Waste cooking oil from Jamie Oliver’s Italian restaurants will help feed as many as four new U.K. power plants as developer Renewable Energy Generation Ltd. races to lock in clean-energy subsidies before they’re dissolved.
REG, backed by BlackRock Inc., plans to build the plants in the next two years for about 25 million pounds ($39 million), Chief Executive Officer Andrew Whalley said in an interview.
REG and its peers are adding clean-power projects to take advantage of a government subsidy program that ends in 2017. Waste-to-electricity stations are used by the grid as reserve generators, providing instant supply when fossil-fuel plants trip, demand peaks or wind and solar energy falls short.
“Balancing the grid using plants such as ours is going to become ever more important as more renewables come online,” Whalley said in London.
REG already has four plants that generate heat and power using waste cooking oil from restaurants in Birmingham, Nottingham and the East Midlands. They vary in capacity from 2 megawatts to 18 megawatts and receive subsidies through the state’s Renewables Obligation system.
As part of wider energy reforms the government is phasing out the RO program and replacing it with contracts for difference, which guarantee power payments for 15 years regardless of market prices. Generators will be forced to bid for a limited number of contracts in annual auctions.
REG’s new plants, which will use waste oil from a number of restaurants as well as the Jamie’s Italian chain, will be financed with debt and the developer’s own equity.
Caterpillar Inc., which provided the engines for REG’s bio-energy station in Yorkshire, northeast England, as well as 4.3 million pounds of debt, has “expressed interest” in supporting future plants, Whalley said.
REG also has onshore wind farms around the U.K. The Guildford, England-based company is considering raising about 30 million pounds for wind projects through zero-coupon preference shares, or stock that has no entitlement to dividends.
REG expects to bid for three or four wind farms and a similar number of solar projects — 50 megawatts to 100 megawatts in total — in the next contracts-for-difference auction. It has about 800 megawatts of wind power at different stages of development.
Article sourceWaste Olive Oil from Jamie’s Oliver’s Italian restaurants will feed four new U.K. power plants,
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