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Close partnership delivers real benefits

In December 2013, a new anaerobic digestion (AD) facility in Holbeach, Lincolnshire, completed commissioning and began generating electricity.

The 1.5MW, 30,000 tonne a year plant is the result of an innovative partnership between AH Worth, the parent company of fresh and prepared vegetable supplier QV Foods, and AD operator Tamar Energy, which had set up some two years before.

“A partnership made a lot of sense from the very beginning,” says QV chairman Duncan Worth. “In recent years, we have faced spiralling energy costs, making investment and growth an increasing challenge. It has also been a goal of ours to provide a more sustainable offering to our customers, so we were searching for a partner which could offer an environmentally friendly way of managing organic waste.

Tamar Energy Holbeach AD Facility

“Our farm is a remote 4,500-acre site served by relatively weak local infrastructure. As a vegetable supplier to some of the UK’s biggest retailers, including Asda, Aldi and Marks & Spencer, we need to be confident we can work 24/7. We also have large quantities of vegetable trimmings and potato waste, which required many vehicles to take it long distances to be used either for cattle feed or composting. Not only was this environmentally inconsiderate, but also the commercials did not add up.”

Mat Stewart, director of operations and feedstock at Tamar Energy and managing director at Tamar Organics, agrees: “The Holbeach AD facility was one of our first projects, funded as part of an initial equity investment. This gave us the freedom to search for innovative partnerships. For a firm new to the industry, as we were at the time, the partnership with QV Foods offered a secure feedstock supply, a guaranteed market for the electricity and a market for the digestate.”

While Tamar Energy is responsible for day-to- day operation of the plant, the two companies maintain a close working relationship, according to Stewart.

“When we first formed the partnership, we did not envisage quite how close the working relationship would be between us. We knew that the board of Holbeach Biogas, the partnership’s subsidiary company, would meet quarterly and comprise directors from both partners. In reality, director-level contact is more frequent and we exchange telephone calls and emails weekly.  

“It also quickly became clear that, at an operational level, the plant manager and his QV Foods counterpart would be in daily contact because the interlinking of feedstock and digestate deliveries requires that dialogue.

“Both parties realised early on in the process that this closeness would be important. We each brought expertise from very different industries, characterised by their own cultures and processes. One thing we share is an unwavering commitment to quality – and that has shone through all aspects of our relationship.”

Such a working relationship is something both sides of the partnership agree has been integral to the site’s success.

Worth explains: “When Tamar Energy was designing and constructing the plant, we were able to provide it with details of what feedstock we would be delivering, as well as our electricity and digestate needs at the other end of the process. Tamar used this information to design a plant specification that was as efficient as possible and maximising the benefits for both parties. Looking back over the past year, we are delighted that the approach has produced the scale of benefits it has.”

He believes there have been several challenges that the facility has solved for QV Foods: “We now have a reliable, secure energy supply that protects us from rising energy costs. The electricity generation from the plant is delivered to our facility via private wire, now meeting more than 90% of our energy needs and delivering savings of 20% on our energy bills.

“We have also achieved real cost savings through a supply of digestate from the plant, which can be used as a nutrient-rich biofertiliser. The liquid biofertiliser which we now use on our crops will save us around £100,000 in the first year alone.”

Stewart adds: “The Holbeach site has been our first to gain the PAS110 certification. It is this mark of quality, backed by WRAP, that gives producers like QV confidence in the nutritional content and quality of the digestate being produced by a particular AD plant. We know that we are providing a consistent product.

“We are benefitting as well as QV Foods with the digestate at Holbeach. The market for such product remains in its relative infancy, and finding a secure supply chain can prove a challenge when planning new AD plants. A partnership of the type we have got at Holbeach means Tamar Energy could be confident of an end-user for much of the digestate produced by the plant.”

Worth believes there are also broader benefits: “It is clear that ourselves and Tamar have benefited from this deal. But we also feel really strongly that there are major benefits from this partnership which go beyond our two firms.

“Using the waste on-site avoids additional vehicles on the road as, before, we were having to transport the peelings very long distances. If more partnerships of this sort, between operators and food producers, can be fostered around the country, we would see even more efficiencies in the food production sector.”

Stewart continues: “As well as QV Foods, Tamer has also worked with other local businesses. The AD plant still has capacity for other sources of feedstock. As a result, we have quickly created a network of local feedstock suppliers, able to benefit from flexible feedstock contracts, and diverting even more organic waste from composting or even landfill.”

An area of success that is more difficult to quantify is the reputational benefits QV Foods has gained, but Worth believes this is just as important as other benefits.

“At a time of growing public awareness on the issue of food waste and a drive by major supermarkets – including our own customers – to improve their green credentials, the plant allows us to cut our own carbon footprint and those further up the supply chain.”

Hundreds of people worked on the plant during construction and four full-time jobs were created in operation. Stewart comments that “it is proof that our partnership not only benefited the environment, but boosted the local economy as well”.

“We began by saying that this was an innovative partnership and, as with any innovation, we have had to demonstrate faith in each other to get it off the ground,” adds Worth. “But we are all proud of what has been achieved at Holbeach. It is a model that can be replicated and, while the benefits are clear, both sides should be in no doubt that embarking on a partnership of this type is a serious undertaking.”

Stewart agrees: “AD is a complex thing to get right, with so many variables that require active management. It is a huge undertaking, both financially and in terms of the time and commitment needed on all sides.”

But Worth warns: “There are pitfalls in getting an AD plant off the ground, and it is not a commitment to be entered into lightly, otherwise you could easily find your project becoming financially unviable. I am glad to be working with a partner like Tamar Energy because the plant team knows what they’re doing and can draw on experience from across Tamar’s operations if needed.

“As the past year has demonstrated, AD can deliver real benefits.”

QV Foods

What it produces: Potatoes and other vegetables for national retailers such as Asda, Aldi and Marks & Spencer

Where it sits in the supply chain: Grower and processor

What it did with its waste previously: Transported long distances for cattle feedstock or composting

How much waste it generates: around10,000 tonnes a year

Holbeach AD plant

Size: 1.5MW

Capacity: 30,000 tonnes a year

How long the build took: Just over a year

When it opened: Electricity generation began in Q4 2013

Duncan Worth is chairman of QV and Mat Stewart is director of oprations at Tamar Energy

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