Biogen plans food waste-to-power plants in UK on rising landfill tax

LONDON -- Biogen Ltd., a U.K. developer of plants that generate electricity from food waste, plans to start building four to five facilities this year as rising landfill taxes increases the costs of burying waste underground.

The company already has the funding in place to build the projects, Richard Barker, chief executive officer of Bedfordshire-based Biogen, said today by e-mail. It plans to raise about 30 million pounds ($48 million) to implement projects through 2014 and beyond, he said, and some of this funding is already in place.

Supermarkets and businesses are being encouraged to send their food waste to anaerobic digestion facilities such as those offered by Biogen by a landfill tax that makes it increasingly expensive to bury waste. It was introduced in April at 64 pounds a ton and is set to increase by 8 pounds a year. The tax will help drive expansion of the U.K.’s waste-to-energy industry, Barker said.

Biogen plans in March to start building a 2.5-megawatt project in Hertfordshire that will generate enough electricity for about 4,000 homes. It also plans to start work on a plant in Denbighshire and is the preferred bidder for a plant in South Wales. Biogen is already building a facility in North Wales. By 2014 its total food waste processing capacity will have doubled to about 200,000 tons-a-year, the CEO said.

The U.K.’s Department of Energy and Climate Change estimates bioenergy plants using wood chip and food and agricultural waste to produce heat and power may meet 8 percent to 11 percent of the country’s primary energy demand within eight years.

Increased Competition

Interest in Biogen’s facilities comes from across the whole food waste supply chain, from manufacturers through to supermarkets and the hospitality industry, said Barker. This year will probably see increased competition from new companies and merger and acquisition opportunities, he said. Biogen will focus on the U.K. market.

Kier Group Plc, a U.K. construction company, in August bought half of Biogen for 24.4 million pounds. Biogen remains “open minded” about taking on new strategic investors in the future, Barker said. It’s already in discussions with potential partners for future projects.

Copyright 2013 Bloomberg

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