New Earth Energy, ("NEE" or the "Company"), the renewable energy business recently set up by New Earth Solutions Ltd ("NES"), the UK recycling and waste management company, has announced it has partnered with Biossence, the UK arm of European environmental investors, Network Economy, to create Mersey Green Solution. This new venture will develop, finance and operate projects to treat, and recover energy from, a range of municipal and commercial wastes.
The first project, a gasification-pyrolysis plant in Merseyside will aim to generate around 40MW of renewable energy from fuel made from industrial, commercial and household waste.
Mersey Green Solution's facilities will be funded through equity investment from institutional investors, high net worth individuals, and the IFA network. NES has a track record of successfully financing projects in this way. Last year, due to the growth potential and investment opportunities within the waste sector it established the New Earth Solutions Recycling Fund. The Fund invests directly in New Earth's waste management facilities and is open to retail investors.
Chris Cox, Managing Director of New Earth Energy said: "We're looking to decouple the development of waste and renewable energy infrastructure from local authority procurement and bank lending. This will give us an exciting head-start in the market place so that we can have merchant facilities up and running to receive waste from the private and public sectors next year. Our phased development will allow debt and financial gearing of the projects to be introduced later, once the facilities are established. At a time when the Private Finance Initiative is stalling in the waste sector, Mersey Green Solution provides excellent opportunities for the experienced investor."
Dr Raif Trottnow, Director of Biossence, said: "In the UK, the attractive Renewables Obligation regime, tough recycling and landfill diversion targets, and the relentless rise in landfill costs are creating a great business environment for us. We've observed many projects in Europe that have failed because the interfaces between waste handling and the creation of a fuel and its thermal conversion into heat and power have not been understood or properly linked up. Combining forces with New Earth has meant we can overcome this. The partnership has massive potential."
The venture incorporates two waste facilities on either side of the Mersey. One is located on the Wirral and the other in Widnes. The plants aim to be operational in 2010, and will be capable of handling 600,000 tonnes of waste per annum when completed.
Energy recovery will take place at Hooton Park on the Wirral, which has planning consent for the processing of up to 400,000 tonnes per annum. This could create 40MW of renewable energy. Some of this power, as well as surplus heat, can be supplied to nearby industrial energy users. The majority of the generation will be exported to the grid and, by using advanced thermal conversion gasification and pyrolysis technology, will benefit from enhanced power sales under the Renewable Obligation Certificate (ROC) regime.
At the second site on the Widnes waterfront, planning consent is being sought for a composting, biological treatment and solid recovered fuel (SRF) preparation facility to handle 200,000 tonnes of organic and residual waste per annum. Construction at the site will start later this year, subject to securing consents, and the facility will mirror those already operated by New Earth Solutions in Dorset and Kent and under development in Bristol and Leicestershire.
This project will help the North-West region take a lead in meeting tough environmental and sustainability targets for reducing landfill, while increasing recycling rates and renewable energy generation.
The Mersey Green Solution merchant facilities will be developed in a modular fashion. Phasing of the developments will be in line with the rising demand for waste treatment services from municipal and private customers alike, as the pressures of waste targets and policies grow and the costs of landfill disposal continue to escalate rapidly.
The sites will complement each other and offer a well-placed, innovative infrastructure to serve Merseyside and the north-west region. Much of the five million tonnes of municipal and commercial waste in the region is suitable for SRF and energy recovery and Mersey Green Solution's facilities will also contribute to recycling and composting performance.
Customers will include private sector companies handling commercial and industrial wastes, transfer station operators, major producers of organic wastes, local authorities and contractors providing services to local authorities.