An £8.1m Regional Selective Assistance grant from the Scottish
Government has been awarded to help fund the project. The new facility will supply steam and electricity to the Tullis Russell Papermakers paper mill under a long term contract.

Tullis Russell’s paper mill currently uses a coal fired plant to provide the
steam and electricity needed to produce its products. Working with RWE
npower, the new facility will enable Tullis Russell to dramatically reduce
its carbon emissions.

Phil Piddington, Head of npower Cogen said: “Our plans to build a CHP plant at the Tullis Russell paper mill form an important part of our wider
strategy of reducing our carbon intensity, through investment in lower or
zero carbon power generation sources. This project is an excellent example of how innovative new energy technologies such as Biomass can be deployed to help the UK energy industry - and individual businesses - to reduce their impact on the environment.”

Tullis Russell’s Chief Executive Chris Parr said: “We are looking forward to working very closely with RWE on the CHP project. This will replace our existing coal-fired CHP plant and allow us to use steam and electricity produced from renewable fuel. The project will reduce the carbon intensity of our paper making process and therefore supply our customers with low carbon paper products. The project will reduce our carbon emissions by approximately 250,000 tonnes per year.”

Scottish First Minister Alex Salmond said:

“This is tremendously exciting with huge economic and environmental benefits for Scotland. The Scottish Government has fully supported the partnership working of these two leading, international companies, RWE npower Cogen and Tullis Russell.

“The new biomass plant in Markinch is a significant investment in Scotland and pays testament to our competitive advantage in terms of skills and workforce and the development of energy supplies that are cleaner, greener and economically competitive.

“I am delighted that we have attracted and secured this significant
investment. The project complements the Scottish Government’s work to make Scotland a greener, wealthier and fairer place to live and do business in. This announcement points the way to the future and shows the resilience of the Scottish economy in the face of international financial pressure.”

The npower Cogen and Tullis Russell team hopes to secure all necessary
approvals by the end of 2008 with the CHP plant entering operation in 2011.

The project will add 45MW of CHP capacity to RWE npower’s existing CHP portfolio which supplies a total of 2000MW of energy. RWE npower owns 11 CHP plants on key customer sites supplying power and heat to industrial
customers in the oil, paper and chemical sectors.

CHP plants combine electricity generation and heat production, producing significant efficiency and cost benefits. The technology also delivers environmental benefits through lower carbon dioxide emissions.

Ends


For further information please contact the RWE npower press office on 0845 070 2807 or Jennifer Crawford on 07989 493 350


1. RWE npower is a leading integrated UK energy business. It generates
electricity and supplies gas, electricity and related services to around 6.8
million customers through its retail business npower. The company operates and manages a flexible portfolio of power stations, and its sister company RWE Innogy, is a market leader in renewable energy development.

2. RWE npower Cogen has more than 15 years experience developing and delivering CHP projects. With 11 plants in the UK and Republic of Ireland, we have more than 2,000MW of heat and power capacity and a wealth of experience in plant operations and management of CHP plants.

3. Tullis Russell Papermakers is a leading independent, employee owned paper making company. Founded in 1809, it has built an outstanding reputation for producing high quality paper and boards for use in the graphical, cards, covers and premium packaging markets.