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Green Gas to Grid

www.adnamsbioenergy.co.uk

www.biogroup.co.uk

www.adnams.co.uk

BIOGAZ EUROPE, 2011 - NANTES

The Rationale

• Bio Group has been building and operating organic waste plants for over 10 years

• We spent 4 years developing and testing our renewable energy system – based on AD

• Our driver is the reduction of greenhouse gas emissions – Every tonne of food waste disposed of in landfill can produce 200-400 m3 of

biogas (55% methane) and every tonne of methane emitted into the atmosphere has 21 times the warming potential 1 tonne of carbon dioxide

• BUT if processed and captured…. – One tonne of food waste can produce enough methane to drive a car for 600

miles

• Adnams Bio Energy represents the first of 25 facilities over the next 4 years and we are now in construction on a second facility in Manchester

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What have we built?

• An Energy Park, complementing AD with solar thermal and photo voltaic panels to produce additional energy

• AD processing food waste

• Using cryogenic technology to produce 97% biomethane from biogas

• Biomethane injected into the National Gas Grid and for use as vehicle fuel

• Produces water and liquid fertiliser for use in agriculture, water produced by biomass process

• Parasitic load minimised by electrical energy generation and export

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The “Firsts”

• First food AD green gas to grid

• First use of plastic technology in tanks

• First time AD tanks have been buried

• First deployment of plastic tanks with no internal moving parts, using patented gas displacement technology

• First use of biomass to naturally clean the digestate output

Adnams Bio Energy – How and Why

• Adnams plc- our key partner • On May 1st 2008 at the 2nd in reducing carbon emissions and leading by

example • The following September we agreed to work closely together • We have now built Phase 1 of a 25k tonne AD and energy facility

– On land leased from Adnams – With Adnams providing around 20% of feedstock – With Adnams beginning a rolling program of converting Adnams delivery trucks to run

on gas – With a robust plan to work with schools, businesses and the public sector to develop

knowledge and awareness

• AD is complemented by solar thermal and PV arrays • Other other partners

– National Grid – Centrica/British Gas

• Managing the Partnerships

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Working with our Partners

• Adnams

• National Grid

• Centrica

• Government involvement – The Environment Agency

– The Planning Authority

Why biomethane?

• It’s new to the UK and therefore presents a first mover opportunity

• It is more efficient

• It is energy “storage”

• Strangely, it can be easier to export than electricity

• Issues – OFGEM, the UK regulator is still an obstacle not an enabler

– Costs

– Clean up technology

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The Business Case

• Plant cost Euros 3.5m – This excludes the cost of the actual grid injection kit and the PV

– Funding came from • 55% Grant or equivalent

• The balance was senior – bank – debt and equity from the JV partners

• The business case would have worked with external non grant funding

• Increasing energy costs continue to make plants attractive

• The facility makes around 20% return – The business model works for future plants

• Fairfield Bio Energy, Manchester

• Dunsfold Bio Energy, Surrey

The Business Case

• Gate Fees, plus energy, plus subsidy – To get the returns required to attract investment you need all 3

• European and local grant funding was essential to first deployment

• The facility makes around 20% return – The business model works for future plants

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The Key Lessons

• The right partners are essential

• Control and own as much of the process as possible

• Don’t underestimate the difficulties with regulators – They don’t understand commercial timescales

• Build in sensible timescales for new technology – You can’t rush things, so ensure that the business case doesn’t stress

the deployment too much

The Future?

• AD has a key role to play in reducing greenhouse gases and generating renewable energy

• National Grid says up to 50% of domestic gas could come from biomethane in the UK

• We need the right conditions for the industry to grow – – The right energy framework and incentives

– A sensible regulatory regime

– Sensible engagement with the food industry

– A banking sector that backs AD

– Certainty – on incentives, on carbon pricing and on policies

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Steve Sharratt, Group Chief Executive, Bio Group Limited