Duchy launches AD venture with Dorset farmers
In conjunction with the Duchy of Cornwall, a group of Dorset farmers has created an energy system which will eventually produce enough gas to power 56,000 new-build homes on the Duchy’s Poundbury Estate in Dorchester.
Using renewable crops and food waste from industry, the plant is the first in the UK to inject renewable gas directly into the local distribution network on a full-scale business.
The idea for the system came after Nick Finding, one of the members of joint venture JV Farming and a Duchy tenant, heard of a renewable energy project being developed at the estate.
“We were using oilseed rape as an energy crop which wasn’t sustainable in a three-year rotation,” says Mr Finding, who farms 1,400ha in partnership with neighbouring farmers Howard Mason, Frank Van Nes, Tim Merry and Raymond Williams.
“I heard about the development at Poundbury so we created a proposal for an anaerobic digestion unit.”
The plans for the site involve using a total of 41,000t of fuel, made up of maize and grass silage sourced from the farm partnership, as well as food waste from Dorset Cereals and Express Potatoes in Weymouth.
Digestate from the plant, which will condition the area’s chalky soils, will also be used to fertilise crops on local farms.
Impressed with the farmers’ plans and their partnership structure, which had been running for 12 years, the Duchy accepted the proposal. However, the group struggled to find the necessary funding to get the development off the ground.
“The farming group is very strong and proved that the joint venture was a successful way to work,” says Andrew Phillips, the Duchy’s rural director of finance.
“To begin with they went to the financial market to raise the capital but the banks weren’t attracted by a single venture and those that were, offered tight, inflexible terms. That’s when the Duchy finance committee stepped in.”
Working with Active Business Partnerships, who helped pull the project together, the Duchy and JV Farmers set up a separate joint venture called JV Energen LLP.
Together they raised the £7m needed to fund the building of the AD plant and combined heat and power (CHP) system.
Local gas distribution network Scotia Gas agreed to provide an additional £2m investment to pay for the technology needed to clean up the biogas produced, and inject the resulting biomethane directly into the gas network.
Mr Phillips says being part of a joint venture helped iron out problems, particularly when it came to securing planning permission and agreeing the legal aspects of the agreement.
“The farmers were used to working together and as everyone wanted the same end result, the financing and legal was fairly simple. JV Energen sorted out the planning and the site and it really helped having local knowledge,” he adds.
The AD plant was planned for an 3ha site on Mr Finding’s farm in nearby Martinstown, an Area of Outstanding National Beauty.
Through relationships with local residents and councillors, the group was able to address concerns around the plans and find a way to make the plant unobtrusive to villagers by agreeing to embed it in the landscape.
The farmers were also able to counter criticism of using crops for energy rather than fuel.
“We held an open day with local residents and councillors to explain AD and the process of using fuel crops,” says Mr Phillips.
In the past the farmers’ break crop of OSR was going to Germany for biodiesel, a process which was inefficient.
“We have swapped one energy crop for another and now it’s travelling three miles instead of 1,000. It is also more efficient as we get more kW per acre than biodiesel,” he adds.
“By bringing in planners, the Environment Agency and the community at an early stage we were able to get planning permission sorted in 13 weeks.
“After construction of the plant started in October 2011, we started generating electricity in March 2012 and we reached full capacity in October 2012.”
In addition to the farms’ energy crops now being used more efficiently, the maize will be an important source of income for the farmers and will help boost yields, they hope.
“We have enlisted a company to help us assess the viability of digestate through proper trials,” says Mr Finding.
“We see it as something that could increase yields by as much as 10-15%.”
In the future, JV Energen hopes to increase the amount of fuel it obtains from local industries and see its investment paid back in ten years thanks, in part, to being able to claim the Renewable Heat Incentive.
“We are very keen on this way of working,” says Mr Phillips. “At the Duchy we tend to back people rather than projects and this group proved that a joint venture was a way to get things done.
“We have the knowledge and expertise now, as well as the only technology which has been signed-off by Ofgem for use in the UK to supply to the grid, so it’s definitely something we’d like to do more of.
“This is the first project of its kind and it’s impressive that it wasn’t done by a PLC or a venture capitalist – this was a traditional landed estate working in partnership with farmers and it’s worked well.”
Tips for creating a joint venture to develop renewable energy projects:
Investing in renewable energy can be expensive, but working together with other like-minded local farmers can help spread the costs, risks and stress.
“In a way joint ventures are like a marriage – they are about vision, compromise and trust,” says Mr Finding.
“Farming can be very singular, but by sharing responsibility from buying grain to fertiliser you can share the pain and the benefits, which is especially useful when developing a project like this.”
Mr Finding says it is important to use the skills and find a role for each member of the joint venture when taking on a large project like developing an AD plant.
“I was lucky to find three other people in a logistical radius who were like-minded and prepared to find a role they were comfortable with.
“We each have a role to play which has been helpful – we have saved £250,000 in consultancy fees as I have done a lot of the work with the Environment Agency and with planning and benchmarking. Andrew from the Duchy was great on the finance side and in getting involved with our vision.
“For us it’s worked really well and I would definitely recommend it.”
Andrew Philllips of the Duchy Estate gives his tips for producing energy for the grid:
- Make sure you have the feed stocks to properly fuel it
- Work out what to do with the digestate to make best use of it
- If you are just producing electricity, make use of the heat you get off it, such as maret gardening or fish farming – it adds value to the project
- Work with the local community and planners
- Check out infrastructure in the first instance to ensure your local energy networks have the capacity to take energy into the grid
- Talk to people who have already done it and find local experts in utility companies
For more energy on the project visit: www.jvenergen.co.uk/
For more information on anaerobic digestion and other renewables technologies, visit our dedicated Farm Energy section