Farmers showing strong interest in AD grants

Farmers are showing strong interest in government grants for anaerobic digestion in England.

It follows WRAP’S offer of grants of up to £10,000 to help farmers carry out economic and environmental research for small-scale, on-farm anaerobic digestion (AD).

The £3m fund is aimed at people who would like to consider AD but haven’t known where to start or haven’t wanted to invest in the initial costs of a feasibility study.

DEFRA director Colin Church said there had been strong interest in the scheme since it was launched earlier this month.

Mr Church gave evidence last week to a House of Lords committee looking at ways of reducing waste along the food supply chain.

As well as creating energy, small-scale AD is seen as a way of improving slurry management, increasing fertiliser value and creating diversified income streams.

But consultants have highlighted the importance of a thorough feasibility study before farmers embark on an AD project.

Until recently the capital costs and lack of technology options for small-scale plants had made AD inaccessible to many, said Cath Anthony of farm business consultants Bidwells.

But advances in technology and reductions in price mean we are now revisiting a number of projects that were previously unviable.

Despite this, it is still essential to do your homework, said Ms Anthony.

Too many people jump into projects without considering the true feasibility and viability of projects or take the wrong advice.

AD is a complex technology, with many factors influencing a project, meaning each project is different, Ms Anthony explained.

The site-specific nature of AD means that in every case it is essential to carry out a full feasibility study – for peace of mind and to ensure a fundable project.

One of the biggest barriers to uptake for the small-scale AD market is access to funding, said Ms Anthony.

Large commercial projects are able to take advantage of economies of scale, making the initial feasibility reports a small percentage of the total cost.

In the case of smaller plants, these economies of scale are not available and the percentage cost of pre-funding research is much higher.

The on-farm AD grant is designed to contribute towards the cost to farmers of consultancy fees, planning and permitting.

This initial capital input will allow schemes to progress to a stage where a credible business plan can be put forward to apply for funding.

On Farm Anaerobic Digestion Fund

  • WRAP is offering a grant of up to £10,000 a farm to create a business plan that will investigate the potential of developing AD.
  • Farm required to contract a suitably qualified person to carry out the study and develop a business plan using templates and guidance supplied.
  • On Farm AD Loan Fund will be offering loans of up to £400,000 or up to 50% of the projects costs for AD plants producing up to 250kW in England from early 2014.

More details

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DEFRA offers loans for small-scale AD plants