Anglesey Aluminium Studies 300-Megawatt Biomass-Fired Power Plant in Wales

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Researched by Protel Associates Limited in alliance with Industrial Info Europe (Galway, Ireland)--Anglesey Aluminium Metals Limited (AAM) (Holyhead, Wales), jointly owned by London-based Rio Tinto plc (NYSE:RTP) (51%) and Kaiser Aluminum & Chemical Corporation (NASDAQ:KALU) (Foothill Ranch, California) (49%) has submitted an application for Section 36 approval for construction of a £350 million ($567 million) biomass-fired power station, which will be located near the company's Penrhos Works aluminum smelter in Holyhead, Wales, in the United Kingdom.

Anglesey Aluminium currently relies on electricity from the Wylfa nuclear power station for its energy intensive electrolytic process. However, Wylfa is set to close by 2010, and the company has been forced to consider alternative supply options in order to avoid buying electricity at wholesale prices.

For at least 10 years, Anglesey Aluminium has studied options to get into the independent power market, including a natural-gas-fired option. In 2000, the company studied a 560-megawatt natural-gas-fired combined-cycle power plant with then-partner ConocoPhillips, but the project never proceeded.

Anglesey Aluminium has consulted with the Welsh Assembly regarding investment and support options for the construction of a power station to supply AAM's aluminium plant and the national grid. It is proposed that the new facility will run significantly or in part on biomass-derived fuel. Discussions have been in progress for some time, with a view to releasing the project as a build, own, operate, transfer (BOOT) contract.

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