Thermal Power

10 Nov 2020

MGT Delays UK Biomass Plant Start-up for Third Time

10 Nov 2020  by Georgia Gratton   

UK biomass developer MGT Teesside has further delayed the launch of its new-build 299MW biomass-fired combined heat and power plant in the northeast of the country, pushing the start date back by three months.

The plant is now scheduled to start up on 10 February 2021, data from UK state-owned firm Low Carbon Contracts (LCCC) show. This is the third delay for the unit, which was initially set to begin operations on 31 March. The start date was later adjusted to 31 July and then 10 November.

The facility — which is expected to consume 1mn t/yr of wood pellets when running at full capacity — will be fully supplied by US pellet producer Enviva. But the delay to this major new demand project has coincided with near-record low European wood pellet spot prices. The Argus cif northwest Europe spot index for industrial wood pellets has held below $125/t since May, around $30-40/t below breakeven costs for North American pellet producers.

MGT was awarded a 15-year subsidy in 2014 under the UK's contracts for difference scheme, at an inflation-linked strike price of £125/MWh ($165/MWh). The current strike price is £145.22/MWh, LCCC data show.

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