Mitsubishi Hitachi Power Systems says industrial burn tests of the waste-derived pellets to Simec Atlantis plans to use at Uskmouth Power station “couldn’t have gone better”.
The two hope to create a new global market converting coal-fired power stations to burn ‘sub coal’ pellets derived from waste including unrecyclable plastics, i.e. more car dashboards than plastic straws, according to CEO Tim Cornelius.
Successful completion of the burn tests at Mitsubishi Heavy Industries’s Research & Innovation Centre in Nagasaki bring that ambition a significant step closer to reality.
The companies say it proves the pellets can be used in Mitsubishi Hitachi burners, which are used in power stations around the world, without needing any oil or gas to support firing.
According to a joint statement:
‘During the testing MHPS established that it was possible to feed large volumes of pulverised fuel to the burner via a pneumatic system without disturbances, at a rate that is comparable to that required at the Uskmouth Conversion Project. Mitsubishi Hitachi Power Systems also investigated and confirmed that flue gas emissions were within anticipated levels and that the burner was able to achieve expected low NOx performance whilst maintaining low CO levels.’
Simec Atlantis said final stages of the pre-EPC detailed design contract for the Uskmouth conversion are now underway, with the burn test results informing refurbishment design. It stated Mitsubishi Hitachi Power Systems will have completed all of that work by Q4 2020 and will then be able to offer a fixed price for the combustion system under a contract structure that can attract project finance.
CEO Cornelius said the burn testing success “represents a very important step towards achieving financial close”. He added that the test results could have “material implications for the way plastic waste and ageing coal-fired power stations is managed globally in the future”.
Falk Hoffmeister, Vice President Head of Service of Mitsubishi Hitachi Power Systems Europe, said “the testing couldn’t have gone better” and that the results “pave the way for this successful project and huge global future opportunities”.
Update 24/06/20: how will Simec Atlantis finance Uskmouth?
Asked how it plans to finance Uskmouth, pending all approvals, a spokesperson issued the following:
Management are looking at multiple ways to fund this highly cash flow generative project in a manner that will not be dilutive to existing equity holders:
1. Traditional project finance (debt) with some short term mezzanine debt layered on top during construction that could be re-financed out post construction;
2. 100% receivables finance;
3. Vendor finance from EPC contractor; or
4. Equity farm down pre-financial close to a strategic or infra structure fund investor.