Author Archives: Fraser Macdonald

More renewables will help build the UK’s energy resilience

Amid the soaring gas prices, the bankrupting of small energy companies, and the growing awareness of the need to rapidly decarbonise our energy sector, the energy regulator, Ofgem’s chief executive, Jonathan Brearly, has said that the way it regulates the energy market needs to change, to build an energy market that is more resilient in future.

Resilience is just another way of describing the UK’s energy security – the uninterrupted availability of energy sources at an affordable price. Recent events have shown just how weak that energy security is, and its consequences. Several retail energy suppliers have gone bust from the rapid jump in gas prices, and the UK came perilously close to running out of fertiliser and industrial CO2, needed for transporting fresh food and even medicine. Consumers will eventually see the price hikes reflected in their energy bills too.

Several factors have combined to create this perfect storm. Domestically, gas reserves were depleted by a cold winter, and then went unreplenished as gas power stations made up the shortfall for a relatively windless summer. Chinese demand for energy is soaring, while Russia stands accused of throttling gas supplies to Europe.

There are also long-term domestic factors, including a lack of gas storage capacity. The UK has only enough gas storage capacity to meet the demand of about four or five winter days, significantly less than our European neighbours. During the cold snap in March 2018, the UK came alarmingly close to running out of gas altogether. But we have continued to rely on gas imports to cushion any spikes in demand.

Fundamentally, the UK remains too dependent on gas. 87% of the UK’s homes use gas for heating, and it provides roughly half our electricity too. It isn’t just climate change that should compel us to wean ourselves off gas as soon as possible, but also the fact that North Sea production could cease by around 2030, leaving the UK entirely reliant on imports for half a decade until the UK’s energy supply is planned to become fossil-fuel free, and remaining gas users even more exposed to global gas market shocks.

Part of the answer to this conundrum must be faster development of domestic renewable energy generation, using the resources we the UK has in great abundance – wind, sun and sea – and faster decarbonisation of heating. But to increase the pace of development, we need to see more frequent wind farm auctions, and a concerted effort to remove major obstacles, such as dealing with the lack of capacity in the electricity grid.

But that is not the whole story. More wind and solar energy might make us less vulnerable to global energy market shocks, but it will make us more susceptible to changes in the weather. That is why we come back to the subject of storage, but of electricity rather than gas.

According to Wärtsilä, the UK needs to reach 49.5GW of energy storage this decade, from just 1.3GW of operational storage capacity today. Fortunately, the pipeline for utility-scale battery storage is growing rapidly, and is now over 20GW, across more than 800 different projects.

When coupled with developments in other low carbon technologies, the rapid development of renewable generation and storage will establish the energy resilience that the UK currently lacks. With all these opportunities, experienced developers and asset managers are essential for getting the most out of your investment. If you have a project or asset that Eco2 could help with, get in touch.

Operational Asset Management

PM commits to fossil fuel-free energy by 2035

If the UK is to have any chance of reaching Net Zero by 2050, it is essential that the UK decarbonise its energy supply along the way. That is why Eco2 keenly welcomes the announcement from the Prime Minister earlier this week, committing to eliminating fossil fuels from the UK’s energy supply by 2035.

Mr Johnson said that the country can significantly reduce its reliance on fossil fuels through the development of renewable and nuclear energy. If achieved, total generation from clean energy sources will represent a key step towards meeting the UK’s target of a 78% cut in CO2 emissions by 2035, and eventually to the ultimate Net Zero target.

However, there is a long way to go to meet these targets. Making the UK’s energy supply entirely free of fossil fuels is not just a case of building more wind, solar, tidal and nuclear power plants. With so much interruptible energy capacity on the grid, we will also need investment in crucial infrastructure for storage and balancing. That is why the UK today is still falling back on fossil fuels when renewable energy generation is interrupted, as it did earlier this year when generation from fossil fuels shot up by 36% due to unfavourable weather. More nuclear power and rapidly improving battery storage technologies will help with this, but nuclear plants take longer to develop and build than we have time, and storage technologies are not yet being developed at the requisite scale.

To meet the target, the renewable energy industry will also need support from the Government to access funding and skilled workers, and to expand grid capacity as the Welsh Affairs Committee reported earlier this year. The grid capacity issues, in particular, are the single biggest constraint on renewable energy development in some parts of the country, and the UK Government and Ofgem must urgently plan investment in the grid to enable further renewables generation.

