GIG and Covanta reach financial close on Grangemouth EfW facility
Green Investment Group (GIG), the specialist green energy project developer and investor, and US-headed Covanta Holding Corporation (Covanta), a leading energy-from-waste (EfW) owner and operator, has announced financial close on the acquisition of a 50 percent stake in the Earls Gate Energy Centre (EGEC), a 21.5 MWe EfW facility located in Grangemouth, Scotland.
As a combined heat and power (CHP) project, Earls Gate Energy Centre (EGEC) will prevent 216 000 tonnes of mixed household, commercial and industrial waste from entering landfill per annum. Instead, the waste will be converted into 79 GWh of green electricity and 81 GWh of heat in the form of steam annually.
According to a statement on December 18, construction is due to commence in 2019 and is anticipated to become operational in late 2021, creating up to 500 jobs during construction. The total project value is approximately GBP210 million (≈ EUR 233 million).
Construction of the facility will be led by France-headed Constructions Industrielles de la Mediterranee (CNIM), that will also provide operations and maintenance services when the project commences operations in late 2021. Covanta will provide technical oversight services during construction and operations.
Today marks a significant milestone in our valued partnership with GIG, as Earls Gate represents the first of our four advanced UK development projects to reach financial close. The project is well-structured with long-term contracts on both waste and energy and will provide critical sustainable waste disposal capacity in Scotland. It will also greatly benefit the local economy by supplying neighboring industry with reliable, low-carbon heat and power, said Matthew Mulcahy, Executive Vice President and Head of Corporate Development, Covanta.
EGEC is Green Investment Group’s (GIG) nineteenth Scottish project and follows a range of investments supporting sustainable economic growth in Scotland. By preventing volumes of waste equivalent to around 20 percent of Scotland’s total landfilled household waste in 2017 from going to landfill, the facility will make a significant contribution to the local authority’s ability to achieve the goals of Scotland’s biodegradable municipal waste landfill ban, which is due to come into effect on January 1, 2021.
For the first time ever, 2017 saw Scotland recycle more waste than it sent to landfill. This is a fantastic achievement, but there remains a lack of capacity in Scotland’s waste management system to unlock the value to businesses and households from converting residual waste into low-carbon energy. The Earls Gate facility will play a major role in changing that. GIG is very proud of its Scottish roots and base in Edinburgh. Earls Gate is our nineteenth investment in Scotland to date, and we’re delighted it will help secure a reliable, low-cost, green heat and power supply for local industry, further supporting the decarbonisation of the Scottish economy, said Edward Northam, Head of GIG Europe.
Working closely with co-investor and developer Brockwell Energy Ltd, an independent power producer formed in 2017 to raise investment capital to develop a GBP800 million (≈ EUR 887.6 million) portfolio of energy projects, owns the remaining 50 percent stake, the facility will become a direct source of reliable, green, low-cost energy for local businesses located at Earls Road.
The success of EGEC reflects the skills and dedication of the Brockwell and GIG teams and delivers a new world-class renewable CHP facility to support the site. This is the first of a number of EfW projects that we will build over the next three years. As one of the most efficient plants in the UK, EGEC has unparalleled environmental credentials. The use of heat and power on-site will future-proof full-time local jobs. It will also create roles during construction, including a range of professional, skilled and entry-level positions and apprenticeships, said Alex Lambie, CEO, Brockwell Energy.
Chemical manufacturer and site service provider, CalaChem Ltd, has entered into a long-term Energy Supply Agreement (ESA) for the offtake of electricity and steam produced by EGEC. The steam will be used in the manufacturing processes of CalaChem and others on site. The ESA is expected to decarbonise CalaChem’s annual energy consumption by approximately 39 000 tonnes CO2e per year. The remaining electricity will be exported to the grid.
CalaChem has been a part of Grangemouth industry for almost 100 years. Electricity and heat are both vital to the operations of CalaChem and the other companies based on our Earls Gate Park. In addition to improved environmental performance and operational reliability, the new Earls Gate Energy Centre will also enhance CalaChem’s international competitiveness by controlling overall energy costs. This will help secure jobs, meaning CalaChem remains a valuable economic asset to the region. We are very excited that the project has reached this milestone and look forward to construction commencing shortly, said Neil Partlett, CEO of CalaChem.