BIOMASS FEATURE BY SAMUEL McKEOWN Don't sap energy in wrong market
BIOMASS companies are experiencing the sector’s volatility including Abel Energy, VG Energy and Prescient Power Ltd, which all exhibited at RWM 2017 in Birmingham, but all recently experienced issues.
Not all companies in the sector are fi nding trading tough. Late 2017 saw wood biomass suppliers VerdEnergy – who have three depots in Goole, Tockwith and Richmond – awarded a £200K growth support boost by Merica Debt Finance, as part of the Northern Powerhouse Investment Fund (NPIF).
Ian Atkinson, investment manager at Mercia, said: “Biomass off ers an environmentally-friendly, low-cost alternative to conventional energy sources and take-up is growing amongst hotels, country estates, commercial occupiers and domestic users.
“The funding will provide additional working capital to fund extra pellet shipments and support the increased demand.”
Biowood Recycling's Anthony Lake said: “What we’re fi nding at the moment is the price of biomass fuel is being driven down, and eventually it won’t be profi table for biomass companies to run through and no money will be made ‘on the gate’.
“Larger companies such as Stobart can aff ord to open biomass sites across the board, which increases the demand for wood. This is more than what smaller companies can supply – so we’re fi ghting to bring in as much wood as we can. We’ll have to start importing wood.
“Realistically, the revenue will have to come from schemes such as RHI or other government funding, but there will be no return because this will not outway the cost.”
As many biomass companies feel the heat of the market’s volatility, Anthony believes companies must be versatile.
He added: “It’s becoming very competitive. So many companies
•MERCIA'S Ian Atkinson, VerdEnergy's Mark Duncan and also fi nancial specialist Martin Bell (left to right)
that only specialise in biomass are trying to commercialise the concept to new markets such as schools.
"This is a fairly big investment to take on especially when a buyer needs to make sure the return is correct. It’s a risk many just aren’t willing to take within this current economic climate.”
Also, other areas are statistically stronger than others - as General Manager of Scot Heating & Power, Andy Wiseman added.
He said: “Edinburgh has not been a good market for biomass as the city has air quality issues and the council put a moratorium on new biomass boilers some years ago.
"Nevertheless, there are opportunities across the board for big, new biomass heat and power systems.
“Any process industry or business that has a high heat, power or cooling demand could benefi t by switching to biomass, particularly if they are not on the gas grid and they have some process waste that we can use as a fuel source.”
MATEC Plant (UK) Ltd T: +44 (0) 7807 760966 E:
info@matecservices.co.uk W:
www.matecplant.co.uk
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