Simec Atlantis shares surge on successful testing of fuel pellets

Simec Atlantis Energy announced the successful completion of industrial-scale combustion testing of the waste-derived fuel pellets to be used at the Uskmouth Conversion Project on Tuesday.

The AIM-traded firm awarded Mitsubishi Hitachi Power Systems Europe (MHPS) the contract to carry out the design and development of the combustion system for the flagship Uskmouth Conversion Project in October.

At the time, it said the contract included the “largest ever combustion testing” of the fuel pellets, which would be used as fuel in the project, at Mitsubishi Heavy Industries's Research & Innovation Centre in Nagasaki, Japan.

Successful completion of the testing was described by the company on Tuesday as a “significant milestone” for the project.

The test reportedly “conclusively” proved that a pulverised fuel burner based on MHPS's ‘DS Ultra Low NOx’ burner could be used to stably combust the waste-derived fuel unsupported - that is, without any oil or gas support firing.

Simec Atlantis said the burner was able to operate continuously at 25MW thermal power using the fuel, and was comparable in rating to the burners required for the Uskmouth Conversion Project.

During the testing, MHPS established that it was possible to feed large volumes of pulverised fuel to the burner using a pneumatic system without disturbances, at a rate that was also comparable to that required at the Uskmouth Conversion Project.

MHPS also investigated and confirmed that flue gas emissions were within anticipated levels, and that the burner was able to achieve expected low nitrogen oxide (NOx) performance, while maintaining low carbon levels.

Following successful completion of the test the final stages of the pre-engineering, procurement and construction (EPC) detailed design contract was now underway.

Simec Atlantis said final design studies include using the successful combustion test results to validate the computational fluid dynamics modelling, carrying out more detailed Uskmouth boiler system refurbishment design, and confirming the requirements for refurbishment and enhancement of the existing flue gas treatment system.

MHPS would have completed all of that work by the fourth quarter, at which point it would be able to make an offer for a fixed price supply of the combustion system under an EPC contract, with terms and conditions suitable for project finance.

The board said the bespoke fuel pellets, designed and produced by project partner, Netherlands-based alternative fuel specialist N+P Group, contained about 50% biogenic waste material such as paper and cardboard, with the rest made up primarily of plastic waste.

It said the waste used to make the pellets was not currently economically recyclable, and thus, if not used in production of fuel pellets, would be sent to landfill or diverted from landfill to purpose-built incineration facilities, or exported for use abroad.

“The successful completion of the fuel combustion testing is a major milestone for this flagship conversion project and represents a very important step in the program towards achieving financial close,” said chief executive officer Tim Cornelius.

“This project is the world's first example of a coal-fired power station being repurposed to run on 100% waste derived fuel pellets and the results of this test will potentially have material implications for the way plastic waste, and aging coal fired power stations, is managed globally in the future.”

At 1403 BST, shares in Simec Atlantis Energy were up 34.55% at 14.8p.