Perth company Plantation Energy Australia (PEA) has struck a $70 million, three-year deal with a Belgium-based power company to supply densified biomass fuel pellets.
Private company PEA said the deal with Electrabel NV is the first of its kind in Australia, with the pellets made from non-commercial plantation forest residues.
Initial exports will be shipped from Albany where PEA has a pellet manufacturing facility.
"This agreement is an important first step as we look to expand our business model in Victoria and South Australia and increase our capability to meet growing world demand," PEA business development manager Jarrod Waring said.
"We also believe there is great potential to supply the domestic market over time as fuel pellets become more widely understood and accepted here in Australia".
Densified biomass fuel pellets are burned with coal in coal-fired power stations and are extensively used in Europe, PEA said.
PEA is backed by US-based private equity firm Denham Capital.
The announcement is below:
Plantation Energy Australia Pty Ltd ("Plantation Energy"), Australia's largest manufacturer and exporter of Densified Biomass Fuel (DBF) pellets, announced today the signing of a three year AUD 70 million supply agreement with Belgium-based Electrabel NV, subsidiary of GdF-Suez, Europe's largest power company. Plantation Energy is backed by leading US-based global private equity firm Denham Capital, which in October 2008 announced an equity investment of up to US$80 million in the company.
The agreement between Plantation Energy and Electrabel is the first of its kind in Australia that will see Plantation Energy manufacture and export clean renewable energy in the form of DBF pellets made from non-commercial plantation forest residues. Initial exports will be shipped from Albany, Western Australia, where the first of several planned pellet manufacturing facilities is in operation.
"This agreement is an important first step as we look to expand our business model in Victoria and South Australia and increase our capability to meet growing world demand," said Jarrod Waring Business Development Manager of Plantation Energy. "We also believe there is great potential to supply the domestic market over time as fuel pellets become more widely understood and accepted here in Australia".
"This agreement strongly supports Electrabel's continuous efforts to replace fossil fuels with renewable sources and helps us to retain market leadership in this segment." commented Rudy Willemse, Biofuel Purchase Manager of Electrabel. "The extremely efficient logistics of the Plantation Energy Albany plant fully preserve the CO2-neutral character of their product".
DBF pellets are used extensively in Europe, where they are burned with coal in coal-fired power stations. Demand for pellets exceeded 8 million tonnes in 2008 and is expected to top 16 million tonnes by 2014.
About Plantation Energy Australia Pty Ltd
Plantation Energy is incorporated in Western Australia with offices in Melbourne and Perth and is funded by Denham Capital, a leading energy-focused global private equity firm. The company has an experienced executive team with current operations centered in Albany, Western Australia and further capacity under development in the Green Triangle of Victoria and South Australia. The company's pellet manufacturing business builds on and compliments Australia's large, well-established, plantation timber industry bringing economic benefit and employment to regional Australia.