The Prime Minister’s commitment is immensely important, but it must be backed up with greater detail, and quickly. There have already been considerable delays on the Environment Bill, and on strategies for Net Zero, hydrogen, and heating; Ministers will need to pick up pace if the key policy hurdles are going to be cleared in time to meet this critical 2035 target.

Whatever the case, decarbonising our energy sector presents huge opportunities for the renewable energy sector, from developers to investors and everyone in between. With Eco2’s experience as a developer of successful wind, solar and biomass projects, as an asset manager, and in the growing market of ESG consulting, we are always looking for new opportunities and partnerships. If you have a project or asset that we could help with, get in touch.

UK is sixth in the world for wind and solar

As we draw nearer to COP26, there are encouraging signs that the UK is starting to meet the pace of change needed to reach net zero by 2050.

Recent analysis by Ember shows that the UK is now sixth in the world for wind and solar energy production. While nearly a third of the UK’s energy now comes from wind and solar, other advanced European economies including Denmark, Ireland, Germany and Spain show that far more is possible.

There is still huge potential for growth over the next decade, both in generation and in the storage infrastructure needed to make the transition possible. Eco2 are always looking to put our development expertise to work, such as our Welsh wind development and Canadian biomass development activities.

With ever greater competition in the renewable energy sector, owners of existing assets also need to ensure they are keeping up with the rapid advances in the industry. As an experienced developer and asset manager, Eco2 can help you get more from your existing wind, solar, biomass or AD asset, be it through adding battery storage, a mid-life update, or re-energising a project at the end of its life.

If you have a new project in the pipeline, or an old project in need of optimisation, get in touch.

Growth of EVs needs to be met with grid investment

We are really excited to see the outcome of this design competition, to make EV charging points as iconic as red telephone boxes.

Enthusiasm for electric vehicles is rapidly increasing. UK businesses are investing more than £15 billion in electrifying their vehicle fleets in the next year, and a third of businesses with company cars would consider installing EV charging points at employees’ homes. Alongside that, Ofgem is investing in 3,500 EV charging stations network around the UK’s towns and major road network.

All of this is extremely welcome. But with more and more of our vehicles and appliances powered by electricity rather than fossil fuels, major upgrades to the UK’s electricity infrastructure are becoming more and more urgent.

For renewable energy developers, the UK is like a house with no spare sockets. In areas of the country that are critically important for new wind and solar development, the electricity grid is already at capacity, inhibiting development of new renewable energy. Urgent investment in the electricity grid in remote parts of the country would unlock enormous potential for new renewable energy generation, reducing energy prices and enabling a smoother transition to a carbon-free future.

Public support for renewable energy is growing fast

It is clear that more and more of the public want to see taxpayers’ money shifted away from oil and gas to support new renewable energy instead. A new survey of more than 2,000 UK adults, published today, shows that 63% of the public want fossil fuel spending redirected to low-carbon industries such as wind and solar power.

This comes on the back of another poll carried out last month by YouGov for RenewableUK, that found that 45% of the public would pick renewable energy as their first priority for green investment from the Government, five times more than the next most popular option.

The same poll also showed public attitudes to renewable energy are changing, with a third of people saying they have a more positive opinion of onshore wind than they did five years ago.

With support for renewable energy increasing amongst business, Government and in communities, now is a great time to be investing in renewable energy. With Eco2’s experience across a wide range of renewables technologies, we are ready to support any renewable energy project, as an asset manager or as a developer for hire, or both.

8 ways to improve your income from your anaerobic digester

Anaerobic digesters offer a great way to sustainably diversify a farm in a way that dovetails with the rest of your farming business.

An anaerobic digestion plant, even at small-scale, allows you to create additional value from slurry and waste, and to produce fertiliser and biofuels on-site.

And crucially, this can add another income stream for your farm, all while reducing the environmental impact of your business.

But running an anaerobic digester alongside the other demands of a busy farm can be a lot of work.

Between managing your feedstocks, negotiating deals on any biogas or electricity you sell, and the regulatory compliance, it can all become a bit of a handful, especially if it is not the main focus of your farming business.

But there are a few things you can do to help get the most out of your anaerobic digestion plant that could potentially mean a big increase in income for your farm, as well as some important tips to make the job of managing your plant easier.

So read on to find how to take some of the angst out of anaerobic digestion.

