UK Green Investment Bank backs new biomass projects

By Katie Fletcher | April 02, 2015

U.K. Green Investment Bank has made several announcements recently about investments made for upcoming, renewable energy projects, including the Levenseat Renewable Energy Ltd. 12.3 MW energy-from-waste (EfW) plant and adjacent materials recycling facility (MRF) at Forth by Lanark, Scotland.  

GIB’s £28.25 million ($42.26 million) investment was made through the Foresight Group-managed fund, U.K. Waste and Resource and Energy Investments, in which GIB is a cornerstone investor. This is the eighth investment made by the fund, which has now fully deployed £78 million having mobilized over £350 million in capital.

Upon its anticipated completion in 2017, the £111 million project will recycle over 1 million metric tons of materials including plastics, metals, paper and aggregates in its expected 25-year lifespan. The project will also supply electricity to the national grid in the equivalent of nearly 18,000 homes in that period. The generated electricity’s heat output will assist the operations of the MRF.

The project is expected to divert 1.4 million metric tons of waste from the landfill, and reduce greenhouse gas emissions (GHG) by approximately 1.3 million metric tons—equivalent to taking over 23,000 cars off the road for each year the plant operates. The MRF is in place to process household waste from several local authorities and commercial waste from the Glasgow and Edinburgh regions.

According to GIB, this will be the first time a U.K. plant has combined fluidized-bed gasification technology with refuse-derived fuel (RDF) processed by the MRF. “This first-of-kind project is the latest innovative example of how the U.K. is modernizing its waste management infrastructure,” said Shaun Kingsbury, chief executive with U.K. GIB. “By increasing recycling and using the remaining waste to produce energy, the Levenseat project will make a significant contribution towards Scotland’s ‘zero waste plan’.”

Another funding announcement GIB made recently is in the amount of £4 million for a new, on-farm anaerobic digestion (AD) plant in Old Quarrington, in northeast England. This is the first investment made by the £50 million Recycling and Waste LP (RAW) fund, backed by GIB.

Farm crops, initially 12,000 metric tons of silage from Quarrington Farms, will be treated to produce power, heat and agricultural fertilizer. In the project’s 20-year lifespan, it is estimated it will generate 3,400 MWh of electricity—enough for 800 households—and 3,300 MWh of heat. Over 3,000 tons of CO2 equivalents per year in GHG reductions is also expected.

Revenue for the project is anticipated under the feed-in-tariff and renewable heat incentive (RHI) programs. The plant will include a drier and will sell heat to dry woodchips from a local woodchip operator. The project will receive the RHI tariff in respect of the heat supplied to the drier. 

A third GIB investment in a £190 million renewable power plant at the Port of Tilbury, Essex, was made jointly with the Irish electricity utility Electricity Supply Board in the amount of £70 million. The plant will use waste wood to produce over 300 GWh of electricity annually—enough to power over 70,000 households. Stobart Biomass will provide 270,000 metric tons per year of wood waste for the project, once it reaches its expected commission date in early 2017.

Besides these three projects, GIB has made a number of other announcements about activity in the European renewable energy sector. One announcement is GIB’s commitment of £5 million to fund the installation of boiler replacements in sheltered housing complexes throughout England. GIB’s investment in the U.K. social-housing sector will result in up to 28 developments, each complex consisting of between 38 to 50 individual homes. These installations are expected to be completed at the end of this year.

This announcement follows a report GIB issued on March 25, titled, “Smarter, Greener Cities: Ten Ways to Modernize and Improve U.K. Urban Infrastructure.” The report showcases ten innovative technologies that are already being used in at least one U.K. town or city and have the capability to be rolled out immediately and at scale across the country. The full report can be found here.

Besides the report, GIB published a Green Investment Handbook, outlining the tools it uses on a daily basis to assess, monitor and report the environmental impact of its investments.

One last announcement made by GIB over the past week was that it has agreed upon terms with the Department for Energy and Climate Change on a £200 million international green investment pilot program, additional to the bank’s allocation of £3.8 billion to invest in U.K. projects. Under the program, GIB will initially target East Africa, South Africa and India. “This important new pilot program will see GIB investing outside the U.K. for the first time,” Kingsbury said. “I am confident that our unique business model, tried and tested in the U.K., will have a very positive effect in developing countries, helping them to build vital new green energy infrastructure.”