John Laing Environmental commits to Vulcan plant expansion – John Laing Environmental Assets Group has announced a further investment in the Vulcan Renewables anaerobic digestion (AD) plant. The investment consists of provision of funding of c.£8.5m to significantly expand the AD plant’s biomethane generating capacity.
Vulcan Renewables was acquired in August 2017. The plant is located in Hatfield Woodhouse, 9 miles north east of Doncaster, South Yorkshire and was commissioned in October 2013. It has a current capacity of 5MW(th) and predominantly produces biomethane. In addition, the plant also has a 0.5MW(e) CHP engine and is accredited under the Renewable Heat Incentive (RHI) and Feed-in-Tariff (FiT). (see our note for an explanation).
The plant extension will be carried out by Future Biogas, JLEN’s business partner in the AD sector and current service provider at the Vulcan site. The works involve converting the existing storage tank to a primary digester, providing for separate digestate storage, installing an additional biomethane upgrading unit, together with associated engineering, electrical and civil works. The construction works are expected to complete in late 2019. Operations will continue throughout this period with no expectation of significant downtime.
This further investment in the Vulcan Renewables AD plant will be funded by a draw-down under the Company’s revolving credit facility.
Richard Morse, the JLEN Chairman, said “We are pleased with our initial investments in the anaerobic digestion sector, and this expansion project is a good opportunity to build out our capability at the Vulcan Renewables AD plant. It represents our first investment in a construction project, and we have taken care to understand and limit the risks involved, including through the choice of Future Biogas as our delivery partner. We are looking forward to a successful delivery and enhanced revenues once completed.”
[QD comment: this is a great deal for JLEN which gets to add considerable capacity to the plant for a relatively low outlay. We expect that JLEN will continue to expand its AD portfolio given the attractive returns available.]
JLEN : John Laing Environmental commits to Vulcan plant expansion