 

1. Sort out your anaerobic digester’s feedstock supply

Sourcing additional feedstock for your anaerobic digester from outside your farm can maximise the output of your anaerobic digester, and increase your profits from any biogas or electricity you sell.

If you source feedstock from outside your farm, then getting a good deal on that feedstock is essential.

There are a lot of variables to consider, from the gas yield that different crops will deliver, to their cost, and to the logistics of transporting them to your plant.

An experienced renewable energy Asset Manager with experience in biomass or anaerobic digestion should be able to help you access good quality feedstock at good prices.

Eco2, for example, manages several biomass plants and has access to a UK-wide network of biomass suppliers.

They can help you source suitable feedstocks, arrange logistics, and advise on the appropriate storage of the feedstock on-site.

 

2. Treat your digestate to produce higher-quality fertiliser

The digestate left as a by-product by anaerobic digestion can be treated to turn it into an effective fertiliser, but in its untreated state is mostly water, and difficult to dispose of properly.

There are strict regulations on what you can do with digestate, and all the additional water volume in untreated digestate means that it can be troublesome and expensive to store or move around.

Also, spreading untreated digestate on land also carries the risk of propagating invasive species, like black grass, which can be extremely difficult to remove from cereal crops.

But by treating the digestate from your anaerobic digester you can remove a large amount of the water content, leaving behind a thick, nutrient-rich slurry that is cheaper to store and to move, and far more useful as a convenient fertiliser.

Some larger-scale treatment processes can remove even more water content, producing dry fertiliser pellets.

Additionally, some treatment processes also pasteurise the digestate, neutralising invasive species like black grass, and bringing your digestate up to PAS110 standard, ensuring that it is a safe and reliable fertiliser.

Some older anaerobic digestion plants do not have their own digestate treatment facilities. But with a bit of investment, treatment facilities can be added to any AD plant, greatly increasing your plant’s performance and value to a farm.

 

3. Get a better deal on your Power Purchasing Agreement

If your anaerobic digestor includes a Combined Heat and Power (CHP) engine, and you sell electricity to the grid, make sure you get the best deal on your Power Purchasing Agreement (PPA).

The best rates are not the ones you can get ‘off the shelf’ from the biggest energy offtakers. Instead, producers can get better deals at PPA auctions.

This approach has typically only been available to large investment funds with vast portfolios of renewable energy, because they have the time, resources and contacts to put into hunting for the best deals.

But by employing a renewable energy Asset Manager like Eco2 to handle the financials of your anaerobic digester, even owners of relatively small plants can get a better deal from the sale of electricity. Get in touch with Eco2’s asset management team to find out how they can help you.

 

4. Sell your biogas for road transport fuel, instead of heating

Most gas from anaerobic digesters usually gets sold into the gas grid. But there are other markets for biogas that might prove more lucrative for your farm business.

For example, many farms with an anaerobic digestion plant can make more by selling biogas to the road fuel market.

As well as the revenues from your fuel sales, you also earn RTFCs (Renewable Transport Fuel Certificates), which themselves can be traded, as they are needed by big fuel companies who can’t obtain enough of their supplies from renewable sources.

The value of RTFCs varies with the market, but in recent times, waste-fed AD plants have been able to earn more through the RTFC mechanism for transport fuels than via the Renewable Heat Incentive (RHI) tariff for gas for heating.

And in January 2021, the Government raised the buy-out price ceiling for RTFCs from 30p per litre to 50p per litre, meaning anaerobic digestion plants can get even more income for gas sold for transport fuel.

It is always worth hiring a dedicated Asset Manager to help make sense of the different markets for biogas, and the different subsidy regimes attached to them.

The Green Gas Support Scheme, which will be introduced later in 2021, will also introduce additional flexibility to trade gas into the transport fuel market at the same time as trading gas for heating.

 

5. Increase the amount of waste in your feedstocks

Selling biogas for road transport fuel can net you a tidy profit with RTFC trading. But if you are using a large amount of non-waste products in your feedstock, you could be missing out on even bigger gains with RTFCs.

Because of the way the Renewable Transport Fuel Obligation works, the greater the waste content in your biogas, the more RTFCs you can earn by producing it.

So, if you are selling into the road fuel market, you can double your income from RTFCs by replacing crop feedstocks with wastes. That could be waste straw, waste animal manure, or food waste.

 

6. Understand the differences between RTFO and RHI subsidies

It is also important to know how the different subsidy schemes work. If you are selling your biogas for heating, then your gas only qualifies for the Renewable Heat Incentive (RHI) if it contains at least 50% waste content.

