Belgium recently saw its first ever large-scale IPP (Independent Power Production): Tessenderlo. This Siemens-designed high-efficiency gas-fired combined cycle power station is in strict compliance with the latest environmental regulations. With an installed capacity of approximately 430 megawatts (MW) and an efficiency of well above 58% it can supply more than 240,000 three-person households in Belgium with eco-friendly electricity.
But, the benefits of this first-of-its-kind project go far beyond the eco-friendly power it supplies.
A carefully planned project under harsh market conditions
Six years ago, in 2005, a joint venture comprising the three companies – Siemens Project Ventures (SPV – a company under Siemens Financial Services), Tessenderlo Chemie and Advanced Power – laid the foundation for a privately-funded power plant matching the favourable political climate and expected electricity demand in Belgium. The project was carefully planned and outlined, and subsequently the consortium received the first private power generation license in Belgium ever. From there on, by involving major international players such as Siemens Energy as EPC and service provider and by securing a long-term contract with RWE Essent, a major Dutch utility, the T-Power project continuously moved toward becoming a promising success story.
The next milestone was reached when SPV and its partners, secured the non-recourse project financing in the year 2008. The total project cost of 440 million Euros was financed through 85% senior debt divided among ten banks; 15% equity was provided by the three companies in the joint venture. Although the financial world had just been left clueless after the collapse of Lehman Brothers, none of the ten banks withdrew from the deal, demonstrating the high level of trust and confidence in the project against the backdrop of the escalating financial crisis. After an only three-year-long construction phase, the plant started commercial operation on June 15, 2011.
Best available technology for high reliability, availability and eco-friendliness
For a power plant more than one feature is extremely important in competitive market conditions: High reliability and availability combined with high efficiency and flexibility. Tessenderlo CCPP will provide these features in an exceptional way. It has a very adjustable design, based on the most flexible and proven single-shaft concept with the SGT5-4000F. It also features high on-line versatility, short start-up times and fast load cycling – properties that are becoming more and more important against the background of increasing shares of fluctuating wind power in the grid. Tessenderlo is slated to meet intermediate and peak load demand – making an important contribution to Belgium’s power demand and reducing the dependency on electricity imports into the country.
For Siemens, the project marks a milestone in delivering solutions for the European power market: The Tessenderlo plant was designed, financed and built pairing state-of-the-art technology with financing know-how and reliability. In addition, the plant became fully operational not only in time with the project outline, but even with higher capacity and efficiency rate than anticipated.
For Europe, the Tessenderlo success story could very well spark a trend of similar projects within the European energy infrastructure landscape. Not only in terms of efficient project planning and execution, but also as incentive for project financers: With the plant’s inauguration, Siemens Project Ventures and its partner Tessenderlo Group are already able to announce the reduction of their participations from 33.3% to 20% – opening the door for other investors and achieving rewarding returns for the joint venture.