25 April 2012
Alkane Energy plc
(“Alkane” or “the Company”)
Biogas and North East Wales AD Project Update
Alkane updates the market on recent developments in its biogas operations.
Alkane has successfully completed its first biogas power plant at Glenfarg in Scotland. The power plant, which was built during 2011, has now been commissioned and is exporting to the grid.
North East Wales
Alkane previously announced that its joint venture with the TEG Group plc, NEAT Biogas Limited (“NEAT”), in which Alkane has a 30% stake, had been awarded preferred bidder status by three Councils in North East Wales (“the Hub”) to construct and operate an Anaerobic Digestion (“AD”) facility.
The preferred bidder status was subject to NEAT securing satisfactory finance for the project and whilst NEAT had received an offer of bank finance, it has not been possible to agree contractual terms with the funder that are satisfactory to the joint venture partners or the Hub. Consequently, NEAT is unable to continue as preferred bidder.
Alkane is delighted to report that it has been appointed as contractor to supply and instal the power plant for an AD biogas facility to be constructed at May Farm in Cambridgeshire. The facility will process 60,000 tonnes of energy crops per annum and will upon completion have an installed engine capacity of 2.4MW. The contract has a value of c. £1.8m.
Alkane continues to appraise a number of biogas power projects ranging from being operations provider, power plant contractor and in some cases joint venture equity partner. All of these project appraisals will have to meet Alkane’s financial and risk criteria.
Neil O’Brien, Chief Executive Officer, commented:
“The May Farm contract award augments our position in biogas, which provides a complementary business stream that utilises the same power assets and skills as our core coal mine methane operations.”
For more information please contact:
020 7796 4133
Alkane Energy is one of the UK's fastest growing independent power generators. The Company operates mid-sized "gas to power" electricity plants providing both predictable and fast response capacity to the grid. Following the acquisition of Greenpark Energy Limited ("Greenpark"), Alkane has a total of 70MW of installed generating capacity and an electrical grid capacity of 92MW.
Alkane’s main operations are based on a portfolio of Coal Mine Methane ("CMM") sites. Alkane has the UK's leading portfolio of CMM licences, enabling the Company to extract gas from abandoned coal mines. Alkane started extracting CMM for direct sales of gas in 1999 with sites at Shirebrook, Steetley and Markham.
As CMM declines at any one site Alkane retains valuable generating capacity and a grid connection which we move to power response. Power response sites are connected to mains gas and produce electricity at times of high electrical demand or in order to balance the electricity grid. Alkane now operates 24MW on conventional gas post the Greenpark acquisition.
The Group operates from 19 mid-size (up to 10MW) power plants across the UK, 12 CMM, 4 conventional gas and 3 using both fuel sources, and sells this power through the electricity network, using standard modular reciprocating engines to generate the electricity. The engine units and other plant are designed to be flexible and transportable and this allows additional capacity to be brought onto growing sites and underutilised plant to be moved to new sites to maximise efficiency.
The biogas market also provides a potential new business stream. Running on gas generated from the processing of organic waste will require exactly the same power assets and core gas and electricity skills as CMM.
Coal bed methane ("CBM") is a longer term opportunity where Alkane has 500km2 under licence and contingent resource estimates of circa 350 billion cubic feet. In February 2012 the Company signed a partnership agreement with Aberdeen Drilling Management Limited to explore two of our licences with CBM potential.
More information is available on our website www.alkane.co.uk