Wednesday, February 15, 2012

Driving the Cost Out of UK Biogas is Good - But Has Anaerobic Digestion Industry Cost Saving Already Gone Too Far?

(Image: Courtesy
Before Christmas WRAP instigated a project which they will fund, with the intention being to find ways to drive out the cost from UK Anaerobic Digestion. It has tendered for experts to offer ideas and bid for this work, but has this trend already beaten government aspirations already, and not in a good way?

Unfortunately, rather than just cost being beaten out, are we not seeing a depressing image of quality compromised and UK regulations being neglected, with serious consequences for buyers?

Although, ADBA has described 2011 as being a year of resounding success for UK anaerobic digestion, which is undoubtedly true, with new projects on-stream having increased the UK's biogas capacity by 30% in one year: We should be concerned that all this could be very short-lived and much financial credibility ruined, if investors throw good money into poor quality, poor value, biogas installations.

The following press release from Landia would suggest just that. Leading mixer and pump manufacturer Landia says that the biogas industry’s reputation needs protecting from packaged systems that have been trimmed to the bare minimum.

It may be that UK government funded bodies should be instead, looking at ways to ensure that buyers (particularly from the agricultural biogas market) don't end up with inadequate facilities unable to be operated at the high levels of up-time essential for success in this business. (Your reader comments using the box provided on the full article page, are appreciated!)

Here is the Landia Press Release to which I refer:

"Biogas Packages - Landia call for ‘thinking inside the box’

Landia, whose pumps and mixers are installed in biogas plants worldwide, claim that they are among a number of suppliers who bear witness to the increasing amount of manipulation that goes into selling low-margin, all-in-one ‘boxes’.
“It’s not all down to price,” said Landia’s Paul Davies, “but too many customers are making substantial outlays without asking fundamental questions.  Even if the equipment is of reasonable quality, they should consider:  ‘Who is going to look after it?  And:  ‘How long is it going to take to get spares?  And:  Who is going to fit them – and when??”
Davies says that this doesn’t just apply to pumps and mixers, but potentially the feeder wagon, mill, gas detectors, blowers and flares.
He added:  “Those currently financing biogas projects should take a long hard look at what they are committing to and ask:  “What exactly is in the box? 
“The ‘route-one’ purchasing decision makes it easier to raise the all-important finance as most of these overseas companies have reference sites that appear to provide the banks with the words they want to hear.  If I was lending money, especially in what’s supposed to be a recession, I’d want far more long-term security for my investment”.
Davies is also concerned that some overseas firms are providing new ‘biogas packages’ with, for example, CHP engines that don’t always meet UK regulations.
“This is an absurd situation,” he continued, “especially when you have UK companies offering the very same CHP unit that does comply with all regulations.  The industry must address this.
“If I was a German biogas provider, I’d be dealing with almost any country other than UK because our regulations are so demanding – but if you are one of those choosing to ignore some or all of the legislation,” he continued, “then you’ll find everything much, much easier as a supplier, and obviously be more competitive.  
Unfortunately for the biogas industry, some customers currently seem blinded by the attraction of a single supplier”."

Before you say to yourself that Landia has somehow come to the views expressed due to their not being awarded the work. Please be aware that Landia is not a competitor in that way. This is not a case of "sour grapes*". Landia does not provide turnkey Anaerobic digestion Plants, and is not in direct competition with such providers.

(* - Refering to In the fable The Fox and the Grapes, which is attributed to the ancient Greek writer Aesop, and the the fox that isn't able to reach the grapes and declares them to be sour.)

What do you think? Any similar experiences to Landia, or have you found the opposite? Anyone?

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