CGN in Korea gets REC confirmation for 109-MW biomass project

CGN New Energy Holdings Co (HKG:1811) has obtained confirmation that its Daesan biomass power project in South Korea will be getting the expected rate of renewable energy certificates (RECs), a key condition for the start of EPC works.

The project is expected to have a capacity of 109 MW gross. The company said today its unit CGN Daesan has just issued a “limited notice to proceed” under the engineering, procurement and construction (EPC) contract, awarded earlier in 2018 to Hyundai Engineering & Construction Co Ltd (KRX:000720).

The project is to help CGN Korea meet the renewable portfolio standard (RPS) introduced by the Korean government, in line with the country’s clean energy goals. Back in April, on announcing the KRW-295-billion (USD 264.3m/EUR 226.2m) EPC contract award to Hyundai, CGN said South Korea was expected to increase the RPS target ratio up to 28% by 2030. CGN Korea thus decided to proceed with the biomass power project “as early as possible”. The start of work depended on it receiving a REC weighted value of 1.5, which has been confirmed on Monday.

A full “notice to proceed” is to be issued once financial close is reached. After that, construction of the plant is expected to take about 28 months.

Canadian company Pinnacle Renewable Holdings Inc (TSE:PL) was awarded in April a contract to supply 315,000 tonnes of industrial wood pellets annually to Daesan, commencing in 2021.

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