Farming News - Magic of ‘miracle’ green digesters fades as pioneers go bust

Magic of ‘miracle’ green digesters fades as pioneers go bust

08 Aug 2018
Frontdesk / Renewables

They were sold as EU subsidised miracle machines that could convert waste into gas to heat homes, but a string of insolvencies has left lenders and investors questioning the wisdom of anaerobic digestion plants.

The equipment, which turns food and agricultural waste into methane that can be sold to the national grid, has attracted millions of pounds from big-name investors, such as the private equity veteran Jon Moulton.

However, the law firm Fieldfisher estimates that the number of plants that have gone into administration has doubled over the past three years. Incentives have been offered under the common agricultural policy to install digesters, which can cost more than £10m, but experts say the plants need more attention than owners can give while running a farm too.

Stewart Perry, Partner, Fieldfisher states:

"Anyone with land and farms especially want to diversify as much as possible to ensure their survival. The use of digesters is seen as one of those methods. It makes a lot of sense because you can put your waste in a machine and out the other end comes some power. It does a lot of good for the environment and the farmer."

"We're seeing an increase in the number of people considering doing these things, so from that you'd expect to see a greater level of insolvencies." 

Crouchland Biogas in West Sussex, which set up one of Britain's biggest plants, and SS Agri Power in Essex went into administration last year. Devon-based Greener for Life Energy was restructured after finding new funding.

The plants have become a fixture across parts of rural Britain but have attracted criticism. Some have required specialist crops to be grown for fuel, defeating the object of using farm waste. Others have caused toxic spills.

"These businesses have gone into administration because the budgeting has not been done properly," said Jason Baker, a partner at the administrators FRP Advisory.

"For your average farmer, even one used to running a complex farming or dairy process, it is easy to underestimate the complexity of embarking on a project where you are becoming a manufacturer at a scale of greater than £10m.

However, Rob Greenow, Director, BioG UK (digester operator) says:"You can turn your muck into gas”

"It can't be run as a sideline project. You have to be prepared to come out day and night. You have to live and breathe ADs [anaerobic digesters]."

"There are usually two reasons ADs don't work. They're not built for function, or they're not run properly.

"If I was a multimillionaire, I'd put all my money into ADs."

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