Energy group planning £1bn biomass plants at Scots ports

Published Date: 28 August 2009
By Hamish Rutherford
FORTH Energy has unveiled plans to invest £1 billion building biomass power stations at four Scottish ports.
The group, a joint venture between Forth Ports and Scottish & Southern Energy (SSE), is conducting engineering studies and consulting locals about the plan, which would see 100 megawatt stations built at Dundee, Rosyth, Grangemouth and Leith. Planning applications are expected to be submitted early next year.Biomass stations generate electricity by burning organic materials and are classed as renewable energy. Much of the fuel used comes from byproducts of the forestry industry, and having the stations near shipping facilities is more efficient than transporting it by road.While Forth Energy said all of the materials used in the stations would be from sustainable sources, some of the fuel will come from overseas.Forth Port's chief executive Charles Hammond said four stations would cost more than £1bn to construct, and the port and property group expected to own only a small share of any completed facilities.As well as a small equity stake Forth Ports would earn returns on the use of its land and the handling of fuel. If all the stations are built they will need two to three million tonnes of fuel annually."The benefits we will get are from the land values and the port throughput as well as enjoying some form of equity return, but very much in a minority," Hammond said, adding that it would be "no issue" for the Scottish ports to be able to handle the fuel for the stations.Forth Energy, which was formed in 2008, is also considering applying for permission to build wind turbines at some of its ports, although Hammond said focus had been on the biomass project, which was "much larger in scale and impact".Perth-based SSE already owns and operates an 80MW biomass plant at Slough in Berkshire.Chief executive Ian Marchant said biomass would play an increasing role in energy production in the future "and it is an area in which SSE expects to be a significant player".The biomass plans were unveiled as Forth Ports reported a 10 per cent fall in underlying pre-tax profits to £14.8 million in the six months to June 30.While the group's core UK port business was stable, the group's Nordic business, which sells recyclable goods, suffered from a sharp fall in demand. Forth Ports also wrote down the value of Ocean Terminal by £2.4m although Hammond said the Leith retail complex continued to attract new high-quality tenants.Forth Ports, which has extensive excess land around Leith, has scaled back its property development since the recession hit and Hammond cautioned against hopes of an early recovery for the sector. "We believe that we won't be seeing a real recovery in the property markets until, probably to coincide with the tram being built in Edinburgh, in 2012."Shares in Forth Ports closed down 28p at 1,280p