Saltend Chemicals Park-owner PX Group has been awarded an operations and maintenance (O&M) contract for the Tees Renewable Energy Plant (Tees REP).
The facility, which is located in Tees Valley, is one of the world’s largest purpose-built pellet biomass power plants, according to PX Group’s announcement. It has the capacity to generate 299 MW of electricity, or 2.3 TWh per year, equivalent to powering 600,000 homes.
Tees REP is owned and operated by MGT Teesside, which was acquired by Australian investor Macquarie Group and Danish pension fund PKA in 2016 on a 50:50 basis. On its website, MGT says the plant uses co-products from timberland that is primarily for growing saw-timber for its biomass pellets. In order to meet sustainability criteria regulated by Ofgem the biomass is traced from point of origin, though the website does not provide further details.
However, previous announcements from several years ago have said that the feedstock would be sourced from sustainable forestry projects developed by the MGT team and partners in North and South America, as well as the Baltics. US-based Enviva Wilmington Holdings firmed up a 15-year offtake agreement with Tees REP in 2016 for nearly 1m tonnes per year (tpy) of wood pellets.
The plant was initially expected to enter service in 2020 but ran into delays during construction. Although it is reported to have begun generating electricity in 2022, it subsequently experienced technical challenges that have led to outages at the facility.
PX Group, a portfolio company of private equity firm Ara Partners, is taking over O&M at Tees REP following a prior collaboration through its PX Engineering division, which provided consultancy services to the plant during its commissioning phase.
PX operates the St Fergus Gas plant in Peterhead and the Teesside Gas processing plant on behalf of owners, North Sea Midstream Partners (NSMP). It also manages the Holbrook and the Widmerpool biomass plants for owner Gren, a Finnish investor that entered the UK market with the acquisition of 11 waste and biomass-fueled assets in 2023.
“It is a landmark moment for PX Group to take on the operations and maintenance of the largest new-build biomass plant in the world and a transformative moment for the entire regional energy sector,” said PX chief operating officer Dave Thompson.
MGT’s chief executive Ian Coxon said that PX Group’s “extensive expertise in safely managing large-scale green energy projects, combined with its proven success in operating other biomass sites” makes it the “ideal partner” to conduct O&M at Tees REP.
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