Ireland-headed EQTEC plc (formerly REACT Energy plc), a technology solution company for waste gasification to energy projects, has provided an update on the progress the company has made with its near-term UK power project pipeline since the completion of acquisition and readmission on December 28, 2017 including, Reliable Energy Melton Hull and Reliable Energy Seal Sands projects as well as Zebec Energy project.
As previously stated in the company’s admission document dated November 27, 2017, a series of projects have been secured by way of an engineering, procurement, and construction (EPC) contract and/or a Memorandum of Understanding (MoU). A new Memorandum of Understanding (MoU) has been signed along with “key steps” towards commencing these projects have been taken.
MoU for biomass gasification in Usk
In Usk, southeast Wales the Usk Project – previously known as Zebec Energy project – is for a facility which will have a capacity to process around 42 000 tonnes of wood waste per annum and a power output of 6.4 MWe. According to EQTEC, the Usk Project is now to be built and operated by a consortium led by Brooke Energy Ltd, a company that builds, operates and manages biomass fuelled power plants that cover the South West of England and Wales.
EQTEC has renewed its agreements with the new operator of the project and has now signed a MoU with the project consortium containing Brooke Energy, Exergon Sp. z o.o. (EXERGON), an energy consultancy spinout from the Silesian University of Technology in Poland and RAFAKO SA (RAFAKO), part of the PBG Group and is involved in the power generation industry with particular experience in biomass and waste power plants.
Under the terms of the MoU, EQTEC will sell its patented EQTEC Gasifier Technology (EGT) to RAFAKO who is the Engineering, Procurement, and Construction (EPC) contractor for the whole power plant and will exclusively use its proprietary EGT for the gasification and gas cleaning process.
The Usk site has already in place gas engines, a biomass dryer, absorption chiller, and grid connection among other equipment and the new owner has chosen EGT to complete the project.
Brooke will seek to secure equity finance for the project and RAFAKO will seek the debt financing. Financial close and the commencement of the project is, as previously expected, in the first half of 2018. EQTEC revenues from the Usk Project are still expected to be around EUR 11 million to be invoiced over a period of two years.
Two Reliable Energy Solutions Energy-from-Waste projects
Also in the UK, Reliable Energy Solutions Ltd (Reliable) is focused on developing Melton Hull and Seal Sands, two 16 MWe Energy-from-Waste (EfW) projects in the North East of England.
A primary EPC contract was signed in July 2017 between Reliable and Energy China for both projects which specify the use of EQTEC’s proprietary gasification technology EGT. The total project investment for the two plants is forecast to be approximately EUR 210 million and each plant is expected to process 130 000 tonnes of waste annually.
In 2018, EQTEC and Energy China have been working on the engineering of a revised scheme for the application of EGT coupled to a steam turbine instead of the previous scheme of coupling to a gas engine.
According to EQTEC, the shift to a steam turbine is because initial indications show an increase in the projected returns of the project. A future benefit of this revised scheme is that the additional engineering work will enable the company to compete in a wider range of projects with power outputs up to 50 MWe.
As a result of the revision of the scheme, financial close and the commencement of both projects is now expected to occur within the next three to six months, when the engineering works to develop the revised scheme for the application of EGT coupled to a steam turbine will be finished.
The estimated turnover of EQTEC on each project is EUR 19 million of the EPC contract to be spread over a period of two years. Discussions are ongoing with China Construction Bank for debt finance for the projects and with a major third-party investor for the provision of equity for each project.
We are pleased that our three near-term projects in the UK are all progressing well. The objective of our strategy of forming strategic alliances with major players in the energy infrastructure sector such as COBRA, Energy China and RAFAKO is to accelerate growth and increase scale in order to take advantage of the lack of domestic incineration and gasification capacity that is forcing the UK to pay European incinerators to take its waste. The strategic alliances also enable us to be in a prime position to win Energy from Waste projects in the UK, Spain, France and Croatia, commented Luis Sanchez, CEO of EQTEC plc.
