AEG raises £11.57m to fund development of biomass coal replacement fuel
Active Energy Group (AEG), a London Stock Exchange-listed firm and renewable energy specialist, has raised £11.57 million (€13.50m) via the issue of five-year convertible loan note to existing and new investors, with the cash set to be used to accelerate the development of the company’s CoalSwitch technology.
In a statement, AEG said it plans to build the first commercial-scale plant that will burn the biomass product that can be burned by old, coal-fired generation facilities without the need for a retrofit.
The company also revealed “numerous utilities” and owners of coal power stations across the world have requested the delivery of commercial batches of “drop-in” biomass fuel.
Timberland assets
Richard Spinks, CEO of Active Energy said: "The completion of this capital raise supports our strategy to accelerate the production of CoalSwitch and to collaborate with forestry owners around the world to increase the commercial viability of their timberland assets. AEG's commercialisation strategy should capitalise on the interest we have already received from utilities and major coal fired power stations and feedstock owners from across the globe, to commercially utilise our proven 'drop in' coal replacement biomass product.
"Crucially our product can differentiate itself from other coal replacement products as it is made from forestry or other industrial process waste (including not only forestry and sawmill wastes, hog fuels and demolition wood, but also otherwise completely unusable biomass waste streams such as empty fruit bunch and palm trunks).
“We firmly believe that the product has been significantly enhanced and improved since we began working with our partners some two years ago, and continue to believe that it has the potential to transform the coal-fired power industry, whilst at the same time making a positive impact on the global and regional air quality and environmental landscapes. We would like to thank our new and existing investors for participating in the CLN and are further encouraged that these funding partners share this positive, environmentally responsible view of our activities and are joining AEG for the next stage of CoalSwitch's commercial development."
Waste wood
The CoalSwitch product is made from the utilisation of waste wood which would normally be left to decompose following forestry operations including pulp mill / saw mill by-products such as bark, sawdust and thinnings, and wood which is over-age, under-quality, blow-down, beetle-kill, forest-fire damage and industrial waste.
Research, development and testing have been undertaken over the past two years in conjunction with the University of Utah.
Both burn and handling tests, including the recent ball mill grinding tests have all passed, the company said.
In a statement, AEG said: “The CoalSwitch product is hydrophobic so it is easy to transport and avoids the need for expensive weatherproof storage facilities unlike white fuel pellets which require climate controlled storage and expensive shipping and handling consideration.”
The company is planning to roll out CoalSwitch globally in jurisdictions where it has identified long-term, high volume feedstock arrangements and where “CoalSwitch has significant advantages over all other processes available today”.
The company is seeking to secure binding contracts with companies to secure feedstock arrangements which may include empty fruit bunch and palm trunks in Asia, low-value hardwoods and mill waste streams in Alberta and fir tree and sawmill residues elsewhere in Canada.
The company will make further announcements regarding its strategy to roll out CoalSwitch when appropriate.
This story was written by Liz Gyekye, editor of Bioenergy Insight.
