Simec Atlantis has entered into discussions with a data centre company for offtake options for its converted Uskmouth power station.
The developer said it is exploring options with TechRE to locate data centres within the biomass plant’s site at Newport in Wales.
Proposals include delivered power through a private wire network under a long-term power purchase agreement to owners and operators of the data centres.
Simec Atlantic plans to repurpose the coal-fired Uskmouth power station to operate using waste-derived fuel pellets consisting of 50% waste biomass materials with the remaining fuel pellet content made up of plastic wastes unsuitable for recycling.
Uskmouth is expected to generate 220MW of baseload electricity from this sustainable fuel source, when it is fully converted.
Simec Atlantis will develop the project in two phases. The initial phase will comprise the conversion of the first 110MW generation unit at the power station.
Conversion works for phase one are expected to take 18 months.
Upon successful commissioning of the first phase a second unit, phase two, will be converted to increase the total net output from the station to 220MW.
Final design studies are now underway to inform the scope of the engineering, procurement and construction (EPC) contract.
The EPC tender process will be a global tender process for qualified participants.
EPC contract negotiations are expected to conclude in early 2021 with an announcement of the successful bidder or consortium shortly afterwards.
The terms and conditions of the EPC contract will determine the final structure of the project finance package.
Financial close is expected to occur in the later part of the first quarter in 2021 or early second quarter.
Atlantis will seek to achieve financial close for phase two as soon as possible following commissioning of phase one.
Simec Atlantis chief executive Tim Cornelius said: “The continued focus on the transition to a carbon neutral economy has received fresh impetus as a result of the impact of Covid-19 and countries around the world are looking at the opportunities presented by a move to a carbon free economy as a way to create jobs and generate sustainable prosperity.
“The Uskmouth project is leading the way to a sustainable future and we are delighted that so much progress has been able to be made on this important project despite the disruptions we have all experienced so far during 2020.
“The decision to phase the conversion into two stages is prudent as it de-risks supply chain timelines, fuel supply and most importantly the timeline to first electrons exported to the grid and therefore revenue generation.
“Further, we are delighted to be working with TechRe on the potential development of a large, private wire supply contract to data centre operators at Uskmouth.
“This could become one of the most exciting corporate PPA projects in the UK, demonstrating how the digital economy can work hand-in-hand with sustainable energy generators to establish more data centre capacity in the UK to meet ever growing demands in an ethical and responsible way.”