Tamar Energy secures industry-first loan to support 'next wave' of AD plants
Confidence in the anaerobic digestion (AD) market has been reaffirmed with a 'first-of-its-kind' £32m investment from RBS to support the UK's leading AD plant operator.
The finance agreement with Tamar Energy is said to be the first of its kind within the AD sector, providing a seven-year non-recourse project finance facility which will be used refinance Tamar Energy's five existing AD plants and to build the next wave of AD plants currently in Tamar's development pipeline.
Tamar Energy chief executive Willie Heller said: "This is a springboard to our next phase of growth, and demonstrates the increasing maturity of the commercial-scale AD sector. It provides us with the resources and flexibility to consider all opportunities for growth as we continue to build out our project pipeline".
The group's finance director Dean Hislop added: "The RBS facility is a significant achievement for us, not only for being the first of its kind in the AD sector but also for its scale. It’s a sign of confidence in Tamar Energy’s business model from a leading UK bank and enables us to drive our business forward at pace."
In the pipeline
Tamar's five existing AD sites have a combined capacity of 11MW. The group already has permission for a sixth plant at Bromley in Greater London, secured in October 2014, but it would not reveal any specifics on other new AD plants that it has lined up for 2015.
Renewable energy is produced at Tamar's AD plants from three main sources of feedstock - organic waste from the food processing industry, agricultural sources and 'post-consumer' organic waste, sourced from both households and commercial facilities such hotels, supermarkets, prisons, schools and hospitals.
A power purchase agreement (PPA) was recently signed between Tamar Energy and EDF Energy, for its first five AD plants. The Basingstoke and Holbeach AD facilities started on the PPA terms in December 2014 and the other plants in Retford, Halstead and Hoddesdon will follow this year.
The amount of organic waste treated by anaerobic digestion has more than doubled since 2010 to 154MW produced by 145 AD plants in 2014. According to the Energy Technologies Institute report released today, continued development of bioenergy will be crucial to the UK's low-carbon plans to ensure 2050 targets remain achievable.
Energy and Climate Change Minister Amber Rudd said: "With AD developers now being recognised as worthwhile investments in their own right without the need for additional assets to raise financing, this is an exciting moment for the industry. Already AD deployment has soared by over 200% since 2010 and I look forward to the continued growth of the AD sector as a source of clean energy as well as investment and jobs."
In related AD news today, it appears the industry is also continuing to expand in Scotland as fellow waste management company Shanks Group announce it is nearing completion of a 100% expansion of its Energen biogas AD plant. When the work is completed in April, the site will become Scotland's largest AD facility.
The expansion is in anticipation of the expected increase in food waste when Zero Waste Scotland comes into effect on 1 January 2016. Energen Biogas' operations director Robert Etherson, said: "By expanding our facility we are able to significantly grow the renewables industry in Scotland and improve resource efficiency. Scotland's vision where all waste is seen as a resource is one we are firmly aligned with and we are pleased we can contribute to making a Zero-Waste Scotland a reality."