UK chemical plant granted £7m for energy resilience project
A Green Investment Bank (GIB) supported fund has provided £7m to an energy efficiency project for a global chemical manufacturer, which could reduce greenhouse gas (GHG) emissions by an estimated 28,000 tonnes per annum.
GIB is the cornerstone investor in the UK Energy Efficiency Investments (UKEEI) fund, which will provide capital for the installation of steam-raising boilers, compress technology and other heat-recovery measures at global chemical manufacturer Huntsman’s plant in Wilton, Redcar.
Huntsman expects to produce 100% of its on-site steam requirements upon completion, with the emissions reductions equal to the removal of 12,750 cars from the road for the life of the project.
“Many manufacturers continue to rely on low-efficiency boilers to service their energy needs,” GIB head of investment banking Edward Northam said. “By investing in new technology, the country’s energy intensive industries can reduce energy wastage. Huntsman is an example to its peers; it has recognised that it can cut costs and help mitigate climate change by making its processes more energy efficient.”
Construction work has commenced with the project scheduled for completion by summer 2017. The project is also expected to make the biggest impact of any investment made by the UKEEI fund to date in terms of GHG emissions reduced per pound of capital.
UKEEI is the energy efficiency investment arm of Sustainable Development Capital Limited (SDCL), whose investment director believes the project demonstrates that energy efficiency is one of the largest and most cost-effective sources of GHG emission reductions.
“SDCL are delighted to be working with a world-class team to deliver a major steam generation project to Huntsman," David Maxwell said. “The turnkey solution, which will encompass all elements of the project from design and construction through to the long-term operation and maintenance of the plant, will deliver significant cost savings, energy resilience and long-term price certainty to Huntsman."
The project marks the latest investment from the GIB, having been initially formed by the UK Government in a bid to accelerate the UK’s transition to a greener economy.
GIB recently provided power generation company Albion Community Power with a £5m investment to develop two new Highlands hydropower projects.
In March, the bank announced plans to upgrade a district heating scheme in the north of Scotland, and also raised £355m in the second tranche of investment for its Offshore Wind Fund, bringing the total value to more than £818m.
The news follows the launch of the GIB privatisation process – the Government confirmed earlier this year that it had put the bank up for sale, which could potentially see it wholly transferred to private ownership.
Civil society and business groups have stated that commitments to keep the GIB at the forefront of the green infrastructure market and ensure the best standards of governance and transparency are among the measures against which any prospective buyers of the GIB should be assessed.