OREANDA-NEWS. December 02, 2015. UK government’s support for biomass power generation was re-affirmed, following confirmation the conversion of the Lynemouth coal-fired power plant to biomass has passed state aid approval. RWE will now progress plans to convert the plant to biomass.

Andree Stracke, Chief Commercial Officer of RWE Supply and Trading GmbH said, "We welcome this confirmation of the government support for biomass power generation, which provides a reliable base load to compliment other renewables such as wind and solar. This is an important milestone for the further development of the site. We are working towards full conversion and power production from 100% biomass within 18 months. Once operational the project will be able to export 390 MW of low carbon electricity to the National Grid, supporting the Government’s climate change targets.”

The 420 MW (gross capacity) Lynemouth Power Station is located in the north east of the UK. The plant is capable of producing enough electricity to meet the needs of over 450.000 households. The conversion from coal to biomass will allow the station to operate under new tighter EU emission regulations which come into force on the 1st January 2016.

The acquisition of Lynemouth in December 2012 was part of the Principal Investment Business of RWE Supply & Trading.

Andree Stracke: “Todays confirmation is a win-win-situation for all stakeholders. It is fantastic news for the plant and its 135 employees, with positive impacts for the region. It supports the climate change goals of the UK government and will be important for UK’s security of supply. This project supports RWE’s strategy to convert the plant to preserve and boost the value of the operations.

Principal Investment

Leveraging our extensive energy commodity expertise, RWE Supply & Trading has introduced the department “Principal Investments”. Principal Investments targets energy assets and companies including distressed opportunities and/or where RWE Supply & Trading brings physical trading capabilities to manage commodity risk for the investment. We target investments where the majority of the value is driven by the relevant commodity rather than a focus on financial leverage or operational improvement.

Geographical focus is including but not limited to Western/Eastern Europe, North America, Latin America and Asia. Ideal investments involve strong management teams with the appropriate incentives to deliver returns with an exit strategy at high valuations targeting 3-5 years.