It's 'full steam ahead' for green fuel plant

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Tuesday, January 12, 2010
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This is Grimsby

FUNDING for Grimsby's first bioethanol plant has moved a stage closer with a partnership formed to raise the required £236-million.

Vireol, the company that brought the South Bank scheme forward, has joined forces with investment company Future Capital Partners and construction firm Simon Carves, with summer 2010 a possibility for work starting.

  1. <P>Ged Russell, left, technical operations director of Vireol PLC and Nick Fennell planning consultant for Dalton Warner Davis, look at plans for the bioethanol plant which could be built in Moody Lane, Grimsby.</P>

    Ged Russell, left, technical operations director of Vireol PLC and Nick Fennell planning consultant for Dalton Warner Davis, look at plans for the bioethanol plant which could be built in Moody Lane, Grimsby.

  2. <P>VISION:  A 3D layout plan of what the bioethanol plant could look like.</P>

    VISION: A 3D layout plan of what the bioethanol plant could look like.

Bank lending and equity will be combined to meet the financial requirements and with agreements now in place to sell the bioethanol – a wheat-based fuel, key to driving down emissions from road transport – the funding element is at an advanced stage.

More than 50 permanent jobs will be created, with hundreds of roles in the construction period, when the 10-hectare site is realised between Bluestar Fibres and Lenzing, off Moody Lane.

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The deal created waves in the financial sector yesterday, with international coverage of the partnership formulation.

Ged Russell, technical and operations director at Vireol, said: "This is very positive news. We have been working in the background for some time to secure finance for the project and this is an important step in this process.

"We have been working with Future Capital for two years and have got to the point where we see how we get through the major fundraising work.

"The thing that has triggered this is the agreement for the ethanol out take – reported to be a £1-billion deal. With that sort of scale of project behind us we are confident we will be able to raise the required amount of finance. It will carry considerable weight in the market for raising finance."

The partnership will see the plant leased to operator Vireol, with Future Capital planning to then sell or float the stake further down the line.

The Government has set targets for the amount of renewable fuel filling the tanks of UK vehicles. Bioethanol is seen as the way forward as it can be blended with traditional fuel.

Grimsby's location, with access to deep-water ports, three of the biggest refineries and the most intense wheat-growing area in Britain, made it ideal for such a development.

Mr Russell said: "It is all hands on deck now, full steam ahead. We are putting the final touches to the paperwork for finance, getting everything ready, so when we close on the finance we are ready."

Asked how optimistic he was about securing the full funding – with targets of 40 per cent investor equity – Mr Russell said: "We sense the banks are in a position where they are now considering lending money again. We have been working behind the scenes with them and a number of advisors think now is the time when we should be able to close the deal. We have still got to close the deal, but banks out there are ready, willing and able to help us."

Planning permission for the 150,000 tonne capacity plant was granted in July 2008, and ground investigative work has been completed on site, so the build can begin once the funding is confirmed.

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  • Profile image for ImmArthur

    by ImmArthur

    Sunday, October 21 2012, 1:48PM

    “Wrangler,

    Water in ethanol has been a significant concern re corrosion for some time, however modern production standards are increasingly demanding the use of corrosion inhibitors. These standards are driven almost entirely by the single fact that the presence of water in ethanol is almost unavoidable, due to its strongly hydrophyllic nature.

    Finally, why has the incompetent GT Team ascribed this article to me? I simply commented on an article. To paraphrase that great thinker of the late 20th century; "Fools!".

    Arthur, Immingham”

  • Profile image for whyhaveone

    by whyhaveone

    Sunday, October 21 2012, 12:49PM

    “The bad news is that last week the EU announced that in the near future, only half of the 10% biofuel content target for transport fuels will be permitted to come from a crop based source.
    My guess is that it won't be that long before crop based sources are not permitted at all.

    Crop based biofuels are being blamed in part for recent increases in food costs.”

  • Profile image for ImmArthur

    by ImmArthur

    Sunday, October 21 2012, 12:23PM

    “For 'different', read 'difference'. Sorry.

    A, I”

  • Profile image for ImmArthur

    by ImmArthur

    Sunday, October 21 2012, 12:22PM

    “This has gone very quiet, surely not another promised development failing to materialise?

    By the way, Dave, the word you were looking for is 'exacerbated', not 'exasperated', which is what I am by the different between the number of jobs promised for this area and the number which actually appear.

    Arthur, Immingham”

  • Profile image for This is Grimsby

    by A Grimland Elder, GRIMLAND the tipsy...

    Sunday, January 17 2010, 5:09PM

    “Sorry to be simplistic and definitely open to informed comment, but isn't Ethanol a.k.a. ethyl alcohol, CH3CH2OH, produced by the fermentation of sugars by yeast. I believe it's the basic process by which Brazil produces its ethanol for 'petrol/gasoline' substitution, using molasses ('Blackstrap') as the food for the yeasts. Of course, yeasts, even the alcohol-tolerant varieties, are killed by the alcohol, eventually, so there's a limit to the amount of alcohol produced by this means.

    I personally use the process fairly often. I call it brewing or wine-making. It uses barley for the beer (but in Germany they also use wheat). Cherry plums, damsons, currants or even brambles are also good sources of flavour, but the process does require the addition of sugar in one form or another to get a reasonable alcohol content. Most yeasts die in concentrations of 15% alcohol.or even less.

