Active Energy Group PLC (LON:AEG) has landed financing for its first CoalSwitch plant, which allows traditional coal-fired power stations to burn low value wood and saw mill by-products.
It has agreed a US$6mln, five-year, unsecured loan facility that will fund a 35,000 tonne a year facility in North America producing the new fuel.
The deal follows the testing of the technology by Rocky Mountain Power, a US utility that is part of the giant PacifiCorp.
The creation of the plant will have a commercial impact on the AEG business as it opens a “significant revenue stream”. The payback on the initial investment is expected to be “rapid”, investors were told.
“This is a landmark moment for AEG,” said chief executive Richard Spinks.
“The funding unlocks our ability to commercialise our revolutionary and proven CoalSwitch technology and will enable us to generate meaningful revenues within the USA, which is set to be one of our core geographic markets. Additionally, we are delighted with RMP's public support for our product.
“Not only is it positive in terms of our future relationship with RMP [Rocky Mountain] but we anticipate that this will aid our ongoing discussions with other potential customers going forward.
“Due to its ability to enable coal fired power stations to meet strict green regulations without the need for expensive retrofit programmes traditionally required to accommodate biomass feedstock, we believe that CoalSwitch represents a potentially ground-breaking force in the market.
“Therefore we look forward to providing further details and timescales regarding the development of AEG CoalSwitch, which will be transformative for the Company and our customer base in the coming months."