Uskmouth Operational Update

RNS Number : 7080R

SIMEC Atlantis Energy Limited

31 October 2019

 

31^st October 2019

SIMEC ATLANTIS ENERGY LIMITED

("Atlantis", the "Company" or the "Group")

Notification of award of contract for combustion system design for Uskmouth Power Station Conversion Project

SIMEC Atlantis Energy Limited ("Atlantis"), the owner and operator of the Uskmouth Power Station Conversion Project located in Newport, Wales, is delighted to announce that after a competitive process, it has awarded Mitsubishi Hitachi Power Systems Europe GmbH ("MHPS Europe") the contract to carry out the design and development of the combustion system for the flagship Uskmouth Power Station conversion project. This contract includes the large scale testing of the waste derived pellets which will be used as fuel in the converted Uskmouth plant.

MHPS Europe is the European subsidiary of Mitsubishi Hitachi Power Systems, Ltd. a joint venture company between Mitsubishi Heavy Industries, Ltd. and Hitachi, Ltd. integrating their operations in thermal power generation systems and other related businesses, headquartered in Yokohama, Japan.

The contract will cover:

·      Completion of industrial scale milling tests on the fuel pellets;

·      Completion of industrial scale combustion tests on the fuel; and 

·      Completion of Uskmouth furnace burner system design.

The results of these final validation tests are required ahead of the negotiation and award of the major Engineering, Procurement and Construction ("EPC") contract to supply the full combustion system to the project under the terms and conditions necessary for the project to secure project finance. 

MHPS Europe anticipate that the fuel can be successfully milled and combusted using their existing technology and therefore the testing will take place using equipment already deployed across the globe in existing power projects. It is expected that industrial milling testing will occur in Germany at an existing MHPS Europe milling test facility and then final industrial scale combustion testing will occur at an existing MHPS combustion test facility in Nagasaki, Japan. We expect the testing to provide final validation of the fuel specification and the mill and burner designs required for use on the Uskmouth Power Station conversion project.

The fuel supplier for the project Simec Subcoal Fuels ("SSF") will assemble a dedicated industrial scale pilot production line for supply of the test fuel at their existing pelleting facility in Netherlands. The fuel produced at this facility will be sent to Germany and Japan for final testing by MHPS. The milling, combustion efficiency and emission results are expected to be available in Q2 2020.

The Uskmouth Power Station Conversion Project represents the world's first conversion of a power station from coal to 100% waste derived fuel, and following successful trials with MHPS the project will seek to achieve financial close in Q3 2020 with generation beginning in 2021.

David Taaffe, Director of Projects of SIMEC Atlantis, commented:

"After investing more than £2m over the past 12 months in development of the fuel specification required for combustion at Uskmouth and the conversion project's design and consents, we are now very excited to enter into this important partnership with Mitsubishi Hitachi Power Systems, one of the world's largest and most experienced thermal generation solution and equipment providers. The project is well on track to contract the conversion works on an EPC basis with terms and conditions suitable for project finance. Completion of this contract with MHPS will be a key enabling step towards that goal. The Atlantis project team at Uskmouth and our fuel partners SSF are looking forward to working closely with MHPS on the final industrial scale tests of the fuel."

Tim Cornelius, CEO of SIMEC Atlantis, commented:

"Uskmouth is not only the largest end of waste conversion project in Europe, it is the pilot plant for the world's ageing fleet of coal fired power plants and a solution for governments world-wide faced with the unavoidable problem of non-recyclable waste and landfill. The successful commissioning of the converted Uskmouth plant is vitally important for the United Kingdom in terms of future waste management strategies and commercially exciting for our shareholders and stakeholders. To have a technology and construction partner of the calibre of Mitsubishi Hitachi Power Systems onboard is further validation of this ground-breaking project which is set to disrupt and change the way utilities and governments view ageing coal fired assets globally. Predicated on success at Uskmouth, we hope to work with Mitsubishi Hitachi Power Systems on many future projects which will provide grid operators with stable, flexible generation and governments a solution for the perennial issue of the responsible disposal of non-recyclable waste."

