TEG Announces First AD Plant;

RNS Number : 8796P

TEG Group (The) PLC

26 July 2010

 



 

For release

07:00

Date: 26 July 2010

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

TEG Announces First AD Plant.

Grant Awarded by Zero Waste Scotland.

The TEG Group Plc, the AIM-listed cutting edge green technology company, which develops and operates organic composting and energy plants, is pleased to announce that it is to construct its first anaerobic digestion ("AD") plant.  The Company has formed a 50:50 joint venture ("JV"), TEG Biogas (Perth) Limited ("TEG Biogas") with Albion Ventures LLP ("Albion"), the London based venture capital investor.  TEG Biogas is to construct and operate a 16,000 tonnes per annum food waste AD plant to operate alongside TEG's well established in vessel composting plant at Glenfarg, Perthshire.  TEG is to supply the AD plant to TEG Biogas.

TEG Biogas has been awarded a grant for approximately 20% of the plant and equipment capital funding (£700,000) by Zero Waste Scotland, the Scottish Government funded organisation that provides support to the waste and recycling sector.  The grant will help fund the purchase of the AD plant and equipment.  Albion has provided approximately 80% of the remaining total capital in the form of equity and debt.  The balancing capital will be provided by TEG in the form of equity and a working capital loan, the latter to be issued out of the proceeds of the sale of the plant to the JV.  Total capital expenditure is estimated to be approximately £4.5m, including working capital. 

The TEG Biogas facility is expected to generate approximately 0.7 MW of electricity and 0.25 MW of heat.  TEG Biogas has agreed terms with the landlord, Binn Farm Limited ("Binn"), to supply the heat to a new concept Binn Eco Park development.  It is expected that the AD plant will be operational by the end of the first quarter in 2011.  TEG will operate the plant on behalf of TEG Biogas under a management agreement.  TEG will manage sales and will supply waste to the AD facility from its surplus currently under management.

Planning permission for the AD facility is in place.

As announced on 4 June 2010, TEG has entered into a Licensing Agreement with its partner, UTS Biogastechnik GmbH ("UTS"), for the supply of UTS technology into the UK waste market.  UTS will provide the plant design, support services and core biogas plant equipment to TEG who will provide overall procurement, construction and project management to TEG Biogas.  UTS will provide technical expertise, training, commissioning and operational support services, and TEG has completed the recruitment of an AD specialist.  Alkane Energy plc ("Alkane") will be responsible for the gas to power element of the project which includes methane management, power generation equipment, grid connection and securing the power purchase agreement.

Commenting for TEG, Chief Executive Mick Fishwick said:"We are excited to be developing our first AD facility and to be entering into the renewable energy sector, and we look forward to working with UTS and Alkane.  We are very grateful to Zero Waste Scotland for their valuable support and we look forward to working with them to provide further food waste processing capacity in Scotland.

This AD facility promises to be an excellent showcase to support the many bids for AD plants throughout the UK and we look forward to developing our first venture with Albion. Albion is well informed and experienced in TEG's market place and we are delighted they have selected TEG as a partner.

This development follows on from the acquisition of Simpro, some key contract gains in Scotland and the recently announced contract win with May Gurney in Bridgend.  We are very pleased with the progress we are making and, with the recently announced support of the organic waste market by both the Scottish Executive and new UK Government, we look forward to a very exciting time ahead."

Iain Gulland, Director of Zero Waste Scotland, said:""Investment in anaerobic digestion is essential if we are to deliver the Scottish Government's vision of zero waste.  We are delighted to support TEG in developing the Glenfarg facility, which will complement their existing composting operations and create an all-in-one organics recycling facility, capable of treating a wide range of wastes from commercial, industrial and household sources and producing renewable power and BSI PAS110 certified fertiliser outputs to meet local needs."

David Gudgin, Partner in Albion Ventures LLP said: "Albion is an experienced VCT investor. We see the environmental sector as a key area for growth and change and have identified TEG as a leader in organic recycling. This is our first AD investment, but look forward to many more investments in AD with TEG."

ENDS

Contact:
The TEG Group Plc	Tel: [phone]
Tanja Willis, Finance Director	www.theteggroup.plc.uk
Peckwater PR	Tel: [phone]
Tarquin Edwards	[e-mail]
Canaccord Genuity (Nomad)	Tel : [phone]
Robert Finlay / Guy Blakeney

Editor's Notes:

TEG

TEG provides an in-vessel composting technology, which is one of the few approved technologies capable of treating animal by-product (ABP) waste, and is now providing an anaerobic digestion (AD) technology to produce power from food waste.  Plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).  The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs").  TEG owns its composting technology and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets.  The TEG processes are an economic alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies in Europe capable of treating this waste, is a natural process producing compost as an end product.  The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease.  TEG's Silo-Cages are housed in self-contained buildings, are not unsightly and are environmentally friendly.

Collaboration with UTS

Having supplied equipment to more than 1,500 equipped biogas plants, UTS Biogastechnik GmbH is one of the world's leading biogas companies.  The UTS group of companies offers services in the planning, construction, delivery and installation of biogas plants and their key components.  The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base.  UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited. to service the United Kingdom & Ireland markets.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners.  The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste.  Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year. 

The Natural Organic Fertiliser Company Limited ("NOFCO"), a subsidiary of TEG, is a marketing company specialising in the development of end markets for compost products, an important aspect of all plant developments and key to local authority development.  The company has an expertise in the development of agricultural and horticultural markets and this capability is provided to customers to enhance TEG's overall service offering.

About Albion Ventures

Albion Ventures LLP is a leading independent venture capital investor, managing approximately £200m across seven Venture Capital Trusts. Focused on the UK, Albion looks to invest £1-10 million in a wide range of growing businesses, from technology orientated companies to service and asset-based businesses. Albion was established in 1996 and has delivered market leading performance. Albion Ventures is authorised and regulated by the FSA.

About Zero Waste Scotland

Zero Waste Scotland is the new programme created by the Scottish Government to support delivery of its Zero Waste Plan.  It will integrate the activities of WRAP Scotland, Waste Aware Scotland, Keep Scotland Tidy, Remade Scotland, Envirowise in Scotland, NISP in Scotland, and some programmes delivered by the Community Recycling Network for Scotland.

 

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