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Blue Sphere lands major SDE grant for Dutch biomethane project

US-headed Blue Sphere Corporation (BLSP), a clean-tech independent power producer (IPP) that develops, owns and manages waste-to-energy facilities globally, has announced that on December 8, 2016, the Netherlands Enterprise Agency awarded the company’s wholly-owned Dutch subsidiary, Blue Sphere Brabant B.V., a grant to sell renewable gas on a per MWh basis to Rijksdienst voor Ondernemend Nederland (RVO) under the Renewable Energy Production Incentive Scheme (SDE).

According to a statement, the grant provides for the sale of up to 234 466 MWh per annum, for a maximum total value of the grant equal to up to EUR 151.9 million (≈ US$161.6 million) to be paid over twelve years commencing on the date the proposed facility begins production.

The grant relates to the company’s new construction plans for a waste-to-energy anaerobic digester (AD) plant in Sterksel, Netherlands, which is currently in the development stage. The grant can be similarly compared to Renewable Energy Contracts (REC’s) in the United States (US). The primary difference between the SDE and REC is that the SDE is paid directly to the company by a governmental agency, in this case, the Netherlands Enterprise Agency.

Major milestone

Receiving the SDE grant from the Netherlands Enterprise Agency is a major milestone in the development of the proposed Sterksel biogas facility. However, the grant is conditioned on several factors, including, but not limited to, the company choosing an engineering, procurement and construction (EPC) contractor for the construction of the plant within one year of the grant being awarded and the facility must begin production within four years of the grant being awarded.

Blue Sphere has been working with EPC contractors and will now focus on finalizing an agreement with the EPC partner. The company also has been working on completing the permitting process for the project and has identified Feedstock Suppliers.

Additionally, the company will now work on finalizing the Feedstock Agreements as well as arranging for project finance solutions to allow it to begin construction. Once financing is in place, the construction of this facility can take between twelve to eighteen months to complete.

We are very excited to have won this important grant from the Netherlands Enterprise Agency. This is a key step in the execution of developing this project and we also believe that this is a key catalyst for moving forward with other waste-to-energy projects in the Netherlands. The entire Blue Sphere team has been working very hard over the last year to bring our development pipeline to the next stage. This grant is a perfect example of our focus on developing assets with long-term revenue agreements in place prior to construction or acquisition, said Shlomi Palas, CEO of Blue Sphere.

In addition to potential revenues generated by the new facility under the SDE, the company also plans to sell the biomethane or green gas directly to end users. The project is located in Brabant, a region in the Netherlands where innovation, enterprise and partnership go hand-in-hand. Global companies such as Abbot, GE Healthcare, Aspen Pharma, Amgen, Janssen and Merck have established operations in the region.

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