The UK Green Investment Bank has committed £80m of senior debt to the construction of a new large-scale combined heat and power (CHP) energy from waste facility near Sittingbourne in Kent.
Once complete, the 43 MW plant will supply renewable electricity to the grid and renewable heat to DS Smith’s Kemsley Paper Mill, which produces sustainable packaging for the retail industry.
The plant is expected to help decarbonise the production process by replacing part of the mill’s gas-fired steam supply and support the UK government’s increasing efforts to cut carbon emissions from the manufacturing sector.
The project developer, Wheelabrator Technologies Inc (WTI), has secured more than £300m of debt from a lending club that includes GIB alongside Barclays, Bank of Tokyo-Mitsubishi UFJ (BTMU), Natixis and Investec.
The plant becomes the first large-scale energy from waste facility supported by the Contract for Difference (CfD) mechanism. It is expected to generate up to 154 GWh of renewable electricity annually once fully operational – equivalent to the power consumed by 37,500 homes – and 180 GWH of renewable heat.
Displacing fossil fuels in heat and power production, the facility is also expected to help reduce greenhouse gas emissions by over 163,000 tonnes per year – equivalent to removing 75,000 cars from the road for the lifetime of the project – and prevent around half-a-million tonnes of waste from going to landfill per annum.
Constructions industrielles de la Méditerranée S.A. (CNIM) has been awarded the engineering, procurement and construction (EPC) contract for the project. WTI will manage the operations and maintenance (O&M) of the plant.
Around 500 jobs are expected to be created during the construction phase, with the plant expected to support around 40 full-time operational roles upon completion.
Waste will be supplied by a number of local and national waste management companies. The plant is expected to come online in 2019.
GIB CEO Shaun Kingsbury said: “This plant will put renewable energy to work for one of Kent’s major employers while helping the UK meet its climate change and waste management goals.
“Combined heat and power is a prominent feature of the low-carbon energy infrastructure in mainland Europe and Scandinavia and is one of the key technologies that can help British industry become more efficient, competitive and cleaner.”
During the construction phase, the project can create about 500 jobs and once the plant is complete and operational, it can create about 40 permanent jobs throughout the life time of the plant.
Wheelabrator managing director Paul Green said: “We remain focused on continuing to develop our pipeline for growth in the UK and building long-lasting relationships, including the one we have with DS Smith.
“We are committed to bringing our experience and industry expertise to Wheelabrator Kemsley to deliver the highest safety and operational performance.”
Image: GIB awards £80m to Wheelabrator CHP plant in UK. Image: Courtesy of UK Green Investment Bank.