UK Green Investment Bank funds several recent biomass projects

By Katie Fletcher | December 29, 2014

U.K. Green Investment Bank has made several biomass investments in recent months, including investments in a waste wood renewable energy facility, an energy-from-waste treatment plant, the installation of biomass heating on a poultry farm and a biomass boiler installation at a whiskey distillery. These recent investments join many others as GIB passes its £5 billion milestone ($7.8 million).

GIB has invested into the U.K.’s green-energy sector for the past two years, and as of Oct. 30 has funded 37 projects producing 13.1 terawatt hours (TWh) of renewable energy, equivalent to energy consumption in 3.1 million U.K. homes, and preventing 1.5 million tons of waste from going to landfill sites each year.

Prime Minister David Cameron congratulated GIB on reaching the milestone. “Under this government as part of our long-term economic plan to back business, create more jobs and secure a brighter future for Britain, we have become one of the best places for green investment anywhere in the world, and the Green Investment Bank has played an instrumental role in this,” Cameron said in a statement.

GIB’s current portfolio of investments is expected to deliver an annual return of 9 percent. Once all its investments have completed construction and are operational, GIB is projected to make an annual operating profit in excess of £10 million.

Fall was a busy investing season. On Oct. 27, GIB announced its investment in the installation of a 4 MW Vyncke wood-fueled boiler to replace the existing heavy-fuel oil boilers at Royal Brackla Distillery in Nairn. The boiler will produce steam necessary for several parts of the whiskey production process. The pellets, which will feed the boiler, are manufactured by U.K. pellet manufacturer Balcas Limited using renewable energy at its plant in Invergordon and raw materials sourced from local forests. The project is expected to be completed in 2015.

This announcement was followed shortly by news on Nov. 3 that GIB invested £33 million into a waste treatment plant in North Yorkshire. The £319 million project is expected to process up to 320,000 tons of household, commercial and industrial waste per year. More than 7 million tons of waste could be diverted from landfills over the plant’s lifetime, and over 1.5 million tons of recyclable materials recovered. The plant will be constructed at an existing landfill and quarry site by contractor AmeyCespa, who will operate the plant upon completion.

The project’s campus will include a mechanical treatment facility that will recover metal, paper and plastic for recycling, and an anaerobic digester to treat organic waste, which will generate around 8 gigawatt hours (GWh) of renewable electricity per year. The energy-from-waste facility will produce steam to feed a turbine generating 203 GWh of electricity, which is enough to supply the equivalent of more than 40,000 homes.

GIB has also recently made an investment in renewable energy production from woody biomass. Nov. 21, GIB and Foresight Group invested in the construction of a new £110 million project to construct a 20.2 MWe waste wood combined-heat-and-power (CHP) plant in Widnes, Merseyside. GIB’s direct investment is £16.9 million of mezzanine loans. The bank is also making a £13.2 million equity investment via its Foresight-managed fund, U.K. Waste Resources and Energy Investments, which is its cornerstone investor.

The project will take in 146,000 tons of Grade B-C recovered wood each year sourced by Stobart Biomass Products Limited under a long-term fuel supply contract. The facility will provide 150 GWh of net electricity to the grid per year, and the heat offtake will be utilized by Stobart’s adjacent wood drying facility. The plant will be built and operated by Burnmeister & Wain Scandinavian Contractor A/S with expected completion by December 2016.

The last of the months string of investments is the financing of 60 199 kW biomass boilers at Moy Park poultry farms. These boilers will generate over 90 percent of the farm’s heating needs. The boilers will be fed with wood pellets from a wood pellet plant in Girvan, Scotland, to heat poultry sheds previously heated with fossil-fuel burning liquefied-petroleum-gas heaters. Work on the project began this October and is expected to be completed by March 2015. “We are pleased to back another energy efficiency project in the agricultural sector, helping to reduce business costs and cut carbon emissions,” said Bill Rogers of U.K. GIB. “This project is a good example of how we are working together with industry to provide innovative financial solutions for green projects of all sizes.”