Standardkessel, the long established German power plant technology company, has just closed it’s first US based dedicated biomass project. The plant is situated on the fourth largest Hawaiian island of Kaua’i and will provide base load electrical demand for the island’s 65,000 population. The plant will be the first closed loop biomass power plant to be built in the US.
The plant will be fuelled by wood chip produced from sources on the island and there is no off-island dependency. Power from the plant will be sold to the Kaua’i Island Utility Cooperative (KIUC) to help meet their 50% renewables target. The biomass plant will reduce usage of oil for generating electricity by providing 11% of the islands capacity and increasing the share of renewable capacity up to 23%.
The electricity will be sold under a 20 year power purchase agreement (PPA) that provides KIUC with a lower cost solution than oil and also will provide for long term price stability. The base load nature of the biomass power will also help compliment the variable output of the islands significant solar power resources.
The plant will use the equivalent of about 80,000 tonnes of wood chip per year and generate 7.5 MW of electricity with a net export of 6.7 MW. The wood is provided from a number of on-island sources. About 75% of the demand will come from short rotation plantations (about 1000 hectares) while the remaining will come from clearance of invasive species and low grade wood from the islands existing forestry operations.
The plant has been designed based on a well proven moving grate design with water tube boiler raising steam at 79 bars and 477°C. The fuel will have an average moisture content of 47%. Power is generated in a fully condensing steam turbine with cooling tower. Flue gas treatment will be provided by an electrostatic precipitator.
Direct investment in feedstock production
As part of the development Standardkessel has invested in land and new plantations for the short rotation growing of Eucalyptus. The local climate is ideal for fast growing and eucalyptus will be harvested on a 4 year rotation. The horticultural expertise for the project has been brought to Hawaii by Standardkessel from its experience with developing energy crop in Europe.
The project will create 200 construction jobs and 40 long term operational jobs both at the plant and in the fuel supply chain. This will help invigorate Kaua`i’s diversified agricultural economy.
International partnership
Standardkessel developed the project from the start with local partner Green Energy Hawaii LLC. The SPV, Green Energy Team LLC (GET) was created with shareholders 49% Green Energy Hawaii and 51% Standardkessel. Standardkessel is taking the EPC contractor role and providing long term operational support to Green Energy Team under an operation and maintenance contract.
Financing
The overall project value (including project development, EPC, plantations and fuel logistics, etc,) is $90M and the financing process, lead by Standardkessel’s financial team in Duisburg, has been completed using a two stage non-recourse project finance process. Funding for construction is by Deutsche Bank New York with long term financing from Rural Utility Service.
The project reached financial close on 23rd October 2012, with construction due to begin in December 2012 and operations in 2014. Filip Ackerman, managing director of the Standardkessel group, said “Closing the project has been challenging but it shows that even in difficult financial times, good renewables projects with the right partners involved can still be financed”.
Standardkessel are developing a number of biomass CHP projects in the UK through their subsidiary Standardkessel Baumgarte UK Ltd. James Heath, Managing Director for the UK, said “The expertise gained in developing and financing the Kaua’i project is now being applied to closing a number of our UK biomass projects. This project not only illustrates our technical and construction credentials but also our ability to finance”.
For further information contact: JHeath@sb-uk.co.uk
Photo: flickr/wallyg
