Further details emerged today of a proposed deal enabling power-from-waste pioneers Powerhouse Energy to launch their intended joint venture in Poland.
Under outline terms agreed with partners Hydrogen Utopia International, the Merseyside-based firm will build and run an energy-capture plant in Konin, Wielkopolska, a province in the centre of the country.
The pair believe synergies exist between their technologies, focused to extract low carbon hydrogen from end-of-life plastics and waste material previously deemed beyond recycling.
Today’s announcement to investors provides detail of an emerging relationship which the firms believe can deliver carbon-free hydrogen at scale for industrial and trucking use across Europe.
With grants from the European Commission, the Konin plant aims to convert 1 million tonnes a year of end-of-life waste into hydrogen, providing new jobs for some of the country’s 78,000 coal miners.
Development costs for the new joint venture will be met equally. Under the outline terms, Powerhouse will make no entry payments to HUI, but HUI will be allowed to recover at financial close of the project, its costs to date fixed at Euros 250,000, with Euros 250,000 premium.
Both sides intend for each’s committed development costs to be capitalised at financial close and recovered through an appropriate mechanism, yet to be agreed.
PHE’s participation in the new joint venture is subject to further definitive agreement, including over the management and governance of the JVCo.
Last month the partners signed heads of terms to develop a second plant at Lanespark in County Tipperary.
Under that deal Powerhouse agreed to pay Alexandra Binkowska’s and Guy Peter’s Hydrogen Utopia a maximum of £1 million, 60% of that as a loan, to set up a joint venture. Subject to a lease being finalised, development of Lanespark and commercialisation of its clean hydrogen would then be delivered on a 50:50 basis.
Earlier this month, Powerhouse Energy announced that it was taking a 50% shareholding in Protos Plastics the £170 million dedicated EfW industrial site in Cheshire developed by its landlords Peel PRE.
Powerhouse’s forays overseas build on a strategy re-vamp launched last year by a new management team under CEO Paul Drennan-Durose, pictured.
Commenting on this morning’s clarification, Powerhouse Energy’s interim chair Keith Riley said:
“This formalises Powerhouse Energy’s position in the Konin project and brings to an end speculation within the market on what our role will be.
“We now have the task of agreeing the detailed documents for all three projects at Protos, Lanespark and Konin, which will conclude PHE’s recently adopted policy of holding at least some level of control of the projects on which it embarks.
“I am well aware that this increases our cash flow, so an important aspect of the project controls we are implementing is careful cash management and expenditure control which we have built into the management forecasts. HUI has made a fast start in Poland, and announced that it had signed a Letter of Intent with the City of Konin on 3 February 2021.
“Events in Eastern Europe since, however, inevitably mean that this project is likely to fall behind. In consequence, I am confident that the three developments can be phased.”
Market reaction to this morning announcement saw Powerhouse’s shares drop over four per cent by mid morning.