Customer’s Value Proposition

PowerHouse customers will have differing internal drivers for the application of Distributed Modular Generation (DMG®). Most customers procuring DMG® systems, whether operators or developers, will require favourable commercial returns for their investment. PowerHouse maintains several commercial revenue models for customers that provide robust demonstration of the monetization benefits of DMG® facilities over their 25 year lifecycle. These financial models are adapted and shared with customers during the pre-sales studies and we also present the key aspects of a typical revenue model for a UK application of DMG® technology.

Dmg Unrecyclable Plastic

Customer’s Waste Plastics Revenues

The market for waste plastics in the UK demands a price for processing waste plastic that is not recycled, which currently represents more than 70% of the plastic currently in the waste stream. The alternative end destinations for these plastics is either incineration at costs of up to £100 per tonne, or landfill at c.£130 per tonne. Operators DMG® facilities accepting non-recyclable plastic diverted from incineration or landfill can therefore expect to receive a gate fee for plastic received in the region of c.£80 per tonne. Further detailed evaluation of such revenues by PowerHouse and Peel will be undertaken in the coming months.

Customers Waste

Customer’s Hydrogen Sales

The hydrogen market in the UK is not well developed, hydrogen supplies are scarce and thus the current price of distributed hydrogen is high at £10-£12/kg. The UK government, via its Department for Business, Energy and Industrial Strategy (“BEIS”), is targeting a “production cost” for hydrogen below £5/kg, but distribution costs will add significantly to this. Peel undertook its own detailed studies with specialist consultants on the potential of the hydrogen market concluding that a sale price of £7-8/kg can be assumed for DMG® hydrogen, with the expectation that this could be higher in the earlier years and falling in real terms over time as the technology is refined. Powerhouse will undertake further independent research into this market position through 2020.

Hydrogen Sales

Customer’s Electricity Sales

Current and forecast wholesale and retail electricity prices vary tremendously with many industries paying variable rates with supply demands. Electrical power from DMG® facilities can be used on site by customers or sold directly to local businesses saving costs on relatively expensive national grid pricing. A flat wholesale price of £50/MWh is an indicative assumption for the 25-year lifecycle period.

Customer’s Heat Sales

Where the customer or neighbouring businesses have a need for heat or cooling, then heat recovery and heat export systems from the DMG® plant may be included, providing an additional revenue stream.