Business Secretary opens London’s ‘first’ commercial-scale AD plant

The AD and composting facility called TEG Biogas has been constructed, and is being operated and managed, by organic waste recycling specialist TEG Group.The UK Green Investment Bank (GIB) has invested in the TEG facility via its Foresight-managed fund.

Speaking at the opening of the plant yesterday (23 April), Business Secretary Vince Cable said: “This plant provides a cutting edge, environmentally friendly way to manage London’s waste and generate power. That is why it is so pleasing this was the very first investment made by the Green Investment Bank back in 2012.”

Situated on a 4.7 acre site owned by the Mayor of London and within his 60 acre London Sustainable Industries Park (LSIP) in Dagenham, the plant has the capacity to process up to 50,000 tonnes, per annum, of food and green waste. Much of the waste, which could have otherwise gone to landfill, will come from households and businesses across London.

It will produce 1.4MW of renewable electricity each year, which is being sold to the National Grid. It will also produce 14,000 tonnes of compost and 36,000 tonnes of digestate each year, for agricultural use.

Residual heat produced by the plant will amount to 1.15MW and will be used by the plant’s nearest neighbour Closed Loop Recycling, the world’s first food grade PET and HDPE plastic bottle recycling plant. Vince Cable also visited Closed Loop Recycling yesterday (23 April) to open its new plastic recycling line.

GIB’s first investment, via its Foresight-managed fund UK Waste Resources and Energy Investments (UKWREI) fund, was announced in late 2012. Foresight played a pivotal role in the transaction, providing capital from two of its managed funds and structuring the deal.

The UKWREI fund, in which GIB is the cornerstone investor, made a £2m equity investment in the project, while Foresight Environmental Fund (FEF) led the project with a £9m equity investment.

FEF is a £60m fund targeting waste infrastructure projects within Greater London, cornerstoned by the European Investment Bank and the London Waste and Recycling Board (LWARB) through the London Green Fund (LGF) alongside several institutional and private investors.

The remaining £2m of equity was provided by private sector investors. Senior debt of £7.9m was provided by Investec Bank plc and LWARB. The TEG Group will provide operating and maintenance services to TEG Biogas under a 15 year contract.

Speaking about the new facility, Mayor of London, Boris Johnson said: “I welcome the opening of this fantastic new project. It is great news for the local area and it shows that the London Sustainable Industries Park can deliver low carbon energy, jobs, innovation and growth for London.”

TEG Group chief executive Mick Fishwick said: “I am delighted to see the Dagenham plant completed on time and on budget and that it has now been passed across to its owners. This project once again demonstrates TEG’s ability to take a plant from the drawing board to full commercial production and we look forward to operating and maintaining the plant for the coming 15 years, while we continue to develop and build further UK based IVC and AD plants”.

UK Green Investment Bank chief executive Shaun Kingsbury added: “This project is an important first for London and provides a positive demonstration of a fully integrated renewable energy and waste management project. The anaerobic digestion and composting facility will see waste, which could have been sent to landfill, now being used to create renewable energy and heat as well as compost and digestate for the agriculture sector.”

Last month, the GIB announced that it was investing £51m in an energy-from-waste plant in Kings Lynn, Norfolk. It will process 170,000 tonnes of black bag waste from households across the county and 100,000 tonnes of commercial and industrial waste each year.

Liz Gyekye