Anaerobic digestion (AD) company Tamar Energy is planning to build a national network of 40 plants and has begun looking for traditional forms of funding as it moves into a stage of “rapid growth”.
The new chief executive officer of Tamar Energy, Willie Heller (left), told MRW the company has been working with the original £97m funding that it received from private equity in order to prove the concept works.
Investors included RIT Capital Partners and Fajr Capital, the Duchy of Cornwall, Lord Rothschild’s Family Interests and Sustainable Technology Investments.
Some AD experts have said the industry will be able to get investment from commercial debt as the technology is proved in the market place.
Heller said: “We have three plants in completion and commissioning and now we need to go back to the market and start looking for debt as opposed to original investors.”
He added: “We are now going on our rapid growth mode.”
Heller said Tamar would not be going into the market every year because it is raising funds on a bundled basis, as opposed to a plant-by-plant basis.
He added: “Bundled plants should attract debt on reasonably attractive terms.”
The next step is an AD plant at Hoddesdon going into construction. There are another 15 projects in the pipeline.
Although the company has been working on various newer forms of technology including chicken litter, fines and dry AD plants, it is focusing on the core objective of a 40-strong national AD network treating food waste with a combined 100MW capacity.
Heller said: “Whether we hit that target in 2018 or 2019 is not critical, but it is an appropriate target if we want to be an industry leader.”
Comparing his previous experience in wind energy with the AD sector, Heller said: “Planning takes longer than you think.”
He said Tamar originally aimed to get projects through planning within 12 months, but now it looks at 18 months as a good timeframe.
Heller added: “A few years ago everybody thought it was easy to jump into this business and build plants and make lots of money. The reality is that people are realising it’s not that easy to permit these (plants).
“The process of engineering is more complicated and everybody’s got digestate issues.” (See box below).
There are a lot of competitors in the AD industry but Heller said there is not much place for one-off projects unless they are tied to a specific feedstock or fuel-source.
He said: “It’s going to be hard for competitors to build one plant based on there being a lot of waste in one area.”
Heller took over the chief executive role of Alan Lovell one month ago. Lovell has remained chairman of the company.
Heller said: “The standards board is looking at PAS110 (the industry standard for AD quality) again. That’s appropriate - we should always be doing that, but I don’t think that’s the key issue.
“Not long ago people thought they didn’t have to worry about digestate. They thought it is going to go out the back door and we’ll spread it on land.
“Now when you develop a project you have to have a specific digestate solution and just saying I’m going to spread it on land is not the base case solution anymore.”
Tamar Energy’s financial history
Tamar Energy raised £97m in funding in 2012. This was the biggest greentech deal of the year globally.
Since then Tamar has not sought further investor funding, but expects to obtain a further £250m in debt funding to support the 100MW network target. This will be raised in a number of phases.
Willie Heller CV
Heller joined Tamar Energy as chief executive in January 2014.
Prior to this, he was chief executive and a founder of Falck Renewables Wind, active in the UK, Italy, Spain and France.
Willie was previously the chief executive of Edison Mission Energy, an international independent power producer.
Prior to that Willie was president of Edison Mission Energy, Europe, and senior vice president of Edison International.
From 1982 to 1995 he was a consultant and partner with McKinsey and Company’s Energy Practice in Houston, London and Los Angeles.