Falk Hoffmeister, Vice President BU Plant Optimisation of MHPS Europe, commented:

"Mitsubishi Hitachi Power Systems Europe are delighted that Atlantis have awarded us the pre-EPC combustion testing contract for their flagship Uskmouth conversion project. We are looking forward to working with both Atlantis and their fuel supplier, SIMEC Subcoal Fuels on this project to demonstrate the capabilities of our existing high-performance mills and burners on this new fuel. Our thermal generation equipment is already extensively proven on a large number of coal and converted biomass projects around the world and we are confident we can deliver similar results using the waste derived energy pellets being used at Uskmouth. The successful completion of this large-scale testing contract is a key enabler for a major EPC contract with Atlantis for conversion of the Uskmouth power station and will hopefully open up a huge new market globally for MHPS and Atlantis for future similar conversions."

Lars Jennissen, CTO of SIMEC Subcoal Fuels ("SSF"), commented:

"The Uskmouth project is the most exciting example of waste management solutions anywhere in the world at present. This project uses non-recyclable waste streams and converts them into a high quality fuel pellet using the N+P Group's proprietary Subcoal® process which can be used to generate long term, predictable and sustainable energy in former coal fired power stations. Through this process, usage of and dependence on fossil fuels can and will be significantly reduced. In addition, there will be a reduced requirement to send waste to landfill. Over the past few months, our dedicated team have worked with a number of partners around the world to further improve the quality of our pelletized fuel, so that it can be combusted in similar ways to how coal is combusted. At the N+P Group, we are now in the process of commissioning an industrial scale pellet plant in the Netherlands. This pilot facility will allow us to produce the required volumes of the fuel for these large scale milling and combustion trials. In parallel, our joint venture, SSF, is currently developing two new full scale production facilities in the United Kingdom which will supply the Uskmouth project with the required volume of fuel at a world leading quality and specification, using domestic UK waste - waste which is currently either exported to Europe or sent to UK landfills."

Enquiries:

SIMEC Atlantis Energy Limited	via FTI Consulting
Tim Cornelius, Chief Executive Officer Andrew Dagley, Chief Financial Officer
Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker)	[phone]
Rick Thompson David Porter
J.P. Morgan Cazenove (Joint Broker)               Michael Wentworth Stanley	[phone]
FTI Consulting	[phone]
Ben Brewerton Alex Beagley James Styles Molly Stewart

Notes to Editors

Simec Atlantis Energy 

SIMEC Atlantis Energy is the global developer, owner and operator of sustainable energy projects with a diverse portfolio of more than 1,000 megawatts in various stages of development. This includes a 77% stake in the world's largest tidal stream power project, MeyGen, and a 100% stake in the 220MW Uskmouth Power Station conversion project.

https://simecatlantis.com/ 

Mitsubishi Hitachi Power Systems Europe

Mitsubishi Hitachi Power Systems Europe GmbH (MHPS Europe), a subsidiary of the global company Mitsubishi Hitachi Power Systems, Ltd., plans and constructs power plants and offers long-term service and maintenance contracts. The plant constructor also delivers key components such as gas turbines, steam generators and environmental technology. As a market and technology leader, e.g. for fuel-flexible gas turbines and for steam generators, the company focuses on modern, environmentally friendly and efficient plants. MHPS Europe acts as a total solution provider and employs around 670 staff.

https://www.emea.mhps.com/en/

N+P

The N+P Group, internationally recognized and certified service provider in recycling, has developed into a pre-eminent specialist in the purchase and supply of industrial residues for industrial reuse.

By developing recycling concepts for the industrial residues N+P is in the position to carry through purchase and supply guarantee, independent of seasonal influences.

In this way N+P opens up new horizons when deploying industrial residues as secondary raw materials and fuels.

https://www.np-recycling.nl/en/

 

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