 the equity and subordinated debt portions of the funding were contributed by Fibrowatt, Catamount Energy Corporation of Vermont, Foster Wheeler Energy Limited and the Marubeni Corporation (who contributed a mixture of senior and junior debt totalling 8.5 million).

The Bank of Scotland and WestLB syndicated the 57 million of senior debt to a club of six other banks in April 1996; a number of these are international banks based in countries in which Fibrowatt plans to develop further projects including Italy, Germany, France, the Netherlands and Belgium. The senior debt is to be drawn-down during the 25 months of construction and commissioning and repaid over 12 years on a straight amortisation basis at an interest rate 150 base points over LIBOR. By August 1996, the project reached financial close and construction began immediately. The project is now commissioning with handover by the contractor planned for September 1998. Overall the financing of Fibrowatt Thetford has shown that the UK project finance market is continuing to develop.

Spiral screw auger used for fuel handling at Thetford.

Environmental benefits

  • The use of biomass fuel reduces net CO2 emissions by recycling carbon rather than producing new CO2 .
  • Poultry litter is no longer stored in the open, so there is no groundwater pollution and no leaching of nitrates.
  • Elimination of methane emissions from stored poultry litter reduces greenhouse gases.
  • The composition of poultry litter ensures that levels of noxious gases released, such as SO2 and nitrogen oxides, are a fraction of those emitted by coal-fired power stations.
  • Farmers are paid more for drier poultry litter ­ a direct incentive for them to improve the conditions under which they rear their birds by, for example, improving ventilation, drinking equipment etc.
  • The power stations have low visual impact and are clean in operation.

For more information contact the CADDET UK National Team in Oxfordshire.

The CADDET Renewable Energy Newsletter is a quarterly magazine published by the CADDET Centre for Renewable Energy at ETSU, UK.

The articles published in the Newsletter reflect the opinions of the authors. They do not necessarily reflect the official view of CADDET.

Enquiries concerning the Newsletter should be addressed to
Pauline Toole, Editor, CADDET Centre for Renewable Energy, ETSU, Harwell, Oxfordshire OX11 0RA, United Kingdom. Tel: +44 1235 432968, Fax: +44 1235 433595.