Stobart to supply biomass to 40 MW UK facility

By Erin Voegele | March 05, 2015

Stobart Group Ltd. recently announced it has signed a 20-year biomass supply agreement with Brite Partnership (North East) Ltd. to provide 260,000 metric tons of fuel annually to a 40 MW bioenergy facility in the U.K. The facility, located in Rotherham, South Yorkshire, is expected to reach financial close within the next two weeks.

According to Stobart, it will begin supplying biomass to the facility in 2017. Over the life of the 20-year contract, the company is expected to supply and transport 5.2 million metric tons of wood waste to the plant.

The agreement means Stobart is contracted to provide 1.75 million tons of biomass per year to customers by 2017. The company has set a goal to be contracted for 2 million metric tons per year by that time.

As part of the announcement, Stobart also issued a trading update. Regarding its energy division, the contract with Brite Partnership is the third major biomass supply contract Stobart has announced in recent months. In January, an agreement for 250,000 metric tons of waste wood per year was signed with a proposed biomass plant in Margam, South Wales. In November, an agreement for 146,000 tons per year of waste wood was signed with a facility under construction in Widnes. Stobart will also source 140,000 metric tons of wood waste for a drying operation adjacent to the Widnes facility. That operation will supply 90,000 metric tons of dried product to the biomass market.

Stobart recently published its 2014 annual report, announcing that its biomass division supplied nearly 1 million metric tons last year, up from 650,000 tons the prior year. The biomass division reported EBITDA of £4.4 million ($6.76 million) last year, up from £4.1 million in 2013. Revenue for the biomass division was £28.1 million, up from £16.4 million in 2013. 

Overall, the Stobart Group reported underlying profit before taxes of £5.4 million, down from £6.3 million during the prior year. Total revenue was £99.18 million, up from £76.79 the previous year. The company reported a loss before tax from continuing operations of £10.2 million, compared to a profit of £3 million before tax from continuing operations in 2013.