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Investing in biomethane projects

Investing in biomethane projects

There is no doubt that anaerobic digestion (AD), and specifically biomethane production, is a key technology that gives governments the best chance of meeting their clean energy goals.

There is a real buzz in the clean energy industry about the potential growth of AD, but what is biomethane, and what are the real opportunities for the sector?

Biomethane and its uses

All AD plants produce biogas, which usually constitutes of around 50-60% methane. However, in order to inject this into the UK’s national grid, for example, the biogas needs to be ‘upgraded’ to remove the CO2 and increase the methane level to around 95%, thereby meeting the quality of natural gas already in the grid. This is known as biomethane.

Biomethane has a number of benefits for the national grid. It is one of the most viable and stable renewable gases, ensuring the grid can be supplied with a continuous, predictable level of ‘green energy’, that isn’t reliant on weather conditions as with solar or wind technology.

Another major advantage of biomethane is the existing national gas infrastructure. This can be used to transport the gas from the point of production, on-farm for example, to homes, creating a significant cost saving when considering the viability of large-scale production.

Developments in the industry

At Prestige we are active lenders to this market and have loaned more than GBP 500 million to clean energy projects in the UK, most of it to AD plants. This has made us one of the leading providers of finance to the UK’s AD sector, helping to bring clean energy to more than 120,000 British homes.

In the first six months of this year we have helped to finance five AD plants, either from scratch of modernizing the existing operations to increase their capacity and enable them to contribute directly to the national grid.

In order to ensure the future viability of the AD industry, more collaboration and uptake of innovative technologies is needed. We are already seeing significant technological developments enabling methane to be upgraded, while also capturing and utilising the CO2, which will inevitably make the system more viable.

As a finance provider, we at Prestige Funds are passionate about exploring new technologies and will support the AD industry to develop a commercially viable network, that in turn supports the government’s renewable energy ambitions, and helps in the critical battle against climate change.