Turning waste into 24 hour clean energy offers huge potential, says think tank

3 July 2012

Anaerobic digestion plants that turn waste and purpose grown crops into energy have the potential to power more than 2.5 million UK homes by 2020, a new report by CentreForum suggests.

Yet the think tank warns that this vision will only be realised if certain barriers to sector growth and development are removed. (1)

The report 'Hit the gas' sets out a number of advantages to expanding the anaerobic digestion sector. It praises anaerobic digestion for generating a multi purpose biogas that is easy to transport and store, and for diverting food waste from landfill.

Anaerobic digestion currently produces around 1.3 TWh of energy in the UK - enough to power 300,000 homes. CentreForum believes that the sector can expand by more than 800 per cent (11 TWh or 2.5 million homes) over the next eight years if the recommendations of its report are followed.

The coalition agreement made a firm commitment to support this expansion.

Ed Davey, Secretary of State for Energy and Climate Change, said:

"The government is committed to promoting an increase in energy from waste schemes through anaerobic digestion. CentreForum's report offers some interesting ideas for how this increase can be achieved."

Report co-author Quentin Maxwell-Jackson said:

"Anaerobic digestion technology has so many clear advantages over other waste treatment and energy generation options that it is very surprising it has not taken off in a big way yet in the UK. But that is because trying to get an anaerobic digestion scheme up and running at the moment is like trying to win a cycle race with the brakes on."

The report's other author Thomas Brooks added:

"There are some simple things government can do to release the brakes on anaerobic digestion. For instance, simply banning organic waste to landfill in England, as they are already planning to do in Scotland, would give anaerobic digestion a huge boost."

Lord Redesdale, Liberal Democrat peer and chairman of the Anaerobic Digestion and Biogas Association  (ADBA), said:

"This is an important report which lays out clear recommendations for how government can better support the anaerobic digestion sector and realise the benefits it could bring to economic growth, waste management, renewable energy and climate change."

"CentreForum have shown that anaerobic digestion already represents a significant part of the UK's renewable energy mix - generating four times more electricity than solar PV - and are pushing for government to support an 800 per cent increase in that generating capacity by 2020..." [full quote in NOTES TO EDITORS]

NOTES TO EDITORS

'Hit the gas: how to get the anaerobic digestion sector moving' by Thomas Brooks and Quentin Maxwell-Jackson can be downloaded.

(1) The report identifies six barriers to growth and development in the anaerobic digestion sector, and offers six solutions. The NFU has argued that the government should set a target of 1,000 farm based anaerobic digestion plants by 2020. Today there are only 27 farm based plants, so this represents a major opportunity.

• Obtaining financing | Many anaerobic digestion schemes have struggled to secure financing. ADBA should build on the experience of its finance forum to produce a succinct guide for developers and future funders. The guide should contain information on key financial risks and how they can be managed.
• Feedstock supply | Waste treatment anaerobic digestion plants often struggle to secure long term supply contracts for feedstock. Only 13 per cent of households in England have the benefit of separate food waste collection, whereas in Wales 82 per cent are covered. The government should move to ban all food waste to landfill in England by 2020.
• Confusion about government support | There is a widespread perception that government policy on anaerobic digestion is not coherent, consistent or stable. Developers need more certainty.
• Government appears opposed to purpose grown crops | Using purpose grown crops for anaerobic digestion has several advantages, including the relative technical simplicity of anaerobic digestion plants treating purpose grown crops, the virtuous cycle in which digestate returns nutrients to the land where purpose grown crops are grown, and a simpler digestate regulatory regime. Government concerns over purpose grown crops promoting monoculture, diverting incentives from waste schemes, harming the environment and compromising the UK's food security do not stand up to scrutiny.
• Cost and regulatory complexity of making grid connections | Injection to the gas grid is the most efficient use of biogas, but only two plants are currently connected. Amendments to the gas regulations, already being contemplated, such as increasing the amount of oxygen bio-methane may contain and relaxing the stringent accuracy requirements on calorific value measurements would make a major difference.
• Underdeveloped market for digestate | Although the anaerobic digestion digestate market has a potential value of over £200 million a year, for most anaerobic digestion plants digestate is currently viewed as a cost. Defra and WRAP have recognised the need to help the market develop, and CentreForum welcomes the initiatives they have taken. It would help further if regulations were amended so that farm cooperatives could spread waste co-digested with on farm waste as long as both were pasteurised. More education about the benefits of digestate among farm end users and major supermarket buyers is also needed.

Lord Redesdale's quote in full:

"This is an important report which lays out clear recommendations for how government can better support the anaerobic digestion sector and realie the benefits it could bring to economic growth, waste management, renewable energy and climate change."

"CentreForum have shown that anaerobic digestion already represents a significant part of the UK's renewable energy mix - generating four times more electricity than solar PV - and are pushing for government to support an 800 per cent increase in that generating capacity by 2020. As they also recognise, this is about more than just renewable energy. By leading the world in waste treatment through anaerobic digestion, the UK could create export markets which support tens of thousands of jobs in manufacturing and other sectors. Anaerobic digestion will also be central to the future of sustainable food production, by recycling critical nitrates and phosphates back to land and providing economic support to the farming industry."

"As CentreForum have clearly shown, realising all those benefits requires action from government - a ban on biodegradable waste to landfill, more source segregation of waste, sensible support for the use of purpose grown crops, and funding from the green investment bank. We look forward to working on all of these areas and more over the coming year."

Vicky Pryce: hands off approach to industrial policy not an option

28 June 2012

Britain is in dire need of a 'fourth generation' industrial policy, a new report by the economist Vicky Pryce suggests.

Writing on behalf of the think tank CentreForum, Vicky Pryce picks apart 'three generations' of industrial policy: the state interventionism of the post war era, the industrial upheavals under Margaret Thatcher, and the piecemeal approach of the 1990s and 2000s. She concludes that none of these approaches has provided the optimal conditions for business success.

Her 'fourth generation' policy, set out in the report, challenges the government to play an active role in shaping Britain's industrial future. The report says that policy makers need to understand:

• the challenges and opportunities facing Britain as a whole in the short, medium and long term.
• why Britain is so strong in some sectors and yet so weak in others in order to see the best place to grow further specialisation into areas of current strength, or diversification into areas of current - not necessarily long term - weakness.
• that government must provide the conditions for business success. This is true both in the conventional sense of providing good laws, infrastructure and a well educated workforce and in the less conventional sense of government using its might to borrow long and cheap in order to share the risk in new and yet unproven technology areas and help in their development and commercialisation.
• that interaction between government and industry is complex and can be done well or badly. All stakeholders need to have clear roles and responsibilities - not just the government.
• the importance of incentives, innovation and competition in driving private sector performance at every level.
• the importance of evaluation and periodic review, undertaken by those with no vested interest in the answers, ensuring that policy is evidence based and effective in delivering desired outcomes.

Vicky Pryce said:

"My ten years in the business department taught me that government policy really matters. We can get it very right or very wrong. This report draws on lessons from the past to set out the policies that our country needs today."

NOTES TO EDITORS

The CentreForum report 'Britain needs a fourth generation industrial policy' can be downloaded.

ABOUT THE AUTHOR

Vicky Pryce CB is senior managing director at FTI Consulting and a former joint head of the Government Economic Service. She was previously a partner at London Economics and KPMG and corporate economist at Esso Europe. She is also visiting fellow at Nuffield College Oxford, visiting professor at Queen Mary College London, and Adjunct professor at Imperial College London. The views expressed in the report 'Britain needs a fourth generation industrial policy' belong to Vicky Pryce. They are not the views of any organisation she works for.