Wasabi Energy (LON:WAS, ASX:WAS) announced this morning that it has signed a term sheet with ArcelorMittal South Africa to build, own and operate two waste heat-to-electricity Kalina Cycle power plants at the Vanderbijlpark Steel Plant in South Africa.
The proposed power plants will be 100 per cent-owned by Wasabi and will use the Kalina Cycle technology to efficiently generate electricity from the waste heat released from Vanderbijlpark’s hot strip mill. Wasabi will sell the electricity produced back to the steel plant under a long-term power purchase agreement.
The power plants will be designed by Wasabi’s in-house Kalina Cycle engineering team with further engineering, procurement and construction support from firms such as South Africa’s Group Five and the US’s Power Engineers. They will be built in two stages: initially a six-megawatt plant followed by a 24MW plant.
A full feasibility study will begin immediately, and Wasabi expects this to take approximately 20 weeks to complete. The 6MW plant is expected to be operational in the second half of 2013.
“The signing of this term sheet with ArcelorMittal South Africa marks a pivotal point in Wasabi Energy’s strategy,” said John Byrne, Wasabi’s executive chairman. “We have been focusing our business development on energy intensive industries and aligning the Kalina Cycle with leading industry players. We are delighted to be partnering with ArcelorMittal South Africa which is part of the world’s largest steel producing group, ArcelorMittal, to build, own and operate a 30 MW Kalina Cycle power plant at Vanderbijlpark steel plant in South Africa.”