£75m low-carbon power deal for giant EfW plant
One of the UK's biggest ever low-carbon power purchase deals has been signed ahead of the opening of a £300m energy-from-waste (EfW) plant in Yorkshire later this year.
Multifuel Energy – a joint venture between SSE and US-based Wheelabrator Technologies – has signed a two-year Power Purchase Agreement (PPA) with SmartestEnergy for the output from the Ferrybridge Multifuel 1 project near Knottingly.
According to Wheelabrator Technologies, the power plant has already started burning solid fuel for the first time in two of its boiler lines, as construction work has nearly been completed.
When fully operational by the end of 2015, the power station will produce around 600GWh of low-carbon electricity a year from processed municipal, commercial and industrial waste. It will handle around 570,000 tonnes of waste-derived fuel annually, producing enough electricity to power 160,000 homes.
The PPA is expected to be worth around £75m over the contract which also covers generation during the commissioning phase which is now in its final stages. Under the agreement, SSE will purchase the Levy Exemption Certificates (LECs) which are granted for electricity produced from renewable energy sources.
Tom Maillet, director of engineering and operations for Multifuel Energy, said: “Signing this Power Purchase Agreement is another step forward for the Ferrybridge Multifuel 1 facility and this will allow a new supply of low-carbon electricity on the national grid at the earliest opportunity.”
The Multifuel project is located next to the existing Ferrybridge C power station which SSE incidentally said would close because it is “no longer economical”.
SSE said the old coal plant was forecast to make a £100m loss over the next five years due to Britain’s environmental policies and rising costs, so it will close for good in March 2016. SSE managing director for generation Paul Smith said: “It’s been known for many years the UK would have to phase out coal as it moves towards a more sustainable energy mix.”
Phil Taylor, a professor of electrical power systems and the director of the Institute for Sustainability at Newcastle University, welcomed the closure, saying it showed that the UK can’t continue to rely on fossil fuels.
He said: “We simply can’t continue to burn coal – it’s one of the most environmentally damaging fossil fuels and is an inefficient and expensive way to meet our energy needs. It’s inevitable that coal-fired plants like Ferrybridge will close, with severe consequences for local jobs.
“The fact that this happens driven by market forces rather than as part of a well-considered energy strategy threatens the country’s energy security. This is why we need a long-term, progressive energy strategy in place urgently.”
Last year, UK power from coal fell by a quarter, with coal-generation producing around a third of all UK energy.
Meanwhile, the UK’s EfW market is continuing to grow. Statistics from DECC show that, including landfill gas, EfW has exceeded 2TWh of electricity generation - enough to power around 470,000 homes. This growth has primarily been driven by regulations on limited landfilling of municipal solid waste (MSW) and policy incentives on account of lowering carbon emissions.