Danish power plant specialist awarded €150m biomass power plant order after five years of intensive sales effort. When the straw-fired biomass plant in Sleaford, United Kingdom, in 2014 comes online, it will be based on Danish technology and expertise.
The Danish engineering and contracting company Burmeister & Wain Scandinavian Contractor A/S (BWSC) has after five years of endeavors landed a contract worth €150m to build a 38.5MW straw-fired biomass power plant on a full turnkey basis. The plant will be located at Sleaford in Lincolnshire in the Eastern part of the UK. In addition to the construction, the contract includes an agreement for 12-years of operation and maintenance of the plant.
"After 5 years of consistent efforts we are very satisfied to be able to put ‘the cherry on the cake’. This contract demonstrates that the strategy for our renewable energy market leads to positive results and that persistence pays off", Anders Heine Jensen, CEO in BWSC, explains.
Persistence is a term which associates well with BWSC, and it was also a vital element in securing the new order.
"Energy projects are complex, involve a multitude of disciplines and demand efficient cooperation skills. Accordingly, a successful project depends on the right partnerships and the right mix of competencies and experience. Mutual trust is crucial and all parties involved must be flexible to overcome the challenges which inevitably arise in project development," Anders Heine Jensen, says and points to the landing of the new contract as a result of a particularly successful and persistent cooperation between BWSC, the client Eco2, and the Danish boiler supplier and BWSC’s consortium partner, Burmeister & Wain Energy (BWE).
The team has faced a high number of challenges during the project development. Unclear and changing legal framework conditions have put the project on hold several times. The long drawn financial crisis has forced some investors to withdraw from the project and has strongly increased investor and lender demands for project security and profitability.
However, despite the many challenges, the parties involved have managed to maintain faith in the project whilst diligently moving ahead and jointly finding solutions.
Financial seal of approval
On top of Eco2’s stringent approval processes, the project has also passed the meticulous, investigating eyes of the investors and received the rubber stamp of the financial community. Now, finally with minds at rest for all involved, the real work can commence.
"The financial storm has led to increased demands for the soundness of projects. It has been interesting to follow and participate in the financial partners’ examination and risk assessment, scrutinizing all agreements and financial models. We are proud that the Sleaford project can live up to today’s financial requirements. The trust in BWSC as a financially strong supplier has been absolutely crucial for the project. Now, with the effective contract in-hand BWSC has reached yet another important business development milestone and that feels good," Anders Heine Jensen smiles.
The prolonged in-depth financial analysis of the project was not a particular difficulty for BWSC. With over 160 power plants in 50 countries worldwide and a great number of operation and maintenance agreements on the reference list, BWSC is used to dealing with all aspects of power project issues.
Unexploited export potential
Already in 2006, BWSC participated as leading partner in the construction of a woodchip-fired biomass plant in Wales, which continues to be operated and maintained by BWSC and its partner on behalf of the client, Western Wood Energy.
The new straw-fired biomass plant will receive fuel from local straw producers. Using straw as fuel in power plants is a recognized and well-documented technology developed in Denmark in the 1990s. Whereas Denmark as the world leader utilizes a large amount of straw for energy production, only a minor percentage of the straw is being used for energy purposes on a global scale.
Anders Heine Jensen hopes that this unexploited straw potential will open the doors for further export possibilities.
"The Danish straw experience gives us the possibility to export to other countries, where there is less experience with straw-fired power plants. We are involved in project development in a number of countries, where, however, we hope for a slightly faster implementation than what we have experienced with the Sleaford project," Anders Heine Jensen concludes.
The British framework conditions for renewable energy are amongst the most attractive in the EU. Since 1990, renewable energy has played a significant role in British energy policy, and the new straw-fired biomass plant will be the second biomass plant in the UK, utilising Danish technology for straw-fired power generation.