    To get the 50%-ish+ of 'hard' spirits, one needs to use a still (as the Kentuckyans and the Irish use, for their hard wiskeys and poteen -- from potatoes, which, of course feed the yeasts with their sugar and starch . This, does requires heat, almost inevitably from a carbon-composed source... In Brazil, they may fire their furnaces with the spent cane, but I know nothing further about ethanol production, but I thought you might be interested.

    Personally, I'd rather drink it than put it in a car so I can't advise on ethanol as a substitute for petrol/gasoline... Maybe Vireol can advise? Isn't Vireol what 'growing girls needed, and took like medicine, by the spoonful every morning. Oh... now we're back to brewing again. I believe 'Virol' is 'malted yeast extract' -- something like 'Marmite' with added sugar?? Marmite, of course, is made from the dead yeast which acted on the malted barley in brewing.

    Full circle. Hope 'twas intrestin.”

  • Profile image for This is Grimsby

    by Pensioner, Immingham

    Thursday, January 14 2010, 12:21PM

    “Dave Grimsby,

    If you look at todays wind, how can your windmills possibly supply the entire south Humbert bank.....I think you are whistling in the wind a little!

    http://www.xcweather.co.uk/

    I agree they are a fantastic engineering feat.........who ever thought up building wind turbines that only generate now and then was also fantastic...... I wonder if the vast subsidies were an attraction.”

  • Profile image for This is Grimsby

    by Dave, Grimsby

    Wednesday, January 13 2010, 10:19PM

    “If anyone checks the planning application for this site there is an associated application that is a 3 km pipeline that will be used to transport the ethanol from the site to the storage facilities at Immingham where, I assume, it will be blended with the petrol that is shipped through those docks for distribution throughout the NE. Now I'm not sure, but usually companies don't invest that kind of money without knowing the investment won't fall apart really quickly?

    Ethanol is corrosive to steel (not entirely sure of the mechanism) which is why it can't be distributed in the existing petrol infrastructure (wrong steel or can't treat it etc). This is further exasperated by the fact ethanol is hygroscopic (it attracts water), so if it contacts any air it will absorb the moisture that is carries with it (all ambient air carries water vapour). Everytime the ethanol is transferred from storage tank to storage tank it collects water by contacting the air and these big tanks (10 000 m3) are too big to provide controlled atmospheres. The Brazilians have mastered using hydrous ethanol 95% ethanol 5% water, this is less of an issue, however the speed with which the car fleet changes and the time it takes the EU government to issue fuel specs we are unlikely to see hydrous ethanol at our pumps any time soon. It will be some years (I believe) before E85 pumps become common place (there is a handful in the entire country) producing fuel that can be used by flex fuel cars.

    As for the arguement on Wind Power etc, I have been to Butlins Skegness the past 2 years for a break with the kids and I marvelled when looking out at the sea and watching the wind farm which is producing enough electricity for domestic use for the entire South Humber bank, a fantastic engineering feat.

    My comment about my diesel car was slightly tongue in cheek, I already make my own biodiesel using waste oil from a couple of the take aways in town, my production cost is about 65p/Litre and Mr Brown kindly gave me a personal allowance of 2500L/yr tax free! Not the most exciting hobby in the world but I feel I am doing my bit to save the planet!

    Happy motoring.”

  • Profile image for This is Grimsby

    by The Wrangler, NE Lincs

    Wednesday, January 13 2010, 12:55PM

    “Jim, I'm not saying that it is not transported by road in your part of the world.

    I am saying that it *CAN* be transported by pipeline if you want to.

    Please explain the mechanism by which condensation occurs inside a pipe!

    This is what I do for a living Jim - Condensation of water can only occur if a gas containing water is cooled or compressed below the dewpoint of the water in the gas at which point condensation will occure. As with any pipeline transporting a gas or liquid that that cannot be mixed with water, the pipeline would be dried with Nitrogen (or heated Nitrogen or a suitable solvent ) and then commissioned on what ever you want to put into the line.

    If the Ethanol is dry going in, I can assure you it will be dry coming out - that is how pipes work!!!”

  • Profile image for This is Grimsby

    by Jim, Regina

    Wednesday, January 13 2010, 12:42PM

    “Sorry Wrangler the fact is Ethanol is not transported by pipe line because it will pick up water. Condensation happens & pipe lines gather moisture. In this part of the world it always goes by tanker.”

  • Profile image for This is Grimsby

    by OAP., Nth Lincs.

    Wednesday, January 13 2010, 11:49AM

    “Jim. Regina. I agree with your comment about the sustainability of a plant to produce any ammount of ethanol which would be financialy viable.

    I believe the fact that these plants are planned near to the ports suggests that this fuel may be loaded onto tankers for export also it is convenient for cheap subsidised wheat from France and other E U countries who are paid higher subsidies than British farmers, this imbalance in E U subsidies is caused by our very own labour government failing to claim money that we were entitled to.
    Over the past 20 years or so the E U has forced british farmers to take valuable land out of production, this land should have been farmed to provide alternative crops but if they hadn't taken this land out production they would have lost the reduced subsidies that they were to get.

    Finaly Dave. Grimsby. Your diesel car will run on rape seed oil, another crop grown on food producing land.”

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