Renewable Energy Generation Ltd (REG) has signed contracts with Finning UK and Caterpillar Financial Services for the construction, operation and financing of an 18MW bio-power plant at Whitemoor Business Park near Selby, Yorkshire.
Finning will be responsible for the design, construction and maintenance of the project, intended to be the first of a series of renewable energy plants providing clean standby generation capacity. The project will use Caterpillar engines, powered by REG's patented LF100 fuel derived from recycled waste cooking oil.
The project is expected to cost £6.3m, of which REG will initially contribute 15%. The plant is anticipated to become operational during the second half of 2014 at which point Caterpillar Financial will provide funding of 70% of the project costs through a long-term debt facility, the balance being provided by REG.
REG chief executive officer Andrew Whalley said: "We are delighted to be procuring engines from the world's largest diesel engine manufacturer to build the Whitemoor project. That Finning is prepared to build and operate the plant whilst Caterpillar Financial is providing long-term debt finance to the new facility, demonstrates the commercial application of a process that has taken us many years to perfect.
"We believe the standby generation market will grow strongly, a result of the closure of older electricity generation plant leading to greater intermittency on the UK grid. REG is in a strong position to participate in this growth, utilising its proven, clean generation technology."
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