Foresight acquires AD plant on the Isle of Wight

Foresight Group LLP has announced its acquisition of an operational anaerobic digestion (AD) plant on the Isle of Wight.

The 24 acre site at Arreton has a combined heat and power plant. This will provide 250 kilowatts of electrical power generation to power the facility (and related waste heat use), about 580 standard cubic metres per hour of biomethane export and capacity to process in excess of 50,000 tonnes per annum of energy crops – low-cost and low-maintenance crops grown specifically for the production of energy – whilst benefiting from feed-in-tariffs and renewable heat incentive revenue.

The infrastructure and private equity investment manager, which also managed the £50 million Recycling and Waste fund targeting biomass power with the Green Investment Bank, has previously invested in 20 greenfield and operational AD plants across the UK and an additional five plants in Germany, with a combined capacity of 36.5 megawatts.

This acquisition aims to consolidate Foresight’s Bio-Energy team’s market position in the UK and enables it to continue to export its deep sector experience to Europe, Australia, North America and beyond.

Charlie Sheldon, Foresight Group LLP said: “We are delighted to have completed the acquisition of this operational AD plant, our first on the Isle of Wight, which comprises the latest component in our growing AD portfolio. We look forward to making further acquisitions as part of our wider AD aggregation strategy.”

When discussing the growth of AD, Nigel Aitchison, Partner at Foresight, commented: “At Foresight, we have been an early-mover in acknowledging the compelling investment proposition presented by the combination of biomass/waste processing capacity with subsidy-backed RPI-linked revenues. We recognise the contribution AD can and does make towards the UK’s climate change targets.”

Anaerobic digestion in the UK

Since the UK’s first food waste AD facility at Greenfinch began trials in 2006, the number of plants has grown at quick rate. However, progress has recently been slowing down and experts agree that there is one primary hurdle: food waste failing to reach the plants.

In 2017, the UK had around 557 AD plants operating at a capacity of 730 megawatt electric, an increase of 18 per cent over 2016, according to a market report by the Anaerobic Digestion & Bioresources Association (ADBA). That network is generating 10.7 terawatt hours per year – enough, the organisation says, to power over a million homes.

However, while these facilities can turn our food waste into green energy, 292 of them still feed off purpose-grown crops and the total number of plants being fed by food waste is dropping. Despite talks from the UK Government on extending separate food waste collections to all households in England – in line with Wales and Scotland – collections currently lie at just over 50 per cent. Similarly, the majority of commercial food waste collected does not make it to AD either.

However, the actual amount of food waste being used in AD plants is still rising, though at a much-slowed rate – 2.3 million tonnes (mt) was recycled through AD in 2017, up from 2.1mt the previous year. Food waste still only contributes 16.6 per cent of the material being taken to AD plants, and that’s before the reported 24 million tonnes of sewage sludge is included.

Nigel Lee, General Manager at AD services provider Amur EnergyRecent, commented: “Changes to renewables incentives mean that agricultural plants coming onto the market will need to include a fraction of food waste in their ration. Based on the current climate, it seems likely that unless waste managers and local authorities do more to drive material to AD, feedstock shortages, and under-performance, will become increasingly acute.”