Bioenergy – advantages and disadvantages

3rd December 2020, 4:41 pm

Priscilla Hall, Partner and Head of Green Energy at national law firm Clarke Willmott LLP, shares her thoughts on the advantages and disadvantages of bioenergy as the Government develops its green energy strategy.

When people think of energy being created from gas, often it is placed in the same category as coal in terms of harmful and polluting energy generation. Sometimes the preconception is that the creation of energy from biogas is also a non-green energy source and damaging the environment. To respond to this preconception, it is important to understand a little more about biogas along with the some of the advantages and disadvantages of bioenergy.

Biogas is a naturally occurring gas predominantly consisting of methane and carbon which is generated from organic matter. This matter which could include agricultural waste, sewage, food waste and plant material is processed inside a closed system aided by microorganisms, a process often referred to as anaerobic digestion. Once the biogas has been sufficiently treated it is then transferred to a combined heat and power unit for the creation of renewable energy to be used in a variety of formats.

With an increasing worldwide population more waste from both livestock and humans will be generated regardless of eating habits. In fact, the World Economic Forum is predicting the global population will be 9.7 billion in 2050 compared to today’s global population of 7.8 billion. As a result, there will always be a continual source of base material, providing a steady source of reliable base load electricity, which can be a challenge for other renewable sources such as wind and solar. Therefore, bioenergy is certainly is supporting the challenge of achieving NetZero.

From an environmental perspective, the benefit of anaerobic digestion plants is also worth noting. It can help remove harmful elements from the waste products which might contaminate water supplies, reduce harmful pathogens in slurry along with reducing odours which can improve air quality particularly close to high density population areas. We should also not forget the valuable by-product of the process, the manufacturing of compost and fertilizer which could be an incremental income source for the producer.

The principal challenges for anaerobic digestion centre around scale and time. The initial upfront cost of construction and follow on operating expenditure for digestors can be expensive but can be overcome through professional advice and support. It is fair to say that most farms which set up an anaerobic digestion system tend to be more substantial, have a significant herd of cows and or access to plentiful plant waste. Depending on scale storage considerations need to be taken in to account along with the time needed for operations and maintenance which can be considerable.

Taking into consideration all aspects I would conclude that there is a case for development of anaerobic digestion activity. As always, each opportunity should be treated on its own individual merits in terms of economic viability and environmental impact, with impartial advice being sought. It will be interesting to see how bioenergy is incorporated into the Government’s green industrial revolution combined with the longer-term impact of Brexit for the agricultural sector. Over the coming weeks and months more details will emerge from the Government and I look forward to updating clients accordingly.

Our work relating to bioenergy is varied and extensive with our specialist and nationally rated cross-disciplinary team of solicitors having been involved in the green energy and agricultural sectors for many years. One example of our work includes acting for a client developing biogas plants in the UK, which has included advising them on site acquisition, option agreements, freehold transfer and long lease, all due diligence aspects, advice in relation to feedstock agreements, finance arrangements and construction documentation. We also advised on connection requirements, as the plants are gas to grid, as well as including CHP units to enable the generation of electricity.

In addition, we have supported clients funding anaerobic digestion plants involving negotiating project finance documentation including facility agreements, debentures, share charges, security assignments direct agreements, shareholder agreements and associated documentation. It addition advising clients in relation to the underlying site documentation and the negotiation of variations with the landowners involved in order to satisfy the funders requirements.

Overall, we deliver seamless sector-focused legal advice on all aspects of energy generation by providing a ‘one-stop shop’ for our clients including operators, contractors, investors, farmers landowners and local authorities, many of whom we have a long-standing relationship with and would be happy to have a conversation in how we can help and support your ambitions.

Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.

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