RWE buys unbuilt Helius biomass plant

By Fiona Harvey
Published: September 25 2008 20:02

Helius Energy has sold its unbuilt biomass power plant to RWE Innogy, the German utility group, for about £28m.
RWE will invest a further €260m (£206m) to complete the plant at Stallingborough in north-east Lincolnshire.

The 65MW plant, for which Helius has planning permission and construction contracts in place, will run mainly on waste wood and is due to be completed in 2011.
Helius said it had spent £5m – raised on its Aim flotation in February 2007 and a subsequent placing – and about £2.5m in debt on the plant over the past two years.
The company expects to make a total profit of about £20m on the plant, which will be used to pay down the debt and to fund other planned plants. Helius is also working on a 7MW combined heat and power plant in Scotland, which would use waste from distilleries as its feedstock.
John Seed, managing director, said the company was also working on a biomass plant in the west of England and had two more possible proposals under consideration.
He said: “This is exactly what we said we would do when we floated.”
Under the deal with RWE, Helius will also receive 13 per cent of the yearly earnings from the plant for the first 24 years of its operation.
Mr Seed said that the UK produced enough wood each year – in the form of offcuts from construction and other industries, forestry waste, tree clippings and waste wood that is normally sent to landfill – to power many more biomass plants.
He estimated that the Stallingborough plant would use about 400,000 tonnes of waste wood a year, while the Department for Environment, Food and Rural Affairs estimates that the UK produces between 5m and 10m tonnes of waste wood a year, most of which is currently landfilled.
However, Mr Seed said Helius’s power plants were near ports in case imports of wood were needed.
The shares fell 5½p to 30½p on profit-taking.
Copyright The Financial Times Limited 2008