Sweetman Biomass Signs Japanese Bioenergy Deal
08 Aug 2021 by energyglobal.com
Terms surrounding a 20-year, binding supply agreement have been reached between a subsidiary of ASX bound Sweetman Renewables and a leading Japanese conglomerate over a material supply of waste biomass to help power Japan with the renewable fuel of the future.
Under a term sheet that has been recently signed, Sweetman Biomass, a wholly owned subsidiary of Sweetman Renewables will export 60 000 tpy of Green Woodchip (biomass) to a power plant near Kitakyushu, Moji, Japan. This biomass export deal represents US$4.5 million/yr in recurring revenue.
“Some 18 months in the planning, this is a ground breaking deal for us and one which highlights the tremendous potential of Sweetman Biomass as a long-term provider of alternative fuels” said Sweetman Renewables Director, Garry Millar.
“Sweetman Biomass expects to sign up many more coal to biomass conversion projects, particularly in Japan, within the next few years. This is the first of many to come.”
“Additionally, because the Japanese forward sell their power and demand certainty over stock and price, the process was very difficult, but we were able to deliver on both requirements with confidence.”
“The Japanese market is switching away from nuclear and coal very quickly. Over the next five years, there will be a huge push for alternative energy sources such as biomass and hydrogen. Sweetman Biomass sits at the intersection of that energy conversion”.
A spokesperson for the Japanese Power Company said: “Our new 15 MW Biomass Power Station near Nagasaki is one of many that we are planning to build. Decentralising power production into regional prefectures is part of our national energy strategy to make our power grid more resilient and less reliant on nuclear or coal as a fuel source.”
“The global push is on in earnest to convert away from using traditional fossil fuels to using alternative sources of fuel and Sweetman Biomass is perfectly placed to capitalise on this growing trend. We have an abundant fuel stock locked in and the distribution capability to deliver this biomass-for-fuel into the Asia Pacific market”, Mr. Millar said.
Sweetman Renewables has three existing divisions: hydrogen production, biomass supply and high-quality timber products via Sweetman Renewable Timbers, elevating the company’s current revenue base tenfold.
Earlier in 2021, Sweetman Renewables announced its intention to list on the ASX with a long-term goal of becoming one of Australia’s largest true green hydrogen producers.
In addition, the Sweetman Biomass division has already secured a lucrative long-term contract to supply waste wood biomass to Verdant Earth Technologies Limited’s AUS$550 million 151 MW green renewable energy power station at Warkworth, New South Wales.
That power station will be the third largest renewable baseload power station in Australia after the Snowy Hydro scheme and Hydro Tasmania.
Mr Millar said the biomass was being sourced from hardwood timber mills along the New South Wales coast and was in plentiful supply.
“The biomass we are sending the Japanese is of a very high quality with high calorific value and is far superior to what is currently being supplied to them from North America and parts of Asia.
“Furthermore, there’s starting to be a worldwide shortage of quality biomass, which means companies like Sweetman are in prime position to become a global powerhouse in this international export market in the years to come,” Mr Millar said.