Biomass efforts to save Tullis Russell cost £12m

RWE Innogy replaced the coal fired boilers at Tullis Russell at a cost of �12m.
RWE Innogy replaced the coal fired boilers at Tullis Russell at a cost of �12m.

Biomass owners RWE Innogy have revealed they put over £12 million pounds of investment into the stricken Tullis Russell - THREE years before it finally went bust.

The company came to the paper manufacturer’s rescue in early 2012 replacing obsolete coal-fired boilers as part of a 20 year contact.

But the investment, which helped TR half its £24m per year energy bill, was not enough to see the company through the financial distress despite its annual turn over of around £125m.

Administrators were called in after the 206-year-old paper mill collapsed in April with the loss of over 500 jobs.

The news came from Ian Calvert, RWE’s head of biomass UK who spoke at a public meeting to discuss the impact the closure of Tullis Russell had had on the new £200m biomass plant.

“We agreed with Tullis Russell to replace that plant as part of a 20 year contract to supply their energy needs,” said Mr Calvert.

“That contract started in March 2013 though they were benefiting from us before that, in fact when they were in financial distress in late 2012 we ploughed quite a lot of money into TR to keep them alive.”

Representing RWE’s interest at a meeting of creditors in Edinburgh on Thursday, Mr Calvert added that administrators had confirmed it could be as long as 18 months before TR’s machinery could be sold, as the impact of the paper manufacturer’s demise continues to be felt far and wide.

He added: “Those attending the Edinburgh meeting were made fully aware of our support for Tullis Russell throughout our relationship with them, it is a deeply unfortunate situation.

“We are one of the biggest losers out of all this, obviously people are the main victims but financially we are right up there.”

While RWE continue to supply the paper mill with some power as they complete orders, Mr Calvert said they were supporting Fife Council and Scottish Enterprise in their efforts to find alternative uses for the site.

“We have a lot of equipment here that is capable of supplying high density heat and we want to supply that to someone,” he said.

“A district heating scheme similar to the system that supplied Woodside in the 1960s is currently being considered.

“But I estimate it would take three years to come up with something like that.

“Fife Council have undertaken two studies in recent years to see if this is viable, the problem is a long lead time with a labour intensive preparation involving digging up roads both to supply industrial and then domestic.”

Mr Calvert added that RWE were working to see the TR site occupied.

He said: “We would like to get something quicker than the two to three years a district heating project would take.

“We are very keen to facilitate n the prospect of an industrial alternative to TR.”