Lord Rupert Redesdale
explains why the expanding anaerobic digestion industry needs
financial solutions.


Photograph of Lord Rupert RedesdaleThe
world of anaerobic digestion (AD) may evoke images of The Good
– who could forget the chicken poo-powered generator?
This frivolous image seems to have stuck, even though it has been
calculated that once all the organic waste – roughly 100ms tonnes –
is processed, Britain could generate 20% of domestic gas demand
from AD.

In order to meet the huge
potential of this industry, the UK will need to build up to 1,000
AD plants. These plants will be diverse and based in the
agricultural, commercial and industrial, municipal and water
sectors. They will cost in the region of £2bn to £5bn (€2.24bn to
€5.61bn) depending on the technology involved.

Why would this market be of
interest to the finance and leasing sector? It could be argued that
the digester tank is the main construction component required for
the process, and that these tanks are of little value outside the
AD sector. However, this underestimates the complexity of the AD
process. AD sites also require such things as combined heat and
power (CHP) engines, pumps, gas and grid connection equipment,
tractors and vehicles for transport. All of these are valuable
pieces of equipment that will need financial solutions.

Collecting and transporting
the feedstock alone will involve collections from homes,
restaurants and hotels, and the movement of slurries, silage and
energy crops on farms. This requires infrastructure and

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The waste trucks used to
collect household, commercial and industrial waste will be far more
specialised than most current fleets in operation, and in today’s
straitened economic times, those operating the plants will need to
look at imaginative ways to finance all this equipment.

Technology is needed to deal
with everything from farm slurries to food collection caddies, and
from organic fertiliser (the residue of AD process) to the
production of renewable gas and electricity and compressed
biomethane for use in HGVs.

Each of these sectors has
specific financing requirements. The interest in the AD sector has
seen huge growth in the past three years. Some 1,400 people
attended AD & Biogas 2010 at the NEC in Birmingham, the UK’s
first trade show dedicated to AD and biogas.

UK AD & Biogas 2011 has
already grown by 75%. This is phenomenal given most trade shows
only grow by 30% in their second year.

UK AD & Biogas 2011 will
be held on 6-7 July at the NEC and, with its conference and free
seminars, represents an excellent opportunity for those in the
leasing sector to get to grips with the range of opportunities in

The coalition government made
AD a priority by committing to “a huge increase in energy from

ADBA has calculated there is
£700m of AD plants in the planning stages, with further plants due
to follow in the wake of the 6.5p/kWh renewable heat incentive
subsidy for gas injection into the grid.

If you forgive my quoting Oscar Wilde, to miss out on this
opportunity “would be unfortunate”.