BWSC and PensionDanmark have joined forces to build, operate and own a brand new biomass power plant in Lincolnshire, in the east of England. They have committed to the investment of a total of £160m via the BWSC PLC joint venture, established by the two parties.
The new power plant will have a capacity of 40MW and will be primarily fuelled using locally sourced straw. The plant is expected to produce enough energy to cover the total consumption of 70,000 households and will result in an annual CO2 emissions reduction of approximately 300,000t.
BWSC’s share of the investment in the new power plant is £32m and they will be in charge of building, operating and maintaining the plant, which is expected to be operational from early 2016.
BWSC is a global leader with more than 30 years’ experience in developing, building and operating power plants, while PensionDanmark has specialised in direct investments in energy-related infrastructure. The BWSC PLC joint venture provides the necessary framework for establishing further new power plants in future.
Anders Heine Jensen, CEO of BWSC, said: "This is a breakthrough for Danish energy technology exports. The financial crisis has challenged the success of Danish businesses exporting sustainable energy plants. Now, BWSC and PensionDanmark are forming a joint venture with the aim of building, owning and operating selected biomass power plants internationally. This adds more strings to our bow. With this model, not only will we be market leaders in power plant technology, but we will also own, operate and finance new plants in collaboration with PensionDanmark. This boosts our competitiveness considerably and establishes Danish energy technology on the world map."
Torben Möger Pedersen, CEO of PensionDanmark, said: "We have found a model that provides PensionDanmark an attractive return with limited risk. The risk is limited by the fact that the majority of PensionDanmark’s investment is in the form of loans and the bulk of earnings are regulated, with the costs fixed via long-term contracts. We are looking forward to working with BWSC, whose established expertise meets our high standards for industrial partners in this type of joint venture."
PensionDanmark’s share of the investment in the new power plant is £128m and will be funded via the Copenhagen Infrastructure I fund, which was established in 2012 and is administered by Copenhagen Infrastructure Partners (CIP). PensionDanmark is the sole investor in the fund with DKK 6bn.
Christian Skakkebæk, of Copenhagen Infrastructure Partners, said: "Over the years, BWSC has proven to be a market leader in building medium-sized power plants, so we see considerable potential in the partnership. A closer and more direct collaboration between financial and industrial players in the energy sector has significant prospects."
Following on from the much awaited announcement by the British government regarding the UK Biomass Cap, the investment commitment was finally agreed between all parties on the 8th August 2013.