15 May 2019
("EQTEC" or the "Company")
Business Strategy Update
EQTEC plc (AIM: EQT), the technology solution company for waste gasification to energy projects, is pleased to provide an update on its business strategy.
EQTEC remains focused on becoming a progressive technology partner creating a unique ecosystem, where waste operators, developers, technologists, engineering, procurement and construction ("EPC") contractors and capital providers collaborate to build sustainable waste elimination and clean energy infrastructure projects.
Through viewing the market as a collaborative ecosystem and leveraging its in-house gasification technology capabilities, sector know-how and strategic relationships, EQTEC is seeking to mitigate technology and project execution risk to become the one-stop-shop for gasification technology, engineering design, EPC, O&M and project funding to developers and owners of waste to energy ventures.
EQTEC has already entered into a number of key strategic partnerships with leading partners as it seeks to address its target markets, with further strategic collaborations being considered. The Board of the Company ("Board") believes that this collaborative approach is already bringing new opportunities to the Company and will enable the Company to deliver projects on an expedited basis. This approach has also enabled the Company to have greater visibility and control over the project pipeline.
EQTEC's engagement with strategic partners and customers, both existing and new, has driven the Company to concentrate on successful applications in specific target markets where the Board believes that as a result of EQTEC's experience and successful commercial implementation, it has a competitive advantage. While the focus is on opportunities within the UK, US and European market, EQTEC engages with customers globally through strategic alliances.
Ian Price, CEO of EQTEC, commented: "We feel very positive about the current position of EQTEC and its ability to execute its strategy. The Board believes that working with a select group of strategic partners, with track record and success in their markets, will enable us to create and coordinate the ecosystem required to develop successful projects with proven counterparties. We continue to expand our pipeline and through this approach, to have a much greater influence on all aspects of such projects from design to operations.
"Our team have worked extremely hard to get us where we are and I am excited to share with our shareholders the transformational period ahead. I look forward to keeping shareholders updated in this regard."
The Company is now focused on the following three verticals in order to capitalise on its competitive advantage:
Elimination of Waste Streams - RDF
Municipal Solid Waste (MSW) and Refuse Derived Fuel (RDF)
EQTEC's target project size: 10-30 MW
It is estimated that approximately 3.5 million tonnes of RDF are exported annually by the UK due to lack of elimination and processing capacity, presenting a significant opportunity to EQTEC and its partners. To address this market, EQTEC has entered into collaboration with two of the largest energy infrastructure construction groups in the world, China Energy Engineering Corporation Limited International Company ("Energy China") and COBRA Instalaciones Y Servicios ("COBRA"), having passed their technical due diligence in 2017 and 2018 respectively, allowing EQTEC to provide the full technology and EPC offering.
The Board believes that the Company's collaborative strategy to address this sector was validated by Scott Bros. Enterprises Limited ("Scott Bros") entering into the memorandum of understanding with EQTEC and COBRA for the joint development of the proposed 25 MW Billingham Energy waste gasification and power plant as announced on 8 May 2019. The project, once operational, is anticipated to process 200,000 metric tonnes per annum of RDF from municipal waste with a project value in the range of £150 million to £180 million.
EQTEC is working with COBRA to deliver further EPC offers on other similar projects within the UK.
Elimination of Waste Streams - Industry Specific
Industry Specific Energy Recovery
EQTEC's target project size: 2-10 MW
Approximately 4 million tonnes of olive pomace waste are produced annually in Spain alone and this is becoming a significant issue for the industry throughout the Mediterranean.
EQTEC's initial focus in this vertical is on the elimination of olive pomace waste in the Mediterranean area, having successfully deployed its technology in eliminating such waste on a commercial scale since 2011, with 90,000+ hours of operational data at the Movialsa plant in Spain.
EQTEC are in discussions with a major Spanish business group, active in the sector, to partner and collaborate on developing projects for this application. The Board believes that through this partnership approach, EQTEC will be able to rapidly expand its presence in the market, providing technology sales revenues and recurring annual revenues from O&M contracts and potential technology licensing fees.
Another industry that the Company will be focusing on is waste produced during the pulping process in the paper mill industry throughout Europe.
Recovery of Clean Energy from Biomass
EQTEC's target project size: 2.5-5 MW
The U.S. Energy Information Administration currently predicts that wood biomass will be used to generate 117,000 MWh per day worldwide in 2019, estimated to be sufficient to power 100 million homes, and is expected to continue to grow year-on-year.
The United States, and in particular California, which needs immediate solutions for waste wood, offers significant opportunities for the recovery of energy from biomass feedstocks. The most recent drought in California caused a die off in excess of 100 million trees. Dead trees pose a serious threat of wildfire, pushing government and private agents to take action for urgent remediation. The State of California has declared a state of emergency to immediately address the risk. However, fewer than half a dozen small scale biomass plants exist in California. To address the current issue, the Bioenergy Association of California, estimates that more than 100 would be needed just in the Sierra Nevada.
As announced on 24 September 2018, EQTEC's proprietary gasification technology has been chosen by Phoenix Energy for two power plants in California, with the design work for the first power plant having already been completed. Given the significant opportunity that exists within California, EQTEC and Phoenix Energy are in discussions to form a deeper collaboration to develop Phoenix's project pipeline.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
+353 (0)21 2409 056
Ian Price - Chief Executive Officer
Gerry Madden - Finance Director
Strand Hanson - Nomad, Financial Adviser & Broker
+44 (0) 207 409 3494
James Harris/Richard Tulloch/Jack Botros
IFC Advisory - Financial PR & IR
+44 (0) 203 934 6630
Tim Metcalfe / Miles Nolan / Zach Cohen
Notes to Editors
About EQTEC plc
EQTEC's business model involves sourcing and providing assistance in developing waste elimination projects to which it will ultimately sell its EQTEC Gasifier Technology ("EGT") and O&M services. EGT enables project developers to construct waste elimination plants and recover electrical and thermal energy from the waste streams.
EQTEC sources projects that have a local supply of waste in need of elimination and conversion. It builds relationships and brings together the developers, the waste owners, the building contractors and funders. It then supplies the energy recovery technology and provides engineering services to the projects. Furthermore, EQTEC will provide O&M services to the operating projects generating recurring revenues over the life of the projects.
The Company is quoted on AIM and trades as EQT. Further information on the Company can be found at www.eqtecplc.com.
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