Skip Navigation LinksMy Argus / News / News Story

Teesside biomass CHP proposes 2020 start

04 May 2016 16:09 (+01:00 GMT)
Teesside biomass CHP proposes 2020 start

London, 4 May (Argus) — A start date of 28 February 2020 has been proposed for UK firm's MGT Power's 299MW Teesside combined heat and power (CHP) plant, over a month later than the end of the project's target commissioning window.

The commissioning deadline was set at 22 January 2020 by the UK's Low Carbon Contracts, the government-owned body responsible for issuing and monitoring contract for difference (CFD) subsidies. The generator has proposed the later February start date, Low Carbon Contracts said, but was unable to comment on the discrepancy between the deadline and the generator's proposed commissioning date.

MGT declined to comment on the proposed start date or the commissioning deadline.

MGT has secured an inflation-linked £125/MWh ($177/MWh) for output from the Teesside CHP plant under the UK's CFD scheme.

The project received state aid approval from the EU for its CFD subsidy in January 2015 and had a commissioning deadline of July 2018 at that time. But delays to the project have extended that timeline.

Under the CFD scheme, companies are required to fulfil so-called "milestone requirements" to demonstrate substantial commitment to investment in a project within one year of signing the CFD contract. Low Carbon Country accepted MGT's application to delay the project's Milestone Delivery Date from 23 January 2016 earlier this year, but no details of the new milestone delivery date have yet been released.

US wood pellet producer Enviva is contracted as the sole supplier to supply the Teesside CHP with almost 1mn t/yr of wood pellets. Deliveries are due to start in 2019, ramping up to full supply in 2021 and continuing until 2034. The contract is contingent on the Teesside project reaching financial close, which in February was expected in the middle of this year.

2142759