PowerHouse has signed an option for an exclusivity agreement for the UK with Peel Environmental. This potentially makes Peel the lead developer of DMG waste-to-energy projects, both on its own extensive land bank and on sites belonging to councils and waste management companies and other industrial partners across the UK. The agreement provides a mechanism for PowerHouse to monetise its IP through licensing and means PowerHouse will not need to raise finance for individual projects.
The agreement gives Peel Environmental the option to lead the engagement with all potential end-customers in the UK for DMG plants. If exercised, Peel will pay PowerHouse £0.5m as a one-off fee for the exclusive rights to develop DMG in the UK, with an additional £0.5m annually per site payable when each plant that Peel develops becomes operational. PowerHouse may also earn additional fees from providing technical engineering and maintenance services for each project. Myles Kitcher, who is currently executive director, Natural Resources & Energy of Peel L&P has become a non-executive director of PowerHouse. The agreement is conditional on PowerHouse completing the acquisition of its original development partner, Waste2Tricity, for c 1.44bn new PowerHouse shares. This acquisition is subject to finalisation of a shareholder circular and general meeting.
The agreement regarding the development of third-party sites complements the previous agreement with Peel announced in February 2020 regarding the development of DMG waste-to-energy plants on 11 UK sites owned by Peel. Peel has agreed to pay PowerHouse a £0.5m annual licence fee per site for each of these as they are commissioned, as well as £0.1k in historic back costs. In March 2020, Peel was granted planning permission for a DMG facility at the first site, which is the Protos Energy Park on Merseyside. Protos is one of Peel’s proposed ‘plastic parks’ where waste plastics are either recycled or regenerated into power and hydrogen. Peel sees DMG technology as a key enabler to ensure plastic from these sites that cannot be recycled does not end up in landfill.
PowerHouse has a qualified pipeline of over 30 sites in the UK where DMG units may be deployed. If there was an operational DMG facility on one-third of these sites, this would represent more than £5m in annual licence fees for PowerHouse.