Logistics group Stobart will seek refunds from delayed biomass plant

Stobart Group will be seeking to recover costs from delayed biomass-fuelled power plants that have required less fuel than expected, it said in a trading update.

The logistics group said it had developed a renewable energy fuel supply chain to supply two million tonnes of biomass to power stations across the UK, but the new power stations have experienced both delays in commissioning and volume volatility. Stobart had been required to deliver only around 40,000t of fuel in the six months to 31 August – 190,000t less than planned.

It said, “In the second half, according to latest notifications from new power stations, we expect to deliver around 330,000t under these contracts.”
The company said the low volumes were a short-term issue, but “There are further non-underlying costs relating to the challenges in the build-up to the official contract start date of around £1.6 million. We are looking to recover some of this extra operational cost from the plants where it relates directly to their delays.”
However, Stobart said earnings per tonne of fuel delivered were “ahead of our stated objectives”.

In its most recent annual report Stobart listed its biomass plant contracts as Margam, Widnes, Templeborough, Tilbury, Port Clarence and Cramlington. It said some costs were incurred because Stobart had developed fuel processing sites. “Given the infrastructure of supply chain, wood processing sites, transport network, contract management and quality control that are required to service these sizable contracts, a change to the timing of when a key biomass plant becomes fully operational presents a significant challenge to our business,” it said at that time.