Ireland-headed gasification to energy technology provider EQTEC plc has announced that it has signed an Exclusivity Agreement with Logik Developments Ltd (Logik), the owner of 6.27 ha of land at the Deeside Industrial Estate, Flintshire, Wales, in respect of the Deeside Refuse Derived Fuel (RDF) project being developed with planning permission for a waste management facility comprising the recycling of waste, the production of refuse-derived fuel (RDF) and an anaerobic digestion (AD) facility.
Further to signing a Memorandum of Understanding (MoU) with Logik, and completing initial due diligence, the EQTEC entered into an exclusivity agreement on July 23, 2020, pursuant to which Logik has granted the Company exclusivity to enter into a potential transaction whereby EQTEC can obtain full ownership of the Project from Logik via the acquisition of the Project SPV.
In consideration for the granting of exclusivity, EQTEC has paid Logik GBP 100 000, (≈ EUR 110 000) which would be deducted from the final purchase price for the Project. The exclusivity runs until March 2021 and can be extended by mutual agreement.
The proposed purchase price for the Project will be GBP 4.6 million (≈ EUR 5 million) plus a further amount to be calculated based on a formula linked to the final planning achieved and a detailed financial model of the Project (subject to a maximum further amount of GBP 5.4 million or ≈ EUR 5.9 million). Any such transaction, inter alia, will be subject to definitive agreements, further due diligence, and funding.
Under the MOU, EQTEC will act as lead developer for the Project, having responsibility for, inter alia, introducing potential project investors and EPC and O&M partners.
Seek additional planning permission
The existing planning permission on the Project provides for the construction and operation of a waste management facility for municipal, commercial and industrial waste for 182 000 tonnes of annual residual waste, and an AD plant which is projected to produce 2 MW of biogas.
Under the current planning, 60-70 percent of the RDF produced at the proposed waste management facility would incur disposal and/or landfill costs.
Logik achieved planning on the site over a year ago and we have been looking for a partner who could deliver and operate a waste-to-energy facility to our high standards and bring employment and expertise to the local area. EQTEC’s advanced gasification technology has the potential to significantly improve the environmental and economic impacts of this project for the benefit of the local community and large industrial energy users alike. Together with EQTEC, we look forward to continuing to work closely with all local stakeholders to help ensure this project secures additional planning and gets built, said Neil Spencer, Director of Logik.
Under the Agreement, EQTEC will now seek additional planning permission such that its advanced gasification technology can be applied to the Project, which would reduce the environmental impact of the Project whilst, also improving its economics.
With the addition of gasification technology, the plant would be capable of converting hundreds of thousands of tonnes per year of non-recyclable everyday household and commercial waste, otherwise destined for landfill or incineration, into green energy.
Subject to achieving the additional planning, the company estimates that, with the application of its advanced gasification technology, the Project would be capable of generating 20 MW of green electricity, and 27 MW of thermal heat production. The electricity and heat could be exported to the grid and/or sold locally.
The company’s preference would be to create private wire and heat networks using the surplus electricity and heat, as it is already aware of interest from a large industrial energy user in the area. It has also been in discussions with the local authority, which, it says “has been supportive and is keen to have such infrastructure as an alternative to incineration technologies.”
This significant RDF project in the UK highlights the increasing demand for EQTEC’s proven, proprietary, and patented advanced gasification technology and solutions, which can significantly improve both the environmental impact and the economics of many traditional waste-to-energy facilities, whilst potentially delivering attractive returns to EQTEC and our shareholders. The Project has the potential to provide communities and companies with a credible and commercially attractive alternative to landfills and incineration for residual municipal and commercial waste with much less of an environmental impact. We look forward to providing further updates to shareholders in due course, said David Palumbo, CEO of EQTEC.
Subject to obtaining the additional planning permission, and concluding the acquisition as planned, EQTEC estimates that the additional capacity for the thermal conversion of waste, utilizing the Group’s advanced gasification technology, would generate additional revenues for the Project SPV of c.GBP 16 million (≈ EUR 17.6 million) in gate fees, c.GBP 6 million (≈ EUR 6.6 million) in electricity sales and up to GBP 1.5 million (≈ EUR 1.65 million) in heat sales.
