Sunday, September 11, 2016

Uncertain Outlook for UK Anaerobic Digestion in 2017

Image shows an investor pledge for UK Anaerobic Digestion sustainable investment
The continued high level of activity of UK anaerobic digestion sector was open to doubt before the nation voted to leave the EU during a referendum in June 2016. Now, 3 months on the picture looks no clearer.

UK Anaerobic Digestion – Leaving You Short Of Breath

The UK’s biogas sector faces an uncertain future following the latest report from The National Non-Food Crops Centre.

Past and current growth rates in the sector look set to plateau around late 2017. This will inevitably bring with it increased investor uncertainty and reduced backing from government groups.

Statistics show over 450 sites are in the development phase at the moment, with predictions indicating that just over 50% of these will be successfully built and become fully operational.
There is of course still potential for sites to go ahead and be built albeit behind schedule, but planning for new sites has taken a dramatic hit with around 50% fewer sites making it past the planning stage in the last year.

Growth is the problem

Rather ironically, the substantial growth in the sector is what is creating its demise, as investors were speedily getting multiple plants through the planning stage in order to gain incentives such as the Feed-in-tariff (FIT’s) and Renewable heat incentives (RHI).

As a result, the quarterly caps set on these schemes are being hit significantly ahead of schedule, therefore triggering cuts in the prospective quarters as the government looks to decrease its investment in the sector.

Whilst ongoing research is conducted and final papers are due on the FIT’s rates moving forward, it seems that it may be too little too late for this sector in the EU. via Anaerobic Digestion – Leaving You Short Of Breath

ADBA reacts to EU referendum | News | ADBA

Commenting on the UK's decision to leave the European Union, ADBA Chief Executive Charlotte Morton said:

“The policy framework for anaerobic digestion has been closely linked to European directives, and the industry will need to work hard to ensure that we maintain and build our place in Britain’s future."
“The UK’s fundamental need for secure energy, waste treatment, clean water and a strong British farming sector continue. The AD sector needs to make its voice heard, and to work closely with the government to build new structures in all the areas that affect us.”

via ADBA reacts to EU referendum | News | ADBA | Anaerobic Digestion & Bioresources Association

And yet clearly some UK anaerobic digestion projects which have recently been brought on-stream are providing a high degree of success, and an example of one such project follows:

Biogas - Saria runs one of its sites completely off-grid using anaerobic digestion

The firm’s state-of-the-art ReFood anaerobic digestion plant recycles more than 160,000 tonnes of food waste per year, generating 5 megawatt hours (MWh) of electricity via combined heat and power (CHP), alongside hot water and heat. A percentage of the energy is being used to power other businesses at the Doncaster Ings Road site, as part of a group-wide sustainability initiative.

The Doncaster site, which consists of businesses operating right across the food chain by-products industry, also produces a sustainable biofertiliser as a by-product of the process. This is being used by local farmers to support crop growth.

“With a group-wide commitment to energy efficiency, realising our goal of achieving off-grid status is a noteworthy achievement – demonstrating true commitment to meeting food sector sustainability targets” said Philip Simpson, commercial director at Saria Ltd. “Through continued investment and our pioneering AD process, we are now able to not only provide homes and businesses across the region with access to a complexly sustainable energy source, but also minimise our own reliance on fossil fuels.”

Saria prioritises sustainability across its business operations, with a highly environmentally-friendly vehicle fleet and sustainable building methods that are utilised in every new site development and expansion project undertaken. Each of the company’s UK facilities feature state-of-the-art energy saving measures to minimise environmental impact. via Saria runs one of its sites completely off-grid using anaerobic digestion

It is to be hoped that the vision of companies like Saria, which competes for shareholder funding with other businesses, will continue and be adopted with equal enthusiasm elsewhere.

Nowadays, retaining a high long-time share price ahead of rivals, is seen as essential by many ambitious companies. Let us hope that the desire for sustainability as a route toward gaining that shareholder credibility, will continue. It certainly can be a significant incentive toward further anaerobic digestion plant investment. It is to be hoped that this will prove to be a significant factor in encouraging UK Anaerobic Digestion Plant investment going forward.