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Active Energy raises US$14 million in funding round

UK-headed renewable energy, forestry management and timber processing business Active Energy Group Plc (AEG), has announced that it has raised GBP11.57 million (≈ US$14.15 million) in funding through the issue of convertible loan notes (CLNs) to new and existing investors. The net proceeds raised will primarily be used to fund the construction of the company's first commercial-scale CoalSwitch advanced biomass fuel production plant currently underway in North America.

The completion of this capital raise supports our strategy to accelerate the production of CoalSwitch and to collaborate with forestry owners around the world to increase the commercial viability of their timberland assets. AEG’s commercialisation strategy should capitalise on the interest we have already received from utilities and major coal-fired power stations and feedstock owners from across the globe, to commercially utilise our proven ‘drop in’ coal replacement biomass product, said Richard Spinks, CEO of Active Energy in a statement.

The new funds have been raised from new London institutions as well as existing shareholders. The funds raised will be used to develop the company’s CoalSwitch project in North America and to repay certain short-term creditors amounting to circa US$1.4 million.

Commercial rollout

The company has a strategic plan that has identified key geographies in the United States and Canada, Europe and Asia where it says that demand for CoalSwitch already exists. Though the technical details of its proprietary CoalSwitch technology have not been disclosed, the advanced biomass coal replacement fuel is made from waste wood such as logging residues, thinnings and beetle-kill, pulp and sawmill by-products such as bark and sawdust.

Research, development and testing have been undertaken over the past two years in conjunction with the University of Utah in the US. Both burn and handling tests, including a ball mill grinding test, “have all passed.” Unlike conventional white pellets, the product is hydrophobic thus avoiding costs associated with weatherproofed handling, shipping and storage facilities.

The company is planning to roll out its CoalSwitch globally in jurisdictions where it has identified “long-term, high volume” feedstock arrangements and where the technology has “significant advantages” over all other processes currently available.

To this end, it is seeking to secure binding contracts with companies to secure feedstock arrangements which may include empty fruit bunches (EFB) and palm trunks in Asia, low-value hardwoods and mill waste streams in Alberta, Canada and fir tree and sawmill residues elsewhere in Canada.

Crucially our product can differentiate itself from other coal replacement products as it is made from forestry or other industrial process waste including not only forestry and sawmill wastes, hog fuels and demolition wood, but also otherwise completely unusable biomass waste streams such as empty fruit bunches and palm trunks. We firmly believe that the product has been significantly enhanced and improved since we began working with our partners some two years ago, and continue to believe that it has the potential to transform the coal-fired power industry, whilst at the same time making a positive impact on the global and regional air quality and environmental landscapes, Spinks said.

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