This works like a cliff-edge: you get no subsidy at all for less than 50% waste, and no additional benefit for going far over the threshold.

By contrast, the Renewable Transport Fuel Obligation (RTFO) system works on a sliding scale, rewarding producers for each additional unit of waste in their feedstock.

In each quarterly reporting period, you can only claim for either the RHI or the RTFO, not both.

But you can still switch between them at the end of each quarter. This offers you some scope to choose different markets for your biomethane, taking advantage of commercial opportunities.

But however you do it, you can only claim either the RHI or RTFCs in any given quarter.

If you don’t have an anaerobic digester yet but you’re thinking of investing in one, you should know that the RHI scheme is now closed to new applicants (but will continue for plants already registered with it), and new anaerobic digesters will need to register for the Green Gas Support Scheme (GGSS) instead, which opens in Autumn 2021.

The GGSS offers much more freedom than the RHI, and will allow you to claim RTFCs on whatever you sell to the road transport market and GGSS on whatever you sell for heating, in the same quarter.

This will give new AD plants much more flexibility in where they sell their gas. Unfortunately, AD plants that are already registered with RHI can’t switch over to GGSS, at least not in the foreseeable future.

The continually changing landscape of the biogas subsidies, along with the shifting market conditions and changing feedstock standards, means it can be tricky to work out which market is best to sell your gas to.

But for a bespoke solution designed to maximise the profitability of your anaerobic digester, speak to an expert renewable energy asset manager, like Eco2.

 

7. Capture and sell the CO2 from your anaerobic digester

Increasing production of renewable biofuels, including from anaerobic digestion, is important to meeting the all-important goal of Net Zero greenhouse gases by 2050.

Anaerobic Digestion is a carbon-neutral process. Yet counter-intuitively it often releases a lot of CO2 into the atmosphere.

That’s because the CO2 released during the anaerobic digestion process would be released anyway if the biomass were left to decompose naturally in the open air.

But instead of releasing this CO2, the carbon from anaerobic digesters can actually be captured, to either be stored or used elsewhere.

This is called Carbon Capture, Utilisation and Storage, or CCUS. With CCUS, anaerobic digestion turns from a carbon-neutral activity into one that is carbon-negative, actively reducing the net amount of CO2 released into the atmosphere and doing more to tackle climate change.

This isn’t just good for the planet. It can be good for your profits too. While CCUS technologies in other industries can be quite difficult and costly, the process of capturing CO2 in anaerobic digestion is actually quite straightforward.

Adding a CO2 liquefaction plant to your anaerobic digester means you can capture CO2, and then sell it for use in everything from refrigerators and fire extinguishers to food products and chemical processes.

These applications are always going to need CO2, but sourcing it from anaerobic digestion rather than non-renewable sources reduces the amount of greenhouse gases we release into the atmosphere overall.

Captured, liquefied CO2 can be sold for around £120 per tonne, and solid CO2 (which requires cooling even further) is worth even about £600 per tonne.

So as well as helping to combat climate change, you can also make even more money from your anaerobic digester by selling CO2 as well.

 

8. Hire an asset manager to take care of your anaerobic digester

If all these ideas seem like they would create too much work for you, don’t worry. The simplest way to get the most out of your anaerobic digester is to get a dedicated Asset Manager involved who can do all this for you.

Renewable energy Asset Managers are experts in the administrative and technical management of renewable energy plants, such as wind, solar or biomass plants, or anaerobic digestors.

Some Asset Managers specialise in just dealing with large-scale renewable energy projects, or focus on one or two renewable technologies, like wind energy.

But others, like Eco2, handle all kinds of renewable energy, including biomass and anaerobic digestion, meaning that they have a wide network of contractors and suppliers, as well as teams around the UK.

Eco2 have been managing and improving the performance of biomass assets for 15 years and are now a one-stop-shop to handle the financial, technical, fuel procurement and regulatory management of all kinds of renewable energy plants, including anaerobic digesters.

They deal with everything from the negotiation of PPA deals, to optimising your feedstock, managing subsidies and reporting to OFGEM, to managing monitoring, maintenance and regulatory compliance.

With highly competitive fees, a Management Services Agreement from Eco2 could easily pay for itself through expert management of your anaerobic digester, while freeing you up to focus on the other demands of your farm and your business.