Aim and AltX-listed renewables-focused development company Kibo Energy will potentially bring in an additional revenue stream from its 2.7MW plastic-to-syngas power plant, which resides at its subsidiary Sustineri Energy, 65% owned.
This potential new revenue stream involves the production of synthetic oil from non-recyclable plastic waste, in addition to the production of electricity from syngas, which promises significant added benefits to the project.
It is expected that the addition of synthetic oil production could significantly increase the profitability of the project and provide Kibo with the opportunity to generate revenue potentially much earlier than originally anticipated. The company said on January 17 that it would also materially contribute to de-risking the project and make it significantly more attractive to a wider spectrum of interested funders, thereby reducing the risk of financing.
“The potential introduction of this significant development to our first South African waste-to-energy project has great potential for investors, business and South Africa’s very challenging energy sector,” said Kibo CEO and acting president Louis Coetzee said
Kibo said it has already determined the technical and commercial feasibility of synthetic oil production through the project’s current design. It is now conducting a comprehensive integration study to determine the total technical, operational and financial impact of the project in terms of construction, commissioning and, most importantly, final profitability and return on investment.
As a result of the decision to potentially introduce synthetic oil production to the project, its development can be executed in different phases, with an expected positive impact on the project’s financing needs and its ability to achieve this financing
Phase 1 will include the construction of the plant to produce synthetic oil and will be followed by Phase 2, when electricity from the synthesis gas production facility will be added. Phase 1 involves the installation of a material preparation system, a pyrolysis chamber and condensers that will produce synthetic petroleum products.
During the second phase, the temperature of the pyrolysis chamber will be raised to produce synthesis gas that will be fed to the newly installed gas engines for electricity generation. The core design of Phases 1 and 2 will remain the same, with only a few team additions during Phase 2.
The final decision to proceed with the implementation of Phase 1 remains subject to the results of the integration study.
Kibo will now complete the integration study and continue to secure financial close, with the construction phase commencing shortly thereafter.
“The phased approach to the project will allow Kibo Energy the opportunity to stay on track with project rollout, but with potentially significant added value to an already strong business case. It will also ensure that the company is on track to actively pursue the successful execution of its stated strategy of moving forward in cleaning. [and] renewable energy solutions,” said Coetzee.
