Biomass-fuelled energy plants “are not economically viable on their own”, impact firm Earth Capital’s head of investment, Avent Bezuidenhoudt, has found. Bioenergy – natural gas extracted from organic waste – is a relatively nascent energy solution, typically produced in small-scale sites. Earth Capital is merging four such assets in its portfolio, all located in different parts of the UK, into one company to scale these operations. Three of these were financed “from scratch” by Earth Capital and have been operational since 2017.
Bioenergy “hasn’t developed at the rate that people expected it to, but if we are going to achieve the transition, it is absolutely critical because it supplies baseload energy, which wind and solar cannot do”, Bezuidenhoudt told New Private Markets. “One plant cannot support a strong management team that can bring the value-add… [to make it] economically viable.”
Such “value-add” measures, which Earth Capital hopes it will now be able to explore, include implementing carbon capture processes and improving its sourcing of feedstock options. “Rather than paying for feedstock, we could use feedstock that we are paid to remove,” said Bezuidenhoudt.
The newly minted company, Sustainable Energy Holdings, sits within Earth Capital’s Nobel Sustainability Fund, a growth vehicle that closed in 2021 at $300 million. It has a UK focus and is nearly fully invested, said Bezuidenhoudt. The firm plans to launch its next fund over the next 18 months and to expand its geographic focus to Europe.