Farmers are being asked to sign up to two-year premium-priced oilseed rape contracts to supply a new 140,000t oilseed rape crushing plant at UK Coal’s Harworth Colliery headquarters near Doncaster, South Yorks.
The development is a joint venture between Harworth Power, UK Coal’s renewable energy arm, and non-food crop specialists Springdale Energy.
Rapeseed will be cold-pressed to produce meal which will be burned in a new biocombuster powering an existing 18MW electricity generator previously running on mine gas.
The oil will go for biodiesel and other off-site uses.
Speaking exclusively to Farmers Weekly this week ahead of a formal announcement today (Friday 10 Feb), Springdale’s Clifford Spencer said the £4.5m investment would enable the new company, Stem Power, to offer farmers winter and spring OSR growing contracts for this harvest.
Those contracts would be priced at £150-166/t delivered.
“We are looking to contract 100,000t from this harvest from about 60,000 acres of rape, less than 5% of the UK crop,” Mr Spencer said.
“The plant will be in the middle of one of the biggest and most successful growing areas in the UK.
Contracts will be for two years and we are looking to move the business plan forward for the longer term; we’ll have a fresh offer for harvest 2007.”
Thanks to the new initiative, the power plant – which was due to close after the mothballing of the colliery this year – will remain open at a reduced output of 10MW of electricity, Harworth Power’s development director Tim Breheny confirmed.
The new crushing facility is expected to be up and running by the last quarter of 2006, with the biocombuster commissioned soon after.
Growers will be eligible to claim the Energy Crops Payment on land entered into supply contracts which have been pegged to the electricity market, with power supplied to the National Grid qualifying for Renewable Obligation Certificates.