17 January 2007
Helius Energy Limited (“Helius” or the “Group”) today announces its intention to list on the London Stock Exchange’s AIM market for listed securities (“Admission”). Daniel Stewart & Company plc is the Company’s nominated adviser and broker.
Helius was established to install and operate biomass-fired renewable electricity generation plants, designed to meet the growing need for reliable power and support the move away from fossil fuels. The Group is positioned to take advantage of renewable energy legislation developed to combat climate change.
Helius will initially focus on the UK and Southern Africa, where it plans to install and operate a range of biomass energy plants supplied by leading international suppliers of thermal power generation and environmental engineering services. Plants will be sited at locations with excellent transport logistics and access to competitively priced and readily available feedstocks, including adjoining process operations which produce biomass as a by-product. The larger plants, which will generate electricity for supply to the grid, will be located in industrial zones with suitable support infrastructure, whilst the smaller modular Biomass Power Generation systems are to be co-located with existing producers of suitable biomass feedstock, such as manufacturers in the food and drinks industry.
The plants will burn an extensive range of sustainable biomass feedstock including residues from bio-ethanol production and other qualifying feedstock. Helius’ strategy is to secure feedstock at an economically viable cost from a number of sources. These feedstocks are expected to qualify for Renewable Obligation Certificates under the UK Ofgem legislation. Helius’ plants will operate with low emissions, high availability and proven technology.
To date the Group has focused its attention on:
securing suitable sites with strong prospects for obtaining the relevant consents;
procuring proven technology;
establishing a management team;
procuring and characterisation of biomass feedstock;
sourcing off-balance sheet project implementation finance
The Company is seeking admission and raising funds to implement its strategy, including the provision of working capital to complete its initial projects to the point of construction and to provide general working capital.
Helius holds a 3-year option to purchase this 36 hectare freehold Stallingborough site which is located on Humber Estuary, 6km from the port of Immingham. The local grid capacity supports a new 65MW power station and the application for planning permission is at an advanced stage. The site also allows for the potential co-location of separate bio-ethanol and bio-diesel plants, which would produce biomass as by-products. Helius holds an eighteen-month option to acquire a site on the Tees Estuary and is actively seeking a third large site in the UK. Subject to suitable financing, the Group intends to initially develop one other large project and up to three further small-scale projects.
The larger sites are industrially-zoned and located adjacent to existing heavy industry and close to transport links and deep-water port access as well as sources of co-products from agriculture, forestry, food, drink and road transport fuel processing industries.
Sites for the smaller 5MWe Greenswitch tm units, which have been developed by Helius under an exclusive with Wartsila Oy, will be located adjacent to producers of suitable qualified biomass feedstock. These smaller plants provide an economic and environmentally efficient way of utilising residues at source without incurring transportation costs associated with wet biomass.
John Seed, Chief Executive, said today:
“We look forward to listing on the Alternative Investment Market, which we believe will further enhance our ability to take advantage of the exciting growth opportunities to develop biomass as a sustainable source of renewable power”.
For more information contact:
Helius Energy plc |
Tel: 020 7554 1400 |
Daniel Stewart & Company plc |
Tel: 020 7776 6550 |
Gavin Anderson & Company |
Tel: 020 7554 1400 |
Alex Worrall, FCCA, aged 56, Non-Executive Chairman
After qualifying as an accountant Alex worked at Ford and ICI before serving 20years at Tallent Engineering latterly as Finance Director. He became Non-Executive Chairman of ThyssenKrupp UK Plc into which Tallent was subsumed. He was a founder director of D1 Oils plc, which floated on AIM in 2004 and is a past Chairman of the Durham Chamber of Commerce. He is currently a non executive Director of AIM listed China Goldmines plc.
John Seed, aged 48, Managing Director
John has extensive experience in renewable energy and sustainable systems, serving as director on key trade associations lobbing and advised government and local authorities on renewable energy policy, including the DTI’s Biofuel Advisory Panel and the Board of the Scottish Renewables Forum. Since 1992 he has been the commercial director of SgurrEnergy Ltd, one of Scotland’s largest renewable energy engineering companies.
Elizabeth Payne, ACA, aged 37, Finance Director
A graduate in aeronautical engineering, Elizabeth qualified as a Chartered Accountant. Before moving to Volkswagen and then to Krupp Camford, where she was responsible for implementing financial systems for the merged ThyssenKrupp automotive business, Director of Finance & Business Assurance for Monteray Limited, a facilities management to BT plc.
Dr Adrian Bowles, aged 42, Technical Director
Adrian is a chartered energy engineer with a PhD in fluid mechanics. He has worked in research at Electricity de France and the Central Electricity Generating Board and established power purchase agreements for an independent biofuels company. Since 2004, he has been a principal consultant to SgurrEnergy Ltd assisting on biomass, liquid transport fuels, hydrogen and waste to energy projects. He is a member and regular contributor to the Energy Institute.
Christopher Corner, aged 42, Commercial Director
Chris holds a BSc in physics, a masters degree in engineering ceramics and the Chartered Institute of Marketing’s diploma in marketing. Between 1986 and 1993, he worked with T&N and then ICI. Following the completion of an MBA at Durham University in 1994, Chris joined BICC and in 1997 became operations director of the UK’s largest Chamber of Commerce, in the North East. Chris has been involved in a number of public sector projects including Renaissance South Yorkshire.
