Lloyds Bank Mulls Loan to Utility-Scale U.K. Biomass Power PlantLouise Downing
Lloyds Banking Group Plc is studying lending to a project to convert a power plant from burning coal to wood pellets next year as it expects growth in green energy.
“Investment in the U.K. is a big driver for us,” Alan White, infrastructure and energy finance senior director, said in an interview in London. “This is a sector that has got a huge amount of investment required over the next 10 years and beyond as the government looks to decarbonize electricity.”
Lloyds will wait for pellet supply contracts to be put in place before deciding on funding the utility-scale conversion. The bank is also considering lending to a biomass plant of less than 20 megawatts of heat and power and U.K. offshore wind, said White, who didn’t give any estimates for the level of funding.
The lender, which provided about 330 million pounds ($540 million) to the renewable energy industry in 2012, had expected to maintain that this year until the market slowed as companies waited for the government’s Electricity Market Reform, he said. White didn’t give a revised estimate for financing this year.
“We expect this to pick up in 2014 and 2015 as developers bring more projects to market and utilities consider what projects to finance,” he said. “We have been waiting with baited breath for details. We hope that next year we will be lending about the same as we did in 2012.”
The U.K. on Dec. 4 issued a list of final guaranteed rates, or strike prices, it will offer clean generators under the EMR. The legal framework for the program will be created with the Energy Bill expected to be passed before the end of the year.
The government has awarded early investment contracts to some projects that may face delays because of the political process, including conversions of coal-fired power stations to biomass by Eggborough Power Ltd. and Lynemouth Power Ltd.