Government cash needed now if investors are to go green
The boss of Britain’s leading Anaerobic Digestion (AD) business says ambitious plans to cut greenhouse emissions, reduce landfill and increase the generation of green energy can only succeed if the government puts its money where its mouth is. Richard Barker is Chief Executive Officer of BiogenGreenfinch and he says that if the right incentives are not put in place investors will not take up the challenge.
“The Budget says two hundred billion pounds investment is needed in the next ten years to maximise Britain’s green energy potential,” says Richard, “but the right conditions have to be created for investors to bite. That means a far more attractive set of incentives including Feed-in Tariffs (FITS), Renewable Obligation Certificates and specific government grants for particular projects. The current level of incentives just won’t attract the money we need to create some element of green energy security for Britain in the coming years. What’s more, Britain is committed to a significant increase in Britain’s renewable energy production over the next ten years and the clock is ticking ”
“I speak to potential investors everyday who genuinely are interested in putting money into renewables because they know energy production has to move in that direction. However, some of them can be reluctant to commit because of the way they perceive current levels of risk, particularly current technology risk, construction risk and first loss risk. This means that some investors with money in their pockets who would really like to dive in are sitting on their hands waiting for the signal that it is safer to enter the market. The government holds the key to the funding door and only they can unlock it. This should be where the Green Investment Bank (GIB) comes in. Four or five billion pounds of government money and a generous helping of risk underwriting, at least in the early stages, could potentially encourage a hundred billion to emerge from the private sector. Someone has to blink first to get this ball rolling, and it’s got to be the government … if they want to hit their 2020 targets.”
The taxpayer stands to lose billions of pounds paid in fines to the EU if Britain does not meet its obligations on waste-to-landfill and renewable energy by 2020. Richard Barker says we as a nation are going to have to spend the money somewhere along the line and that paying now and benefitting from the environmental improvements that would bring would be far better than continuing with our over-reliance on fossil fuels until we are hit with any fines.
“At the moment we don’t even know when the Green Investment Bank is to open, how much money will be behind the counter or what its terms and conditions will be. The government may be new but these are questions to which we need fast answers. There are undoubtedly some green businesses with terrific potential out there which will just not take off if they do not know what the rules of the game are going to be. Unfortunately, as a result, there isn’t time for the renewable energy market to develop “organically.” That is to say, investors would historically watch as new technologies developed on a small-scale to make sure the risks had been minimised before hazarding their money. Unless the process is speeded up by improving the balance of risk and reward – by boosting FITs or ROCs or getting the Green Investment Bank quickly up-and-running – the 2020 deadline will not be met and it will cost the country dear.”
Richard also says it is important that the people running the Bank understand the technologies about which they will be making critical decisions. He believes there is a risk that the Bank will become “hung up on giant, hugely expensive glamour projects involving wind, wave and solar and ignore tried and tested technologies which already work well, regardless of whether the sun shines or the wind blows. Value-for-money, environmental impact and a strong business case have to be the first priorities for investment. The people at the GIB need to think how much environmental benefit they will get per pound invested and how viable is the business into which the money will go?”
Both this government and its predecessor have identified Anaerobic Digestion as the best way forward for diverting food waste from landfill and the Coalition has called for a massive expansion in the number of plants in Britain. Richard says, “BiogenGreenfinch is in the fortunate position of having been able to fund our existing plants ourselves, so we have proven ourselves to the market and conditions are considerably better for us than for many other good companies with great ideas who will struggle to get off the ground.
“Anaerobic Digestion is a success story. With Britons throwing away a third of the food we buy, and the commercial and industrial food sectors also suffering a massive waste problem, there should be no shortage of fuel for this energy from food waste technology. In the AD process, waste food goes in at one end and methane for electricity generation comes out of the other, along with a rather useful liquid bio-fertiliser.”
“Not only is landfill space saved but the methane which would have greatly added to global warming (the gas is twenty-two times more destructive than carbon dioxide) is not released into the atmosphere. Food suppliers (councils via doorstep collection, industrial and commercial food businesses and agriculture) save on Landfill Tax and boost their recycling figures. Furthermore, the digestate, or bio-fertiliser can be used to substitute some of the fossil fuel-based fertilisers currently employed. All round it is a win-win-win”
“BiogenGreenfinch is the only UK company to design, manufacture, build and operate AD plants. The business has benefitted hugely from the financial backing and belief given by the business’s parent company, Bedfordia Plc. We are ahead of the game compared to other players in the UK – we have proven operational experience at three plants across the country. However, if Britain is serious about cutting waste and generating clean energy another kind of “Green” input is needed; Cash.”
“An AD plant of viable size can be built for around ten million pounds. However, this amount can be harder to raise than the significantly higher sums needed for nuclear or wind projects. These larger projects already benefit from existing complex financing structures involving project finance, long term generation contracts and lock-in pricing etc. The market already serves these projects reasonably well and offers strong funding solutions. Furthermore, the large utility companies which dominate this sector have access to significant funding pools themselves.
“These same robust, complex financing approaches do not apply in the sub-twenty million pound bracket, despite shorter lead times (an AD plant can go from planning to completion in under eighteen months). This is where a real failure in the investment market exists and is an area the GIB urgently needs to address.”
For more information please contact: Anita Smith, Marketing Manager, BiogenGreenfinch on 01234 827227 email@example.com
Notes to the Editor:
BiogenGreenfinch ADspecialists has pioneered the recycling of food waste in the UK to produce renewable energy and is responsible for 15 anaerobic digestion plants in the UK.
The company’s Westwood AD plant can process a total of 45,000 tonnes of food waste per year to produce sufficient green electricity to power nearly 3,000 homes continuously.
The same amount of food waste can produce 35,000 tonnes of a superior biofertiliser which is spread onto 1,750 acres of growing crop.
BiogenGreenfinch were winners in 3 categories of the prestigious Rushlight Awards in January this year and were hailed for making a substantial positive contribution to environmental issues.
This press release was distributed by ResponseSource Press Release Wire on behalf of BiogenGreenfinch in the following categories: Business & Finance, for more information visit https://pressreleasewire.responsesource.com/about.