Ingenious Clean Energy made the investment through its investee company, Generation X Energy Ltd.
The anaerobic digestion plant is located on the premises of Thomas Swan, the County Durham-based, family-run specialist chemicals business. The plant, managed by Generation X, is expected to produce around 8,500MWh of electricity every year when complete -- the equivalent of powering 2,600 homes. The plant will allow Thomas Swan to reduce its reliance on and consumption of fossil fuel derived electricity by as much as 100% and heating by up to 20%. This equates to slashing their industrial energy bills by up to £60,000 every year and providing certainty of future pricing, which was Thomas Swan’s key objective for the project.
According to Ingenious Clean Energy, anaerobic digestion1 plants provide a safe, unobtrusive source of renewable energy that can be both used by its owners and sold back to the grid. The UK’s AD sector has seen a sharp uplift in investment in the last five years, although the total number of operational anaerobic digestion facilities (excluding water industry plants) stands at just 131. In Germany however, anaerobic disgesiton is a widely adopted source of renewable energy with nearly 8,000 such plants producing more than 22 million MWh of green power every year (enough to power 7 million homes) and creating an annual turnover of €7 billion.
Under the terms of the arrangement, Thomas Swan will purchase 60% of the electricity generated from Generation X through a long-term power purchase deal. The remaining 40% of the electricity will be sold to the National Grid, creating a regular return for investors of the Ingenious Energy Efficiency EIS Fund.
“As part of our commitment to exploring different and varied ways to generate returns on investments in renewable energies and energy efficiency, we are delighted to have expanded our remit to anaerobic digestion plants for the first time," said James Axtell, investment director within Ingenious Clean Energy. "Biogas generation is not seasonal or cyclical; it can be produced continually throughout the year, creating a steady return on investment for our investors."
According to Harry Swan, managing director at Thomas Swan, the new plant "will put the challenges of energy supply and costs – which have been rising rapidly -- back into our own hands, which will improve our competitiveness in global markets. We will be able to manufacture on a more sustainable basis and invest in new technologies which will help develop and expand the business.”
The Thomas Swan project is the first anaerobic digestion project to have been backed and managed by the Ingenious Clean Energy team. The investment was financed by the Ingenious Energy Efficiency EIS Fund; the cost of the installation is financed by Ingenious and will be recouped through the sale of heat and electricity to Thomas Swan under long term agreements.
REFERENCES
- An anaerobic digestion plant breaks down farm crops, such as maize and grass silage, with anaerobic bacteria to release a biogas that is converted through an engine into heat and electricity.