Michelle Susette Morris, aged 45, Executive Director and Company Secretary
Michelle has a background in the health and leisure and in 1994 since when she has held a range of senior management roles in recruitment. Michelle is a major shareholder in an East Anglian commercial recruitment company and a founder member of The Tree of Dreams Company Limited, which assists start up companies, including D1 Oils plc.
Legislation in the field of biomass renewable energy includes the EU Biofuels Directive and UK legislation such as the Renewables Obligation and the Renewable Transport Fuel Obligation. The introduction of the EU Biofuels Directive will lead to the production capacity for renewable transport fuels to grow internationally which is likely to create significant quantities of biomass which may, in turn, be used for energy production. The Directors believe the EU Biofuels Directive, if met, could create over 20 million tonnes of transport biofuels per annum and over 50 million tonnes of related biomass by-products. The Directors believe the time is now right to commercially exploit biomass energy given these market drivers, the increasing global demand for energy and the need to replace ageing power generation assets.
In the UK, when accredited renewable energy is produced, ROCs and LECs are usually claimable, and if it is connected to the local distribution network embedded benefits are receivable as a consequence of lowering network transportation costs. Independently from these benefits, renewable generation benefits from the increased costs that fossil generators face as they acquire EU Emission Allowances (“EUAs”) under the EU Emissions Trading Scheme (“EUETS”). In other European countries there are other schemes established to recognise and pay for the environmental value of renewable energy.
The target established by the EU White Paper for Renewable Energy Sources is to increase the share of renewable energy sources in gross inland energy consumption from 6 per cent. in 1996 to 12.0 per cent. By 2010 and legislative actions are in place to help achieve this target.
The UK Government’s 2006 Energy Review Report states that the UK will need substantial new investment in electricity generation capacity to replace closing coal, oil and nuclear power stations to meet expected growth in electricity demand. Roughly a third of the UK’s coal power stations must close no later than 2015 as a result of EU environmental legislation. The UK is likely to need around 25GW of new electricity generation capacity by 2025, equivalent to more than 30 per cent. of today’s existing capacity. The effect of rising fuel costs on industrial electricity prices has been an increase of between 32 and 39 per cent. in the period Q2 2005 to Q2 2006 excluding climate change levy which adds a further 4-6 per cent., on average.
Fossil fuel prices have risen in real terms since 2000 with:
gas up 104 per cent.;
heavy fuel oil up 41.9 per cent.; and
coal up 22.1 per cent.
The Renewables Obligation, sets a target for the proportion of renewable electricity supplied to be 6-7 per cent. for 2006/2007 rising to 15.4 per cent. by 2015. Renewable energy related output will qualify for payments from various environmental certificates, including ROCs, LECs, recycle benefits and carbon allowances.
The UK is projected to become 80-90 per cent. dependent on foreign imported gas by 2025, further supporting the development and deployment of renewable technologies, such as Helius Energy’s projects.
The EU’s Biomass Action Plan has identified the unrealised potential of biomass. The EU currently meets 4 per cent. of its energy needs from biomass. If it made full use of its potential, it would more than double biomass use by 2010, while complying with good agricultural practice, safeguarding sustainable production of biomass and without significantly affecting domestic food production.
The UK Biomass Task Force was established to support the UK Government’s energy policy goals. The Task Force concluded that biomass, in its diverse forms, has potential for contributing strongly to our renewable energy and climate change objectives, and that much of this potential is currently unrealised. Current EU policy is to achieve 5.75 per cent. of renewable transport fuel in all road transport fuels by 2010.
The UK currently lags behind other major EU producing nations. The UK Government has put in place the Renewable Transport Fuels Obligation which comes into force during 2008-09 requiring transport fuel suppliers to ensure a set percentage of their sales are from a renewable source. The obligation level is set at 2.5 per cent. in 2008-09, 3.75 per cent. in 2009-10 and rising to 5 per cent. in 2010-11. The Directors believe these taken together will equate to over 20 million tonnes of liquid fuel per annum, which will provide over 50 million tonnes of co-product that could be potentially used as a fuel in the Group’s projects.
To meet all of the 2010 Biofuels target of 5.75 per cent., the EU may require approximately 29 million tonnes of cereals for ethanol production (11 per cent. of the annual EU cereal crop), which would produce a potential 9.6 million tonnes of distillation co-products, versus current EU consumption of 0.75 million tonne for animal feed. The Directors are not aware of any direct competition in the sector for energy supply and believe the market is sufficiently large to accommodate further entrants.
Suitable overseas sites are also being sought, initially in Southern Africa where the company is in discussion with a number of government organisations, multi-national utilities and businesses, through its subsidiary Helius Energy Africa (Pty) Ltd. Southern Africa is facing an energy crisis as economic growth outstrips the supply of reliable electricity. Helius is currently working with one of the largest electricity suppliers in South Africa. The Group is also exploring opportunities in other countries in the region. Helius’ overseas operations are expected to be locally funded.
