The division, Brockwell Energy Limited, will look after the development and potential spin-off of Hargreaves' energy project interests. The subsidiary will be led by Alex Lambie as Chief Executive Officer (CEO), supported by Iain Cockburn the Group's Finance Director, who will step down from the Board once a suitable replacement has been identified.
On the development of energy projects through Brockwell, the company said: "The Board strongly believes that there exists today an exciting opportunity to use the Group's projects and assets as the platform upon which to build an integrated energy business in the UK including onshore wind, solar PV, EfW and flexible technologies including gas and energy storage."
Key schemes under active evaluation and/or development include two Energy from Waste (EfW) projects in Grangemouth and Fife; Earl's Gate Combined Heat & Power (CHP) and Westfield respectively.
In addition, Brockwell will oversee 400MW worth of onshore wind projects, including a single 300MW scheme, as well as flexible gas generation projects centred around a number of the Group's own grid connections.
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In an update on the Earl's Gate scheme, the Group stated: "We are pleased to report excellent progress on the development of the Earl's Gate project. This project is a circa 200,000 tonnes per annum, 22MW electrical CHP plant that will utilise well-established and proven technology from one of the world's leading providers. The CHP plant will benefit from selling heat and power into an existing private heat and power network at the Earl's Gate complex, making it one of most efficient CHP plants of its type in the UK.
"Following the grant of planning permission in January 2017, the Group announces that it has agreed an MOU to develop the project in partnership with GIB. Under the terms of the MOU, GIB has deployed technical and commercial resources to work alongside the Brockwell team with the intention of taking a 50% equity stake in the project at financial close, expected by the end of December 2017. The projected capital expenditure required for the plant is circa £150m which will likely be funded by £50m of equity and approximately £100m of non-recourse project debt.
"The Board expects the Earl's Gate project to generate significant long-term returns and value. In the short term, the successful financial closure of the project should generate a modest development premium and offer an opportunity for the Group to co-invest alongside a highly credible and successful third party investor."
David Morgan, Chairman of Hargreaves, said: "Exciting progress continues to be made in developing value in our energy projects. The formation of Brockwell Energy creates an opportunity to raise the specialist capital and create the partnerships necessary to enable the Group to extract maximum value across the entire portfolio of energy projects whilst allowing the Group to control the level of any investment and to focus on cash generation and the continuing simplification and development of the Group."
(LM/MH)
