AmeyCespa, one of the UK’s leading waste-management providers, has signed a Power Purchase Agreement (PPA) with GDF SUEZ Energy UK for the output from its major new energy-from-waste facility in North Yorkshire.
Under the agreement, GDF SUEZ Energy UK will buy all of the electricity generated by Allerton Waste Recovery Park, which will process around 320,000 tonnes of household and some commercial waste each year. The waste will be burned to generate enough renewable electricity to power around 40,000 homes per year.
The plant is expected to be operational by early 2017, with GDF SUEZ Energy UK contracted to buy up to 208GWh of electricity annually.
Power purchase agreements are essential to the viability of any new renewable energy plant. Banks and other funding providers for major renewable projects need to be assured that the money they invest will be repaid through the sale of energy to a reliable, experienced and creditworthy power purchaser.
GDF SUEZ Energy UK has built up a strong reputation as a reliable partner in the power purchasing arena, with experience of many large and successful projects. Of particular interest to AmeyCespa and its funders were the three energy-from-waste plant PPAs that GDF SUEZ Energy UK has secured in recent years – proving its ability to tailor contracts to the needs of this specific type of plant.
Under the PPA, GDF SUEZ Energy UK will buy the output from Allerton Waste Recovery Park at an index-linked rate, providing AmeyCespa with a market-reflective price for its energy. To provide an assured return on investment for the project’s funders, the PPA also incorporates a floor price, guaranteeing a minimum rate should market prices fall steeply.
Once completed, Allerton Waste Recovery Park (www.allerton-waste-recovery-park.co.uk) will divert around 95% of York and North Yorkshire’s household waste from landfill. As well as the environmental benefits this will bring, the anticipated long-term savings on the cost of waste treatment are expected to be around £250 million over the life of the contract.